Bush Still Wants To Cut Social Security

From the Associated Press:

The Bush administration said Monday the only way to permanently fix Social Security is through some combination of benefit cuts and tax increases.

That was one of the key findings in a new paper on Social Security released by the Treasury Department in an effort to achieve common ground on the politically explosive issue.

"Social Security can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax increases," the paper said. The Treasury paper said that while other changes to the giant benefit program might be desirable "only these changes can restore solvency permanently."

I do not understand why the Bush Administration says benefit cuts are necessary. My understanding is that simply removing the cap on earnings that are subject to the FICA tax takes care of 93% of the problem and does not affect most wage earners. Take a look at the "Social Security Game" put out by the American Academy of Actuaries and make your own choices.

The Rhinoceros In The Room?

Below is a small extract from a longer work from ERI, a company in the business of selling employment data, particularly what they regard as a replacement for the Dictionary of Occupational Titles (DOT) (Emphasis added).

Each month the eDOT Skills Project [one of ERI's products] collapses DOT jobs no longer found in the economy into remaining eDOT data (so that historic data is not lost and we don’t inadvertently, as we have and corrected, eliminate a job like “chicken debeaker” which still exists in the American economy). It should come as no surprise that unskilled, sedentary jobs are disappearing. The joke among PAQ [part of ERI, apparently] analysts is that the only unskilled, sedentary job to remain in America is the “DOT Killer.” [I think they are referring to those they accuse of wanting to destroy the DOT.] But you can’t joke about your opposition. As opponents, the “study of specific work” has politicians desiring to be reelected, executive administrations wishing to hide unacceptable unemployment rates, a major user group – career planning, admittedly finding the O*NET a superior alternative, a judicial system where pain and emotion are appealing compared to fact (the latter being appealable), an SSA focused on “studying the problem,” vocational experts who believe labor economic data is an “art not a science,” and a legal system where attorneys are magnificently compensated under the status quo.

If this makes little sense to you, let me try to give a little background. Social Security is denying tens of thousands of disability claims each year based upon the premise that there are many unskilled sedentary jobs in the economy. Social Security's evidence for the existence of these unskilled sedentary jobs is the DOT, which said that there were, but the DOT has not been updated in decades and is terribly out of date. ERI is saying that they have evidence that these unskilled sedentary jobs no longer exist. If they are right, tens of thousands of disability claimants are being denied improperly each year. ERI is saying that a lot of people have incentives to ignore this problem.

A Photo From The Late 1940s

Upside Down Scrambled SSNs

From the Register:

A Pennsylvania crusader has slapped Google with a $5bn lawsuit, claiming that the world's largest search engine is endangering his personal safety.

With a suit filed in federal court, Dylan Stephen Jayne insists that the company is guilty of "crimes against humanity" because its name turns up when his social security number is scrambled and turned upside down.

Senator Bryon Dorgan On Backlogs

A news release from Senator Byron Dorgan, a member of the Senate Appropriations Committee:

DORGAN WANTS INVESTIGATION OF SOCIAL SECURITY DISABILITY BENEFIT DENIALS, DELAY IN DECIDING APPEALS

2,800 North Dakotans now caught up in "broken system"

(WASHINGTON, D.C.) --- U.S. Senator Byron Dorgan (D-ND) wants to know why 2,800 North Dakotans and hundreds of thousands of other Americans who have submitted disability claims under the Social Security Administration are being systematically denied, only to have them approved on appeal - after waiting nearly a year and a half.

"This system is broken," Dorgan said Thursday. "How else can one explain that the appeal process results in nearly two thirds of the claims that were previously denied finally being approved? Moreover, the huge backlog of claims means that many with disabilities are forced to live in poverty while waiting for a fair resolution of their disability claim."

Dorgan has asked the Inspector General's office to investigate what has caused these problems and to determine how it affects people.

"This is unfair to a lot of working Americans who have paid premiums in the form of their social security payroll tax for a program that includes disability payments if they become disabled," Dorgan said. "However, it seems that someone has decided they are going to systematically deny those claims and force those people to wait lengthy periods of time before an appeal will be heard. We now learn that nearly two thirds of the claims that have been denied were subsequently approved on appeal. This suggests to me that a whole lot of folks who are suffering with disabilities are being mistreated by this system and I want it fixed."

"Nationwide, there are more than three quarters of a million waiting in long backlogs to have their appeals decided. I don't know whether it is sheer incompetence or a deliberate decision to delay and deny benefits that people desperately need that have previously paid through the social security system, but I intend to find out."

In a letter to the President, Dorgan is also asking for action to correct the situation.

"The bottom line is that elderly Americans and other poor individuals with disabilities that prevent them earning a living and paying their bills deserve better," Dorgan wrote. "Social Security disability benefits keep millions of disabled Americans out of poverty. But these people who are unable to work and need immediate assistance to avoid financial collapse do not appear to be a priority for your Administration."

What Happened Here?

From the Kingman (AZ) Daily Miner:

A lot of things can be lost in the red tape of bureaucracy.

What Kingman resident Deanene L. Greenwood didn't expect was her life.

Greenwood, 50, came to the sudden realization roughly 10 months ago that her checks were bouncing.

When she contacted her bank, they notified her that her checks from the Social Security Administration were no longer being deposited into her account.

"My initial thought was they just transposed numbers," Greenwood said. "I really just thought it was a typing error."

