Failed "Grand Plans" And Republicans

I have written about the string of "grand plans", re-engineering, Hearing Process Improvement (HPI) and Disability Service Improvement (DSI), tried at Social Security over the past twelve years, in an effort to produce dramatic productivity gains at the agency. The net result of the first two of these schemes was a dramatic worsening of Social Security service. DSI is just now being introduced, but I am convinced that it is also doomed to failure. This raises the question of why these failed and why would I believe that DSI is also doomed to failure? I also noted that this twelve year period corresponded exactly with Republican control of Congress. This raises another question. What do these schemes have to do with Republican control of Congress.

To answer the first question of why "grand plans" to dramatically improve efficiency at Social Security are doomed to fail, let us take a look at some fairly simple numbers. The Social Security trust funds currently total about $1,994 billion. The President's budget proposal for 2008 is $9.637 billion. Social Security annual administrative expenses come to 0.05% of the assets of the Social Security's trust funds. On it's face, does that not seem awfully low? By contrast, a report from the Cato Institute, which was clearly trying to promote privatizing Social Security, calculated the annual administrative costs of a privatized old age benefit plan at 0.3% to 0.65% of assets. Note that the Cato estimate is about ten times as high as the actual administrative costs for the Social Security Administration and the plan that Cato is promoting, unlike Social Security, does not include disability or survivors benefits which are much more expensive to administer. By comparison, the Social Security Administration looks incredibly efficient.

My point here is not that a plan to privatize Social Security would result in vastly greater administrative expenses. That is obvious enough, but privatization is not going to happen for many reasons and administrative efficiency is not even one of the more important reasons. My point is that the Social Security Administration is already incredibly efficient. The idea that Social Security could be managed into much greater efficiency is ridiculous on its face. Of course, not every Social Security employee is a dynamo and there are inefficiencies and some money wasted at Social Security. The agency is large and some problems are inevitable. However, the idea that major improvement in efficiency is possible at Social Security is ludicrous. The agency is already a model of efficiency. Any efficiency gains at Social Security are bound to be small -- or, perhaps, incremental to use a word that the new Commissioner of Social Security used during his confirmation hearing.

As to the second question of why we saw these silly schemes whose authors hoped to dramatically improve productivity at Social Security while Republican were in control of Congress, we have to look at ideology. It has long been an item of faith on the American political right that government agencies, particularly government benefit programs, are astoundingly wasteful and inefficient. A natural corollary is that Congress should put pressure upon agencies to become more efficient and that budgetary pressure is one good way of doing this. There was an incredible display of Republican ideology at the Astrue confirmation hearing. Republican Senator Jim Bunning, who was at one time in the House of Representatives and chairman of the House Ways and Means Committee Subcommittee on Social Security, became irate in telling Astrue, and I will paraphrase, that he did not want to hear that Social Security did not have an adequate budget, because he knew that the problem was inefficiency. Bunning's display was astonishing because Astrue had said nothing whatsoever to provoke Bunning. How did Bunning know with such certainty that Social Security was so very inefficient? The facts strongly suggest that Social Security is already incredibly efficient. I cannot imagine any basis for Bunning's outburst other than that it was a display of irrational political ideology. Unfortunately, Bunning and others in his party were able to impose that political ideology upon the Social Security Administration over the past twelve years. Things got so bad by 2006 that Republicans in Congress thought that a Republican Commissioner of Social Security was bluffing when she warned that her agency would have to close its door for two weeks because the budget that Congress was about to enact was so disastrously inadequate. Probably, only the results of the November election prevented this catastrophe.

Cornell Law Review Symposium On Social Security

The Cornell Law Review issue for January 2007 includes a symposium on Social Security, with the following articles:

Medical Proof, Social Policy, and Social Security's Medically Centered Definition of Disability
Frank S. Bloch

The Social Security Administration's New Disability Adjudication Rules: A Significant and Promising Reform
Frank S. Bloch, Jeffrey S. Lubbers & Paul R. Verkuil

A Response to Bloch, Lubbers & Verkuil's The Social Security Administration's New Disability Adjudication Rules: A Cause for Optimism . . . and Concern
Robert E. Rains

Social Security and Government Deficits: When Should We Worry?
Neil H. Buchanan

Comment on Neil H. Buchanan's Social Security and Government Deficits: When Should We Worry?
Benjamin A. Templin

Social Security Reform: Lessons From Private Pensions
Karen C. Burke & Grayson M.P. McCouch

Transofrming the Role of the Social Security Administration
Colleen E. Medill

Professional Responsibility and Social Security Representation: The Myth of the State-Bar Bar to Compliance with Federal Rules on Production of Adverse Evidence
Robert E. Rains

The AFGE Should Be Ashamed

I hate to do this but Local 2452 of the American Federation of Government Employees (AFGE) is stealing from me. In three separate instances they have copied complete items off this blog and posted them on their website without even an attribution. It would be copyright infringement to do this even with attribution. Trying to pass off items I wrote as if they had written them is something worse, plagiarism.

