Some States Look To Social Security

From the New York Times:

Lawmakers in Maine have found an unusual tool for tackling their state’s pension woes: Social Security.

Just as workers in the private sector participate in Social Security in addition to any pension plan at their companies, most states put their workers in the federal program along with providing a state pension.

Maine and a handful of others, however, have long been holdouts, relying solely on their state pension plans. In addition, most states have excluded some workers ...

Now, Maine legislators have prepared a detailed plan for shifting state employees into Social Security and are considering whether to adopt it. They acknowledge it will not solve their problem in the short term but see long-term advantages.

Some variation on this idea could ultimately appeal to other states grappling with their own exploding pension costs and, in extreme cases, quietly looking for help from Washington. ...

The Attacks Work

From USA Today:

USA TODAY/Gallup Poll finds that a majority of retirees say they expect their current benefits to be cut, a dramatic increase in the number holding that view. And a record six of 10 non-retirees predict Social Security won’t be able to pay them benefits when they stop working.

Skepticism is highest among youngest workers: Three-fourths of those 18 to 34 don’t expect to get a Social Security check when they retire. ...

The downbeat outlook reflects “all the attacks on Social Security that we have this total crisis in the program,” says Alicia Munnell, director of the Center for Retirement Research at Boston College. What’s more, she says, “the fear and distrust as a result of the financial collapse and the Great Recession has spilled over into people’s expectations generally, that you can’t count on anything.”

Union Newsletter

Council 220 of the American Federation of Government Employees (AFGE), the union that represents most Social Security employees, has posted its newsletter for July. The newsletter includes an article complaining that Social Security did not do enough to commemorate the 15 year anniversary of the bombing of the federal building in Oklahoma City, a bombing that killed many Social Security employees.

Access To Electronic Files -- The Holdup Is Bandwidth

Social Security has just issued a new section to its POMS manual dealing with attorney and representative access to their clients' electronic folders at Social Security. The section tells us what is causing the delay in allowing all the attorneys and representatives access to the electronic folders, "Until we are sure of our bandwidth capability, only those invited representatives will succeed in accessing their clients’ eFolders." I suspected that was the problem but this is the first time, as far as I know, that Social Security has publicly acknowledged that the problem is at least partially bandwidth.

The Dream Dies Slowly

The George W. Bush administration inspired the fantasy among the right wing faithful that the country might someday see the light and realize that Social Security must be phased out. This fantasy is only dying slowly. The budget reduction commission may represent the last best hope for those who believe it imperative that we end the error that Franklin Roosevelt foisted upon the country almost 75 years ago. Some findings from a recent national survey conducted for the National Committee to Preserve Social Security and Medicare ought to make the anti-Social Security zealots cry:

• Americans do NOT believe Social Security is a major cause of the deficit – it is only cited by 2% of Americans as the primary cause of the deficit.
• Three out of four Americans do not think policymakers should make significant changes to Social Security in order to reduce the national deficit.
• Two out of three Americans (64%) think that Social Security provides security and stability to the U.S. economy while only 20% think it is a drain on the economy, and 11% think it does some of both.
• 70% of younger Americans (under 35) believe they will need Social Security when they retire.
• 78% of Americans oppose raising Social Security’s retirement age – with two-thirds of Americans expressing strong opposition to such a proposal.
• Half of Americans support removing the current cap on Social Security wages that are taxed ($106,800). Upper income voters – that is, those who are most likely to pay higher taxes under such a proposal – are also the income group most likely to support removing the cap.

NCSSMA Newsletter

The National Council of Social Security Management Associations (NCSSMA), an organization of Social Security management personnel, has posted its June 2010 newsletter online. One small point that I had not heard before: Social Security has an Office of Innovation. Seriously.

Staffing Shortages Cost Money

Social Security's Office of Inspector General (OIG) issued a report in September 2005 calling upon the agency to do better follow-up of the offsets that reduce Social Security disability benefits due to workers compensation benefits. At the time, Social Security had a large backlog of cases to work through. OIG decided to take a look at what Social Security has done in response to that report. The report is discouraging. Social Security had done little or nothing, with the result being:

...the volume of cases with WC [Workers Compensation] claims pending for 2 or more years increased from 227,615 in January 2005 to 268,825 in November 2009, an 18-percent increase over the past 4 years. In addition, we estimated SSA had overpaid Title II beneficiaries between $44 and $58 million because of unreported WC payments since our [earlier report].

The reason that Social Security has not taken action on this problem:

An official from the Office of the Deputy Commissioner for Operations told us the Agency plans to pursue processing its pending WC workload to the extent possible. However, according to this official, SSA resources are limited, and the Agency must take a holistic approach in applying those resources, considering many other priority workloads.

Inadequate budgets and the staffing shortages that result from inadequate budgets cost money.

House Markup Of Social Security Appropriations Bill

The House Appropriations Committee is meeting today to markup the Fiscal Year (FY) 2011 appropriations bill that covers Social Security. FY 2011 begins on October 1, 2010. It is most unlikely that a bill can be passed and signed by the President before the beginning of FY 2011. It may be well into calendar year 2011 before this happens.

The "Chairman's Mark" is the starting point for the markup process. Chairman David Obey's "mark" is $12,485 million, the same as the Administration's appropriation request for Social Security. That represents an 8% increase over Social Security's regular FY 2010 appropriation. However, this is misleading since Social Security got to spend a lot of money in FY 2009 and FY 2010 that was part of the economic stimulus package rather than Social Security's base budget. In terms of money that could be used for operational expenses, that money is about gone. Things are not going to be getting any better at Social Security even if the appropriation passes as proposed. Should Republicans gain control of either house of Congress after the November election, Social Security may be plunged back into a new budget abyss.

I wonder whether Michael Astrue would be happy or sad to see Republicans take control of the House of Representatives.