Should 401(k)s And IRAs Count?

From a press release:

Goodwill Industries International is calling on the U.S. House of Representatives to pass H.R. 3696, which would modify the nation's disability policies to exclude 401(k) and IRA retirement accounts from federally funded means-tested benefits, so that all Americans can pursue a path to self-sufficiency and financial independence. ...

When people with disabilities are placed into a full-time position for the first time, they can do things that many people take for granted, such as opening a checking account and even making small contributions to their employer's 401(k) plan. But existing disability policy creates a disincentive to work and is feeding fears that if people do work and save for retirement they will lose their eligibility for income support and Medicaid.

What Happened?

Above is a page from the budget request that Social Security submitted to Congress in February 2007 for fiscal year (FY) 2008, which began on October 1. No budget has yet been adopted for FY 2008. Social Security is operating on a continuing funding resolution. Click on the page shown above to see it full size. The $9.597 billion figure shown above is not the budget that Jo Anne Barnhart urged, but the President's much lower budget. Note that even though this budget contained a 5% budget increase in funding for Social Security, that the agency projected in February that this budget that its backlogs would get worse and that the service it offers would deteriorate, although not badly. The projections in February called for a tiny cut in Social Security's workforce, from 74,823 total Social Security and DDS workyears to 74,596 workyears. (see page 91 of the Budget Request.)

We are now eight months later. Commissioner Astrue is saying that this same budget will require a near total hiring freeze for FY 2008, which will mean a dramatic decline in Social Security's workforce and dramatically increased backlogs throughout the agency. What happened since February 2007 to cause such a dramatic change? Were the projections in February unrealistically optimistic? Is Michael Astrue lowballing with the current projections to make himself look better when things turn out a bit better or is he lowballing as a covert way of lobbying for a higher budget? Did something happen in the last eight months to affect Social Security's projections for staffing levels for this fiscal year?

Demonstration Near SSA Headquarters

From the Baltimore Sun:

A day after a federal judge ruled that the government could not use mismatched Social Security numbers to crack down on employers who hire illegal immigrants, a coalition of immigrant advocates, faith leaders and workers gathered near the Social Security Administration headquarters in Woodlawn to voice their outrage at the proposal. ...

Interfaith Worker Justice and Maryland immigrant advocacy group Casa of Maryland sponsored the gathering of about 100 people yesterday at St. Gabriel Roman Catholic Church, just blocks from SSA headquarters. ...

Weiss said agency officials declined her group's request for a meeting to express their concerns. So after yesterday's gathering, faith leaders and advocates walked to Social Security headquarters to deliver a letter of opposition addressed to Commissioner Michael J. Astrue.

"The Social Security Administration exists to help people live with security," the letter stated. "Your Administration should never be turned into the immigration police." ...

Maria Welch, president of the Baltimore Hispanic Chamber of Commerce, said that six years ago she received a "no-match" letter after she married and changed her name. "It took six months to get straightened out," she said. "The government doesn't do anything in 90 days." ...

The SSA does not have the resources to handle the crush of people responding to letters, said Witold Skwierczynski, president of the local American Federal Government Employees, which represents the agency's employees.

"We have the lowest staffing levels since 1973," he said. "Anyone who has tried to visit a Social Security office or call the 800 number knows how difficult it is to get service. ... We likely will not be able to meet the 90-day requirement, resulting in people losing their job through no fault of their own."

A Very Interesting Article About Michael Astrue That I Missed

Here is an article I missed that appeared in the Belmont Citizen-Herald on March 9, 2007, shortly after Michael Astrue became Commissioner of Social Security. Belmont is the Boston suburb where Astrue lived before becoming Commissioner of Social Security. By the way, Mitt Romney also lives in Belmont.

Belmont resident Michael Astrue was in Washington, D.C. this week, but he wasn’t there to check out the museums, see the cherry blossoms in bloom or soak up the nation’s history.

He was there to become a part of it.

Astrue was sworn in as the new commissioner of Social Security on Feb. 12.

This is the second time Astrue has been an employee of the federal government — he was general counsel to the commissioner during the Reagan administration.

“It’s fun and unusual to come back two decades later. My old office is about 20 feet away from my new one,” he said.

Astrue was in Washington until 1992, when he moved back to the house he and his wife bought in 1985 on Benton Road. He started a law firm, then served as CEO of several biotech firms, including Biogen in Cambridge.

His wife, Laura Mali-Astrue, is better known to the children of Belmont as “Madame.” She has been a French teacher at the Belmont Day School for the past 14 years. This will be her last year at the school. She will join her husband in Washington in June.

The two have been “empty-nesters” since last fall, when their daughter departed for her first year of college. Their son James is a sophomore at Georgetown University in Washington.

