Early-Outs Offered

     The Social Security Administration is once again offering "early-outs" to its employees. Employees who are 50 and older and have 20 years of federal or military service or employees of any age with 30 years of federal or military service may retire and receive pensions. The point of the early-outs is to induce employees with higher salaries to retire. Unfortunately, those are the most experienced employees, the ones who can solve knotty problems. They're often the most productive employees.

Another NY Field Office To Close

     Social Security plans to close its office in Ulster County, NY even though 39% of the county's population receives either Social Security or Supplemental Security Income (SSI) benefits. Local politicians are unhappy. These office closures are an inevitable consequence of the limited funding being given to the agency.

Service Contract Inventory

     As required by law, the Social Security Administration has published its annual inventory of service contracts. Notable on the list is Lockheed Martin, which received over $100 million in contracts over the last year. Northrup Grumman received over $60 million in contracts. In glancing through the list I was a little surprised by the number and amount of contracts with Brookfield Relocation, apparently for employee relocation services. It's a small matter in the overall picture but I didn't think there would be that many Social Security employees being relocated at agency expense or that the costs, often over $100,000, would be that high.

Disability Trust Fund Doing Better Than Projected

     The final 2013 numbers are in for Social Security's Disability Insurance Trust Fund. Here's a summary (in billions) for both the actual results and the projections that had been made for the year:

Receipts
Actual: $111.5
Intermediate Projection: $111.4
Low-Cost (optimistic) Projection: $112.5

Expenditures
Actual: $143.5
Intermediate Projection: $144.8
Low-Cost (optimistic) Projection: $142.8

Amount of Decline in Trust Fund Balance:
Actual: $32.3
Intermediate Projection: $33.5
Low-Cost (optimistic) Projection: $30.3

Trust Fund Balance at end of year
Actual: $90.4
Intermediate Projection: $89.2
Low-Cost (optimistic) Projection: $92.

     The key question is when, if ever, the Disability Insurance Trust Fund runs out of money. You might think it obvious that the Disability Insurance Trust Fund will run out of money in 2016 but you'd be wrong. While the most recent Intermediate projection was that the Disability Insurance Trust Fund will run out of funds in 2016, it is projected to be only a narrow shortfall in 2016 -- $3.4 billion. Note that the actual results in 2013 were $1.2 billion better than anticipated by the Intermediate Projection. It's impossible to say for sure but the slightly better than expected results in 2013 suggests that the projections for 2014-2016 should be more optimistic as well. The methodology will certainly be more sophisticated but if you multiply $1.2 billion times four years you find that instead of running out of money in late 2016, the Disability Insurance Trust Fund squeaks into 2017. My expectation is that the Intermediate Projection in the next Trustee's report coming out this Spring will show an exhaustion date of 2017. Of course, unfavorable economic news or even a small uptick in benefit payments could change this. 

     The difference between 2016 and 2017 may be politically crucial. It's three years off but 2017 looks like a better year for Democrats than 2016.

     Note that I indicated above that it is uncertain whether the Disability Insurance Trust Fund runs out of money at all. How can that be? Both the Intermediate and Low-Cost projections show that the declines in trust fund balance will be decreasing in coming years. They differ on how quickly the receipts and expenditures move towards each other.  The most recent Low-Cost projection was that the decline in Trust Fund balance will be rapid enough to keep the Disability Insurance Trust Fund in the black as far as the eye can see and that the Trust Fund balance actually starts rising in 2020.The Low-Cost projection was a bit less accurate for 2013 than the Intermediate projection. There's no telling what the next Low-Cost projection will look like. In any case, projections become less reliable the further you extend them into the future. It's more likely than not that the Disability Insurance Trust Fund runs out of money at some point but it's not a certainty. If it does happen, it'll probably be after 2016.

     By the way, Social Security's actuaries also made a High-Cost or pessimistic projection that the Disability Insurance Trust Fund would run out of money in 2015. I've omitted that from the summary above since it was so far off from what actually happened in 2013.

New Addresses For Service Of Process

     Social Security has posted a new list of addresses for service of process. This is essential information if you're suing the agency.

Blast E-Mail From Acting Commissioner

I want to share with you the good news about our operating budget for fiscal year (FY) 2014. 

We began FY 2014 without an appropriation, which was followed by continuing resolutions.  I am pleased to report that Congress has approved, and the President has signed, legislation that provides funding for the remainder of the fiscal year.  With this funding, we will be able to expand our capacity to complete more of our cost-effective continuing disability reviews (CDR), improve our service to the American public, and enhance our vigorous fraud prevention efforts. 

