Do You Care What Andrew Saul Has To Say?

     Former Social Security Commissioner sat for a long interview with a staffer at the right wing American Enterprise Institute "think tank." I don't want to waste the time listening to it but maybe you will. Apparently, Saul claimed that Social Security has 100,000 employees! I knew that he never bothered to try to understand the agency he was supposed to be leading but this is over the top. Actually Social Security has fewer than 60,000 employees. Did he care about anything at the agency other than being as obnoxious as possible to employees?

Strange Bedfellow

      The Cato Institute, a right wing "think tank which has pushed a plan to privatize Social Security, has joined in an amicus brief to the Supreme Court in the case of Carr v. U.S. arguing that Social Security claimants should be able to raise the issue of the constitutionality of the appointments of ALJs even though they had not raised the issue before the agency.

I Agree But Do You Have To Use That Word "Notch"?

From an earlier "Notch Baby" controversy

     From Paul N. Van de Water writing for the Center on Budget and Policy Priorities:

The next COVID-19 relief bill should fix an unintended benefit “notch” under which, due to the pandemic and resulting recession, Social Security benefits will be significantly lower for workers who turn 60 this year and will be eligible for early retirement benefits in 2022. Those becoming eligible for disability or young survivors benefits in 2022 will also see lower benefits. ...

Normally, average earnings in the economy rise from one year to the next. Due to the sudden, sharp unemployment increase in 2020, however, many workers will suffer a big decrease in their annual earnings. And those decreases will cause the economy-wide average annual wage to fall as well. That, in turn, will reduce the average indexed earnings and Social Security benefits of workers turning 60 in 2020 compared to those with similar earnings who turned 60 in 2019. If the average wage falls by 5 percent in 2020, as now seems likely, the retirement benefit of a 60-year-old worker with average earnings will drop by about $1,200 a year for each and every year of retirement. If the average wage falls more, the decreases will be even larger. ...

Policymakers should fix this unfair result. One solution would be to specify that the wage-indexing factor couldn’t fall from one year to the next, even when the average wage index declines. ...

GAO Report Pans Idea Of Mandating Increased Private Disability Insurance

     Some right wing "think tanks" have been promoting the notion that mandatory private disability benefits could somehow substitute for or augment Social Security disability benefits. I wouldn't call the ideas even half baked. It's been more like vague notions. The proponents of these ideas got Senator Orrin Hatch to ask the Government Accountability Office (GAO) to do a report on their ideas, to the extent that GAO could even identify what the ideas were. Predictably, the GAO report wasn't encouraging for these reasons:

• Insurers told GAO that is was unclear how expanding PDI [Private Disability Insurance] would affect PDI premiums and the impact this would have on enrollment.
• Employers told GAO they were concerned about potential additional requirements or administrative burdens that would be placed on them if PDI were expanded.
• Employee and disability advocacy groups told GAO they were concerned about whether PDI expansion would provide standard services or employee protections currently available under SSDI, especially with respect to PDI expansion proposals that would replace SSDI for 2 year.

     One enormous problem is that long term disability insurance (LTD) as we know it is reduced by the amount that Social Security pays. That means that LTD just pays the full rate until a claimant is approved by Social Security and then supplements the Social Security disability benefits thereafter. There's only a handful of LTD recipients who never get approved for Social Security disability benefits and continue to receive the full unreduced LTD payment indefinitely. Making LTD the primary payor would completely change the insurance product and make it much, much more expensive. It's never been clear to me whether the think tank proponents of private disability insurance understand just how different what they're asking for would be from any product that exists now. The LTD carriers might like to get big contracts for helping Social Security administer its disability benefits programs but I've never seen evidence that the LTD carriers actually want to be the insurers. Apparently, that's what GAO heard directly from the insurance companies.

I Hope Andrew Saul Doesn't Endorse This

     Andrew Saul, President Trump's nominee for Commissioner of Social Security, was on the board of trustees of the Manhattan Institute for Policy Research. He's off now but I can't tell when he joined or left that board.
     Here's an excerpt from a recent op ed by a Senior Fellow at the Manhattan Institute with my comments in brackets.

