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.” ...

What Happend In The Past At Social Security When There Were Previous Government Shutdowns Or Threats Of Shutdowns?

     From a February 17, 2011 e-mail sent out by head of the union that represents most Social Security Administration (SSA) employees to union members: 

I have heard that SSA is having a high level management conference call today regarding the Agency’s furlough preparations. ... In some past furloughs the Agency has closed all field offices. In other furloughs SSA has declared maintenance of benefit rolls as essential and kept skeleton staffs at work but such staff was instructed to take no new claims. In the 1995-96 furlough the Agency closed all field offices for the first 5 day furlough. They kept all field offices open during the 2nd 20 day furlough and declared field employees essential. Employees were called back from X-mas leave and forced to work without pay. When the furlough ended, Congress reimbursed all employees whether they worked or not.

       From an April 6, 2011 e-mail from then Social Security Commissioner Michael Astrue to Social Security employees:

As soon as funding lapses, Federal agencies will not be permitted to incur further financial obligations performing activities funded by annual appropriations, except those related to the orderly suspension of operations or performance of excepted activities. This means that some employees will be furloughed and unable to work. Our contingency planning for the potential funding lapse includes determining which agency functions are excepted from a furlough. We plan to continue services associated with the White House's statement that Social Security checks will continue to go out. Our field and hearing offices, teleservice and program service centers, and State disability determination services will provide limited services if there is a shutdown. Should it become necessary to implement our contingency plans, you will receive details from your supervisor no later than Friday, April 8th regarding your furlough status.

Acting Commissioner's Broadcast E-Mail

A Message To All SSA And DDS Employees

Subject: Budget Update

 

As many of you are aware, annual funding for the Federal Government expires on September 30.  The Administration strongly believes that a lapse in funding should not occur.  There is enough time for Congress to prevent a lapse in appropriations, and the Administration is willing to work with Congress to enact a short-term continuing resolution to fund critical government operations and allow Congress the time to complete the full-year 2014 appropriations.

 

However, prudent management requires that we be prepared for all contingencies, including the possibility that a lapse could occur at the end of the month.  A lapse would mean that a number of government activities would cease due to a lack of appropriated funding.  It would also mean that a number of employees would be temporarily furloughed.  To prepare for this possibility, we are working with our Office of the General Counsel to update our contingency plans for executing an orderly shutdown of activities that would be affected by a lapse in appropriations. 

 

I realize the uncertainty of the current circumstances puts you in a difficult situation, and should a lapse occur, it could impose hardships on many of you, as well as the people that we serve every day.  As we approach the end of the month, I am committed to providing you with updated and timely information on any further developments.  I know you have many questions about your particular situation.  The Office of Personnel Management has a website that should answer some of the questions that may be on your mind. 

 

Thank you for your hard work, dedication, and patience through this process.  You remain the best employees in Government, and I know I can count on you to continue your unwavering commitment to serve the public during this uncertain time.

 

 

Carolyn W. Colvin

Acting Commissioner

More Info On Sequestration From AFGE

     A message to members of the American Federation of Government Employees (AFGE) working for Social Security:

AFGE NATIONAL COUNCIL OF SSA FIELD OPERATIONS LOCALS, AFL–CIO 

SSA Budget Cuts Furlough Update 

Yesterday, Acting SSA Commissioner, Carolyn Colvin met with SSA’s [Social Security Administration's] AFGE General Committee Officers to brief the Union on sequestration.  [After one initial meeting, former Commissioner Astrue had refused to meet with AFGE leaders. This meeting is one sign that things have changed at least a little since Astrue left.]

AC [Acting Commissioner] Colvin informed AFGE that under the current budget continuing resolution (CR), she believes SSA will not have to furlough employees if sequestration is implemented. However, she is clear that if the budget changes, furlough may have to be revisited. 

There are two current situations that may change SSA’s current budget: 

1. The CR expires at the end of March. Congress is working on a new CR for the remainder of the year. Some Members of Congress want to see cuts to the CR in place of sequestration, as stated in the Budget Control Act of 2012. 
2. Legislation to override sequestration. Current discussions in the House and Senate may lead to fewer cuts in the Department of Defense cuts and shift to additional discretionary spending cuts. SSA’s budget is included in the discretionary spending. 

AC Colvin also informed AFGE that to avoid furloughs, there will be cuts to SSA’s budget in other areas. Some of those areas are expected to include a freeze on all overtime, hiring and travel; and release of all temporary hires and reemployed annuitants. As employees leave the agency for retirement or other reasons, their positions will not be replaced. 

