Poll Shows Social Security Illusions

The Associated Press reports that the Treasury and the Federal Reserve have polled baby boomers about their retirement expectations. Only 16% of the baby boomers expect to go on Social Security retirement benefits at age 62 -- but 34% actually do. Only 16% of baby boomers expect that Social Security will be their main source of retirement income -- but Social Security is actually the main source of income for 31% of retirees.

Union Objects To Fines For Social Security Employees

The Federal Times reports that the National Treasury Employees Union (NTEU) is objecting to monetary penalties for Social Security employees who are alleged to have improperly applied expert testimony to allow a large number of Social Security disability claims. The fines involved amount to $3.5 million for one supervisor and $100,000 and $215,000 for other employees. The matter is being litigated and the union has filed grievances.

Social Security Employees Face Large Fines

There have been rumors for some time that Social Security's Office of Inspector General was investigating one Administrative Law Judge (ALJ) for his conduct in allowing benefits to a large number of Social Security disability claimants. The Des Moines Register now confirms these rumors, but makes it clear that the ALJ is now deceased. It is other employees who acted at the ALJ's direction who are being targeted. See the excerpt below:

In deciding whether to award Social Security disability benefits to certain people, a government administrative law judge will often rely on expert testimony as to the applicant's employability. However, one such judge, the late J. Michael Johnson of West Des Moines, is alleged to have repeatedly relied on expert testimony obtained from one individual in one disability case. In that case, the expert had answered broad, hypothetical questions. Johnson allegedly applied the expert's hypothetical answers to 700 subsequent cases that he handled, awarding benefits in most, if not all, of those cases.

The inspector general's office, which has been investigating the matter for at least four years, contends that it was improper for Johnson's written decisions not to have disclosed the reliance on expert opinions that were not tied to the cases under consideration.

Johnson died in August 2003. The fines that are now being proposed would be levied against three Social Security Administration lawyers who wrote Johnson's decisions and one management official who oversaw the work of the decision-writers.

The inspector general is proposing civil fines of $5,000 for each of the 700 cases in question. As a result, the manager is facing a potential fine of $3.5 million, and the three decision-writers are each facing fines of more than $100,000.

Federal records indicate that the inspector general's office initially tried to bring criminal charges in the matter, but prosecutors in two states turned down the case.

Telephone Answering Problems At Social Security

Some excerpts from a report of a recent conference call between Social Security officials and the National Council of Social Security Management Associations (NCSSMA), an organization of Social Security management personnel, on answering the telephones at Social Security:

From FY 05 to FY 06 there were 1 1/2 million more calls coming in to the agents[at Social Security teleservice centers that answer Social Security's 800 number calls]. ...

Rick [Warsinskey, president of NCSSMA] reported how FO [Field Office] managers report that many calls go unanswered in the FOs. The most recent report states FO’s got 67.8 million business related calls in FY 2005. He asked if there was any possibility of getting more FO calls routed to the 800# either by Forward on Busy (FOB) or publishing the phone number in the phone book. Do the TSCs [teleservice centers] have the capacity for handling these additional calls?

OTS [Office of Telephone Services?] responded that the TSCs are beyond capacity. The targets are at 330 seconds to answer a call. The target busy rate is 10%. If we sent more calls to the TSC we could seriously degrade the service we are giving now. There is no capacity for that work in the TSC nor is there any capacity to handle it in the FO. The TSC targets are way higher than the private sector. One difference is that SSA will busy you out. Private sector will not busy you out.

Companies in the private sector have goals like: answer 80% of the calls within 20 seconds. They are competition and profit driven and that adds to their drive. SSA is no where near that. Even our 10% and 330 second targets are hard to meet. Since the beginning of FY 07, we haven’t met our target more than 20 days.

Stink Bomb At Gulfport Social Security Office

According to the South Mississippi Sun Herald, the Gulfport, MS Social Security District Office had to be evacuated yesterday because a stink bomb that created an sulfur like smell had been set off.

Draft US-Mexico Totalization Agreement Released

Back in 2004 the heads of the U.S. and Mexican Social Security agencies signed a Social Security totalization agreement. The agreement is not effective until ratified in both countries. The agreement has proven controversial in the U.S. and has never been signed by the President or submitted to Congress. The controversy in the U.S. has been more than a little peculiar since the agreement had not been released to the public. No one knew for sure what was in the agreement.