Our FY 2014 funding will allow us to bolster our program integrity activities that reduce improper payments and help combat fraud, waste, and abuse.  Protecting taxpayer dollars has always been a priority, and the recent budget debates have magnified its importance.  While program integrity is a priority, service to the public is, of course, job one.  We will use our funding to increase overtime and restore some staffing losses in critical frontline positions.  This will help us reduce backlogs and wait times in many of our workloads. 

I commend you for enduring the last few years of uncertainty and difficult circumstances.  Through it all, you continued to provide the compassionate services that Americans depend on at the most critical times of their lives.  It is because of your steadfast commitment that we find ourselves in better circumstances today.  Our approved funding indicates that Members of Congress recognize all that you do and that they can count on you to use this funding to enforce greater program integrity and improve our world-class public service. 

Thank you for your hard work, dedication, and patience.  You have always been, and always will be, our most valuable asset.  I know I can count on you to continue your unwavering commitment to serve the American public.

Carolyn W. Colvin
Acting Commissioner

Partial Layoffs At Allsup

     From the Belleville News-Democrat:

Belleville-based Allsup Inc. [which represents Social Security disability claimants, mostly at the behest of long term disability insurance companies] will reduce the number of hours some of its employees work as the Social Security Administration is witnessing fewer disability claims reviews, a spokeswoman said.

In a statement released Monday, Rebecca Ray, the company's director of corporate public relations, said the move will not mean layoffs and all employees will continue to receive health insurance benefits and retirement. But some employees' work weeks will be cut to fewer than 40 hours.

The number of hours cut will be specific to an individual's job and work load and may not be the same across the board.

Ray said the hours reduction will go into effect next month. She could not comment on how many of the company's 700 employees will be affected.

Read more here: http://www.bnd.com/2014/01/27/3025748/allsup-cutting-some-employees.html#storylink=cpy

Out Of Control Bureaucracy

     The Social Security Administration had 3,500 employees at its Baltimore offices near the Lexington Market in 2001. That's down to 1,600 employees now. They'll soon be moving to a newer, smaller office complex in uptown Baltimore. A local merchant remembered that at noon there used to be "massive amount of people" coming out of the current buildings. It's down to a "little trickle" now.

     The reduction in staffing didn't happen because Social Security moved those employees elsewhere. It happened because Social Security's workforce declined.

A Quad's View Of Social Security's Work Incentives

     A working quadriplegic talks with the Washington Post about Social Security's work incentives. By the way, it's naive to think that if a quadriplegic can work, anybody can work regardless of their impairments. Pain and mental illness are different ball games. Age reduces the ability to make vocational adjustments. People with lowered intellectual capacity have diminished ability to make vocational adjustments. The biggest factors, though, are pain and mental illness. I'd rather be a quad than a schizophrenic or to suffer from chronic, severe pain. Most Social Security disability claims involve mental illness or chronic pain.

Facts And Figures From Social Security

Plans To Expand Social Security Becoming More Popular With Congressional Democrats

     Senator Kirsten Gillibrand (D-NY) is proposing a new program to be administered by Social Security that would give workers up to 12 weeks of benefits at two-thirds of their usual salary at times of family crisis. It would be funded by employer and employee contributions of 0.2% of workers' wages.

     Does this have a realistic chance of passage at this point? Of course it doesn't. Tea party Republicans control the House of Representatives. However, this proposal and Senator Warren's proposal to increase Social Security benefits significantly are both signs that Democrats increasingly view expansion of Social Security as a political winner today and something that will become feasible in the not too distant future. Democrats may well decide that proposing to increase Social Security benefits is their best path to win back the House of Representatives.

Social Security Benefits Eaten Up By Medical Costs

Differing Proposals On Unemployment Benefits And Disability

     From a piece in U.S. News & World Report (they're still in business?) by Chad Stone:

The other major policy issue that derailed the emergency [unemployment] benefits program was a proposal to curtail the joint receipt of unemployment insurance and disability benefits. Reid included a proposal from President Obama's budget to do that. Sen. Rob Portman, R-Ohio, had his own proposal, which he said would merely "[end] double-dipping between unemployment and disability benefits," and that it's "in the president's budget." As my CBPP [Center for Budget and Policy Priorities] colleague Paul Van de Water points out, however, the Portman proposal would go well beyond merely ending "double-dipping" and is far different from the president's proposal.

To receive disability benefits, an applicant must have a severe impairment that has prevented him or her from engaging in "substantial gainful activity," defined as earning more than $1,070 a month, for at least five months. In other words, it allows a recipient to work a modest amount, and thus be exposed to a job loss that would legitimately qualify the recipient for unemployment insurance.

The Portman proposal would define receiving unemployment insurance as a substantial gainful activity that, as Van de Water explains, would not only prevent people from receiving both benefits simultaneously – what Portman calls "double-dipping" – but would also delay eligibility for both disability and Medicare for some people with serious disabilities and hasten benefit losses for others. 

