Ezra Klein On Social Security

 From Ezra Klein writing in the Washington Post:

1. Over the next 75 years, Social Security’s shortfall is equal to about 0.7 percent of GDP. Source (PDF).
2. For the average 65-year-old retiring in 2010, Social Security replaced about 40 percent of working-age earnings. That “replacement rate” is scheduled to fall to 31 percent in the coming decades. Source.
3. Social Security’s replacement rate puts it 26th among 30 Organization for Economic Cooperation and Development nations for workers with average earnings. Source.
4. Without Social Security, 45 percent of seniors would be under the poverty line. With Social Security, 10 percent of seniors are under the poverty line. Source.
5. People can start receiving Social Security benefits at age 62. But the longer they wait, up until age 70, the larger their checks. Waiting to 66 means checks that are 33 percent larger. Waiting to 70 means checks that are 76 percent larger. But most people start claiming benefits at 62, and 95 percent start by 66. Source.
6. Raising the retirement age by one year amounts to roughly a 6.66 percent cut in benefits. Source.
7. In 1935, a white male at age 60 could expect to live to 75. Today, a white male at age 60 can expect to live to 80. Source.
8. In 1972, a 60-year-old male worker in the bottom half of the income distribution had a life expectancy of 78 years. Today, it’s around 80 years. Male workers in the top half of the income distribution, by contrast, have gone from 79 years to 85 years. Source.

Speakers At NOSSCCR Conference

 I am bumping this up since Blogger's problems had it hidden for so long.

The National Organization of Social Security Claimants Representatives (NOSSCR) is having a conference this week in Baltimore. I am unable to attend. Eric Schanufer has been kind enough to take some notes on the speakers at this morning's general session. Here are Eric's notes with some light editing by me:

Carolyn Colvin, Deputy Commissioner of Social Security

• Nine States under Disability Determination Services (DDS) furloughs
• About 4,700 representatives are registered for electronic access
• Through second quarter of 2011, 386,000 requests for hearings precessed
• Anticipate processing 814,000 requests for hearings in fiscal year (FY) 2011
• Average processing time is less than one year as of March 2011
• FY 2009 36,000+ attorney advisory fully favorable decisions, FY 2010 54,000+, FY 2011 at present 32,000+
• There is a virtual screening unit. It now has 72 attorney advisors. In FY 2011, it has screened 22,000 requests for hearings and rendered 6,000 fully favorable decisions
• In FY 2011, about 130 Administrative Law Judges ALJs will be hired with support staff. There is a hiring freeze except for Office of Disability Adjudication and Review (ODAR). The Agency will lose 2,500 employees through attrition.
• In 2011, eight new hearing offices will be opened, including August, GA, Columbus, MO, Franklin, TN, Reno, NV, and Tacoma, WA. Eight offices that were planned will not be opened, including El Paso, TX, Marquette, MI, Muncie, IN, and St. Paul, MN.
• About 4.5% of initial claims will be paid either through Quick Disability Determination and Compassionate Allowance.
• The Tallahassee Teleservice Center is on hold.
• There is limited overtime.
• Information technology investments are on hold.
• About 50,000 DDS denials will be reviewed by Quality Review.
• There are 538 certified non-attorney representatives. There will be an examination in 2011. The Agency is looking for a contractor. The Agency is working on regulations for certifying non-attorney representatives.

Judge Thomas I. Vanaskie, Court of Appeals for the Third Circuit. 

