Commissioner Testimony On Appropriations

Michael Astrue has been testifying today before the Senate Appropriations Committee. His written remarks talk about about what is already happening because his agency is operating under a Continuing Resolution (CR) that freezes the operating budget at last year's levels and what will happen if this freeze continues:

Because of the uncertainty of our budget and the length of the CR, I have had to make choices that will begin to erode service. Our employees continue to churn out work, but they are disappointed and are becoming demoralized about the prospect of watching what they have worked so hard to achieve slip away. I regret that we may not be able to keep our commitments to the American people because we do not have the necessary funding to continue moving forward. ...

While we regret the resulting loss in service, we have tried to prepare for the CR. In July, we instituted a full hiring freeze for all headquarters and regional office staff, and then we further restricted hiring to allow only those components critical to the backlog reduction effort to replace staffing losses. Under a CR, we will continue – and likely expand – the hiring freeze. We will reduce or eliminate, overtime, which our front line employees depend on to keep up with their work.

We have decided not to open eight needed hearing offices, and we will not have staff to open our new Jackson, Tennessee Teleservice Center this year, and perhaps not even next year. We are discontinuing service in over 300 remote service sites throughout the United States. Most of these sites are contact stations housed in locations like libraries, senior centers, or other facilities where a Social Security employee travels, typically once or twice a month, to take applications for Social Security cards or benefits, as well as answer questions. We have also begun looking at field office consolidation where that decision makes fiscal sense.

Each year we send Social Security Statements to non-beneficiaries who are over age 25. These annual Statements cost us approximately $70 million each year to print and mail. In order to conserve funds, we will suspend the current contract and stop sending out these Statements.

The Commissioner also talks about what would happen if the appropriations bill passed by the House of Representatives, which would cut funding well below last year's levels, becomes law:

[T]here is a direct nexus between our funding and our service level. We want to prepare you for what a deep cut would mean. Our backlogs will skyrocket, and people will wait considerably longer to receive decisions. As our backlogs grow, it will become more difficult, expensive, and time-consuming for us to eliminate them. Waiting times in field offices and on our 800-number will increase dramatically. Deep cuts will cause billions of dollars of payment errors that will take years to address, hardly a wise use of taxpayers’ dollars. Even if we have specific funding for program integrity work, we need the people to do that work plus all of their other fundamental responsibilities. ...

I hope the House Appropriations Committee has a chance to hear this.

ODAR Always Follows FIFO Except When It Doesn't

Social Security's Office of Inspector General (OIG) was asked to do a study to determine whether the agency's Office of Disability Adjudication and Review (ODAR) has been following a First In First Out (FIFO) policy in reviewing claimants' requests for hearings. The report is now out. OIG was reassured by ODAR's regional management teams that ODAR was following FIFO "as much as possible." OIG was informed, truthfully, that there are many legitimate reasons not to review cases FIFO. As best I can tell from reading the report, OIG reviewed only 20 actual case files to see whether hearing offices were actually doing what its regional management teams thought they was doing. OIG concluded that they were.

A few thoughts: First, what in the name of goodness made OIG think they could find out anything about the situation by asking the regional management teams? If ODAR offices are diverging from FIFO, it is not happening at the regional level but at the individual hearing office level. Second, this study took 10 months and all OIG could do was to review 20 individual case files to see what is going on at ground level. On its face this seems grossly inadequate.

I cannot say how widespread the problem is but I see many dramatic departures from FIFO with no apparent justification. This report seems inadequate to me.

My understanding is that at the Department of Veterans Affairs (VA) appeals are assigned a serial number. Basically, VA does not go on to the next serial number until it takes care of the earlier serial numbers. I wish that ODAR were doing this.

"Protecting The Public And Our Employees In Our Hearing Process"

The Office of Management and Budget has just approved a regulatory proposal from Social Security. You can see all the information from the OMB website below but no summary of the proposal is available. It should appear in the Federal Register soon.