The Reid/Obama proposal is quite different from Portman's – and far preferable. It would eliminate "double-dipping" by reducing disability benefits dollar-for-dollar by the amount a person receives in unemployment benefits. In effect, a person who was legitimately eligible for both sets of benefits could receive the higher of the two – but not both.

Incidence Of Disability Going Down

     From a report by Social Security's Office of the Chief Actuary:

The projected probability of becoming disabled before normal retirement age has decreased for insured men between the 1966 and 1993 cohorts [that is, people born in 1966 and 1993], but has increased for insured women. For the 1993 insured cohort, we project that the probability of surviving from age 20 to normal retirement age without ever being disabled is 64 percent for males and 69 percent for females. Comparable probabilities projected for the 1966 insured cohort are 58 percent for males and 70 percent for females. Between the 1992 and 1993 cohorts, the projected probability of death before normal retirement age decreased slightly for both sexes.

Central Offices Closed Due To Weather

     Social Security Administration offices in the Washington-Baltimore area are closed today because of severe weather conditions. They're expecting 5-8 inches of snow and wind gusts to 25 miles per hour.

Some Hypothetical Questions

     Let me pose a hypothetical situation. A woman is drawing Social Security disability benefits. She posts on Facebook: "Having a great time visiting Disneyworld with my grandchildren." Along with this she posts a photo taken of her and her grandchildren at Disneyworld. In the photo, she's smiling.

     Does this hypothetical situation bother you? If so, why? Do you think the information given should trigger some sort of investigation? If so, what sort of investigation and why? Do you feel that you need more information in order to answer these questions? If so, why?

AALJ Gets A NY Times Op Ed

     Randall Frye, the President of the Association of Administrative Law Judges (AALJ), the union that represents Social Security's ALJs, has an op ed piece in today's New York Times that tries to use the recent fraud allegations in New York City to promote a longstanding AALJ proposal to make Social Security's hearings adversarial.

      There are a couple of simple reasons why adversarial hearings aren't coming to Social Security. First, they would cost a lot of money. Second, and more important, it's been tried before and it didn't have any effect that anyone could claim was beneficial. The same people were bring approved and denied.

     If you think I oppose adversarial hearings out of fear for what they would do to my practice, you're wrong. My clients would still win at the same rate and my fees would go up significantly because adversarial hearings would subject Social Security to the Equal Access to Justice Act (EAJA), which would shift the attorney fee burden to the Social Security Administration itself in most cases. I oppose adversarial hearings because they are a bad idea. What the agency needs is increased funding so it can deal with its serious backlogs. Almost everything else is a distraction.

Being Told You're A Prisoner When You're Not Sucks

     Can you imagine having the Social Security benefits you depend upon being cut off with no warning on the grounds that you're a prisoner even though you've never been in prison in your life? It happens much more often than you'd think.

     I had a client who was suddenly cut off benefits. When I asked what was going on, I was told that my client was in prison in New Mexico. My client gave a classic response: "I've never been in Mexico in my life!" The New Mexico prison authorities told me that they had no record of any inmate with either the name or Social Security number of my client. It took two months to get the benefits resumed.

Up In The Clouds

     The Social Security Administration is seeking information about using cloud computing in its operations. In general, Social Security has resisted cloud computing since it would disperse computing over many non-agency computers. However, Social Security is now seeking information about an "on-premise private cloud."

Disability Shaming

     I don't think I've ever seen a newspaper article dealing with disability that is as rancid as the one in the New York Post today. The article tells us that Kevin Simpkins is a New York city firefighter. On November 1, Simpkins was driving a fire department van when he was T-boned by another vehicle. Simpkins pulled the driver from her vehicle moments before it was engulfed by flames. The fire department plans to give Simpkins an award for bravery for what he did after the crash. Simpkins tried to go back to work after the accident but lasted only a week before he went out complaining of neck and shoulder injuries. He has filed a claim for disability benefits but it's not clear whether he's seeking temporary or permanent benefits.

     See anything remarkable about Simpkins story? I don't. He was involved in what was obviously a serious car crash. I don't have any problem believing that Simpkins received significant injuries. At this point probably no one, including Simpkins, knows how long it will take him to recover from his injuries or what residuals he may have. His return to work for a week before realizing he couldn't handle it is nothing rare. That sort of thing happens all the time. What's the problem with Simpkins filing a disability claim? 

     Why did the New York Post think it appropriate to try to shame Simpkins for filing a disability claim? They have a few reasons. Simpkins had tested positive for marijuana in the past and was suspended by the fire department for a week. He wasn't supposed to have been driving the van because he had been barred from driving fire department vehicles because of the positive marijuana test. However, there's no allegation that Simpkins was intoxicated at the time of the crash. Otherwise, Simpkins had had a conversation with a neighbor where he suggested that he wasn't all that happy with his fire department job. Also, Simpkins is black and has been involved in a lawsuit against the Fire Department alleging racial discrimination in hiring. That's it. 

