Raising Full Retirement Age Is A Bad Idea

     From Michael Hiltzik, writing for the Los Angeles Times:

Washington wonks love to portray raising the retirement age for Social Security as a painless "fix" for the program's finances. ...

But a new study punctures this argument with stark data showing that within the average there are winners and losers — mostly distinguished by household earnings and wealth. The analysis comes from the Social Security actuaries, who showed in a study released last week that mortality rates among people 62 and older are inextricably linked to lifetime earnings. The higher the earnings, the lower the mortality rate. ...

What the actuaries found is that lifetime earnings are a powerful predictor of mortality. As Kathy Ruffing of the Center on Budget and Policy Priorities points out, among men ages 65 to 69, those in the lowest 20% of lifetime earnings (less than $22,400 a year) had death rates more than three times as high as those in the top 20% (annual earnings of $74,356 or more). Specifically, the lowest-income group had a mortality rate 65% higher than the average of all men ages 65 to 69, while the highest-earning had a rate 39% less than the average. ...

As we've written before, these factors help to explain why proposals to raise the retirement age tend to come from well-nurtured policy wonks comfortably ensconced in Washington think tanks, or from members of Congress assured of a decent government pension after they leave office. ...

Scheme To Cut Social Security To Pay For Family Leave Criticized

From Michael Hiltzik writing for the Los Angeles Times:

The idea of government-sponsored paid family leave is gaining popularity at the state level and in Washington, where Sen. Marco Rubio (R-Fla.) and Ivanka Trump are "strategizing" to bring more Republicans into the fold. Sens. Joni Ernst (R-Iowa) and Mike Lee (R-Utah) are said to be interested.

It's a good idea that would finally bring the United States into line with every other high-income nation on Earth, as a recent analysis by the Urban Institute points out. But the Urban Institute also observes that the Rubio-Trump idea for financing the program through Social Security is a terrible idea. It would not only undermine Social Security's fiscal condition, but change the very nature of Social Security in ways that will harm the millions of Americans who depend on it for their retirement.

Given that Republicans have had the knives out for Social Security since its inception in 1935, that outcome may even be deliberate. We'll take the charitable view of the Rubio-Trump idea, and assume that undermining Social Security would be an unintended consequence of their idea. But if they're blind to the consequence, it may only be because Republicans as a party wouldn't really care if Social Security as we know it disappeared. ...

The idea is to allow mothers and fathers to take up to 12 weeks of paid leave for the birth or adoption of a child, and repay the benefit by delaying their Social Security at retirement or accepting a long-term cut in their Social Security checks. ...

Final Rules Of Conduct Regs Go To OMB

     Even without a confirmed or even acting Commissioner of Social Security, the agency is asking the Office of Management and Budget to approve Revisions to Rules of Conduct and Standards of Responsibility for Appointed Representatives. These would final regulations. Perhaps, they contemplate a new Commissioner being confirmed by the time OMB finishes its work. We cannot know what is in these final regulations. We know that final regulations on this subject had been submitted to OMB near the end of the Obama Administration but were withdrawn just before inauguration. Here's what I wrote at the time the regulations were proposed on August 16, 2016:

The summary provided by Social Security includes a sentence that seems to encapsulate their approach: 

The changes to our rules are not meant to suggest that any specific conduct is permissible under our existing rules; instead, we seek to ensure that our rules of conduct and standards of responsibility are clearer as a whole and directly address a broader range of inappropriate conduct

     Social Security thinks it's important to point out that there's no representative conduct that they find permissible but plenty they want to forbid because they believe it's inappropriate? That certainly suggests as attitude.

     Here's a couple of excerpts from the proposal:

A representative should not withdraw after a hearing is scheduled unless the representative can show that a withdrawal is necessary due to extraordinary circumstances, as we determine on a case-by-case basis. ...

Disclose in writing, at the time a medical or vocational opinion is submitted to us or as soon as the representative is aware of the submission to us, if: ...

• (ii) The representative referred or suggested that the claimant seek an examination from, treatment by, or the assistance of the individual providing opinion evidence.

     Why would these be a problem? 

