Lucia Case To Be Argued Monday

     Lucia v. SEC, concerning whether Administrative Law Judges (ALJs), as currently appointed, are unconstitutional, at least at the SEC, will be argued before the Supreme Court on Monday. Ronald Mann gives an argument preview for SCOTUSblog. Here are some excerpts:

... On the merits, the argument that the appointments are invalid is a powerful one, largely because the activities of ALJs are so similar to the activities considered by the Supreme Court in its 1991 decision in Freytag v. Commissioner, which held that “special tax judges” of the Tax Court qualified as officers for purposes of the appointments clause.  Like the ALJs involved here, those officers supervised trial-like proceedings, formed an evidentiary record and reached preliminary decisions in the matters before them. If the justices decide to take seriously the opinion and analysis in Freytag, then the challenge here will have a great deal of credibility.

The strongest argument in support of the existing arrangement is that the judges here are not officers because nothing that they do is actually effective as a decision of the SEC until the SEC approves it – the ALJ decisions are only tentative and have no effect until the SEC acts. [Note that unlike SEC ALJs, Social Security ALJs do make final decisions. If the Supreme Court decides the case on this point, Social Security ALJs will be at risk.] ...

The oral argument may be crucial here. Several of the justices have stated in previous cases that they regard ALJs generally as officers subject to the appointments clause (Justice Anthony Kennedy, by his joinder in the Freytag opinion, and Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor in more recent decisions). If those four maintain that view, it will be difficult for Metlitsky [arguing that the ALJs are constitutional] to find five votes to uphold the status quo. I would watch particularly for the reaction of Justice Elena Kagan, whose scholarly background is likely to give her a strong reaction to the competing interests. ...

     Of course, there's no live broadcast of the oral argument. The Supreme Court will release an audio recording of the argument but not until next Friday. However, a written transcript of the oral argument will be released sometime Monday.

GAO Report Pans Idea Of Mandating Increased Private Disability Insurance

     Some right wing "think tanks" have been promoting the notion that mandatory private disability benefits could somehow substitute for or augment Social Security disability benefits. I wouldn't call the ideas even half baked. It's been more like vague notions. The proponents of these ideas got Senator Orrin Hatch to ask the Government Accountability Office (GAO) to do a report on their ideas, to the extent that GAO could even identify what the ideas were. Predictably, the GAO report wasn't encouraging for these reasons:

• Insurers told GAO that is was unclear how expanding PDI [Private Disability Insurance] would affect PDI premiums and the impact this would have on enrollment.
• Employers told GAO they were concerned about potential additional requirements or administrative burdens that would be placed on them if PDI were expanded.
• Employee and disability advocacy groups told GAO they were concerned about whether PDI expansion would provide standard services or employee protections currently available under SSDI, especially with respect to PDI expansion proposals that would replace SSDI for 2 year.

     One enormous problem is that long term disability insurance (LTD) as we know it is reduced by the amount that Social Security pays. That means that LTD just pays the full rate until a claimant is approved by Social Security and then supplements the Social Security disability benefits thereafter. There's only a handful of LTD recipients who never get approved for Social Security disability benefits and continue to receive the full unreduced LTD payment indefinitely. Making LTD the primary payor would completely change the insurance product and make it much, much more expensive. It's never been clear to me whether the think tank proponents of private disability insurance understand just how different what they're asking for would be from any product that exists now. The LTD carriers might like to get big contracts for helping Social Security administer its disability benefits programs but I've never seen evidence that the LTD carriers actually want to be the insurers. Apparently, that's what GAO heard directly from the insurance companies.

Man Threatens To Blow Up Social Security Office

     From Palos Patch (whatever that is and wherever it is):

A Bridgeview man threatened to blow up a social security office because he wasn't happy with the service he was receiving, reports said. Michael Perelka, 48, was charged with disorderly conduct. According to police, Perelka was talking to a customer service representative at 10718 S. Roberts Road around 2 p.m. Police said he started to yell, "I'll blow this place up." Perelka has a May 31 court date in Bridgeview.

This Is What's Getting Funded At Social Security

     From Federal News Radio:

The Social Security Administration is approximately six months into what will likely be a five-year effort to modernize the agency’s aging IT infrastructure. Sean Brune, chief program officer for IT modernization at SSA, said many of the planned upgrades revolve around services used by the general public. This fiscal year, Brune said, the agency will focus on improving communications and existing services.

“We’re currently working to put all of our online services behind that secure online portal … my Social Security,” he said on Federal Insights: IT Modernization. “We encourage all members of the public to establish their personal my Social Security account. That will then allow, prospectively, a member of the public to see all the relevant services for their circumstance.”

