It has been confirmed that there will be no new money for Social Security in 2025, and this will have major implications for millions of retirees and Americans who rely on the Social Security Administration (SSA) for monthly benefits. This budget freeze, which was included in the federal government’s final 2024 spending package passed in March, means that Social Security’s operating budget remains at $14.3 million, like last year.
Failure to allocate the Social Security Administration new money could cause delays in payments, service cuts, and increased waiting times for millions of Americans who have issues to resolve. Possible delay in payments comes at a time when inflation is pushing costs up. The SSA is already facing pressure due to a shortage of workers and offices, and advocates warn that a budget freeze could worsen the situation.
“It will degrade customer service,” said Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.
Why the Budget Freeze is a Big Deal
Every year, the SSA has to make payments for over 70 million Americans, including retirees, surviving family members, and people with disabilities. To be able to disburse these payments, it has to process applications, manage appeals, mail checks, and answer queries. Although the SSA is funded through payroll taxes and is therefore not directly affected by the 2025 budget freeze, the cost of running the system, which includes staff, local offices, and call centers, is still needed.
Without new money for Social Security in 2025, the agency will have to operate with the same budget and resources while trying to serve more people. Advocates say that this is a recipe for disaster.
“It’s the equivalent of cutting the agency’s funding because costs go up every year,” Romig said. “When Congress freezes funding, services decline.”
Delays and Backlogs Already an Issue at the SSA
Even before this 2025 budget freeze, the SSA is struggling to meet the increasing demand. According to recent government data:
- The SSA has over 1 million people waiting for their disability claims to be resolved.
- It takes over 7 months on average to process a disability appeal.
- One has to wait for over 30 minutes to speak with someone on the Social Security’s national phone line.
- Local offices have been reduced following the closure of many SSA offices, and now people have to drive long distances and wait in line for hours.
What This Means for SSA Beneficiaries
Those receiving Social Security or applying for benefits in 2025 should prepare themselves for the impact of the budget freeze. Here is what they might have to endure:
- · Longer wait times at local SSA offices and on the phone.
- · Delays in processing applications for retirement, disability, or survivor benefits.
- · Reduced access to in-person help in some areas.
- · Slower appeal decisions if your claim is denied.
Although they should not be worried about any cuts in monthly payments at the moment, a delay in payments is very likely due to staff shortages and outdated systems that might go unaddressed because of insufficient funding.
Advocates Are Sounding the Alarm
Kathleen Romig, and others who track Social Security policy have warned about the long-term consequences of freezing the SSA’s budget for multiple years. It puts the SSA at risk of insolvency, yet millions of people depend on it.
“Customer service is essential,” Romig emphasized. “For many Americans, Social Security is their main or only source of income. When the system slows down, real people suffer.”
Despite the warnings, Congress passed the latest spending bill without considering that the SSA needs an increase in its administrative budget. It is expected that partisan gridlock will continue, and this means that it is uncertain whether new money for Social Security will be approved in the coming years.
There will be no new money for Social Security in 2025, and while the SSA will continue to send benefit payments, it is expected to struggle. Therefore, service cuts and delays in payments should be expected. The lack of sufficient funding adds more challenges amid the current staff shortage and backlogs.
As demands continue to rise, advocates say that it’s time for Congress to realize that freezing the budget is no longer sustainable and that this could risk the lives of millions of Americans.