FICA Tax To Drop For One Year

From the New York Times:

President Obama announced a tentative deal with Congressional Republicans on Monday to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy. ...

It would reduce the 6.2 percent Social Security payroll tax on all wage earners by two percentage points for one year ...

I have a couple of concerns:

• If the reduced payments into the trust funds are not made up in some fashion, Social Security's long term financing problem will be made significantly worse. It will be fine in a sense if they are made up out of general revenues -- or more accurately, out of Treasury borrowing -- but this puts us possible on a path towards the end of a dedicated financing mechanism for Social Security, which puts Social Security at more risk. Of course, there are some on the left who may favor this because FICA is regressive but there are even more on the right who would favor this since it would make it easier for them to categorize Social Security as "welfare."
  
• This recession is not going to end in the next year. How do you allow the FICA tax to go up dramatically a year from now? If you do not let it go back up, Social Security has an impossible long term financing problem without applying general revenues which leads us back to my first point.
  

Update: The Washington Post says that the FICA reductions will be made up to the Social Security trust funds out of general revenue.

Colvin Nomination Revived

The Senate Finance Committee has scheduled a hearing for Thursday to consider the nomination of Carolyn Colvin to become Deputy Commissioner of Social Security. The nomination had been blocked for unknown reasons for well over a year.

A Class Act

From Paul Krugman's blog:

...[C]utting Social Security is one of those things you’re for if you’re a Very Serious Person....

But why Social Security? There was a telling moment in 2004, during one of the presidential campaign debates. Tim Russert, the moderator, asked eight or nine questions about Social Security, trying to put the candidates on the spot, while asking not once about Medicare, which serious people – as opposed to Serious People – know is the real heart of the story. Why the focus on Social Security? ...

The answer, I suspect, has to do with class.

When medical expenses are big, they’re big; even the very affluent are grateful when Medicare pays the bills for their mother-in-laws bypass or dialysis. The importance of Medicare, in short, is obvious to all but the very rich.

Social Security, by contrast, is something that matters enormously to the bottom half of the income distribution, but no so much to people in the 250K-plus club. ...

So going after Social Security is a way to seem tough and serious — but entirely at the expense of people you don’t know.

E-Mail Delivery Of Social Security News Ends

While Social Security News is very much up and running, I am permanently shutting down e-mail delivery of Social Security News. Changes at Blogger have made it impractical to continue e-mail delivery.

Please come to this website to read Social Security News.

Errors In SSI Attorney Fee Payments

From a recent report by Social Security's Office of Inspector General (OIG):

The objective of our audit was to determine whether the Social Security Administration (SSA) accurately paid authorized fees to attorneys and non-attorney representatives (referred to collectively as representatives) for Title XVI claims, through its One-Time Payment system. ...

We reviewed 250 randomly selected Title XVI claimant representative fee payments issued through SSA’s One-Time Payment system during the 2-year period July 1, 2007 to June 30, 2009. ...

In total, 95 (38 percent) of the 250 randomly sampled Title XVI claimant representative fees had payment errors totaling $68,532. Projecting our sample results to the population, we estimate that approximately 10,306 fees had about $7.4 million in payment errors during the period July 1, 2007 to June 30, 2009. ...

Of the 82 overpayment errors, 44 (54 percent) occurred because SSA employees did not properly offset the Title II benefits. Additional overpayments occurred when SSA employees did not always consider the Title II attorney fee amount previously paid, resulting in combined Title XVI and II fees that exceeded the applicable fee limit.

I am not seeing anything like this sort of error rate in my fees. Maybe the local field offices I am dealing with are doing a much better job than is the case nationally.

Operations Building Renamed For Robert Ball

A press release from Michael Astrue, Commissioner of Social Security:

I am extremely pleased that the United States Senate has joined the House in passing legislation to name the Operations Building at Social Security headquarters in Baltimore as the “Robert M. Ball Federal Building.” Bob Ball was the longest-serving Commissioner of Social Security, and his dedication to the agency and its programs lasted until his death in 2008.

I want to thank Maryland’s two Senators, Barbara Mikulski and Benjamin Cardin, for their leadership on this issue. I also thank the Chair of the Committee on Environment and Public Works, Senator Barbara Boxer, and Ranking Member, Senator James Inhofe, who cleared the bill for Senate passage. I look forward to the President’s signing of the bill.

Claim Withdrawal Regulations Clear OMB

Those proposed regulations to prevent people from withdrawing claims for Social Security retirement benefits after several years of receiving benefits has now cleared the Office of Management and Budget (OMB). A few people have done this in recent years and then filed a new claim for benefits in order to increase their monthly benefit amount. This has worked but if you withdraw a claim you have to pay back all the money you received. For some reason, the proposal was changed while at OMB. Expect to see this in the Federal Register in the near future.

Pathetic

The President's deficit reduction commission has finished up its work without ever holding a vote on the proposal of the co-chairs or any other proposal.

Number Of Threats Increases Dramatically

From a report by Social Security's Office of Inspector General (OIG):

Preventing workplace violence is a growing concern. Public interest and media attention have focused on recent incidences of violence at Federal facilities. ...

SSA [Social Security Administration] uses the Automated Incident Reporting System (AIRS), an online, incident-based reporting system, to collect data about incidents that affect the safety and security of SSA’s personnel, property, or operational capabilities. ...

SSA has experienced a dramatic increase in the number of reported threats against its employees or property. The number of threats recorded in AIRS increased by more than 50 percent in Fiscal Year (FY) 2009 and by more than 60 percent in FY 2010. ...

Plowing Ahead With An Occupational Information System

From a report issued by Social Security's Office of Inspector General (OIG):

The objective of our review was to assess the Social Security Administration's (SSA) plans for developing an occupational information system (OIS) designed specifically for its disability adjudication process. ...

To conduct this review, we attended public meetings on the OIS, interviewed SSA staff, and gathered and reviewed information on the Agency’s efforts to develop an OIS designed specifically for its disability adjudication process. ...

Based on information available as of July 2010, SSA’s strategy to develop an OIS designed specifically for its disability adjudication process appears reasonable. ...

SSA has put much effort into developing an OIS and established the Office of Vocational Resources Development to oversee the project. ...

The Agency is performing an Occupational and Medical-Vocational Study to determine which occupations to review first when the Agency begins conducting job analyses. As a part of this study, SSA staff is reviewing 5,000 cases to determine the most common jobs reported by claimants for their past work and the most common occupations cited in medical-vocational denials by adjudicators.

There is not even a mention in this report of concerns that an OIS created by Social Security will be manipulated to achieve pre-determined goals and will lack the credibility needed to stand up to judicial review.

Michael Astrue's term as Social Security Commissioner will end in a little over two years. Unless Astrue is nominated to a new term, a new Commissioner will review the OIS project. It may well be derailed or shifted to a different track then. Even if the OIS project is completed as planned, it still has to stand up to judicial review. No one can now predict how that will come out.

To me, it is obvious that a consensus plan would be far more sensible. Achieving a consensus plan would require that Social Security relinquish the ability to control the process so that it can achieve pre-determined goals. Unfortunately, retaining the ability to control the process to achieve pre-determined goals seems to be the entire point for Social Security.

By the way, I have heard rumors about the size of Social Security's Office of Vocational Resources Development. Does anyone have any solid numbers on how many employees it has?