Why Isn't This Being Told To The Public?

From Josh Marshall writing at TPM:

... If Hill Republicans will not allow the government to continue borrowing money beyond the current statutory debt limit, I think there's probably a decent constitutional argument that the president must shut down parts of the government and many government payments before defaulting on the country's debt obligations [It's more than decent. It's unavoidable.] .... [I]f you don't borrow more money you have to shut down vast amounts of federal outlays. And the most logical places to start are with Social Security payments and Medicare reimbursements. Stuff like cutting Social Security checks in half starting the following week.

I think it's fair to say that there's no way to do it [handling maxing out the federal government's ability to borrow] without immediate and huge cuts to entitlements and the military. Discretionary spending just isn't a big enough piece of the pie. So why the adamant refusal to put this in front of the public? It seems quite clear to me that if what was coming in early August was an immediate 50% cut in Social Security payments and/or a similar cut in salaries to members of the military and a lot else that the tenor of this whole conversation would be quite different.

House Hearing On Social Security Administrative Law Judges

Two Subcommittees of the House of Representatives held a hearing today on the role of Social Security Administrative Law Judges (ALJs). Commissioner Astrue was the main witness. Some points I caught:

• Too much political pointmaking by members of Congress on both sides but it is particularly annoying to hear a Republican member defend Social Security's operating budget for this fiscal year by saying the President signed it!
• No one beat up on ALJs
• No ALJs mentioned by name
• 58 ALJs have been discliplined while Astrue has been Commissioner
• Social Security may take disciplinary action against ALJs for low production.
• Astrue talking about the lack of significant additional salary for supervisory ALJs: "There's a lot of heartache in managing lawyers."
• Social Security was close to furloughs in April 2011.
• Astrue thinks it may be realistic to eliminate reconsideration in a few years.
• Astrue thinks the number of District Court remands has something to do with the use of Magistrate Judges.

I understand the hearing was on CSPAN-3. It will probably be replayed tonight.

I have no idea why the Subcommittees has not posted the written statements online. One member quoted some strong language in Astrue's written statement about the need for the President's recommended budget for fiscal year 2012. Everyone concerned for the future of the Social Security Administration should be pleased with this.

What Happens At Social Security -- And Elsewhere -- If The Debt Ceiling Is Not Raised?

Most people must believe that if the debt ceiling is not raised that the U.S. will default on its bonds. That is not at all how things are going to go down if the debt ceiling is not raised. There is a constitutional prohibition on the U.S. government defaulting on its bonds. No, it is other U.S. obligations -- like Social Security -- that will be defaulted on. From the Bipartisan Policy Center:

An analysis released today by the Bipartisan Policy Center (BPC) confirms that at some point in early August, unless the debt ceiling is raised, the federal government will be unable to meet all of its spending obligations. BPC’s analysis also shows that, after that date, federal spending would be reduced by as much as 44% for the remainder of August, as the Treasury prioritizes payments to remain under the debt limit. ...

Under a system of prioritization, to pick one illustration, Treasury could exhaust all inflows for the month of August by paying only six major items: interest on our existing debt, Medicare, Medicaid, Social Security, unemployment insurance and defense contracts. Without cutting from these items, there would be no money to fund entire U.S. departments, such as Justice, Labor, and Commerce. There would also not be funds to pay for veterans’ benefits, IRS refunds, military active duty pay, federal salaries and benefits, special education programs, Pell Grants for college students or food and rent payments for the poor. ...

Moreover, BPC’s research shows that the day-to-day outlook would be even more harrowing. For example, if the cash shortage begins on August 3, as projected by Treasury, the government could find itself unable to make a $23 billion Social Security payment that has to go out that day.