• District Judge Robert W. Pratt introduced Judge Vanaskie 
• Judge Vanaskie discussed the Third Circuit's case of Capato ex rel. B.N.C. v. Comm'r of Soc. Sec., 631 F.3d 626 (3d Cir. 2011).
• Stated that he knew of four cases involving videoconference. He provided citations for two. Below are quotes from them:
• Kirby v. Astrue, 731  F. Supp. 2d 453, 457 (E.D. N.C. 2010) (“This Court finds as a matter of law that an ALJ cannot impeach the credibility of a claimant, nothing else appearing, based on his or her personal impressions, such as how often a claimant shifts positions, or moves around during a hearing conducted via video conference. There could be any number of reasons for such movement by a claimant and there is no one valid interpretation as to why a claimant was sitting in a certain manner or continuously standing up that an ALJ can use to impeach the claimants credibility.”).
• Holliday v. Astrue, No. 05-CV-1826 (DLI)(VVP), 2009 WL 1292707, at *11 (E.D. N.Y. May 5, 2009) (“The transcript hearing indicates that Plaintiff appeared via video teleconferencing equipment before an ALJ who presided from Virginia. (R. 35, 156-57.) The Court notes that Plaintiff was notified in advance of the hearing that video teleconferencing equipment would be used, and apprised of her right to object to the use of such equipment, as required by 20 C.F.R. § 404.938(b). (R. 35.) Even so, construing Plaintiff's pro se pleadings and papers `to raise the strongest arguments that they suggest,’ Triestman, 470 F.3d at 474, the Court finds that the use of teleconferencing equipment here may have been especially prejudicial, since it may have impaired the ALJ's ability to (1) observe the existence and severity of Plaintiff's lesions; (2) make proper credibility determinations; and (3) evaluate whether Plaintiff was intoxicated at the hearing, thus rendering her unable to knowingly waive her right to an attorney. On remand, in determining whether Plaintiff will be appearing at the hearing in person or via teleconferencing equipment, the ALJ should consider whether the need to assess these factors prevents the use of teleconferencing equipment in this case.”).

Eileen Sweeney Award

NOSSCR gave the Eileen Sweeney Award for public service to:

• Daniel Devine
• Richard Morris

Glenn Sklar, Deputy Commissioner for Disability Adjudication and Review

• There is a fifth National Hearing Center in St. Lous.
• There are now 1,400 ALJs. There is a historically high attrition rate for ALJs. Fifty have left this year.
• ODAR wants ALJs to meet “pace,” i.e., dispose of 500-700 cases per year. At present, three quarters of ALJs on “pace.”
• There is a 5-2 ratio of “new” cases to “old” cases.
• No Hearing Office has an average processing time of greater than 500 days.
• Less than a dozen Hearing Offices have average processing times of greater than 450 days.
  8,000 invitations have been sent to representatives for eFolder access. 4,700+ representatives have eFolder access.
• There will be access to the eFolder at the Appeals Council in the summer of 2011.
• There will be case status summary access in eight to nine months (winter 2012).
• In FY 2011, there will be 130,000 video hearings.
• There are 841 hearing rooms with video equipment, and 317 desktop video units.
  There have been 5,300 RVP hearings (hearings in the representative’s office) to date. There are 28 certified representatives. At present, a DSL line is used. There will be a national rollout this year for IP-based RVP.
• $300 million has been cut from information technology.
• The Agency is on the “cusp” of furloughs.
• ODAR is in a slightly better position than the Agency generally.
• All temporary remote sites will be closed after scheduled hearings are held. Some temporary remote sites will be made permanent remote sites.
• There is a “full freeze” in the field offices. There will be no information technology innovation for representative fee payment.
• There is no routine provision of CDs to representatives who have electronic access.
• It is OK to use a stamp to complete Form 1696s. 

Nancy Altman, Co-Director, Social Security Works, 

•  Spoke about Social Security solvency.
• There is a petition to be signed.

Nancy Shor, Executive Director NOSSCR

• The Disability Insurance Trust Fund will not run out of money in 2018. Money will be reallocated from the Retirement Trust Fund to the DI Trust Fund.
• It appears that where a representative signed up for electronic access matters. If a representative signed up for electronic access at a Hearing Office, CDs are not sent to the representative. If a representative signed up for electronic access at an SSA "event," e.g., a NOSSCR conference, CDs are sent. CDs should be provided upon request to all representatives.
• NOSSCR wants to know about problems with encyrpted CDs and using Electronic Records Express.
• NOSSCR is aware that an entire representative's staff wants to use electronic access, but the agreement for such access restricts access to the representative him- or herself.
• The Senior Attorney Advisor program will be extended to August 9, 2013.
• The disability program will not go away. See what the response was to Rep. Ryan's plan for Medicare. A "knife cannot successfully be put" into the "heart" of the disability program.
• NOSSCR has asked Social Security's Office of General Counsel to consider using a standard language for addressing debt collection issues after Ratliff.