     As to the withdrawal provision, the agency insists on recognizing only individual lawyers as representing claimants, not law firms. Prohibiting the substitution of one attorney for another after a hearing is scheduled makes it difficult for a law firm to properly allocate its resources and makes it easy for individual attorneys employed by a firm to pick up and leave their firm with the files of their clients after the firm has spent large sums of money on the cases over the many months or years that the firm has represented the claimants. I don't know what the point of this is other than to harass law firms. Let me anticipate the response from a government employee. "Law firms don't spend much money on Social Security cases -- only a few dollars obtaining medical records -- so that's no big deal." Anyone who thinks this has never run a law firm. Law firms spend almost all of their money on salaries and other overhead. The problem is that a law firm may spend thousands of dollars on the office overhead associated with a case only to see an attorney waltz away at the last minute pocketing the entire fee. Is it unreasonable for a law firm to try to make this difficult? What exactly is the problem with a law firm substituting one attorney for another after a hearing is scheduled? It doesn't delay anything. 

     As to the requirement that attorneys notify Social Security if they suggest medical treatment, if I tell my client that he or she ought to get in psychiatric treatment, I'm supposed to disclose this to Social Security if the psychiatrist later offers an opinion? What if I tell my client to get back to the doctor he or she used to see? Am I supposed to carefully track the advice I give clients about medical treatment?

SCOTUSblog Summary Of Lucia Oral Argument

     Ronald Munn, a law professor at Columbia, has written a summary for SCOTUSblog of yesterday's Supreme Court oral argument in Lucia v. SEC on the issue of whether Administrative Law Judges, at least at the Securities and Exchange Commission, are constitutional. Here are some excerpts:

... Although the argument ranged broadly, four distinct threads provide a good overview. The first is sympathy for the development of an independent and merit-based civil-service system. Breyer, for example, plainly approached the case from the premise that the Constitution could accommodate that system. ...

More expansively, Justice Elena Kagan seemed viscerally sensitive to the importance of maintaining the independence of adjudicators from political influence. ...

A second thread, almost diametrically opposed to the first, is evident in the emphatic view of Roberts that the APA’s [Administrative Procedure Act's] effort to “insulat[e]” judges from the elected executive derogates directly from the Constitution’s requirement of accountability. ...

A third thread noted the odd circumstances of the challenge to this particular group of appointments, which argues that the existing judges were unduly biased despite the civil-service methodology of their appointment. It seemed troublesome both to Kagan and to Justice Anthony Kennedy that a shift to appointment by the commission itself would, if anything, produce judges who were even less independent than the judges that Lucia challenges. ...

If that summary captured the entire argument, I might have expected a strong majority to rule in favor of the existing appointments, perhaps with a dissent from Roberts and Justices Clarence Thomas and Neil Gorsuch. But to complete the picture I have to mention a fourth and final thread: the strong sense that the court’s prior decisions all but compel a ruling invalidating the challenged appointments. The basic point is that the activities of the officers here are 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....

Even Kagan, who plainly shared Metlitsky’s concerns about fostering an independent civil service, found it hard to swallow Metlitsky’s attempt to distinguish Freytag. ...

I would, though, add two closing observations. First, the justices seem to view this as a case likely to have broad implications. Mark Perry (appearing on behalf of Lucia to challenge the appointments) tried repeatedly to limit the breadth of his argument to a small group of only 150 administrative law judges scattered around the federal government, suggesting that the court’s decision would apply only to cases of wholly adversarial adjudication – a group from which he pointedly tried to exclude Social Security adjudications. ...  Second, if any of my readers are thinking that the “originalist” camp is likely to accept these appointments, I would mention that the only comment of the often-voluble Gorsuch during the oral argument was a question about what the appropriate remedy would be if the existing appointments are held unconstitutional. ...

In sum, the defenders of the administrative state are not entirely out of the woods. Although some of the justices are sympathetic to the goals that motivate independent appointments, it is not at all clear that five of them will agree that those goals pass muster under the constitutional framework the court’s decisions establish.

Lucia Transcript Available

     The transcript is now available for the Supreme Court argument in Lucia v. SEC, concerning whether Administrative Law Judges, at least at the Securities and Exchange Commission are constitutional.

