Illegal Immigrants And Social Security

From Edward Schumacher-Matos writing on the Op Ed page of the Washington Post:

The contributions by unauthorized immigrants to Social Security -- essentially, to the retirement income of everyday Americans -- are much larger than previously known, raising questions about the efforts in many states and among Republicans in Congress to force these workers out.

In response to a research inquiry for a book I am writing on the economics of immigration, Stephen C. Goss, the chief actuary of the Social Security Administration and someone who enjoys bipartisan support for his straightforwardness, said that by 2007, the Social Security trust fund had received a net benefit of somewhere between $120 billion and $240 billion from unauthorized immigrants.

That represented an astounding 5.4 percent to 10.7 percent of the trust fund's total assets of $2.24 trillion that year. The cumulative contribution is surely higher now. Unauthorized immigrants paid a net contribution of $12 billion in 2007 alone, Goss said....

"If for example we had not had other-than-legal immigrants in the country over the past," Goss e-mailed me, "then these numbers suggest that we would have entered persistent shortfall of tax revenue to cover [payouts] starting [in] 2009, or six years earlier than estimated under the 2010 Trustees Report."

Looks like it is the illegal immigrants who are supporting us Americans. Should we be so eager to deport them?

OIG Report On Stimulus Act Hiring

Social Security's Office of Inspector General (OIG) has issued a report on hiring under the American Recovery and Reinvestment Act (ARRA), the large economic stimulus bill passed last year. The agency hired 2,115 new employees under ARRA. The report indicates that 74% of the "operations" employees hired under ARRA were hired under the Federal Career Internship Program (FCIP). About 16% of the Office of Disability Adjudication and Review (ODAR) hires were made under FCIP.

FCIP hires are controversial since there is no public listing of such positions. There have been concerns that this allows favoritism and other shenanigans. The explanation given for the heavy use of FCIP is that it is quicker to hire under FCIP and that FCIP hires have a longer period of evaluation. Somebody needs to take a hard look at federal hiring policies. At best, secretive hiring reduces the applicant pool which makes it harder to hire the best possible employees. At worst, secretive hiring can lead to scandals.

Early Delivery Of Checks To Some On East Coast

A press release from Social Security:

Michael J. Astrue, Commissioner of Social Security, today announced that benefit checks are being delivered to some Atlantic coast residents on Thursday, September 2nd, before the arrival of Hurricane Earl and ahead of the regular September 3rd payment date. About 737,000 beneficiaries in South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, Rhode Island, Massachusetts, and Washington, D.C. are affected by this early check delivery.

"Delivering checks early to these residents eliminates one concern beneficiaries might have as they prepare for the storm,” Commissioner Astrue said. “As beneficiaries take steps to ensure their own safety, this is one step we can take to help them. They should also be aware that Direct Deposit is a more secure and convenient way to receive payments, particularly when natural disasters strike."

Social Security worked closely with the U.S. Postal Service and the Department of the Treasury to make the early delivery of checks possible. Beneficiaries living in areas with the following first three digits in their zip codes will receive early delivery.

State	3-Digit ZIP Code Prefix	City
North Carolina	270 – thru – 289 and 297	Greensboro, Raleigh, Rocky Mount, Charlotte, Fayetteville, Kingston, Hickory, and Asheville
South Carolina	290 – thru – 296	Columbia, Greenville, Charleston, and Florence
Maryland	206 – thru – 212, 214 – thru – 219, and 267	Linthicum, Baltimore, Cumberland, Eastern Shore, and Frederick
Washington, DC	200, 202 – thru - 205	Washington DC
Virginia	220 – thru – 225, 228 – thru – 239, and 244	Richmond, Culpeper, Norfolk, and Farmville
Pennsylvania	189 – thru – 194	Philadelphia and Southeastern PA
Delaware	197 – thru – 199	Wilmington
New Jersey	070 – thru – 074, 076 – thru – 078 and 080 – thru – 088	DV Daniels, NNJ Metro, South Jersey, Newark, Trenton, Monmouth and Kilmer
New York	100 – thru – 104, 110 – thru – 114, and 116, 115, 117, and 119	Manhattan, Staten Island, Queens, Brooklyn, Bronx, and Western Nassau
Massachusetts	021 – thru – 026	Brockton, Boston, Northwest Boston, and Cape Cod
Rhode Island	027 – thru – 029	Providence

The Department of the Treasury, through the Federal Reserve, has requested that financial institutions in the affected areas honor the paper checks.

