Retirement Inequality

     From a study by the Center for Effective Government:

Company-sponsored retirement assets of just 100 CEOs are equal to those of more than 40 percent of American families. 

• The 100 largest CEO retirement funds are worth a combined $4.9 billion. That’s equal to the entire retirement account savings of 41 percent of American families (more than 50 million families and more than 116 million people).
• On average, the CEOs’ nest eggs are worth more than $49.3 million, enough to generate a $277,686 monthly retirement check for the rest of their lives. 
• David Novak of YUM Brands had the largest retirement nest egg in the Fortune 500 in 2014, with $234 million, while hundreds of thousands of his Taco Bell, Pizza Hut, and KFC employees have no company retirement assets whatsoever. ...
• Fortune 500 CEOs saved $78 million on their 2014 tax bills by putting $197 million more in these tax-deferred accounts than they could have if they were subject to the same rules as other workers. These special accounts grow tax - free until the executives retire and begin to withdraw the funds. 
• The Fortune 500 CEOs had more in their company-sponsored deferred compensation accounts than 53.8 percent of American families had in their deferred compensation accounts. ...

New Fraud Provision In The Grand Deal

     Let's take a closer look at some of the Social Security portions of the grand deal which is likely to be approved by Congress in the next few days. I'll start out with the fraud provision that I said earlier looked to me as if it makes it a crime to submit medical evidence in support of a disability claim. I didn't mean to suggest that was going to happen. I know this isn't the intent. This looks like a drafting error to me. Here's the statute involved as it will read after this is enacted, with the new portion bolded:

42 U.S.C. §1011 (a)  In general Whoever—

     (1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in an application for benefits under this subchapter; 

     (2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining any right to the benefits; 

     (3) having knowledge of the occurrence of any event affecting—

          (A) his or her initial or continued right to the benefits; or

         (B) the initial or continued right to the benefits of any other individual in whose behalf he or she has applied for or is receiving the benefit,

conceals or fails to disclose the event with an intent fraudulently to secure the benefit either in a greater amount or quantity than is due or when no such benefit is authorized; or  

     (4) having made application to receive any such benefit for the use and benefit of another and having received it, knowingly and willfully converts the benefit or any part thereof to a use other than for the use and benefit of the other individual, shall be fined under title 18, imprisoned not more than 5 years, or both; or

      (5) conspires to commit any offense described in any of paragraphs (1) through (3) except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.’’.

     This doesn't make sense. The new language seems to make it illegal to submit evidence without specifying that it's only illegal to knowingly submit false or misleading evidence which was almost certainly the intent. I don't think anyone is going to be prosecuted under this even if they're guilty as sin because the language is so confusing.

     The right wing extremists in the Freedom Caucus have been demanding "regular order" in the House of Representatives, meaning that they want bills to progress from Subcommittee to Committee to the House floor with members having the opportunity to carefully study the bills and offer amendments. I agree with them on this if nothing else. Regular order helps prevent this sort of problem. Members of Congress, their staffs or outside individuals have a chance to study a bill and point out problems, including drafting errors. The problems can be sorted out before a bill becomes law. However, I've seen plenty of problems like this one in legislation signed by the President even when there is "regular order." Such problems are typically cleaned up with technical corrections acts but the Congressional sclerosis has gotten so bad that it's now difficult to even pass technical corrections acts.

More On Contracting For Rep Payee Reviews

     I had posted earlier today on Social Security's notice seeking a contractor to handle representative payee reviews. I received this e-mail in response:

Dear Mr. Hall,

We read your blog post Contractor Sought To Handle Representative Payee Reviews and agree with your assessment.

In 2009, the National Disability Rights Network (NDRN) and our members, the Protection and Advocacy System (P&A), became involved with representative payee reviews following the discovery of horrific abuse and neglect of thirty-two men with disabilities by Henry's Turnkey Service, an organizational representative payee in Iowa who also employed the beneficiaries.

Following the discovery of the abuse and financial exploitation by Henry's, SSA moved very quickly to determine whether other organizational payees were employing and exploiting the beneficiaries they were appointed to serve. As part of this effort, SSA turned to NDRN and the P&A agencies to conduct reviews of organizational representative payees who also employ beneficiaries.

They chose us because P&A agencies are a nationwide network of legal services agencies who provide services specifically to people with disabilities. Our mission is to advocate for and protect the basic rights of individuals with a wide range of disabilities. The services that P&A agencies are created to provide squarely positioned us to carry out SSA s representative payee reviews and we have been awarded the reviews every year since 2009.

Unfortunately, SSA's recent announcement that the Representative Payee monitoring project going forward would only be performed by a small business forecloses the ability of the NDRN and the P&A agencies from competing to perform this work in the future because NDRN is a nonprofit organization and cannot compete for a small business set aside contract.

SSA has already spent extensive resources to clear 261 P&A monitors in every state, the District of Columbia and the Native American P&A. P&A agencies have done 3,415 reviews which included interviews with 15,974 beneficiaries. It is baffling to us why now they would choose to exclude us in favor of an untested small business who may have no experience working with the disability population. Beneficiaries are all across the country and sometimes in different states than their representative payee.  Is a small business going to be a capable monitor in this nationwide environment?

Your observation that  this is the sort of thing best done by experienced personnel who are located in the communities where the representative payees live  is exactly correct. And being a nationwide network of disability advocates, we are those experienced personnel who have been doing it with great success.

Of the reviews that have already taken place, 84% of the NDRN and P&A identified reviews discovered problems, while only 65% of the other SSA initiated reviews found problems. This is a clear indication to us that our knowledge and expertise on disability related issues are necessary for the representative payee project to be successful in protecting beneficiaries. 

Excluding NDRN from applying for this contract would be a grave disservice to an already vulnerable population.