The Sky Is Falling

 A press release from Social Security:

The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds. The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2036, one year sooner than projected last year. The DI Trust Fund, while unchanged from last year, will be exhausted in 2018 and legislative action will be needed soon. At a minimum, a reallocation of the payroll tax rate between OASI and DI would be necessary, as was done in 1994. The Trustees also project that OASDI program costs will exceed non-interest income in 2011 and will remain higher throughout the remainder of the 75-year period.

In the 2011 Annual Report to Congress, the Trustees announced:

The projected point at which the combined Trust Funds will be exhausted comes in 2036 -- one year sooner than projected last year. At that time, there will be sufficient non-interest income coming in to pay about 77 percent of scheduled benefits.

The point at which non-interest income fell below program costs was 2010. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.

The projected actuarial deficit over the 75-year long-range period is 2.22 percent of taxable payroll -- 0.30 percentage point larger than in last year’s report.

Over the 75-year period, the Trust Funds would require additional revenue equivalent to $6.5 trillion in present value dollars to pay all scheduled benefits.

“The current Trustees Report again reflects what we have long known to be true -- we need changes to ensure the long-term solvency of Social Security and to restore younger workers' confidence in the program,” said Michael J. Astrue, Commissioner of Social Security. “The report also highlights the more near-term shortfall in the Disability Insurance Trust Fund. Our disability programs are complex, and there is a long history of well intended ‘reforms’ causing unintended consequences. The President sent to Congress our Work Incentive Simplification Proposal, which would be a good start for bipartisan debate. I urge the House and Senate to review this proposed legislation carefully and schedule hearings this year.”

Other highlights of the Trustees Report include:

Income including interest to the combined OASDI Trust Funds amounted to $781 billion ($637 billion in net contributions, $24 billion from taxation of benefits, $117 billion in interest, and $2 billion in reimbursements from the General Fund of the Treasury) in 2010.

Total expenditures from the combined OASDI Trust Funds amounted to $713 billion in 2010.

The assets of the combined OASDI Trust Funds increased by $69 billion in 2010 to a total of $2.6 trillion.

During 2010, an estimated 157 million people had earnings covered by Social Security and paid payroll taxes.

Social Security paid benefits of $702 billion in calendar year 2010. There were about 54 million beneficiaries at the end of the calendar year.

The cost of $6.5 billion to administer the program in 2010 was a very low 0.9 percent of total expenditures.

The combined Trust Fund assets earned interest at an effective annual rate of 4.6 percent in 2010.

The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: Timothy F. Geithner, Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Kathleen Sebelius, Secretary of Health and Human Services; and Hilda L. Solis, Secretary of Labor. The two public trustees are Charles P. Blahous, III and Robert D. Reischauer.

The 2011 Trustees Report will be posted at www.socialsecurity.gov/OACT/TR/2011/ by Friday afternoon.

Inspector General Gives Good Report On iClaims

 From a recent report by Social Security's Office of Inspector General (OIG): 

At an April 15, 2010 hearing before the House of Representatives’ Committee on Ways and Means, Subcommittee on Social Security, Congressman Xavier Becerra asked the Office of the Inspector General to review the iClaim application to ensure individuals filing for benefits using the iClaim application were receiving an appropriate level of service from SSA [Social Security Administration]. ...

During our review of DIB [Disability Insurance Benefits] iClaim applications, there were no indications that individuals filing for DIB using the iClaim application did not receive an appropriate level of service from SSA. In fact, SSA employees re-contacted 70 percent of the individuals in our sample to obtain additional information or clarification. While employees raised concerns regarding re-contacting individuals about the Form SSA-827 and the Adult Disability Report, they also recognized that iClaim applications were typically faster to process than in-person or telephone applications. In addition, we found that the information individuals provide on their iClaim applications corresponded with the information in SSA’s system used to determine benefit eligibility and amount.

Blogger Problems

Blogger was down altogether for many hours. It is now back up but everything posted since sometime Wednesday has disappeared for the time being. I expect it will be back eventually.

12% Reduction In Social Security Appropriations?

The House Appropriations Committee has announced a schedule for markup of spending bills for fiscal year (FY) 2012, which begins on October 1, 2011. The Labor-HHS appropriations bill, which includes the Social Security Administration, is set for subcommittee markup on July 26 and for full committee markup on August 2.