I know that Administrative Law Judges have been seeking to have a security guard in each hearing room but that would not require new regulations and is most unlikely to happen anyway. I am having trouble imagining what this proposal might contain.

AGENCY: SSA	RIN: 0960-AH29
TITLE: Protecting the Public and our Employees in Our Hearing Process (3702F)
STAGE: Interim Final Rule	ECONOMICALLY SIGNIFICANT: No
RECEIVED DATE: 01/18/2011	LEGAL DEADLINE: None
** COMPLETED: 03/07/2011	COMPLETED ACTION: Consistent with Change

Problems With Headquarters Security Guards Continue

A recent audit report by Social Security's Office of Inspector General (OIG) shows that the agency's problems with security contractors for its headquarters in the Baltimore region continue. The agency had been using USProtect but that company shut down after two former executives of that company were convicted of tax evasion, bribery and concealment of material information. A Vice President of USProtect became President of Paragon Systems which got a new contract for Social Security's headquarters security. Paragon hired many of the same personnel who had worked for USProtect. OIG's audit of Paragon's work shows serious deficiencies. Here is an excerpt:

Our audit work determined that Paragon was not complying with certain terms of the contract. We found guards were not following post orders as stated in the contract, and supervisors were not providing sufficient post inspection checks. There were excessive errors and discrepancies on the forms used to track post hours worked and account for firearms. These errors and discrepancies could indicate that posts were unattended. Our observations noted several instances where guards did not check the identification of people entering buildings; guards were gathered at posts involved in personal conversations and not focused on post duties; roving guards were not providing foot patrol; and guards were not following operating procedures for x-ray scanners and hand-held wand metal detectors.

The OIG report makes it clear that Social Security was already well aware that there were problems with Paragon.

The OIG report has drawn the attention of the Federal Times.

One wonders whether Social Security would be better off with federal employees providing security.

Cutting Federal Workforce Costs Money?

John Gravois writing in the Washington Monthly makes the case that reducing the federal workforce may actually cost more money than it saves:

The problem is that, as employers go, the federal government is in fact pretty exceptional. A corporation can shed workers and then revise its overall business strategy accordingly. A strapped city government can lay off a few street sweepers and then elect to sweep the streets less often. But federal agencies are governed by statutory requirements. Unless Congress changes those statutes, federal agencies’ mandates—their work assignments—stay the same, regardless of how many people are on hand to carry them out. ... “It raises the hairs on my neck when I hear people say we’ve got to do more with less,” says John Palguta, a vice president for policy at the Partnership for Public Service, a nonprofit focused on the government workforce. “The logical conclusion is we’re going to do more with nothing.” ...

[I]f Congress and the White House agree to substantial cuts in the federal workforce but don’t also agree to eliminate programs and reduce services, the end result could be more spending and deficits, not less. Strange as it may sound, to get a grip on costs, we should in many cases be hiring many more bureaucrats—and paying more to get better ones—not cutting their numbers and freezing their pay. Because in many parts of government, the bureaucracy has already crossed that dangerous threshold beyond which further cuts can only mean greater risk of a breakdown. Indeed, much of the runaway spending we’ve seen over the past decade is the result of our having crossed that line years ago—the last time there was a Democrat in the White House, a divided government, and calls for slashing the federal workforce in the air. ...

The average voter may imagine federal bureaucracies as overstaffed, full of people leaning on their rakes and sharpening their pencils. But the truth is, most agencies are, if anything, understaffed. The government has grown tremendously in its spending and scope since the 1960s, and the population of the nation has grown by a margin of 100 million people, but the size of the federal workforce has remained remarkably static at about 2 million. Since coming into office two years ago, the Obama administration has bumped up staff levels by about 100,000, in part through “in-sourcing”—bringing back into the civil service inherently governmental work that had been farmed out to contractors. If this leads to better management, it could well mean a stanching of some of the cost overruns and regulatory failures that have been causing the government to bleed red ink. Today’s mindless demands for austerity, however, could reverse this trend.