     Marijuana may be legal in New York and other states within a few years at the rate things are going. There's no evidence that marijuana had anything to do with this accident. Simpkins wasn't supposed to have been driving that vehicle but that has nothing to do with how seriously he was injured. What difference does it make that Simpkins had some conversation with a neighbor suggesting that he thought he could do better than working at the Fire Department or that Simpkins had filed a discrimination lawsuit? The issue is the severity of Simpkins' injuries. Is the New York Post planning to investigate every city employee who files a disability claim to try to find something derogatory to publish? Will anyone filing a disability claim seem pure enough to the New York Post?

Appropriations Bill Passed

     In case you haven't heard, Social Security now has an appropriation. The agency is funded through September 30, 2014. What I have seen since the beginning of this fiscal year has been rapidly rising backlogs of hearings to be scheduled and Administrative Law Judge (ALJ) decisions to be issued. I hope something can be done to at least stabilize the situation.

Real People Affected By Same Sex Marriage Policies

    A real person being hurt by Social Security outsourcing to the states the decision on recognizing same sex marriages.

Another Field Office Closure

     The Amherst, NY Social Security field office is to close. Local politicians aren't happy.

Exactly Twenty-Five Additions To Compassionate Allowance List

     Social Security has made 25 additions to its "compassionate allowance" list. Why is it that additions to this list always come in round numbers?  Here's the new list:

1. Angiosarcoma
2. Atypical Teratoid/Rhabdoid Tumor
3. Chronic Idiopathic Intestinal Pseudo Obstruction
4. Coffin-Lowry Syndrome
5. Esthesioneuroblastoma
6. Giant Axonal Neuropathy
7. Hoyeaal-Hreidarsson Syndrome
8. Intracranial Hemangiopericytoma
9. Joubert Syndrome
10. Leptomeningeal Carcinomatosis
11. Liposarcoma- metastatic or recurrent
12. Malignant Ectomesenchymoma
13. Malignant Renal Rhabdoid Tumor
14. Marshall-Smith Syndrome
15. Oligodendroglioma Brain Tumor- Grade III
16. Pallister-Killian Syndrome
17. Progressive Bulbar Palsy
18. Prostate Cancer - Hormone Refractory Disease - or with visceral metastases
19. Revesz Syndrome
20. Seckel Syndrome
21. Sjogren-Larsson Syndrome
22. Small Cell Cancer of the Thymus
23. Soft Tissue Sarcoma- with distant metastases or recurrent
24. X-Linked Lymphoproliferative Disease
25. X-Linked Myotubular Myopathy

The New York City Fraud Allegations

     Here is the description of the alleged disability fraud conspiracy  in New York given by Social Security's Inspector General to the House Social Security Subcommittee today:

Upon retiring from the NYPD [New York Police Department] or FDNY [New York Fire Department] (a few of the defendants are other public employees), retirees would contact Esposito or Minerva, who were known within the New York City law enforcement community as men who could assist individuals in obtaining disability or retirement benefits. Esposito and Minerva were the recruiters, and generally instructed the potential applicants that, in order to obtain SSDI, their claim needed to include a psychiatric illness; and that they could create a convincing version of such an illness based on events that occurred while they were working, such as the September 11, 2001 terrorist attacks .

Once they had a new client reeled in, Esposito and Minerva would connect applicants with Hale, a disability consultant who would schedule the applicant with a psychiatrist or psychologist. Since a qualifying disability must be expected to last for a year or more (or result in death), these applicants would generally undergo treatment for a full year before applying. This medical evidence would be included in the applicant’s SSDI [Social Security Disability Insurance] claim, which would be completed and filed by Hale and by Lavallee , who would be the applicant’s attorney of record.

Esposito instructed applicants to exhibit symptoms of depression, anxiety , and related disorders during doctor visits . He coached them on how to act at an SSA consultative examination: how to dress, how to behave, and how to fail a concentration test. Finally, he coached them on specific claims to make, such as that they couldn’t concentrate or sleep, didn’t go out, and even that they were afraid of planes and large buildings, if they were claiming to be disabled based on their participation in the events following the 9/11 terrorist attacks. ...

Because they were treated for a year before even applying for benefits, their ultimate SSDI award included a lump sum retroactive benefit payment from the alleged disability onset date. These lump sum initial payments were between $10,000 and $50,000 . 

The law currently limits a representative's fee to $6,000 of an applicant’s lump - sum retroactive benefit , and with Lavallee listed as the attorney of record, he would generally receive a payment of $6,000 directly from SSA . However, the a greed-upon “fee” paid to the facilitators by these fraudulent beneficiaries was generally 14 months’ worth of benefits, as much as $45,000. 

