Rising Income Inequality And Social Security

       From Marketwatch:

When Alan Greenspan and his committee supposedly “fixed” Social Security’s funding crisis in the early 1980s, the program was supposed to remain solvent well into the 2050s.

Instead, the trust fund is scheduled to run out of money in 2034 — decades ahead of schedule. What went wrong?

Stephen Goss, who has been the Social Security Administration’s chief actuary for more than 20 years, posed this question recently during a retirement conference hosted by the Harkin Institute. And his answer may surprise some people.

Sure, birthrates have collapsed from the heady days of the baby boom, he said, and that trend hasn’t helped. But it’s nothing new: The big fall started in 1965, nearly 20 years before the Greenspan Commission.

And yes, people are living longer than they used to. But that isn’t a surprise, he added —actually, the decline in mortality is pretty much in line with expectations. The forecasts have proven “remarkably accurate,” he said.

So what changed? In a word: inequality.

Goss argued that rising income inequality — with fast growth at the top and slow growth everywhere else — is the mystery ingredient that has thrown Social Security’s finances into turmoil earlier than planned. And the big change took place in the 17 years after the Greenspan Commission made its projection, from 1983 to 2000, he said.

During that time, incomes for the best-paid 6% of earners rose by 62% in real, inflation-adjusted terms, he said. For the other 94%, incomes rose by just 17%.

The net result was that the lion’s share of U.S. income growth was above the Social Security cap, and wasn’t subject to the program’s payroll taxes. The percentage of incomes subject to the program’s tax collapsed from around 90% in the early 1980s to barely 82% by the turn of the millennium. …

Does "Temporary Disability Insurance" Reduce Social Security Disability Claims?

     From Does Temporary Disability Insurance Reduce Older Workers’ Reliance On Social Security Disability Insurance? by Siyan Liu, Laura D. Quinby, and James Giles:

Temporary Disability Insurance (TDI) provides workers with wage replacement while they recover from a serious medical condition. Proponents of a national paid leave program argue that these benefits allow workers to adjust to health shocks and return to the workforce, reducing reliance on Social Security Disability Insurance (DI). Yet, TDI could also encourage DI application by providing income during the lengthy qualification period. This study uses the 1992-2020 Health and Retirement Study to evaluate how access to TDI benefits affects the likelihood that older workers end up on DI after a work-limiting health shock. Specifically, it compares the experience of workers in states with mandated TDI benefits to those living in states without such policies.

The paper found that:

TDI helps workers with severe impairments stay in the labor force.

Specifically, workers who develop severe disabilities are 26 percentage points more likely to be employed and 16 percentage points less likely to apply for DI when they have TDI benefits.

However, workers whose impairments do not qualify for DI may use TDI to facilitate early retirement. ...

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     I have serious problems with this study. First, the authors didn't realize that the generally used term isn't Temporary Disability Insurance but Short Term Disability which suggests that they didn't get very far into anything other than abstruse math, such as "𝑈𝑆=𝑈(𝑤𝑆(𝐻)+𝑦)+𝜑𝑆𝐻." Second, and far more important, the authors are comparing states like New York, California and Rhode Island with states like Iowa, Louisiana and Georgia. There are major demographic and economic differences between these states that likely explain most if not all the differences they're finding. You could easily produce a study demonstrating that disability claims are more common in areas where college football is highly popular but do you think that means that following college football causes disability claims?

    In general, I'm highly, highly skeptical of those who think they can manipulate sick people into working longer. That might or might not be in their best interests but I don't think it's possible anyway. The factors that go into producing disability claims such as illness often combined with adverse vocational factors such as age and lack of work skills can't be manipulated out of the way. Even if you can get people back to work it's usually only postponing the inevitable by a few months.

Homelessness Soars Among Older People

    From Yahoo Finance:

Many baby boomers across the country are now coming to terms with the hard reality that working for your entire adult life is no longer enough to guarantee you’ll have a roof over your head in your later years.

Thanks in part to a series of recessions, high housing costs and a shortage of affordable housing, older adults are now the fastest-growing segment of America’s homeless population, according to a report in the Wall Street Journal, based on data from the Department of Housing and Urban Development. ...

