President's Budget

The President's recommended budget for Social Security for Fiscal Year (FY) 2012, which begins on October 1, 2011, is out. It recommends $12.496 billion for Social Security, a 2% increase from the President's recommended budget for FY 2011 although that is a somewhat theoretical number since it will never be enacted, and a 9% increase over the FY 2010 budget. Social Security is currently operating under a Continuing Resolution (CR) which allows the agency to spend money at the FY 2010 rate. This would amount to a nice jump for Social Security if it could be enacted.

The budget proposal says that the President "proposes a new Disability Insurance Work Incentives Simplification Pilot (WISP) to provide beneficiaries a simpler set of work rules that no longer terminates benefits based solely on earnings." I have no idea whether this is simply a new name for the Benefits Offset National Demonstration (BOND) experiment that has just started. If it is the same thing, why are they giving it a different name and acronym? If it is different, why do we need two similar experiments going on at the same time.

The budget proposal also talks of the creation of a a "Disability Research Center." I am deeply skeptical of this sort of research in general and especially skeptical of the Social Security Administration overseeing it. That is not the agency's mission.

Republicans in Congress will undoubtedly declare this budget "dead on arrival." The Social Security Administration may be lucky to continue spending in FY 2012 at the FY 2010 rate.

Update: The President's budget would increase employment at Social Security from 67,060 under the current CR to 69,306, a 3% increase.

The Commissioner's recommended budget, which, by law, must be conveyed to Congress, is $13.093 billion, 5% higher than the President's recommended budget.

The Last Time A Government Shutdown Happened

Let me stress that this describes historic events. This does not tell us what will happen in the future. I will have try to have more on this tomorrow. This is from Social Security's official history (emphasis added):

On November 14, 1995, SSA was advised to begin a shutdown of operations [due to a budget stalemate] beginning at 10 a.m. The Agency’s contingency plan was implemented. Employees were instructed to pay close attention to the media to determine when the impasse was resolved and when to return to work. SSA furloughed 61,415 employees and retained 4,780. The majority of the employees retained were in direct service positions to ensure the continuance of benefits. ... Other functions considered essential and permitted under applicable statutes (including the Anti-Deficiency Act) during a lapse in appropriations related to areas of health and safety, oversight and coordination of all human resources and financial functions related to the furlough.

SSA’s contingency plan was altered shortly after the shutdown began when the Commissioner approved the recall of an additional 130 Office of Hearings and Appeals employees to handle time-sensitive mail in the hearing offices. Without the assistance of these employees, this claims-related mail would have been returned to the sender, further delaying claims processing. ...

It was evident to Agency executives after a couple of days that the shutdown was not acceptable, and that it was affecting some of its most vulnerable people, namely its elderly, disabled, and low-income recipients. It became very clear that it was important that SSA reopen its offices to conduct business, even during the shutdown. There was tremendous concern internally, as well as within the White House that SSA not providing service would cause harm to too many Americans.

President Clinton held a press conference that afternoon and announced to the public that this shutdown was unacceptable, that Americans needed to be able to conduct business, and that SSA was recalling approximately 49,715 more employees in direct service positions back to work. This involved recalling sufficient staff to effectively administer its programs, including processing new claims for Social Security benefits. This put field offices, the toll-free 800 number service and State DDS facilities back in business. Although SSA would take and process new applications for benefits and resume processing appeals, it would not process applications for SSNs, perform personal earnings and benefits estimates or conduct annual wage reporting activities. A total of 54,495 staff would be retained. ...

There was a great deal of discussion and some dissention internally over which employees should return to work, and that if SSA was going to recall 54,000 employees, why not recall all 66,000. The concern was that by recalling all but 12,000 employees, what message were you sending to them? ...

The second shutdown was the longest in history and presented new challenges to Agency management. When the threat of a second shutdown surfaced, SSA determined that the trust funds and benefit programs could not tolerate another interruption of claims-taking activities. Based on the experience during the November lapse in appropriations and the loss of four full days of production time, any further interruption in service would have a devastating long-term impact on SSA’s ability to process Social Security, SSI and Black Lung claims. The Agency was still attempting to recover from the effects of the November furlough. Therefore, employees in direct service positions would remain operational, while staff support employees would be furloughed. When the partial shutdown began December 16, 1995, about 55,000 Agency employees, most of whom processed claims and/or provided direct public service, were told to report for work. A total of approximately 11,000 staff employees remained furloughed.

