For Those Worried About Social Security Furloughs

Make of this what you will. It is from Gov.Exec.com:

We had an interesting lunch in our offices today with Paul Anderson and Susan Becker of the public affairs shop at the Government Accountability Office. They noted that like executive branch agencies, GAO has been working through contingency plans for what to do if Congress enacts a measure essentially freezing its funding this year. And also like other agencies, among the possibilities GAO is considering is employee furloughs. Interestingly, congressional staffers have responded to this possibility by asking GAO officials what would happen if the House and Senate prohibited them from using furloughs to cut costs.

Inspector General Issues Report

Social Security's Office of Inspector General (OIG) has issued it Fall 2006 report to Congress. It is surprising that the report is an expensively printed full color document, which sounds like a questionable use of public funds, especially for an agency which may have to furlough staff because of its short budget. The OIG is supposed to be fighting waste.

Astrue's Nomination Sent Back To Senate

Michael Astrue's nomination to become Commissioner of Social Security was not acted upon during the last Congress. President Bush has now renewed Astrue's nomination in this Congress, as well as Andrew Biggs' near hopeless nomination to become Deputy Commissioner of Social Security.

House Ways And Means Business Meeting Posponed

The House Ways and Means Committee business meeting scheduled for today has been postponed. The members and chairmen of subcommittees, including the Social Security Subcommittee, will be up for decision at this meeting. No new date has been announced.

Texas Woman Pleads Guilty To Social Security Fraud

Pamela Gwen Green of Port Arthur, TX pleaded guilty to Social Security fraud, according to The Examiner, a Texas newspaper. She was working under a relative's Social Security number while drawing Social Security disability benefits.

Social Security Fraud In Sacramento

KCRA reports on Angelica Ferrer of Sacramento who pleaded guilty to Social Security fraud going back 25 years and involving $131,000.

The President's Notion Of Social Security Reform

The following excerpts from a Dow Jones article seems to confirm that the White House is seeking a plan to "save" Social Security in which Democrats take the blame for cutting benefits and raising taxes, while President Bush takes the credit for some sort of private account.

U.S. President George W. Bush would prefer not to boost Social Security taxes, but is ready to listen to all ideas on entitlement reform, the White House said Tuesday, declining to explicitly rule out the idea of a tax hike. ...

Bush has tasked Treasury Secretary Henry Paulson with working with lawmakers on a fix for the ailing Social Security system. The talks, conducted behind closed doors, have triggered speculation that a bipartisan compromise could include raising the $97,500 limit on income subject to the Social Security payroll tax and adopting Bush's proposed personal retirement accounts.

Asked if taxes were off the negotiating table, Snow said, "We never said that they were on the table." ...

Democrats have shown no willingness to accept retirement accounts, particularly if they are funded by payroll taxes. Investment accounts, however, remain at the top of Bush's Social Security reform agenda.

"We'll let the debate proceed, but you know what the president's bright lines are: he believes it's important to have an investment component that allows people to take advantage of the far superior rates of return that one gets investing in a market place," Snow said.

National Retirement Risk Index

The Center for Retirement Research at Boston College is an important resource that draws little public attention. A recent release gives information about their "retirement risk index" which deserves wider attention. Here is their description of their recent research on this subject:

In June 2006, the Center for Retirement Research released the National Retirement Risk Index (NRRI). The results showed that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, 43 percent will be at risk of being unable to maintain their standard of living in retirement. Households are more likely to be ‘at risk’ if they are young, have low incomes, or lack pension coverage.

This brief looks at the three major factors that have caused the Index to increase since the early 1980s. These factors are: 1) a decline in Social Security replacement rates due to the decline in one-earner couples and the increase in Social Security’s Normal Retirement Age; 2) lower pension replacement rates as a result of the shift from defined benefit to defined contribution plans; and 3) lower annuity payments due to the dramatic decline in real interest rates. These negative factors have been only partially offset by a modest increase in financial assets, and an increase in the retirement income that homeowners could potentially obtain through reverse mortgages.

Having identified the key movers, this brief also updates the Index from 2004 to 2006. During this period, the run-up in housing prices was cancelled out by a corresponding surge in mortgage debt, which resulted in no change in the ‘at risk’ status of any of the Index’s age cohorts. However, compared to the 2004 Index, the 2006 Index has more Generation Xers and fewer Baby Boomers. Since Generation Xers are more likely to be ‘at risk,’ this change increased the Index slightly to 44 percent.