Social Security Facing Waterloo In The Spring?

From Dean Baker, Co-Director of the Center for Economic and Policy Research, writing at the Huffington Post:

Sometime in the spring the government will run up against its debt ceiling. This will prevent the government from any further borrowing.

Since the government has a substantial deficit, with spending exceeding revenue, hitting this limit would mean that the government would not have sufficient funds to pay for all its programs. It also would mean that the government could not pay interest or principle on debt that is coming due; in effect requiring it to default on its debt.

The prospect of the U.S. government defaulting on its debt creates the sort of end of the world scenario in which Congress rushed to pass the TARP in 2008. Back then, President Bush, Fed Chairman Ben Bernanke and all sorts of other luminaries told members of Congress and the public that we would have a second Great Depression if the Wall Street banks were not immediately bailed out, no questions asked. And the money flowed.

The prospect of defaulting on the debt will create a similar outbreak of shrill warnings of disaster. This would likely to lead to scenario in which President Obama signs whatever debt ceiling package House Republicans hand him, even if it includes the privatization of Social Security and Medicare and major cuts and/or elimination of other important programs. The argument from the administration will be that they have no choice.

I do not buy that this is going to happen, especially since any form of privatization would increase the deficit dramatically, but Baker is not the only one sounding the alarm.

22% More Funding For VA But No More For SSA

The Senate is working on a continuing resolution (CR) to fund government activities for a few more months. This is facing the threat of a filibuster. A government shutdown just before Christmas is unlikely but not totally out of the question. The current version of the CR would increase funding for the Veterans Benefits Administration by 22% "to support efforts in reducing the processing times of disability claims." Social Security would get no increase from its 2010 funding level under the CR.

Social Security Hearing Office Average Processing Time Report

From Social Security by way of Nancy Shor, Executive Director of the National Organization of Social Security Claimants Representatives (NOSSCR).

Social Security Calls This The Waterfall Report

From the newsletter of the National Organization of Social Security Claimants Representatives (NOSSCR). Click on it to see it full size.

What Will It Be Like If Social Security's Operating Budget Is Cut By 25%?

From the New York Times:

The collapse of a government-wide spending package in the final days of this Congressional session sets up a politically charged fiscal showdown early next year, testing the determination of Republicans about to take over the House with promises to slash an array of domestic programs....

Republicans say that timeline will allow them to quickly put their stamp on the budget for the current fiscal year, and Mr. Boehner and his leadership team have vowed to eliminate about $100 billion in spending out of about $400 billion in domestic programs. ...

The 2011 spending fight could be complicated by the need to raise the federal debt limit to avoid a federal default — a vote that many new Republican lawmakers have indicated they would not make.

Republicans say the debt limit vote could also present an opportunity, allowing them to tie a package of spending reductions to the debt increase to make it more palatable.

FICA Tax Cut

The bill that cuts Social Security's lifeblood, the FICA tax, by 2% "temporarily" is awaiting the President's signature after both houses of Congress finished work on the bill last night. The bill calls for a transfer of funds from the Treasury to make up for the cut.

The fear among those passionate about protecting Social Security is that it will be impossible to avoid the temptation to make the cut permanent, thereby crippling the funding mechanism that has set Social Security apart from programs such as Food Stamps or Temporary Assistance to Needy Families which are perceived -- negatively -- as "welfare."

That Binder And Binder Lawsuit

I have received many questions about Binder and Binder's lawsuit seeking that Social Security be required to allow them to represent Social Security claimants at hearings solely by video appearance from their office -- meaning that they would never have to meet with the claimant in person. I have downloaded the most recent documents filed in the cases from PACER, the federal court's online system. I have uploaded the to Yousend it so you do not have to mess with PACER or pay its fees. The documents will be available for you to download from Yousendit through December 23.

Omnibus Fails

The effort to pass an omnibus spending bill for this fiscal year has failed. This means lower funding for the Social Security Administration for the rest of this fiscal year. The manner in which it failed -- nine Republicans reneged on promises to vote for the bill -- suggests massive problems in passing any appropriations bills or anything else in the next Congress. I fear that we are embarking upon a two year continuing resolution which will have terrible consequences for the Social Security Administration.

A Couple Of Nuggets

Nancy Shor, the executive director of the National Organization of Social Security Claimants Representatives (NOSSCR), spoke recently at a continuing legal education seminar put on by the Disability Advocacy Section of North Carolina Advocates for Justice. Here are a couple of news items from her presentation:

• There are now four pilots on providing encrypted CDs to attorneys representing Social Security claimants.
• Social Security expects to provide online access to cases pending at the Appeals Council by the middle of 2011 -- to attorneys who have been registered by Social Security for online access.
  

Saturday Shutdown?

From Federal Times:

The federal government could be headed for a shutdown at midnight Saturday, and the problem might not be fixed before Monday morning rush hour, Senate sources say.

Agencies currently are operating at fiscal 2010 spending levels under a continuing resolution that expires at midnight Saturday. It remains possible for the Senate to pass another short-term CR that would keep the government running for another three or four days beyond Saturday, then to vote on final appropriations for the entire fiscal year. But Senate sources, speaking on condition of anonymity, cite another scenario that could lead to a shutdown.

There is a strong possibility opponents of the $1.1 trillion fiscal 2011 omnibus funding bill will require clerks to read aloud the 1,924-page Senate document. Reading the bill is expected to start sometime on Friday, and not be finished until Sunday. Reading of the bill could be followed by another day or more of debate. Then, the Senate may not be able to vote on funding until 1 a.m. Monday, at the earliest.

Senate leaders believe a midnight Saturday shutdown of the government would cause little harm because essential employees are required to work even if there is no funding and most government workers wouldn't return to the office until Monday.

If the problem runs into Monday, federal workers likely would report to work for the day but could be sent home, Senate sources said.

The good news is the implicit assumption that the votes are there to pass on omnibus spending bill. I hope it is true that opponents can only slow it down, not stop it. Even if this passes, Social Security and other government agencies are not out of the woods. There will be a risk of a government shutdown when the debt ceiling needs to be raised. That date will apparently arrive in early Spring.