Social Security And Terrorists

From a recent audit report by Social Security's Office of Inspector General:

In September 2001, President Bush signed Executive Order (EO) 13224, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, giving the Government a means of disrupting the financial support network for terrorists and terrorist organizations. On December 18, 2002, the Department of the Treasury (Treasury) issued Financial Manual, Bulletin No. 2003 04, notifying Federal agencies of the implementation of EO 13224. The Bulletin states Federal agencies must not make payments or draw checks or warrants payable to an individual or organization listed on the Office of Foreign Assets Control’s (OFAC) Website of persons who commit, threaten to commit, or support terrorism.

In 2005, we reviewed the actions SSA had taken to ensure it was not making payments to individuals or organizations on OFAC’s Website. We determined that SSA had not taken all of the necessary steps to ensure it was not making such payments. Specifically, SSA had not matched payment records for its Title II and XVI programs or its Third Party Payment System (TPPS) with OFAC’s file. ...

However, SSA does not screen other payments because it believes that neither EO 13224 nor the Social Security Act gives the Agency authority to withhold or stop benefit payments when a person is identified on the OFAC list as a terrorist. Additionally, the Agency believes it is taking all appropriate measures in its authority to carry out the provisions of EO 13224. ...

In September 2009, SSA began providing Treasury with identifying information to enable OFAC screening of SSA recipients who reside outside the United States and receive payment by direct deposit at a foreign financial institution. An official from SSA‘s Office of Financial Policy and Operations told us the Agency began providing Treasury with such information because of new rules governing international direct deposits. These rules were written to ensure that international transactions undergo the screening required by OFAC to fight terrorist financing and money laundering. According to this official, SSA is also working with Treasury to develop a similar process to screen recipients who reside outside the United States and receive payment by direct deposit at a domestic financial institution. However, this official told us that Treasury had not decided whether it will screen these payments or request that SSA do so. ...

Accordingly, we recommend that SSA work with DoJ, Treasury, OMB, and, if necessary, others to resolve any issues the Agency believes prevent it from screening payments to individuals identified on OFAC’s list.

As a legal matter, Social Security's position is unassailable. No president has the authority to summarily prohibit payment of Social Security benefits to a person who is otherwise entitled to them.

When you do a match between a large database and a humongous database, you are going to come up with many matches. In this case, virtually all of the matches would be spurious. Look at the problems with the no-fly list. Nothing is impossible but the idea that any meaningful amount of Social Security benefits is being used to support terrorists seems far-fetched to me. We all want security but let's not get carried away.

I guess we can expect a Congressional hearing on this if Republicans take control of the House of Representatives next year.

The Merits Of That Binder And Binder Lawsuit

I have posted on the separate Social Security Perspectives blog the complaint brought against Social Security by Binder and Binder, a large entity which represents Social Security claimants. Binder and Binder may include a law firm but it is primarily something other than a law firm. Whatever it is, it is large and advertises heavily on cable television. Binder and Binder is seeking an order that would force Social Security to allow its employees to appear before Administrative Law Judges (ALJs) by video hookup.

I hope this lawsuit fails. The idea that someone could represent a Social Security claimant without ever once meeting that claimant in person is abhorrent to me. The notion that Social Security would be compelled to allow such a thing is almost inconceivable to me. However, my feelings about the result sought by Binder and Binder are irrelevant to the question of whether this lawsuit has legal merit.

I will try not to belabor the legal questions presented by this lawsuit. My opinion is that this lawsuit lacks merit. A fundamental question in administrative law is whether a decision by an administrative agency may be reviewed by the courts. If every decision could be reviewed, the federal courts would be overwhelmed and federal agencies would be unable to function. There are rules about what can and cannot be reviewed. This strikes me as a clear example of a non-reviewable decision. To give you an idea of how serious a problem this is, one Court of Appeals has held that even when Social Security bars a person from representing claimants before the agency, thus taking away that person's livelihood, that there is no right to judicial review. Binder and Binder tries to get around this problem by invoking mandamus. The writ of mandamus is beloved by American attorneys because it was at the center of that most famous constitutional decision, Marbury v. Madison, which established that the Supreme Court could declare an Act of Congress unconstitutional. Strictly speaking, the writ of mandamus no longer exists. It was abolished by Rule 81(b) of the Federal Rules of Civil Procedure but this is a quibble since the same sort of relief is still available. It just lacks a venerable name or, indeed, any name. There is a long history of attempts to use mandamus to obtain judicial review of federal agency action. It virtually always fails. In fact, a complaint alleging only mandamus jurisdiction is usually a sign of a weak lawsuit that will be quickly dismissed. I and others have used mandamus successfully when Social Security had a clear duty to act but completely failed to act but that is not the situation here. Social Security has acted. Binder and Binder does not agree with that action.

