Wall Street Journal Article On Yesterday's Hearing

Damien Paletta has an article in the Wall Street Journal on yesterday's Congressional hearing. Here are some excerpts:

Social Security Administration Commissioner Michael Astrue said judges in his agency who award disability benefits more than 85% of the time cost taxpayers roughly $1 billion a year. ...

"I find it interesting that there is so much wringing of the hands about a judge who pays almost 100% of his cases, as if the agency didn't know about it, as if the agency wasn't complicit in it, as if the agency didn't encourage it," said Marilyn Zahm, a Social Security judge in Buffalo who is an executive vice president of the judge's union, speaking in an interview after the hearing....

The hearing included several tense exchanges between Mr. Astrue and lawmakers, with Democrats frustrated the agency hasn't done more to reduce a backlog of applicants and Republicans questioning abuse in the system.

Mr. Astrue, at one point, lashed out at lawmakers for threatening to cut his agency's funding, which he said will make it harder for judges to move more cases and erase a large backlog of pending cases.

"We're on the verge of getting there. And if we miss it, it's not because I have failed," Mr. Astrue said. "It's because Congress chose to fail, and it's up to all of you."

In watching this over the internet none of the exchanges between Astrue and the Congressmen seemed tense. I do not remember Astrue saying anything about ALJs costing Social Security a billion dollars a year. Even if he did, Astrue's expressed attitude towards ALJs was nothing like what is implied in the first sentence of this article. We all tend to hear what we want to hear or expect to hear. There may be some element of that in Paletta's article.

I am glad that Paletta quoted Astrue on the possibility of failing to bring down the backlog. There is no distortion in that quote. There clearly was passion in Astrue's voice when he spoke. To me that was the only striking moment in a rather mundane Congressional hearing.

Commissioner Astrue's Testimony Yesterday: Budget, ALJ Hiring, ALJ Discipline, Limiting ALJs To 1,200 Hearings Per Year

Some excerpts from Commissioner Astrue's written testimony at a Congressional hearing yesterday:

... [T]o continue our progress [in reducing the hearing backlog], we need Congress’ help. We must receive full funding of the FY 2012 President’s Budget request. ... Unless Congress provides us with the President’s Budget, we will not be able to meet Congress’ goal and our commitment to the American public to eliminate the hearing backlog in 2013 although our margin for error is slim. The gains that we achieved will vanish. The additional funding we received in recent years was critical to achieving our success to date. ...

Budget permitting, we would like to hire 125 ALJs in September of FY 2012 [Not September 2011 but September 2012 and that is if the budget permits. I would regard that as most unlikely] ...

The Administration [Note the use of "the Administration" which appears to indicate that he is talking for the Obama Administration.]  is open to exploring options for addressing ["the small number of judges who underperform or do not apply the statute fairly"] , if it is done in consultation with ALJs, other Federal agencies, and other stakeholders and mindful of the importance of preserving the decisional independence of these judges. Areas to explore could include examining statistical evidence showing very significant variation between the decisions of a small number of ALJs and the decisions of other agency ALJs (whether in the direction of approving or denying claims) and peer review by other ALJs.[This paragraph sounds like something that was negotiated or at least something that was gone over very, very carefully by several people.] ...

We have taken affirmative steps to address egregiously underperforming ALJs. With the promulgation of our “time and place” regulation, we have eliminated arguable ambiguities regarding our authority to manage scheduling, and we have taken steps to ensure that judges are deciding neither too few nor too many cases. By management instruction, we are limiting assignment of new cases to no more than 1,200 cases annually.[This will affect only one or two ALJs with the most prominent one affected being Fred McGrath of Atlanta.]

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."