Is This No More Than A Minor Technical Change?

From today's Federal Register:

We propose to give adjudicators the discretion to proceed to the fifth step of the sequential evaluation process for assessing disability when we have insufficient information about a claimant's past relevant work history to make the findings required for step 4. If an adjudicator finds at step 5 that a claimant may be unable to adjust to other work existing in the national economy, the adjudicator would return to the fourth step to develop the claimant's work history and make a finding about whether the claimant can perform his or her past relevant work. This proposed new process would not disadvantage any claimant or change the ultimate conclusion about whether a claimant is disabled, but it would promote administrative efficiency and help us make more timely disability determinations and decisions.

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A Blow To Claimants Awaiting A Social Security Hearing

     While there has been a good deal of improvement in the backlog of Social Security claimants awaiting a hearing before an Administrative Law Judge (ALJ), we should not think that the problem has been resolved. Claimants in places like Columbus, Dayton, Cleveland and Buffalo are still waiting for 17 months on average. Most claimants are still waiting almost a year.

     The lack of adequate administrative funding for Social Security may soon start to make these backlogs worse. Social Security ALJs have always been helped at hearings by personnel who work in the hearing room, taking care of a number of functions, such as operating the recording equipment. In years past, this was done by some regular hearing office employees as part of their job duties..Social Security began contracting out this work some years ago. "Hearing reporters" paid by the case replaced regular Social Security personnel. This freed up regular Social Security employees to do other vital work.

     I heard this past week that the two Social Security hearing offices that my firm deals with most often, Raleigh and Fayetteville, NC are doing away with the hearing reporters for hearings held at the main hearing office. I was sorry to hear this since the hearing reporters I know do a fantastic job. I hate to see them lose their jobs. The bigger problem is that they will be replaced by regular hearing office personnel. This would be satisfactory if Social Security were hiring more personnel to take up the slack but I know that is not going to happen.

     This amounts to a cut in staffing at these two hearing offices. I cannot say exactly what the percentage cut in staffing will be. Perhaps, a reader can tell us what the Social Security Administration is expecting. I will give a ballpark figure that this amounts to a 5% cut in staffing but that is no more than a somewhat informed guess. I also cannot say how widespread this change will be. There are reports that this is only being done on a pilot basis but the fact that two hearing offices in one state are affected suggests that this may be a widespread change.

     This will certainly cause bottlenecks and increase backlogs at hearing offices wherever it is implemented. This is not happening because Social Security management wants to create bottlenecks or increase backlogs but because the agency is facing a serious lack of funding.

September 11, 2001

A Rare Thing For Social Security: A New Idea -- And AARP Likes It

From Jed Graham, writing at Investors.com:

It’s not every day, one can safely assume, that AARP’s chief policy guru John Rother offers supportive words about a specific approach for cutting Social Security benefits.

So it was to my great surprise that I received an email from Rother recently with relative praise for a new approach to Social Security reform called Old-Age Risk-Sharing that has flown under the radar of policymakers....

Of all the options, reducing COLAs [Cost of Living Adjustments] is among the worst approaches because it could make retirement at 62 look like a better financial decision than it really is — before the Social Security safety net is gradually unwound by inflation over the next few decades in retirement. 

Here is a brief case for a new approach that works in the opposite way — providing the biggest cut, though in a progressive way, in the first year of retirement in order to avoid any benefit cuts in very old age...

[I]in Old-Age Risk-Sharing, ... the steepest benefit cuts would come in the first year of retirement; the cuts would be progressively smaller for lower earners; and they would gradually unwind over 20 years to provide robust support for retirees of all income levels in very old age, when almost everyone will depend on it.

New Ruling Coming Out On Monday

Social Security has a new Ruling coming out on Monday concerning disability determination in younger adults. It's very long.

Here are a couple of excerpts (footnote omitted):

If a young adult has a substantial loss of one or more of the basic mental demands of competitive, remunerative, unskilled work, the occupational base will be significantly eroded, despite vocational factors that we would ordinarily consider favorable (for example, young age, college education, and skilled work experience).The basic mental demands of competitive, remunerative, unskilled work include the
abilities to:

• Understand, remember, and carry out instructions;
• Make simple work-related judgments typically required for unskilled work;
• Respond appropriately to supervision, coworkers, and work situations; and
• Deal with changes in a routine work setting. ...

[A] child’s impairment(s) that met or medically equaled a part B listing [as a child] will often meet or medically equal a part A listing at age 18 unless the impairment(s) has medically improved.

FICA Tax Cuts Are Centerpiece Of Obama's Plan

From a New York Times report on the President's speech to Congress last night:

The centerpiece of the bill [proposed by the President], known as the American Jobs Act, is an extension and expansion of the cut in payroll taxes [the FICA tax that funds Social Security payments], worth $240 billion, under which the tax paid by employees would be cut in half through 2012. Smaller businesses would also get a cut in their payroll taxes, as well as a tax holiday for hiring new employees.

What Is The Problem?

The Subcommittee markup of the appropriations bill that covers Social Security has been postponed once again. It had been scheduled for 9:30 this morning. The new federal fiscal year begins on October 2, which is only 22 days away.