To make these payoffs, Esposito instructed applicants to withdraw cash from their banks in small amounts so as not to trigger IRS reporting requirements or any suspicions on the part of their financial institutions. The applicants would then make cash deliveries to Esposito and/or Minerva of an amount equal to 14 months’ worth of benefits, less the $6,000 Lavallee had already received from SSA . Esposito and Minerva would then split the cash with their co-conspirators.

      Maybe it all went down exactly like this but it sounds bizarre to me. A few questions:

• Why were there all these middlemen?
• Why undergo a year of psychiatric treatment before filing the claim? You don't have to do that. The standard advice from reputable Social Security attorneys for claimants with psychiatric problems who are not in treatment is to file the claim now and get in treatment now. Don't delay doing either one.
• Here's the big question: I have a hard enough time persuading clients who unquestionably have psychiatric problems (and these include people with a history of multiple involuntary commitments due to mental illness) to get in treatment and stay in treatment yet the allegation here is that people who did not have psychiatric problems voluntarily submitted to seeing a psychiatrist over the course of a full year and repeatedly making false assertions to the psychiatrist. Would you do that?
• Why would these allegedly fraudulent claimants voluntarily pay vastly inflated attorney fees?

Did Social Security's Own Office Of General Counsel Decline To Prosecute NY Fraud Cases?

     In her written statement at today's House Social Security Subcommittee hearing, Acting Social Security Commissioner Colvin said that "In cases where Federal prosecutors do not take action on fraud cases presented by the OIG [Office of Inspector General], our Office of the General Council agency attorneys may prosecute these cases instead."

     Does this mean that it wasn't just the U.S. Attorney for the Southern District of New York who refused to prosecute the alleged disability fraud in New York City, that OIG had to shop these cases around to the state District Attorney because Social Security's own Office of General Counsel also refused to prosecute the cases?

Get Your Own House In Order

     A quote from the opening statement of Sam Johnson, the Chairman of the House Social Security Subcommittee, at today's hearing:  "The public is fast losing faith in Social Security, and I don’t blame them, because I have too."
     No, Representative Johnson, no matter how much you wish it were the case, the public isn't losing faith in Social Security. Alleged fraud by a few people isn't going to do that. And, no, Representative Johnson isn't losing faith in Social Security because of these allegations. He's crowing over them since he thinks he can use them as ammunition in the pointless Republican fight against Social Security. Republicans have been losing that fight for nearly 80 years now. A few fraud allegations isn't going to turn the tide in that battle.
     It's worth noting that it is a fact that the public is fast losing faith in Congress.

Today's House Social Security Subcommittee Hearing

     Patrick O'Carroll, Social Security's Inspector General, and Carolyn Colvin, Social Security's Acting Commissioner, will be testifying at today's hearing before the House Social Security Subcommittee on the alleged disability fraud ring in New York city. 

     The Chairman of the Subcommittee is planning to call for a review of Social Security's management structure. That may be a good idea but I have no idea what it has to do with the fraud allegations.Such a review would make more sense after a new Commissioner is nominated and confirmed.

     By the way, I hope someone asks the Inspector General why these cases aren't being prosecuted by the U.S. Attorney. I think that subject deserves exploration. It's certainly surprising and raises questions about the strength of these criminal cases.

When Will New Commissioner Be Nominated?

     The President is to make a "personnel announcement" this afternoon. It could be the nomination of a new Commissioner of Social Security but I wouldn't bet on it. There's been no sign that a new Commissioner will be nominated anytime soon. 

     Social Security has been operating with an Acting Commissioner now for about 11 months. It's time for the President to act.

Target Security Breach Affecting Social Security Recipients

     From WVEC:

The Target security breach may just be the tip of the iceberg. It now appears it's also affecting those who collect Social Security.

When you qualify for Social Security you receive a pre-loaded debit card [if you don't already have an account of your own]. It allows users to pay bills, buy groceries and withdraw cash.

If you used your Social Security US Direct Express debit card during the Target security breach, expect a call from your bank. That call will likely inform you that a new card is on the way. But in that 7-10 day period it takes to receive that new card, some accounts may be frozen.

Many of these card holders rely solely on the money they collect from Social Security so
not being able to access that money could pose a hardship.

     Query: Will the banks notify Social Security or the Treasury that the account numbers of these individuals have been changed? I'll guess that the answer is no. Will the banks warn recipients of government benefits that they need to notify the government that their account number has been changed? Again, I'll guess that the answer is no. If no one notifies the government, are the banks going to bounce Social Security payments back to the Treasury? I'll guess yes to this question. I hope my guesses are wrong because if my guesses are correct this will be a real mess.

