Interview With The Commissioner

     Commissioner Martin O'Malley gave an interview to the Dallas Morning News. Nothing earth shattering but it's still interesting that he's talking about Social Security's long term funding problem and the President's budget in a much more open way than prior Commissioners. You can tell that he's working for the President rather than trying to be scrupulously above even the hint of politics. The whole "Independent Agency" claptrap is fading away. It never worked. A government agency that pays money to one American in five is inherently part of the political system.

    Next step, make Social Security a cabinet level department.

Seila Law Oral Arguments

     SCOTUSblog has posted a summary of oral arguments in Seila Law v. CFPB. There appears to be a good chance that the position of head of the Consumer Financial Protection Bureau will be found to be unconstitutional or, at least, that its head serves at the pleasure of the President.

     What would such a holding mean for Social Security? For one thing Andrew Saul would be gone by the end of next January at the latest if President Trump is not re-elected but, more important, there would probably be endless litigation on the validity of decisions made, regulations adopted and contracts granted at the Social Security Administration. These issues may require multiple Supreme Court opinions to resolve.

     It's distressing to see that the case argued before the Supreme Court dealt only with a tiny agency and that there was virtually no briefing on how this might affect a vastly larger agency that pays benefits to one person in five in this country.

     In retrospect, making Social Security an independent agency was a terrible idea. It's never really been at all independent but its theoretical independence is leading it toward pointless constitutional problems.

Is The Position Of Commissioner Of Social Security Unconstitutional?

     From Reuters:

Facing an existential threat at the U.S. Supreme Court, which will hear oral arguments on March 3 in a constitutional challenge to the unusual structure of the Consumer Financial Protection Bureau, the CFPB has found an unlikely champion. The Trump administration believes that the bureau's lone director is unconstitutionally shielded from accountability to the president, yet the Justice Department’s final brief before oral argument urged the Supreme Court not to issue a ruling that will halt the CFPB’s “critical work." ... [The case is Seila Law v. CFPB .]

Seila’s lawyers ... had asked the Supreme Court to decide whether the provision that shields the CFPB director from being removed without good cause runs afoul of the separation of powers doctrine. The Justice Department and the CFPB, repudiating the CFPB’s longtime defense of its structure, backed Seila’s petition, arguing that the provision was an unconstitutional restraint on the president....

DOJ and Seila also agreed that Clement’s attempt to fit the CFPB’s structure within the penumbra of 1935’s Humphrey’s Executor v. U.S. falls short. In that case, the Supreme Court upheld the constitutionality of the Federal Trade Commission, but Seila and DOJ said the court’s analysis applies only to “quasi-judicial” agencies headed by several commissions, not to the CFPB’s lone director. They also hinted that if Humphrey’s Executor controls this case, then the Supreme Court should consider overruling its precedent, which Seila described as “erroneous and already repudiated.”  ...

     The Social Security Administration is also headed by a lone director who can only be removed "... pursuant to a finding by the President of neglect of duty or malfeasance in office." If, as this Administration is arguing, the position of head of the CFPB is unconstitutional, I see no way that the position of Commissioner of Social Security isn't also unconstitutional.
     If the position of Commissioner of Social Security is unconstitutional are regulations adopted by unconstitutional Commissioners valid? What about decisions made under a delegation of authority from an unconstitutional Commissioner such as those made by Administrative Law Judges and Appeals Council members? This isn't a problem that can be easily solved in the same way that the problem with how ALJs are appointed was solved.
     If the Supreme Court rules that positions such as that of the Commissioner of Social Security are unconstitutional, the Social Security Administration can no longer be an independent agency, at least not without a multi-member board heading it and maybe not then.
     This could put a real crimp in Andrew Saul's plans for a batch of far reaching regulations.

Kavanaugh Would Hold That Social Security Commissioner Is Unconstitutional

     Supreme Court nominee Brett Kavanaugh has no history of rulings directly in Social Security cases as best I can tell. There just aren't that many Social Security cases arising in the D.C. Circuit where he has been a judge. However, he has opined on an issue that could directly affect the Social Security Administration. He believes that it is unconstitutional to have an independent agency with a solitary head, such as the Social Security Administration. He's a fan of the "unitary executive" theory who believes that we're all safer if the President has largely unlimited power over the Executive Branch. Since the President can't simply fire a confirmed Commissioner of Social Security, the agency, as presently constituted, would be unconstitutional in Kavanaugh's view. If Kavanaugh is confirmed, expect litigation over the constitutionality of the Social Security Commissioner, assuming a Commissioner is also confirmed.