The American polity recently tore itself apart debating the morality of adding $1.5 trillion in tax cuts to the national debt. Yet the $82 trillion avalanche of Social Security and Medicare deficits that will come over the next three decades elicits a collective shrug. Future historians — and taxpayers — are unlikely to forgive our casual indifference to what has been called “the most predictable economic crisis in history.” ...

Politicians brush aside the issue by promising easy fixes. Tax the rich? Doubling the 35 and 37 percent tax brackets to 70 and 74 percent would close just one-fifth of the long-term Social Security and Medicare shortfall. Even seizing all annual income earned over $500,000 would not come close. [These are damned lies. The long term Social Security deficit is 2.83% of taxable payroll. You can solve most of the long term financing problem simply by eliminating the FICA earnings cap.] ...

In reality, balancing the long-term budget without reforming Social Security and Medicare (and fast-growing Medicaid) would require either nearly doubling income-tax rates across the board or eliminating nearly every remaining federal function. [There's no way around it. This is a preposterous lie.] ...

[T]here’s the argument that Social Security and Medicare represent an unbreakable, unamendable promise to the elderly, consequences be damned. Of course, today’s teenagers never signed up for this budget-busting deal. Besides, benefits have been repeatedly expanded far beyond what current retirees were promised while working.

Those reasonably claiming “I just want the benefits I earned!” should be considered allies for reform. Setting lifetime Social Security and Medicare benefits equal to the net present value of each person’s lifetime contributions to the systems — and not a penny more — would eliminate most of the long-term shortfall. ...

More realistically, Social Security can be addressed by gradually raising the eligibility age and more aggressively means-testing benefits for wealthy retirees. [Actually, these measures wouldn't do nearly as much good as eliminating the FICA cap. However, a 0.25% tax on financial speculation with revenues going to the Social Security trust funds would solve 93% of the long term shortfall. ] ...

     It's not fair to blame or credit Mr. Saul for everything written by a person who works for a "think tank" merely because he was at one time on that think tank's board of trustees but this may be the most obviously deceptive, intentionally misleading piece on Social Security financing that I've ever read and I've read a lot. It's ridiculous on its face and it's not the only obnoxious piece produced by the Manhattan Institute. I hope that Saul repudiates this sort of thing.

Fighting Fraud By Denying Disability Claims In The Heartland

     A television station in Kansas is running a piece on a young woman in Kansas diagnosed with lupus who is fighting the denial of her Social Security disability claim. Here's a little excerpt:

The backlog started snowballing about 10 years ago, around the time Jason Fitchner became acting deputy commissioner of the Social Security Administration.

He says that during the Great Recession, a lot of people who had disabilities applied but weren’t necessarily unable to work. 

“But they’re on the margin,” Fitchner says. “They can work, but when the recession happens, those are the first people who tend to lose their jobs, and then they apply for disability insurance.” ...

This spring, the agency introduced changes to fight fraud and streamline the application process, including a new fraud-fighting measure that removes the special consideration given to a person’s long-time doctor. ...

[F]ormer administrator Fitchner, now a senior research fellow at George Mason University’s Mercatus Center, says the agency is obligated to weed out any fraud it can, including the admittedly rare cases of treating physicians tipping the scale in favor of their patients. ...

     Not surprisingly, Fitchner, who works for a right wing think tank, is pushing the narrative that those who apply for disability benefits aren't really disabled, just unable to find a job. Right. I've been laid off. Instead of looking for work, even though I'm healthy, I'll just apply for Social Security disability, put up with years of delay and probably never get on benefits. Even if I do get on benefits, they'll be far less than what I was earning when I worked. That makes sense. He's also pushing the narrative that refusing to consider the opinion of a claimant's treating physician has something to do with preventing fraud. That's nonsense. Social Security is just trying to bootstrap itself into a stronger position when it defends its decisions in federal court. Folks like Fitchner like to claim that fraud is rampant among Social Security disability claimants even though the agency's Office of Inspector General (OIG) can't seem to find more than a handful of cases each year. Of course, to Fitchner that would just be proof that OIG hasn't tried hard enough. The existence of widespread fraud is an idée fixe for people like Fitchner. They try to justify their belief regardless of the evidence.
     By the way, the woman whose story is featured in the article has systemic lupus erythematosus (SLE) and now has esophageal problems. Fitchner wouldn't know it but that combination sounds a bit ominous.

