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 a hearing on Social Security’s current revenue streams, proposed changes to those structures and the impact they would have on the program, beneficiaries, workers and the economy. The hearing will take place on Thursday, June 23, 2011 in B-318 Rayburn House Office Building, beginning at 1:30 p.m. ...
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced the OASDI payroll tax paid by the worker by 2 percentage points in calendar year 2011. The law also required the Secretary of the Treasury to make general revenue transfers to replace revenues temporarily diverted from the trust funds. ...
The Social Security actuaries have estimated a number of revenue generating proposals, including those proposed by the President’s Fiscal Commission which would require all newly hired state and local workers to participate in Social Security and increase the amount of earnings subject to Social Security payroll taxes by increasing the taxable wage base.
In announcing the hearing, Chairman Sam Johnson (R-TX) stated, “When Social Security first began, the payroll tax was only 2 percent – evenly split between employers and employees -- on the first $3,000 in wages. Today the payroll tax is 12.4% on the first $106,800 in wages. Yet despite the tax increases, Social Security is in trouble. Clearly tax hikes have not been a panacea. This hearing will provide an opportunity to learn more about Social Security revenues, options for change and their impacts.”
Jun 17, 2011
Congressional Hearing On Social Security Finances
From the Social Security Subcommittee of the House Ways and Means Committee:
Jun 16, 2011
A Message From The Chair
An e-mail I received recently:
A MESSAGE FROM THE CHAIROn June 13, the Social Security Administration (SSA) posted a position for a lead scientist for the Office of Vocational Resources Development to provide technical guidance for the development of the occupational information system to replace the Dictionary of Occupational Titles in SSA's disability programs. The OIDAP strongly supports SSA's effort in recruiting for this position. Please disseminate the link below for the position to all parties who may be interested in applying.
Mary Barros-Bailey, Ph.D
Chair
Occupational Information Development Advisory Panel
Jun 15, 2011
Shot Down
From TPM:
Two leading Republicans say they do not support President Obama's plan to broaden, deepen, and extend a payroll tax cut to stimulate the economy in the short-term.In a briefing with reporters in the Capitol Tuesday, the House and Senate GOP conference chairs said they're through with short-term stimulus measures, even if they take the form of tax cuts."Well they've tried this once, and it hasn't seemed to be working," said Rep. Jeb Hensarling (R-TX).His Senate counterpart, Lamar Alexander (R-TN) echoed this view.
Will Disability Claims Start Declining Next Year?
Social Security's Office of Inspector General (OIG) has issued a report on Social Security's Strategy for Reducing The Initial Claims Backlog. Basically, the report says that the prospects for achieving the agency's goals are poor because the agency expects to be badly underfunded over the near two years at least. The poor prospects are despite the agency's projection that the number of disability claims filed is about to drop dramatically. Does that sound realistic?. See below for the agency's chart:
Jun 14, 2011
Congressional Panel Hearing About Overpayment Also Hears About Budget
From the prepared statements at today's hearing before the House Ways and Means Committee on overpayments at Social Security:
... Our hard-working, dedicated employees have done their utmost to maintain the level of service that the American people expect and deserve. ... Inevitably though, as our workloads rose and our appropriated funds were less than our budget requests, our service delivery suffered. Despite a long string of increases in productivity, we could not keep up. Throughout most of the past decade, the amount of program integrity work we could handle dropped dramatically, even though we know that work saves the taxpayer about ten dollars for each dollar spent. The time a claimant waited for a disability hearing rose to an average of 800-900 days in many cities, and some claimants waited as long as 1,400 days. Waiting times for in-person and telephone service increased, as did the public’s and Congress’ frustration with us. ...
... For FY [fiscal year] 2009, SSA [Social Security Administration] reported improper payments totaling $8 billion, including underpayments and overpayments, the third-highest amount of improper payments in the year, behind the Department of Health and Human Services (DHHS) ($71.4 billion) and the Department of Labor ($17.5 billion). SSA’s Supplemental Security Income (SSI) program made $48.3 billion in total payments, including an estimated $4 billion in overpayments and an estimated $800 million in underpayments, resulting in a 10 percent improper payment rate; SSA projects it will reduce that rate to 9.2 percent in FY 2011 and to 8.7 percent by FY 2012. SSA’s Retirement, Survivors, and Disability Insurance (RSDI) program made $659.6 billion in total payments, including an estimated $2.5 billion in overpayments and an estimated $600 million in underpayments, for a 0.5 percent improper payment rate; SSA projects it will reduce that rate to 0.4 percent in FY 2011. Verification and local administration errors, such as a beneficiary’s unreported or undetected financial accounts and wages, cause the majority of SSA’s improper payments, according to the Agency. ...
In conclusion, the President has outlined an aggressive plan of action to reduce improper payments and improve payment accuracy throughout the Federal government. Thus far, agencies like SSA are working to improve their reporting of improper payments and identify overpayment and underpayment causes and solutions, even when budgets are limited and staff workloads are increasing.
... [W]e also found a limitation in SSA’s Recovery of Overpayments, Accounting and Reporting (ROAR) system. Used to track overpayments and collections, ROAR does not reflect debt due SSA past year 2049 so the total balance due the program is unknown, and likely larger than the agency is reporting....
