Preaching To The Choir

From the Philadelphia Inquirer:

David Walker,who warned Congress against spending more money than it collects from U.S. taxpayers while he headed the Government Accountability Office under Presidents Bill Clinton and George W. Bush,is in Philadelphia this week on a national tour pushing new restrictions on Social Security and Medicare eligibility, and higher payroll taxes, at least for the rich.

He's asking support from influential Philadelphians who don't personally need federal checks. As president of the Peter G. Peterson Foundation, endowed by the billionaire Blackstone Group L.P. investment manager, Walker was guest of honor Wednesday night at tech investor Thomas Gravina's Haverford home, where local invitees included real estate mogul Ira Lubert of $12 billion-asset Independence Capital Partners, bond and casino investor Michael Forman, and McDonald's meat-supplier-turned-philanthropist Herbert Lotman. ...

What exactly does Walker want? For Social Security, he wants an added "automatic" savings plan without guaranteed payouts, like a 401(k) plan; delayed eligibility, eventually limited to age 70 and older or "indexed to life expectancy" for the continuing guaranteed benefit; and higher payroll taxes on the rich, who pay no Social Security after their first $108,000 in salary.

That's a lot more than would be needed to address any long term financing issues with Social Security.

Searching For Plausible Occasions

Ted Marmor has an interesting piece on the Huffington Post concerning the work of the National Commission on Fiscal Responsibility and Reform. Marmor believes that the Commission seems determined to recommend deep cuts in Social Security benefits. Here is a brief excerpt:

[T]he same attacks on Social Security have been going on -- in different guises -- for at least four decades. ... What is crucial to understand is how devious and misleading such lines of argument are. They are best understood as an ideological remedy searching for plausible occasions to celebrate what was presumed.

Marmor's piece must be hitting home. Andrew Biggs has chosen to respond on his own blog. Biggs seems to feel that it is inappropriate for anyone to respond to the right wing attacks upon Social Security. He calls Marmor's piece an attack upon the character and motivation of those who want to dismantle Social Security. Biggs takes offense at the suggestion that he and others who want to gut Social Security are ideologically motivated. Yeah, right, you're just a scholar and a patriot, Biggs. You've got no ideological ax to grind.

Union Newsletter

Council 220 of the American Federation of Government Employees (AFGE), the union that represents most Social Security employees, has issued the May 2010 issue of its newsletter, UNITY. Here is a small sample from the newsletter:

The Social Security Administration has again shown there are two sets of rules: one for management officials and one for bargaining unit employees. Jared Gaspard was featured in the January, 2010 UNITY after he apparently processed about 38 phony SSI applications in order to meet agency “goals.” At the time, Gaspard was manager of the SSA office in Independence, Missouri. ...

The Office of the Inspector General (OIG) conducted an investigation, and the result was that Gaspard was moved to the Training and Development Team in the Kansas City Regional Office. ...

Despite the evidence that Gaspard falsely attested to contacting applicants and taking fake applications under their name, Kansas City Regional Commissioner Michael Grochowski recently awarded him with a Regional Commissioner’s citation award for exemplary service.

[Union President] Skwierczynski said, “Awarding Gaspard who took fake SSI applications and attested to their accuracy with a Regional commissioner’s citation is outrageous. This is especially hypo-critical since the Union is currently defending bargaining employees who have been fired for the same alleged infractions.” ...

OIG Report On Flexiplace

From a report by Social Security's Office of Inspector General (OIG):

Negotiated agreements between the Social Security Administration (SSA) and its unions established Flexiplace for ODAR [Office of Disability Adjudication and Review] bargaining unit employees. Flexiplace allows qualified hearing office staff to perform assigned work at a management approved alternate duty station (ADS), which is typically their personal residence. As such, employees who participate in Flexiplace take claimants’ case files to their ADS. These case files can be in paper form or stored on portable devices, such as compact discs (CD) and laptop computers, and generally include claimants’ PII [Personally Identifiable Information]—Social Security numbers (SSN), names, addresses, earnings information, and medical histories. According to an ODAR survey, approximately 2,037 (29 percent) of its 6,992 employees worked Flexiplace at least 1 day per week in Calendar Year 2008. ...

To accomplish our objective, we selected 20 hearing offices. At each office, we randomly selected and interviewed hearing office employees who participated in Flexiplace in Calendar Year 2008 as well as group supervisors. We also interviewed each office’s director and chief ALJ. In total, we interviewed 135 hearing office employees and 75 managerial staff. ...