Please feel free to use any or all parts of this letter on your blog.

Sincerely,

Curt Decker

Executive Director

National Disability Rights Network

Gruber On Backlogs

     Terrie Gruber was recently appointed to head Social Security's Office of Disability Adjudication and Review (ODAR). The agency's Administrative Law Judges (ALJs) work at ODAR. Gruber spoke today at the National Organization of Social Security Claimants Representatives (NOSSCR) conference in Denver. I am not attending this conference but I'm told by someone who is attending that Gruber told those attending the NOSSCR meeting that ODAR would begin to reduce its hearing backlog in Fiscal Year (FY) 2017 which begins on October 1, 2016. She thought the agency could eliminate the hearing backlog by FY 2020. She said "We can't hire our way out of this."

     First, ODAR could definitely hire its way out of the backlog if it were given enough money. It's just that there's no prospect of this happening. Second, it would be a big step forward if ODAR could just keep the backlog from growing in the current FY. I don't know how likely this is. ODAR would need a lot of money for overtime and it would need permission to aggressively use the Senior Attorney program and to encourage ALJs to issue on the record reversals. They would also need the cooperation of other components of the agency for a strong re-recon program. I'm not going to explain Senior Attorney, re-recon and on the record reversals here. Let's just say that these are ways of diverting strong cases for special reviews which can result in the strongest claims being approved quickly. To do this, the agency will have to get over its fear of being accused of paying down the backlog. Gruber has said things to the Washington Post indicating the agency is getting past this concern but we'll have to see what actually happens on the ground. Finally, talk of eliminating the backlog by 2020 is almost pathetic. I'm sure that there's plenty of desire to do so. Given the means, I'm sure the agency will do so. It's just that achieving this goal will take plenty of hiring which takes money and no one can fully predict the agency's operating budget for the current FY much less its operating budget for FY 2020.

Contractor Sought To Handle Representative Payee Reviews

     Social Security is seeking a contractor to handle representative payee reviews. Representative payees handle Social Security benefits for claimants who lack the mental capacity to do so. Sadly, some representative payees fail to do their jobs properly or simply steal from the people they are supposed to be helping. Having a contractor handle representative payee reviews would be new, wouldn't it? 

     My gut feeling is that this is questionable, that these reviews aren't rote work or a specialized or technical service which should be contracted out. This is the sort of thing best done by experienced personnel who are located in the communities where the representative payees live. What do you think?

How Republican Congressional Leaders Deal With Their Rank And File

     Monday night there were press reports that the budget deal recently being announced would include dramatic changes in Social Security disability. There would be $168 billion in cuts which would be around a 10% cut. Actually, the cuts were tiny. What happened? From what I've been able to piece together the $168 billion figure came from a fact sheet that Republican Congressional leaders released to their members. Conventionally, in preparing this sort of document, increases or decreases in spending are stated for a ten year time period. About $150 billion a year are paid in Social Security Disability Insurance Benefits. A $168 billion cut over ten years would be a dramatic 10% cut in benefits. However, the $168 billion wasn't for ten years. It was for 75 years! A 75 year time frame is occasionally used in discussing Social Security's long term financing but I don't think I've ever seen such a time frame used in discussing budgets. Republican leaders released only the fact sheet until late Monday night when the actual bill was posted. I would call the Republican fact sheet deliberately misleading.

     There may have been another deception. The bill awaiting Congressional approval transfers part of the FICA tax revenues from the Retirement and Survivors Trust Fund to the Disability Trust Fund for only three years. That means the Disability Trust Fund problems are solved for only three years, until 2019, when Republicans get another crack at the program, right? Take a look at today's New York Times. It says that the Disability Trust Fund problem is solved until 2022. How can that be? The bill will increase the portion of FICA that goes to the Disability Trust Fund from 1.8% to 2.37% for only three years. However, it appears that this reallocation for only three years will be enough to solve the problem for six years. If they had been trying to solve the problem for only three years, the reallocation would have been smaller. Of course, it would be better to solve the problem for the indefinite future but six years is a lot better than three years. Maybe there was some other reason for drafting the bill like this but it looks to me like Congressional Republican leaders wanted to make it appear that they'd get another crack at Social Security disability sooner than they will.

Statement From Social Security Works

     A statement from Social Security Works, a major advocacy group:

“Last night, the Republican leadership agreed to release their hostages: the need to raise the debt limit, the need to keep the government operating, and the need to ensure that all Social Security benefits can continue to be paid in full and on time beyond 2016.  When hostage takers release their hostages, we are, of course, relieved that the hostages are no longer in harm’s way, but this is nothing to celebrate.  That the ransom isn’t steeper is also not something to celebrate.

Among the ransom is a diversion of Social Security resources towards virtually nonexistent fraud.  Those provisions will likely require workers with disabilities to wait longer to receive their earned benefits and may prevent some from receiving their earned benefits completely.  That is wrong.  The legislation has some good provisions, along with the ransom.  It does ensure that Medicare beneficiaries will not experience drastically large premium increases.  It also closes a loophole that was introduced in the law relatively recently that allows wealthier Americans to game the system by claiming extra benefits inconsistent with the goals of the program.  Though some provisions are positive, Social Security legislation, as a matter of principle, should go through regular order, in the light of day.

If that were done, Social Security would be expanded. As the overwhelming majority of Americans recognize, Social Security’s one shortcoming is that its benefits are too low. Congress should follow the will of the people by expanding those modest but vital benefits and restore the program to long range actuarial balance by requiring the wealthiest among us to pay their fair share.”

