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Attacks On Chief Actuary Continue

Stephen Goss

     Senator Grassley, the Chairman of the Senate Finance Committee, is continuing his attacks on Stephen Goss, Social Security's Chief Actuary. Goss had the temerity to do his job and give truthful answers to hypothetical questions about a possible policy alternative. The President had proposed doing away with the F.I.C.A. tax that supports the Social Security trust funds and had proposed no replacement. Goss was asked what would be the result. Of course, he answered that the trust funds would quickly run out of money. What is Goss supposed to do -- refuse to answer the question because it would make Trump look bad? Goss's answer isn't the problem. The problem is what the President said.

     If Trump loses, I fear that there will be major acts of retribution before Inauguration Day. I hope that Goss is not at risk.

Biden Social Security Plan

      I had earlier posted Joe Biden’s plan for Social Security disability benefits. Here’s his plan for Social Security retirement benefits:

• Put Social Security on a path to long-run solvency. ... The Biden Plan will put the program on a path to long-term solvency by asking Americans with especially high wages to pay the same taxes on those earnings that middle-class families pay. ...
• Provide a higher benefit for the oldest Americans. At advanced ages, Americans become more vulnerable to exhausting their savings, sometimes falling into poverty and living a life of hardship. The Biden Plan will provide the oldest beneficiaries – those who have been receiving retirement benefits for at least 20 years – with a higher monthly check to help protect retirees from the pain of dwindling retirement savings. 
• Implement a true minimum benefit for lifelong workers. ... Under the Biden Plan, workers who spent 30 years working will get a benefit of at least 125% of the poverty level. 
• Protect widows and widowers from steep cuts in benefits. ... The Biden Plan will allow surviving spouse to keep a higher share of the benefits. This will make an appreciable difference in the finances of older Americans, especially women (who live longer on average than men), raising the monthly payment by about 20% for affected beneficiaries. 
• Eliminate penalties for teachers and other public-sector workers. Current rules penalize teachers and other public sector workers who either switch jobs or who have earned retirement benefits from various sources. The Biden Plan would eliminate these penalties by ensuring that teachers not eligible for Social Security will begin receiving benefits sooner – rather than the current ten-year period for many teachers. The Biden Plan will also get rid of the benefit cuts for workers and surviving beneficiaries who happen to be covered by both Social Security and another pension. These workers deserve the benefits they earned. 
•      I don’t think that Donald Trump has any coherent plan for Social Security other than to end the F.I.C.A. tax.
  

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Social Security's Chief Actuary Responds To Concerns Of GOP Senators

      Some Democratic Senators asked Social Security's Chief Actuary what the effect would be upon the Social Security Trust Funds if the President's proposal to end the F.I.C.A. tax that supports the Trust Funds is ended, without any replacement. Trump didn't say that this would be without a replacement but he didn't specify a replacement. The response, of course, is that the Trust Funds would quickly run out of money and be unable to pay benefits. The Chief Actuary's response has now appeared in campaign ads.

     Some Republican Senators took offense at this and sent the Chief Actuary a letter complaining about his letter. I'd say they should blame the President for making a bone-headed proposal that would inevitably sound foolish in a TV ad. Responding to Congressional inquiries is part of the Chief Actuary's job. He can't very well say "I'm not going to answer your question because the answer would make the President sound foolish and irresponsible and I don't think he meant to sound that way."

     The Chief Actuary has now responded. Here's part of the final paragraph of the letter:

... While it is never desirable for the Office of the Chief Actuary to engage in matters with political implications, it appears that this is unavoidable to a degree, as long as we are asked to provide objective and factual answers to questions posed by members of Congress. Our answers have always been as direct and objective as possible, and we regret that even clear answers may be taken out of context or used for purposes other than intended. ...

Supreme Court Asked To Hear Case On SSI For Puerto Rico

      The United States Solicitor General has petitioned the Supreme Court for a writ of certiorari to review the First Circuit Court of Appeals decision in U.S. v. Vaello-Madero. That means they are asking that the Supreme Court hear the case. In Vaello-Madero the First Circuit held that it is unconstitutional to deny SSI benefits to U.S. citizens who reside in U.S. territories such as Puerto Rico. 

