AARP Opposes Extension Of Partial FICA Holiday

     AARP has come out in opposition to any extension of the partial F.I.C.A. tax holiday. The F.I.C.A. tax supports the Social Security trust funds. The partial F.I.C.A. tax holiday of the last two years is set to expire at the end of the year unless continued. General revenues have been used to make up for the lost F.I.C.A. tax revenues over the last two years.

No News Is No News

     I am at the conference of the National Organization of Social Security Claimants Representatives (NOSSCR) in Seattle. Normally on the first full day of the conference I post a summary of the morning general session or if I can't make it to the conference, I find someone who is present to write a summary to post here. Usually, there is real news coming out of this session. This year there has been no real news. This is not because the conference is deficient. This is what I expected. It's just the time frame that the conference occurs in. A general election is right around the corner. Things may be vastly different at Social Security depending upon the results of that election. Also, the Commissioner of Social Security, Michael Astrue, will be leaving office in less than three months, regardless of the election results. Even if you knew who will win the Presidential election, you could not now predict who will replace Astrue. How the new Commissioner  will manage Social Security will depend not merely upon who is in the White House, but also upon which party controls the Senate and the House of Representatives.

Another Appellate Decision Holding DOMA Unconstitutional

     A second federal court of appeals has declared the Defense of Marriage Act (DOMA) unconstitutional. DOMA prevents the Social Security Administration from recognizing same sex marriages allowed under state law. This issue will be decided by the Supreme Court in the not too distant future. There is an issue about whether it is constitutional for a state to outlaw same sex marriages. That argument may or may not prevail at the Supreme Court but it's different and not as strong as the argument that DOMA is unconstitutional.

Weirdness At AARP

    AARP is running a $50,000 Fill The Social Security Gap Sweepstakes where you can "Empower yourself with Social Security facts" and  "win big!"

1.7% COLA

     The Cost of Living Adjustment (COLA) effective for 2013 Social Security payments is 1.7%, which amounts to $21 a month or $252 a year for the average recipient.

Online Services Down

    Social Security's online process for uploading medical records, filing appeals and for attorneys to obtain access to their clients records is down. There is no explanation online. I think the lack of explanation or warning annoys me more than anything else. It's not like it just went down. A few people have been able to get in today, but apparently it's been down most of the day. Problems happen but, at least you can warn people when you're having technical problems.

Earnings Statement Mailings Suspended

     From the Federal Times:

Tight money has again led the Social Security Administration to halt the mailing of all paper statements of earnings and benefits to millions of Americans. These are the handy documents that give you an idea of what to expect in terms of Social Security retirement or disability income.

The latest suspension, which took effect Oct. 1, results from the “overall budget situation,” including a stop-gap continuing resolution that will leave the agency at last year’s funding levels through March, spokeswoman Kia Anderson said.

SSA officials had originally suspended mailing paper statements in April 2011 to save $70 million annually. This February, however, they had resumed mailings to people aged 60 or older and in July, to participants in the year they turned 25.

Little Change In Head Count Between March And June

The Office of Personnel Management (OPM) has posted updated figures for the number of employees at Social Security. Here they are, with earlier numbers for comparison purposes.

• June 2012 65,282
• March 2012 65,257
• December 2011 65,911
• September 2011 67,136
• June 2011 67,773
• March 2011 68,700
• December 2010 70,270
• June 2010 69,600
• March 2010 66,863
• December 2009 67,486
• September 2009 67,632
• December 2008 63,733
• September 2008 63,990
• September 2007 62,407
• September 2006 63,647
• September 2005 66,147
• September 2004 65,258
• September 2003 64,903
• September 2002 64,648
• September 2001 65,377
• September 2000 64,521

Social Security And Medicare Are A Bargain

     A new Urban Institute study shows just how big a bargain Social Security and Medicare are for most people. Here are some numbers from the study on total lifetime taxes and total lifetime benefits for various demographic groups turning 65 in 2020.

Single Male Earrning Average Wage:
Total lifetime benefits $536,000 Total Lifetime Takes $427,000

Single Female Earning Average Wage:
Total lifetime benefits $595,000 Total Lifetime Takes $427,000

One Earner Couple Earning the Average Wage
Total lifetime benefits $1,016,000 Total Lifetime Takes $427,000

Two Earner Couple with One Earning the Average Wake and the Other Earning a Low Wage
Total lifetime benefits $961,000 Total Lifetime Takes $618,000

Two Earner Couple Each Earning Average Wage
Total lifetime benefits $1,059,000 Total Lifetime Takes $853,000

Two Earner Couple with One Earning High Wage and the Other Earning Average Wage
Total lifetime benefits $1,183,000 Total Lifetime Takes $1,108,000

     The study gives numbers for other anticipated retirement dates and demographic groups. Those who oppose Social Security and Medicare will undoubtedly note that some of these demographic groups might have done better if they could have invested the money instead of paying taxes. It's also true that if I did not pay homeowners insurance on my house and invested that money instead that I would have a fair amount of money in the bank in 30 years -- as long as my house didn't burn down in the meantime. However, if my house did happen to burn down, I wouldn't have nearly enough money in the bank to cover the cost of rebuilding it.
     Insurance is a valuable thing. Social Security and Medicare are insurance. Their true value cannot be fully displayed in the way that this study presents it. What's remarkable is just how good Social Security and Medicare appear even in a study that does not fully show their value. Could any insurance company provide coverage comparable to Social Security and Medicare? Of course not.

Baucus Warns Of Grave Service Delivery Problems Ahead For Social Security

     From a press release:

In response to an inquiry from Senate Finance Committee Chairman Max Baucus (D-Mont.), the Social Security Administration (SSA) today warned that drastic funding cuts proposed by the House of Representatives would dramatically impact service to beneficiaries and needlessly waste taxpayer dollars. 

