Good Stewardship?

From WMUR-TV of New Hampshire:

A grieving widow says the Social Security Administration added to her heartache after they took back her Social Security check without notice. ...

After [her husband's] death, Marchulitis noticed her late husband’s Social Security check for $1,008, which had been deposited on June 1, had been removed from their bank account. ...

She never got a notification, and suddenly the 69-year-old widow was bouncing checks and had no idea why.

She contacted the Social Security Administration and learned the bank did a reclamation of the money after learning her husband died.

She later found out the reclamation was an error, because her husband was alive for the entire month of May. The money was promptly returned to her account, and her bank forgave her overdraft fees.

Reached by News 9, the Social Security Administration said reclamation is common when a family member dies, and no written notice is required.

Orszag Leaving

Peter Orszag will be stepping down from his position as Director of the Office of Management and Budget (OMB) next month. OMB has enormous influence over the Social Security Administration because of OMB's role in the budget process and the process of adopting new regulations.

Zombie Lies

From Paul Krugman's blog:

It must have sounded like a good idea (although not to me): establish a bipartisan commission of Serious People to develop plans to bring the federal budget under control. ...

[T]he immediate problem is the statements of Alan Simpson, the commission’s co-chairman. And what got reporters’ attention was the combination of incredible insensitivity – the “lesser people”??? — and flat errors of fact.

But it’s actually much worse than that. On Social Security, Simpson is repeating a zombie lie — that is, one of those misstatements that keeps being debunked, but keeps coming back.

Specifically, Simpson has resurrected the old nonsense about how Social Security will be bankrupt as soon as payroll tax revenues fall short of benefit payments, never mind the quarter century of surpluses that came first. ...

So what does it mean that the co-chair of the commission is resurrecting this zombie lie? It means that at even the most basic level of discussion, either (a) he isn’t willing to deal in good faith or (b) the zombies have eaten his brain. And in either case, there’s no point going on with this farce.

Probation For Threats In Alaska

From the Anchorage Daily News:

An Anchorage man pleaded guilty to threatening Social Security Administration employees over unpaid medical benefits and was sentenced Friday in federal court to five years' probation. ...

Prosecutors say Stockheim sent a Social Security Administration employee threatening e-mails in April, saying he would kill Anchorage police officers if the SSA didn't pay his medical bills. The same month he threatened to bring weapons to his next SSA hearing. When Anchorage police and federal officers approached Stockheim at his home, he became violent, prosecutors say.

An Interesting Interview

The President's debt commission has been meeting in secret. Alex Lawson of Social Security Works has been standing outside the closed doors and trying to record interviews with Commission members as they enter and leave. Here is a small excerpt from an interview that Lawson did with former Senator Alan Simpson, co-chair of the Commission, that gets at a fundamental difference in the way that people look at the Social Security trust funds.

SIMPSON: There is no surplus in there [the Social Security trust funds]. It’s a bunch of IOUs.

LAWSON: That’s what I wanted to actually get at.

SIMPSON: Listen. Listen. It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.

LAWSON: Two wars, tax cuts for the wealthy.

SIMPSON: Whatever, whatever. You pick your crap and I’ll pick the real stuff. ...

Since more than 90% of the costs of the interstate highways comes from gasoline taxes, I think that one would have to say that Lawson was much closer to the truth.

By the way, the rest of the interview shows that both Lawson and Simpson suffer from important misconceptions. Lawson thinks that the Social Security trust funds are still growing. Due to the recession they are contracting slightly at this time. They might grow a little for a short time if we make a rapid recovery from the recession but they are destined to start contracting in a few years under even the most optimistic forecasts. For his part, Simpson is unaware that Social Security actuaries predicted fairly accurately the increases in life expectancy that have occurred over the nearly 75 years that have passed since the creation of Social Security in the U.S. Increases in life expectancy are not the reason for Social Security's long term funding problems. The blame goes mostly to benefit increases without corresponding tax increases.

I have always wondered what we ought to invest the Social Security trust funds in if not U.S. government bonds. If the trust funds were invested in stocks and bonds they would own a good part of the U.S. economy. I do not think that either conservatives or liberals would be comfortable with that idea. Those who claim that the Social Security trust funds are meaningless abstractions do not want the trust fund monies invested in something other than U.S. government bonds. They want the trust funds and all of Social Security to cease to exist. They are just afraid to say so.

AFGE Notes More Positive Attitude

Some contract negotiation news from the American Federation of Government Employees (AFGE), the union that represents most Social Security employees:

After a break of several weeks, negotiations between AFGE and the Social Security Administration resumed today and Union leaders believe there has been a positive change in the agency’s tone and attitude.

“We seem to be moving on a number of issues,” said Witold Skwierczynski, the Union’s Chief Negotiator.

Steve Kofahl, another member of the AFGE contract team, also said SSA officials are now showing a willingness to deal with the Union on matters which had previously stalled. One of those is a procedure for Union reps (including retired employees who still do Union work) to have access to SSA space and facilities.

This latest round of contract talks should continue until June 25th, with more bargaining set for mid-July.

What The LTD Carriers Think

From a press release:

The 2010 Long-Term Disability Claims Review, conducted by the Council for Disability Awareness (CDA) [an organization of companies involved in writing or administering long term disability or LTD policies mostly as part of employee benefits plans], reveals that CDA member companies paid more than $8 billion in ongoing disability insurance payments to individuals during 2009. ...

Despite the record number of people receiving disability payments, the 2010 CDA Claims Review reports that roughly 100 million workers have no private income protection insurance. In addition to the decline in the number of insured, fewer employers provided group long-term disability programs in 2009.

New claim applications submitted to the Social Security Disability Insurance (SSDI) program continued to surge in 2009. More workers are applying for SSDI claim payments than at any time in history, with new applications totaling 2.8 million in 2009 — an increase of 21 percent, and by far the most ever. New SSDI claims are projected to continue to rise dramatically in 2010. Over 5 percent of the workforce, or 7.8 million workers, were receiving SSDI at the conclusion of 2009.

At the same time, the approval rate for initial SSDI claims continued to decline. The approval rate fell to 35 percent in 2009, representing a continued steady decline from 52 percent 10 years ago. The CDA Claims Review found that 31 percent of individuals receiving private group long-term disability insurance benefits did not qualify for SSDI assistance ...

For a copy of The 2010 Long-Term Disability Claims Review, please visit http://www.disabilitycanhappen.org. ...

Note that insurance companies, which are notoriously tight fisted when it comes to paying LTD, are vastly more likely to approve a disability claim than the Social Security Administration. Note also that these insurance companies are saying that it has become more difficult to get LTD recipients on Social Security disability benefits. These insurance companies are concerned with getting their LTD recipients on Social Security disability since they reduce the LTD benefits by Social Security disability benefits.

No More Paper Checks

From a Notice of Proposed Rule-Making posted in the Federal Register by the Department of the Treasury:

The proposed rule would generally require individuals to receive Federal nontax payments by EFT [Electronic Funds Transfer] , effective March 1, 2011, except that there would be a delayed effective date to March 1, 2013, for two categories of individuals, namely: Individuals receiving Federal payments by check on March 1, 2011, and individuals whose claims for Federal benefits are filed before March 1, 2011, and who request check payments when they file.

For Federal benefit recipients, this means that individuals whose claims for Federal benefits are filed on or after March 1, 2011, would receive their benefit payments by direct deposit. Individuals receiving their payments by direct deposit prior to March 1, 2011, would continue to do so. Individuals who do not choose direct deposit of their payments to an account at a financial institution would be enrolled in the Direct Express® Debit MasterCard® card program, a prepaid card program ...