Disability And Unemployment

     I said that I would have more on the testimony at the House Social Security Subcommittee hearing on December 2. Let me finally start getting around to it. The testimony of Stephen Goss, Social Security's Chief Actuary,  included a statement that "Periodic economic recessions, as illustrated by the civilian unemployment rate in bright orange in the figure below, have been associated with temporary increases in disability incidence." I have copied his chart below. Click on it to see it full size.
     What strong an association do you see? It seems to me that the correlation is so weak as to be indistinguishable from ordinary fluctuations associated with small policy changes. Does anyone have the statistical background to do an analysis on this? Is this chi square? I don't know my statistics but surely some reader does.
     This is not a minor point. If the Social Security disability programs are little more than a form of unemployment benefit, perhaps they should be dramatically altered. That is the point of much of the  recent criticism of the Social Security disability programs. Is there substance to this claim? I don't see it. Do you? If you do, can you prove it statistically? If it can't be proven statistically, those trumpeting this view ought to shut up.

Challenges For Social Security Administration

Here are a couple of excerpts from Fiscal Year 2011 Inspector General Statement on the Social Security Administration’s Major Management and Performance Challenges, a report by Social Security's Office of Inspector General (OIG):

As the end of FY [fiscal year] 2011, SSA’s [Social Security Administration's] hearings backlog was approximately 787,000 cases—about 82,000 cases higher than the backlog at the end of FY 2010 and 62,000 higher than its goal for FY 2011. However, SSA continued to improve the timeliness of hearing decisions. The cumulative average processing time for hearings dropped to 360 days as of the end of FY 2011, compared to 426 days as of the end of FY 2010. ...


In FY 2011, DDS [Disability Determination Services] staffing decreased from 18,269 employees to 17,271 employees – a loss of 998 employees. With the hiring freeze, DDSs are not allowed to replace the lost staff. At the end of 2011, five States were still furloughing DDS employees. ...

Windfall Elimination Provision Problems

     From a recent audit report by Social Security's Office of Inspector General (OIG):

Our objective was to identify Old-Age, Survivors and Disability Insurance (OASDI) beneficiaries whose payments may have been affected by State or local government pensions. We limited our review to those beneficiaries who may have been receiving State or local government pensions and for whom the Social Security Administration (SSA) had not determined whether the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) applied. ...

Based on the results of our review, we estimate SSA overpaid about $623.8 million in OASDI benefits to approximately 24,900 beneficiaries because Agency staff did not apply WEP and GPO provisions to the OASDI benefits. If SSA does not take action to identify and correct these payment errors, we estimate it will pay about $869.9 million in future overpayments over the beneficiaries’ lifetimes ...

     This was based upon a small sample. I suppose these auditors know what they are doing but they are basing a projection of almost a billion dollars on 13 or so cases. To a layman, that seems questionable.

Arizona Governor Investigated For Social Security Fraud

     There is a report that Arizona governor Jan Brewer has been under investigation for Social Security fraud. Let me hasten to say that the report suggests nothing more to me than an overpayment. The situation is that Governor Brewer's son, Ron, is severely mentally ill. Ron's father died. Ron started receiving disabled adult child benefits on his father's account. Governor Brewer was made his representative payee. In 1989 Ron was found not guilty of kidnapping and sexual assault by reason of insanity. He was sent to a state psychiatric hospital. In 1995 the Social Security Act was changed to make individuals confined to a psychiatric hospital after being found not guilty by reason of insanity ineligible for benefits. This made Ron ineligible for Social Security benefits but Governor Brewer never informed Social Security. Ron was overpaid by $75,000.

     Anyone want to put Governor Brewer in jail for being unaware of an obscure change in the Social Security Act? I don't think so but an Arizona paper says that Social Security's Inspector General has investigated and has presented the case to the Department of Justice which seems uninterested in prosecuting. The newspaper seem obsessive about pursuing this matter.

     A few points here:

• Republicans in Congress are eager to investigate Social Security overpayments. They imply that overpayments are due to rampant fraud at Social Security. They want aggressive action to root out this fraud and to punish the wrongdoers. As this case shows, plenty of Social Security's overpayments are due to the complexity of the programs the agency is administering. These overpayments happen to Republicans as well as Democrats.
• Investigating routine overpayments as if they were fraud is a waste of money and would harass a lot of honorable people, many of them Republicans.
• When they write about mental illness, many Republicans like to put the term "mental illness" in quotation marks. I doubt that Governor Brewer does this. I would wish a chronically mentally ill child on people who do this but that would be too cruel a punishment.