Binder and Binder tries to buttress its argument by alleging that it spent money in reliance upon its interpretation of agency regulations. If anything, this hurts Binder and Binder's case. Leaving aside the question of whether Binder and Binder's interpretation is the only way in which the regulations can be read and leaving aside the question of whether there should be any relief even if this is the case, this does not seem to me to come close to justifying the injunctive relief sought. Monetary damages would seem an adequate remedy for what is, essentially, a claim based upon detrimental reliance. It is a fundamental legal principle that a party cannot get a form of equitable relief such as an injunction if legal damages -- as in money -- will suffice to make the party whole. That is exactly the situation here.

I note that Binder and Binder's attorney does not list administrative law as a field in which he practices.

Update: No doubt the 2005 decision of the Second Circuit Court of Appeals in Binder & Binder, P.C. v. Barnhart, 399 F.3d 128, will be cited as support for finding jurisdiction in the case at hand. In that case, Social Security paid an attorney fee and then demanded it back because the client's debts had been discharged in bankruptcy. The Court used mandamus as the basis for jurisdiction to review the decision. There is loose language in that decision suggesting that mandamus is always available if there is not some other basis for reviewing the actions of a federal agency. I said above that trying to use mandamus to obtain review of federal agency actions virtually always fails. This old Binder case is an example of why I added the qualifier "virtually." On rare occasions it works. Using mandamus to obtain review of Social Security's interpretation of the bankruptcy laws is vastly different than using mandamus to obtain review of Social Security's interpretation of its own procedural regulations.

The Binder And Binder Lawsuit

Binder and Binder, which probably represents more Social Security claimants than any other entity, has sued Social Security seeking an order that would require Social Security to allow its employees to appear at hearings before Administrative Law Judges (ALJs) solely by video. It is unclear to me whether Binder and Binder seeks this only where a video hearing has already been scheduled or whether the firm seeks to appear by video even in cases where no video hearing has been scheduled because the claimant and ALJ will be in the same room. I will post my views later on the legal merits of this lawsuit but I will talk now about what I think is behind this suit.

I have no inside information about Binder and Binder's motivations. However, I have been practicing Social Security law for 31 years so I have some idea of the economics of their type of practice. I think this helps me understand what is going on.

Binder and Binder is representing Social Security claimants nationally. There are very few other entities trying to do this. Certainly, Binder and Binder is audacious. Just about everyone else is trying to get clients only in local areas.

I think there are major disadvantages to trying to operate nationally but Binder and Binder has one thing going for them with a national practice. If you are going to have much of a Social Security practice, you just about have to advertise. Television advertising is the most efficient way to do this, assuming you want a lot of cases. Television advertising is more efficient when it is done nationally rather than locally.

Normally, attorneys and others who represent Social Security claimants meet with their clients at least once or twice well in advance of any hearing. Binder and Binder is big but nowhere near big enough to have offices all over the country. Sending employees out to meet with clients in advance of hearings would be impossibly expensive for Binder and Binder so they dispensed with that a long time ago. This has the effect of reducing client satisfaction but you are not looking for repeat Social Security business anyway. This has to cut down on referrals from satisfied clients, however. Binder and Binder does not have to worry too much about clients firing them. Binder and Binder is notoriously aggressive when clients try to fire them. They always refuse to waive their fee meaning that anyone replacing them must file a fee petition, which is a pain in the neck. Binder and Binder always files a fee petition in these cases. It is amazing just how many hours of work that Binder and Binder shows on these fee petitions. This makes it hard for anyone replacing them to get a decent fee. Most people who represent claimants dislike messing with former Binder and Binder clients.

