More Fallout In West Virginia

From the Wall Street Journal:

The chief Social Security Administration judge in Huntington, W.Va., has stepped down from his post, an agency official told employees Wednesday, broadening the fallout from a recent page-one Wall Street Journal article about the office.

The decision by Charlie Andrus, who became Huntington's chief judge in 1997, was voluntary, two people familiar with the matter said. Debra Bice, the acting national chief judge, told employees in Huntington he would remain with the agency as a judge, the people said.

"Revisions To Direct Fee Payment Rules"

Below is the notice of a regulatory package that the Social Security Administration has sent over to the Office of Management and Budget (OMB):

AGENCY: SSA	RIN: 0960-AH21
TITLE: Revisions to Direct Fee Payment Rules (3625I)
STAGE: Interim Final Rule	ECONOMICALLY SIGNIFICANT: No
** RECEIVED DATE: 06/06/2011	LEGAL DEADLINE: None

Social Security must have OMB approval before publishing this in the Federal Register. 

No, I don't know what this is. The "interim final" process that Social Security wants to use suggests that  the agency regards this, or at least wants OMB to regard it, as very minor. Could anyone enlighten us?

Update: I found this:

We are revising our rules to include changes made by the Social Security Disability Applicants’ Access to Professional Representation Act of 2010 (PRA). We are revising the requirements that an eligible non-attorney representative must meet to receive direct fee payment under titles II and XVI of the Social Security Act (Act). We are also making permanent the direct fee payment rules for eligible non-attorney representatives under titles II and XVI of the Act and for attorney representatives under title XVI of the Act. 

It's Only Crazy People

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

Our objectives were to determine whether the California Disability Determination Services (CA-DDS) (1) incorrectly denied initial claims based on failure to cooperate (FTC) . ...

RESULTS OF REVIEW
CA-DDS did not always comply with SSA’s policies and procedures for FTC denials. Based on our review of 150 FTC denials, we found that 37 (24.7 percent) did not comply with SSA’s policies and procedures ...

We also found that CA-DDS branch offices’ interpretations of the FTC policies resulted in an inconsistent level of service for disability applicants. ...

A DDS is required to assist claimants who allege a mental impairment.When this occurs, a DDS should consider contacting a third party, SSA field office, treating physician, or the claimant. We found that CA-DDS staff did not request assistance from third parties for 12 claimants, as required. These claimants had alleged mental impairments including depression, anxiety, and schizophrenia. The claimants had listed authorized representatives, family members, or friends who would provide assistance during the application process. However, CA-DDS did not contact these individuals before denying the claimants for FTC.

Congressional Hearing On Overpayments

From a press release:

House Ways and Means Oversight Subcommittee Chairman Charles Boustany, Jr, MD (R-LA) and Social Security Subcommittee Chairman Sam Johnson (R-TX) today announced that the Subcommittees on Oversight and Social Security will hold a hearing on the accuracy of payments made by the Social Security Administration (SSA).  The hearing will take place on Tuesday, June 14, 2010, in 1100 Longworth House Office Building, beginning at 2:00 P.M. ...

According to the President’s fiscal year 2012 Budget request, next year the SSA is expected to distribute nearly $820 billion in benefits to over 60 million people. ...

[D]istribution of such significant sums of taxpayer dollars means that even a very low overpayment rate can result in a substantial loss to the taxpayer and the Social Security program.  According to the latest available data, in FY 2009 overpayments included $841 million in the OASI program, $1.7 billion in the DI program, and $4.0 billion in the means-tested SSI program. ...

For the five-year period ending fiscal year 2009, errors involving the determination of “substantial gainful activity,” essentially whether earnings are high enough to end eligibility for DI  benefits, account for the majority of overpayment errors, nearly $1 billion annually, or 36 percent of total retirement, survivors, and disability program error dollars.  Of these error dollars, 64 percent resulted from beneficiaries’ failure to report their work activity.  The other 36 percent were associated with the SSA’s failure to schedule a work continuing disability review (CDR) after the beneficiary notified the SSA that they returned to work.  Once a beneficiary notifies the SSA of their earnings, it may be months or years before the SSA sends an overpayment notice to the beneficiary, demanding repayment of sometimes tens of thousands of dollars of accrued overpayments. ...