The bottom line is simple. If the debt ceiling is not raised by August 3, Social Security payments due to be made on that date will not be made or, at least, not made in full. They may be paid later. Social Security payments due thereafter may also be delayed or not paid in full. Paying Social Security benefits, even on a delayed basis, will make it impossible to pay many other federal obligations. The President will be forced to make impossible decisions between paying Social Security benefits, soldiers in the field, Department of Defense vendors, Medicare, Medicaid,  VA benefits, Food Stamps, the costs of VA hospitals, air traffic controllers, keeping the CIA running, grants from the Department of Education that keep schools and colleges open, etc. There would be no good choices. No one would escape the pain, including bond holders since even without a bond default, bond prices would plummet. And, in case what I am describing does not sound serious enough, there would also be an enormous risk that the U.S. economy would be plunged into a 1930s style depression.

Small Town Newspaper Produces First Rate Story: Serious Problems With Death Master File

From the Kitsap (WA) Sun:

Joyce Simpson, 87, was "scared to death" when her Social Security and pension checks stopped showing up in the mail. ...
It turns out the federal government had mistakenly declared Simpson dead in 1997. Her name was added to a list of deceased people in the United States maintained by the U.S. Social Security Administration called the "Death Master File." ...
The problem is it contains names of people like Simpson, who are very much alive. Social Security spokesman Mark Hinkle admitted that one in every 200 entries to the Death Master Files is false because of "inadvertent keying errors" by federal workers. ...
Something similar happened to Helen Sturdivant of Bremerton, who also noticed the problem when her Social Security checks stopped.
She'd been declared dead in 1997, she discovered. ...
Simpson and Sturdivant are among 21 people in Kitsap and Mason counties who wrongly appeared in the Death Master File. In a sample of the years 1998, 2008 and 2011, Scripps Howard News Service identified nearly 32,000 names nationally that were wrongly put on the list. Those names, including those of the 21 local people, later were removed after the Social Security Administration identified the mistake.

Yes, it has been no secret that the Death Master File contains inaccuracies but I do not think that the extent of the inaccuracies has been known before. Widespread use of this error -illed database outside Social Security makes this a serious matter.

Update: The Kitsap newspaper is part of the Scripps chain. A similar story is many, if not all Scripps newspapers, each one highlighting the effects upon local people.

Updated Fee Payment Numbers

Updated numbers on payments of fees to attorneys and others for representing 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
June-11	33,568	$104,782,743.07

The Details?

From Dow Jones:

Minority Leader Nancy Pelosi (D., Calif.) reassured angry House Democrats that a proposal to change a key measure of inflation linked to Social Security was not likely to be part of a debt ceiling deal, lawmakers said Friday. ...
"She basically reassured the group that there's no way it's going to happen," said Rep. Barney Frank (D., Mass.), following a Friday afternoon meeting of House Democrats in the basement of the Capitol building. "After this, I do not think reducing the CPI in any way is a viable option."

"The Dirty Rotten Devil's In The Dirty Rotten Details"

From TPM Media:

House Minority Leader Nancy Pelosi (D-CA) has made one thing clear, publicly and behind the scenes, in high-stakes debt discussions: Her caucus won't support Social Security benefit cuts, and Republicans better listen closely, because they need Democratic votes to increase the borrowing limit.

But she may be powerless to stop one increasingly discussed plan to lower Social Security's cost of living adjustment, which would escalate cuts to the program over time. Though in public, and more frequently through surrogates, she agitates against the change, it's an idea that has bipartisan support -- and so a likely candidate in any final debt deal....

"There's concern in my caucus about what would happen with CPI, some think that it's a benefit cut, others do not," she admitted. "The dirty rotten devil's in the dirty rotten details."

Report From House Social Security Subcommittee Hearing

From Dow Jones:

Lawmakers and witnesses diverged over the implications of switching how the Consumer Price Index is calculated at a Friday hearing of the House Ways and Means Social Security panel. Some experts argued that changing to a different indexing method could be seen as a technical fix that more accurately reflects the true rate of inflation, while others stressed that such a move could disproportionately burden women and those who depend the most on Social Security.

Switching to a "chained CPI," which takes into account consumers' changes in behavior when prices rise, and translates into a slower rate of inflation, has been floated as a potential way to help close the federal deficit in the negotiations over increasing the $14.29 trillion debt ceiling.