The State Of The Negotiations

From Federal News Radio:

... SSA [Social Security Administration] and the union finished a second week of negotiating last Friday [February 25] for a new contract. SSA workers have been working under the old contract, even though it expired more than a year ago.

SSA and AFGE completed their first round of negotiations in January and agreed to 12 of the most straightforward issues in the new contract, said Witold Skwierczynski, AFGE's chief negotiator.

"The entire contract has about 50 issues so the easiest 12 are agreed upon," Skwierczynski said. "We now are embarked on the toughies. Things like appraisals, performance awards, some union institutional stuff like office space, the use of their e-mail and some travel and training issues."

Last week, SSA and AFGE were supposed to meet with federal mediation experts to help push the process along.

"They haven't decided anything despite the fact a furlough is potentially imminent," he said. "We were to negotiate scenarios about what may happen, and how agency will implement furloughs. But since they were unable to tell us anything today about what they are planning, we are discussing proposals we will put on the table on any particular scenario."

He said SSA management wouldn't tell the union who is essential or what jobs are exempt. Skwierczynski said SSA management also didn't want to discuss if there was a funding shortfall, if they planned to keep a short staff or just close offices altogether to make up for the lack of funding.

He added that AFGE and SSA are deferring current contract negotiations to March 22.

"We are up against difficult negotiating team on management side who is reluctant to compromise in many areas," he said. "We are hopeful with the Federal Mediation and Conciliation Service involved we can whittle down the differences, and then go to federal services impasse panel if we need to."

Skwierczynski said among the top issues employees want AFGE's help with is around workplace stress, specifically around having a more flexible working environment.

He said health and safety issues around indoor temperature and air quality were among the other top issues as were alternative work schedules for field employees, including flex time, telework and credit hours.

"I've done a lot of contracts and there is an evolution involved and we are cognizant that we have to get to it," Skwierczynski said. "The agency's strategy is to keep the current contract in place so they are stretching the process out. We need to try to start getting to our final positions and get to the bottom line."

Senate Appropriations Proposal

From a press release issued by the Senate Appropriations Committee, concerning the Committee's bill to keep the government operating through the end of the fiscal year (FY):

The House Republican CR [Continuing Resolution] cuts funding for the Social Security Administration’s administrative expenses by $125 million below the FY 2010 enacted level. This would force the SSA to freeze hiring across the agency and possibly furlough employees, at a time when the number of Americans filing for disability and retirement benefits is at record levels. As a result, every American filing benefits this year would wait longer for the benefits they’ve earned, backlogs of those with pending disability claims and hearings would increase significantly, and waiting times at field offices and SSA’s 1-800 number would jump dramatically. The Senate bill, by contrast, provides $600 million more than the House Republican proposal (including rescissions). Compared to the House CR, it will allow SSA to process about 300,000 more initial disability claims and 150,000 more disability hearings, and prevent delays in beneficiaries receiving their retirement benefits.

Despite this, the Senate Appropriations proposal would give Social Security $557 million less than the President's proposal for this FY. At least it would still be $372 million more than the FY 2010 level if my math is correct.

The Associated Press is already saying that this proposal cannot pass the Senate much less gain acceptance by the House of Representatives. We may be lucky to keep Social Security's funding at the FY 2010 level for the rest of the fiscal year.

Below is a countdown clock to a possible government shutdown.

Contradictory Poll Findings

From the Wall Street Journal:

Less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the country's mounting deficit, according to a new Wall Street Journal/NBC News poll, illustrating the challenge facing lawmakers who want voter buy-in to alter entitlement programs. ...

More than 60% of poll respondents supported reducing Social Security and Medicare payments to wealthier Americans. And more than half favored bumping the retirement age to 69 by 2075.

This is despite the fact that about half of those eligible already retire at age 62. A lot of younger people badly underestimate the effects of the aging process.