Medical CDRs are periodic reviews conducted to ensure recipients are still disabled according to Agency rules.  In FY 2009, these reviews have generated $12.50 in savings for every dollar invested. Despite their substantial savings, the frequency of these reviews is declining.  The number of completed medical CDRs fell 65% between FY 2004 and FY 2008, with a backlog of more than 1.5 million medical CDRs at the end of FY 2010.  The SSA Office of Inspector General (OIG) estimates that this backlog may lead to as much as $1.1 billion in overpayments in 2011 alone.

SSI program integrity work has followed a similar pattern, with funding levels and redeterminations peaking in 2003, falling through 2007, and then beginning to rise again in 2008. ...

In announcing the hearing, Chairman Boustany said, “Whether through error or outright fraud, overpayments across the government are a substantial problem costing taxpayers tens of billions of dollars each year.  The Oversight Subcommittee is reviewing these overpayments in a series of hearings, taking a closer look to identify how overpayments occur and funding solutions to better protect taxpayer dollars and program beneficiaries.” 

In announcing the hearing, Chairman Johnson said, “We are facing a debt crisis because Washington spends too much and wastes too much.  Payments that are wrong due to fraud or poor management at Social Security are unacceptable. Americans whose hard earned wages support these programs want, need and deserve better.”

It is hard to follow the numbers being given in this press release but the overpayment rate in Title II appears to be about 0.4% in Title II and 8% in Title XVI, Supplemental Security Income. This is real money but this is not going to get better without more operating funds for the Social Security Administration but the Republicans in control of the House of Representatives are determined to give Social Security far lower operating funds. In general, the attitude of Republicans to programs they dislike but cannot completely eliminate -- with Social Security being the prime example -- is to decry their mistakes and inefficiencies which gives justification in their minds for decreasing funding for those agencies which leads to more mistakes and inefficiencies which justify even lower funding, etc. They cannot make the Social Security Administration disappear but they can hobble it and hold it up to ridicule in the forlorn hope that this will help the American people see Social Security they way they see it, as the original sin that has led to what they regard as a welfare state that sucks away the country's hard earned wealth and gives it to a bunch of free loaders, albeit it freeloaders who mostly worked hard all their lives and paid the taxes based upon the promise that they would be taken care of in their old age.

Some Republicans Want To Make Social Security Voluntary

 From TPMDC:

Republican leaders left Social Security untouched in their House budget this year, but a group of GOP lawmakers are looking to fill the gap themselves with legislation that would create a voluntary privatized version of the program.

Introduced by Rep. Pete Sessions (R-TX), who also chairs the House's campaign efforts at the NRCC, the "Savings Account For Every American Act" would allow people to immediately opt out of Social Security in favor of a private "S.A.F.E." account. Eventually the program would expand to let employers send their matching contribution to workers' Social Security to a "S.A.F.E." account as well.

"Our nation's Social Security Trust Fund is depleting at an alarming rate, and failure to implement immediate reforms endangers the ability of Americans to plan for their retirement with the options and certainty they deserve," ...

 From from ending the "depletion" of the Social Security trust funds, this plan would completely deplete them quickly, probably in less than ten years because it would quickly become obvious that there would not be enough money available to pay Social Security benefits for more than a few years. Continuing to pay FICA taxes would be pointless because there would be no chance of future benefit payments. This plan could only work if Social Security were already fully funded but the authors of this plan are claiming that Social Security cannot be trusted because it is not fully funded!

