The Social Security Administration warned in a letter to employees that it may have to furlough workers if proposed cuts to its budget are enacted into law.

The agency, which is responsible for processing benefit applications, issuing checks to recipients and sending new Social Security cards out to families with newborns, referred in the letter Thursday to a continuing budget resolution proposed by congressional Republicans that would cut the SSA’s administrative funding by more than 9 percent in 2011, from $11.8 billion in 2010 to $10.7 billion this year. In addition, the Republican proposal provides for $1.7 billion less than the SSA needs to keep pace with inflation and rising workloads, according to Democrats on the House Ways and Means Committee.

The letter “serves as notice to bargain over the impact and implementation of a furlough procedure in the event of an agency furlough,” Acting Associate Commissioner of SSA Jay Clary wrote in a letter Thursday. He noted that the SSA commissioner has “not decided to effectuate a furlough,” but that in light of “the potential of reduced congressional appropriations for the remainder of the fiscal year, the agency is issuing this notice at this time in the event that a furlough may become necessary.”

The GOP budget plan would leave the already cash-strapped agency with far fewer resources with which to process claims for seniors, widows and people with disabilities, issue new Social Security cards to families with newborns, reduce overpayments to safeguard Social Security’s trust fund for future beneficiaries, conduct appeals hearings for disability applicants, answer phone calls from individuals whose checks are missing, and record wages of workers to make sure they receive all the benefits they have earned, committee Democrats noted.

“Threats of a Social Security shutdown are real,” said Ways and Means Social Security Subcommittee Ranking Member Xavier Becerra, D-Calif., in a statement. “With $1.7 billion in reckless and shortsighted cuts being proposed for the Social Security Administration’s operating budget, employees are now being prepared for a furlough. If Social Security field offices are closed, claims will go unprocessed, a backlog of cases will pile up, and hard-earned benefits of seniors, widows and disabled workers could be delayed. Social Security didn’t get us into this mess, and we must divorce it from the deficit reduction debate.”