Unemployment Offset Stalled -- For Now

     At the moment the bill to extend emergency unemployment benefits is stalled in the Senate. Even if the Senate could pass the bill, it faces an uncertain future in the House of Representatives. The Senate bill included a new offset that would reduce Disability Insurance Benefits under Title II of the Social Security Act by any unemployment benefits received. Even if the bill to extend emergency unemployment benefits cannot be revived, there's a good chance that the unemployment offset will come to Social Security eventually. It would save only a small amount of money, it would be difficult to implement and its fairness is debatable but the proposal has great superficial appeal and few opponents.

Appropriation Coming Soon -- Expect Service To Get Worse

     You may have heard that there was a "budget deal" in December and thought that it took care of the Social Security Administration. If so, like the vast majority of Americans, you don't understand the way Washington works. A "budget" just sets the top line numbers, that is the total amount to be appropriated and the share going to broad categories of spending. It's the appropriations bills that actually give agencies money to spend. The federal fiscal year began on October 1, 2013. Since the government shutdown ended, agencies have only been permitted to spend money under a "Continuing Resolution", knows as a "CR.". Under the CR, agencies can only spend at the rate they were spending in the prior fiscal year.
     It looks like we'll get something called the Consolidated Appropriations Act, 2014 passed by Congress and signed by the President by the weekend. Here's the House Appropriations Committee's summary of the Social Security Administration provisions of this bill:

Social Security Administration (SSA) – The bill includes $11. 7 billion to administer SSA activities, which is a $265 million increase above the fiscal year 2013 enacted level. This level is sufficient to allow the SSA to continue prompt processing of Social Security checks and claims , and will help ensure that all eligible recipients get their benefits on time and in the proper amount. Within the total, the bill devotes $1. 2 billion to program integrity activities to ensure that disability and other benefits are properly paid.

     Social Security had asked for $12.3 billion. The $1.2 billion for program integrity is the same amount that Social Security had asked for. Even the amount in the President's recommended budget, which was somewhat less than what Social Security had asked for, assumes continued deterioration of service at Social Security. Here's some data from the President's budget proposal:

Key Performance Targets:

• Initial Disability Claims Completed (thousands) FY 2012 3,207, FY 2013 2,970, FY 2014 2,851;

• Reconsiderations Completed (thousands) FY 2012 809, FY 2013 803, FY 2014 725;

• SSA Hearings Completed (thousands) FY 2012 820, FY 2013 836, FY 2014 807;

• Average Speed of Answer (ASA) [on Social Security's 800 number] (seconds) FY 2012 294, FY 2013 455, FY 2014 482

     Since the amount in the appropriation bill to be passed is significantly less than the President's proposal, we should expect a significantly greater degradation in service.

     I find it frustrating that so little attention is paid to Social Security's appropriation while enormous attention is paid to the chained CPI debate, if you can call it that. I wish the President had never talked about chained CPI but there isn't now nor was there ever the slightest chance that chained CPI would come to pass. However, a dramatic decline in public service at Social Security that is actually happening draws almost no national attention. Appropriations must seem so abstract if you don't personally deal with Social Security's operating components.

Challenges At Social Security

     From a report by Social Security's Office of Inspector General on the agency's Major Management and Performance Challenges:

While SSA made progress in FY 2013 in addressing these challenges, some improvements are needed.

• While SSA had a plan to eliminate the hearings backlog by 2013, the number of pending cases has increased, and the average processing time remains above the 270- day goal
• SSA needs to address millions of initial disability and reconsideration claims, as it still has backlogs of initial disability claims and continuing disability reviews.
• SSA is one of the Federal agencies with a high amount of improper payments. SSA will need to take additional actions related to reducing improper payments. ...

The Predictable Response

     Rupert Murdock owned media rush to claim that fraud allegations in New York City are proof of deep seated problems with the Social Security disability programs.

     In my mind, bank robberies aren't a sign that we need to shut down our banks. Fraud on Wall Street isn't a sign that we need to shut down our financial markets. Crime is crime. You take reasonable steps to prevent it. When it happens anyway, you punish it. You don't use it as an excuse to shut down vital institutions relied upon by the public.
     And, by the way, everyone needs to remember that no one has been convicted. Anyone writing about these charges needs to use the word "alleged." It's not simply a matter of fairness to those accused. It's a shame when someone who has been convicted gets off on appeal because hostile media coverage made a fair trial impossible.

CCD Opposes Unemployment Offset

     The Coalition for Citizens with Disabilities (CCD), the major umbrella organizations lobbying on disability issues, has come out in opposition to reducing Social Security disability  benefits on account of the receipt of unemployment benefits.

