Yesterday's Hearing

     The hearing yesterday before the Labor-HHS Subcommittee of the House Appropriations Committee went about as I expected but there were interesting details.

Robert Aderholt, Subcommittee Chair

    Robert Aderholt, the Chair of the Subcommittee, spoke first. He said he was happy that Commissioner O'Malley had already come to his office to discuss the agency's appropriation. He said that less than half of agency heads did this, which I find surprising. He also said that this was the first House Appropriations Committee hearing on Social Security in a decade. I knew it had been a long time but that's even more than I imagined. Note to future Commissioners, including Acting Commissioners: Meet with Appropriations Committee members on as regular a basis as you can.

    Aderholt went quickly into Republican talking points which basically amount to pressure to force an end to telework and a demand that the agency manage its way out of its service delivery problems. In particular, he didn't like the amount of overtime at Social Security and thought that it was being abused by employees. Maybe there are problems with overtime but if it there are, it's just the normal sort of management issue that you find at any large entity. It's hardly responsible for any work backlogs, nor is telework. Just about every entity employing white collar employees allows telework. If you don't allow it, you have a hard time holding onto your employees or hiring new ones.

    The other Subcommittee members divided along party lines in predictable and somewhat depressing ways. My limited experience with Congressional hearings in past decades was that they were nowhere near as partisan as this.

     There were many questions along the lines of “Can’t you use AI so you can give better service inexpensively?” The Commissioner’s answer was basically “We hardly have the money to maintain the systems we already have so we can’t possibly afford new AI contracts.”

    It grated on me that Commissioner O'Malley kept saying he had "turned around" Social Security. He's a politician so you expect some hyperbole but saying that the agency has been "turned around" is over the top. O'Malley has done a good job in the short time frame he's had but actually "turning around" the agency was impossible without more time and more money.

    In the end, I hope I'm wrong but I would be surprised to see any additional money for Social Security coming out of this Subcommittee.

    Republicans will get a chance to see whether a Trump appointee as Commissioner can manage the agency out of its service delivery problems. I don't have high hopes of anyone even being nominated for the position for many months, if not years, into the future. Given the quality of the man Trump appointed in his first term in office, I'm not expecting a transformational leader.

House Appropriations Hearing

     The written witness statement of Commissioner Martin O'Malley for today's hearing before the Labor-HHS Subcommittee of the House Appropriations Committee is already available. I think someone slipped up. They normally embargo these until literally the moment the witness starts speaking.

    The hearing, which is set for 10:30, will be available for viewing online.

Appropriations Hearing On November 14

    The House Appropriations Committee has scheduled a hearing on the Social Security Administration appropriation for 10:30 on November 14. Commissioner Martin O'Malley is the only scheduled witness.

John Oliver On Social Security Disability

     I've found a video of that John Oliver piece on Social Security disability. I can't say whether this is an excerpt or the whole thing.

    By the way, I wish I could set this up so you click on the image on the left and you go directly to the video but Blogger doesn't make it that easy.

John Oliver Segment Segment On Social Security Budget; Also "Tackling That Outdated Occupations List"

     A couple of tweets from the Commissioner of Social Security (emphasis added):

Martin O'Malley

@OMalleySSA

·

I want to thank @iamjohnoliver @LastWeekTonight for calling out the crucial need for more staffing + funding @SocialSecurity

 

Martin O'Malley

@OMalleySSA

·

In the 9 months I've been serving, @SocialSecurity has made good progress to improve our disability programs but - as you noted - we need more Congressional support and partnership. By the way, we're tackling that outdated occupations list.

    Did anyone catch that John Oliver segment?

No Anomaly For SSA

    The federal fiscal year ends on September 30. Without some sort of appropriation bill passed before then, there will be a federal government shutdown on October 1. Usually, a continuing resolution (CR) is passed which allows the government to keep functioning based upon the prior year's rate of spending. Every year "anomalies" are added to the CR allowing additional funding for some functions. The Biden Administration has sought an "anomaly" to give additional funding to the Social Security Administration. The CR which has been agreed to contains no "anomaly" for Social Security. This is not good for now and portends an inadequate regular appropriation.  Social Security has been an agency which appears to have been disfavored by appropriators for many years.

