Ten years of errors in federal records could cut the Social Security checks of 40 million recent retirees by $50 a month, a union says, and government auditors say there's little chance of fixing the mistakes.
Although a new agreement between two government agencies goes a long way toward preventing similar errors in the future, "early reconciliation results for past (error) backlogs are not encouraging," said Joseph F. Delfico, senior associate director of the General Accounting Office.Kenneth L. Blaylock, president of the American Federation of Government Employees, which represents 60,000 employees of the Social Security Administration, said the discrepancies could affect the pensions of one-third of all recent retirees.
Testifying Tuesday before two House Ways and Means subcommittees, Blaylock said a recently announced plan by the Social Security Administration and the Internal Revenue Service to correct the records "is a cruel hoax and a charade." He said the two agencies are unwilling to commit the money and manpower needed to fix the problem.
At issue are the worker earnings reports that employers file with SSA; these reports determine how big a Social Security pension workers eventually receive. Employers must report once a year to SSA but four times a year to IRS.
For a number of reasons, those reports do not always match. Between 1978 and 1984, GAO estimates, employers reported $58.8 billion less to SSA than to IRS. That means the IRS collected and turned over to the Social Security trust funds more than $7.7 billion in taxes that are not credited to any worker's account.
That is only about 0.5 percent of all wages that SSA recorded during those years, but the discrepancy is enough to affect the pensions of 10 million retirees by about $17 a month, GAO estimated. Blaylock said the figures could reach 40 million and $50 a month unless the government makes a better effort to clear up past-year errors.