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Trump Budget To Call For Social Security Disability Cuts

     Roll Call is reporting that the White House budget proposal for Fiscal Year 2018, which begins on October 1, 2017, will call for cuts in Social Security disability benefits. The cuts are not specified in the article. 

But sources said the budget will include proposals to reduce the cost of the Social Security Disability Insurance program, which is not means-tested. - See more at: http://www.rollcall.com/news/policy/trump-wants-800-billion-10-year-cut-entitlement-programs#sthash.YV839krT.dpuf

White House officials are crafting a fiscal 2018 budget proposal for President Donald Trump that aims to wipe out the deficit through a combination of robust economic growth, steep cuts in certain means-tested entitlement programs and other savings. - See more at: http://www.rollcall.com/news/policy/trump-wants-800-billion-10-year-cut-entitlement-programs#sthash.YV839krT.dpuf

White House officials are crafting a fiscal 2018 budget proposal for President Donald Trump that aims to wipe out the deficit through a combination of robust economic growth, steep cuts in certain means-tested entitlement programs and other savings. - See more at: http://www.rollcall.com/news/policy/trump-wants-800-billion-10-year-cut-entitlement-programs#sthash.YQqJR9St.dpuf

White House officials are crafting a fiscal 2018 budget proposal for President Donald Trump that aims to wipe out the deficit through a combination of robust economic growth, steep cuts in certain means-tested entitlement programs and other savings. - See more at: http://www.rollcall.com/news/policy/trump-wants-800-billion-10-year-cut-entitlement-programs#sthash.YQqJR9St.dpuf

Social Security Wants Case Processing System For ODAR Pronto

     From a contracting notice posted by the Social Security Administration:

The Social Security Administration (SSA) is seeking a Case Management Software System inclusive of a correspondence system; scheduling system; invoicing system and a provider repository that will move cases along the Office of Disability and Adjudication Review’s (ODAR) business process to the closure of the case. The purpose of this RFI [Request for Information] is to identify potential vendors capable of providing a solution for this Case Management Software System....

The solution must be able to do the following: 

• Be a commercial off the shelf (COTS) product; 
• Be commercially available as of May 31, 2017;  ... 

Responses must be received by 12:00 noon EST on May 17, 2017. ...

     A response by May 17? Sounds like they already know what product they intend to buy. But how will an off the shelf product do everything they want it to do and work with Social Security's other systems?
     I'm probably wrong but what they're describing sounds a lot like the case management systems used by law firms. They're not going to use one of those, are they? One of those wouldn't be this scalable, would it? That wouldn't work with the agency's other systems, would it? But what other type of off the shelf system could it be?

Back To Two Factor Authentication

     In August 2016, Social Security introduced two factor authentication for claimants using its online systems. It was a fiasco. The public hated it. The agency quickly backed away.

     They're not letting that set them back. They're now planning to again require two factor authentication as of June 10. Users will have the choice of receiving the second factor either by text message or e-mail message.

     Will the public find this any more acceptable? Will it actually improve security?

Why Disability Benefits Are Especially Important Fro Less-Educated Workers

     The Center on Budget and Policy Priorities (CBPP) has a report up on 4 Reasons Why Disability Insurance Is Especially Important to Less-Educated Workers.

     Let me be less diplomatic than the folks at CBPP. Less-educated workers are frequently people with lower cognitive abilities. We do not live in Lake Woebegone. All the children are not above average. Some are born with lower cognitive abilities. The cognitive abilities of others are permanently stunted by difficult childhood circumstances. Lower cognitive abilities lead to lower educational achievements. Adult education is of only limited use for people with low cognitive abilities. They lack the ability to profit from it. People with lower cognitive ability are at a huge disadvantage when they develop medical or psychiatric problems. All they are suited to do is to work at jobs with low skill requirements and those jobs aren't in offices. Those jobs generally involve significant exertional requirements and offer limited tolerance for psychiatric issues. If all you ever had to offer an employer was a strong back and a good attitude you're in big trouble if your back loses its strength or your good attitude isn't so good.

DCPS Fight Going Into Extra Innings

     Social Security is now planning to hire MITRE, a consulting company, to do a "Build Versus Buy" analysis of its plan to build a new Disability Case Processing System (DCPS) in-house rather than buying it from an external vendor. The vendor of the DCPS now in use is vigorously promoting a new system it wants to sell Social Security but to this point the agency has been convinced that it can build a better system in-house. A good new DCPS is of great importance to Social Security.