Why Social Security Needs An "Anomaly." Also, The "F" Word Gets Mentioned

     From Government Executive:

...  In a letter to House Appropriations Committee Chairman Tom Cole, R-Okla., O’Malley warned of dire consequences if SSA is flat-funded past September, as proposed in the House GOP’s six-month continuing resolution. House Speaker Mike Johnson on Wednesday cancelled a planned vote on the measure, after dissent within his caucus threatened to derail its passage.

“If enacted, a six-month CR without any additional funding for the Social Security Administration would be devastating,” O’Malley wrote. “We would be forced to implement a hiring freeze with minimal exceptions. We would lose over 2,000 staff in the first half of the year alone and reach a new 50-year staffing low by the end of December. We would need to significantly reduce overtime to historically low levels, decreasing processing capacity for our most critical workloads.” 

And in testimony before the Senate Budget Committee, O’Malley laid out how both the House and Senate funding proposals for SSA would fall short of the agency’s needs. Under the House plan, employees would be furloughed by 20 days, while the agency would see its headcount fall by 3,400 staff, not including the 1,500 decrease in staff at state Disability Determination Services offices. And funding for the agency’s IT infrastructure would be “barely” enough to “keep the lights on.” ...

Anomaly Requested For Social Security

     The federal fiscal year ends on September 30. Without Congressional action there will be a government shutdown. It's clear that individual appropriation bills will not be passed before the end of the month. A Continuing Resolution (CR), which permits the continuation of spending at the previous rate, will be needed. Every time there's a CR, the Office of Management and Budget (OMB) submits a list of "anomalies" -- government functions that require something beyond the prior rate of spending. The OMB anomalies list this time includes a request that the Social Security Administration be funded at the full rate of the President's budget request for FY 2025 -- $15.4 billion instead of the $14.2 billion in the FY 2024 appropriation, warning that:

... Without the anomaly, SSA would be required to reduce funding for core information technology operations including SSA's network support. In addition, SSA would likely reduce the hours field offices are open to the public and would need to close field offices over time, extending wait times or seniors and individuals with disabilities. ...

    Government Executive calls the OMB request for Social Security an "unusual step."

    It's unlikely that Social Security will receive anything like what is requested. The House funding bill doesn't include an increase for Social Security. In fact, it cuts Social Security's appropriation below the current FY.

Action Plan 2024

     Social Security has recently released its Action Plan 2024. It's a good summary of what has been done during the time that the current Commissioner has been on the job.

    Social Security can be proud of what has been accomplished this year but there's going to be no fundamental change for agency employees or those who deal with the agency until the agency gets a significantly higher appropriation. The low hanging fruit has been picked. There's no way to manage the agency out of the hole it's in. As former Commissioner Michael Astrue said, it's going to take "brute force," as in a lot more employees.

Appropriations Bill Advances In Senate

 

    From Government Executive:

The Senate Appropriations Committee on Thursday advanced spending legislation that would increase the Social Security Administration’s administrative budget by $500 million, setting up a standoff with the House. ...

That figure would fall short of the $15.4 billion requested by the Biden administration in the president’s fiscal 2025 budget proposal, but it is around $1 billion more than the $13.7 billion slated for the agency under the GOP-controlled House’s version of the legislation. ...

Field Office Closure

     Social Security is closing its field office in Newburgh, NY. Predictably, this is drawing opposition from local political leaders. The appropriations bill favored by Republicans in the House of Representatives would ban field office closures while failing to give the agency enough money to keep them open. How would that work?

Bill To Cut Social Security Funding Advances

     From Government Executive:

The House Appropriations Committee voted along party lines Wednesday to advance appropriations legislation that would cut the Social Security Administration’s administrative budget by $450 million next fiscal year. ...