All of this will lead to fewer employees to do the work. Backlogs will grow; waiting times will rise; reception areas will become and/or remain full; calendars will back up; more calls will be in cue; and busy rates will increase. AFGE is very concerned that the adverse impact on public service will result in more complaints and hostility from the public. 

AFGE will be providing you with information during this difficult, confusing period of budget discussions. 

If SSA dodges the bullet of furloughs, many of our fellow Federal employees who work in our communities and cities, may not. AFGE will be planning a number of events in the next month to address the impact of budget cuts for all federal agencies, including SSA.

Acting Commissioner Hopes To Avoid Furloughs

A Message To All SSA Employees

Subject: Budget Update

     I want to share with you the latest information we have regarding our operating budget. I know sequestration is on all of our minds.
     Clearly, this is a challenging time for us all. I want you to know that, here at SSA, we will work to minimize the risk of furloughs that would further harm services and program integrity efforts in the event of a sequester. This includes making some very difficult decisions and taking necessary steps to mitigate our budget risks this fiscal year—including steps such as restricting hiring, limiting overtime availability, delaying purchases, and limiting agency travel. We will also be restricting our spending to mission critical activities. By taking these actions, we are hopeful the funds available to us will allow us to operate without furloughs.
     On March 1, we will continue to serve the American public. I recognize and appreciate all you do to keep service to the American public our number one priority. Thank you for your continued commitment. I will keep you informed of developments.

Carolyn W. Colvin
Acting Commissioner

What Happens With Sequestration?

     Sequestration, the odd term for automatic budget cuts, seems almost certain to take effect on March 1 unless there is a last minute "Come to Jesus" moment. Thank goodness the furloughs don't start instantly. From Government Executive:

Federal employees will not feel the immediate impact of sequestration, should automatic budget cuts set to go into effect March 1 take place, an Obama administration official said Thursday.

Office of Management and Budget Controller Danny Werfel told the Senate Appropriations Committee that union negotiations would start on March 1, if sequestration hasn’t been averted, and most federal employees would not receive furlough notices until mid-March.

“Will the furloughs take place on March 1st?” Werfel asked himself rhetorically. “No, because of legal requirements,” referring to the need to bargain with unions and provide 30 days notice to employees.

OMB clarified on Friday that Werfel was referring specifically to Defense Department civilians when setting April as the earliest possible start date for sequestration furloughs. The Obama administration is leaving open the possibility furlough notices could be sent out to non-Defense feds before March 1.

     Below is a letter that then Commissioner Michael Astrue sent to Senator Mikulski concerning the sequester. You can click twice on each page to view at full size. It appears to me that Astrue was understating the effects of sequestration on Social Security. I don't see how the agency avoids widespread furloughs. We won't have to wait long to find out. If furloughs are coming, Social Security will have to notify the employee unions and begin negotiating with them pretty much immediately after sequestration begins on March 1.

     Update: Let me respond to a persistent misunderstanding. Social Security benefits are exempt from sequestration. Social Security's administrative budget, the budget that pays employee salaries and that pays for rent and electricity and paper clips and all the other goods and services needed to keep the Social Security Administration operating, is very much subject to sequestration

Cliffhanger

     The fiscal cliff negotiations drag on. At this point, preventing the sequester is on the table and the chained CPI change for Social Security's Cost Of Living Adjustment (COLA) is off the table. Republicans are even denying that they want chained CPI! 

     If this is not resolved, Social Security employees should soon expect to receive a furlough warning. As an example of what's coming, the Department of Defense is preparing to notify 800,000 civilian employees that they can expect several weeks of unpaid leave. However, the White House has not informed agencies of exactly how sequestration will be administered. According to the Wall Street Journal, the Office of Management and Budget (OMB) was not even returning phone calls on the subject last week!

Sequestration Nearly Inevitable

     The Washington Post reports that sequestration seems all but certain to take effect on January 1. Most likely, it will last a couple of months. Social Security could avoid furloughs if sequestration were only to last a few days but it's hard to imagine such a huge cut in the agency's operating budget over a couple of months not resulting in furloughs.

     I was once a federal employee. I know many federal employees. I know that job security is an extraordinarily important consideration for most federal employees. I feel for the federal employees who may suffer partial or total furlough as a result of sequestration but I feel more for the members of the public who will suffer as a result of sequestration. This is a big deal.

     This shouldn't have happened.

What Follows Plan B?

     When House Speaker's Boehner decided to go ahead with his "Plan B", we started down a track that seems to lead directly over the "fiscal cliff." I'm not sure that the failure of "Plan B" in and of itself made the jump into the abyss more likely but the lack of progress over the past few days and the fact that the House of Representatives is adjourning until after Christmas makes that terrible outcome seem nearly inevitable.