Don't Get Fooled

     From R.J. Eskow:

There is a highly funded campaign to cut Social Security and Medicare while distracting us from the true sources of our multi-generational retirement crisis. This narrative can be traced back to the work of conservative billionaire Peter "Pete" Peterson and his foundation, who sent minions like Alan Simpson out to stigmatize so-called "greedy geezers" for our country's retirement woes.

The Peterson crowd has worked very hard to convince Millennials that the older generation has robbed them of retirement security, a strategy they've pursued with false-front organizations like "The Can Kicks Back." A number of lazy journalists have bought into their narrative without consulting experts in the field ...

The Peterson cohort's goal was to convince Millennials that the best way to get even with their elders was by cutting Social Security -- for themselves. (Most benefit-cut proposals exempt those who are about to retire, for political reasons.) It's astonishing that they expected Millennials to fall for it -- which, according to polls they haven't. But then, it's equally astonishing how many pundits and politicians have fallen for it.

Getting Nuts

     This is getting nuts. Eric Holder, the U.S. Attorney General, has announced that the United States government will recognize, for purposes of federal benefits, presumably including Social Security benefits, same sex marriages performed in Utah during the brief period of time between the date that a U.S. District Court issued an order declaring Utah's prohibition of same sex marriages unconstitutional and the date that the Supreme Court granted a stay of that order. On the other hand, Social Security will not recognize the same sex marriages of Utah residents if those marriages were solemnized outside Utah! Does that make sense to anyone?

Offsetting Disability Benefits For Unemployment Benefits

     Michael Hiltzik at the Los Angeles Times doesn't like the idea of reducing Social Security disability benefits because of the receipt of unemployment insurance benefits. As he points out, this would only estimated to save $100 million a year. That estimate almost certainly doesn't include the cost of implementation. The cost of implementing new Social Security provisions is never taken into consideration. There's also the problem of state laws that run an offset in the opposite direction potentially subjecting a claimant to double offsetting.

Social Security Subcommittee Schedules Hearing On Alleged Fraud

     The House Social Security Subcommittee has scheduled a hearing for January 16 on the alleged Social Security disability fraud in New York.

And You Thought That Sequestration Was Almost Over

     From Politico:

Senate Democrats are coming together on a proposal that would pay for a revival of emergency unemployment benefits through the fall by extending the sequester for one year, senior Democratic aides said.

Republicans are demanding that any extension of unemployment insurance be paid for and, in turn, Democrats are pitching an extension of the sequester’s mandatory savings through 2024. Along with a crackdown on people who draw both disability and unemployment benefits, the proposal would raise roughly $18 billion and fund an extension of an expired unemployment benefits through November.

     Why in the name of God would Democrats be pushing for sequestration through 2024?

OIG Recommending New Tool For Evaluating Hearing Offices And ALJs

     From Analysis of Hearing Offices Using Key Risk Factors, a report from Social Security's Office of Inspector General (OIG):

We developed a model that measured variances among multiple risk factors . The model analyzes performance and outcome data among ALJs in the same office and uses five risk factors: (1) ALJ allowance rates, (2) ALJ dispositions, (3) ALJ on-the- record (OTR) decision rates, (4) ALJ dismissal rates, and (5) ALJ average processing time. While the Agency’s monitoring process identified a number of potential workload problems at the time of our review , such as ALJ -specific issues and productivity declines, our model offers another method to evaluate the performance of individual hearing offices. 

Using our model and FY 2012 workload data, we identified hearing offices with the highest and lowest variance score s. We believe o utlier hearing office s provide ODAR managers with indications of potential processing issues (high-variance) as well as potential best practices (low - variance). We fou nd 4 regions had 20 percent or more of their hearing offices among the 25 high- variance offices , and 4 regions had 20 percent or more of their hearing offices among the 25 low- variance offices. In discussions with ODAR regional managers, we learned that they focused their oversight on individual ALJ performance rather than variances among ALJs in hearing office s as we do in our model. 

Finally, our review of the hearing offices with the 10 highest variance scores identified an outlier ALJ who had a significant number of dispositions and OTR decisions with 1 claimant representative. We referred this case to ODAR management for additional review.

     No, they don't explain their model all that well nor do they give the variance score for any office, other than indicating that the Huntington, WV office had high variance scores in past years. The OIG model also identified the Huntington ALJ who was the subject of media attention as being an outlier. Of course, the model was probably tailored so that it would point to Huntington and that particular ALJ.

More Info On Charges Against Retired Police Officers And Fire Fighters

     The Daily Beast gives a little detail on the accusations against the retired New York City police officers and fire fighters who were arrested this week on charges of defrauding the Social Security Administration. 

     I keep wondering why the U.S. Attorney for the Southern District of New York isn't bringing federal charges in these cases. All these charges have been brought in state court. That's very odd. The U.S. Attorney must have declined to bring charges. How strong are these cases? Will they end up being plea bargained to misdemeanors?