I am of the strong opinion that eliminating face to face contact before the hearing reduces the effectiveness of representation. There are some things that cannot be done well over the telephone. As an example, gauging the severity of mental illness and persuading a mentally ill individual to get under psychiatric care are much less difficult to do in person. However, I must admit that there are plenty of attorneys who are not trying to operate nationally who meet with their Social Security clients for the first time on the day of the hearing. I think this is wrong on many levels. Even if viewed only in financial terms, this is the wrong decision because it cuts down on referrals from satisfied clients and because it reduces the chances of success.

Whatever disadvantages come from not meeting with clients prior to the day of the hearing pale in comparison to the expense which Binder and Binder must bear when their employees travel, often a considerable distance, to attend ALJ hearings. Many, perhaps most, of Binder and Binder's hearings require them to send someone by air. In most cases, this will take at least a day. Even if Binder and Binder is able to send an employee by car to a hearing, the employee may be traveling hundreds of miles round trip. On the whole, I am pretty sure that this alone completely overwhelms any advantage they have from advertising nationally.

There are reports that Binder and Binder runs a very lean operation. Another way of putting it is that they pay low wages, give few benefits and afford their employees poor working conditions. You can read about it here, here here, here and here. I hesitate to link to such anonymous reports but from conversations I have had with former Binder and Binder employees, I think these anonymous reports are true. This has to make it difficult to give good quality service and has to reduce the firm's chances of success in winning cases.

If Binder and Binder could dispense with the need to have their personnel travel to hearings, they would be better positioned to overcome the disadvantages that flow from operating nationally. They would be better situated to compete in an environment in which the average fee per case is reduced because backlogs have been reduced.

I'm Glad Republicans Oppose Class Warfare

Word has been leaking out that Republican members of the President's deficit reduction commission want to cut Social Security benefits, probably by increasing full retirement age. Word is now leaking out that at the same time Republicans are pressing for the Commission to recommend corporate and capital gains tax cuts. Their plan is to cut Social Security benefit payments so we can reduce taxes on corporations and wealthy individuals.

By the way, the National Organization for Women found an interesting way of protesting former Senator Alan Simpson's remarks about how "We've reached a point now where it's like a milk cow with 310 million tits!"

Social Security Versus Afganistan War

From Robert Naiman writing in the Huffington Post:

In an editorial today, the Washington Post takes President Obama to task for being concerned about the cost of the war in Afghanistan and the fact that it conflicts with domestic priorities. ...

[Quoting the Post] "Mr. Obama repeatedly cites the cost of the war and the need to shift resources to domestic priorities -- though spending on Afghanistan is well below 1 percent of U.S. gross domestic product." ...

Considering the Washington Post's view of proposals to reduce the projected long term deficit in the combined budget by cutting Social Security benefits by raising the normal retirement age to 70, it's seems apparent that the Washington Post's view is the latter: spend freely on the war, pinch pennies from America's working families.

I asked economist Dean Baker how much raising the normal retirement age would be likely to save. He said it would be about 0.7% of GDP. Thus, according to the across-the-board "less than 1% of GDP" standard, this would be too small to bother with.

But that is not the view of the Washington Post. In a front-page news analysis on September 24, the Washington Post took Congressional Republicans to task for not "offering solutions" to "tackling the ever-growing cost of entitlement programs" in their "Pledge to America."

Binder And Binder Boycotts Glenn Beck

In doing some research, I happened to come upon this item that appears to show that Binder and Binder is or was trying to boycott Glenn Beck's show on the Fox network.

Social Security Subcommittee Hearing Delayed

The House Social Security Subcommittee had a hearing scheduled for tomorrow on "Protecting and Preserving Social Security for Generations" but that hearing "has been delayed until further notice."

It Takes People To Provide Public Service

From Joe Davidson's Federal Diary column in the Washington Post:

During a period when federal employees have been targeted again and again, it's not surprising that House Republicans' "Pledge to America" would promise to freeze the federal workforce. ...

Promoting the plan on NBC's "Meet the Press," Rep. Mike Pence (R-Ind), chairman of the House Republican Conference, was clear: "We can reduce government employment back down to 2008 levels."

Federal workers are always an easy target, but it's worth examining whether a freeze would come at the expense of public service....

[R]eturning to employment levels in effect at the end of George W. Bush's presidency could mean service backlogs in many government programs. Take the Social Security Administration for example. It provides payments to retirees, people with disabilities and others. The number of the agency's pending cases and the time it takes to process them has been a serious problem.

Recently, there has been progress as a result of agency hiring. ...

Technology is great, but it takes people to provide public service.