Union Objects To Plan To Stop Policing Questionable Retirements

    From a press release issued by the American Federation of Government Employees (AFGE), the union which represents most Social Security employees:

The American Federation of Government Employees cried foul today on the Social Security Administration’s plans to rescind Social Security Rulings 66-18c and 91-1c, which allow the agency to question retirement allegations made by corporate officers and the self-employed.

“Development of questionable retirement allegations have always been an important part of what SSA [Social Security Administration] employees do to ensure that only qualified individuals receive Social Security benefits,” said Steve Kofahl, regional vice president of AFGE Council 220. “By rescinding this policy, SSA will be ignoring potential fraudulent activity by wealthy corporate offices and self-employed individuals who shift their income in order to receive SSA benefits.”

Quiz Answer

Question: Who was Social Security Commissioner on August 14, 1985, when Social Security celebrated its 50th birthday?

Possible Answers:

• John Svahn
• Martha McSteen
• Dorcas Hardy
• Louis Enoff

Correct answer: Martha McSteen was Acting Commissioner

Incident At Denver Office

     A local TV station in Denver is reporting on a report that a Social Security claimant at a local Social Security office was punched. Who did it and why are not reported.

Payment Slowdown

     Social Security has released updated stats on payments of fees to attorneys and others who represent Social Security claimants. See below. They shows a stunning decline in payments made since the beginning of the fiscal year, October 1.
     I am well aware that the Social Security Administration does not exist to provide me and other attorneys with a means of making a living. However, when you are looking at these fee payments you are looking at a near perfect analogue of payments to disability claimants. The attorneys get paid at the same time as the claimants. If payments are delayed to the attorneys, it is only because payments are delayed to the claimants. Can I make it any clearer? This is not just an attorney problem. It is a sign of a major problem brewing.

     Not only are October and November the lowest months for this calendar year; they are the two lowest months since December 2009! October and November are down 15% from the average for the preceding. fiscal year. Continue this over the entire fiscal year and it will be taking 1.8 months longer to get a claimant paid after a favorable decision or almost three months total.
     There is some reason to believe that things are not as bad as they seem. The October payments were affected by Social Security's bizarre decision to tell many of its employees that it would essentially ignore any work they did in the last month of September.  There were fewer favorable decisions issued in late September to be implemented in October. That was a bureaucratic foul up that will not be repeated.
     Unfortunately, there are other reasons to be pessimistic about coming months. There is virtually no overtime at Social Security now and there is virtually no hiring. With no hiring, Social Security's workforce is slowly shrinking, which means that the payment delays will slowly accelerate as the workforce slowly declines. But, it gets worse still. Social Security has an annual workload crunch in January of each year. This is caused by the number of people who retire at the end of each calendar year, as well as the mailing of forms asking retirees under full retirement age to predict their earnings for the coming year and the mailing of SSA-1099s. These two mailings come at the very end of December or in January. They generate a spike in calls to Social Security's 800 number in January of each year. Social Security has traditionally responded to the increased telephone calls in January by "spiking" the employees whose normal job is putting claimants on benefits, that is calling them off their regular duties to answer the phone (something they do poorly but that's another story). In the past, Social Security has tried to make up for the "spiking" with overtime. With no overtime, there's going to be two problems in January. The phones won't get answered and claimants who have been approved won't get put on benefits. Unless Social Security has a little money for overtime, not only will the payment numbers for January be brutal; the telephone situation is going to be awful as well.
     This is all a predictable consequence of Republican budget cutting. An indefinite continuation of this results in the Social Security Administration falling apart. Giving Social Security a slightly higher budget but directing that a huge proportion of the total budget get spent on program integrity, which seems to be the plan favored in Congress at the moment, does not help. It may make things worse.

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
July-11	40,451	$123,981,011.36
Aug-11	35,575	$109,778,785.74
Sept-11	36,159	$109,990,042.36
Oct-11	27,269	$79,526,149.33
Nov-11	32,677	$100,272,851.46