The Actual Language From The Big Deal -- Doesn't Look Dramatic But Hard To Understand

     The reporting from various media sources last night on the Social Security provisions of the deal between the White House and Congressional leaders varied from confused to inadequate to completely wrong. We have the actual bill now. Here is some of the actual text of the bill with my interpretation, or maybe I should say questions, in brackets and bolded:

• Not later than October 1, 2022, the Commissioner of Social Security shall take any necessary actions, subject to the availability of appropriations, to ensure that cooperative disability investigations units have been established, in areas where there is co-operation with local law enforcement agencies, that would cover each of the 50 States, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. [Congress demands that Social Security extend cooperative disability reviews to every state and even to the Northern Mariana Islands but limits this to the extent that Congress appropriates money, dramatically undercutting the demand]
  
• Section 3 811(a) of such Act (42 U.S.C. 1011(a)) ... is further amended by striking the period at the end and inserting ‘‘, except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.’’. [I don't understand. It's now a crime to submit medical evidence in support of a disability claim? This doesn't make sense to me.]
• Section 1140(b) of such Act (42 U.S.C. 15 1320b-10(b)) is amended by inserting after the second sentence the following: ‘‘In the case of any items referred to in subsection (a)(1) consisting of Internet or other electronic communications, each dissemination, viewing, or accessing of such a communication which contains one or more words, letters, symbols, or emblems in violation of subsection (a) shall represent a separate violation’’. [Even viewing an inappropriately used Social Security symbol is a crime?]
  
• The Commissioner shall carry out a demonstration project ...[A]ny such benefit otherwise payable to the individual for such month (other than a benefit payable for any month prior to the 1st month beginning after the date on which the individual’s entitlement to such benefit is determined) shall be reduced by $1 for each $2 by which the individual’s earnings derived from services paid during such month exceeds an amount equal to the individual’s impairment-related work expenses for such month [OK, we're only talking about a benefits offset demonstration project.] ... For purposes of paragraph (2)(A) and except as provided in subparagraph (C), the amount of an individual’s impairment-related work expenses for a month is deemed to be the minimum threshold amount. [This sounds like a stringent offset. Any earnings over impairment-related work expenses are subject to the offset. That would strongly discourage work by Social Security disability recipients]... In this paragraph, the term ‘minimum threshold amount’ means an amount, to be determined by the Commissioner, which shall not exceed the amount sufficient to demonstrate that an individual has rendered services in a month, as determined by the Commissioner under section 222(c)(4)(A). [What are you saying here? There is a threshold amount beyond the impairment-related work expenses? I don't understand what you're trying to say.] The Commissioner may test multiple minimum threshold amounts.[So lots of thresholds will be tried. Good.] ... An individual who has authorized the Commissioner of Social Security to obtain records from a payroll data provider under subsection (c) shall not be subject to a penalty under section 1129A for any omission or error with respect to such individual’s wages as reported by the payroll data provider.’’.  [You're going to enforce the benefit offset by getting electronic records from employers and you won't punish the claimant if these records are mistaken. Sounds fine if these electronic records are accurate. Are they? I don't think my firm is reporting wages to anyone other than the IRS. What about self-employment?]
  
• If an individual is eligible for a wife’s or husband’s insurance benefit (except in the case of eligibility pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), in any month for which the individual is entitled to an old-age insurance benefit, such individual shall be deemed to have filed an application for wife’s or husband’s insurance benefits for such month. ... If an individual is eligible (but for section 202(k)(4)) for an old-age insurance benefit in any month for which the individual is entitled to a wife’s or husband’s insurance benefit (except in the case of entitlement pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), such individual shall be deemed to have filed an application for old-age insurance benefits. [I think they're ending file and suspend.]
  
• An initial determination under subsection (a), (c), (g), or (i) shall not be made until the Commissioner of Social Security has made every reasonable effort to ensure—  ‘‘(1) in any case where there is evidence which indicates the existence of a mental impairment, that a qualified psychiatrist or psychologist has completed the medical portion of the case review and any applicable residual functional capacity assessment; and ‘‘(2) in any case where there is evidence which indicates the existence of a physical impairment, that a qualified physician has completed the medical portion of the case review and any applicable residual functional capacity assessment.’’. [This ends the Single Decision-Maker project. This modestly slows down disability determinations.]
  
• Section 201(b)(1) of the Social Security Act (42 U.S.C. 401(b)(1)) is amended by striking ‘‘and (R) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and so reported’’ and inserting ‘‘(R) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and before January 1, 2016, and so reported, (S) 2.37 per centum of the wages (as so defined) paid after December 31, 2015, and before January 1, 10 2019, and so reported, and (T) 1.80 per centum of  the wages (as so defined) paid after December 31, 12 2018, and so reported,’’. [This would end the Disability Trust Fund problem but only for three years, at which point we may have to go through the same "crisis" again.]
  
• The Commissioner of Social Security shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the number of work-related continuing disability reviews conducted each year to determine whether earnings derived from services demonstrate an individual’s ability to engage in substantial gainful activity. [Is work supposed to trigger a continuing disability review, that is, if you do any work, is Social Security supposed to review your medical records to see if you're still disabled? If that were the case it would be a big deterrent to any attempt to return to work. I think, or maybe hope, that they are just talking about using employment records to determine whether a beneficiary's status under the work incentives.] 
  
• Notwithstanding any other provision of law, the Office of Personnel Management shall, upon request of the Commissioner of Social Security, expeditiously administer a sufficient number of competitive examinations, as determined by the Commissioner, for the purpose of identifying an adequate number of candidates to be appointed as Administrative Law Judges under section 3105 of title 5, United States Code. The first such examination shall take place not later than April 1, 2016 and other examinations shall take place at such time or times requested by the Commissioner, but not later than December 31, 2022. Such examinations shall proceed even if one or more individuals who took a prior examination have appealed an adverse determination and one or more 1 of such appeals have not concluded ...[This is strong pressure on the Office of Personnel Management to assure that enough Administrative Law Judge candidates are available to be hired by Social Security. Why do I suspect that this problem won't go away?]
  