Now, the over-50 demographic represents half of the homeless single adults in the U.S. — with no sign of their numbers slowing, leaving baby boomers (those aged 57 to 75) particularly vulnerable.

“Elderly homelessness has been rare within the contemporary homeless problem. We’ve always had very few people over 60 who’ve been homeless historically,” Culhane from the University of Pennsylvania told PBS NewsHour. ...

    I'm sure there are many reasons for this increase in homelessness among older people but the failures of Social Security's disability programs have to be a major factor. There are far, far too many disabled people in homeless shelters.

New Instructions On Transferability Of Skills

     The Social Security Administration has issued new instructions in its POMS manual on transferability of skills for purposes of determining disability. The sections affected are:

• DI 25015.015
• DI 25015.017 
• DI 25015.019

    At first glance I don't see anything that makes a difference but this is a sensitive enough subject that it bears a closer reading than I have given it to this point. 

    My longstanding opinion is that transferability of skills should only be found quite rarely. Those who really did have transferable skills almost certainly transferred them and didn't file disability claims.

PRW Time Period To Be Reduced From 15 Years To 5 Years

     From a notice that Social Security has scheduled for publication in the Federal Register:

We propose to revise the time period that we consider when determining whether an individual’s past work is relevant for purposes of making disability determinations and decisions. Specifically, we would revise the definition of past relevant work (PRW) by reducing the relevant work period from 15 to 5 years. This change would allow individuals to focus on the most current and relevant information about their past work, better reflect the current evidence base on changes over time in worker skill decay and job responsibilities, reduce processing time and improve customer service, and reduce burden on individuals.

    This is overdue by about 40 years but better late than never. It never made sense to tell disability claimants that they are not disabled because they can return to jobs they last held 12 years ago. Work skills just don't stick with people that long.

Good News For SSI Claimants

     From a notice that Social Security has scheduled for publication in the Federal Register:

We propose to expand the definition of a public assistance (PA) household for purposes of our programs, particularly the Supplemental Security Income (SSI) program, to include the Supplemental Nutrition Assistance Program (SNAP) as an additional means-tested public income maintenance (PIM) program. In addition, we seek public comment on expanding the definition to include households in which any other (as opposed to every other) member receives public assistance. We expect that the proposed rule would decrease the number of SSI applicants and recipients charged with in-kind support and maintenance (ISM). In addition, we expect that this proposal would decrease the amount of income we would deem to SSI applicants or recipients because we would no longer deem income from ineligible spouses and parents who receive SNAP benefits and live in the same household. These policy changes would reduce administrative burden for low-income households and SSA.

    Again, I'm not going to try to explain this. Just understand that it's good news for many SSI claimants.

"Close Proximity Of Time" Extension Made Permanent

     From a notice that Social Security has scheduled for publication in the Federal Register:

On July 23, 2021, we issued a temporary final rule (TFR) with request for comments to lengthen the “close proximity of time” standard in the Listing of Impairments (the listings) for musculoskeletal disorders because the COVID-19 national public health emergency (PHE) caused many individuals to experience barriers that prevented them from timely accessing in-person healthcare. That prior TFR is effective until six months after the effective date of a determination by the Secretary of Health and Human Services (HHS) that a PHE resulting from the COVID-19 pandemic no longer exists. The Secretary of HHS made that determination, and the COVID-19 national PHE ended on May 11, 2023. However, healthcare practices in a post-PHE world are still evolving. We are therefore issuing this new TFR to extend the flexibility provided by the prior TFR until May 11, 2025, so we can evaluate changes in healthcare practices and determine the proper “close proximity of time” standard for the musculoskeletal disorders listings. ...

    I'm not going to try to explain this other than to say that it's modestly good news for disability claimants with orthopedic problems -- a slight reduction in harshness is how I would put it.

Let Me Circle Back To This

     Let me circle back to the article I posted about yesterday concerning a man being asked to repay money allegedly overpaid in 1978. Here's a part of the article I didn't quote yesterday (emphasis added):

Byrd's father died when he was 4 years old. So his mother received social security for him while he was a minor. 

"This is not money I ever saw. I was not even living at home at the time," he said.

