Happy Independence Day!

Soaring Disability Payments?

     We keep hearing that Social Security disability benefit payments are soaring. They're going through the roof. It's ruinous how rapidly disability payments are rising. Funny thing about that. It's not happening, at least not anymore. Below is a chart showing Disability Insurance Benefits payments over the last two years. I know the chart contains some extraneous information but I couldn't copy just the month and the total benefit payments. Notice that benefit payments have gone up in the last two years by 8%, which is certainly significant but hardly a disastrous increase considering the aging of the baby boom population and considering the 3.6% cost of living adjustment at the end of 2011 and the 1.7% cost of living adjustment at the end of 2012. More interesting is that the increase in benefit payments has ground to a halt over about the last year. We seem to be near stasis. This is exactly what the actuaries have been predicting. Once the number of baby boomers reaching full retirement age, making them no longer eligible for disability benefits, started equaling the number reaching their prime years for disability, the boom in disability claims would be over. Well, it's happened. It's right there in the numbers you see below. Total benefit payments in June 2013 were less than they were nine months earlier in September 2012, despite the intervening cost of living adjustment.

DI Payment Summary
(in millions)

Year	Month paid	Total benefit payments a	Cyclical payments b					Medicare premium deductions	All other payments
			Total	Cycle 1	Cycle 2	Cycle 3	Cycle 4
2011	Jul	$10,897	$9,116	$5,168	$1,305	$1,303	$1,341	$430	$1,351
2011	Aug	10,761	9,133	5,171	1,309	1,307	1,345	430	1,198
2011	Sep	10,818	9,169	5,189	1,315	1,313	1,352	433	1,216
2011	Oct	10,758	9,207	5,206	1,322	1,320	1,359	433	1,118
2011	Nov	10,638	9,235	5,222	1,326	1,324	1,363	435	967
2011	Dec	10,970	9,337	5,292	1,337	1,334	1,374	434	1,199
2012	Jan	11,278	9,668	5,459	1,391	1,388	1,429	428	1,182
2012	Feb	11,279	9,693	5,472	1,395	1,393	1,433	429	1,156
2012	Mar	11,522	9,730	5,490	1,401	1,398	1,441	438	1,354
2012	Apr	11,376	9,767	5,508	1,407	1,404	1,447	434	1,175
2012	May	11,247	9,811	5,529	1,415	1,412	1,455	436	1,000
2012	Jun	11,625	9,816	5,531	1,416	1,414	1,455	442	1,367
2012	Jul	11,434	9,841	5,539	1,422	1,419	1,461	442	1,152
2012	Aug	11,124	9,849	5,542	1,424	1,421	1,462	442	832
2012	Sep	11,847	9,846	5,542	1,423	1,420	1,461	449	1,551
2012	Oct	11,139	9,889	5,562	1,431	1,428	1,469	442	807
2012	Nov	11,219	9,894	5,568	1,430	1,428	1,468	449	876
2012	Dec	11,788	9,966	5,627	1,435	1,431	1,472	445	1,378
2013	Jan	11,583	10,079	5,676	1,456	1,453	1,494	471	1,033
2013	Feb	11,590	10,076	5,677	1,455	1,451	1,493	472	1,041
2013	Mar	11,827	10,089	5,684	1,456	1,453	1,496	475	1,263
2013	Apr	11,572	10,106	5,695	1,458	1,455	1,498	470	997
2013	May	11,786	10,136	5,716	1,460	1,458	1,502	471	1,179
2013	Jun	c 11,734	10,136	5,717	1,460	1,457	1,501	475	c 1,123

Chief Actuary Projects Effects Of Immigration Reform On Social Security

     From a June 28 letter from Social Security's Chief Actuary Stephen Goss to Senator Marco Rubio:

I am writing in response to your request for estimates of the long-range financial effects on Social Security of Senate Bill S. 744, as reported out by the Judiciary Committee, amended, and passed by the Senate on June 27. ...

We estimate that enactment of this Bill would increase asset reserves for the combined Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds by $284 billion by the end of 2024, and would extend solvency of the OASDI program for an additional 2 years ...

Telephone Problems At ODAR Today

     I'm hearing reports that Social Security's Office of Disability Adjudication and Review (ODAR) offices nationwide are experiencing telephone difficulties today. It's not clear to me whether this is affecting other parts of Social Security as well.

Some Agencies Were Prepared For Supreme Court Decision On DOMA

     I wrote last week that Social Security seemed unprepared for the decision of the Supreme Court holding the Defense of Marriage Act (DOMA) unconstitutional. Some agencies were prepared for this decision. See the memo from the Office of Personnel Management (OPM) issued just a day after Social Security issued staff instructions to hold all claims filed by those in same sex marriages.

Payment Delays Reported

     There is a report of delays in direct deposits of Social Security benefits in the Wichita, KS area. If this report is accurate, the fault lies not with Social Security but with the Department of the Treasury which processes the direct doposits -- but Social Security will get the calls.

Continued Decline In Number Of Emloyees At Social Security

The Office of Personnel Management (OPM) has posted updated figures for the number of employees at Social Security.These figures do not show the effects of reductions in overtime at Social Security.

• March 2013 63,777
• December 2012 64,538
• September 2012 65,113
• 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

     Since the Republicans took control of the House of Representatives in January 2011, there has been a 9% decline in the number of employees at the Social Security Administration. 6,493 employees lost in about two and a half years at a time when the agency's workload is burgeoning.

Education Is So Important

    I think this chart from a recent Urban Institute report is interesting. (DI = Disability Insurance):

SSA Unprepared For SCOTUS Decision On DOMA

     Social Security has sent out its first staff instruction on what to do with same sex marriages in the wake of the Supreme Court decision that the Defense of Marriage Act (DOMA) is unconstitutional. The instruction is to "Take and hold all claims by individuals who are filing for benefits that are dependent upon the existence of a same-sex marriage." This is not just for those who have moved from the state in which they were married. This is for all cases. The instruction to 800 number operators is to "Please advise callers that we are working with the Department of Justice to review the decision and how it impacts our programs -- including benefits administered by this agency – to ensure that we implement the decision swiftly and smoothly."
     The Supreme Court decision that DOMA is unconstitutional didn't come as a surprise to anyone who had been paying attention. I think that Social Security could have been better prepared. How long will it take them -- and the Department of Justice -- to write staff instructions?

AP Report On Today's Hearing

     From an AP piece:

Driven to reduce a huge backlog of disability claims, Social Security is pushing judges to award benefits to people who may not deserve them, several current and former judges told Congress Thursday. 

Larry Butler, an administrative law judge from Fort Myers, Fla., called the system "paying down the backlog." 

A former Social Security judge, J.E. Sullivan, said, "The only thing that matters in the adjudication process is signing that final decision." Sullivan is now an administrative law judge for the Department of Transportation.

The House Oversight and Government Reform Committee is investigating why many judges have high approval rates for claims already rejected twice by field offices or state agencies. Two current and two former judges spoke at a subcommittee hearing. ...

None of the judges who testified spoke of being specifically ordered to award claims. Three said they had been pressured to decide cases without fully reviewing medical files.

The judges described a system in which there is very little incentive to deny claims, but lots of pressure to approve them. It requires more documentation to deny a claim than to approve one, said Sullivan, the former Social Security judge. Also, rejected claims can be appealed while approved claims are not.