Lowered Appropriations For Social Security? Shutdown Looming On October 1?

     The Labor-HHS appropriations bill, which includes the Social Security Administration, was set for House Appropriations subcommittee markup on July 26 and for full committee markup on August 2 but that was postponed due to the debt ceiling crisis. No doubt it will be rescheduled for the near future.

     Some time ago, the House Appropriations Committee announced subcommittee allocations, that is the total amount of each subcommittee appropriation. The Labor-HHS Subcommittee has been told to cut appropriations by 12% from FY 2011 and by 26% from the President's budget. If I understand correctly, one aspect of the debt ceiling bill that will finally pass later today is that it essentially enacts the budget limits for FY 2012 that had been reported out of the House Budget Committee, the limits that the House Appropriations Committee used in preparing its subcommittee allocations. What is unclear to me is the extent to which the appropriations process is bound by the budget. The top line number for the entire budget will soon be established but how far down does that go? Does that debt ceiling bill enact the allocation to the Labor-HHS appropriation or is it still possible to trade off between the Labor-HHS appropriation and the Defense Department appropriation, for instance? In any case, I am pretty sure that nothing has yet been settled about the allocations within the Labor-HHS budget, so there can be tradeoffs between Social Security and HHS, for instance. If this sounds like an amateurish attempt to explain a complicated situation, it is. Still, it's far more than you're likely to find anywhere else.

     Social Security's operating budget is not going to be cut by 12%. If that happened, Social Security might have to do something like shut down one day every week for an entire year. The agency's business just wouldn't get done. However, some cut may be inevitable. Furloughs are a distinct possibility. Increased backlogs are inevitable.

     Is there a risk of a government shutdown on October 1? You would think not since we will shortly have a budget cap established for the year. Even if there is still jockeying for position among agencies surely Congress can adopt a continuing resolution to keep everything going until things can be sorted out. Unfortunately, appropriations are also about policy. There are no policy issues of substance affecting Social Security's appropriation but there are major issues affecting appropriations for the Department of Health and Human Services (HHS). Social Security has the misfortune of being linked to HHS in the appropriations process. Republicans want to use appropriations to make it impossible to implement what they love to refer to as "Obamacare." This has the possibility of causing a shutdown at least in the parts of the government covered by the Labor-HHS appropriation and again I remind you that this includes Social Security. Will Republicans press things that far? In the wake of the debt ceiling mess, who knows? The Federal Aviation Administration is currently shut down over lesser issues.

Can You Trust The Answers You Get When You Call Social Security's 800 Number?

From Steve Vernon's CBS Money Watch blog:

Since I’ve been writing my posts on Social Security benefits, I’ve received emails and comments from several readers who complain that they can’t get a consistent or correct answer when they call the Social Security Administration. So is it true? Can you trust the answers you get when you call Social Security?

I’d be very careful relying on answers you hear when you’re on the phone with Social Security, particularly when it comes to complex situations. ...

The laws and regulations that surround Social Security and Medicare benefits can be extremely complex. Now mix this complexity with situations like these:

• Citizens might not ask questions accurately, or they may use certain terms incorrectly, at a time when you need absolute precision with the terms you use.

• Social Security representatives are expected to instantly respond to questions on a very complex subject, and occasionally they might not get it right. Or they might be tired at the end of the day — after all, they’re human, too.

• Social Security is not immune from cost-cutting initiatives, which can impact the skills and training of Social Security service representatives. ...

So here’s the bottom line for me: If the answer to a question about Social Security is really important to your planning, I’d call two or three times, just to compare the answers you get. Ask for citations on Social Security’s website or the internal administration manual that supports the answers. You might even ask to speak to a claims representative, just to be sure.

Vernon gives the example of asking an unusual question about "file and suspend." He got two different answers from Social Security. I am not at all sure that the answer that Vernon thinks is correct is actually right, although I would have to research it a bit more. Unlike Vernon -- and many Social Security employees -- I do not regard Social Security's POMS manual as infallible. Anyway, there are people reading this who would be able to give a definitive answer to Vernon's question, so help him out.

The bigger point is that no matter how good Social Security's online systems ever get to be, there will always be a need for a well-trained human element.

More Funds For Continuing Disability Reviews And SSI Redeterminations

 From the Congressional Budget Office (CBO) analysis of the debt ceiling bill to be voted upon tonight in Congress:

The bill would allow adjustments to the discretionary caps that would permit additional appropriations to:

• The Social Security Administration (SSA) to conduct continuing disability reviews of beneficiaries of the Disability Insurance (DI) and Supplemental Security Income (SSI) programs and redeterminations (of the eligibility criteria other than disability) of SSI beneficiaries ...

Social Security Administration [SSA]. The annual discretionary funding caps would be adjusted by the amount by which funds appropriated for the SSA program integrity activities for a year exceed $273 million; the maximum such adjustment would rise from $623 million for fiscal year 2012 to $1.309 billion a year for fiscal years 2017 through 2021. If the Congress were to appropriate the maximum amounts eligible for the cap adjustment related to SSA funding, spending for such activities would be about $4 billion above CBO’s baseline. Based on the $4 billion increase, CBO estimates that benefit outlays for DI, SSI, Medicare, and Medicaid would fall by nearly $12 billion over the 2012-2021 period (see Table 2). Additional savings would accrue after 2021. ...

Can Anyone Explain This To Me?

     From Jay Newton-Small writing at The Swampland blog at Time, writing about the debt ceiling agreement :

... [J]ust to ensure we don’t have another bruising government shutdown fight over cuts in September, the deal deems and passes the 2012 budget. Yes, that’s right, the old Gephardt Rule or Slaughter Solution, is back. What’s deem and pass? It’s a legislative trick that essentially means that Congress will consider the budget passed without ever actually having to vote on it.