Trump Proposal Coming On SSI Children's Benefits?

     The Center on Budget and Policy Priorities (CBPP) has put out a piece on the importance of Supplemental Security Income (SSI) benefits for disabled children. I take it as a sign that they believe that Trump budget proposal will call for ending these benefits. By the way, if that is the proposal, take it seriously but don't get too excited. It wouldn't save much money and would be very difficult to get through the Senate. Think about it. Taking benefits away from disabled kids; how popular would that be, really?

Pete Peterson Keeps Wasting Money

     The McCrery-Pomeroy SSDI Solutions Initiative, which is part of the Committee for a Responsible Federal Budget (CRFB), has issued a book containing "Ideas to Strengthen the Social Security Disability Insurance Program." 

     CRFB is officially bipartisan and has Democrats as well as Republicans on its board. However, it is closely affiliated with Pete Peterson who seems to have cutting Social Security as his primary goal in life. Peterson has huge wealth to support his mania.

     The book has been out for a month or two but has not been promoted, probably because there's little in the book that would actually bring about cuts in Social Security disability or which is practical.

     The book is a mishmash with each chapter by a different author or group of authors. For the most part, I'd say that few, if any, of the authors have ever met a Social Security disability claimant or recipient. It seems to mostly be "blind people describing an elephant" or perhaps describing how they would build a better elephant. I think that if the authors of this book had to actually try to help real, live Social Security disability claimants that they would be likely to say "Who knew disability could be so complicated?"
     One of the most important types of recommendation in the book is for "early intervention" to prevent disability. Roughly speaking, the idea is that if people can receive "early intervention" of some type after they become sick or injured, that reliance upon disability benefits can be avoided. I have no idea how this would work. I have no idea what the "early intervention" would consist of. More important, I'm pretty sure the authors don't have much idea how this would work or what the "early intervention" would consist of. I see no reason to believe that such "early intervention" would help any significant group of people. One of the authors is at least honest enough to tell us:

What is clear to me from all three papers in this section is that there is neither completed research nor an evidence base upon which to enact nationwide early intervention or work support programs. Additional study and evaluation will be needed to generate this evidence; certainly before making changes to the SSDI program.

      However, even this statement assumes that such evidence would be forthcoming if the "additional study and evaluation" is done. I think there's strong reason to doubt that.
     There already is a good deal of "early intervention" in workers compensation cases, at least where I am. All I've seen from that is heavy-handed pressure on claimants to resume work, even for brief periods of time, not because the injured person achieves any long term benefit but because it helps the employer's insurance company limit what it has to pay. I've seen no evidence that it has done anything to reduce reliance upon Social Security disability benefits. If there were such evidence, I think one of the authors of this book would be touting it.
     Otherwise, the book makes recommendations such as eliminating reconsideration, introducing some sort of government representative at hearings, encouraging private long term disability insurance, performing more continuing disability reviews, time limited disability benefits, partial disability benefits and changing the definition of disability. I'm not going to bother to discuss any of this since none of it could possibly be adopted at this time or at any foreseeable time in the future. Yes, for example, doing away with reconsideration would be nice but it would cost a lot of money since far more people would request hearings and hearings are more expensive so it's not going to happen. If you really think this is possible, you fail to understand the problems that Social Security has in getting enough money to continue its current operations much less more money to fund a more expensive version of its operations.
     Overall, when I read this book, I keep thinking the authors are nothing more than amateur dilettantes whose "advice" to Social Security policymakers is no more valuable than the "advice" I might give to the head coach of an athletic team I follow.