I Know! Let's Just Be Harsher!

     Social Security's Office of Inspector General (OIG) did a study on collection of overpayments through long term repayment plans. Social Security deducts amounts from current benefits to repay the debt. The amount of the deduction depends upon the claimant's income. OIG found that some claimants were so poor that their monthly repayment amount wereso low that they would die before their overpayments were recouped. OIG's response: Stop worrying about whether the claimants have enough money to live on; just recoup more each month. Social Security's response is that they agree. They want to go to collecting at least 10% of monthly benefits without regard to whether this leaves the claimant with enough money to live on. They're not sure if they can just change their regulations or whether they need new legislation.

     And by the way, many, perhaps most, of these overpayments are due to mistakes made by the Social Security Administration. Few are due to fraud.

More Cross-Program Recovery Possible

     From a recent report by Social Security's Office of Inspector General (footnotes omitted):

CPR [Cross Program Recovery] is the process of collecting overpayments for one SSA-administered program by withholding the individual’s payable benefits from another SSA-administered program [recovering an SSI overpayment from regular Social Security benefits or vice versa]. ... The Agency can use CPR to withhold up to 10 percent of individuals’ OASDI [Old Age Survivors and Disability Insurance] monthly payments and either 100 percent of individuals’ SSI monthly payments or an amount that is 10 percent of their income, whichever is lower. ...

The Agency did not always use mandatory CPR to recover OASDI and SSI overpayments, as authorized under SSPA. ....

The Agency could have used mandatory CPR to collect $257,914 in OASDI overpayments from the SSI payments of 49 of the 50 individuals we reviewed. Based on our sample results, we estimate the Agency could have imposed mandatory CPR to collect about $52.9 million in OASDI overpayments from the SSI payments of the remaining 11,268 individuals we identified. ... 

The Agency could have used mandatory CPR to collect $248,166 in SSI overpayments from the OASDI benefits of the 50 individuals we reviewed. Based on our sample results, we estimate the Agency could have imposed mandatory CPR to collect about $33.5 million in additional SSI overpayments from the OASDI benefits of the remaining 9,364 individuals we identified.

Acting Commissioner's Message

From: ^Commissioner Broadcast
Sent: Friday, May 05, 2017 4:34 PM
Subject: FY 2017 Budget

A Message To All SSA Employees

Subject:  FY 2017 Budget

I have some good news to share about the budget.  This afternoon, President Trump signed the omnibus spending bill for fiscal year 2017, which provides the Federal Government with funding for the remainder of the fiscal year.

The omnibus appropriation includes an increase to our agency’s program integrity funding, which will allow us to conduct additional continuing disability reviews and redeterminations.  It also sets aside funds to focus on reducing our hearings backlog.    

I appreciate your patience during the latest budget negotiations.  Thanks again for all you do each day to support our mission.

Nancy A. Berryhill
Acting Commissioner

Tax Evasion Hurting Social Security Trust Funds

     From the Center on Budget and Policy Priorities (CBPP):

“Egregious employment tax noncompliance” by employers has risen substantially in recent years while the IRS’s ability to recover the lost revenues and investigate fraud and embezzlement has fallen, a report by the Treasury Inspector General for Tax Administration (TIGTA) finds. More than 1 million employers owed over $45 billion in unpaid employment taxes as of December 2015, including interest and penalties. The report provides further evidence that the deep cuts to IRS funding since 2010 have weakened the agency’s ability to perform its core functions of collecting taxes and enforcing the nation’s tax laws.

This type of employer tax evasion is particularly harmful; it not only reduces federal revenues but it also hurts workers because employers often don’t report their earnings to the IRS and Social Security Administration. That makes it hard for employees and their families to claim the benefits they’ve earned when they retire, become disabled, or die and leave dependents behind. ...

     The "employment tax" they're talking about is F.I.C.A., the tax that goes to the Social Security trust funds.

Death Master File Problems

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

Death information on CDPH [California Depart of Public Health] files was not always recorded on SSA records. At the time of our audit, SSA was issuing benefit payments to 83 individuals whose PII [Personally Identifiable Information] matched that of individuals who died in California from 1970 through 2004. 