Is Social Security As An Independent Agency Constitutional?

     The Court of Appeals for the District of Columbia held yesterday in PHH Corporation v. Consumer Financial Protection Bureau that independent agencies with a single head appointed for a fixed term of office are constitutional. The argument was that this arrangement encroaches on the President's constitutional powers. If you thought that the question of whether independent agencies are constitutional had been decided in the affirmative during the New Deal, you'd be right when it comes to independent agencies headed by a multi-member board but there has never been any decision on the issue when it comes to independent agencies headed with a single head appointed to a fixed term of office. I really don't see the distinction and neither did this Court but I expect that the right wing effort to wipe out independent agencies will continue. This particular issue may eventually come before the Supreme Court.

     Of course, the Social Security Administration is an independent agency with a single head appointed for a fixed term of office. However, it would be hard to raise the constitutionality  issue now for the Social Security Administration because the agency currently has an acting Commissioner who could be removed by the President at any time.

Where's The Budget?

     From CQ News (sorry, I don't have a link):

The White House did not include a required Social Security Administration request in President Donald Trump’s fiscal 2018 budget —and lawmakers are waiting to find out why.

The Senate Finance Committee wrote a bipartisan letter to White House Budget Director Mick Mulvaney on June 1 asking for the administration to release what is called the Social Security commissioner’s “unrevised” administrative budget.

Under a 1994 law (PL 103-296) that made the Social Security Administration an independent agency, the president is required to include the commissioner’s administrative request in the full budget....

“We have not yet received an official response, but understand OMB is working on it,” a GOP aide to the Finance Committee told CQ. ...

The Finance Committee letter says the requirement for the president to make the Social Security budget request public is a “key feature of the Act that made Social Security independent.” ...

In the case of Social Security, the president’s budget is supposed to include both the Social Security’s Administration’s request to the president, and what the president is requesting from Congress....

Why Did Astrue Agree To Have OMB Clear His Remarks?

     Sean Reilly at the Federal Times takes note of former Commissioner Astrue's remark that he wouldn't "miss having everything I say being cleared by a 28-year-old at OMB" [Office of Management and Budget, part of the White House]. Reilly asked OMB for comment. OMB didn't deny what Astrue said.

     Why did Astrue consent to this? The statute says that Social Security Commissioners are independent. There was no direct way of forcing Astrue to clear his remarks. If anything, this is inconsistent with Social Security being an independent agency. My guess is that during the transition after the 2008 election Astrue made the commitment to not speak without OMB clearance. Is OMB so powerful that the job of Commissioner would have been untenable in the face of OMB hostility? Was there a threat to reorganize Astrue out of a job if he didn't agree to be a team member? How much independence did Astrue have in other ways? He had to clear new regulations through OMB, of course, but what about Rulings? What about major contracts? Maybe we'll get answers to these questions some day.

     And one more question, does Social Security as an independent agency really make sense?

More On Yesterday's Hearing

     I had some time today, while I did other things, to listen to yesterday's Senate Finance Committee hearing. Here are some things I heard that seemed noteworthy to me:

• Commissioner Astrue said that the technology used for Social Security video hearings before Administrative Law Judges had gotten so good that one could see the watermark on a drivers license.[That is not close to my experience. Often I can hardly recognize the people on the other end.]
• A quote from Commissioner Astrue responding to a question about the number of Social Security employees who are eligible or near eligible to retire: "I'm close to panic about holding onto our people."
• Social Security has a system which reports episodes of violence or threatened violence affecting Social Security offices. There used to be about 500 reports a year. It's now around 2,500.
• Ticket to Work is a "disappointment." The actuaries say it is not cost effective.
• Astrue said emphatically at about one hour into the hearing that it is not the law that attorneys and others who represent Social Security disability claimants are required to submit all medical evidence.
• The Commissioner is uncertain whether current law which gives Social Security Commissioners fixed terms which can overlap Presidential Administrations is a good idea. He seemed to indicate that he thinks it is a bad idea.
• Astrue said that his continuing as Commissioner after the change in the White House was not what the incoming Obama Administration wanted.
• He does not want another term as Commissioner. He wants to return to Massachusetts.

