You Have To Watch The Stock Market To See If Your Social Security Check Will Keep Coming

Ezra Klein writing in his blog at the Washington Post about the efforts to extend the debt ceiling -- and keep the Social Security checks coming out on a regular basis:

It's pretty clear that if it was just John Boehner and Barack Obama in a room, they could come to a deal. If it was just the Senate that had to approve a bill, they could come to a deal -- perhaps even a big one. It's the House that's the problem. They rejected the $4 trillion deal the White House offered, suggesting they can't go big, and the Tea Party is whipping against the McConnell deal, which implies they can't go small. A lot of the dealmakers are, at this point, stymied. “We want to accommodate their needs,” Sen. Benjamin L. Cardin said of the House leaders. “We just don’t understand what their needs are.”

It's not clear they do, either. One common explanation for where we are in the talks is that we're waiting for the last minute. No deal struck before the last minute will be credible as the best deal Republicans could possibly get, because in this negotiation, time is leverage, and if the clock isn't one minute from midnight, that means there's leverage Republicans chose not to use. Until we hit that point, there's just not enough incentive for the House GOP to say "yes" to anything, not enough pressure to force them to say "yes" to anything, and there's an argument, popular among some conservatives, that it would in fact be a mistake to say "yes" to anything.

But what no one quite knows is what the House GOP will accept when the clock is one minute from midnight, or, in more pessimistic tellings, the Dow is 1,000 points below whatever it was at the day before. We're hearing talk that the "Big Deal" is being revived, but the bigger the deal, the tougher it is to pass quickly. And so if it is the case that we can't strike a deal until the markets are beginning to bottom out or the debt ceiling is about to cave in, it's a pretty good bet that we're not going to strike a big deal, and it's very hard to predict what sort of small deal the politics will permit at that point. Which is worrying. The political dynamics here imply a lot of uncertainty all the way to the end, but excess uncertainty is the one thing that could lead the market dynamics to turn sharply against us.

Got that? Worried that you won't get your Social Security check on August 3? Watch the stock market. Nothing will happen until the stock market plummets and maybe even that won't be enough to get House of Representatives Republicans to vote for a debt ceiling hike.

Senator Coburn Has A Plan For Social Security

Senator Tom Coburn (R-OK) has put forth a new proposal for cutting the federal deficits. It is by far the most ambitious proposal out there. The chances of this being adopted by this Congress are nil. My guess is that the chances of anything like this being adopted by a future Congress are virtually nil. However, I keep getting asked about it so here are its Social Security elements:

• Means test Social Security
• Increase full retirement age to 69
• Increase early retirement age to 64
• Switch to chained CPI method of computing cost of living adjustment (which slowly but significantly cuts Social Security benefits from what they would be under current law)
• Reduce spousal benefits from 50% of the Primary Insurance Amount to 33%
• Make continuing disability reviews the first priority in administering Social Security's disability benefits programs, ahead of adjudicating new claims for benefits
• Eliminate the medical improvement standard in continuing disability reviews
• Eliminate interim benefits for those who are appealing disability benefits terminations
• Remove the maximum collection amount for SSI overpayments
• Reduce SSI benefits by eliminating the $20 disregard
• Reduce SSI child's benefits for families with more than one child on benefits
• Eliminate the ability to file a new disability claim while another is pending on appeal
• Eliminate reconsideration (this would actually cost money)
• Close ALJ record one week prior to hearing
• Implement government representation at ALJ hearings (this one too would actually cost money since the evidence is that it does not affect the outcome in any significant way)
• Raise the category of "approaching advanced age" to at least 58-60
• Reduce disability benefits to the early retirement amount once a disability benefits recipient reaches early retirement age
• Allow Social Security disability applicants to use Ticket to Work while they are still applying for benefits
• Time limit Social Security disability benefits. After an unspecified length of time disability benefits recipients would have to reapply in order to stay on benefits, regardless of how sick they may be
• All disability benefits recipients for whom medical improvement is possible must have a "treatment plan" designed to return them to work
• Shift SSI management from Social Security to the states

Remember that I said that it appears to me that the chances of anything like this ever being adopted are virtually nil. 

I have to think that Coburn must either not be planning to run for re-election or that he feels that it is inconceivable that he could be seriously challenged when he runs for re-election.

The National Computer Center As Currently Planned May Not Be Needed?