From the viewpoint of someone who lives in North Carolina (although not on the coast), this seems like an overabundance of caution. We could easily have two or three other hurricanes traveling up the East coast before the end of this hurricane season, indeed before the end of the month. In this case, the checks are to be delivered on the same day the hurricane is supposed to be skirting (we hope) the NC coast!

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Now You Tell Us

From Andrew Biggs, writing in the National Review, a conservative magazine:

Personal accounts [to add onto or substitute for Social Security] are a valid choice, and one I’ve supported in the past and continue to support. But accounts aren’t exclusive to tax increases or benefit cuts; they don’t, as I’ll explain, reduce the need for these other choices. One problem for the Bush administration’s reform drive in 2005 was that many congressional Republicans had bought into the idea that accounts reduce or eliminate the need for tax increases or benefit cuts. Finding out they don’t may have taken some wind out of their sails. ...

[O]nce transition costs are accounted for, the total rate of return on a personal-accounts-based program would be about the same as the current system. ...

Also unchanged would be the program’s financing shortfall, even assuming that account holders gave up a share of their traditional benefits. A pay-as-you-go program like Social Security is always in the hole, such that each generation honors the benefits of the preceding one while hoping their own claims will be honored by the following generation. No generation can break away from this cycle without either ponying up extra cash (tax increases) or defaulting on its promises (benefit cuts). Neither solution is costless. ...

The only way personal accounts could fix Social Security on their own is if accountholders gave up traditional benefits far in excess of the taxes they put into accounts. For instance, individuals might put half their taxes into an account but give up all their traditional benefits. This would fix Social Security, but it’s not clear that most (or even many) workers would take the deal. You might come out ahead if you got solid investment returns, but you could also fall far short. This is just asking accounts to do more than they reasonably can.

As you may recall, Biggs was sent by the Bush Administration to work at Social Security to promote privatization of Social Security. Unlike the Commissioner of Social Security at the time, and all other Social Security employees, Biggs actively campaigned with President Bush for partial privatization of Social Security. He now works at the Cato Institute, a right wing "think tank." The Koch brothers were instrumental in creating Cato and still give it heavy support. With reasonable talk like this, you have to wonder how long Biggs will be able to stay at Cato.

Off Topic: Republicans Have Gone Mad

Click on the thumbnail once or twice to see it full size. It is a question from a Newsweek Poll conducted by Princeton Survey Research Associates International.

Most Republicans believe their President wants to impose Sharia law in the United States? Only 7% of Republicans know this is definitely not true? Where are the Republican grown-ups? How can a party which depends upon the votes of such woefully misinformed people govern?

Meet The President's Budget Commission Members

Read TPM Media's rundown on the members of the President's Budget Commission. Talk about a stacked deck!

Disabled Employees Sue Social Security

From the Baltimore Sun:

A group of disabled workers is moving forward with a class-action lawsuit against the Social Security Administration alleging the federal agency discriminates against employees with disabilities by denying or limiting promotions.

An office of the U.S. Equal Employment Opportunity Commission on Aug. 25 affirmed a 2008 decision by an EEOC administrative judge that certified the case as a class action, attorneys for the plaintiffs said Monday. The lawsuit seeks compensatory and other damages as well as changes in policies and procedures that will improve career opportunities for disabled employees, according attorneys for the plaintiffs.

The federal agency could not be reached late Monday for comment.