What's Ahead On The Budget Front?

     My understanding is that the Bipartisan Budget Agreement recently passed by Congress and signed into law by the President will allow total domestic discretionary spending, which includes Social Security's administrative budget, that will be almost identical to the total provided for by the President's proposed budget for Fiscal Year (FY) 2016, which began on October 1, 2015. 

     The Bipartisan Budget Agreement just sets the total amount for all domestic agencies. The amount each agency gets must be determined by individual appropriations acts. Those are still to come. Social Security and other agencies are currently operating on a continuing funding resolution which runs for about another month.

     The President's budget proposal can only be a rough guide for what to expect when an appropriation is finally passed but Social Security's administrative budget isn't a contentious matter so the President's budget may not be too far off what is to come. The President's proposal was for about a 5% increase in Social Security's operating budget, taking it to $12.8 billion. This contrasts with $11.8 billion in the House appropriations bill and $11.6 billion in the Senate appropriations bill that were under consideration prior to the Bipartisan Budget Agreement.

     My hope is that the Social Security Administration will use as much of the extra money as possible to hire new employees. I know that it takes time to hire and train new employees. Every time the agency hires new people I wince because I know they're going to make mistakes which will take time to correct. Using overtime would reduce, or perhaps I should say, stabilize backlogs more quickly. However, the agency needs more employees for the long haul. We keep going through a boom and bust cycle every year. Part of the year there's little or no overtime. Backlogs go up. Part of the year there's money for overtime and backlogs go down or at least hold steady. On the whole, backlogs keep rising. This can't keep going on. I know that agency management worries about having to furlough new employees but how likely is that? Appropriators seem to try hard to avoid furloughs. Really, which politician wants to be responsible for furloughs at Social Security? The agency would function so much better with several thousand more employees.

Social Security Headcount Climbs Back To 2012 Level

     The Office of Personnel Management (OPM) has just posted updated figures for the number of employees at the Social Security Administration as of the end of the second quarter of 2015:

• June 2015 65,666
• March 2015 64,432
• December 2014 65,430
• September 2014 64,684
• June 2014 62,651
• March 2014 60,820
• December 2013 61,957
• 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

Veterans Day 2015

Senator Cotton Has A Theory

     From Raw Story:

Sen. Tom Cotton (R-AR) suggested on Monday that population decline and drug abuse in poor areas could be the result of too many people on Social Security disability.

Speaking to the conservative Heritage Foundation on Monday, Cotton warned that communities with high a percentage of residents on Social Security disability had reached a tipping point that was linked to population decline. But he said that communities which used fewer benefits were enjoying a population increase.  

“It’s hard to say what came first or caused the other, population decline or increased disability usage,” Cotton opined. “Or maybe economic stagnation caused both. Regardless, there seems to be at least at the county and regional level something like a disability tipping point.”

“When a county hits a certain level of disability usage, disability becomes a norm,” he continued. “It becomes an acceptable way of life and alternative source of income to a good paying full-time job as opposed to a last resort safety net program to deal with catastrophic injury and illness.”

     The are at least a couple of problems with Cotton's theory. First, the incidence of disability in the U.S. has been going down, not up. If Social Security disability is responsible for population decline and drug abuse, you'd think those problems would be getting better, not worse. Second, U.S. Social Security disability benefits are stingy compared to those in other developed countries yet those other countries are not experiencing the ills that Cotton blames on Social Security disability.
     Cotton is certainly right that there are many rural areas of the country with a high incidence of disability. My firm represents many Social Security disability claimants who live in such areas in North Carolina. Let me suggest a theory to explain what is going on in these rural areas. Manufacturing has gone to hell in this country. Also, there are far fewer jobs in agriculture and mining. These economic changes have hit rural areas hard. There has been population decline in those areas as younger, healthy people have moved to other areas of the country to find jobs. Those left behind are older and sicker. They have poor access to health care. A high incidence of Social Security disability claims is to be expected. This country has a serious problem with opioid abuse but it's a national problem which is not caused by Social Security disability benefits since those benefits are not paid for drug abuse.
     We need to be working hard as a nation to restore manufacturing jobs and to deal with opioid abuse instead of looking for scapegoats.

Disabled People Have High Mortality Rates

Persons With Low Educational Attainment Do Harder Work And Find It Difficult To Find Easier Jobs To Do When They Develop Health Problems

Social Security Budget Not Keeping Up With Caseload

Ticket To Work Is A Failure

     From the Social Security Bulletin (emphasis added):

The Social Security Administration (SSA) rolled out the Ticket to Work (TTW) program between 2002 and 2004, with goals of expanding employment-related services for disability program beneficiaries and increasing program exits for work. Provider and beneficiary participation were initially low and the program did not measurably increase the extent to which beneficiaries achieved earnings sufficient to forgo benefits. In 2008, SSA revised the regulations in order to make participation more attractive to service providers, but the revisions also reduced provider incentives to help beneficiaries give up their benefits for work. Using administrative data from SSA, we find that provider and beneficiary participation increased substantially after the regulations changed, but the percentage of participants forgoing benefits for work declined. The extent to which that decline reflects the effects of the recession versus an increase in TTW program use by those with a relatively low chance of forgoing benefits for work remains unclear.

Why $11 Billion In Overpayments Is Pretty Good

     From the Federal Eye column in the Washington Post:

[The Government Accountability Office] reported that, from 2005-2014, the Social Security Disability Insurance program overpaid $11 billion to beneficiaries who earned too much money to qualify for full benefits. An untrained observer might think this represented an unconscionable squandering of public funds.  ...

But on the first page of the report, GAO notes that SSA paid out approximately $143 billion in disability benefits in 2014 alone. SSA’s own actuarial estimates put the total ten-year outlay from 2005-2014 at $1.169 trillion, compared to $11 billion in overpayments. That’s less than 1 percent of total expenditures.

Furthermore, all $11 billion wasn’t lost to the government. SSA can claw back overpayments from disability beneficiaries in subsequent years. In fact, GAO reveals on page 9 of its report that SSA collected $7.8 billion in outstanding debt in the ten-year time frame. Only $1.4 billion in work-related overpayments were completely written off. Now we’re down to 0.12 percent of total expenditures. ...

If I were to tell you that the Social Security disability program was 99.88 percent accurate in issuing benefit amounts to recipients, you might think they were doing an outstanding job. But if I told you the program overpaid by $11 billion – while neglecting to mention how they clawed most of it back – you might dust off your pitchfork and join your local mob’s march to the nearest SSA satellite office. ...

The drumbeat of stories about stray billions lost here and spent there serves the side of our national debate that wants to reduce the size of government and privatize many of its functions. They’re given an artificial boost by reporting which flatters their prejudices. It’s hard to advocate for expanding social benefits amid inaccurate tales of waste. And this can have real consequences. ...

[L]ast week’s budget deal creates roving Cooperative Disability Investigations units, special Justice Department prosecutors and expanded reviews to look into suspected fraud. The changes result directly from the insistence of Congressional Republicans, aided by the media, that the disability program is rife with fraud.

But the budget deal’s reforms sound like something you would invest in to police a broken agency, not one with a 99.88 percent accuracy rate. Any private-sector company with a record as sterling as the disability program would be lauded as an industry model. But thanks to the massive amount of money they pump out on an annual basis, they can be demonized for minor slippages.

     And let's not forget to mention the active collusion of the GAO and Social Security's Office of Inspector General with Republican efforts to present overpayment information in a misleading way.

Colvin On Leadership

    Tom Fox of the Washington Post recently interviewed the Acting Commissioner of Social Security, Carolyn Colvin, on the subject of leadership.