More importantly, the House Appropriations Committee has announced subcommittee allocations, that is the total amount of each subcommittee appropriation. The Labor-HHS Subcommittee has been told to cut appropriations by 12% from FY 2011 and by 26% from the President's budget. This would render the agency just about non-functional. You can fantasize all you want from whatever cost savings scheme you can imagine but you cannot come up with any way to reduce Social Security's operating budget by 12% and leave the agency able to do its mission. The only way to accomplish this would be with massive personnel reductions, either by a huge reduction in force or by regular, frequent furloughs of all of Social Security's personnel or by a combination of the two.

You almost want to see what would happen if this were enacted. Would we then have a truly "grown-up" discussion about government spending?

Galveston Office To Move

 From The Galveston County Daily News:

GALVESTON — Despite worries that a move could pose problems for some Social Security beneficiaries, the island’s Social Security office is planning a move to League City next year. ...

“After repeated efforts to find space which met the requirements of the Social Security Administration, none could be located on Galveston Island,” Deborah Ruiz, of General Services Administration, said.

Discussion about moving the main county office to the mainland started in May 2008, prompting concern from island residents. Three years later, Social Security Administration staff still is working in a cramped office at 4918 Seawall Blvd.

Critics of the move have said elderly and disabled residents in Galveston could have trouble getting to the office in League City.

Public transportation for the roughly 25 miles between the island and League City doesn’t exist, and a taxi trip to and from could cost about $150, a local taxi cab company said.

Commissioner's Broadcast E-Mail

A Message To All SSA And DDS Employees

Subject:  The FY 2011 Budget

It is a relief to finally know what our fiscal year (FY) 2011 budget is, although I am frustrated that it is very late and very short of our expectations and needs.  Congress passed an appropriation that is nearly one billion dollars less than the President’s budget. 

While all of your work is important, we are not making cuts evenly across the board.  We need to do what we can to preserve the most critical activities.  Cutting all areas evenly is an easier approach, but it’s not the right way if we are going to continue to provide the best possible service.  Most of the cuts already in place will have to stay because easing up on them increases the likelihood of furloughs, especially next year, and I am doing what I can to avoid them.

As I have mentioned before, operating under a continuing resolution (CR) at last year’s budget level actually gives us less money than we had last year because our fixed costs like rent and guards continue to increase.  Regrettably, not only are we not operating at CR levels, but Congress also cut our budget below the CR level. 

Given the Nation’s fiscal climate, we anticipated the possibility of reduced funding, which is why we took action months ago to make cuts and stop hiring.  When I talk with you, you invariably ask for more people to help you handle the work.  Unfortunately, we simply don’t have the resources to lift the hiring freeze.  Hiring freezes make it hard to serve the public and manage work in offices that lose staff, but when we decide whether to hire new staff, we must consider if we can afford to pay them for as long as they stay with us.   Regrettably, even our strongest advocates in Congress are warning us that the best we should expect next year—just five months away—is funding at our current level.  Hiring staff now would increase the likelihood of furloughs next year.

I have authorized a small amount of overtime to support some of our most critical activities, including completing late day interviews instead of turning people away.  In this new, tough fiscal environment, you should not count on the availability of overtime when you make your personal budget decisions. 

Even technology, which has been instrumental in handling our increasing workloads, has taken a hit.  In spite of the proven success of our popular online applications—we took the top three spots for iClaim, Retirement Estimator, and Extra Help in the most recent ACSI report and outdid companies like Amazon and Netflix—Congress also reduced our information technology fund by $275 million, which will limit new technology that is the best way for us to manage our growing workloads.

Budget cuts of this magnitude have very real implications.  We are working creatively to come up with ideas that help us move forward, like suspending the mailing of the Social Security Statement, which will save us about $30 million this year.  With the support of the Office of Management and Budget, I expect that you will see a series of small but significant initiatives to reduce workloads that will also help us weather this difficult fiscal climate.

The choices we make going forward remain difficult.  I share your regret at watching the progress we have made, especially over the last two years, start to slip away.  One goal that we are doing our best to meet is our commitment to eliminating the hearings backlog by 2013.  When I became Commissioner, Congress made it clear that it had to be our number one priority, and that mandate has not changed.  We are on track to meet that goal, and I am giving ODAR resources to deliver on this imperative. 

Please know that we will continue to fight for the budget our work deserves.  Thank you for staying focused on what is most important during all of the distractions.  You should be very proud of all that you are accomplishing.

Michael J. Astrue

Commissioner