“It will be nice to live close to him without being down his back. He told us we aren’t allowed to live within three blocks of his dorm. The place we really like is about 12 blocks away,” Astrue said.

He said James will be happy because his parents will bring their dog, Maggie, an English springer spaniel named for Margaret Thatcher.

“We got Maggie when the kids were little. They wanted to name her after a famous British woman, and the only ones they knew were Margaret Thatcher and the Spice Girls. I pushed for Margaret Thatcher,” he said.

In his new job, Astrue is responsible for administering the retirement, disability and survivors insurance programs that pay out more than $580 billion annually.

He thinks he landed the job because of an appealing blend of private management and public service experience, he said.

Many, many years ago, he said, he was a law clerk while attending Harvard University. His fellow clerk also eventually settled in Belmont, where he lives to this day. His newest job is state representative, and his name is Will Brownsberger.

The Astrues won’t be leaving Belmont for good. The commissioner’s term is six years, Astrue said, and they don’t plan to become a permanent part of Washington. He said they will probably rent out the house on Benton Road, the same way they did when he was in D.C. over 20 years ago.

“We’ll miss Belmont, but we’ll be back,” he said.

A Bullet Dodged -- For Now

Under a Bush Administration plan, the Social Security Administration was going to send out a huge number of letters to employers about instances in which workers' names and Social Security numbers did not match. Unless these discrepancies were resolved within 90 days, employers were supposed to fire the employees or face serious penalties. This plan has been sidelined by a preliminary injunction issued by a San Francisco federal judge. Whatever good or bad effects this plan might have had upon immigration enforcement, it threatened to have a devastating effect upon the understaffed Social Security Administration. An excerpt from a New York Times article hints at what might have happened -- and what might happen yet if this injunction is lifted:

In a December 2006 report cited in the court documents, the inspector general of the Social Security Administration estimated that 17.8 million of the agency’s 435 million individual records contained discrepancies that could result in a no-match letter being sent to a legally authorized worker. Of those records with errors, 12.7 million belonged to native-born Americans, the report found.

Fraud In Pennsylvania

From the Pittsburgh Tribune-Review:

A Brushton woman has been sentenced to three years of probation and ordered to pay restitution of $15,000 for Social Security fraud, federal prosecutors said.

Angelette Freeze of Susquehanna Street was convicted of concealing her marriage from the Social Security administration so that she could receive Supplemental Security Income between 1998 and 2005.

No-Match Letters Blocked

From Reuters:

A U.S. federal court judge on Wednesday granted a preliminary injunction barring the Bush administration from going ahead with a controversial program to remove illegal immigrants from the U.S. work force. ...

Under the proposed program, employers notified of a "no-match" would have 90 days to confirm that an employee was in the country legally or fire him if not. ...

[Federal District Court Judge] Breyer said in his decision Wednesday that the no-match letters will result in the firing of lawfully employed workers because letters based on Social Security Administration records include numerous errors.

This is important to the Social Security Administration. If those no-match letters ever go out, Social Security offices will be deluged by millions of individuals whose records contain mistakes or are out of date. Social Security's desperate staffing shortages could make this a catastrophic situation. Granting a preliminary injunction probably delays implementation for many months, perhaps even past the end of the Bush Administration.

A Question

From yesterday's press release from Social Security:

The agency also plans to hire about 150 ALJs and some additional hearing office support staff in the spring of 2008 – the only new hiring in FY 2008 as the agency continues to contract through attrition due to many years of congressional budget cuts far below what the President has requested.

Why would budget cuts in prior years require that Social Security cut its workforce this year? I can see how budget cuts in prior years would have required staff cuts in those prior years, but now? It is certainly fair to blame a good part of the current backlogs on inadequate budgets in prior years, but staffing levels in fiscal year (FY) 2008, which just began last week, are determined by the FY 2008 budget, not the budgets in prior years.

Since it seems clear that Social Security will get at least as much as what President Bush and Social Security Commissioner Astrue have requested for Social Security for FY 2008, it seems only fair to me to blame President Bush and Michael Astrue for not asking for enough money to properly staff and run the agency. Blaming prior Congresses for today's staffing level seems dishonest to me.

About the only excuse I can come up with for this is that if prior Congresses had given Social Security more funding in prior years, then in preparing the FY 2008 budget the White House and the Congress would have been working from a higher baseline and might have come to a higher number for this year. It would seem to me that it would be Michael Astrue's job to point out the fallacy of adding some small percentage onto last year's inadequate budget and expecting the backlogs to disappear. If he ever pointed out this fallacy, he did so privately. Publicly, he has said that all he wants is the President's recommended budget, even though the President's recommended budget for Social Security will require a near total hiring freeze in an agency that is already badly understaffed.