• In 34 cases, the beneficiaries were deceased. SSA terminated benefits to 28 beneficiaries and identified approximately $4.6 million in improper payments. SSA suspended payments to five beneficiaries but had not quantified the related improper payments. We estimate improper payments in these five cases totaled approximately $ 1.2 million. The remaining case did not involve improper payments. 
• In 43 cases, the beneficiaries were alive. SSA and the Office of Investigations determined that none of the cases involved improper payments to the beneficiaries. 
• In six cases, SSA was determining the beneficiaries’ status. The Office of Operations referred the cases to its regional offices for development. 

We also identified approximately 188,000 numberholders who were likely deceased but had no death information on the Numident [Social Security records]. At the time of our review, none of these numberholders was receiving SSA payments. We provided SSA with the numberholders’ information, and SSA recorded death information on most of these record. ...

     There's a lot to notice here. Yes, benefits were being improperly being paid to at least 28 people. However, there were more cases where simple data matches indicated that a person was dead when they were actually alive. More aggressive use of data matches to cut off the benefits of dead people will inevitably cut off benefits to more people who aren't dead. That's a nightmare for the people whose benefits are cut off. Notice that sensationalist media may point to 188,000 people that Social Security doesn't know are dead without mentioning that none of them is being paid benefits.

Sad Situation In Charlotte

     From a television station in Charlotte:

An east Charlotte mother doesn’t know how she’s going to care for her permanently disabled son, after the benefits that were helping to keep him alive were discontinued at the start of the month.

Lakescia Gamble reached out to FOX 46 Charlotte to tell the heartbreaking story of her 17-year-old son Jai’Quan, who was involved in a horrible accident when he was younger, and would later fall victim to his own attorney. ...

Jai’Quan’s story begins in 2005, when he was 5-years-old. He was hit by a speeding truck while playing in the front yard of his grandma’s house. ...

As if that wasn’t already enough, Gamble would later find out that the attorney she hired to facilitate a settlement with the driver’s insurance company, John L. Schurlknight of Florence, S.C., had stolen Jai’Quan’s settlement money. ...

According to the FBI, Rivers and Schurlknight failed to tell their clients when their cases had been settled, and failed to pay the client’s medical providers, instead forging client’s signatures on releases and keeping all the money received in the client’s settlements.

Schurlknight would later commit suicide at his law office the day investigators were set to meet with him. ...

Gamble said a judge ordered $15,000 to go to Jai’Quan in the form of a trust that he can’t touch until he turns 18.

She told FOX 46 Charlotte that Jai’Quan’s medical costs exceed $30,000 a year, which is why he has been receiving monthly Supplemental Security Income, or SSI benefits, to help with the costs, but now there’s a problem. ...

“Social Security is now saying he’s unable to get any benefits, not even Medicaid,” Gamble said.

Last month, Gamble received a letter from the Social Security Administration informing her that Jai’Quan’s SSI benefits would be slashed from $735 per month to zero beginning in May 2017, because Jai’Quan “has countable resources worth more than $2,000.” ...

On top of that, the Social Security Administration sent Gamble another letter informing her that she needs to pay back $6,900 within weeks due to overpayments. Days after our interview, Gamble told FOX 46 the SSA increased the amount she owes to $12,000, which she says, she can’t afford to pay. ...

     If the money in the trust can't be touched until the child turns 18, this is a mistake because the funds would not be available to the child.
     You can't tell from this article if all the funds stolen from the child have been recovered. The North Carolina State Bar has a Client Security Fund that protects clients whose money has been stolen by their attorney. I and other NC attorneys pay into the fund. I can't find any reference online to a similar fund in South Carolina where this attorney was located. If there isn't one, SC attorneys need to get their act together.

Appropriations Bill Out

     The full text of the omnibus appropriations bill that will fund the government, including the Social Security Administration, for the remainder of the fiscal year, which only has five months to go, is out. It's 1,665 pages. The Social Security part begins on page 1,042. At first glance, I see no noxious riders, that is language directing or forbidding certain agency actions, but appropriations language is notoriously difficult to read so please let me know if I've missed something.

