Will The August Social Security Checks Come Out On Time?

Read this detailed report from the Los Angeles Times on how the debt ceiling talks broke down and tell me that you're still optimistic that the debt ceiling will be raised in time to prevent delays in issuing Social Social checks. I will grant that I have said in the past that we should watch the stock market to see how serious the threat is and the stock market may have been a bit nervous but there has been no sign of collapse.  It's hard for me to believe that anything other than the rapid collapse of financial markets will bring about a resolution of this problem.

By the way, notice that Republicans wanted to delay the announcement that they were withdrawing from talks with the White House until after the stock market had closed for the week. We'll have to watch to see what happens on Monday.

No Security Guard Involved In Feig Firing

When Commissioner Astrue fired Martin Gerry from his high level position at Social Security, Gerry was escorted from the building by a security guard. Also, his computer was seized and his office lock changed. I don't know what happened to Ephraim Feig's computer or office lock but he tells me that there was no security guard involved in his departure. The firing came while he was out of the office. When he returned days later he was allowed back into the building and spent about an hour talking with human resources before leaving.

Commissioner's Message: Field Office Hours To Be Reduced -- Policy Changes Coming

A Message To All SSA and DDS Employees

Subject:  New Social Security Field Office Hours

Given the tight budget situation, we must continue to make tough choices.  The latest decision is that, beginning August 15, 2011, we will close Social Security field offices to the public 30 minutes early each day.  For example, a field office that is usually open to the public Monday through Friday from 9am to 4pm will now close daily at 3:30 pm.

Reducing hours will allow field office employees, who will continue to work their regular hours, to complete interviews without using overtime.  That's essential because Congress provided us with nearly $1 billion less than the President requested for our budget this fiscal year, which makes it very hard to provide the amount of overtime that our usual business process requires.  

Field offices have lost nearly 1,600 workers over the past nine months, and we cannot afford to replace that staff. As a small measure to help deal with those losses, we will close field offices to the public on Friday, November 25, 2011.  Field office employees who work on that day will use the day for backlog reduction.  As we try to adapt to these difficult fiscal times, we need to remind the public that they can find many services and get up-to-date information online or via our 800 number.

Soon I will be announcing policy changes that will allow us to work more efficiently.  Please know that we are doing what we can to help you during these difficult times. 

Michael J. Astrue
Commissioner

Update: And Social Security has issued a press release saying the same thing.

As Bad As Delayed Social Security Checks Would Be, There Are Even Worse Things Threatened

I have no idea where we are going to end up with the debt ceiling negotiations. I doubt that anyone feels confident about what will happen. You can read about the current confusing state of negotiations. 

I have a bad feeling that this is all going to on Monday August 2 amid bitter recriminations and that the country will be plunged into a crisis with delays in Social Security checks, and that would be terrible, being not even the most urgent aspect. We would be looking at an incredibly fast moving economic crisis with a government paralyzed by Republicans in the House of Representatives whose deeply held philosophical beliefs would prevent any effective action to deal with the crisis.

A Little Light On LTD Carriers And The Companies They Hire To Represent Social Security Claimants

See the decision in Kisor v. Advantage 2000 Consultants, No. 10-1045-WEB (D. Kan. June 30, 2011), concerning a non-attorney group (Advantage 2000) hired by an administrator of a long term disability insurance (LTD) carrier (CIGNA) to represent a disabled person before Social Security and also to collect money from that disabled person if he was approved for disability benefits by Social Security. The Plaintiff's case was based upon provisions of the Kansas Consumer Protection Act. The Court held that the lawsuit was barred by federal pre-emption but that the Plaintiff could amend his complaint.  It is unclear what the effect of that amendment would be.

There is some interesting information in the order about the relationship between the insurer, CIGNA and Advantage 2000:

CIGNA pays A2K a flat fee for its social security representation services, and a contingency fee equal to an undisclosed percentage of the actual dollar amount repaid by A2K’s Social Security clients to CIGNA as a result of A2K’s COR services. A2K and CIGNA agreed that A2K would not disclose to its Social Security clients any information about how A2K is paid. ...

A2K’s Benefit Coordinator bonus program (“Bonus Program”) pays commissions to A2 Benefit Coordinators based upon the recovery of money from A2K’s Social Security clients for A2K’s LTD clients.

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.