The DDSs [Disability Determination Services] work in partnership with SSA to provide public service to individuals applying for disability benefits while also balancing stewardship commitments. ...The DDSs evaluate CDRs requiring medical review for SSA, ensuring that only those individuals who are eligible, continue to receive benefits. SSA estimates that every dollar spent on CDRs yields $10 in lifetime program savings. Unfortunately, budget constraints have forced a reduction in this integrity workload. The DDSs can also assist in curbing improper payments by identifying fraud in the disability application process. The detection and prevention of improper payments further enhances the integrity of the program. ...
DDS staffing is critical to the processing of all disability claims. Nationally, DDS examiner attrition fiscal year to date (FYTD) is 12.8%. SSA has imposed a hiring freeze on all DDSs due to funding limitations. The continued inability to hire in the DDSs will severely limit the ability to process initial and reconsideration cases and restrict any additional CDR work, resulting in significant backlogs nationally. ...
Eleven DDSs have an attrition rate for disability examiners over 20%.
Despite SSA’s enormous workloads and challenges, SSA’s FY 2011 appropriation for administrative funding through the Limitation on Administrative Expenses (LAE) account was below the FY 2010 enacted level and $275 million was rescinded from Carryover Information Technology (IT) funds. This funding level does not allow SSA to cover inflationary costs for fixed expenses, which has resulted in a hiring freeze, drastic reduction of overtime hours, and postponements of initiatives to improve efficiency – all of which will have major public service repercussions....
SSA already has an acute staff-to-workload imbalance and is over-extended in critical program areas as it struggles to keep up with rapidly increasing workloads and existing backlogs. Congress must give thoughtful consideration to future appropriations for SSA to ensure the preservation of this valued program. Properly funding SSA to process core workloads and invest in program integrity initiatives to improve payment accuracy will save taxpayer dollars and is fiscally prudent in reducing the federal budget and deficit.
Managers Worried About Administrative Budget
The National Council of Social Security Management Associations (NCSSMA), an organization of Social Security management personnel, has issued its June 2011 newsletter. NCSSMA is heavily focused upon Social Security's perilous administrative budget. One short quote from the newsletter describing the current budget situation: "We are 'walking on eggshells' now. It feels like we are being held together by tape and glue."
Jun 13, 2011
One Sentence
The Social Security Administration's "Update" contains this sentence: "The number of employees we have determines the amount of work we can complete."
Does that sound innocuous? Self-obvious? The last Commissioner of Social Security, Jo Anne Barnhart, would never have allowed such a sentence in a Social Security document. She promised that the magic fairy dust of her "plan" would make everything all better at Social Security regardless of the number of employees her agency had. She promised wonders from her "plan" but delayed and delayed announcing what her plan was. The delay was almost certainly because she had no more than vague ideas about a "plan." She probably also had an increasing realization that no "plan" would work without additional employees. She finally announced her "plan" shortly before she was to leave office, leaving it to her successor to make her "plan" work. Of course, her "plan" was unworkable and quickly abandoned. The whole thing deceived the naive, of which there are many.
This week is an opportunity to fully bury the Barnhart approach. We have a Congressional hearing coming up that will focus on the question of why Social Security keeps overpaying people. Undoubtedly, Social Security will be criticized. Social Security can respond by saying, in effect, "Thank you, Congress, for pointing out our errors. We will do better." Or Social Security can respond by saying, in effect, "Yes, we've known about these issues for years. We'd love to address them but we don't have enough personnel. We've been telling you this for years. We got a bigger budget in 2009 and 2010 but never enough to get these problems resolved. Now, our budget has gotten tighter. Get us a bigger budget and we'll take care of these problems. Otherwise, nothing's going to happen and it's not because we don't care." Which would be a more honest answer to the criticism? Which will Social Security give? I understand the need for diplomacy in dealing with Republican Congressmen who remain all too eager to believe that the amount of work which may be accomplished by a federal agency is independent of the number of employees that agency has but honesty is needed as well.
This week is an opportunity to fully bury the Barnhart approach. We have a Congressional hearing coming up that will focus on the question of why Social Security keeps overpaying people. Undoubtedly, Social Security will be criticized. Social Security can respond by saying, in effect, "Thank you, Congress, for pointing out our errors. We will do better." Or Social Security can respond by saying, in effect, "Yes, we've known about these issues for years. We'd love to address them but we don't have enough personnel. We've been telling you this for years. We got a bigger budget in 2009 and 2010 but never enough to get these problems resolved. Now, our budget has gotten tighter. Get us a bigger budget and we'll take care of these problems. Otherwise, nothing's going to happen and it's not because we don't care." Which would be a more honest answer to the criticism? Which will Social Security give? I understand the need for diplomacy in dealing with Republican Congressmen who remain all too eager to believe that the amount of work which may be accomplished by a federal agency is independent of the number of employees that agency has but honesty is needed as well.
Jun 12, 2011
Updated Fee Payment Numbers
Social Security has issued updated numbers on payments of fees to attorneys and others for representation of Social Security claimants:
Fee Payments | ||
|---|---|---|
| Month/Year | Volume | Amount |
Jan-11 | 34,467 | $113,459,847.04 |
Feb-11 | 33,305 | $107,796,771.38 |
Mar-11 | 34,885 | $112,463,768.46 |
Apr-11 | 48,033 | $153,893,755.37 |
May-11 | 36,479 | $115,159012.77 |
This shows a 2% reduction from the same period last year, a reduction this is certainly due not to fewer claims being approved but to more claims being paid much slower. It is taking claimants longer to get paid after a favorable decision on a disability claim.
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