With a little detective work, otherwise known as repeated calls, Greenwood said a representative with the administration told her that she had never received benefits and wasn't in their system.

Through all the calls, Greenwood said she didn't record or recall the names of the individuals she spoke with.

After a few more calls, Greenwood said a representative with the administration told her that she was listed as deceased.

Greenwood said in April 2005 she started receiving disability benefits from the administration.

She added she was also receiving payment for her two juvenile children through benefits her deceased husband had obtained.

Roughly 18 months ago, Greenwood applied for and received retirement benefits from the Social Security Administration.

Greenwood added they made her choose between that and disability, so she chose the greater retirement check. She was unable to provide documentation of this.

Greenwood said that she had packed up her paperwork, along with the rest of her belongings at her home in the 100 block of Chestnut Street because it is being foreclosed on.

Without the checks, Greenwood said she had to tap into her other resources.

"I've gone through all my savings," Greenwood said. "I've gone through the savings I had for my two children's education."

Around three months ago, she ran out of funds. Utilities were turned off at the residence.

Greenwood said she agreed to put her twin 16-year-old sons in voluntary hardship placement when Child Protective Services contacted her. During her time of need, Greenwood said that she has received support from the St. Vincent de Paul Society and the Salvation Army.

Without transportation and tired of trying to make something happen over the phone, a friend took Greenwood to the administration's office in Prescott.

Greenwood said three months ago she reapplied for disability and retirement payments. She added they told her it would take between two to three months before she received notification of her status.

Social Security Administration Spokesperson Lowell Kepke said they never reported Greenwood deceased. He added they had never given her retirement benefits in the past.

Kepke did say Greenwood was receiving checks for the children of her deceased husband. He added they stopped sending the checks when she no longer had custody of them.

Kepke said the state of Arizona is currently processing her new claim for disability benefits. He added it is impossible to put a time line on how long it would take to process.

"I'm not trying to get disability," Greenwood said when told of Kepke's comments. "I'm trying to get my retirement back."

Greenwood said she applied in person for both and doesn't understand why her application for retirement benefits wasn't mentioned.

"Once you retire, you're retired - supposedly," Greenwood said.

I cannot tell exactly what happened here. Ms. Greenwood is almost certainly mistaken about some important details, but I strongly suspect that someone at Social Security did tell her at one point that she was listed as deceased -- probably not realizing that they were looking at her late husband's Social Security records. I also wonder whether she had been approved in the past for Disability Insurance Benefits and those benefits were, by mistake, not resumed when her Mother's Benefits ended when her children turned 16. More likely, she had been on SSI disability benefits which were ended by her receipt of Mother's Benefits and which would not have automatically restarted if she had been off them for 12 months or more.

In any case, it takes staff at Social Security to sort out this sort of problem and Social Security has an acute current staffing shortage which makes it take forever to sort out this sort of problem.

Also, by the way, the Social Security staffer who contradicted Ms. Greenwood to the newspaper reporter had no business talking with the newspaper about Ms. Greenwood's case, either to agree or disagree with her understanding of what had happened. This appears to me to have been a Privacy Act violation.

Maybe This Doesn't Seem Like A Fantasy In North Dakota

From a press release from Senator Kent Conrad:

Senators Kent Conrad (D-ND) and Judd Gregg (R-NH), chairman and ranking member, respectively, of the Senate Budget Committee, today joined forces to offer a blueprint for prompting swift, bipartisan action to substantially improve the nation's long-term fiscal condition. ...

"The retirement of the Baby Boomers will seriously exacerbate a problem that has been building for years," said Senator Gregg. ...

The Bipartisan Task Force for Responsible Fiscal Action Act of 2007 establishes a 16-member task force comprised of eight Democrats and eight Republicans, designated by Congressional leaders and the President. Fourteen members of the task force will be current Members of Congress, and the remaining two members will be from the current Administration. The Secretary of the Treasury will chair the task force. ...

It will analyze all potential solutions, and make legislative recommendations to Congress and the President on how to substantially improve the long-term fiscal balance in a report due December 9, 2008. To ensure the bipartisanship of the recommendations, at least three-quarters of the task force, or 12 members, must agree to them before the report can be submitted.

Once Congress receives the recommendations as a legislative proposal, it must be fast-tracked to final consideration in both the Senate and House. Final passage of the bill requires a supermajority in each chamber -- three-fifths of the Senate and three-fifths of the House -- which is intended to ensure strong bipartisan support.

Written Statements At Hearing On Bank Treatment Of Social Security Benefits

From the Senate Finance Committee:

Frozen Out: A Review of Bank Treatment of Social Security Benefits

September 20 , 2007, at 10:00 a.m. in 215 Dirksen Senate Office Building

Member Statements:
Max Baucus, MT
Charles Grassley, IA

Witness Statements:

Waverly Taliaferro, Social Security beneficiary, New York, NY

Sara Kelsey, General Counsel, Federal Deposit Insurance Corporation, Washington, DC

Montrice Goddard Yakimov, Managing Director of Compliance and Consumer Protection, Office of Thrift Supervision, Department of the Treasury, Washington, DC

Julie L. Williams, First Senior Deputy Comptroller and Chief Counsel, Office of the Comptroller of the Currency, Department of the Treasury, Washington, DC

Margot Saunders, Counsel, National Consumer Law Center, Washington, DC