I e-mailed the local union to ask that these be taken down and got no response. I e-mailed the communications director for the national union and asked that he tell the local to take these down. I received no response.

Here are links to the items on their website with links to what I had written beside them:

• AFGE This Blog
• AFGE This Blog
• AFGE This Blog

NCSSMA Head On Fed Talk

Rick Warsinskey, the President of the National Council of Social Security Management Associations, an organization of Social Security management employees, spoke on Fed Talk, a radio show, on February 9 about Social Security's budget problems and the issues that his organization is working on. The show is available for download.

Social Security Press Release On New Commissioner

Social Security has now sent out a press release on Michael Astrue who was sworn in today as Social Security Commissioner.

Witness List For Social Security Subcommittee Hearing

The Social Security Subcommittee has released the following tentative witness list for its Valentine's Day hearing on the Social Security disability program backlogs:

The Honorable Michael J. Astrue, Commissioner, Social Security Administration

Sylvester J. Schieber, Chairman, Social Security Advisory Board

Nancy Shor, Executive Director, National Organization of Social Security Claimants’ Representatives, Englewood Cliffs, New Jersey

Rick Warsinskey, President, National Council of Social Security Management Associations, Inc., Cleveland, Ohio

James Fell, President, Federal Managers Association Chapter 275, Alexandria, Virginia

NY Times Editorial

Some excerpts from a New York Times editorial (registration required):

In 2005, President Bush put his political capital where his mouth was, and lost. He went all-out to convince Congress and the American people that privatizing Social Security would be good and necessary. It’s neither — and his plan was justifiably and soundly rejected. ...

Mr. Bush is proving similarly tone-deaf when it comes to choosing members for the Social Security board of trustees.

There are six trustees, four of them administration officials and two outsiders. The job of the two outsiders — nominated by the president and confirmed by the Senate — is to represent the public’s interest in decisions about the program. Last year Mr. Bush nominated the same two men who had served in his first term. That violated the rationale for having public trustees, which is to bring fresh perspectives. So Congress refused to consider the nominees, but Mr. Bush appointed them for another year while Congress was in recess. He has now renominated them for new four-year terms.

Mr. Bush won’t get his way. But he is alienating Congress and creating delays that will make it harder for the next two public trustees — whoever they are — to participate fully. ...

There Are Things That Can Be Done About Backlogs Now

The only longterm solution for Social Security's humongous backlog in holding hearings on disability claims is to give the agency a bigger staff. However, as practical matter Social Security is going to have fewer personnel during this fiscal year and it is unlikely that the agency's budget for the next fiscal year will include the vast infusion of money and personnel that is needed to get the job done quickly. The vast infusion will have to come, but it will take years.

This does not mean that there is no hope for the current fiscal year. Social Security does not have to wait years to start doing something about this backlog. There are things that can be done and done quickly that will prevent things from getting worse between now and the end of the fiscal year. They may even improve the situation a bit in the next few months. These quick fix solutions help only a little in the long run. Few of them would be good ideas if this was not such an unacceptable situation. These ideas can easily be criticized as "paying down the backlog" and that is why none of these ideas was utilized during the last six years, but if the current situation is unacceptable, there is no need to worry about this sort of criticism.

Here is my list of quick fix solutions to help Social Security's hearing backlog, listed by how quickly they can be implemented -- and the time frames I am giving are my estimates based upon the assumption that the Commissioner pushes hard for rapid implementation, since otherwise implementation might take decades:

1. Hold hearings on cases without "pulling" exhibits. When case files come into ODAR they are a mess. There are duplicate copies of medical records. Medical records may have been requested from a single provider on several occasions, meaning that the records from that provider are spread out at several places in the file. Even when all of the records from a single provider are in one place, they may not be in chronological order. Even if they are in chronological order, the order will go forward in one set of records and backwards in another. The files are jumbles. A staff member "pulls" out the relevant medical evidence and places it in some order. This is extremely helpful for all involved and should never be abandoned permanently. However, staff shortages have made pulling exhibits a bottleneck. Many ALJs would like to hold more hearings but cannot because files have not been "pulled." Some hearing offices have abandoned "pulling" exhibits as a general matter. The exhibits are "pulled" only if a claim is to be denied. This is inconvenient for all concerned and can lead to confusion and misunderstandings, but there is no doubt that it improves productivity. Social Security seems to have no fixed policy on this. My opinion is that instructing ALJs to hold hearings routinely on unpulled files would improve productivity by at least 10%. This is a temporary expedient that should be abandoned quickly after the crisis is over. This could probably be implemented in less than three months, although the complaints about it would continue for years after it was over.
2. Re-start re-recon and senior attorney decisions. Re-recon was never Social Security's term, but no one remembers what term Social Security was using. Re-recon was the term most people were using. When re-recon was last used, during the Clinton Administration, once a Social Security disability claimant was denied at the reconsideration (often called "recon") level and asked for a hearing, the case was quickly examined to see if it fit into one of several categories of cases that were frequently allowed by Administrative law Judges (ALJs). If the case fit into one of these categories, such as claimants over 55 or claimants suffering from chronic mental illness, the case was diverted to one of several special units where it was reviewed to see if the claim should be approved. The review was something like a new reconsideration review, hence the term re-recon. The re-recon review was done quickly. If the claim was approved, the case was over and done with in a month or two without any ALJ ever having to look at the file. If the case could not be approved at re-recon, the file was sent on for a hearing, with no delay for the claimant. I would give a guess that re-starting re-recon could reduce the number of cases requiring ALJ review by around 5% and the vast majority of the cases would have been approved by ALJs anyway. Social Security should have statistics showing what effect this had the last time it was done. This could be implemented in about six months to a year, without the need for new regulations, but Senior attorney decisions could be implemented more quickly since those personnel are already in place. Once case files reach ODAR, which is the office where ALJs work, they are routinely reviewed to see if the case can be approved without the need for a hearing. These are called on the record reversals, or ORRs or OTRs. Usually, it is a staff person rather than an ALJ who does the ORR initial review at ODAR. Once a staff person identifies a case that he or she thinks is a good candidate for ORR, he or she must get an ALJ to sign off on the ORR. Most of the time the ALJ does agree with the ORR, but there are some ALJs who seem to believe that virtually no case is appropriate for ORR and some other ALJs seem unwilling to take the time to review these case files, which may not be as unreasonable as it might sound when you consider ALJ workloads. In the senior attorney program, which was also employed during the Clinton Administration, Social Security's senior attorneys review case files for potential ORRs, much the same as now, but instead of taking potential ORRs to an ALJ for action, the senior attorney would be able to take action on his or her own to approve the claim. Like re-recon this can be criticized as paying down the backlog, but the vast majority of the time these claims would be approved by ALJs later anyway. ALJs do not like senior attorney decisions because they feel it reduces their status. Under the circumstances neither objection seems important. My estimate is that re-starting the senior attorney program would reduce the number of cases requiring ALJ hearings by 5-10%. Again, Social Security should have numbers showing what the results were the last time this was done. The problem with restarting the senior attorney program is that the regulations which allowed senior attorney decisions have lapsed, meaning that an official re-start of the program would require the approval of the Office of Management and Budget, which could take months, but the re-recon regulations are still on the books. There is nothing in those regulations that prevents the re-recon regulations from being used as authority for senior attorney decisions. Using this authority the senior attorney program could be restarted in less than three months, although again the complaints about it would continue for years.
   
3. Raise the length of time a claimant has to request reconsideration or a hearing from 60 days to six months. This is my idea. It was not tried during the Clinton Administration or at any other time, as far as I know. However, the time limit for appeals was six months until the mid-1970s. I do not know why it was changed then. Because of the common tendency towards procrastination, going back to a six month time limit would temporarily reduce the number of reconsideration requests and requests for hearings, since it would increase the average length of time between a denial and an appeal. A good guess is that this would increase this average length of time by one to two months at each level, which would produce a temporary but dramatic reduction in the number of reconsideration requests and requests for hearings. This would be a nice breather for Social Security. This might also result in less churning. Many claimants are denied at the initial level, become discouraged or make an unsuccessful attempt to return to work, miss the 60 day cutoff to file an appeal and have to start all over again. It would be better for them and would mean fewer new claims for Social Security if they could just file an appeal. However, this regulatory change does encourage procrastination and that is not a good thing. This change could be done in three to six months, assuming there is no unusual holdup at the Office of Management and Budget, which has to approve changes in regulations -- and this one takes a change in regulations.
   
4. Make a statistical review of cases in which ALJs reverse prior administrative denials to look for patterns showing which types of cases are most reversal prone and carefully consider adjusting policies and practices at the initial and reconsideration levels to allow more of these cases. This was done during the Clinton Administration and it worked. This was a part of something called Process Unification. I have my own candidates for types of cases that Social Security should look at. The most important type would be bipolar disorder. Social Security is turning down almost everyone who is bipolar at the initial and reconsideration level, but 80-90% of these claims are approved by ALJs. I have more clients suffering from bipolar disorder than anything else. It may be 10% of my caseload. The next biggest category is chronic pain syndrome. If the claimant is going to a pain clinic and being told to take methadone or some other powerful narcotic several times a day, they might just be in severe pain. However virtually all such claims are being denied at the initial and reconsideration levels, while the vast majority are approved by ALJs. Social Security probably ought to look at its policies on mental retardation, congestive heart failure, obesity and peripheral neuropathy as well. You could probably eliminate 10-20% of appeals to ALJs in this manner and the vast majority of these claims would have been approved by ALJs anyway. This would probably take at least a year to implement.