Social Security Funding Declines

     An omnibus budget deal has been announced. It will probably be enacted shortly. Here's an excerpt from a summary of that bill:

Social Security Administration (SSA) – The bill provides $12.5 billion for the administration of SSA activities – a decrease of $ 60 million from the fiscal year 2016 enacted level. This funding will ensure those served by the program receive efficient and timely assistance and service. One-time costs for building renovations provided in fiscal year 2016 account for a majority of the decrease. The bill supports program integrity efforts at the fully authorized level of $1.8 billion, an increase of nearly $400 million over the fiscal year 2016 enacted level.

Rep Payee Problem In Iowa

      From the Des Moines Register:

Not long after he moved back to Des Moines in 2015, Dustin Driskell began using a nonprofit downtown called Social Equality to handle his disability money. 

Driskell, 36, was adopted as an infant out of foster care. His mother committed suicide when he was 5; his father died suddenly when he was 11. For several years, he was bumped around between foster homes and shelters. He’s got a laundry list of mental health diagnoses requiring a cocktail of medications. 

Driskell needs help handling money because he’s been preyed upon by those who would take what little he has. 

Yet he struggled to get Phong Heu, the owner of Social Equality, to pay his bills on time or give him money when he needed it to buy groceries and other necessities. 

“Dustin slept on his apartment bedroom floor for several months because the payee wouldn’t give him the money to buy a bed,” his sister Deanna Hepworth wrote Watchdog. ... 

With the help of a staff member from Optimae Lifeservices in the East Village, Driskell filed a complaint last fall with Social Security against Social Equality. 

And then, in October, the payee service at 699 Walnut St. abruptly closed its doors. Driskell’s payments were suspended for a spell, and he was told Social Equality was under investigation. For a time, he got emergency payments, and then those, too, faltered. ... 

Driskell and Hepworth learned about the Social Equality investigation after his payments didn’t arrive last November. 

But in that case, Social Security workers set up emergency funds for Dustin and others after regular payments were suspended. 

Payments arrived in January, February and March. But last month, payments were suspended again. They were delayed again this month until, after three calls and two visits by Hepworth to the Social Security office, they were restarted. 

The delays have meant that Driskell has had no money at times, or he borrows it from his grandmother, Optimae and Iowa’s Department of Human Services to pay for rent and groceries. ...

     By the way, this otherwise fine article includes a weird detour into the Conn case. I didn't include it above. Mentioning the Conn case makes no sense in the article. I can't imagine why the reporter included it or the editor allowed it in.

Underpayment Problems

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

An OASDI [Old Age, Survivor's and Disability Insurance] underpayment accrues when a beneficiary is due a partial or full monthly benefit amount that has not been paid. SSA’s automated systems should detect and process most underpayments due living beneficiaries. However, when SSA’s systems cannot process these underpayments, SSA employees must manually issue them. Further, SSA employees must manually process all underpayments due deceased beneficiaries.

Manually issued OASDI underpayments of $6,000 or more require a secondary review. However, SSA policy does not require a secondary review of manually issued underpayments less than $6,000. ... 

Of the 250 sampled underpayments, SSA issued 62 (25 percent) incorrectly, with payment errors totaling $90,235. Specifically, SSA employees issued 

• 45 underpayments totaling $69,348 more than what was due the beneficiaries — we project SSA issued 187,620 underpayments totaling approximately $289 million more than what was due and 
• 17 underpayments totaling $20,887 less than what was due the beneficiaries — we project that for 70,880 underpayments, SSA did not issue approximately $87 million that was due.

     You might think that the solution would be to just require supervisory approval of all underpayments but there are two problems with this. First, it would require more staff time and the agency lacks the personnel to get its current workload done. Second, supervisory approval would only get you so far. Supervisors also make mistakes, especially when they're overworked.

     If you want better performance from Social Security, you're going to have to give the agency additional operating funds.

Early Intervention For Schizophrenia Not Preventing Disability

     Schizophrenia is a truly horrible disease. It's tragic to see once promising young people reduced to unstable, unproductive lives haunted by the madness of schizophrenia. Schizophrenia always starts before age 30 but continues for the rest of a person's life. There is no cure for schizophrenia. The treatments available generally make long term institutionalization unnecessary and can prevent frequent hospitalization but do little to restore normal functioning. In particular, the treatments available don't touch the negative symptoms of schizophrenia -- lethargy and inability to have appropriate emotional and social responses. The negative symptoms may not sound that bad but they are actually devastating. Everyone familiar with the disease prays for some treatment that would improve the lives of schizophrenics.

