Demonstrating My Lack Of Budget Knowledge

A reader who knows more about budget matters than than I has pointed out while the Commissioner of Social Security has not released his budget statement, the President's budget does include Commissioner Astrue's budget request for the Social Security Administration for fiscal year 2009. Here it is:

As directed by Section 104 of P.L. 103–296, the Social Security Independence and Program Improvements Act of 1994, the Commissioner of Social Security shall prepare an annual budget for SSA, which shall be submitted by the President to the Congress without revision, together with the President’s request for SSA.

The Commissioner’s budget includes $10,529 million for total administrative discretionary resources in 2009. This represents $10,427 million for SSA administrative expenses and $102 million for the Office of the Inspector General.

This total of $10.529 billion compares to $10.386 billion in the President's budget, a difference of $143 million or 1.4%.

Even though Michael Astrue knew that Congress is ready, indeed eager, to give the Social Security Administration more money than the President, he could hardly bring himself to ask for more than the President. Astrue is certainly not asking for enough money to make a significant difference in the backlogs at Social Security. It is not clear whether he is asking for enough to prevent a further decline in employment at Social Security.

When Will Astrue's Recommended Budget For Social Security Be Released?

We have seen the President's recommended budget numbers for the Social Security Administration for fiscal year (FY) 2009, which begins on October 1, 2008. However, unlike other federal agencies, the Social Security Administration is not only allowed, but required to release its own budget requests. When will we see these? Let me list the dates these have been released in recent years:

• FY 2008 -- March 7, 2007
• FY 2007 -- March 1, 2006
• FY 2006 -- February 16, 2005
• FY 2005 -- February 25, 2004
• FY 2004 -- March 4, 2003

In other words, do not expect it today or tomorrow.

President's FY 2009 Budget

The President's recommended budget for the Social Security Administration for Fiscal Year (FY) 2009, which begins on October 1, 2008, is out. Before talking about this budget, let me emphasize that Social Security's budget is a complicated matter and I am no budget expert. All I can give you is my understanding at this point. Readers can study the original documents for themselves.

The President's recommended budget shows the Social Security's administrative budget for FY 2009 being $10.386 billion, which is $596 million over the current fiscal year, a 6.05% increase. However, unlike the current fiscal year, $504 million is allocated for "program intergity", which means making sure that all the money being paid is being paid properly, rather than making sure that everyone who should be paid is being paid. Certainly, money will be spent in this fiscal year on "program integrity", but there is no requirement that a certain amount be spent on program integrity and it is unlikely to be anywhere near $504 million. Basically,the President's recommended budget appears to me to be close to a budget freeze. I doubt that there is any money in this budget for significant increased hiring.

I should make it clear that the President's leverage on the FY 2009 budget is limited. Congress can, and probably will, pass continuing funding resolutions until Bush leaves the White House and then deal with his successor. Democrats in Congress are certain to declare this budget "dead on arrival." The top Republican on the Senate budget committee has already declared this budget "an academic exercise" and said it lacked credibility, according to Reuters.

Here are a few items included in the budget:

• Continues ambitious initiatives to reduce the number of disability appeals that are awaiting a decision from an Administrative Law Judge.

• Provides funding for projects that identify those cases most likely to be allowed so that severely ill applicants can begin receiving benefits on an expedited basis.

• Increases the capacity to process disability appeals by hiring additional Administrative Law Judges and support staff.

• Boosts the overall productivity of hearings and targets overtime to critical areas. ...

• Proposes legislation to synchronize the treatment of retroactive DI payments with Old-Age and Survivors Insurance payments, and to make additional modifications to the distribution of other retroactive payments.

• Proposes legislation to encourage children to stay in school by lowering to 16 the age at which full-time school attendance is a condition of entitlement for Social Security child’s benefits. ...

• Proposes to replace the existing complicated offset with a uniform offset for DI beneficiaries also receiving workers’ compensation. The proposal would limit the length of the offset to not more than five years.

The Detailed Budget Estimates supplement (page 1123) indicates that the proposal to "synchronize the treatment of retroactive DI payments with Old-Age and Survivors Insurance payments" means that the President wishes to reduce retroactive disability insurance benefits from twelve months to six months. I have never heard the word "synchronize" used in this way before.

Who Knew?

From the Arizona Star:

Barring a change in the rules, my wife, Georgina, and I are set with our plan for when to claim — or wait on — Social Security benefits. Using a little-known "file and suspend" strategy, I expect us to receive higher combined benefits over the long run, while protecting Georgina if I die first. ...

Discussed in a working paper for the Pension Research Council at the University of Pennsylvania's Wharton School, this strategy calls for the lower-earner spouse — Georgina in our case — to file for benefits first under her work record.

Depending on their circumstances, some spouses may wish to do so as early as possible, which is age 62. Georgina will wait until her full retirement age of 66 in 2010 primarily because her earnings from freelance work would reduce her benefits until then.

As the higher-earner spouse, I will then "file and suspend" when I reach my full retirement age of 66 in 2011. ...

That means I will file for my full retirement benefits but immediately ask that they be voluntarily suspended (which can be done in the remarks section of the application, either on paper or online, said Dorothy Clark, a Social Security spokeswoman). I will then wait to collect until I am 70. If we need money before then, we can tap our IRAs and other retirement plans.

Why do this?

● Once I file for benefits, even if I immediately suspend them, Georgina will become eligible for the spousal benefit.