Disability Trust Fund Issue May Be Near Resolution

     Many news sources are reporting that a massive deal is underway to clear out many issues remaining before the Congress. The most imminent is the debt ceiling. CNN is reporting that the deal will include provisions to extend the Social Security Disability Trust Fund. The New York Times reports that this will involve unspecified cuts in Social Security disability.

     Update: The Associated Press says the deal will involve a temporary reallocation of FICA revenues but "changes to the disability program to fight fraud and to encourage disabled workers to return to work" that would presumably be permanent. We could be revisiting this in the not too distant future.

     Update: CBS News says the deal would include the end of the Single Decision Maker (SDM)program for Social Security disability claims. This isa small change in the big picture but it makes disability determination even slower.

     Update: The New York Times is reporting:

... [T]he Social Security Disability Insurance program would be amended so that a medical exam now required in 30 states before applicants could qualify for benefits would be required in all 50 states. That change was projected to save the government $5 billion. ...

     I haven't the slightest idea what they're talking about.

     Update: From The Hill:

The deal would ... create a "flat benefit" for disability recipients, which would be tied to the federal poverty line rather than an individual's own savings.  The idea of the flat benefit has been championed by budget experts at the Heritage Foundation. 

"This would be the first significant reform to Social Security since 1983, and would result in $168 billion long-term savings," according to a source familiar with the talks.

     Update: George Zornick at The Nation has tweeted that he is hearing that there will not be large or across the board in Social Security disability but that the appeal process may get longer and there may be some demonstration of a benefit offset for disability recipients with earnings.

      To put it mildly, we're getting conflicting reports. Reporters are getting incomplete information and don't understand much of what they're hearing.

     Update: Multiple media reports say the budget deal would save $168 billion in Social Security disability. Budget savings are generally reported for a ten year period. For purposes of comparison, Social Security is paying out about $150 billion a year. You wouldn't get that kind of savings without massive across the board cuts.

      Update: Time magazine reporting budget deal will involve a change in the way in which Social Security disability benefits are computed.

NADE Members Hear Of Social Securty's Plans For DOT Replacement

     The National Association of Disability Examiners (NADE), an organization of personnel involved in making disability determinations for Social Security, has released its most recent newsletter, focusing on NADE's recent conference in Portland. 

     NADE members attending the conference heard a presentation on Social Security's effort to create a new occupational information system to replace the outdated Dictionary of Occupational Titles (DOT) used in disability determinations. There are a couple of items of interest from the write-up. The number of occupations listed will go down from the DOT's 12,000 to 1,000, which means that each job title will be even more of a composite. Composite jobs are broader and can only be described in more amorphous ways. Training on the new occupational information system is supposed to begin sometime in 2016.

Disability And Survivor Benefits Matter A Lot

Social Security Planning Telecommunication System Changes

     From a recent announcement, it appears that the Social Security Administration is in the early stages of planning major telecommunications system changes. Huge contracts will be awarded.

Sanitation Problems Close Social Security Cafeteria

     From the Baltimore Sun:

Officials at the Woodlawn-based Social Security Administration took the unusual step Thursday of closing its cafeteria facilities after an internal inspection found problematic "housekeeping conditions," a spokesman said. ...

The agency did not provide detail of what was found, other than to note the issues were "sanitation-related." The agency said an inspection found conditions that "do not meet required standards."...

A spokesman for Brock & Company, the Pennsylvania-based food services vendor for the agency, said in a statement that "sanitation is a top priority at all our locations and we are working with our partner client [SSA] in addressing the housekeeping and facilities issues that were discovered during today's inspection."

     Update: The cafeteria reopens Monday.

Online Appeals System Problems

     I'm hearing many complaints about Social Security's system for filing appeals online. Attorneys are required to use the system but it's unreliable. Much of the time when you try to access the system online you get a message that "This page does not exist."

Comp Cuts Causing Increase In Social Security Disablity Costs?

     The Center for Economic and Policy Research has done a study on Rising Disability Payments: Are Cuts to Workers' Compensation Part of the Story? The charts below, extracted from the report, suggest that the answer is "yes."

Frye Out As President Of AALJ

     Randall Frye of Charlotte has been the president of the Association of Administrative Law Judges (AALJ), the labor union that represents Social Security's Administrative Law Judges for some time. I understand that he has left that position. He is resuming his regular duties as an ALJ. I do not know the circumstances of Frye's departure from his position at AALJ.

Workers Comp Changes Costing Social Security

     From National Public Radio (emphasis added):

Ten ranking Democrats on key Senate and House committees are urging the Labor Department to respond to a "pattern of detrimental changes in state workers' compensation laws" that have reduced protections and benefits for injured workers over the past decade. ...

The letter also referred to NPR/ProPublica stories last week that detailed an emerging trend that permits employers to dump out of state-regulated workers' comp programs, write their own injury plans and limit benefits on their own. ...

The Center for Economic and Policy Research is releasing a study Wednesday that estimates that more than 20 percent of the increase in federal disability cases is due to cuts in workers' comp programs. ...

A 2007 study by J. Paul Leigh, a health economist at the University of California, Davis, estimated that workplace injuries not covered by workers' comp cost government programs about $30 billion a year.

Federal intervention may also come as the result of the "opt out" movement in Texas and Oklahoma, in which employers shun heavily-regulated workers' comp and are permitted to write and administer their own largely-unregulated workplace injury plans. South Carolina and Tennessee are considering opt-out laws now and proponents are aiming for a dozen states by the end of the decade. ...

