The Appeals Council Is A Mess

    From a recent report by Social Security's Office of Inspector General (OIG) (emphasis added):

In FY [Fiscal Year] 2013, AC [Appeals Counsel] request for review dispositions exceeded FY 2007 dispositions by about 102 percent. However, receipts were greater than dispositions during the same period, resulting in a tripling of pending cases from about 53,000 to about 157,000 cases by the end of FY 2013. The increase in pending claims resulted in longer average processing times (APT) at the end of FY 2013, with claimants waiting about 364 days for an AC action , up from 227 days in FY 2007.

While SSA had an APT goal for AC workloads in prior years, SSA ended its annual reporting on APT in FY 2012. During this same period, t he AC focused its efforts on processing the oldest cases in the backlog under the Agency's Aged Case initiative and made progress in reducing the average age of its pending claims. Moreover, the growth in the number of dispositions over this 7-year period follows the addition of adjudicators and staff as well as efforts to increase the productivity of analysts and staff supporting adjudicators. While OAO [Office of Appeals Operations] established numerical productivity goals for analysts, it did not establish similar productivity goals for AC adjudicators, although it did have timeliness goals for its adjudicators. In FY 2012, AAJ [Administrative Appeals Judges] annual dispositions ranged from 780 to 3,471 cases. We found a similar range with AO [Appeals Officer] adjudicators. The lack of productivity goals and cap s for AAJs or AOs, particularly given the wide range in the number of dispositions each AAJ and AO issued, increases the risk that OAO may miss opportunities to increase production as well as identify potential quality issues. Finally, while OAO executives had created internal, division-level productivity goals for every DPA division and communicated those goals with OAO manager, some managers and staff were confused as to how those internal goals were determined. ...

In SSA’s FY 2013 APP, SSA explained that it eliminated the APT goal because “We have successfully reduced Appeals Council average processing time over the last few years and want to now focus on eliminating Appeals Council cases pending 365 days or over.”  However, as shown in Table 1, APT had increased over the last few years. ...

[W]e found the number of dispositions per adjudicator dropped in FY 2009 before rising annually through FY 2012. However, by the end of FY 2012, adjudicator productivity had not reached the FY 2008 disposition level ...

Social Security Headcount Decline

      The Office of Personnel Management (OPM) has posted updated figures for the number of employees at the Social Security Administration.

• September 2013 62,543
• June 2013 62,877
• March 2013 63,777
• December 2012 64,538
• September 2012 65,113
• September 2011 67,136
• December 2010 70,270
• 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 over the House of Representatives in January 2011, the number of employees at Social Security has gone down by  7,727, an 11% reduction, in the face of a rapidly increasing workload.

     As a result of the recent budget agreement, Social Security is currently doing some hiring. It's unclear to me whether this will add to Social Security's head count or just slow down the decline in the agency's workforce.

Why Social Security Matters So Much

Senators Propose UI Offset

     Five Republican Senators have introduced legislation that would extend federal unemployment insurance benefits. The benefits extension would be fully paid for by other cuts. One of the "pay fors" is reducing Social Security disability benefits for unemployment insurance. I doubt this proposal will be going anywhere in the Senate. There are no Democrats sponsoring this legislation. This plan is almost certainly not going anywhere in the House of Representatives. Still, this shows that an unemployment insurance offset is gaining ground.

An Opinion On UI Offset

     Michael Hiltzik thinks that reducing Social Security disability benefits for SSI benefits received during the same time period is a bad idea.

Should The Government Be Double-Dipping?

     A high percentage of people who apply for Disability Insurance Benefits under Title II of the Social Security Act also apply for disability benefits under Supplemental Security Income (SSI). SSI benefits are already reduced for the receipt of unemployment insurance benefits. Would it be appropriate to offset the Title II and the SSI benefits for the receipt of the same unemployment insurance benefits? Wouldn't this be, dare I say it, double dipping by the government? If the government isn't allowed to double dip, aren't the estimates offered by Social Security's Actuary off considerably?
     If Social Security has to figure out a way to avoid double dipping, which isn't going to be easy, don't the implementation costs become substantial? The SSI reduction for unemployment benefits isn't necessarily dollar for dollar. There's no point trying to explain it here because it's complicated but usually, not all the unemployment benefits will be offset in computing SSI, just most of them. I think the Actuary needs to take another look at this and assume that there will be no double offset and to try to compute in the costs of administering an offset for unemployment benefits.
     Don't blow off the costs of implementation as a factor in this. Some years ago, in order to save money, Congress forced Social Security to pay out larger amounts of back SSI benefits in up to three installments. I think everyone who knows anything about SSI knows that this provision has cost far more money to implement than it ever saved. An unemployment insurance offset could be at least as complicated to administer as the windfall offset which I wouldn't dare to try to explain here. Can anybody at Social Security tell us how much it costs to administer the windfall offset? I'm just guessing but maybe a quarter of a billion to a half billion per year but, seriously, can anyone tell us?

Senate Committee Schedules Hearing

     The Senate Committee on Banking, Housing, and Urban Affairs, Subcommittee on Economic Policy has scheduled a hearing for Wednesday, March 12 at 2:30 on “The State of U.S. Retirement Security. Can the Middle Class Afford to Retire?” Among other things, the hearing will deal with the question of whether Social Security should be "strengthened."

They Want A Meeting

     Senator Charles Schumer and Congressman Brian Higgins have requested a meeting with Acting Social Security Commissioner Carolyn Colvin to discuss the closing of Social Security's Amherst, NY field office.

Actuary Estimates Effects Of UI Offset

     From a March 4, 2014 letter from Stephen Goss, Social Security's Chief Actuary, to the Office of Management and Budget:

I am writing in response to your request for estimates of the financial effects on Social Security of a proposal, included in the President’s FY 2015 Budget, to reduce Social Security Disability Insurance (DI) benefits, dollar for dollar, for any month in which a disabled-worker beneficiary receives unemployment insurance (UI) payments. ... 

We estimate that enactment of this proposal in January 2015 would reduce DI benefit payments by $ 2.67 billion in total for calendar years 2015 through 2024, assuming the DI benefit reduction applied for UI claims with payments starting in August 2016 or later (see enclosed Table 1) . Reduction in DI benefit payments through the end of Fiscal Year 2024 would be $2.57 billion (see enclosed Table 2). The proposal specifies that the DI offset would apply for UI claims with payments starting in months beginning at least 18 months after enactment. For the long-range actuarial status of the overall OASDI program, we estimate that enactment of the proposal would reduce the actuarial deficit by about 0.01 percent of taxable payroll. ...

     There are at least a couple of problems with this estimate. First, it doesn't factor in the not inconsiderable costs of implementation which will significantly reduce the value of this offset. $2.67 billion is a huge amount of money but it's spread over 10 years. The costs of implementation over the course of 10 years could easily be a billion dollars or more. Nobody ever considers the costs of implementing this sort of proposal. Second, many states already have an offset running in the opposite direction. What will be done about them? Will it be like workers compensation where Social Security doesn't offset if the state does? If so, that dramatically reduces the amount that Social Security can offset. And if you're adopting this offset, is it appropriate to limit it to disability recipients? Shouldn't it also apply to retirement and survivor benefit recipients? There would be a lot more money to offset there. Adopting this offset won't be nearly as simple a matter as OMB and the Chief Actuary seem to think.

President's FY 2015 Budget Released

     The President's proposed budget for Fiscal Year (FY) 2015, which begins on October 1, 2014, is out. The portion of the budget affecting Social Security begins at page 1,247, which is page 1,251 of the pdf.

     Update: Acting Commissioner Colvin has issued a statement on the President's proposed budget.