Will The Freeze on Federal Aid Affect My SSDI?

While President Trump ordered a freeze to domestic and foreign federal aid in an effort to stop government funding for causes that do not fit with his plan for his new administration. The memo states that the pause will allow time to review agency programs and determine the best uses of the funding for those programs consistent with the law. 

However, a federal judge has extended a block on the Trump administration freezing federal spending on grants, loans and other financial aid. A D.C. federal court judge for a 3^rd time ordered the Trump administration to release foreign aid funds. 

The Social Security Administration (SSA) has announced that it aims to cut about 7,000 jobs to align with an executive order from President Trump to broadly slash the federal workforce. Social Security Administration workers are warning that the Trump administration’s plan to significantly shrink the agency could cause chaos and hinder their ability to provide service to the millions of retirees, disabled people and other Americans who rely on the program. SSA provides monthly financial payments to almost 70 million people, or about 1 in 5 Americans. Current SSA employees caution that cutting the already strained Social Security workforce could impact beneficiaries in numerous ways, such as longer wait times to qualify for disability benefits and for assistance on customer service issues. 

Each year, thousands of people awaiting disability decisions die before they receive their benefits, with former Social Security Administration Commissioner Martin O’Malley telling Nextgov/FCW in 2024 that about 30,000 people died while awaiting their determinations during fiscal 2023. Most workers qualify for Social Security disability coverage through their payroll taxes, which provides a backstop in case you get injured and aren’t able to continue working, the Social Security worker noted. But cutting agency staff likely means it could become even more difficult for many disabled workers to get their benefits approved, he added.

The agency’s workforce cuts come as the ranks of Americans receiving Social Security benefits have swelled to an all-time high, largely due to the aging baby boomer population. An average of about 11,000 boomers are set to turn 65 each day this year through 2027, according to a report from the Alliance for Lifetime Income. That demographic change, called “peak 65,” is causing major economic and societal changes, with Social Security on the receiving end. Since 2014, the number of retired workers and their dependents receiving Social Security payments has surged by almost 30%, reaching 54 million people as of last year, according to agency data. At the same time, the number of full-time workers at the Social Security Administration has declined almost 10% from about 63,000 employees in 2014 to about 57,000 workers in 2022, agency data shows. Long wait times for callers seeking help from the Social Security Administration’s workforce was identified as a trouble spot in the agency’s most recent annual performance report. Its goal: To shave an average 34-minute on-hold wait time to 12 minutes, although the agency said it was evaluating that “aspirational goal” as it was unable to hire additional workers last year. 

Some Social Security employees are already opting for the buyouts, which could lead to a brain drain at the administration. Because Social Security workers with 25 years of experience are eligible for the buyouts, the agency will lose some of its most experienced workers. Morale at the agency is at “an all-time low and their salaries are modest at best. About 80% of Social Security workers earn somewhere between Grades 5 to 12 on the federal general schedule pay scale, which includes a starting pay range between about $33,000 to $74,000 a year. Americans fund the Social Security Administration’s services through their payroll taxes, or FICA contributions. 

Numerous experts have issued statements saying the job cuts threaten the agency’s fundamental operations and will be catastrophic for the public. Speaking to CNBC, former SSA Commissioner Martin O’Malley said that the actions, which are being implemented by Elon Musk’s Department of Government Efficiency (DOGE), are putting monthly benefit checks at risk. “Ultimately, you’re going to see the system collapse and an interruption of benefits,” O’Malley said in a recent article. “I believe you will see that within the next 30 to 90 days.” Other reports have shown that the agency is already at a 50-year low in staffing while the number of beneficiaries grows by 10,000 people daily.

The SSA was created through the Social Security Act of 1935, signed into law by President Franklin D. Roosevelt as part of his New Deal initiatives. The act introduced a system of retirement benefits for workers aged 65 and older, funded through taxes on their income. Initially, it did not cover all workers, and benefits were modest. Over the decades, the Social Security program was expanded significantly. In 1939, benefits were extended to dependents and survivors of workers, making it more of a family-based insurance program. In 1956, the Disability Insurance (DI) program was added, providing benefits to workers unable to continue employment due to disabilities. Further expansions came with Medicare in 1965, under President Lyndon B. Johnson, providing health insurance for individuals aged 65 and older, and Supplemental Security Income (SSI) in 1972, offering aid to low-income individuals who are elderly, blind, or disabled. In 1995, during the administration of Democrat Bill Clinton, SSA was made an independent agency and borrowing from the Social Security Trust Fund to offset mounting budget deficits was increased. Calls for the overhauling and privatization of the Social Security system have increased, as the aging population and increasing benefit payouts have been used to raise doubts about its financial stability. Now, the financial oligarchy is seizing on the Trump administration’s claims of eliminating “waste, fraud and abuse” in the federal government to get its hands on the estimated $2.7 trillion in assets maintained by the Social Security Trust Fund.

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