    This suggests how the overpayment occurred.  His mother wasn't entitled to the child's benefits she received on him because he wasn't living with her. So how is this an overpayment to him? His mother took money from him. He was the one injured back in 1978 and you're now compounding the injury by trying to force him to repay money that was taken from him?

Nobody Mentioned Waiver But The Bigger Issue Is The Lack Of A Statute Of Limitations On Overpayments

     From KDFW:

...  [A]n Arlington [TX] man is being told he owes back money that was paid to his mother — in 1978.  ...

The SSA is asking Jimmy Byrd to pay them more than $1,400 that was paid 45 years ago to his mother who died back in 2011. He could not believe his eyes when he opened a letter from the SSA last month. 

"I read the paperwork, and it was from January to June of 1978," he said. "Back in 1978, I was only 17 years old." ...

Byrd filed an appeal.

"Two weeks ago, I received a second letter stating I'm going to have to pay it, and I thought that's not right," he said. "I got in my car, went back down to the social security board."

Bryd told his story again.

‘The gentleman looked at me from behind the counter and said, 'You know, that is just the way it is,’" he said.

Byrd signed an agreement to have $100 a month deducted from his $1,800 social security check for the next 14 months.  ...

    Why, oh why, is there no statute of limitations on overpayments? These cases happen all the time. Of course, this overpayment would have been wiped out with a waiver request but it's easier to tell someone "that is just the way it is" than it is to help with a waiver request.

Proposed Regs On Consideration Of Past Work Advance

     The Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) -- the most important government agency you've never heard of -- has approved proposed Social Security regulation changes with the title, Intermediate Improvement to the Disability Adjudication Process: Including how we Consider Past Work. There's no way to know for sure at this point since we have no more than vague descriptions of what's included but the proposed regulations will likely reduce the number of years of past work considered in determining disability.

    The proposal will now be published in the Federal Register and the public will be able to comment. Social Security must consider the comments before publishing the regulations in final form so they go into effect. This process will take months at the least.

    When I posted about this proposal going to OIRA there were several comments posted here by those who felt this proposal would hurt Social Security disability claimants. If you think this is the case, don't make comments here on Social Security disability issues. You don't have enough knowledge to offer meaningful comments. If this proposal reduces the time frame considered from 15 years to, let's say, 5 years, that's a modest improvement from the point of view of disability claimants. And, no, this isn't some controversial loosening of standards.  I don't think that 15 years ever made sense. It certainly doesn't make sense now. With a nomination for Social Security Commissioner pending, the agency and OIRA are being extremely careful to avoid doing anything the least bit controversial. That's probably an important reason why I've had so little Social Security news to post lately. This proposal wouldn't be going forward now if it were controversial.

Yet Another Golden Oldie

     A post on this blog on June 9, 2020:

    The Social Security Advisory Board (SSAB) has issued a brief report recommending that the Social Security Administration "use evidence-based measures to evaluate access to agency services" which isn't the most exciting recommendation you'll find even in the context of government advisory board reports. There's another more complete report which adds detail. However, the brief report includes this chart which I think is far more interesting than the text in either report. (Click on the image to view full size.)

  

    What I get from this is that the dramatic increase in internet services provided by the Social Security Administration has had almost no effect upon the demand for services provided in person or over the telephone. 

     The idea that Social Security can wean the public off personal service so that in the future the public will just deal with the agency through its online services is bunk. There's no reason to expect that's ever going to work. By all means, provide online services but don't expect that online services will ever replace field offices and telephone service.

By Far The Most Read Post Ever On This Blog

     From this blog on May 22, 2022:

“Serious Concerns” About IG

      From the Washington Post:

… The acting commissioner [of Social Security] “has very serious concerns about the issues raised by The Washington Post about the inspector general’s oversight of this program,” Scott Frey, chief of staff to Kilolo Kijakazi, said in an interview. Kijakazi has scheduled a meeting with her senior staff on Monday “to discuss how to proceed,” Frey said. …

A spokesman for the Senate Finance Committee, which also has jurisdiction over Social Security, said the committee is “evaluating a number of steps” in response to the article. …

     An extreme reduction in productivity has been signaling for months that something is wrong at OIG.

 

 

    And, of course, that Inspector General is still on the job.