During Wednesday’s committee markup, Rep. Dutch Ruppersberger, D-Md., who will retire at the end of this year, filed an amendment restoring the $450 million in cuts, which would bring SSA’s funding flat with its current annual appropriation of $14.2 billion. He warned that, if enacted, the GOP’s proposed cuts would further exacerbate the agency’s customer service crisis. ...

Rep. Robert Aderlholt, R-Ala., who chairs the subcommittee responsible for the bill, defended the cuts, claiming that they would only affect headquarters staff and not any field offices.

“Despite what you may have heard, no field offices will be closed because of this bill,” Aderholt said. “The 4% cut to SSA would come from the $3 billion that Social Security has budgeted for its Baltimore and Washington, D.C., offices, where 61% of the workforce is fully remote. SSA’s mission is customer-facing and it serves America’s most vulnerable population and this egregious use of telework is insulting to them.”

But Rep. Steny Hoyer, D-Md., said Aderholt’s assurances ring hollow.

“Now, the chairman says that no field offices will close,” he said. “Why does he say that? Because he directs, in the bill, that ‘no field offices will be closed.’ Poof, magic! He didn’t ask SSA whether that would be, he just directed it in the bill . . . The population keeps going up, and the senior population certainly keeps going up, and your assertion that somehow the expenditures to service those rising numbers is static is incorrect. Your math doesn’t work.”

Ruppersberger’s amendment failed by a 31-23 vote.

House Appropriations Committee Draft Of FY 2025 Appropriations Bill

     The Republican majority of the House Appropriations subcommittee having jurisdiction over Social Security has released its version of an appropriations bill covering Social Security for Fiscal Year (FY) 2025, which begins on October 1 of this year. It provides for a $13.8 billion appropriation for Social Security's administrative expenditures. This is below the $14.1 billion that the agency has been allocated for the current FY.

    The President's proposed bill for FY 2025 contains $15.4 billion for Social Security.

    This can't get passed without the agreement of the Senate and the White House. Also, nothing is likely to be passed until after the new Congress begins just after New Year's Day in 2025. The new Congress may have different opinions about this appropriations bill.

A One Year Sprint

     Government Executive has out a piece titled Martin O’Malley is on a one-year sprint to save Social Security. The title comes from Government Executive, not O'Malley. I'm sure that O'Malley hasn't claimed that he can "save" Social Security in any time frame, much less in a year.

    The primary thrust of the piece is O'Malley's call for additional budget resources for his agency. However, there's also crowing about O'Malley's accomplishments as Commissioner. O'Malley has certainly changed the tone at the agency and has some important accomplishments in his first six months as Commissioner but I'm pretty sure that the main accomplishment claimed in this piece -- improvement in 800 number answering -- isn't much of an accomplishment.

    Social Security's budget resources are so thin that it cannot make any significant improvement in one area of performance without taking resources from another area of performance -- borrowing from Peter to pay Paul as the old quote goes. If the 800 number service has improved, some other function must have worsened.

    Those on the inside can confirm or deny this but I think that the improvement in 800 number answering has been achieved by calling upon additional backup for the agency's Teleservice Centers (TSC's). The backup comes from the Program Service Centers (PSC's) whose primary responsibility is computing and paying benefits under Title II of the Social Security Act. This has gone on to some extent for many years. I've heard it referred to as "spiking," as in asking the PSC's to step in to handle overflow when there's a spike in call volume. It's not hard to improve 800 number phone answering if all you have to do is to shift the boundary for what's considered a "spike." Of course, the problem is that this causes degradation in the primary PSC workload of computing and paying benefits, which I have seen. Doing a better job of answering the phones is great but asking claimants who have already been approved to wait an extra month for the benefits they are owed isn't so great. Also, changing the spiking policies so that the PSC's give more help to the TSC's isn't sustainable. The payment backlogs will eventually become their own crisis.

