AARP On Social Security's Looming Continuing Resolution Problem

A press release from the American Association of Retired Persons (AARP):

Washington, DC – AARP, along with dozens of organizations representing stakeholders of Social Security, sent a letter to House and Senate leadership today requesting that Congress fund the Social Security Administration (SSA) at the recommended level of $12.379 billion for FY 2011. This funding level was requested by the President and recommended by key Appropriations committees and subcommittees. The organizations also called for funding SSA at a higher level under the possible scenario of an extended Continuing Resolution in order to address the significant backlogs in disability claims, appeals and hearings, along with increased assistance needed for SSA’s field offices

Key excerpts of the letter are below:

“As organizations representing stakeholders of the Social Security Administration (SSA), we respectfully request that as you work to finalize FY 2011 appropriations levels you retain the full President’s Budget Request of $12.379 billion for SSA…

“This level of funding is absolutely critical for SSA to address the increase in requests for assistance from the American public due in large part to the economic downturn. SSA teleservice centers, hearing offices, Disability Determination Services (DDSs), and the nearly 1,300 field offices are in critical need of adequate resources to address their growing workloads.

“The greatest concern for SSA remains the rising number of new claims and appeals coming into the agency, especially disability claims… In the 25-month period ending in October 2010, the number of claims pending a disability medical decision rose from 556,670 to 851,812, an increase of 53 percent.

“SSA was making steady progress in addressing the enormous backlog at the hearings level until recently…Unfortunately, for the last four months the number of hearings pending has increased and as of the end of October is at 718,196. The reason for the sharp increase is the number of new hearings being filed, due in large part to our distressed economy.

“… Processing time for a hearing has been reduced from 491 days for all of FY 2009 to 377 days in the month of October 2010. Unfortunately the number of claims and hearings pending is still not acceptable to the thousands of Americans who depend on Social Security or Supplemental Security Income for their basic income, meeting health care costs, and support of their families. Adequate funding must be made available to continue to reduce the number of cases pending and the time it requires to process these cases.

“SSA field offices continue to see a record number of visitors. In FY 2010, 45.4 million customers requested assistance from the field offices. The field offices are also responsible for processing an additional 1.2 million Supplemental Security Income (SSI) redeterminations in FY 2011 as compared to FY 2008, an increase of 100 percent.

Encrypted Files

Social Security provides CD disks to attorneys of their client files. The agency plans to start encrypting these CDs in the near future. Apple computers will be unable to decrypt these CDs. I have heard a report that Social Security plans to deal with this problem by giving attorneys who use Apple computers priority for signing up to access their clients' files online. I do not yet have details on how this will work. At best, I do not think this is going to fully solve the problem. Apparently, even some Windows users will have problems decrypting the files, depending upon the exact version of Windows they are using. Also, an attorney who uses an Apple computer but who does only occasional business with Social Security is likely to object to having to learn to navigate Social Security's online access process. Of course, it may not be a completely bad idea to discourage dabblers but Social Security needs a better solution for the problem.

The Old Obsession

Peter Orszag, who was President Obama's Director of the Office of Management and Budget for about a year and a half, thinks this is a wonderful time to take on Social Security "reform." He notes that private accounts are off the table "for now" and so are tax increases so why would Democrats have a problem tackling Social Security "reform"? All they would have to do is cut benefits. Who could be against that?

The oddest thing about this is that Orszag acknowledges that compared to Medicare the long term funding problems at Social Security are minor. Why is it that Orszag and many others are obsessed with Social Security "reform" when they should be obsessed with health care reform?

Update: Orszag's piece gets a bad review from Nancy Altman. Writing on the Huffington Post, she calls it "fear-mongering" and "tin-eared."

A further update: Richard Eskow also has a bone to pick with Orszag but respectfully.

Sulu To Make Ads For Social Security

George Takei will be joining Patty Duke in making ads for Social Security.

By the way, Takei, a Japanese American, was interned as a child during World War II. He ran for office as a Democrat in 1972. More recently, he was a regular on the Howard Stern radio program. He has been active in the gay rights movement.

Where Do The Election Results Leave Social Security?

The election results do not change the prospects for major Social Security legislation. There is virtually no chance of that happening in the next two years. We will see if Republicans in the House of Representatives want to do something less major. Nothing comes to mind. Republicans keep talking about Social Security going broke but are seldom interested in more mundane Social Security matters.