     It is almost certain that the Court will hear the case but first the other side gets a chance to respond to the cert petition and then both sides get time to prepare briefs on the merits before the Court places the case on its argument calendar. I don't know how long this takes but I would guess it wouldn't be argued until after Inauguration Day, which is only a little over than four months away. By that time there could be a new President and a new Solicitor General who might view the case differently than the Trump Administration. Of course, it's uncertain that there will be a new President and, if so, whether that would make a difference in the government's position in this case. It would be possible for a new Solicitor General to ask the Court to dismiss the case. The new Solicitor General could go ahead with the oral argument and disavow the government's previously filed brief. Maybe they continue to defend the constitutionality of the statute. I don't know how things like this have been handled in the past when there's been a change of Administration or whether there have been situations quite like this in the past.

I'd Say Trump Walked Right Into This One

      From Jennifer Rubin writing for the Washington Post:

You might not have noticed it during his speech in Pittsburgh on Monday, but Democratic presidential nominee Joe Biden slipped a big issue into the mix for 2020. While focusing primarily on President Trump’s liability for the ongoing pandemic, the rotten economy and the surge in racial violence, Biden also hit Trump’s plan to eliminate or suspend the payroll tax after the election. Biden declared, “The Social Security Administration’s chief actuary just released a report saying if a plan like the one Trump is proposing goes into effect, the Social Security Trust Fund would be ‘permanently depleted by the middle of calendar year 2023, with no ability to pay benefits thereafter.’” Oh, that seems like a big deal.

Biden was referring to Trump’s suggestion to eliminate the payroll tax, the funding mechanism that supports Social Security and Medicare. The Associated Press explained: “These taxes raised $1.24 trillion last year, according to the Congressional Budget Office. Over a 10-year period, Trump’s idea would blow a $16.1 trillion hole in a U.S. budget that is already laden with rising debt loads.”

The chief actuary of the Social Security Administration, Stephen Goss, sent a letter last week to Senate Democrats, explaining, “If this hypothetical legislation were enacted, with no alternative source of revenue to replace the elimination of payroll taxes on earned income paid on January 1, 2021 and thereafter, we estimate that [the Disability Insurance] Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter.” Goss added, “We estimate that [the Old Age and Survivors Insurance] Trust Fund reserves would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.”     

      In a sign that this issue may have hit a nerve, the Chairman of the Senate Finance Committee and the senior Republican on the House Ways and Means Committee have written Stephen Goss, Social Security's Chief Actuary, to complain about his response to the hypothetical question. However, Goss had little option but to respond to the hypothetical question. That's what his office does. He can't refuse to answer questions because he thinks a question because it seems political. All the questions are political. 

     Republicans have long thought that Goss is against them. I think the problem is that they keep putting forward foolish proposals because they have never bothered to try to understand how Social Security works or even given much thought to the politics of Social Security.  It's not Goss' fault the GOP keeps coming up with untenable ideas.

Biden Plan For Social Security Disability

      From Joe Biden's plan for people with disabilities:

PROTECT AND STRENGTHEN ECONOMIC SECURITY FOR PEOPLE WITH DISABILITIES

The Trump Administration has systematically attacked the Social Security disability programs—from proposing monitoring people with disabilities through social media in order to cancel their benefits, including their health care, to tightening eligibility through a proposal to  redefine the number of hours in a work week so some applicants do not receive benefits. The National Council on Disability found that “people with disabilities live in poverty at more than twice the rate of people without disabilities.” To protect the economic security of people with disabilities and increase employment opportunities, Biden will take a holistic approach to Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), Medicaid, and other programs to support people with disabilities. He will: 

