Frank Bernheisel: The View From Here
Frank Bernheisel
Frank Bernheisel
Posted 02.03.15
Just Outside Washington


A US Government service, well run

Last week, I downloaded my copy of Turbotax and started to do my American taxes. Despite the fact that I had paid in November, I not received the disc; so went on-line, telephoneed, and e-mail/downloaded. Done.

Then I started to load our income -- I looked at the file of W-2s and 1099s needed to enter income. I found that we have not received all of them. So I took inventory. We should have a lot of W-2s and 1099s: two from Social Security; three from 401 Ks; two from banks, two from profit-making corporations that employed us, one from the university where Kathy teaches, two from brokerage firms, etc. They had not all come in.

Looking at the arrival dates, the Social Security 1099s came in the earliest and were delivered by the U.S. Postal Service -- the federal government at work.

Living here in Washington DC we hear from Congress and others that the federal government is staffed with quot;bureaucratsquot; who are perpetrators of quot;waste, fraud and abuse.quot;. We hear that we should be quot;Running government like a businessquot; from such leaders as John Kasich, Rick Scott, and Nikki Haley.

So if business is so great at running things, how come Social Security Administration (SSA) delivered their tax documents to me before any other entity? And, I have yet to hear from one corporation and my investment firm. Inquiring minds want to know.

There are 65,525 "bureaucrats" authorized for SSA in FY 2015, not counting the 555 in the Office of the Inspector General and in FY 2015 they will spend a total of 12 billion dollars running SSA that includes wages, benefits, office space, lights, etc. With that money they will manage the $2.8 trillion Social Security trust fund. Payments into the trust fund for FY 2015 are estimated at $913 billion of which an estimated $887 billion will be paid out as benefits.

The administrative costs then compute to 0.4 percent of the trust fund and 1.4 percent of the benefits paid. My broker should be so low. Both the administrative costs and the benefits have grown over the last ten years (see chart).


So what is the point? My point is that the Social Security Administration appears to be efficiently run. My service over a number of years has been very good and quick on delivery. And it is cost effective. The 1.4 percent administrative cost is equivalent to the low end of the discount rate, credit card companies charge retail merchants, which run between 1.4 percent and 4 percent, before additional fees and charges.

"We the People" have turned the federal government over to people who do not want to govern but want to cripple governance. Shame on us.