Testimony At Today's Congressional Hearing

Written testimony from today's hearing before the House Social Security Subcommittee on the recent report of the Social Security Trustees:

Charles P. Blahous, Research Fellow, Hoover Institution and Public Trustee for Social Security

The financial challenges facing Social Security should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected have adequate time to prepare. Earlier action will also afford elected officials with a greater opportunity to minimize adverse impacts on vulnerable populations, including lower-income workers and those who are already substantially dependent on program benefits.

Robert D. Reisehauer, President, Urban Institute and Public Trustee for Social Security

The fact that Social Security's financial viability is significantly affected by the strength of the overall economy in no way diminishes the undeniable fact that changes will have to made in currently scheduled benefits and payroll taxes if the program is to provide our children and grandchildren an adequate level of retirement security. The sooner we address this challenge, the less disruptive the changes will be. Those most adversely affected can be given the time they need to prepare, the burden can be more equitably shared across the generations, and the political animosity and public anxiety associated with the unavoidable changes can be moderated.

 The Republican does not make any recommendation on what to do while the Democrat says that the "undeniable fact" is that benefits will have to be cut as well as taxes raised, a statement which is undeniably false. The problem could easily be solved simply by lifting the cap on income covered by the FICA tax.

Can Social Security Improve Its Regulations?

From a notice posted by Social Security in the Federal Register:

On January 18, 2011, the President issued E.O. 13563, "Improving Regulation and Regulatory Review,'' which requires Federal agencies to develop a preliminary plan to

``periodically review its existing significant regulations" ...

We have posted the preliminary plan on our Open Government Web site, http://www.socialsecurity.gov/open/regsreview, and are now requesting public comments on the plan.

Social Security's "plan" is, essentially, to do nothing they were not already planning to do since they believe that their "regulations do not generally address economic competitiveness or job creation." In general, I agree with that but the Social Security Administration does regulate a billion dollar industry and I happen to be part of it -- representing Social Security claimants. Social Security's regulation of this group is pathetically haphazard and unpredictable. Take a look at Social Security's regulations on attorney fees. They are virtually non-existent. Social Security's operating manual on attorney fees contains absurdities. Those who represent Social Security claimants have a hard time figuring out what Social Security's policies are on fees for representing Social Security claimants. The agency seems incapable on comprehending that most attorneys are employed by entities called law firms and tries to pretend that they do not exist. Social Security's refusal to deal with these issues is causing me and others like me unnecessary headaches and money. This unnecessary burden could be lifted with intelligently crafted regulations.

You can comment on Social Security's "plan" by e-mailing: RegsReview@ssa.gov.

Rejected Disability Applicants Earn Less Before Applying

 From a press release issued by the University of Nebraska-Lincoln:

Male disability applicants rejected for federal benefits tend to have lower earnings and labor force participation rates over the decade prior to applying for federal disability benefits, a new study finds. 

Rejected applicants also work less despite being in better health than accepted applicants, according to the research led by economist Seth Giertz of the University of Nebraska-Lincoln.

On average, the study found, those rejected for benefits made 8.5 percent less than beneficiaries six years before applying – and nearly 22 percent less just prior to application. Also, applicants who were rejected left the workforce faster as their application dates approached than those who were approved for benefits.

The findings suggest that many of the rejections may have been because applicants were not entirely motivated by health reasons when seeking disability.

Another possible interpretation of this data is that rejected applicants suffer more from undiagnosed and untreated, perhaps untreatable, health problems, such as chronic psychiatric illness, including substance abuse, and mild to borderline mental retardation. These health problems are generally life-long and have made these applicants a marginal part of the labor force throughout their lives.

That is the problem with disability research. The data is real but the interpretations are often questionable and have more to do with the researchers' political and social views than anything else.

Obesity Takes Its Toll

From Obesity, Disability, and Movement Onto The Disability Rolls by Richard V. Burkhauser and John Cawley:

The magnitude of the impact of male obesity on work limitations is equivalent to the effect of aging 19.8 years or losing 8.9 years of education.

Little Support For Cutting Social Security

From the Kaiser Family Foundation:

About Time

Social Security is taking steps to move closer to online security standards used in the private sector -- allowing citizens to select a user name and password to access Social Security's online systems.

New York Field Office To Close

From the Ridgewood Times of New York:

Residents of Ridgewood and Glendale seeking Social Security or Medicaid benefits may be forced to travel farther to find them as the Social Security Administration has announced that it will close and merge the Glendale office with its Rego Park branch as soon as this summer.

Vincent Arcuri, chairperson of Community Board 5, announced the proposed merger during the advisory body’s May 11 meeting at Christ the King Regional High School. He subsequently sent a letter to Rep. Anthony Weiner, calling on him to “use your substantial influence” to keep the site open, adding that its closure “would be destructive to the local Myrtle Avenue rental property situation, currently suffering from the recent financial crisis.”

Weiner joined Arcuri at a press conference outside the Glendale Social Security office on Tuesday morning, May 17, calling for the Social Security Administration to overturn its decision, charging that thousands of seniors and others seeking public assistance such as Medicare and Medicaid would be denied a convenient location to apply for benefits and resolve related problems. ...

The consolidation is a cost-cutting move by the Social Security Administration that will reportedly save $3 million over the next decade. Shallman noted that the merger “makes sense,” adding that there are five Social Security offices located within a 25 square mile area around the Glendale site, including locations in Jamaica, Cypress Hills and Bushwick.

“We just got our 2011 budget, and it was less than 2010, and 2012 is looking very austere as well,” he said. “We’ve got a high concentration of offices in a relatively small geographic area.”

I Thought That Conversation Had Been Underway For Some Time

From a press release:

U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security announced today that the Subcommittee will hold an oversight hearing on the findings in the 2011 Annual Report of the Social Security Board of Trustees.  The hearing will take place on Friday, June 3, 2011 in B-318 Rayburn House Office Building, beginning at 9:00 a.m. ...

In announcing the hearing, Chairman Sam Johnson (R-TX) stated, “This year’s annual report again sounds the alarm that Social Security will be unable to keep its promises to the hard-working Americans who pay into the system.  Americans want, need and deserve a Social Security program they can count on and a fact-based conservation about how to get there.  This hearing will begin that conversation.