Which Candidate Is More Interested In Protecting Social Security?

     From a New York Times  comparison of the effects of the Social Security plans of two Presidential candidates:

     Elements of the two plans:

• Christie would raise early retirement age from 62 to 64 and full retirement age from 67 to 69. Sanders wouldn't change either date.
• Christie would eliminate the FICA tax for those 62 and older. Sanders would apply the FICA tax to those with incomes over $250,000, in addition to the current FICA tax structure that applies FICA to incomes up to $118,500.
• Christie would reduce Social Security benefits to those with an income over $80,000 and eliminate all benefits for those with an income over $200,000. Sanders would increase benefits for all recipients, with the amount of the increase being between 2% and 9% depending upon work history. He would also add a special minimum benefit.
• Christie would reduce the Cost of Living Adjustment (COLA). Sanders would increase COLA.

Even WSJ Says COLA Unfair To Retirees

     Even the Wall Street Journal says that the formula used to compute Social Security's Cost Of Living Adjustment (COLA) is unfair to retirees.

Appeals Council To Stop Returning New Evidence

     From a Notice of Proposed Rule-Making (NPRM) that Social Security will publish in the Federal Register tomorrow: 

We propose to amend our regulations by revising our rules regarding the return of evidence at the Appeals Council (AC) level. Our current rules state that the AC will return to the claimant additional evidence it receives when the AC finds the evidence does not relate to the period on or before the date of the administrative law judge’s (ALJ) hearing decision. We are proposing these revisions to give the AC discretion in returning additional evidence that it receives when the AC determines the additional evidence does not relate to the period on or before the date of the ALJ decision.

We now use many electronic services that make the practice of returning evidence unnecessary. For example, we now scan most of the medical evidence into the electronic claim(s) file or appointed representatives submit it through our Electronic Records Express system. ... It is neither administratively efficient or cost effective for us to print out documents that have been submitted to us electronically by a claimant or appointed representative in order to return them to the claimant. ...

The administrative burden of processing and returning evidence also has increased significantly over the last few years. ...

It's OK With Me If You Pretend This Is New -- As Long As You Do It!

     From the Federal Eye column in the Washington Post:

When The Post dug into the backlog for disability benefits at the Social Security Administration a year ago, it discovered that the line was approaching one million applications long. The number of people in this queue was so large that it exceeded the population of six different states.

Since then, the line has only gotten longer, according to a new report...

In July, Social Security replaced the two officials in charge of the appeals office, shifting them to other jobs at the agency in favor of new leadership to tackle the backlog.

Three months later, the new head of the office says she is “putting the finishing touches” on a plan to reduce the number of pending cases and speed the system up.

Terrie Gruber said in an interview that her goal is “compassionate and responsive” service to applicants for disability benefits ...

"We’re committed to new ways of doing business,” she said.

One of the biggest changes will include better triage of cases, so many don’t ever get to a lengthy hearing before a judge. New, electronically-generated data has helped the agency determine which appeals could be screened by attorneys and federal claims examiners, who can make decisions themselves, faster than judges, Gruber said. The number of attorneys is being increased.

When cases do go before judges, a new initiative is assigning support staff to arrange the files in better order, getting rid of duplicate medical documents and evidence that take a long time for judges to sort through. ...

A primary goal is hiring more judges, Gruber said, about 1,800 to 1,900 by fiscal 2018, an increase of about 400. Also, she is making use of new technology to enhance the quality of video hearings in remote locations where there are no judges, and improving support staff’s communications with judges when video hearings are involved.

A new pilot program is creating “pre-hearing” conferences at a handful of  local Social Security offices, so applicants who don’t have attorneys can know what to expect when a judge hears their case.

     The statement that these plans show that the agency is "committed to new ways of doing business" is ridiculous. That doesn't mean I disagree with the plans. It's just that there's virtually nothing new here. I'm actually an enthusiastic supporter of the pre-hearing screenings part and I'd love to see more ALJs hired. The rest is harmless. Let's go through the elements of the plan:

• New, electronically-generated data has helped the agency determine which appeals could be screened by attorneys and federal claims examiners, who can make decisions themselves, faster than judges. This is just the revival of the Senior Attorney and re-recon programs that have been used successfully in the past. Social Security certainly didn't have to replace Glenn Sklar to do this since he supervised the exact same programs in the past. This can make a significant difference. They never should have been dropped. The only reason they were dropped was concern that the agency would be criticized for "paying down the backlog." By the way, ALJs, this is your Bat Signal. It's now OK to issue on the record reversals.
• [A] new initiative is assigning support staff to arrange the files in better order, getting rid of duplicate medical documents and evidence that take a long time for judges to sort through. There's nothing new about this. Support staff has been "pulling" exhibits for at least 37 years. I know. I've been involved with Social Security disability for 37 years. It wasn't new when I started. I don't know why this would even be listed. I can't imagine anything they could be planning that would be new. If anything, ALJs ought to be hearing cases on unpulled files! Yes, ALJs, that's been done before. No, I don't like cases being heard with unpulled files but I'm quite willing to put up with them if we can just get more cases heard. People are waiting two years for hearings. This is a horrible situation that demands urgent action. When cases are heard with unpulled files, the exhibits are eventually pulled, but only if it's going to be a denial.
• A primary goal is hiring more judges, Gruber said, about 1,800 to 1,900 by fiscal 2018, an increase of about 400. They're been saying something like this for at least twenty years. It seems like the Office of Personnel Management (OPM) always makes it impossible for the agency to hire as many ALJs as Social Security says it wants to hire. At least that's what Social Security has claimed.  I've never fully bought into OPM being the villain. I've always suspected that the real reason more ALJs aren't hired is that the agency's budget is way too tight and decisions have been made to devote resources elsewhere. I suspect that the agency uses OPM as its fall guy. I'm pretty sure that there are plenty of names on the ALJ register who could be hired almost immediately if the agency really wanted to hire them.
• A new pilot program is creating “pre-hearing” conferences at a handful of  local Social Security offices, so applicants who don’t have attorneys can know what to expect when a judge hears their case. Pre-hearing conferences haven't been done lately but they may date back a quarter-century. So claimants can know what to expect? Hardly. The primary reason for holding these pre-hearing conferences for unrepresented claimants is to weed out those who don't show up. Send them a show cause notice and then dismiss their cases when they don't respond. Dismissing these cases earlier makes the average numbers look better but it really doesn't reduce the workload by much. Many ALJs already schedule hearings for unrepresented claimants five minutes apart on the assumption that most won't show up. What may be new here is that the agency is talking about doing pre-hearing conferences at local Social Security offices.  Could it be field office personnel doing the pre-hearing conferences?