Fee Payment Numbers

Here are updated numbers on payments of fees for representation of Social Security claimants:

Fee Payments
Month/Year	Volume	Amount
Jan-10	32,227	$111,440,046.23
Feb-10	29,914	$105,708,101.59
Mar-10	34,983	$122,874,426.87
Apr-10	44,740	$153,478,589.32
May-10	34,686	$119,527,194.40
June-10	32,432	$111,887,579.72
July-10	32,232	$132,328,622.27
Aug-10	34,755	$119,424,346.42
Sept-10	32,660	$108,650,373.60
Oct-10	38,705	$128,133,064.77
Nov-10	31,788	$106,559,848.38
Dec-10	33,315	$108,879,872.67

Jan-11
Volume
34,467

Amount
$113,459,847.04

Fantasy Time For House Republicans

The House Republican leadership has released information about what it wants in the budget for fiscal year (FY) 2011. FY 2011 began on October 1, 2010. We are now four and a half months into FY 2011 and operating on a Continuing Resolution (CR), allowing the agency to continue spending at the same rate as in FY 2010. The Republicans want to reduce the budget for FY 2011 to $997.6 million below the President's proposed budget for the year and $625 million below the FY 2010 rate. If this became law all of that $625 million reduction would come out of the remainder of FY 2011. I cannot say exactly what the result would be but I think it is a safe bet that there would be a significant reduction in force at Social Security.

The only hope that Republicans have of getting anything like this, indeed of getting any reduction below the FY 2010 budget, is to shut down the government. Otherwise, Democrats have no reason to do anything other than to counter by offering a CR for the remainder of FY 2011. This all comes to a head in less than three weeks.

Tune in Monday for a history lesson on what happened at Social Security the last time there was a government shutdown.

Teach Your Children Well

From "Remapping Debate:"

No one has done more than the billionaire private-equity investor Peter G. Peterson to stir America’s anxiety over deficits, debt, and what Peterson (among others) considers out-of-control entitlement-program spending. Those same concerns now lie at the heart of a “fiscal responsibility” curriculum being developed for America’s high schools. The curriculum bears the stamp of Columbia University’s prestigious Teachers College, but reflects the focus suggested by the Peter G. Peterson Foundation, which provided $2.4 million in funding for the project. ...

[T]he trial lessons repeatedly point toward two core ideas of Peterson’s long crusade: first, that America’s future is threatened by deficit spending, and, second, that Social Security and Medicare have helped put our economy on an “unsustainable course.” ...

Robert Prasch, an economics professor at Middlebury College, voiced similar complaints about the way the curriculum deals with Social Security. “No effort is made to explore whether, and to what extent, there may or may not be a fiscal crisis facing Social Security,” Prasch said. “It is presumed or taken as an unimpeachable fact.”

The cartoon is from the materials funded by Peterson.

Ways And Means Committee Hearing

The House Ways and Means Committee has posted the written statements of the witnesses at today's hearing on Social Security's new National Computer Center project. The Office of Inspector General (OIG) is mildly critical of the length of time this has taken.

Government Shutdown Looming?

From Bill Matthews writing at Fedblog:

With the March 4 expiration date looming for the continuing resolution that's funding the federal government, budget expert Stan Collender offers this advice: Prepare for a government shutdown.

It is more likely than not that Congress will fail to agree on a new budget for 2011 in time to prevent the federal government from running out of money and simply closing its doors, Collender said Feb. 10.

"My strong suspicion is that the Republicans need to shut down the government once to show the Tea Party folks that they are willing to do it," he said during a discussion of the 2012 budget that's scheduled to unveiled Feb. 14. "I think there's a better than 50-50 chance that we will have one or more shutdowns, and at least one will be longer than a couple of days." ...

Layoffs are likely to happen earlier if there is a shutdown this year, he said. "I can tell you because I've talked to members of the contracting community and to [business] associations, and they've already started to prepare for this possibility."

Indictment In Alabama

From some the Huntsville, AL Times:

A federal grand jury has charged an Albertville woman with sending two fake anthrax letters to the local Social Security Administration.

Charged was Michelle Holladay Ryder, 43, according to U.S. Attorney Joyce White in Birmingham. Ryder faces two counts of mailing a letter containing a powdery substance and a note to someone at the Albertville Social Security Administration. The powder did not test positive for any biological hazards.

The maximum sentence for each count of sending hoax anthrax letters is 10 years in prison and a $250,000 fine.