     One approach to schizophrenia that seemed to have promise was early intervention -- identifying schizophrenics as soon as possible and offering them intensive treatment. This led to various Recovery After an Initial Schizophrenia Episode (RAISE) studies funded by the National Institutes of Mental Health (NIMH).

     Some results from a RAISE study are available and they're not encouraging, at least insofar as Social Security might be concerned. Here's an excerpt from the abstract of a RAISE study:

Method: The Recovery After an Initial Schizophrenia Episode–Early Treatment Program (RAISE-ETP) study, a 34-site cluster-randomized trial, compared NAVIGATE, a coordinated specialty care program, to usual community care over 2 years. Receipt of SSA benefits and clinical outcomes were assessed at program entry and every 6 months for 2 years....

Results: Among 399 RAISE-ETP participants, 36 (9%) were receiving SSA disability benefits at baseline; of the remainder, 124 (34.1%) obtained benefits during the 2-year study period. The NAVIGATE intervention improved quality of life, symptoms, and employment but did not significantly reduce the likelihood of receiving SSA disability benefits. Obtaining benefits was predicted by more severe psychotic symptoms and greater dysfunction and was followed by increased total income but fewer days of employment, reduced motivation (e.g., sense of purpose, greater anhedonia), and fewer days of intoxication. [I'm not sure what sort of intoxication they're talking about. Substance abuse isn't a part of schizophrenia. Some schizophrenics have substance abuse problems like some schizophrenics have high blood pressure but as far as I know there's no connection.]

Conclusions: A 2-year coordinated specialty care intervention did not reduce receipt of SSA disability benefits. There were some advantages for those who obtained SSA disability benefits over the 2-year treatment period, but there were also some unintended adverse consequences. Providing income supports without impeding recovery remains an important policy challenge.

Not Much Fraud To Talk About

     The Social Security Subcommittee of the House Ways and Means Committee held a hearing yesterday on antifraud efforts at Social Security. The hearing was more notable for what didn't happen than what happened. There was no new announcement of some fraud ring preying upon Social Security. I'm not sure how much longer Republicans will try to milk the Conn case but they don't have a new case to talk about.

     The agency witness talked about anti-fraud computer systems that Social Security has installed. Apparently, a fair amount of money and time has gone into this. However, the agency witness didn't have anything to say in his written remarks about fraud that had been uncovered using these systems. Maybe it's too early to expect results from these systems, maybe Social Security hasn't tried hard enough to make the systems work or perhaps organized fraud at Social Security is actually quite uncommon. I think the Republican leadership of the Subcommittee would really, really, really like for Social Security to uncover lots of organized fraud since that would be in keeping with their political and social beliefs. I think they're going to be disappointed. If there is anything organized, it's probably quite small and more likely involves Social Security employees than members of the public.

     Update: Here's a report from the right wing Washington Times on the hearing. You can sense the disappointment pervading the piece.

Don't Plan On Working On And On

     From CNBC:

A stark reality of retirement planning is that your future is riding on the quality (read: plausibility) of your assumptions. Abject optimism can be dangerous. ...

[A] potential flawed assumption is that you will be able to keep working past 65. Yet the recently released 2017 Retirement Confidence Survey by the nonpartisan Employee Benefit Research Institute finds that more than half of workers say they expect to still be on the clock past age 65. By comparison, less than 15 percent of today's retirees kept working that long. ...

It's simply too risky to assume you will indeed be able to work longer. A survey by the Transamerica Center for Retirement Studies (TCRS) found that nearly two-thirds of retirees left the workforce earlier than expected because they were laid off, reorg-ed out of a position, or due to general unhappiness with a job. Only 16 percent of retirees who exited the work force earlier than they expected did so because they felt they could financially afford to.

Moreover, a new report from Prudential puts a dollar value on why your current employer may not be inclined to do back flips to keep an older you happy and engaged. The estimated one-year cost to a firm when an employee delays retirement: $50,000. ...

     And they're not even mentioning the effects of health conditions on retirement decisions.
     Raising full retirement age to 67 was a bad idea. Increasing it further would be a terrible idea. People need security in retirement and Social Security is the only assurance that the vast majority of Americans have or will ever have.

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