My Theory

     For at least the last four years attorneys who represent Social Security disability claimants have been asking each other why there has been little news media coverage of the human costs of the unprecedented backlogs of Social Security disability claims and the general harshness in adjudicating these claims. Large numbers of people are dying while waiting for action on their claims. Many disability claims are wrongly denied, particularly claims based upon mental illness. After all, smaller backlogs and less harsh policies had received extensive media coverage in years past. Why not now?

     My theory on why there has been so little coverage is that the think tanks and advocacy groups based in D.C. who ought to be initiating the media coverage were instead squelching it because they were afraid that a Democratic president would be blamed even though the fault, at least for the backlogs, clearly lies with the Republicans in Congress who have failed to give the Social Security Administration an adequate appropriation.

     If my theory is correct, expect lots of media attention next year to the backlogs. We could have used the attention to these problems over the last four years.

Fees For Representing Social Security Claimants Going Down

     As part of a virulently hostile piece about attorneys who represent the disabled, the Manhattan Institute, a right wing "think tank", posted this graph, which undermines their argument a bit:

Glad We Got Solutions To Those Problems!

     The Cato Institute, a right wing "think tank", has issued a set of what it calls "essays" on "downsizing" Social Security (lots of quotation marks here but they're all merited):

Social Security Retirement: Social Security faces a huge financing gap because of its pay-as-you-go structure and the aging of the U.S. population. It should be transitioned to a system of personal savings accounts, which would increase individual financial security and help to avert future tax increases.   

Social Security Disability Insurance: Growing numbers of Americans are receiving disability benefits, and the system is subject to major abuses. Policymakers should tighten eligibility for the program and explore ways to move it to the private sector.   

Supplemental Security Income: This program for low-income and disabled individuals suffers from similar abuses and overspending problems as Social Security Disability Insurance. The financing and administration of Supplemental Security Income should be devolved to the states.

Center For American Progress Report On Social Security Disability

     The Center for American Progress has issued a report in Q&A format on Social Security's disability programs. Here are a few somewhat random excerpts:
 

...
 Controlling just for income, participation in Supplemental Security by working-age adults who are potentially eligible because of low income has actually declined over the past decade and a half. In 2011 there were 17.6 nonelderly adults receiving Supplemental Security for every 100 nonelderly adults with incomes below 100 percent of the poverty line, compared to 18.5 nonelderly adults in 1996. In other words, the number of nonelderly adults receiving Supplemental Security grew at a slower rate than the number of nonelderly adults with very low incomes. ...

How does the United States compare with other countries?

According to a recent analysis by the Organisation for Economic Co-operation and Development, or OECD, the United States has the least generous disability-benefit system of all OECD member countries except Korea.

Cato Isn't Expecting Privatization

     Giving us an idea how the right wing views their chances of privatizing Social Security, Daniel Mitchell of the Cato Institute writes that that Australia's privatized Social Security system would be a great model for the U.S. All it will take for such a thing to happen in the U.S. is "some sort of Greek-style fiscal meltdown that led to a societal collapse." In a footnote, Mitchell says he doesn't think the U.S. is heading for such a collapse. I guess that means he thinks privatization of Social Security isn't going to happen.

    By the way, Australia never had anything like the U.S. Social Security system. What they had was a means tested program like the U.S. Supplemental Security Income program. That program never went away. They just added a mandatory retirement savings plan on top of it. Basically, Australia uses means tested programs a lot more than the U.S. If you try to compare Australia and the U.S.on income security, I think you're going to find far more indicia of government dependence in Australia.

Another Think Tank Report On Social Security Disability

     The think tanks are really churning out reports on the Social Security disability programs. The latest comes from  Kathy Ruffing of the Center on Budget and Policy Priorities. Her report includes this interesting chart:

     Claims filed are highly sensitive to business cycle? Note that applications for disability benefits began soaring not in 2008 when unemployment soared but in 1998, ten years earlier, at a time of relatively low unemployment. Note also the inverse relationship between unemployment and the disability claim rate in the early 1980s. How do you explain these facts if claims filed are so sensitive to business cycles?