Opting Out Of The Workers Compensation Offset In Texas

     Let me explain first why I'm writing about a development in workers compensation law. Claimants receiving Social Security disability benefits as well as workers compensation benefits are subject to an offset. Usually, Social Security disability benefits are reduced because of the receipt of workers compensation benefits. Sometimes the offset works in the opposite direction. 

     The states of Texas and Oklahoma now allow employers to opt out of workers compensation. You read that right -- opt out of workers compensation. The employers have to set up benefits that parallel workers compensation but they can arrange things in ways that save money, such as refusing to pay for carpal tunnel syndrome or refusing to pay benefits unless a worker reports an injury by the end of his or her work shift or cutting off all benefits after two years. 

     In terms of workers rights, these plans are very worrisome but I'm writing about the Social Security implications. Social Security has decided that benefits under the company plans that substitute for workers compensation aren't subject to the workers compensation offset. This development is already costing Social Security's Disability Insurance Trust Fund money. Other states are studying what Texas and Oklahoma have done. There may be significant effects upon Social Security. Employers are trying to shift the burden of providing for workers injured on the job to Social Security and Medicare. This needs Congressional scrutiny.

Senate Hearing Postponed

     The Senate Homeland Security and Governmental Affairs Committee hearing on Understanding Social Security’s Long-Term Fiscal Picture that had been scheduled for October 20 has been postponed. No new date has been announced.

The Sad Situation In Kentucky

     The Lexington Herald-Leader has an op ed from Ned Pillersdorf, the attorney who has brought class actions both against Eric Conn seeking damages for his representation of claimants before the Social Security Administration and against the Social Security Administration for its efforts to cut 1,787 of Conn's former clients off disability benefits. 

      It's a sad situation. It's surprising that we're still waiting for a decision from a federal District Court Judge. It's surprising that Social Security has started holding hearings in these cases. It may only be days before some benefits are terminated. Without intervention from the federal courts within a few months hundreds will have lost benefits.

Senate Committee Schedules Hearing

     The Senate Homeland Security and Governmental Affairs Committee has scheduled a hearing for October 20 on Understanding Social Security’s Long-Term Fiscal Picture. Here's the witness list:

• Stephen C. Goss, Chief Actuary U.S. Social Security Administration 
• Jagadeesh Gokhale, Ph.D.,  Director of Special Projects Penn Wharton Public Policy Initiative 
• Dean Baker, Ph.D., Co-Director Center for Economic and Policy Research

Andrew Biggs Is Still Annoying -- And Wrong

     When George W. Bush campaigned for the partial privatization of Social Security, Andrew Biggs, a Social Security employee, was at his side. That rankled me. I felt it was deeply inappropriate for a Social Security employee to take on such a politicized role. Bush later nominated Biggs to become Deputy Commissioner of Social Security. Senate Democrats blocked that nomination, suggesting that I wasn't the only one rankled by what Biggs did.
     After his stint at Social Security, Biggs landed a job at the American Enterprise Institute, a Koch brothers front organization.
     Biggs has a blog at the Forbes website on which he's posted a response to the Social Security discussion at the Democratic Presidential debate Tuesday night. The ideas of expanding Social Security and lifting the cap on wages covered by FICA both came up in the debate. Biggs makes the point that lifting the FICA cap wouldn't generate enough revenues to fund an increase in Social Security benefits. This is accurate but it's also rich coming from someone who campaigned for completely undermining Social Security's finances. President Bush never released a plan for partially privatizing Social Security but he was promising to keep paying benefits to everyone already drawing benefits or near retirement age, to not increase the FICA tax and yet to divert much of the FICA tax receipts to private accounts. Put all of that together and it would cost trillions of dollars. Did Biggs and Bush ever put forward a plan for paying for this? Of course not. Republicans never have to pay for their Social Security plans. Only Democrats have to pay for their plans.

     Biggs points out that raising the FICA cap wouldn't be enough to assure that no further change would have to be made anytime in the next 75 years to protect Social Security's funding. He seems to believe that means there's no point in raising the FICA cap. Right. Lifting the FICA cap would only assure program funding until 2080 so obviously that idea is worthless. In fact, if you remove the FICA cap, you could do some modest benefit increases and still assure the future of the Trust Fund well into the future. That was what the Democratic Presidential candidates were talking about.
     I think that Biggs will have to come up with some better arguments to convince the American people that it's a bad idea to raise taxes on the wealthy in order to give higher Social Security benefits to many.

No COLA This Year

     As expected, there will be no Cost Of Living Adjustment (COLA) this year for Social Security recipients. This is the third time this has happened since 2010. It had never happened before 2010.
     Unfortunately, unless there's a change in the law, Medicare premiums will be increasing dramatically for almost one-third of Social Security recipients. Since the Medicare premiums are deducted from Social Security benefits that means that a lot of Social Security recipients will see a significant drop in the payments they receive.

