The Last Word On Social Security's 75th Birthday

Social Security Wants To Close Down A Scheme

Some financial advisers have lately recommended the strategy of filing a claim for Social Security retirement benefits, drawing benefits for several years and then withdrawing the claim while filing a new claim, thereby increasing the monthly benefit. You can do this but there is a big catch. You have to pay back all the benefits you received. I would be interested to know how many people have actually done this. I would bet it is a small number.

Social Security has decided that it does not want anyone using this scheme. They just sent over a proposal to the Office of Management and Budget seeking approval for the following:

We propose to modify our regulations to establish a 12-month time limit for the withdrawal of an old age benefits application. We also propose to permit only one withdrawal per lifetime. These proposed changes would limit the voluntary suspension of benefits only to those benefits disbursed in future months.

Why It Is Important To Visit Centenarians

The U.S. Social Security Administration has long had a practice of visiting beneficiaries when they reach extreme old age. Japan's recent experience shows why this is a good idea. From Reuters:

Revelations last week that police had found the mummified remains of a man thought to have been Tokyo's oldest resident at 111 but actually dead for 30 years shocked a country facing the challenge of a rapidly aging population. ...

More reports of missing centenarians this week showed that their whereabouts were unknown or their family members were unaware of what had happened to them.

U.S. Social Security used to visit people when they turned 100. That has now been pushed up to 103.

Fayetteville Hearing Office

I have posted before about the new hearing office planned for Fayetteville, NC. This is a matter of considerable interest for me since my firm has many clients in and around Fayetteville. The struggles to open that office may have parallels elsewhere since Social Security is in the process of opening many new hearing offices.

The Fayetteville office was originally scheduled to open earlier this year. Social Security agreed to take space for the office in a building currently under construction. That building will not be ready for occupancy until well into 2011.

The Fayetteville Observer is now reporting that Social Security will open the hearing office in temporary space a few blocks away from the building where it is to eventually locate. It is unclear how much temporary space that the hearing office will occupy or how many employees it will have.

There are rumors going around that no hearings will be held in the temporary space. No one locally seems to know what is going on. I keep hearing hints that there is some budgetary reason to open the office before the end of this federal fiscal year, September 30. I understand why it is important to open the Fayetteville hearing office as soon as possible but I do not understand the significance of opening it before the end of the fiscal year, especially if the office would not be functional for an extended period of time after it is opened.

Three-Card Monte

From Paul Krugman writing in the New York Times:

Social Security turned 75 last week. It should have been a joyous occasion, a time to celebrate a program that has brought dignity and decency to the lives of older Americans.

But the program is under attack, with some Democrats as well as nearly all Republicans joining the assault. Rumor has it that President Obama’s deficit commission may call for deep benefit cuts, in particular a sharp rise in the retirement age. ...

[W]here do claims of crisis come from? To a large extent they rely on bad-faith accounting. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own....

And having invented a crisis, what do Social Security’s attackers want to do? They don’t propose cutting benefits to current retirees; invariably the plan is, instead, to cut benefits many years in the future. So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K.

What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic. ...

Social Security And "Improper Payments"

As a result of a Presidential order, Social Security has developed a Reducing Improper Payments web page. Here is Social Security's summary of its recent Title II overpayment and underpayment experience.

RSDI Improper Payments Experience FY 2006 – FY 2009
	FY 2006	FY 2007	FY 2008	FY 2009
Total Payments
Dollars in Millions	$545,000	$576,800	$607,210	$659,565
Underpayments
Dollars in Millions	$680	$754	$495	$619
Target Rate	≤0.20%	≤0.20%	≤0.20%	≤0.20%
Actual Rate	0.12%	0.13%	0.08%	0.09%
Overpayments
Dollars in Millions	$1,824	$1,209	$2,041	$2,547
Target Rate	≤0.20%	≤0.20%	≤0.20%	≤0.20%
Actual Rate	0.33%	0.21%	0.34%	0.37%

By the way, this does not include as underpayments the benefits going to disability claimants who are finally paid back benefits after lengthy appeals. If those were included the underpayment rate would be multiplied by at least ten.

Change Coming On Same Sex Marriages?

No federal agency would be more affected than Social Security if same sex marriage were to become a national right. The idea that this will happen, perhaps in the next couple of years, is no longer far-fetched. Below is the composite public polling on the issue.

75 Years