He Didn't See It Coming

     From this blog on July 9, 2021:

President Fires Saul And Black

      With no fanfare, the Office of Legal Counsel at the Department of Justice issued an opinion yesterday that the President may remove the Commissioner of Social Security from office notwithstanding the statutory provisions limiting removal from office. An opinion had been requested by the Deputy Counsel for the President.

     Update: Senator Grassley has tweeted that he's hearing that the President may oust Andrew Saul from his position as Commissioner. Senator McConnell has retweeted this saying "httI agree with @ChuckGrassley. This removal would be an unprecedented and dangerous politicization of the Social Security Administration."

     Further update: I've received several reports that there was a blast e-mail to Social Security employees at 4:30 today from an Acting Commissioner of Social Security indicating that Saul and Black are gone.

     And another update: The Washington Post reports that Saul still believes he’s Commissioner and plans to report for work on Monday — remotely from his home in New York City. Who’s going to break it to him?

How Field Offices Waste Their Time

     From a "Dear Colleague" letter from Dawn Bystry, Deputy Associate Commissioner, Office of Strategic and Digital Communications, Social Security Administration:

Recently, we notified you that we are no longer accepting faxed applications. We appreciate the feedback we received on the notification and want to provide clarifying information. ...

As you know, the COVID-19 pandemic disrupted our services and the public’s ability to apply for benefits in person. In response, we implemented various temporary flexibilities – temporary changes to our policies and business processes. These flexibilities included accepting faxed applications as validly signed applications if they contained a legible, handwritten signature.  ...

With the end of the COVID-19 Public Health Emergency as of May 11, 2023, we evaluated our temporary flexibilities and decided to discontinue accepting faxed applications. Since we have reopened our offices to walk-in traffic and expanded in-person services, we determined that continuing to accept signatures on faxed applications was no longer justified given the risk that bad actors could use faxed applications to commit fraud. However, you can still use a fax to help your clients. Although we will no longer accept faxed, signed applications as valid applications, a claimant can still submit a faxed application to establish a protective filing date. Upon receiving the faxed application, we will contact the claimant or a proper applicant, go over the information provided, and obtain a signature to validate the application. ...

    I've got a few questions:

• What degree of problem has there ever been with faxed claims?
• Why is a faxed claim more subject to fraud than a mailed claim or any other type of claim?
• How does a fraudulent filed disability claim actually get approved? They don't just look at the form and put someone on benefits. (I know there's presumptive disability but that really wouldn't get you very far with a fraudulent scheme.) Disability claims have to proceed through disability determination. That usually involves phone calls with the claimant. Medical evidence is gathered. There is at least one internal level of review after a determination that someone is disabled. Don't you think there would be problems getting a phony claim through all this without anyone noticing that something looks fishy? I'm no expert on fraud but I'm pretty sure that there are easier ways to commit fraud than submitting a fraudulent disability claim by fax.
  
• Does Ms. Bystry have any clue about the degree of stress that the field offices are under? Maybe she should work in one for a month or two.
  
• Why does Ms. Bystry think it important to waste field office time with such obsessive concerns?
• If she's so concerned about security, maybe she should just force claimants to show up in the office with three types of identification? (I hope I'm not giving her ideas.)
• Is there anyone over Ms. Bystry who can ask whether this emphasis on security is a bit too much?

Sanctioned Representatives

     The Social Security Administration has posted an updated list of "Registered and Unregistered Sanctioned Representatives."

    The list has never seemed that interesting to me but it always draws a good deal of attention whenever I post about an update which isn't often, even though they release an update almost every month.

Government Shutdown Looms

    The federal fiscal year (FY) ends on September 30. Social Security, as well as other agencies, will lack operating funds after that date unless Congress acts. At the moment, appropriations bills are being held up because of disagreements within the Republican Party over what to do. Republicans have a paper thin majority in the House of Representatives. A small group of ultra right wing Republicans is refusing to join the bulk of their colleagues to pass bills that would serve as vehicles for negotiations with Democrats in the Senate, even though anything they pass would be so slanted that Democrats in the House would never vote for those bills. Lacking a functioning majority, the Republicans who have the majority in the House, if not actual control, cannot move forward.