    Finding ways to make yourself look better comes naturally to a seasoned politician like O'Malley. It's not a bad thing for the agency. At the least, it gives members of Congress confidence that if they give the Social Security Administration additional operating funds that they will be well spent. There is another side to the coin, however. Some members of Congress can say "Look, it's what we've been telling you. Social Security doesn't need more operating funds. It just needs better management."

A New Funding Mechanism For Agency Operations?

     The Consumer Financial Protection Bureau (CFPB) has an unusual funding mechanism. The law says it can draw funds “reasonably necessary to carry out” its operations without an annual appropriation. This has been challenged on the grounds that it violates the Appropriations Clause of the Constitution which provides that “[n]o Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” To the great surprise of many the Supreme Court has just upheld the CFPB funding mechanism. 

    This decision suggests that it would be constitutional if there were a similar funding mechanism in the Social Security Act for agency operations, such as a certain small percentage of benefits paid. If I remember correctly, the National Council of Social Security Management Associations (NCSSMA), an organization of agency management personnel, has called for this in the past.

    Would such a thing ever come to Social Security? Only if Democrats control the White House, House of Representatives and Senate and want to do it and can get past the filibuster in the Senate. This could not be done at the moment. Maybe it will never be possible. However, my guess is that this will be proposed. What we've got at the moment is seriously dysfunctional. 

    By the way, if CFPB had lost this case, doubt would have been thrown on the funding mechanism for Social Security benefits themselves. Annual appropriations might have been required for benefit payments, so this CFPB case was a big win for Social Security.

Creamy Or Crunchy?

     From Nextgov/FCW:

...The longer arc of this agency is a phenomenally dedicated, committed, compassionate culture. [SSA staff has] been traumatized by the increased volume and nine years of steady staff reductions, given the lack of any Congressional attention to our budget or even the decency of our own appropriations hearings, said [Social Security Commissioner Martin] O'Malley” ...

The SSI program “purports to be a program of last resort,” but “forces the poorest of people to jump through hoops, stand on their head and gargle peanut butter in order to qualify for it,” he told lawmakers at a recent hearing. ...

O'Malley Trashed

     Mark Warshawsky, of the right wing American Enterprise Institute, has written an op ed for the Baltimore Sun trashing Social Security's Commissioner, Martin O'Malley. Warshawsky blames O'Malley for asking for greater operating funds for Social Security. He says that the increasing number of people drawing Social Security benefits is large irrelevant to the agency's workload since it is mostly retirees who put little burden on the system. He says that the agency's real problem with getting its workload done is employees working from home and Social Security adding a new step in the process of disability review in 2019 and 2020. I don't know what new step he's talking about here. Of course, there's also the problem that in 2019 and 2020 O'Malley wasn't the Commissioner and Biden wasn't the President. Warshawsky goes on criticize what O'Malley is doing about overpayments and O'Malley's failure to adopt new regulations drafted while Republicans were in office to deny far more disability claimants. By the way, Republicans could have adopted those regulations but were no more eager than O'Malley to do so and for good reason. They're not justified by the data not to mention that all hell would break loose if they were adopted.

    By the way, not to knock the Baltimore Sun, which is a fine newspaper, but I'm betting that the New York Times, the Washington Post and the Wall Street Journal passed on this piece before the Sun finally agreed to publish it.

Severe Problems Remain After SSA Appropriation Determined

     From Federal News Network:

After a months-long hiring freeze, the Social Security Administration is once again facing even further declining staffing numbers.

But with agency spending now determined for the rest of fiscal 2024, and hiring now unfrozen, SSA Commissioner Martin O’Malley is readying the agency’s plans to rebuild its workforce as quickly and efficiently as possible.

Currently, SSA is at its lowest staffing levels in 27 years, while serving more customers than ever before, O’Malley told lawmakers on the House Ways and Means Committee during a hearing last week. As a result, customer service has worsened — there are longer wait times on phone lines, and longer delays in receiving decisions on disability applications and appeals. ...

In the 2024 spending agreement Congress reached last week, SSA received $14.2 billion for its administrative expenses. It’s a slight increase over SSA’s enacted budget of $14.1 billion for 2023. ...