These could include filing claims, checking claims status, services for representative payees.

Enhancing its public offerings will involve more mobile digital services. Brune said the agency has been building responsive design into all new services to detect when portal users are on mobile devices.

IT modernization also includes updating the disability claims processing application — to help SSA cut down on the backlog — and enhancing cybersecurity. With two secure data processing centers, Brune said the agency is covered in that regard. ...

     Of course, this is not unimportant work. The problem is that it's being done at the expense of service to the public today. Lines are present outside field offices and phone calls aren't being answered while staffing dwindles.

One For Two Or Why Service Is Still Going To Suck Even With A Bigger Appropriation

     Chuck Shumer of New York, the Democratic leader in the Senate, is pushing for better service at Social Security. He's right to do so. Wait times at the agency's field offices and on the agency's 800 number service are awful. However, you might wonder why he wouldn't be satisfied with the fact that the agency just got a boost in its funding.

     Think about this, though. I'm told that, at least in the field offices, they're only being allowed to hire one employee for two employees who leave. I would appreciate news about what's going on at Social Security's teleservice centers and payment centers. I suspect they're getting much the same treatment.

     The field offices are getting lots of overtime authorized but overtime only takes you so far. Even with lots of overtime you're going to get less work done as your workforce dwindles.

     How is it that field office staffs are being cut even though the appropriation has gone up? First, that appropriation didn't go up that much. It came on the heels of several years where appropriations failed to keep up with inflation. Second, Congress directed that the vast majority of the increase in funding go to information technology. This sort of thing goes back at least to former Social Security Commissioner Barnhart during the George W. Bush administration. Republicans in Congress and in the Executive Branch have wanted to make sure that any increase in administrative funding for Social Security goes not to hiring employees but to contractors.

     I believe that the Republican preference for contractors over employees has several bases. I think that, at best, Republicans in Congress and in the Executive Branch are indifferent to service at Social Security. Consciously or unconsciously they seem to be of the "cut it until it bleeds and then complain about the bloodstains" mentality. Bad service helps undermine public support for what they regard as the original sin of the New Deal. In general, they're hostile to government employees who are perceived as Democrats and partial to contractors who are perceived as Republicans. They're also naive about service at Social Security. They think that field office and 800 number service is unnecessary, that people will just switch to doing their business with Social Security over the internet if we quit babying them. This comes from visualizing Social Security as just processing people onto retirement benefits. They don't get that helping people file retirement claims is only a part of the workload at the field offices. Most of what they do is work on disability, survivor and Supplemental Security Income claims, which are vastly more complicated than retirement claims and many of the claimants they're working with are seriously impaired. There's no practical way to reduce much less eliminate the need for field office service or 800 number service at any foreseeable time in the future.
     I'd like to find out who made that one for two decision. Was it made at Social Security? At the Office of Management and Budget (my guess)? In the White House?

Fake News About Social Security

     There's fake news being spread about Social Security. Whether it's from Russia or produced here in the United States, it was certainly produced with malicious intent. No, there's no "Article 54" of Obamacare that will reduce Social Security benefits by 30% so the money can be given to undocumented immigrants!

Social Security Bill Signed Into Law

     From a press release issued last Friday:

Today, President Trump signed into law the Strengthening Protections for Social Security Beneficiaries Act of 2018 (H.R. 4547). Introduced by Ways and Means Social Security Subcommittee Chairman Sam Johnson (R-TX) and Ranking Member John Larson (D-CT), this bipartisan legislation will modernize the representative payee program so that it will better protect Social Security beneficiaries who are unable to manage their own benefits. ...

Specifically, the Strengthening Protections for Social Security Beneficiaries Act of 2018 will:

• Strengthen oversight of representative payees by increasing the number of performance reviews of payees, requiring additional types of reviews, and improving the effectiveness of reviews;
• Reduce the burden on families by eliminating the requirement to file the annual accounting form for representative payees who are parents living with their children or who are spouses;
• Protect the most vulnerable beneficiaries through improved information-sharing by requiring the Social Security Administration (SSA) to identify whether a beneficiary is in foster care and reassess whether the payee is appropriate, and by directing the SSA to study how better to coordinate with Adult Protective Services and with state guardianship courts;
• Enhance personal control by allowing beneficiaries to make a designation of their preferred payee in advance, and improve payee selection by requiring the SSA to assess the appropriateness of the order-of-preference list it uses to select payees;
• Limit overpayment liability for children in the child welfare system; and
• Ensure that no beneficiary has a barred payee by codifying the policy that bans individuals with certain criminal convictions from serving as payees (including individuals currently serving as payees) and prohibiting individuals who have payees from serving as a payee for others.