I recently talked with Ephraim Feig, who used to be Social Security's Associate Chief Information Officer for Vision and Strategy. He was let go after working at the agency for only about a year and a half. Social Security also dramatically reorganized its Information Technology (IT) management shortly thereafter. Although Feig was happy to explain, I was at a disadvantage since I am a lawyer, not an IT expert.

I know more about how bureaucracies operate so I first concentrated on how it was that he came to leave Social Security. My understanding from Feig is that he and others in IT at Social Security were asked to meet with personnel at the Office of Management and Budget (OMB), which is part of the White House, and did so. Thereafter, Feig continued to be in contact with OMB. He talked with them about his vision for Social Security. Feig's superior, Frank Baitman, Social Security's Chief Information Officer (CIO) was aware of these contacts but the Commissioner may not have been aware. Feig does not profess to know exactly what happened to bring about the IT upheaval at Social Security but his contacts with OMB, which his supervisor, Social Security's CIO, was aware of, probably had something to do with it. Baitman, Feig's former boss, has also recently left Social Security.

Feig  was hired to develop vision and strategy. Social Security's planned National Computer Center was a major part of the vision and strategy for Social Security's IT future that was in place before Feig came to work at the agency. Feig disagreed with the National Computer Center, at least in the planned form, thinking it was overkill. He believes that because of the rapid development of computer hardware that mainframe computers would not be needed and that "commodity hardware" could handle Social Security's IT needs. Basically, the same process that puts more computing power in the smart phone in my pocket than I had in my desktop ten years ago has been happening in the datacenter world. However, Feig never talked with OMB about the planned National Computing Center, although the Commissioner may not have known this.

In what may be a not completely unrelated development,  the New York Times ran an article yesterday on plans to close 800 federal government data centers which are no longer considered necessary.

You may recall that just five months ago, Social Security was being questioned at a Congressional hearing, because it was not further along on the National Computer Center project. Neither Feig nor Baitman testified at that hearing but the man who, in effect, replaced Baitman, Kelly Croft, did testify. The House of Representatives had held another hearing on the same subject just a year before that.

One of Social Security's biggest IT problems is that it has many legacy systems written in COBOL, an antiquated computer language. It is virtually impossible to hire workers who already know COBOL. The Commissioner has talked frequently about the need to update from COBOL to modern computer languages. One of the major things that Feig was working on was planning this transition. Feig told me that Social Security has no existing plan that he is aware of to make this transition. Feig did acknowledge that Social Security is not the only large entity that still runs a lot of COBOL. Many banks still have major legacy systems running COBOL.

Feig is taking a break at the moment before considering his next career move.

By the way, you can see a video of Ephraim Feig talking about his vision while he was still working at Social Security.

Delay In Paying Back Benefits

I just heard today that a payment centers was holding up payment of back benefits to a client of mine because the back benefits were over $30,000 -- which is not an unusual amount  in disability cases that go to a hearing, much less those that go beyond -- because the client did not have direct deposit set up. They won't refuse to pay without a bank account but they do want to contact the client by telephone to see if there is a bank account they can make a deposit to. Since many people who lack a bank account also lack a telephone, this can be a problem. I have not heard of this before. I think it is new.

Retired ALJ Muirhead Passes

Retired Social Security Administrative Law Judge (ALJ) Jean Muirhead, who worked in Memphis, Falls Church and Nashville, has died at the age of 82. Before working at Social Security she served in the Mississippi Senate from 1968-1972. As a state Senator, she was a women's rights pioneer, authoring legislation allowing women to serve on juries in Mississippi and appointing the first girl to serve as a page in the Mississippi legislature.

Turnstiles At Social Security?

Social Security has posted a notice that it is interested in acquiring turnstile replacement parts.

I can't figure this out. The only turnstiles that I can remember seeing have been at sports arenas and subway systems. Why would Social Security have a turnstile?

The Right Wing Has A Dream

Wondering what the right wing has in mind for Social Security now that it is clear that privatization isn't politically feasible? The Heritage Foundation's plan is called "Saving the American Dream." This plan calls for "reforming" Social Security. The end result of these "reforms" is that Social Security would look almost identical to Supplemental Security Income (SSI) except that the retirement age would be 68 instead of 65.

Reuters Swings And Misses

Take a look at this Reuters Q and A on Social Security and the debt ceiling. At best, it is confusing. At worst, it is slanted. Why didn't they just read my Q and A on the same subject? As we approach August 3, accurate reporting on the debt ceiling and Social Security becomes more and more crucial.