According to most ODAR employees we interviewed, SSA’s Flexiplace program has had a positive impact on their morale or helped them work more effectively at home because of fewer interruptions. ...

ODAR’s practices over PII did not properly protect claimant data that Flexiplace employees removed. For example, ODAR management at 17 (85 percent) of the 20 hearing offices we visited allowed Flexiplace employees to remove electronic PII that was stored on unencrypted CDs. As long as employees placed claimants’ electronic data in a locked container, ODAR considered the employees to be taking proper steps to secure PII. However, we do not believe such controls are sufficient because PII remains vulnerable to unauthorized disclosure when it is “secured” in such ways.

The Office of Management and Budget (OMB) requires that Federal agencies encrypt all data on mobile computers/devices, unless the data are not sensitive. To address OMB’s requirement, SSA implemented a policy that requires employees use Agency approved encrypted or password protected electronic devices when PII is removed in electronic form. ... While SSA is working on an encryption solution for ODAR, we believe ODAR needs to adequately safeguard claimants’ electronic data by requiring that employees save PII to an encrypted and password protected laptop—at least until the Agency implements a complete encryption solution.

Federal Computer Week has picked up on this OIG report.

Ratliff Decision No Surprise

The Supreme Court has issued an opinion in Astrue v. Ratliff. No surprise. The government won. The Court held that an attorney fee under the Equal Access to Justice Act (EAJA) belongs to the plaintiff and may be seized by the government for debts owed the government. Justices Sotomayor, Stevens and Ginsburg filed a concurring opinion inviting Congressional action on the issue, saying that the decision in the case would make it more difficult for Social Security claimants to obtain representation in federal court.

S Corp Tax At Issue

Congress is currently considering a bill that would extend tax cuts first enacted during the George W. Bush administration. One aspect of this bill that has attracted little public attention would affect Social Security. Currently "S" corporations do not pay the F.I.C.A. tax, the one that funds the Social Security trust funds. "S" corporations pay no federal income tax; their income passes through to their owners who pay individual income tax. The owners do not pay F.I.C.A. taxes on the income they receive from an "S" corporation. The "S" corporation technique is used primarily by professionals such as physicians, dentists, lawyers, architects, etc. The bill would change that for "S" corporations with three or fewer key service providers. There is a fight against the "S" corporation provisions of the bill, which is being labeled as a tax increase. If passed, the bill would increase tax revenues by about $11 billion over ten years.

Tax increase or loophole closing? What do you think?

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Updated Fee Payment Numbers

Social Security has released updated numbers on payments to attorneys and others eligible for direct payment of fees for representing Social Security disability claimants.

Fee Payments
Month/Year	Volume	Amount
Jan-10	32,227	$111,440,046.23
Feb-10	29,914	$105,708,101.59
Mar-10	34,983	$122,874,426.87
Apr-10	44,740	$153,478,589.32
May-10	34,686	$119,527,194.40

Notice the dramatic changes from month to month. Representing Social Security claimants is a roller coaster. The bills and employee salaries that an attorney who represents Social Security claimants must pay each month are not on the roller coaster with Social Security fee payments. They stay pretty much the same each month. Every year I find that I make most of my profit for the year in just two or three months out of the year. This may be one of the reasons that so few employees of the Social Security Administration leave the agency to begin representing Social Security claimants.

Obama Social Security Number Nonsense

As I reported earlier, the "birthers" who claim that Barack Obama was born in Kenya making him ineligible to be President, are trying a new tack, claiming that the President's Social Security number must be a fake since it is a number that was being assigned at the time to people living in Connecticut even though Barack Obama was living in Hawaii at the time he took his first job. They managed to get questions asked about this asked at a White House press briefing.

The Associated Content blog gives a possible explanation of the Social Security number, that Barack Obama was living not in Hawaii but in Indonesia at the time the Social Security number was assigned and that Obama obtained it by mail, using the return address of his father, who was divorced from his mother and living in Connecticut at the time. I think a simpler and more likely explanation is that Obama obtained his Social Security number while visiting his father in Connecticut. It would have been easier to have obtained that Social Security number by walking into an office while back in the U.S. on a visit rather than obtaining it while oveseas. Others who read this blog might have more knowledge of the process of issuing Social Security numbers to American citizens who were residing overseas back in that era. I suppose it is done now when a birth is registered with a U.S. embassy oveseas but there would have been a different process back in the 1970s.