     Please listen to it yourself. It has its dull moments but also some interesting ones. It's certainly more interesting than most of these.

Is The Social Security Administration Unconstitutional?

Take a look at Tom Shoop's post on Fedblog concerning today's Supreme Court decision in Free Enterprise Fund v. Public Company Accounting Oversight Board. Shoop writes that the Court held:

... that the way the Public Company Accounting Oversight Board was set up under the 2002 Sarbanes-Oxley Act violates the Constitution. Members of the board get two layers of protection: They can only be removed by the Securities and Exchange Commission for cause, and the SEC's members can only be removed by the president for cause. The court's majority ruled that at least in the case of the board, that's one layer of protection too many.

In a dissenting opinion, Justice Stephen Breyer raises an interesting issue: What about the dozens of independent federal agencies who are headed by officials who have some degree of statutory protection from arbitrary removal? If they are, in turn, administered on a day-to-day basis by executives who also get protection from removal under civil service laws, doesn't that violate the two-layers principle?

Justice Breyer's dissent includes a list of 48 agencies that may be affected by the majority opinion in Free Enterprise Fund. Social Security is not on Justice Breyer's list but this appears to be an oversight since Social Security qualifies for the list under the criteria given by Justice Breyer based upon the facts that Social Security has independence in submitting budgetary requests to Congress and Social Security is designated as "indepedent" by statute. Following Justice Breyer's logic, the existence of Senior Executive Service and Administrative Law Judge (ALJ) positions at Social Security makes the agency's setup unconstitutional. Indeed, the existence of any civil service position at Social Security could make the agency's setup unconstitutional.

Remember, this was a dissenting opinion. Justice Breyer was not explaining the majority opinion but giving reasons why he believes the majority opinion is unwise.

Update: Breyer does include Social Security in a list in one of the appendices to his dissent as a possibly affected agency. He specifically mentions Social Security as a possibly affected agency in the body of his dissent at pages 68 and 70 of the PDF.

Social Security would be, by far, the biggest agency possibly affected by this.

Note that there are plenty of people out there who want to litigate the constitutionality of Social Security even though precedent is solidly against them. This decision has nothing to do with the constitutionality of Social Security itself, just the way in which the Social Security Administration is set up to administer Social Security, but that will not stop the litigation. Standing may stop most of the litigation, however.

The majority opinion is a huge win for the "unitary executive" theory espoused by John Yoo and others. I thought that the excesses of the Bush Administration had seriously eroded whatever support there was for this theory but not in the eyes of five members of the Supreme Court.

Further update: I think the only reasonable reading of this opinion is that any statute that would prevent Commissioner Astrue from removing any ALJ or SES employee from his or her position is unconstitutional. This may apply to ANY Social Security employee. Commissioner Astrue may be constrained by union contracts but not by a statute. As the most important Republican holdover in a Democratic Administration and as someone who has publicly expressed frustration over his inability to discipline ALJs, Commissioner Astrue is in a delicate position. Aggressive action on his part could cause him to lose his job as his agency is absorbed back into the Department of Health and Human Services or becomes a cabinet level department.

Elena Kagan's nomination hearing and the gun decision today are getting most of the attention but the Free Enterprise decision may be today's most important judicial development.

Independent Commissioner Of Social Security?

Take a look at some correspondence between Jim McCrery, the ranking Republican on the House Ways and Means Committee and Michael Astrue, the Commissioner of Social Security, on the effect of the children's insurance provisions recently passed by Congress and vetoed by the President. Astrue confirms that Social Security cannot tell for certain who is and who is not a citizen, which should not come as a surprise to anyone.

Note the last line in Astrue's letter: "The Office of Management and Budget advises me that there is no objection to the transmittal of this letter from the standpoint of the President's program." Why did an independent Commissioner of Social Security need the approval of the Office of Management and Budget to respond to a letter from a Congressman? Why is the "President's program" a matter of concern to an independent Commissioner of Social Security? Would Michael Astrue worry about the "President's program" if the President were Clinton or Obama or Edwards? What do we have ahead of us if Michael Astrue remains as Commissioner of Social Security through four years of a Democratic Presidency? That is how long his term of office lasts.

Note also that Astrue's stationery does not include a street address or any telephone number. That is the way it is with all virtually all Social Security stationery. It seems like they want to hide.