Good News On Disability Trust Fund

     For a few months I have been saying that things are looking up for the Social Security's Disability Insurance Trust Fund, that it won't be running out of money in 2016. It will be several months before the Trustees' report comes out but the Congressional Budget Office (CBO) has now issued its projection that the Disability Trust Fund will have enough money until 2017. 

     Big deal, you say, that's just one year. It's still running out of money. However, in political terms the difference between 2016 and 2017 is significant. There's a long way to go until 2017 but Democratic control of the White House, House of Representatives and Senate is a realistic possibility in 2017.

     The Disability Trust Fund projections may keep getting better as the economy improves and it becomes more obvious that we've already passed the peak of baby boomer disability claims. The gap between the Disability Trust Fund running out of money in 2017 and never running out of money isn't all that great. The Trustees' optimistic projection is that the Disability Trust Fund never runs out of money. Events are moving the Disability Trust Fund in that direction. The Disability Trust Fund exhaustion date may keep moving into the future. Even if it is temporarily exhausted, the gap keeps narrowing. Solving the temporary problem of Disability Trust Fund exhaustion by allowing borrowing between Social Security's trust funds becomes a more likely solution.

Does This Explain Some Of The Increase In Disability Claims?

     The abstract of a study by Philip Armour of Cornell University:

This paper uses survey data matched to administrative records to measure the effect on Disability Insurance [DI] application behavior of a natural experiment in the provision of Social Security benefit information. I find that receipt of the Social Security Statement [Personal Earnings and Benefit Estimate Statement or PEBES], a document gradually introduced in the 1990s which contained personalized information on DI insurance-status and potential benefit, had a positive, substantial, and statistically significant effect on DI application rates of the Health and Retirement Study sample. This increased likelihood of application by 0.84 of a percentage point per two-year period, which is a 62% increase over the base rate. This overall effect was driven by a large increase in the rate of application among those reporting a work-limiting condition and who were previously not employed. The non-work-limited population experienced a small decrease in their DI application rates, suggesting that provision of the Statement increased self-sorting efficiency among potential applicants. Furthermore, my analysis shows no evidence of applicants merely "shifting forward" their DI application after Statement receipt; instead, the estimated increase appears to be new applicants. In the absence of these new applicants, the 32% growth rate of the per-capita DI rolls from 1995-2004 would have been approximately 25%. These results provide a novel explanation for a large portion of the marked rise in DI rolls since the 1990s as well as indicate the importance of the information environment in social program application decisions more broadly.

And These Are The 900 Americans Who Really Think Social Security Benefits Ought To Be Cut

     900 Americans are already finished with paying Social Security taxes in 2014.

Mass Social Security Scam In New York City??

     The New York Daily News is reporting, with no detail, that "More than 100 suspected scammers — most of them retired city cops and firefighters — could be arrested as soon as next week for making bogus claims of stress-related illnesses to bilk Social Security for big bucks ..." Maybe this will happen but note the use of the word "could" in that sentence. I think that most newspapers would not publish a sentence like that.

Social Security Headquarters Opening Two Hours Late

     Due to weather conditions in the Baltimore area, Social Security's headquarters are opening two hours late today.

Agency Financial Report For FY 2013

     The Social Security Administration has issued its Financial Report for Fiscal Year 2013. The report identifies agency goals that have been met or not met. The most glaring unmet goal is wait time for a hearing before a Social Security Administrative Law Judge (ALJ). That went up substantially in 2013.

Big Surprise

     The user fee assessed on attorneys who represent Social Security claimants will remain at 6.3% in 2014.

Happy New Year

Does This Tell Us Anything Useful?

     The abstract of a Working Paper issued by Yonathan Ben-Shalom and Arif A. Mamun of Mathematica Policy Research, a big contractor for Social Security:

We follow a sample of working-age Social Security Disability Insurance (DI) program beneficiaries for five years after their first benefit award to learn how certain factors help or hinder achievement of four return-to-work milestones: (1) enrollment for employment services provided by a state vocational rehabilitation agency or employment network, (2) start of trial work period (TWP), (3) completion of TWP, and (4) suspension or termination of benefits because of work. We find that younger beneficiaries are more likely than older beneficiaries to achieve the milestones and that substantial variation exists across impairment types. In addition, black beneficiaries and beneficiaries with higher levels of education have a greater probability of achieving the milestones, everything else equal. Also, such achievement is more probable if state unemployment is low at the time of the award. The probability of achieving the milestones is reduced by having a higher DI benefit amount at award, an award decision made at a higher adjudicative level, and by receiving Supplemental Security Income or Medicare benefits at the time of DI award. Finally, we find large variation in the relationships between state of residence and return-to-work outcomes and between award month and return-to-work outcomes. We attribute these variations to unobserved factors at the state level, policy changes over time, and trends in unobserved beneficiary characteristics.

Nice Try

     There's a new meme coming from the right. Sure, we ought to increase Social Security benefits, but only for the poor. We'll do it by means testing Social Security. Andrew Biggs started this but others are chiming in. I think it's a good idea to remind everyone that Social Security will not change in any fundamental way until one very determined party completely dominates the White House and the Congress. That's not coming anytime soon. Even if the Republicans did dominate the White House and the Congress I'd be amazed if they attempted this. If they did, they wouldn't control the White House and the Congress much longer.