Plan To Avoid "Fiscal Cliff" Includes Social Security Cuts

     From the New York Times (emphasis added):

Senate leaders are closing in on a path for dealing with the “fiscal cliff” facing the country in January, opting to try to use a postelection session of Congress to reach agreement on a comprehensive deficit reduction deal rather than a short-term solution.
Senate Democrats and Republicans remain far apart on the details, and House Republicans continue to resist any discussion of tax increases. But lawmakers and aides say that a bipartisan group of senators is coalescing around an ambitious three-step process to avert a series of automatic tax increases and deep spending cuts.
First, senators would come to an agreement on a deficit reduction target — likely to be around $4 trillion over 10 years — to be reached through revenue raised by an overhaul of the tax code, savings from changes to social programs like Medicare and Social Security, and cuts to federal programs. Once the framework is approved, lawmakers would vote on expedited instructions to relevant Congressional committees to draft the details over six months to a year....

Finally, they would vote to put off the automatic spending cuts, known as sequestration, and tax increases scheduled to hit all at once in January — but with some deficit reduction down payment to signal how serious Congress is.

Mr. Obama has said he would not allow Congress to simply pass a new law to override the $1 trillion in automatic cuts agreed to in the Budget Control Act of 2011, but senators said they believed the White House would go along with a deal that locks in as much as four times those savings in exchange for canceling the automatic cuts.,,,

House Republicans, favored to retain control regardless of the presidential and Senate results, have not been part of the Senate talks so far and could be difficult to sway to back a package with significant new revenue even if it wins bipartisan Senate support. 

      I cannot see how this could possibly work if Republicans continue to oppose any tax increases and no one from the House of Representatives is involved.

FICA Tax Cut Likely To End

     The New York Times reports that the temporary cuts in the F.I.C.A. tax that supports Social Security are unlikely to be renewed when they expire at the end of this year. Neither party wants to champion renewing this temporary tax cut.

Somebody Wants To Make Sure You Can Still Get A Social Security Check

     You can't be sure exactly who's behind this (paper manufacturing interests? postal interests?) but someone has formed Consumers for Paper Options to promote the availability of paper checks, forms and statements with Social Security checks being their top issue at the moment.

Should Seniors Be Scared?

     From The Hill:

Vice President Biden on Friday told Florida seniors that Mitt Romney wants to make them pay $460 more in taxes on Social Security.

“Gov. Romney proposes significant changes, that would result in beneficiaries getting considerably less in their Social Security check in the future," he said, beginning a two-day campaign tour in Florida with a grassroots event at Century Village, a retirement community in Boca Raton. "If Gov. Romney’s tax plan goes into effect, it could mean everyone, everyone, would have to pay more taxes on the Social Security benefits they now receive. The average senior would have to pay $460 more in taxes on their benefits.” ...

The Obama campaign cited estimates from the Tax Policy Center study suggesting that taxpayers making less than $200,000 a year could lose almost 60 percent of their tax preferences under the Romney plan. From that, the campaign estimated that Social Security recipients could take a $458 hit.

For their part, Romney’s campaign has pushed back strongly against the Tax Policy Center study, with the candidate himself saying it reached “a garbage conclusion.”

     You can criticize Biden but until Romney says who will bear the brunt of his tax plans -- and any plan to change taxes that is revenue neutral inevitably cuts some people's taxes while raising those of others -- is Biden making an unfair accusation?

Order Of Succession

     Social Security Commissioner Michael Astrue's term is up on January 19, 2013 as is the term of Deputy Commissioner Carolyn Colvin. I am already hearing questions about who becomes Acting Commissioner at the time if a new Commissioner has not been confirmed. It's unlikely that a new Commissioner will be confirmed for at least a couple of months thereafter. If we see the same obstructionism in the new Congress that we have seen in the last four years, it could take many months to gain confirmation for even a non-controversial appointee.
     Here's the order of succession with the name of the incumbent.