     At this point, I think the "chained CPI", which would reduce the Social Security Cost of Living Adjustment (COLA), is less likely to come to pass than it was last week. It appears that nothing can be passed in the House of Representatives without Democratic votes and the price of those votes is the end of the chained CPI. The current 2% reduction in the F.I.C.A. tax is almost certain to end on December 31. That might be revived later but I wouldn't bet on it. Social Security and other agencies will almost certainly get hit by sequestration on January 1. Sequestration dramatically lowers the agency's budget and will eventually bring about employee furloughs. However, the Office of Management and Budget is telling agencies to send out messages to their employees that do not mention furloughs. I take that to mean that there is enough leeway for Social Security and other agencies to delay furloughs in the expectation that sequestration will not last long.

     Also, I hate to mention it, but we're approaching the statutory cap on the federal debt. Even with everything that happens with the fiscal cliff, we'll still get to that cap sometime in January or early February. The consequences of getting to that cap are almost incalculable. Even shutting down the federal government will probably be inadequate to prevent the country defaulting on its debts. It may take significant reductions in everything including Social Security payments, which, in its own way, would be a default on a federal debt.

I Hate To Be Gloomy, But ...

     A Republican sweep of the White House, House of Representatives and Senate might have had devastating effects on Social Security but the result we got -- basically the status quo -- leaves Social Security at great risk. Yes, the new Commissioner will be an Obama appointee. Yes, Democrats will have a somewhat increased majority in the Senate. However, the following problems remain:

• I have noted over the decades of following Social Security that the House Social Security Subcommittee seems to have more influence over the Social Security Administration than the White House and Senate combined. Republicans will continue to control the House Social Security Subcommittee. They are not big fans of the concept of social insurance.
• Republicans in the House of Representatives will continue to have a choke hold on Social Security's administrative budget. They have been extraordinarily irresponsible yet they too won re-election. Their irresponsibility is unlikely to change.
• The entire federal establishment, including Social Security, is facing even more dramatic appropriations cuts as a result of sequestration, scheduled to begin on January 1, 2013. That word, "sequestration," may seem foreign to you but you're going to hear it more and more over the next two months or so. Sequestration would cut Social Security's operating budget much further, to the point that furloughs would be inevitable. The only question is how the furloughs would be implemented. While no one expects sequestration to continue though the rest of the fiscal year, it is entirely possible, if not probable, that we will see sequestration for at least part of January and possibly for quite a bit longer.
• The Disability Trust Fund will temporarily run out of money in 2016. This is related to the baby boom population reaching its most disability-prone years. The inevitable solution is to allow borrowing from the Retirement and Survivors Trust Fund. This has been done before.  However, we have all seen Republican hostage-taking over the last two years. Will House Republicans try to take Disability Insurance Benefits hostage? I have seen no sign of a Republican agenda for the Social Security disability programs but they may be working on one. It would be great if inter-fund borrowing was included in the resolution of the "fiscal cliff" negotiations but are Democrats focused on this problem which will not come to a head for another three or four years? One frustrating thing for Republicans has to be the fact that there is report after report showing that large amounts of money are being wasted in the Social Security disability programs but almost all of this waste can be attributed to Republicans starving the agency's administrative budget! At the least, the Disability Trust Fund situation serves as a check on the new Commissioner. He or she will find it difficult to do anything that can be seen as benefiting the disabled since he or she will constantly be reminded that the Disability Trust Fund is going bankrupt.

A Very Bad Sign

     From the Federal Times:

The Social Security Administration on Monday offered early retirements to 9,000 employees, almost 14 percent of its workforce.

Anyone taking voluntary early retirement must retire by Sept. 30. The offers are effective immediately, SSA said in an e-mail to Federal Times. SSA is not offering buyouts.

To be eligible, employees must have completed 20 years of creditable service and be at least 50 years of age, or have at least 25 years of creditable service at any age. They must have been continuously on SSA’s payroll since Dec. 26, 2011. ...

SSA currently has more than 62,000 employees. The agency already is struggling with last year’s 6 percent reduction in staffing, which has forced it to rely on overtime or close field offices to the public a half-hour early.

SSA Commissioner Michael Astrue told the Senate Finance Committee on May 17 that further cuts in fiscal 2012 and fiscal 2013 would force the agency to cut its hours even further next year.

Staffing cuts also could hurt SSA’s ability to reduce its claims backlog, which has troubled the agency for years.

      This strongly suggests that the agency is trying to avoid or reduce furloughs once the new fiscal year begins on October 1.
     There's no question about who's responsible for this. It's Congressional Republicans.