• Increase the benefit level for people receiving SSI. Biden will set a federal benefit rate of at least 100% of the poverty level. 
• Eliminate the five-month waiting period for SSDI and two-year waiting period for Medicare. Biden will work to pass legislation to ensure working people who develop a condition or disability are able to get their Social Security support as well as their Medicare benefits as soon as they qualify. 
• Eliminate the “benefit cliff” for SSDI. Earnings limits under SSDI can discourage people with disabilities from engaging in employment or internship opportunities when they depend on SSDI funds. Biden will increase this limit and phase out this benefit gradually so people with disabilities don’t have to choose between employment and health care. 
• Reform the SSI program so that it doesn’t limit beneficiaries’ freedom to marry, save, or live where they choose. Biden will work with Congress and the disability community to eliminate the SSI marriage penalty and “in-kind support and maintenance” provision and raise the asset limits associated with SSI that have not been increased since 1984. 
• Expand access to tax-advantaged savings accounts, ABLE accounts, which provide people with disabilities a way to pay for “qualified disability-related expenses, such as education, housing and transportation.” Biden will work to pass the ABLE Age Adjustment Act, which will make ABLE accounts available to 6 million additional adults with disabilities, including 1 million veterans. 
• Reverse damage done to Social Security rules by the Trump Administration. President Trump announced that he wants to change the Social Security rules for people who get disability benefits, including SSI and SSDI. His proposed change would require many to re-verify their disability every two years, a tough enough process to get through once, targeting adults with disabilities who are close to retirement, children with disabilities, and people with certain medical conditions including cancer and behavioral disorders. If approved by the Trump Administration, Biden will rescind this harmful proposal.
• Strengthen the Social Security Administration. Ensuring that Social Security benefits are easy to access and that field offices and teleservice centers are fully funded is key to our bedrock commitment to seniors and people with disabilities. Cutting Social Security services will only hurt the most vulnerable in our communities. Biden will provide sufficient resources for staffing needs to meet the needs of beneficiaries today and into the future.

Biden Attacks Trump's Attempt To Defer F.I.C.A.

      From the Tampa Bay Times:

Democratic presidential candidate Joe Biden has a new message for Florida seniors: President Donald Trump’s latest attempt to fix the economic crisis could put their retirement at risk.

In a new ad that will air exclusively in the Sunshine State, Biden’s campaign accuses Trump of stealing from Social Security to pay for a new round of coronavirus relief. ...

The Biden ad equated Trump’s proposal [to defer F.I.C.A. for three months] to “slashing hundreds of billions of dollars from the Social Security trust fund every year.” ...

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First Circuit Rules That Puerto Rico Residents Can Be Paid SSI

     The First Circuit Court of Appeals has issued an opinion in the case of U.S. v. Vallelo-Madero holding that it is an unconstitutional denial of equal protection to refuse to pay Supplemental Security Income (SSI) benefits to qualified residents of Puerto Rico. Puerto Rico residents are citizens of the United States but since the beginning of the program ineligible for SSI. If they move to a state, however, they can get the benefit.

     The background of the case is interesting. Vallelo-Madero was receiving SSI while living in New York but then moved to Puerto Rico. Apparently, he didn't tell Social Security he had moved but they somehow found out later. It looks as if they did a criminal investigation but eventually decided not to bring charges. Instead, they did something they rarely do, they filed a civil suit to try to collect the overpayment. It was at this point that he raised the defense that his SSI never should have stopped so there wasn't an overpayment.

     Social Security can now ask all the judges of the First Circuit Court of Appeals to hear the case en banc or they can ask the Supreme Court to hear the case or they can give up and start paying SSI to all eligible applicants living in Puerto Rico. I don't think this Administration is going to pay SSI to a bunch of brown skinned people if it can avoid it. However, if Joe Biden is elected President in November and this case is still pending as I expect it will be, he may decide to accept the First Circuit opinion and start paying SSI to eligible people living in Puerto Rico.

Buttigieg Social Security Disability Proposals

     Pete Buttigieg is the first Presidential candidate to issue detailed proposals to help disabled Americans. Here’s the section of his plan dealing with Social Security:

• Eliminate the “benefit cliff” for Social Security Disability Insurance (SSDI) so benefits gradually phase out until recipients reach nearly $45,000 in annual earnings.
• Eliminate SSDI’s ineffective current work incentives.
• Reduce excessive wait times for SSDI and Supplemental Security Income (SSI) appeals cases.
• Enable SSDI participants to start receiving income benefits as soon as they are admitted to the program.
• Eliminate SSDI’s 24-month waiting period for Medicare coverage.
• Update critical SSI thresholds to allow people to receive greater assistance as costs of living rise.

Senator Warren Wants To Increase Social Security Benefits

     It’s a different plan than the Social Security 2100 Act that may be moving in the House of Representatives and it’s not fleshed out but Senator Elizabeth Warren, who’s running for the Democratic Presidential nomination, is putting forward a plan to increase Social Security benefits.