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I had earlier warned that there might be technical problems early on. The only technical problem that I have seen was that my personal spam filter initially misidentified the e-mailed items from Social Security News as spam and routed them to the spam bin, but that was a simple matter to correct. Any subscriber with that problem would have to correct it on their own end.

Robert Ball On Cutting Social Security

Even this many years after leaving office, Robert Ball is Mr. Social Security. From the Washington Post:

In the Oct. 19 editorial " Mr. Giuliani's No-Tax Pledge," The Post stated: "It's no more responsible for Republicans to rule out tax increases [to strengthen Social Security] than it is for Democrats to insist on no benefit cuts." The Post praised, as a "bipartisan blend," President Ronald Reagan's acceptance of a 1983 fix that included both.

I take exception. It's the essence of responsibility, in my view, to insist on no benefit cuts.

n 1983, I served on the National Commission on Social Security Reform (better known as the Greenspan Commission) and represented House Speaker Tip O'Neill in negotiations with the White House. What was right in 1983 -- a balanced package of benefit cuts and tax increases as part, roughly half, of the final agreement -- would be wrong today.

Social Security benefits are modest by any measure and are already being cut -- by raising the age of eligibility for full benefits and by deducting ever-rising Medicare premiums from benefit checks. So the benefits provided for under present law will replace, on average, a lower percentage of prior earnings than in the past. To cut them further would undermine all that Social Security has achieved -- exposing millions of vulnerable people, both elderly and disabled, to needless economic hardship.

Social Security has never been more important to more Americans than it is now. Private pension plans continue to dwindle -- currently covering only about 20 percent of private-sector employees -- and the national rate of savings hovers around zero. We just can't afford to cut Social Security benefits further. There's no way to make up for the loss.

Social Security benefits are vital to nearly all recipients. About a third of the elderly rely on Social Security for 90 percent or more of their income; two-thirds count on it to supply at least half of their income. The program lifts 13 million elderly beneficiaries above poverty.

Without Social Security, 55 percent of the disabled -- and a million children -- would live in poverty. The program is particularly important to women and minorities. It provides 90 percent or more of the incomes of almost half of all unmarried women age 65 and older (including those who are widowed, are divorced or never married), and it is the sole source of income for 40 percent of elderly African Americans and Hispanic Americans.

Social Security is the nation's most effective anti-poverty program. But it's much more than that. For every worker it provides a solid base on which to try to build an adequate level of retirement income. To weaken that foundation would be grossly irresponsible.

The good news is that there's no need to weaken it. We can shore up Social Security for the future without cutting benefits -- or raising contribution rates. The program can be brought into close actuarial balance over the long run with just three revenue-enhancing changes that are desirable in any case:

¿Gradually increase the maximum amount of earnings covered by Social Security so that the traditional goal -- covering 90 percent of all earnings -- is once again achieved. This change would affect only the 6 percent of earners who make more than the maximum covered amount (now just under $100,000), and implementing the change gradually over the next 20 to 30 years would have only a minimal impact on them.

* Allow Social Security to improve earnings by investing some of its assets -- up to 20 percent, say -- in equities, as just about all other public and private pension plans do.

* Provide a new source of income by retaining a residual estate tax and dedicating it to Social Security. By 2010, the estate tax will affect only individuals with estates worth more than $3.5 million ($7 million for couples). Dedicating the income from the tax to Social Security would considerably improve the progressivity of Social Security financing as well as increasing revenue.

Presidential candidates should be expected to discuss Social Security financing. But in 2008 they shouldn't be held to a 1983 formula. We're in a different time, with different needs -- and there are much better options available than benefit cuts.

Robert M. Ball was commissioner of Social Security in the Kennedy, Johnson and Nixon administrations.

Study On Social Security Disability Decision-Making

From the abstract of "How Large Are The Classification Errors In The Social Security Disability Award Process" by Hugo Benitez-Silva, Moshe Buchinsky and John Rust (emphasis added):

This paper presents an "audit" of the multistage application and appeal process that the U.S. Social Security Administration (SSA) uses to determine eligibility for disability benefits from the Disability Insurance (DI) and Supplemental Security Income (SSI) programs. ... We find that approximately 20\% of SSI/DI applicants who are ultimately awarded benefits are not disabled, and that 60\% of applicants who were denied benefits are disabled.

And from the body of the report:

... our results suggest ...——that the high reversal rates by the ALJs actually serves to reduce the classication error rates. We find that the low initial award rate at the DDS level produces a high rate of rejection errors at this stage. The DDS centers appear to behave according to a philosophy of “when in doubt, reject”. However, self-selection is operative: we find that applicants who appeal an initial rejection by the DDS are more likely to be truly disabled than the initial pools of applicants that the DDS evaluated. Therefore, the relatively high acceptance rate by the ALJs, combined with the self-selection in the decision to appeal an initial rejection, signicantly reduces the rate of rejection errors without increasing the rate of award errors.

What Does The Proposal Mean?

