Decision Time Coming For Mental Listings

Something may be about to happen on the mental listings front. First, a little back story on these listings to help you understand just how important and possibly controversial these listings may be. The mental impairment listings are not the only way by which a person claiming to be disabled by mental illness can be found disabled but they are certainly the most important. Mental illness is an extremely important component of Social Security's disability claims workload. Historically, the mental impairment listings have had the most effect of any of Social Security's listings. Advocates for the disabled follow any mental impairment listings developments extremely closely.

Just before the 2008 elections, Social Security obtained approval from the Office of Management and Budget (OMB) for new mental impairment listings. Social Security then did something extremely unusual. It never published that proposal and eventually withdrew it. I have no knowledge of what happened behind the scenes on the 2008 mental impairment listings but my assumption then and now is that the proposal would have regarded as harsh. by many. I think that Social Security Commissioner Michael Astrue did not publish the proposal because he knew that the incoming Obama Administration would have refused final approval for the proposal and because he knew that even publishing it would have poisoned his relationship with the Obama Administration and Congress.

Social Security submitted a new proposal to OMB for changes in the mental impairment listings on May 12, 2010. We do not know what is in this proposal. It could be identical to the proposal approved by George W. Bush's OMB in 2008 but I would be surprised if it were. What I do know is that OMB is supposed to act upon proposed regulations within 90 days and that time is up next Tuesday. This is not a hard deadline. OMB can extend it. An extension of the deadline would be a strong sign that OMB and Social Security are talking and even negotiating about the proposal. Even if it is delayed, it is unlikely to be delayed for more than a month or two.

Something is coming. Stay tuned.

E-Services Week

The Nevada Daily Mail reports that "the week of Aug. 9-13 has been proclaimed Social Security eServices Week by Jayne Novak, mayor of Nevada; and Sherry Brown, mayor of Bronaugh. "

Deficit Reduction Commission Looking At Slashing Entitlement

From TPM Media:

... Though most of the [Deficit Reduction] commission's work occurs behind closed doors in small working groups, early reports indicate that the GOP's unwillingness to support any significant tax increases are pushing the group toward proposed entitlement slashes and larger budget cuts. ...

On mandatory spending issues, according to the aide, things are shaping up similarly. "We spent all but 10 minutes on benefits cuts and spent 10 minutes on raising the wage caps." ...

The commission's report is due by December 1. House Democrats have committed to voting up or down on the package if the Senate passes it first.

I hope that Republicans get a chance to vote for slashing Social Security. I wish they could vote on this before the election.

More Furloughs In California

The Associated Press reports that California governor Arnold Schwarzenegger has ordered a new round of furloughs for state workers until the legislature passes a budget. Apparently, this includes employees of the state Disability Determination Service (DDS) that makes initial and reconsideration determinations on Social Security disability claims.

State workers had already been furloughed a total of 46 days over the last year under a previous furlough order. That order had just ended in June.

Board Of Trustees Report Issued

A press release from Social Security:

The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds and the long-range outlook remains unchanged. The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2037, the same as projected last year. The Trustees also project that program costs will exceed tax revenues in 2010 and 2011, be less than tax revenues in 2012 through 2014, and then permanently exceed tax revenues beginning 2015, one year earlier than estimated in last year’s report. The worsening of the short-range outlook for the Social Security Trust Funds is due in large part to the recent economic downturn.

In the 2010 Annual Report to Congress, the Trustees announced:

• The projected point at which the combined Trust Funds will be exhausted comes in 2037 – the same as the estimate in last year’s report. At that time, there will be sufficient tax revenue coming in to pay about 78 percent of benefits.

• The projected point at which tax revenues will fall below program costs comes in 2010. Tax revenues will again exceed program costs in 2012 through 2014 before permanently falling below program costs in 2015 -- one year sooner than the estimate in last year’s report.

• The projected actuarial deficit over the 75-year long-range period is 1.92 percent of taxable payroll -- 0.08 percentage point smaller than in last year’s report.

• Over the 75-year period, the Trust Funds would require additional revenue equivalent to $5.4 trillion in present value dollars to pay all scheduled benefits.