     Update: If I were going to guess based upon reading the transcript, I’d predict a 5-4 decision holding the SEC ALJs constitutional with the following split but that guess is only worth what you're paying for it.

Unconstitutional

Roberts (clearly)

Kagan (hard to read because she treated the oral argument as if it were a law school class)

Thomas (of course, he never speaks during oral arguments so I'm making an assumption here)

Gorsuch (had taken this position in a related case while on the Court of Appeals)

Constitutional

Alito (surprise -- but I may misread him since his problem may only be that he didn't like the tests proposed by the attorneys arguing the case)

Sotomayor (concerned about practicalities)

Ginsberg (concerned about practicalities)

Kennedy (concerned about practicalities)

Breyer (concerned about practicalities)

     I'd guess that if there are swing votes, they will be Kagan and Alito, which is weird to contemplate.

     One thing that should be a problem for any Justice is that no one had a bright line test. The attorneys arguing the cases said they had bright line tests but none of the Justices seemed impressed with those tests. 

     It was good that four justices were definitely concerned about practicalities although sobering that four others didn't seem concerned.

     Anyway, read the transcript and tell us what you think.

Social Security Expanded To 500 Million Workers

     From The Economic Times of India:

The Prime Minister’s Office (PMO) has given its approval to the labour ministry proposal on universal social security cover for 500 million workers, including those in the farm sector, seeking to start the process of putting in place a more secure welfare net a year before the general election.

The finance and labour ministries will work out the details of the scheme that will require nearly Rs 2 lakh crore [2 trillion rupees or $30 billion dollars but doublecheck my math -- a lakh is 100,000 and a crore is 10,000,000 in the Indian numbering system while a rupee is worth $.015] when fully rolled out for the lower 40% of the country’s total workforce.

The remaining 60% of the workforce is expected to make contributions out of their own pocket, either fully or partially ...

The labour ministry has proposed a comprehensive social security system to provide retirement, health, old-age, disability, unemployment and maternity benefits to the 500 million workers. ...

     India gets universal health care coverage before the United States?

Social Security Protests In Nicaragua Leave Nine Dead

From the Associated Press:

Nicaragua’s government says it is willing to negotiate over controversial social security reforms that have prompted protests and deadly clashes this week. 

Vice President, first lady and government spokeswoman Rosario Murillo says nine people have been killed in the unrest. She calls the protests “cruel.” 

Dozens of others have been injured or arrested in the chaos in various cities across the Central American nation. ...

     Update: Now more than 25 dead. 

Presenting Officer In Use In U.K.

     The United Kingdom has disability benefits as part of its social security system. There are many, many differences between their disability benefits and those in the United States but one way that they are similar is that claimants may have hearings on their cases, before Administrative Law Judges in the United States and before tribunals in the U.K. Those hearings are somewhat different in that the Department for Work and Pensions (DWP) may be represented at the hearing by a "presenting officer." That's a concept that's been proposed in the past in the U.S. Here's some excerpts from a recent article about the presenting officers in the U.K.:

DWP has finally released information that shows that the presenting officers (POs) it sends to personal independence payment (PIP) appeals must report back to their bosses afterwards on whether they persuaded the tribunal not to grant an enhanced PIP award.

The same applies for those sent to employment and support allowance (ESA) appeals, with POs having to tell their managers whether they persuaded the tribunal not to award the claimant eligibility for the ESA support group. ...

Marsha de Cordova, Labour’s shadow minister for disabled people, yesterday (Wednesday) described DWP’s admission as “truly appalling”. ...

[The author of this piece] has been in contact with a DWP civil servant working on the PIP “frontline” – who is also a former PIP case manager – who has warned that POs are being given the “target” of stopping enhanced PIP payments. ... 

The minister for disabled people, Sarah Newton, said last November that DWP was “recruiting, training and deploying” about 150 POs to attend PIP and ESA tribunals “in order to present the Secretary of State’s case and support the First tier Tribunal in arriving at the right decision”. ... 

“A PO is not there to prevent an award being changed, but to ensure that the award is correct. ..." ...

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.