Colvin Heading To Florida

     Carolyn Colvin, the Acting Commissioner of Social Security, will be in Sarasoto, FL for a town hall discussion on Thursday. Representative Vern Buchanan invited her. Buchanan, a Republican, is a member of the Social Security Subcommittee of the House Ways and Means Committee.

GOP May Demand Social Security Cut

     From CNN Politics:

... [Senate Majority Leader] Mitch McConnell privately wants the White House to pay this price to enact a major budget deal: Significant changes to Social Security and Medicare in exchange for raising the debt ceiling and funding the government. ...

McConnell is seeking a reduction in cost-of-living adjustments to Social Security recipients and new restrictions on Medicare, including limiting benefits to the rich and raising the eligibility age, several sources said. ...

Editorial On Hearing Backlog

    The Des Moines Register recently ran an editorial decrying Social Security's enormous backlogs of hearings on disability claims. The paper said that "Congress needs to give the SSA the resources it needs while resisting the urge to strong-arm judges who appear to be too productive" but also said that the agency needs a "long term strategy" for reducing its hearing backlog. The problem with calling for a "long term strategy" for reducing the backlog is that no long term strategy can succeed in the absence of an adequate agency operating budget. 

     Iowa is represented in Congress by two Republican Senators, three Republican representatives and one Democratic representative. Congressional Republicans are the sole reason this hearing backlog problem exists. They stand in the way of Social Security getting an adequate administrative budget. Backlogs went up rapidly when Republicans controlled the House of Representatives while George W. Bush was President. They started going down once Democrats took control of the House in 2006 and gave the agency a bigger operating budget. The backlog continued to decrease until the 2010 election which put Republicans in control of the House of Representatives. At that point, the agency's operating budget went to hell. The hearing backlog did a U turn and started shooting up. The Republican majority in the House of Representatives is so deeply entrenched in gerrymandered districts that it is hard to imagine any change in the control of that body for many years into the future. The hearing backlog is rapidly heading to two years. These is nothing to prevent the backlog from going far higher than that. Claimants are losing their right to a hearing.

Benefits Began In 1940

No COLA This Year?

     Looks like there will be no Social Security Cost Of Living Adjustment this year. If I remember correctly, the announcement is due out in mid-October.

CCD Benefit Offset Proposal

     There are signs of a possible consensus forming in favor of some tinkering with the work incentives for Social Security disability benefits, probably some sort of benefit offset program, as the "price" for extending the life of the Social Security Disability Trust Fund. The Social Security Task Force of the Coalition for Citizens with Disabilities (CCD), a major umbrella group, has released its benefit offset proposal. I won't detail the whole proposal but the most important parts are the elimination of the Trial Work Period and Extended Period of Eligibility combined with a benefit offset program whereby claimants would lose one dollar for every two they earn over the amount required to trigger a trial work period month, currently $780 per month.

     First key question: Would the CCD proposal cost money or save money? I'm not sure. I doubt that it will have much effect either way.
     Second key question: Would the CCD proposal give further encouragement for claimants to return to work? The proposal would be easier for Social Security to administer, which is a good thing, but I don't think it would have any significant effect upon claimant behavior. Claimants already want to return to work. The problem isn't the incentives; it's the state of their health. Huge bargains won't induce people to shop at a store if the store's doors are locked.

   Third key question: Can any tinkering with work incentives achieve the goal of reducing program costs. The answer to this one is clear. You certainly can save money by tinkering with work incentives. All you have to do is to reduce the work incentives. Can someone come up with a proposal that reduces work incentives while simultaneously pretending that they are increasing work incentives? Probably. That's the sort of thing that politicians excel at. That may be where we're heading.
     Fourth key question: Is there really a consensus forming to only tinker with work incentives or is this just the game that Republicans play until after the election at which point they reveal their real plan to use the exhaustion of the Disability Insurance Trust Fund to force dramatic cuts?

The Goat Rodeo Continues For Eric Conn's Former Clients

     I've learned a few things about Social Security's re-adjudication of the disability claims of Eric Conn's former clients. Let me share some of what I've heard:

• In at least one case, Social Security's file contains reports from Drs. Huffnagel and Adkins, two of Eric Conn’s pet physicians. The report from Dr. Huffnagel has been excluded from consideration but the report from Dr. Adkins is supposed to be considered. Even though he also did work for Conn, Adkins was also working for Social Security. The agency wants the report that Adkins did for them considered. However, any reports that Adkins did at the behest of Eric Conn are excluded from consideration. He was an upstanding physician when he did work for Social Security but he was a crook when he did work for Eric Conn.
• The claimants who had medical exams at the behest of Eric Conn universally describe the exams as reasonably thorough. The claimants say the exams took about twenty minutes. The write-ups of the exams seem professional. There may be problems with forms completed by these physicians but there's no sign of problems with the exams or the exam reports themselves. For example, there seems to be no reason to disbelieve a report by one of these physicians that he detected crepitation in a claimant's knee. Nevertheless, everything from these physicians has been excluded – unless SSA ordered the exam.
• None of the claimants involved reports having been contacted by Social Security's Office of Inspector General (OIG) or the FBI.
• I had thought that Social Security must have given Administrative Law Judges (ALJs) more instructions for these cases than what is contained in the agency's HALLEX manual. It looks like I was both right and wrong. I was right in believing that they should have been given more instructions but wrong in believing that they must have given additional instruction. It appears that they didn't. The result is confusion. At least one ALJ has refused to admit any evidence dated after the prior ALJ decision. Other ALJs are pondering whether they should admit into evidence the reports from Conn’s pet physicians. Nobody has any idea what the process is for asking permission to consider developments in the claimant’s health condition after the date of the prior ALJ decision. It’s not clear that there is a procedure or that any such procedure would be consistent with the agency's regulations, ALJ independence and the prohibition on ex parte contacts.
• There are signs suggesting that no one at Social Security's St. Louis National Hearing Center, which is hearing the vast majority of these cases, has much enthusiasm for the task they’ve been given.
• So far, it looks like well over half of the claimants involved have not sought legal help. There is reason for concern that these claimants are so intimidated by the criminal investigation that they are too scared to do anything even though none of them has done anything remotely criminal.
• We’re still waiting on action from the District Court on the lawsuit aimed at stopping these hearings. The delay doesn’t seem like a good sign for these claimants since the Court knows that the hearings have begun. I’m pretty sure that there are those at Social Security who decided not to worry too much about what the agency was doing in these cases since they figured that the courts would intervene to stop this mess. I thought so too but it looks like we may have been wrong. The Court may dismiss the case on narrow technical grounds. That won't prevent these claimants from eventually getting relief. It just delays it until after these cases grind through the administrative process for a year or two.