The more likely effect of the election is to give Social Security a real appropriations headache. House Republicans have promised to roll back appropriations to the 2008 levels. Social Security would be devastated by that. Thousands of employees would be furloughed. It would be hard to keep the doors open. Fortunately, rolling back appropriations to 2008 levels might pass the House of Representatives but could not possibly pass the Senate much less be signed by the President.

Some Republicans have declared that they are willing to shut down the government by refusing to act on appropriations if they do not get their way on appropriations. That did not work so well for Republicans when they tried it in 1995. I would be surprised if they try it again. However, Republicans have also promised to block appropriations for implementation of health care reform. Social Security's appropriation is part of the Labor-HHS appropriation bill so it could be caught up in this fight. Republicans may be somewhat less unlikely to shut down some agencies in an attempt to make it impossible to implement health care reform. A shutdown even for a few days would be awful.

If there is no governmental shutdown there are two possibilities. Either an appropriations bill that includes Social Security will be passed that the President will sign or Social Security will be on a continuing funding resolution for the entire fiscal year (FY), perhaps for two entire FYs. Under a continuing resolution (CR) the agency would continue to operate but would be limited to fiscal year 2010 budget levels.

A CR is not that bad for most agencies. Appropriations have gone up substantially since FY 2008. There is little or no inflation. Most agencies can get by fairly well on their FY 2010 appropriation. Social Security is not most agencies. Social Security's workloads are going up substantially, primarily due to the aging of the baby boom population. Social Security needs and deserves more money to deal with increased workloads.

At best, there will be a prolonged struggle over FY 2011 appropriations, leaving Social Security operating on a CR for many months into the future. There is a good chance that Social Security will be operating on a CR for two years. This may cause major problems at Social Security. We will see if Republicans are indifferent to these problems.

Pomeroy Loses

Earl Pomeroy, the Chairman of the House Social Security Subcommittee, has lost his race for re-election to the House of Representatives.

Better But Not Good Enough

From Customer Waiting Times in the Social Security Administration's Field Offices, a report by Social Security's Office of Inspector General (OIG):

... [W]e believe SSA [Social Security Administration] is focused on providing timely service to its customers—and, the majority of customers we interviewed agreed that SSA was successful in this goal. However, SSA faces many current and future challenges in maintaining and improving this level of service.

For example, a significant number of customers still waited more than 1 hour for service. Additionally, many others left SSA field offices before receiving service. Specifically, during the period March 1, 2009 through April 30, 2010 (the last 14 months of our audit period), about 3.1 million visitors waited more than 1 hour for service, and of those visitors, over 330,000 waited more than 2 hours. Further, in FY 2009, about 3.3 million visitors left a field office without receiving service. ...

To SSA’s credit, wait times improved during our audit period. During the first 14 months of our 21-month audit period, 7.5 percent of visitors waited more than 1 hour for service. In comparison, during the last 14 months of the audit period, the percentage of customers who waited more than 1 hour decreased to 6.1 percent. This improvement occurred despite an increase of over 1 million visitors. Additionally, the average visitor wait time for customers without appointments decreased from 21.8 minutes in FY 2009 to 20.1 minutes during the first 7 months of FY 2010.

That's A Big Mistake

From Bloomberg Businessweek:

The Social Security Administration asked its inspector general to investigate how a $32.3 billion mistake skewed its statistics on 2009 wages in the U.S.

Two people were found to have filed multiple W-2 forms that made them into multibillionaires, an agency official said yesterday. Those reports threw statistical wage tables out of whack and, in figures released Oct. 15, made it appear that top U.S. earners had seen their pay quintuple in 2009 to an average of $519 million.

The agency yesterday released corrected tables that showed the average incomes of the top earners, in fact, declined 7.7 percent to $84 million each.

Social Security spokesman Mark Lassiter provided few details about the W-2 forms and declined to answer questions about how they were filed, how many were filed by the same two people, or if a hoax was suspected. “We call it erroneous, you call it fictitious. It’s the same thing,” Lassiter said. “There were some invalid, I guess is the best way to put it, W- 2s.”

To make it clear, this was a mistake in a statistical table. This would have had no effect upon anyone's Social Security benefits. I cannot guess why anyone would do this intentionally.