In a letter to Senator Baucus, Social Security Commissioner Michael Astrue outlines how the House budget would force the agency to scale back operating hours at field offices across the country.  The result, according to Astrue, would be long delays and deteriorations in service to seniors and other Social Security beneficiaries.

“It is critically important that we work to preserve Social Security and protect its beneficiaries and save taxpayer dollars.  The House’s radical plan does nothing more than threaten America’s seniors by undermining this critical safety net and severely cuts programs that help the federal budget,” Senator Baucus said.

While a Senate proposal increases SSA funding levels next year, the House bill cuts $762 million from the agency’s current budget.  According to SSA, the cuts in the House bill would increase the average wait time for disability decisions and hearing decisions by as much as two weeks and forego up to $6 billion in budget savings.

“This severe cut would force us to curtail our service to the public and our program integrity efforts,” Astrue writes to Senator Baucus. “The backlog of initial disability claims would continue to increase and our hearings backlog reduction plan would be derailed. There would be long waits in our field offices and on our 800-number because of inadequate staff to address critical public service needs.”

The report from SSA is in response to a request from Senator Baucus to explain how Congress’ proposed budgets would impact Social Security beneficiaries.  The findings are troubling. According to SSA:

• The House budget would cut 5,000 jobs at the Social Security Administration.
• The House Budget would cut Social Security field office hours and delay more than 30,000 people with Social Security claims from getting the support they need.
• Compared to the Senate Budget, the House Budget would force thousands of folks with Social Security claims to wait two additional weeks to get the service they need and create a backlog of 100,000 claims and 100,000 hearings.
• The House Budget would cost taxpayers $5 to $6 billion by cutting a program that fights fraud and reduces waste.

      And here is the text of Astrue's letter:

October3, 2012

Dear Mr. Chairman:

Thank you for your concern regarding adequate fiscal year (FY) 2013 funding for the Social Security Administration (SSA). Below is an illustration of the effects that the House and Senate bill levels would have on our ability to deliver service and maintain critical stewardship of taxpayer dollars.

House Bill

The House Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee bill would provide $10.684 billion for our Limitation on Administrative Expenses (LAE) in FY 2013, a decrease of $762 million over the FY 2012 enacted level and a decrease of $1.076 billion from the President's FY 2013 Budget. This severe cut would force us to curtail our service to the public and our program integrity efforts. Specifically, with a cut of this magnitude, we would lose over 5,000 SSA and disability determination services (DDS) employees in FY 2013 through a combination of attrition and termination of temporary hires.

We would be forced to reduce field and hearings office operating hours equivalent to a month of furlough days. Each day of lost operations prevents us from completing roughly 20,000 retirement claims, over 10,000 disability claims, and 3,000 hearings. Our other workloads would also experience delays and deterioration. The backlog of initial disability claims would continue to increase and our hearings backlog reduction plan would be derailed. There would be long waits in our field offices and on our 800-number because of inadequate staff to address critical public service needs.

We have steadily increased program integrity work over the last five years. However, this bill significantly reduces funding for cost-effective program integrity work (continuing disability reviews (CDR) and SSI redeterminations) from $756 million in FY 2012 to $272 million in FY 2013. We estimate that every dollar spent on medical CDRs in FY 2013 will yield $9 in program savings over 10 years. We estimate that every dollar spent on SSI redeterminations will yield about $6 in program savings over 10 years. At the House level, the backlog of full medical CDRs would grow from 1.3 million currently to a record high of 1.75 million.

Senate Bill

The Senate Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee bill would provide essentially the same funding level as the President's budget request: $11.736 billion for our LAE in FY 2013, an increase of $290 million over FY 2012 and a decrease of $24 million from the President's budget. The Senate bill would allow us to replace our losses in the DDSs in FY 2013 and to replace some critical losses in SSA. At this level, we could also resume mailing paper Social Security Statements to all eligible Americans.

For program integrity, the bill would provide $1.024 billion ($273 million in the base and $751 million in cap adjustment funding), the same as proposed in the President's budget and authorized in the Budget Control Act. At this level of funding, we would complete 650,000 full medical CDRs and 2,622,000 redeterminations. At the Senate level, the backlog of full medical CDRs would decrease to 1.1 million, the lowest it has been since FY 2007.

Comparison of House to Senate Bill
At the Senate level, we would complete 100,000 more initial disability claims and 100,000 more hearings than at the House level. At the House level, the average wait for an initial disability decision would be about one to two weeks longer in FY 2013 than at the Senate level. In addition, the House level would create even longer average waits for decisions in FY 2014 as cases back up in the DDSs in FY 2013. The average wait for hearing decisions would also be about two weeks greater under the House level relative to the Senate level.

As mentioned above, the House bill would provide $272 million in program integrity funding for FY 2013, and the Senate bill would provide the amount authorized under the Budget Control Act, $1.024 billion. Stephen Goss, the agency's Chief Actuary, estimates that the House level of program integrity funding would cost the Social Security programs about $5 to $6 billion. Please see the enclosed letter for additional information. [not available]

History has shown that our service and stewardship efforts suffer with significant budget cuts, and it often takes multiple years to recover, creating uneven service across the Nation. These cracks will only continue to grow without sustained, adequate funding. None of our work is optional; the longer it takes us to complete it, the more difficult and expensive it is to handle.

Moreover, each case represents an action that affects a person's life. Whether it is paying benefits or preventing an overpayment, millions of people depend on us handling their cases timely and accurately.

If you have any questions or if I can be of further assistance, please contact me or have your staff contact Mr. Scott Frey, our Deputy Commissioner for Legislation and Congressional Affairs, at (202)xxx-xxxx. 

Sincerely
Michael J. Astrue