This Is Wrong

     From EM-15034, just issued by Social Security:

Beginning September 25, 2015, the Social Security Administration (SSA) and VA initiated a weekly information exchange agreement in which the VA provides SSA with information concerning veterans who received the VA 100% P&T [Permanent and Total] disability compensation rating. With this release, when an individual contacts SSA, and their social security number is on our database as having the 100% P&T rating, our users will receive an immediate alert that we must expedite the case.

Additionally, when an alert identifies the individual as having this VA rating, no additional proof of the 100% P&T rating is necessary to expedite the case. ...

     We owe our veterans a lot but we don't owe veterans who have 100% VA ratings expediting on their Social Security disability claims. These vets aren't in great financial distress. They have their VA benefits. Other disabled people hurtle towards homelessness while vets who don't really need it get expediting. This is wrong.

Now If They Could Do An Honest Recalculation Of The Attorney User Fee ...

     A notice from Social Security in today's Federal Register:

We provide fee-based Social Security number (SSN) verification services to enrolled private businesses and government agencies who obtain a valid, signed consent form from the Social Security number holder. ...

To use CBSV [Consent Based Social Security Number Verification], interested parties must pay a one-time non-refundable enrollment fee of $5,000. Currently, users also pay a fee of $3.10 per SSN verification transaction in advance of services. We agreed to calculate our costs periodically for providing CBSV services and adjust the fees as needed. ...

Based on the most recent cost analysis, we will adjust the fiscal year 2016 fee to $1.40 per SSN verification transaction. New customers will still be responsible for the one-time $5,000 enrollment fee.

I Keep Asking: Does This Look Out Of Control?

     The number of people drawing Disability Insurance Benefits from the Social Security Administration declined in September. This number has declined in eleven of the last twelve months. The decline is happening because fewer claims are being filed and approved.

Outrage In Iowa

     From the Des Moines Register:

A judge’s long delays in deciding scores of backlogged Social Security disability cases have resulted in Iowa applicants losing their eligibility or homes, or even dying while waiting for benefits, a Des Moines Register investigation has found. ...

[T]he delays go back years, yet only in September were Gatewood’s back cases reassigned from the Office of Disability Adjudication and Review in West Des Moines to another regional office in Topeka, Kan. ...

On average, disability applicants in Iowa wait about 13 months to get a judge to hear their cases. That's about a month less than others nationwide, according to Social Security data reviewed by the Register. Once the hearings are held, decisions typically follow within one to two months, lawyers here say.

But applicants among Gatewood's caseload often waited another year for a decision, and their lawyers say some people in desperate need are still waiting. ...

The Register's Watchdog probe was triggered by attorney David Leitner, who raised questions on behalf of client Shannon Hills.

Hills, 32, applied for disability benefits in 2013 after being denied twice before. Gatewood presided over her hearing in April.

But Leitner was notified last week that the case was among those transferred to Topeka. When he called to ask if a new hearing was scheduled, he was told 300 of Gatewood’s cases are in the pipeline there. ...

Tamara Wolff, 51, who suffered multiple heart attacks and a stroke that permanently damaged her eyesight, said she first applied for disability in 2009.

Gatewood finally heard her case on March 26, 2014, and Wolff was told she could expect a decision in about a month. Seven months later, after Wolff had been hospitalized several times, her lawyer sent a letter to the judge asking that she make the case a priority and expedite the ruling.

Still, no decision was rendered until April 18 — nearly 13 months after the hearing. ...

Lawyers say their clients have been afraid to speak out or complain because they don’t want to risk being denied benefits.

Jensen says 12 of her clients whose cases are being transferred had been waiting 12 to 18 months for a decision from Gatewood. ...

Administrative records from the Merit Systems Protection Board show the Social Security Administration's presiding administrative law judge tried to remove Gatewood from cases in Oklahoma more than a decade ago.

But Gatewood succeeded in an appeal in 2005, arguing that the agency had interfered with her judicial independence.

     I have a couple of thoughts on this. First, as terrible as this is, it affects only a limited number of people. The bigger outrage is that it's taking longer and longer to get a hearing in the first place. That affects everyone requesting a hearing on their claim for Social Security disability benefits. The backlog is rapidly rising to two years. There's every reason to believe it will just keep climbing beyond two years. This will, in effect, deprive claimants of any meaningful right to a hearing on their claim. Second, if you're an attorney with clients caught in a mess such as that described in this article, there is an avenue to relief -- mandamus. I've got an example of a mandamus complaint if anyone is interested. (And, for sticklers, yes I know that technically mandamus no longer exists but the exact same relief exists and everybody still calls it mandamus because we all remember Marbury v. Madison.)