I have heard some skepticism that the Notice of Proposed Rule Making (NPRM) in the Federal Register today really means that henceforth remands and reversals will be for closed periods of disability only. I do not blame anyone for being skeptical since this seems so bizarre. Here is the exact language of the NPRM:

The administrative law judge's hearing decision in your case adjudicated the issues relevant to your case for the period of time up to and including the date the hearing decision was issued. If you or another party files an appeal of that hearing decision, or if the Review Board decides to review the decision on its own motion, the appeal and any subsequent proceedings will consider only that period of time ending with the date of the first hearing decision in your case. If the original hearing decision in your case is set aside, in whole or in part, by the Review Board or a Federal court and remanded to an administrative law judge for a new hearing or decision, the proceedings on remand will consider your case only with regard to the period ending on the date of the original administrative law judge decision in your case.

Any interpretation of this language other than to mean that remands are for closed periods only seems awfully strained to me.

Proposed New Rules Would Limit Remands To Closed Periods Only

My first reading was that the proposed rules concerning Administrative Law Judge (ALJ) decisions and the Review Board, which is to replace the Appeals Council, say that if the Review Board or a Federal Court remands a case that the ALJ may only consider the time period up to the initial ALJ decision. I am surprised to say that my second reading is the same. This would mean that on any remand, an ALJ could only award a closed period of disability up to the date of the initial ALJ decision.

To say this comes out of left field is to put it mildly. I had not heard anything previously indicating that such an idea had ever been under consideration. I cannot imagine that this was under consideration for more than a short time before publication, since word would have leaked out if this proposal had been around long.

I do not see how this comports with the medical improvement standard, which applies to closed period cases. In remand cases, benefits would be cut off even though the evidence would show no improvement and might well show a decline in the claimant's condition. Indeed, the claimant might be dead and yet his or her benefits would be summarily cut off as of the date of the first ALJ decision. The claimant would have to show all over again that he or she was disabled.

If the Social Security Administration has the power to do this, the logical corollary would be that the Social Security Administration has the power to limit any determination of disability at any level of review to a closed period of disability, meaning that once any claimant was approved for Social Security disability benefits, he or she would have to immediately begin a new claim for disability benefits if he or she wished more benefits. Obviously, this would make a mockery of the medical improvement standard and, indeed, would make Social Security disability benefits a never ending merry-go-round that would eventually exhaust any claimant, no matter how disabled.

I do not see how the Social Security Administration may limit the effect of a United States District Court remand in this way. I would expect that many District Courts would issue specific orders to the contrary.

I am surprised that the Social Security Administration would undertake such a dramatic change in its procedures without any prior notice to Congress as best I can tell. I think this will not play well with the Senate Finance Committee and House Social Security Subcommittee.

On a more personal level, why was it that neither Michael Astrue nor Lisa De Soto mentioned anything about this when they spoke at the conference of the National Organization of Social Security Claimants Representatives (NOSSCR) just a weeks ago? They mentioned other items from this proposal but did not mention this dramatic item. (And, by the way, there are other bad items in this that they did not mention. This is just the most dramatic. I will get to the others as I have time.) Why speak at all if you are going to do this?

What is not completely clear to me is whether the proposal would limit the effect of any reversal by the Review Board or a United States District Court to a closed period. I think this is what is intended, but I have so far been unable to find any language in the proposal that specifically covers this situation. It would be inconsistent if this is not what was intended. The lack of clear language on this point adds to the impression that this part of the regulatory proposal was drafted hurriedly.

I think what bothers me the most about this is that it creates a classic trap for the unwary. Experienced Social Security attorneys can mostly get around the problem created by this provision by having the claimant file a new claim in addition to an appeal. By the time any remand happens, there will be a new claim to be consolidated with the remand in order to get full justice for the claimant. It will only be the claimants represented by inexperienced attorneys or who are unrepresented who will be hurt by this.

If Congress can add a budget rider that limits the Social Security Administration's ability to close field offices, Congress can certainly add a budget rider prohibiting the expenditure of funds for preparing final regulations based upon this proposal. It may be necessary for Congress to take action to preserve the status quo until the Bush Administration leaves office.

Former Social Security Employee Sentenced To Prison

From CitizensVoice.com of Wilkes-Barre, PA:

Cynthia Sweppenheiser, whose age and address were unavailable, went before U.S. District Judge William J. Nealon and admitted to converting government property.

Assistant U.S. Attorney Lorna Graham said Sweppenheiser was a customer service technician at the Luzerne County branch of the Social Security Administration in 2006.

On several occasions, she tried to divert social security payments to her personal bank accounts. In September 2006, she deposited into her accounts about $6,000 meant for a social security recipient, according to Graham.

If she had been successful in all of her attempts, authorities estimate she could have taken more than $30,000, according to court records.

Sweppenheiser has since resigned from her position at the Social Security Administration, Graham said.

Although the maximum prison sentence is 10 years, she’ll likely face no more than a year in prison under sentencing guidelines, according to court paperwork. She also may have to pay back the money she admitted to stealing, under the plea agreement filed Thursday.

An Image From Social Security History

Disability Claim In The Future?

I have already posted about Mike McNulty's expected retirement from Congress. McNulty is the Chairman of the Social Security Subcommittee of the House Ways and Means Committee, making him a VIP in the Social Security world. Now comes word of the probable reason for his retirement from Congress at a relatively young age -- 60. He has a history of childhood polio and has become less mobile in recent years. Post-polio syndrome? Hint to McNulty: File your Social Security disability claim the same day you stop work. Post-polio syndrome claims are often denied. Appeals can take a very long time.