The TREA Senior Citizens League sued under the Freedom of Information Act to get the agreement released. After three and a half years of litigation, the U.S. government finally relented and the U.S.-Mexico Totalization agreement was released, apparently just before or after Christmas. One has to wonder if the timing of the release was designed to lower public attention to the agreement, but then one also has to wonder why there was any hesitancy about releasing a copy of the agreement.

The agreement appears to be similar to totalization agreements signed with other countries, which have been routinely ratified by the Senate. The controversy over this agreement has little to do with the actual agreement and much to do with the number of Mexican immigrant in the U.S. and public attitudes towards these immigrants.

NY Times On Social Security Reform

From a New York Times editorial on Social Security reform:

Everyone who followed the debate about privatizing Social Security back in 2005 has vivid memories of the Chilean model. Sometimes it seemed impossible to get through any discussion of fixing Social Security without hearing a free-market paean to the way Chile had given its workers control over their own retirement investments, followed by a demand that the United States get on the same boat.

Therefore, it seems worthwhile to note that the Chileans are now bailing water.

The Chilean government recently announced that in 2007 it plans to pursue far-reaching reforms aimed at creating a larger government role in Chileans’ old-age security. The reforms are urgently needed. It has been nearly a generation since the regime of Gen. Augusto Pinochet began to supplant Chile’s government-supported retirement system with a plan for Chilean workers to save 10 percent of their salaries in private accounts. Today, roughly half of Chile’s labor force has either not participated or has not accumulated enough to generate what the government considers a minimum payout of about $140 a month.

The overarching problem for Chile — and the real lesson for the United States — is that private savings are not a substitute for a guaranteed core tier of old-age support. The first measure of success of a retirement system is not how much certain individuals manage to sock away, but whether the system as a whole provides basic dignity for all. By that measure, Chile’s privatized system has failed and Social Security has succeeded.

Social Security does need some changes to protect it over the long term. The best solution would involve a combination of modest benefit cuts and modest tax increases, which could be phased in gradually over decades and could guarantee a government benefit that replaces about 30 percent of preretirement income on average, compared with a replacement rate of about 35 percent today.

Getting there would require sacrifices from both political parties. Republicans would have to give up on their privatization efforts. And the Democrats would have to control their knee-jerk tendency to preface any discussion of Social Security with a pledge never to cut anyone’s future retirement benefits. President Bush will also have to go further if there is to be any chance of progress while he is still in office. Tax increases must be a part of any plausible Social Security reform mix. Unfortunately, the president appears unalterably opposed even to something as overdue as raising the cap on earnings that are subject to Social Security tax.

Upcoming Meetings and CLE

• February 2, 2007, State Bar of Michigan Social Security Section Meeting, Lansing, MI
• February 13, 2007, Social Security Advisory Board Meeting, Washington, D.C.
  

• March 1-3, 2007, NADE Mid-Year Board Meeting, Washington, DC
  
• March 9, 2007 Ohio Academy of Trial Lawyers CLE, Columbus, OH
• March 25-28, 2007, NADR Conference, Albuquerque, NM
  
• April 18-20 2007, NADE Regional Training Conference, Albuquerque, NM
  
• April 18-21 2007, NOSSCR CLE, Baltimore, MD
• April 27, 2007, Cincinnati Bar Association Social Security Committee CLE, Cincinnati, OH
  
• May 2-4, 2007, NADE Regional Training Conference, Seattle, WA
  
• May 7-10 2007, NADE Regional Training Conference, Atlanta, GA
• May 18, 2007, State Bar of Michigan Social Security Section Meeting, Lansing, MI
  
• May 20-23, 2007, National Association of Disability Examiners Meeting, Stowe, VE
• September 15-20, 2007, NADE National Conference, Sioux Falls, SD
  
• October 17-20, 2007, NOSSCR CLE, St. Louis, MO
• April 8-11, 2008 NADE Regional Conference, Austin, TX
• June 4-7, 2008 NOSSCR CLE, Miami, FL
• October 15-18, 2008 NOSSCR CLE, Century City, CA

If you know of one that I have missed, please e-mail me at charles[at]charleshallfirm.com.