    When Congress is delayed in passing appropriations bills, in the end, they always vote for continuing resolutions (CRs) that allow agencies to continue spending money at basically the same rate as in the just concluded FY.

    House Republicans are working on a one month CR. The Washington Post reports that the CR they're working on would cut expenditures for FY 2024 by 1%. However, this pain would not be spread evenly. The Departments of Defense and Veterans Affairs would be excluded from the 1% cut. After these exclusions, the cut for other agencies, including the Social Security Administration, would be 8%. That would result in massive layoffs at Social Security. The agency would be largely incapable of functioning.

    It's not completely clear that the votes are there for this draft CR in the House. It would certainly not pass the Senate or be signed by the President. It's not even a starting point for negotiations.

    We're likely to see a government shutdown at the end of the month. This is actually the result desired by the small group of ultra right wing Republicans holding up things in the House. If your mindset is basically anarchist -- that government is so evil that we would be better off with no government -- then government shutdowns are a good thing.

    If there is a government shutdown at the beginning of next month, most of the Social Security Administration will continue to function. The field offices, teleservice centers, payment centers, OHO offices, and the Appeals Council will not be affected.

Another Golden Oldie — Many Vets With 100% VA Ratings Get Turned Down When They Apply For Social Security Disability

     A post on this blog on August 7, 2014:

Below is a chart labeled "Allowance rates for first DI applications filed by veterans after receiving VA disability ratings of 100% or IU during fiscal years 2000–2006, by VA rating and SSA primary diagnosis body system and selected diagnostic categories." This appears in Veterans Who Apply for Social Security Disabled-Worker Benefits After Receiving a Department of Veterans Affairs Rating of “Total Disability” for Service-Connected Impairments: Characteristics and Outcomes by L. Scott Muller, Nancy Early, and Justin Ronca published in the Social Security Bulletin, the agency's research journal. DI refers to Social Security Disability Insurance Benefits. IU refers to Individual Unemployability. Veterans may be approved for 100% VA disability benefits either with or without consideration of IU.

          Overall, Social Security is denying about 31% of disability claims filed by veterans with a 100% VA rating. Social Security approves only 43.5% of these 100% disabled veterans claims at the initial level and 13.8% at reconsideration but 70.8% at the Administrative Law Judge level. Social Security is turning down 25.3% of the claims filed by veterans determined 100% disabled by VA due to traumatic brain injury and 34.8% of those found 100% disabled by VA due to dementia associated with brain trauma.

Click on image to view full size

 

Variance By Race In Applying For Social Security Disability Benefits

     From How Does the Social Security Claiming Process Vary by Race?, a report by the Center for Retirement Research at Boston College:

Stats From The Only Part Of SSA Working Down Its Backlog

      Recently released report on Social Security's Office of Hearings Operations:

Click on image to view full size

 

Should State Agencies Serving As Rep Payees For Children Be Allowed To Seize The Children's Social Security Benefits To Pay For Their Care?

     From WUNC, an NPR station

To Teresa Casados, who runs the department in charge of child welfare in New Mexico, it seemed like an odd question. At a legislative hearing in July, a lawmaker asked her if the state was taking the Social Security checks of kids in foster care — the checks intended for orphans and disabled children.

"My reaction really was: That can't be right," said Casados, who in the spring took over as acting secretary of New Mexico's Children, Youth & Families Department. "That can't be a practice that we're doing." ...

Casados and her chief legal counsel drove back to the office. "When we got back, we looked into it and found out it was a practice that the agency had for using those benefits — and had been going on for quite some time." ...

[L]ast month, the U.S. Department of Health and Human Services and the Social Security Administration sent a letter to state and local child welfare agencies to encourage these changes.

The NPR/Marshall Project investigation found that in at least 49 states and the District of Columbia, when young people go into foster care child, welfare agencies routinely look for which ones come with Social Security checks. Or, if the children are eligible, agencies sign them up for benefits. Then state agencies cash those checks — usually without telling the child or their family, the investigation found. ...

Just days after that legislative hearing in New Mexico, Casados says her department "sent out a directive to cease using those funds for care and support." It pledged to start putting aside the Social Security benefits checks for foster children to have when they go back to their families or age out of foster care. ...