● This benefit — 50 percent of what I would have received at full retirement age — will be higher than the benefit under her work record. (Note: If the lower-earning spouse files for benefits before full retirement age, the spousal benefit is reduced.)

● My benefit at age 70 will be considerably higher than at 66. For every year I wait up to age 70, I get a credit of 8 percent a year on top of annual cost-of-living adjustments.

● If I die before Georgina, instead of the spousal benefit she would receive a survivor benefit equal to whatever I was getting (or, generally, was entitled to get if I die before age 70).

Waiting In Dunkirk

From The Post-Journal of Jamestown, NY:

DUNKIRK — Chances are you may have filed a social security disability claim and either healed from the injury, or worse, before you ever received a check. Congressman Brian Higgins, 27th Congressional District of New York, visited the City of Dunkirk Senior Citizen Center on Friday morning to announce his proposed bill which could help alleviate several problems at the social security administration level.

“There is just an unacceptable back-log in social security disability claims and other services that people depend on here in Chautauqua County. I have a bill that I’ve introduced — with a lot of co-sponsorship — that would exercise congressional oversight over the social security administration,” Higgins said. “They have cut staffing, they have cut hours and they’re essentially cutting services and it’s unacceptable at a time where the claims for benefits are actually increasing.” ...

“We have lost staff by more than 50 percent. However, the work that we do continues to increase,” added AFGE Local 3342 President Paul Demler. “The population is not going away. It’s growing and we’re expecting over the next few years the effect of the baby-boom generation is going to increase our services by approximately 30 to 40 percent.”

Downfalls for SSA were noted as offering unreliable office hours for local administration offices and, worst of all, untimely with the processing of claims. ...

Under the SSA’s current plan, Demler says the Dunkirk office would actually close before it hired one new employee.

“Currently, the agency only has a plan to replace employees who leave at a 1:8 ratio, meaning it would require eight employees to leave before another is hired,” he said. “If you think of Dunkirk, there’s only 6 employees, they would close before ever considering to hire another employee under the 1:8 ratio. Jamestown would be down to two or three employees.”

Law Offices Of James Sokolove

Allsup is not the only entity seeking to represent Social Security disability claimants on a national basis -- and issuing press releases in an effort to get free advertising. Here are some excerpts from a press release from the Law Offices of James Sokolove:

The LOJS, dedicated to providing equal access to the civil justice system, cites the importance of the startling results of a two-month investigation into Social Security Disability Insurance (SSDI) claims presented in a recent CBS News video report. ...

“We need to be aware now that an aging boomer population will present an increasing number of claims just as the judges who review denials at the Social Security Administration (SSA) likewise age and potentially shrink in numbers,” says Attorney Jim Sokolove, founder of The Law Offices of James Sokolove. “It’s the perfect storm. As to why new judges aren’t being appointed to handle the increase … that’s the million-dollar question.” ...

About The Law Offices of James Sokolove

For almost 30 years, The Law Offices of James Sokolove (jimsokolove.com) has focused on reinventing how people obtain legal services. Equality of access, irrespective of ethnicity or income, and superior quality of representation and service within our civil justice system is our mission. Within an ever-changing legal profession, the LOJS business model is a proven success strategically matching specific client needs with particular law firm expertise and service quality. LOJS is the nation’s largest and fastest growing marketer of legal services.

Waiting In Perryville

From the Southwest Missourian:

Tarring a roof or putting up walls never made Jeff Niccum bat an eye. Manual labor is all the work he has known.

But his life of construction, roofing and landscaping has resulted in degenerative joints and painful arthritis in his early 40s. Giving his son J.T., who turned 5 Wednesday, a bath hurts him. J.T. got a train for his birthday, but Niccum could only put the toy together from a recliner. Getting on the floor with the boy was out of the question.

Niccum, of Perryville, Mo., has been rejected four times for Social Security disability. His appeals have come back unfavorable since 2000. After the first time, he said he thought they might be right. So he landed a job driving a forklift at Gilster-Mary Lee. After just a week of work, he couldn't get out of bed.

Social Security Retirement Benefits Worth $225,000 And Disability Benefits Worth $414,000

From the National Academy of Social Insurance:

For most Americans, the value of their Social Security is the biggest accumulation of dollars they will take into retirement. In fact, for two-thirds of recipients over the age of 65, Social Security is more than half of their income during retirement, according to a new report released today by the non-partisan National Academy of Social Insurance (NASI).

The report, Social Security: An Essential Asset and Insurance Protection for All, details Social Security’s vital role in safeguarding Americans families and retirees, with a particular focus on groups at high risk of having inadequate incomes – older women, African American families, and the Latino community. The report synthesizes findings from research and outreach activities by twelve organizations funded by the Ford Foundation.

The average monthly benefit for retirees is $1,045 in 2007. A 65-year old who wanted to buy a guaranteed income of that size – with payments that go up with the cost of living and continue for a widowed spouse -- would need to pay an insurance company about $225,000. ...

The value of the disability benefits for disabled workers – those who cannot work at any job for at least a year because of physical or mental illness and impairments – was the equivalent of purchasing a $414,000 disability insurance policy in 2006. That represents the total benefits available to a 30-year old worker who becomes disabled after earning between $25,000 and $30,000 a year, has a 28 year-old spouse, a child age two and an infant under the age of one.

An Administrative Law Judge is supposed to decide upon something like 50 Social Security disability claims in a month. By my calculation, that is over $20 million in benefits -- per month -- and almost a quarter of a billion dollars per year! And that is not even considering the value of Medicare!