Social Security Benefits Cuts On The Way

TPM Media reports that a change to the chained CPI method of computing the Cost of Living Adjustment (COLA) for Social Security is being proposed by Democrats is the budget negotiations that are ongoing. This method would also be used in adjusting tax brackets which would also result in higher revenues but there would be twice as much in the way of benefit cuts as in tax increases. The Social Security COLA change would apply to current Social Security recipients.

If your eyes are glazing over at the thought of trying to understand the chained CPI method, look at the chart below (click on it to see it full size)and think about the fact that Social Security disability benefits recipients will be affected far more than retirees since they stay on benefits so much longer. There is an excellent chance this will become law in the next month.

Socia Security Employee Pleads Guilty To Fraud

From the Milwaukee Journal Sentinel:

A former U.S. Social Security Administration supervisor has pleaded guilty to taking Social Security benefits for someone who was ineligible because he was in prison.

Constance L. Dallas, 41, of Milwaukee had worked for the agency since 1988 and was most recently an operations supervisor at the SSA Teleservice Center in Milwaukee, according to the plea agreement.

On Friday, an SSA spokesman said Dallas resigned from the agency shortly before she pleaded guilty on May 31.

Dallas admitted to one count of defrauding the government by misusing SSA benefits.

Dallas admitted she took Supplemental Security Income funds meant for a man who, in fact, was incarcerated. The man was not named in the plea agreement, and there was no indication of the relationship between Dallas and the recipient.

According to the plea agreement:

Dallas was a designated payee for the man starting in October 2008, after he was released from prison on an unspecified felony. However, the man was not eligible to receive SSI benefits because he had received $15,000 from his recently deceased mother's life insurance.

Dallas knew about the insurance but became the man's designated payee anyway.

In January 2009, the man was locked up on a probation violation and remained behind bars until May 2010.

SSI does not allow prisoners to receive benefits. Dallas failed to notify the Social Security agency and continued to receive the checks.

Congressional Hearing On Outlier ALJs

A press release from two Congressional subcommittees (emphasis in original):

U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security, and U.S. Congressman Howard Coble (R-NC), Chairman of the House Committee on the Judiciary Subcommittee on Courts, Commercial and Administrative Law, announced today that the Subcommittees will hold a joint oversight hearing on the role of Administrative Law Judges (ALJs) at the Social Security Administration (SSA).  The hearing will take place on Monday, July 11, 2011 in 2141 Rayburn House Office Building, beginning at 3:30 p.m. ...

ALJ productivity, award and denial rates can vary significantly.  Based on data provided by the SSA, in FY 2010 74 percent of ALJs met the requested threshold of 500 decisions, however 15 ALJs handled more than 1000 cases and 98 ALJs handled fewer than 100 cases.  Also, nationally, ALJs awarded benefits in 61 percent of cases and denied them in 26 percent of cases and dismissed the requests in 14 percent of cases; however, 54 ALJs consistently awarded benefits in 85 percent or more of their cases and 2 ALJs denied them in at least 80 percent of their cases.  The Social Security Subcommittee has requested that the SSA Office of Inspector General evaluate the most significant cases of variance to see what factors may explain it, and whether SSA is effectively using its management authority to ensure adherence to SSA policies and procedures. That review is now underway.

In announcing the hearing, Chairman Sam Johnson (R-TX) stated, “No one should have to wait months or even years for their hearing decision because of the office or the ALJ their case is assigned to. That’s just plain wrong.  All of us have a responsibility to make things right for workers who paid for and deserve far better service.  At the same time, Social Security must be able to call bad decision-makers and under-performers to account.  I am committed to exploring measures that can be taken to improve productivity, quality, and agency oversight without compromising the right of claimants to a fair and impartial decision on their case.”

Mandatory Online Appeals Coming?

Social Security requested approval from the Office of Management and Budget (OMB) of the following item last Friday:

AGENCY: SSA	RIN: 0960-AH31
TITLE: Mandatory Use of Electronic Services (3707F)
STAGE: Final Rule	ECONOMICALLY SIGNIFICANT: No
RECEIVED DATE: 07/01/2011	LEGAL DEADLINE: None

Note that this is a "final rule" rather than a Notice of Proposed Rule-Making (NPRM). This means that if OMB approves it, there will be no further opportunity to comment before it becomes final. Normally, agencies have to go through the NPRM process to adopt rules. The NPRM process allows comments which the agency must consider. When was there an NPRM on "mandatory use of electronic services"? There wasn't one by that name but there was the "Revisions to Rules on Representation" NPRM in 2008 which would have recognized law firms, corporations and other entities as representing Social Security claimants. That included "mandatory use of electronic process." That NPRM drew many negative comments since the part concerning recognition of entities as representing Social Security claimants was widely considered to be confused and unworkable. That never seemed like a problem that would be impossible to sort out so everyone thought at the time that Social Security would just redo the NPRM to make it workable. However, nothing has happened since. No one at Social Security has given any explanation that I know of. It now appears that Social Security has decided to just go ahead with requiring attorneys and others representing Social Security claimants to file appeals -- and possibly claims -- online.

I wish that Social Security's electronic systems worked better. At the moment, it is not unusual to find it impossible to file an appeal online. The system simply will not allow it. I also have a general feeling of a lack of reciprocity. Social Security wants to solve a problem it has by forcing attorneys and others representing Social Security claimants to file appeals electronically but it walks away after it gets criticized for presenting an unworkable solution to a problem that those representing Social Security claimants have.

Happy Independence Day!

Unrealistic Views About Social Security Contributions

From a press release:

According to a newly released Stony Brook Poll conducted in association with Left Right Research, a Long Island based Marketing Research supplier, more than 81 percent of approximately 7,000 people surveyed believe that they had contributed enough to Social Security to support themselves in retirement, or more than they will receive during their lifetime. ...

When asked about how much they believed they had contributed to ... Social Security during their best paid year, more than 2 in 5 individuals surveyed were wrong by 50 percent or more regarding Social Security contributions ...

One of the reasons that many people believe that Social Security is a bad deal is that they believe that they have paid far more in FICA than they actually have. They think that if they had just invested this money for themselves that they would be wealthy. FICA is not high enough for that to be possibility.

Charlie Binder's Hat

Ever wondered about that cowboy hat that Charlie Binder wears in the TV ads for Binder and Binder? Binder and Binder's blog has an explanation.

McPaper Covers ALJ Disparities

From USA Today:

The growing number of people seeking Social Security disability benefits are finding vast disparities in how their claims are decided.

The gap is most obvious among the Social Security Administration's 1,400 administrative law judges (ALJs), who hear appeals from people who believe their initial application was unfairly denied. Some judges approve most claims they hear, while others approve almost none, federal data show. ...

Congress and the agency's inspector general have begun looking at the disparity. Yet both Social Security officials and advocates for the disabled say they are reluctant to interfere with the judges' independence.

"Congress has been pretty enthusiastic about the idea of ALJ independence," said Social Security Commissioner Michael Astrue, adding that only "a handful" of judges have approval ratings above or below average.