• Chief of Staff -- Jo Tittel
• Deputy Commissioner for Operations -- Mary Glenn-Croft
• Deputy Commissioner for Budget, Finance and Management -- Michael Gallagher
• Deputy Commissioner for Systems -- Kelly Croft
• Deputy Commissioner for Quality Performance -- Stephanie Hall
• Regional Commissioner, Atlanta -- Michael Grochowski
• Regional Commissioner, Dallas -- Nancy Berryhill

     This order could be changed by the President or the President could appoint someone not currently at Social Security to be Acting Commissioner.

Left Hand, Right Hand

     I received an Appeals Council reversal, that is a decision reversing an Administrative Law Judge (ALJ) decision that had denied a Supplemental Security Income (SSI) disability claim, last month. I wondered why my client hadn't heard from the local field office which is responsible for computing the back benefits and certifying their payment so we checked. Turns out no one had bothered to notify the field office about the Appeals Council action until we called. We had to send them a copy of the Appeals Council decision.

     If you wonder what attorneys do to help Social Security claimants, a fair amount of it fits into the category of knowing what Social Security's left and right hands are each supposed to do and then introducing the two hands to each other so they work together. Law offices have tickler systems so we don't drop the ball. All too often, lawyers are Social Security's only tickler system. I say this not to criticize Social Security so much as to point out the complexity of Social Security's operations. It's very hard to keep each individual part of Social Security functioning despite grossly inadequate funding. Keeping the parts of Social Security working together is extraordinarily difficult. It often requires outside help.

The Future?

     From Fast Company:

In South Africa, MasterCard has unveiled one of the world's first debit card-based payment systems for welfare benefits and social security. The new project, released for the South African Social Security Agency (SASSA), will disburse government pension, disability, and public assistance payments onto a biometric debit card. Unlike normal debit cards, the South African cards require users to have their fingerprints and voices digitally analyzed by computers. In effect, they're the next generation of the EBT [Electronic Benefits Transfer] cards commonly used for food stamps in the United States.

Off Topic: Say It Isn't So!

     A world wide shortage of bacon may be "unavoidable" next year.

Sanders Warns Of Post-Election "Grand Deal" To Switch To Chained CPI

     From Sam Stein writing at Huffington Post:

Concern is mounting among some Senate Democrats that President Barack Obama will make a deal with Senate Republicans during the lame-duck session that would result in changes to the benefit structure of Social Security....

[According to Senator Bernie Sanders] "unless we stop it, what will happen is there will be a quote-unquote grand bargain after the election in which the White House, some Democrats will sit down with Republicans, they will move to a chained CPI."

Chained CPI, or consumer price index, is an alternative measure of calculating inflation that would lessen the cost of living increases for Social Security payments. When the president and Speaker John Boehner (R-Ohio) attempted to craft a deal on the debt ceiling last summer, Obama offered the chained CPI as a concession.

     Chained CPI sounds boringly technical but it would be a significant cut in Social Security benefits.

Means Testing With Romney

     From the 60 Minutes interview with Mitt Romney aired last night:

PELLEY:  How would you change Social Security? 

ROMNEY:  Well, again, no change in Social Security for -- for those that are in retirement or near retirement. What I'd do with Social Security is say this:  that again, people with higher incomes won't get the same high growth rate in their benefits as people of lower incomes. People who rely on Social Security should see the same kind of growth rate they've had in the past. But higher income folks would receive a little less.

PELLEY:  So that in the Romney administration, in the Romney plan, there would be means testing for Social Security and for Medicare? 

ROMNEY:  That's correct. Higher-income people won't get as much as lower-income people. And by virtue of doing that -- and again, that's for future retirees. For -- by virtue of doing that, you are able to save these programs on a permanent basis.

     I don't know what he means. If he is talking merely about reducing the cost of living adjustment for higher income recipients, this makes no sense. You can't possibly "save" Social Security that way. General means testing of Title II of the Social Security Act could do the trick but would be unpopular. The ambiguity suggests that he is talking about general means testing.