102 To Be Arrested In Fraud Investigation

     The Wall Street Journal is reporting that arrests have begun of 102 people who are alleged to have engaged in fraud to obtain Social Security disability benefits. According to the article, those who have been or will be arrested include former New York city fire fighters and police officers. Also, one lawyer, one disability consultant, and two "recruiters" have been or will be arrested.
     Update: A New York Times article has more information on the arrests. Apparently, Facebook pages and other online postings are a major part of the evidence against those being arrested. The attorney who is being charged is Raymond Lavallee, who is 83 years old. Some of the charges being filed are federal charges and some are state charges.
     Further Update: The New York Times has posted the indictment in the case. Somebody will have to explain this to me. The defendants are charged with defrauding Social Security but the indictments were under New York state law and the charges are to be heard by a New York state court. I've never heard of this being done.

Vallas Named to Forbes "30 Under 30" List

     Forbes Magazine has included Rebecca Vallas, the Deputy Director of Government Affairs for the National Organization of Social Security Claimants Representatives (NOSSCR), in its "30 Under 30" list of the brightest stars under the age of 30 in 15 different fields.

Good News On Disability Trust Fund

     For a few months I have been saying that things are looking up for the Social Security's Disability Insurance Trust Fund, that it won't be running out of money in 2016. It will be several months before the Trustees' report comes out but the Congressional Budget Office (CBO) has now issued its projection that the Disability Trust Fund will have enough money until 2017. 

     Big deal, you say, that's just one year. It's still running out of money. However, in political terms the difference between 2016 and 2017 is significant. There's a long way to go until 2017 but Democratic control of the White House, House of Representatives and Senate is a realistic possibility in 2017.

     The Disability Trust Fund projections may keep getting better as the economy improves and it becomes more obvious that we've already passed the peak of baby boomer disability claims. The gap between the Disability Trust Fund running out of money in 2017 and never running out of money isn't all that great. The Trustees' optimistic projection is that the Disability Trust Fund never runs out of money. Events are moving the Disability Trust Fund in that direction. The Disability Trust Fund exhaustion date may keep moving into the future. Even if it is temporarily exhausted, the gap keeps narrowing. Solving the temporary problem of Disability Trust Fund exhaustion by allowing borrowing between Social Security's trust funds becomes a more likely solution.

Does This Explain Some Of The Increase In Disability Claims?

     The abstract of a study by Philip Armour of Cornell University:

This paper uses survey data matched to administrative records to measure the effect on Disability Insurance [DI] application behavior of a natural experiment in the provision of Social Security benefit information. I find that receipt of the Social Security Statement [Personal Earnings and Benefit Estimate Statement or PEBES], a document gradually introduced in the 1990s which contained personalized information on DI insurance-status and potential benefit, had a positive, substantial, and statistically significant effect on DI application rates of the Health and Retirement Study sample. This increased likelihood of application by 0.84 of a percentage point per two-year period, which is a 62% increase over the base rate. This overall effect was driven by a large increase in the rate of application among those reporting a work-limiting condition and who were previously not employed. The non-work-limited population experienced a small decrease in their DI application rates, suggesting that provision of the Statement increased self-sorting efficiency among potential applicants. Furthermore, my analysis shows no evidence of applicants merely "shifting forward" their DI application after Statement receipt; instead, the estimated increase appears to be new applicants. In the absence of these new applicants, the 32% growth rate of the per-capita DI rolls from 1995-2004 would have been approximately 25%. These results provide a novel explanation for a large portion of the marked rise in DI rolls since the 1990s as well as indicate the importance of the information environment in social program application decisions more broadly.

And These Are The 900 Americans Who Really Think Social Security Benefits Ought To Be Cut

     900 Americans are already finished with paying Social Security taxes in 2014.

Mass Social Security Scam In New York City??

     The New York Daily News is reporting, with no detail, that "More than 100 suspected scammers — most of them retired city cops and firefighters — could be arrested as soon as next week for making bogus claims of stress-related illnesses to bilk Social Security for big bucks ..." Maybe this will happen but note the use of the word "could" in that sentence. I think that most newspapers would not publish a sentence like that.

Social Security Headquarters Opening Two Hours Late

     Due to weather conditions in the Baltimore area, Social Security's headquarters are opening two hours late today.

Agency Financial Report For FY 2013

     The Social Security Administration has issued its Financial Report for Fiscal Year 2013. The report identifies agency goals that have been met or not met. The most glaring unmet goal is wait time for a hearing before a Social Security Administrative Law Judge (ALJ). That went up substantially in 2013.

Big Surprise

     The user fee assessed on attorneys who represent Social Security claimants will remain at 6.3% in 2014.

Happy New Year