I Hope Andrew Saul Doesn't Endorse This

     Andrew Saul, President Trump's nominee for Commissioner of Social Security, was on the board of trustees of the Manhattan Institute for Policy Research. He's off now but I can't tell when he joined or left that board.
     Here's an excerpt from a recent op ed by a Senior Fellow at the Manhattan Institute with my comments in brackets.

The American polity recently tore itself apart debating the morality of adding $1.5 trillion in tax cuts to the national debt. Yet the $82 trillion avalanche of Social Security and Medicare deficits that will come over the next three decades elicits a collective shrug. Future historians — and taxpayers — are unlikely to forgive our casual indifference to what has been called “the most predictable economic crisis in history.” ...

Politicians brush aside the issue by promising easy fixes. Tax the rich? Doubling the 35 and 37 percent tax brackets to 70 and 74 percent would close just one-fifth of the long-term Social Security and Medicare shortfall. Even seizing all annual income earned over $500,000 would not come close. [These are damned lies. The long term Social Security deficit is 2.83% of taxable payroll. You can solve most of the long term financing problem simply by eliminating the FICA earnings cap.] ...

In reality, balancing the long-term budget without reforming Social Security and Medicare (and fast-growing Medicaid) would require either nearly doubling income-tax rates across the board or eliminating nearly every remaining federal function. [There's no way around it. This is a preposterous lie.] ...

[T]here’s the argument that Social Security and Medicare represent an unbreakable, unamendable promise to the elderly, consequences be damned. Of course, today’s teenagers never signed up for this budget-busting deal. Besides, benefits have been repeatedly expanded far beyond what current retirees were promised while working.

Those reasonably claiming “I just want the benefits I earned!” should be considered allies for reform. Setting lifetime Social Security and Medicare benefits equal to the net present value of each person’s lifetime contributions to the systems — and not a penny more — would eliminate most of the long-term shortfall. ...

More realistically, Social Security can be addressed by gradually raising the eligibility age and more aggressively means-testing benefits for wealthy retirees. [Actually, these measures wouldn't do nearly as much good as eliminating the FICA cap. However, a 0.25% tax on financial speculation with revenues going to the Social Security trust funds would solve 93% of the long term shortfall. ] ...

     It's not fair to blame or credit Mr. Saul for everything written by a person who works for a "think tank" merely because he was at one time on that think tank's board of trustees but this may be the most obviously deceptive, intentionally misleading piece on Social Security financing that I've ever read and I've read a lot. It's ridiculous on its face and it's not the only obnoxious piece produced by the Manhattan Institute. I hope that Saul repudiates this sort of thing.

Lucia Case And Robert Mueller

     From the Los Angeles Times:

The Supreme Court is set to hear a seemingly minor case later this month on the status of administrative judges at the Securities and Exchange Commission, an issue that normally might only draw the interest of those accused of stock fraud.  

But the dispute turns on the president's power to hire and fire officials throughout the government. And it comes just as the White House is saying President Trump believes he has the power to fire special counsel Robert S. Mueller III. 

Trump's Solicitor Gen. Noel Francisco intervened in the SEC case to urge the high court to clarify the president's constitutional power to fire all "officers of the United States" who "exercise significant authority" under the law. ... 

Peter Shane, a law professor at the Ohio State University, called Francisco's argument a "radical proposition," and one that goes beyond what is at issue in the case. The justices said they would focus only on how the SEC in-house judges are appointed. But Francisco is asking them to go further and rule on the "removal" issue. 

"The solicitor general is obviously trying to goad the court into a broad statement about the removability of all officers of the United States," Shane said. "Were the court to make any such statement, it would surely be cited by Trump as backing any move by him to fire Mueller directly." ... 

Francisco's defense of broad presidential power is likely to win favor with Chief Justice John G. Roberts Jr. and the court's other conservatives. In 2010, Roberts spoke for a 5-4 majority that struck down a provision in the Sarbanes-Oxley Act, which created an independent public accounting board at the SEC whose members could be fired only for "good cause." 

Roberts said shielding these "officers of the United States" from presidential control was unconstitutional. "Since 1789, the Constitution has been understood to empower the president to keep these officers accountable — by removing them from office, if necessary," he wrote in Free Enterprise Fund vs. Public Company Accounting Oversight Board. ...

Social Security Claims, Awards And Number In Payment Continue To Decline

From Social Security's Office of Chief Actuary