Although SSA’s latest hiring freeze has ended, there have already been net staffing losses as a result of a months-long string of continuing resolutions — landing the agency once again at the lower staffing levels it had a year ago. ...

Right now, SSA employees “are understaffed, and they are overwhelmed,” O’Malley said. “Not surprisingly, when somebody’s been on hold for an hour, they come off that call hot. We right now have an attrition rate of about 24% in our teleservice centers.”     ...

“We need to change our [hiring] strategy as an agency,” O’Malley told lawmakers. “I think we target too much on college graduates and not enough on high school and community college graduates. And with proper training, that could really be an investment that holds for a long time.” ...

O'Malley Testimony To Senate Aging Committee -- And Note The Overpayment Changes

     Social Security Commissioner Martin O'Malley testified before the Senate Aging Committee today. Here's are some excerpts from his written testimony (emphasis added):

...Currently – due to the extended continuing resolution (CR) that we are under in FY 2024 – we have stopped all hiring, and our staffing levels have already fallen below where they were in April of last year. If we continue this path of no hiring, we will fall to a new all-time low of around 55,000 full-time permanent staff by the end of this fiscal year – nearly 11 percent lower than the roughly 62,000 full-time permanent staff we averaged from 2010 through 2019.

Similarly, the State disability determination services (DDS) were able to make some progress increasing their staffing levels in FY 2023, following years of record-high attrition and a historically low staffing level in FY 2022. But in FY 2024, the DDS have quickly dropped below last year’s staffing levels due to our pause in hiring given the funding level, which is leading to a severe setback in addressing a service delivery crisis. ...

Members may be surprised to learn that Social Security has now been reduced to operate on less than one percent of its annual benefit payments. This is extremely low – much lower than private insurance companies. For instance, Allstate operates on 19 percent of its annual benefit payments, and Liberty Mutual operates on nearly 24 percent of its annual benefit payments. ...

Under the current system, Social Security’s operating overhead, as a share of benefit outlays, has shrunk by 20 percent over the last ten years. ...

People who try to reach us by phone are now waiting on hold for 38 minutes or more on a dysfunctional 800 Number system. ...

Starting next Monday, March 25, we will be ceasing the heavy-handed practice of intercepting 100 percent of an overpaid beneficiary’s monthly Social Security benefit by default if they fail to respond to our demand for repayment. Moving forward, we will now use a much more reasonable default withholding rate of 10 percent of monthly benefits — similar to the current rate in the SSI program.

We will be reframing our guidance and procedures so that the burden of proof shifts away from the claimant in determining whether there is any evidence that the claimant was at fault in causing the overpayment. ...

Biden Proposes 9% Increase In Social Security Operating Funds

     From President Biden's budget proposal for Fiscal Year 2025, which begins on October 1, 2024:

... The Budget provides an increase of $1.3 billion, nine percent over the 2023 enacted level, to improve customer service at SSA’s field offices, State disability determination services, and teleservice centers for retirees, individuals with disabilities, and their families. The Budget also improves access to SSA’s services by reducing wait times. ...

    Nothing like this can be passed until after the election and only then if Democrats control the White House, Senate and House of Representatives -- and Senate Democrats are willing to scrap the filibuster, at least in part.

    In the lengthy supplement to the budget, the detailed explanation shows that program integrity would not increase. One complaint about recent appropriations is that there has been lavish funding of program integrity while basic operations have suffered greatly.

    The Commissioner of Social Security gets to include his own proposed budget for the agency in the supplement to the budget. Commissioner O'Malley's proposal is for the agency to be funded at $16.45 billion, about three quarters of a billion dollars higher than the President's budget but O'Malley has issued a statement praising the President's budget.

    The proposals of the President and the Commissioner are nice but restoring acceptable service at the Social Security Administration will have to be a multi-year effort.

    By the way, the Biden budget also calls for extending SSI to U.S. territories, such as Puerto Rico.