“The impact of the current economic downturn continues to be felt by the Social Security Trust Funds,” said Michael J. Astrue, Commissioner of Social Security. “The fact that the costs for the program will likely exceed tax revenue this year is not a cause for panic but it does send a strong message that it’s time for us to make the tough choices that we know we need to make. I applaud President Obama for his creation of the Deficit Commission so we can start the national discussion needed to ensure that Social Security remains a foundation of economic security for our children and grandchildren.”

Other highlights of the Trustees Report include:

• Income including interest to the combined OASDI Trust Funds amounted to $807 billion ($667 billion in net contributions, $22 billion from taxation of benefits and $118 billion in interest) in 2009.

• Total expenditures from the combined OASDI Trust Funds amounted to $686 billion in 2009.

• The assets of the combined OASDI Trust Funds increased by about $122 billion in 2009 to a total of $2.5 trillion.

• During 2009, an estimated 156 million people had earnings covered by Social Security and paid payroll taxes.

• Social Security paid benefits of $675 billion in calendar year 2009. There were about 53 million beneficiaries at the end of the calendar year.

• The cost of $6.2 billion to administer the program in 2009 was a very low 0.9 percent of total expenditures.

• The combined Trust Fund assets earned interest at an effective annual rate of 4.9 percent in 2009.

The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: Timothy F. Geithner, Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Kathleen Sebelius, Secretary of Health and Human Services; and Hilda L. Solis, Secretary of Labor. The two public trustee positions are currently vacant. President Obama nominated two individuals to serve as public trustees, and the Senate Finance Committee held hearings on July 29 for both trustee nominees. Their confirmations are pending.

The 2010 Trustees Report will be posted at www.socialsecurity.gov/OACT/TR/2010/ by Thursday afternoon. [It is there now.]

The Right Wing Take On Social Security

Jagadeesh Gokhale works at the Cato Institute, a right wing think tank. He is on the Social Security Advisory Board (SSAB). He has a blog post up arguing with the Top 5 Social Security Myths posted by MoveOn.org. His basic point seems to be that the Social Security trust funds are a meaningless abstraction but that because this meaningless abstraction is going to run out of money in 2037 we need to cut benefit payments now. This seems contradictory to me.

Gokhale argues against solving Social Security's long term funding problem by lifting the cap on income covered by the F.I.C.A. tax since that would only increase government spending and because it would be unfair to high wage earners. Of course, this takes for granted that increased government spending during a recession would be a bad thing, that an increase in the F.I.C.A. cap would lead to increased government spending and that progressive taxation of income is a bad thing. Those beliefs can all be assumed among his colleagues at the Cato Institute but the rest of us may need some convincing.

More On Yesterday's Hearing

Joe Davidson's Federal Diary column in today's Washington Post discusses yesterday's hearing before the Permanent Subcommittee on Investigations of the Senate Committee on Homeland Security and Governmental Affairs. Davidson reveals the crucial fact that "The investigations subcommittee is a bit unusual in that, unlike on most congressional panels, members of the minority party, Republicans at the moment, can initiate hearings." This hearing was initiated by Senator Tom Coburn (R-Okla.). Coburn and two other Republican Senators had requested the report from the Government Accountability Office (GAO).

Astrue called the GAO report "fatally and hopelessly flawed" in his prepared remarks for the Subcommittee. He complained the the GAO report !inflammatorily characterized the situation it found." Gregory Kurtz, the GAO employee who prepared the report said that Social Security "expressed its displeasure even more vividly in private."

Unfortunately, Davidson accepts the basic premise of the GAO report that anyone who is working and drawing Social Security disability benefits at the same time is a fraud. As a matter of Social Security law, this is flatly wrong. It is quite legal to work and draw Social Security disability benefits at the same time within certain limits. Ask yourself a couple of simple questions. Do we want people who draw Social Security disability benefits to return to work? Is it a good idea to reflexively accuse someone who does this of a criminal offense?

Two Maryland Sites Under Review For National Data Center

From the Frederick News Post:

The Social Security Administration is looking for a new site for its National Data Center -- and Frederick County [Maryland] made the short list.

The end of Bennett Creek Boulevard in Urbana is one of two sites under consideration and both are in the state, according to a news release from U.S. Sen. Barbara Mikulski, D-Md.

The other site is on Johnnycake Road in Woodlawn, in Baltimore County, according to the news release.