Fred Kelly at the Charlotte Observer has written another article about Social Security's terrible backlogs in processing disability appeals.
Feb 13, 2007
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.
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:
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:
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.
Feb 12, 2007
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. ...
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