"Skeleton Crew" In Case Of Government Shutdown

From the Federal Times (emphasis added):

The Social Security Administration on Feb. 17 told the American Federation of Government Employees that it wants to start bargaining by March 22 over how it would enact a furlough.

Jay Clary, SSA's acting associate commissioner, told AFGE that the agency has not decided to furlough employees, but that it wants to figure out arrangements in case lawmakers order a governmentwide furlough or if budget negotiations fall apart and the government shuts down.

SSA Chief Human Capital Officer Reginald Wells said the agency has largely planned who would make up a "skeleton crew" that would have to keep working during a shutdown.

"Discussions [about how to implement a possible shutdown] are happening at a very high level on a regular basis these days," Wells said.

And here is more from Reginald Wells from another Federal Times article:

Most of those employees [who would keep working during a government shutdown] would have to maintain computer systems, facilities, and other elements of SSA's infrastructure, or provide security at buildings.

AP Picks Up On Social Security Furlough Danger

The Associated Press is picking up on the story of possible furloughs at Social Security.

Union Concerns Over Possible Furloughs

An e-mail to union members from the head of the union local that represents most Social Security employees:

From: Witold Skwierczynski
Sent: Thursday, February 17, 2011 10:41 AM
Subject: Furloughs in SSA

Folks:

I was orally informed by SSA labor relations yesterday that SSA intends to provide a notice in a day or 2 (i.e., today or tomorrow) to the Union regarding furloughs. I was also informed that the Agency had not yet decided on the methodology of the furlough (i.e., to close offices for a day a week, to close offices completely for a period of time, or to keep offices open with reduced staff due to employees being furloughed on a staggered basis). OLMER [Office of Labor-Management Relations?] could not answer any questions regarding the duration of any potential furlough. This is obviously speculative at the present time.

I have heard that SSA is having a high level management conference call today regarding the Agency’s furlough preparations. My suspicion is that they will be discussing the SSA furlough plan in the event of a government shutdown effective 3/5/11. I do not know if the Agency will declare any employees essential and force them to work without any guarantee of pay. In some past furloughs the Agency has closed all field offices. In other furloughs SSA has declared maintenance of benefit rolls as essential and kept skeleton staffs at work but such staff was instructed to take no new claims. In the 1995-96 furlough the Agency closed all field offices for the first 5 day furlough. They kept all field offices open during the 2^nd 20 day furlough and declared field employees essential. Employees were called back from X-mas leave and forced to work without pay. When the furlough ended, Congress reimbursed all employees whether they worked or not.

The union and management will probably attempt to negotiate an agreement regarding furloughs in SSA during the week of February 28, 2010.

AFGE Council 220 is planning nationwide informational picketing at SSA facilities on March 2 to protest the House SSA budget for FY 11 which if enacted will likely result in furloughs of a month for SSA workers. We need our brothers and sisters in the other components to join us on March 2, 2011. I am receiving more and more reports of angry and concerned employees who want to express their dissent.

…

I’ll keep you informed of developments.

Witold Skwierczynski

President

AFGE National Council of SSA Field Operations Employees

AFGE Council 220

Social Security Warning Of Furloughs If Republican Budget Proposal Adopted

Sent yesterday:

Mr. James E. Marshall, Spokesperson

SSA/AFGE General Committee

P.O. Box 1698

Falls Church, VA 22041

Dear Mr. Marshall:

Pursuant to Article 4 of the National Agreement, this letter serves as notice to bargain over the impact and implementation of a furlough procedure in the event of an Agency furlough. It is important to note that the Commissioner has not decided to effectuate a furlough. However, given the potential of reduced Congressional appropriations for the remainder of the fiscal year, the Agency is issuing this notice at this time in the event that a furlough may become necessary.

Following receipt of a request to bargain, management is prepared to bargain over negotiable proposals concerning procedures and arrangements related to the aforementioned issue. Any bargaining will be in accordance with the Statute and Article 4 of the SSA/AFGE National Agreement. Accordingly, since this notice is being provided electronically, any bargaining must commence no later than the first Tuesday following the twenty-eighth (28) calendar day period after the receipt of this notice. In accordance with Article 4, Section 1(B), failure to request to bargain within the timeframes set out for national level bargaining may result in unilateral implementation.

Pursuant to Article 4, Section 3(C), please submit your reply to this notice by electronic correspondence to DCHR.OLMER.OAC@ssa.gov. Should you wish to discuss this matter please contact Eddie Taylor at (410) 965-7066.

Sincerely,

Jay Clary

Acting Associate Commissioner

Office of Labor-Management

and Employee Relations