     Neither the House nor the Senate Appropriations Committee has even started formally considering the Labor-HHS appropriations bill that includes Social Security, so how can we now rule out a government shutdown after September 30, 2011?

Debt Ceiling Deal Causes No Cuts For Social Security Until At Least 2013

     Nate Silver at the New York Times makes it clear. The debt ceiling deal will cause no cuts in the operating budget of Social Security or any other domestic agency until at least fiscal year 2013. The expiration of the  Bush tax cuts at the end of 2012 may prevent any cut in Social Security's operating budget.

     There is less to this debt ceiling agreement than meets the eye. There is little chance that the "super committee" that has been set up will recommend anything. Even if it does, there is even less chance the recommendation will be adopted. The failure to adopt something will have little immediate effect. Even down the road, the effect should be limited if President Obama is re-elected. If he is not re-elected, there will be problems but there would be problems for Social Security anyway.

     By the way, I really like the idea of using the super committee as a means of forcing Republicans in Congress to vote for enormous cuts in Social Security and Medicare.

So What Just Happened?

     You have heard about the debt ceiling agreement reached yesterday. Here's what you may not have heard:

• It is far from clear that this can pass the House of Representatives. Many Republicans members oppose increasing the debt ceiling. It will take Democratic votes but most Democrats in the House oppose the agreement. However, Wall Street appears to believe that this will pass since the market is up this morning. 
• If the bill does not pass, we are in default. Probably, the August 3 Social Security payments will go out on time -- probably -- but anything beyond that will be delayed.
• The bill would cap domestic spending for the next 10 years. This means that it will be difficult for Social Security to get a larger budget or even to hold onto the operating budget it already has.
• The bill, if passed, sets up a process whereby a special 12 member joint committee of members of both the House and the Senate will recommend measures in November to dramatically cut the budget. Congress will then vote on the recommendations on December 23. If the committee cannot agree or if Congress does not enact the recommendations, automatic budget reductions kick in. The reductions exclude Social Security and apparently exclude Supplemental Security Income (SSI) and other poverty programs. Medicare is excluded except for provider payments.

     Unless Republicans on the joint committee are willing to include significant tax increases, I have a hard time imagining what the joint committee could come up with that Democrats would perceive as better than what happens if nothing is done and the automatic budget reductions kick in. After all, if the alternative is dramatic cuts in Social Security, Medicare, Medicaid, SSI, Food Stamps and Unemployment Insurance Benefits, what is so terrible about percentage cuts?

     I have this vision of how this joint committee will work. Democrats will come up with one plan, Republicans will come up with another plan and the two sides will be unable to come to any agreement. The joint committee has a vote on the rival plans. They deadlock 6-6 on the Democratic plan. When the Republican plan comes up, one of the Democrats votes "present." This means that the vote is 6-5 in favor of the Republican plan and it goes forward. Republicans in Congress are then forced to vote to dramatically reduce Social Security and Medicare. The plan fails, the country is left with the automatic cuts, and Republicans have to explain their votes to dramatically cut Social Security and Medicare when the election comes up.

     The question I wonder about is what would be the percentage reduction in appropriations for agencies such as Social Security if nothing is passed by December 23? I cannot seem to find the answer. Whatever the reduction is, furloughs at Social Security would be inevitable.
     Update: I am doing some very rough calculations and come up with a reduction in Social Security's operating budget of about 4% if no further agreement is reached. I am basing this upon the fact that the current agreement would call for $1.2 trillion in cuts over ten years. Divided by ten that would be $120 billion in cuts in this year's budget but that would be further divided in two between defense and non-defense spending and the Bloomberg business calculator figures on domestic expenditures-- although that is based solely on August 2011 expected expenditures, so I multiplied that by twelve. This is rough at best and there's certainly a chance that I have erred in some way. I hope someone can give us a more accurate number soon. A 4% cut in Social Security's operating budget would definitely cause furloughs and significantly reduced service but it would not cause the collapse of the Social Security Administration, at least in the short run.
    I do not know what effect the planned National Computer Center would have on this. Suspending that project would certainly save money. Isn't there a vacant data center building in the D.C. area that Social Security could take over so it doesn't have to build from scratch? That would be quicker and cheaper. If that project goes forward despite what has happened, I think some explanations are in order.
     Further update: I am reading that the cuts in domestic spending will be delayed until 2013 -- after the Bush tax cuts are due to expire. If I understand correctly, that would save Social Security from any immediate cuts in its administrative budget. The end of the Bush tax cuts, which is certain to happen, at least in part, will help avoid cuts after 2013. If I am understanding this agreement correctly, there will be huge pressure on Republicans to agree to tax increases and little pressure on Democrats to agree to anything.

New POMS On "Expedited Vocational Assessment"

Social Security has published some changes to its Program Operations Manual Series (POMS) that may explain the proposed regulatory changes it recently sent over to the Office of Management and Budget (OMB) for approval. The POMS change has the title, "Expedited Vocational Assessment at Steps 4 and 5 of Sequential Evaluation." The proposed change sent over to OMB has the title, "Expedited Vocational Assessment Under the Sequential Evaluation Process" so it sounds like these are the same thing. Why is Social Security already implementing a rule when it just asked OMB to approve a proposed rule?

Emergency Message On New Claims While Appeal Pending Does Not Help

Social Security has issued a new Emergency Message (EM) on the new Ruling which seeks to prevent a claimant from filing a new claim while an old claim is pending on appeal. The EM does not expand upon the Ruling in any meaningful way. It does not even address the question of what to do about cases where a new claim and an appeal are both already pending.