I have a modest plan of my own for those who want to opt out of Social Security. Everything stays the same as now until a person reaches full retirement age. Once an individual reaches that age they could take back all of the FICA taxes they ever paid plus a generous imputed interest rate as a lump sum. In return, they and all others who might be eligible on their Social Security number would be permanently ineligible for benefits under both Titles II and XVI of the Social Security Act. Yes, I know, it's unworkable because few other than those who expect to die soon would take the deal. Also, it wouldn't be fair to allow a man to deprive a despised former wife of benefits on his account, for instance. However, it 's conceivable that one could come up with ways of dealing with these and other related issues. My "plan" comes a lot closer to working than the plan put forward by these few Republicans. I wonder how many people would take this deal and how quickly most of them would become destitute and homeless.

Republicans Want Investigation But ALJs Approwing Fewer Claims

From the Salt Lake Tribune:

Rejected for federal disability benefits, unemployed workers who appealed to Judge David B. Daugherty in West Virginia last year had a change of luck: He approved every request he saw.

That record has spurred Utah Republican Sen. Orrin Hatch and Sen. Tom Coburn, R-Okla., ranking members of the Senate Finance Committee, to seek an investigation into whether unemployed Americans are cheating the system.

Lenient administrative judges may be viewing Social Security Disability Insurance payments “as an extension of unemployment benefits, rather than as a program to assist the truly disabled,” they told Social Security Inspector General Patrick O’Carroll Jr.

Allowing the unemployed to “exploit SSDI,” they wrote, would pass “enormous and crippling costs to taxpayers.” ...

[C]ontrary to the concerns raised by Hatch and Coburn, Social Security’s 1,500 administrative judges are approving fewer payments — the overall “allowance rates” are declining, [a Social Security spokesman] said.

Nationwide, judges approved 67 percent of cases they heard in fiscal 2010, according to a Salt Lake Tribune analysis of data posted on the Social Security website. So far in fiscal 2011, it has reached 64 percent.

We've Already Cut Benefits

From a press release:

Changes enacted by Congress in the 1980s to ensure the long-term solvency of Social Security will cut retirement benefits by 19 percent for workers born in 1960 and later, and more cuts could undermine the basic economic security of future retirees, a new report said today.

The report, released by the National Academy of Social Insurance, said modest benefit improvements and revenue increases are affordable, have broad public support and can close Social Security's long-term financing shortfall without more benefit cuts.

"Social Security benefits are already being cut more than many people realize," said Virginia Reno, NASI's vice president for income security and a co-author of the report. "Cutting benefits further is not necessary to preserve Social Security for future generations. Other alternatives merit consideration by policymakers."

NASI is a nonpartisan organization made up of the nation's leading experts on social insurance. 

As policymakers consider calls for further retirement benefit cuts, the NASI report said it is important to remember that the Social Security amendments passed by Congress in 1983 relied far more on benefit cuts than new revenue to balance the system's long-term finances. Those amendments changed Social Security by:

• Gradually raising the full-benefit retirement age from 65 to 67, a change that results in a 13.3 percent reduction in benefits.
• Taxing part of benefit income, which results in a 5.1 percent benefit cut.
• Delaying the cost-of-living adjustment by six months, resulting in a permanent 1.4 percent cut.

Social Security Laborforce Declines Rapidly

The Office of Personnel Management (OPM) has posted  updated figures for the number of employees at Social Security. Here they are with earlier numbers for comparison purposes.

•  March 2011 68,700
• December 2010 70,270
• June 2010 69,600
• March 2010 66,863
• December 2009 67,486
• September 2009 67,632
• June 2009 66,614
• March 2009 63,229
• December 2008 63,733
• September 2008 63,990
• September 2007 62,407
• September 2006 63,647
• September 2005 66,147
• September 2004 65,258
• September 2003 64,903
• September 2002 64,648
• September 2001 65,377
• September 2000 64,521
• September 1999 63,957
• September 1998 65,629

Notice the rapid decline since the beginning of the fiscal year. Republican foot-dragging in the last Congress and the election results have more than a little to do with this.