Congressional Hearing On SSI Technology

     From a press release:

Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on Human Resources of the Committee on Ways and Means, announced today that the Subcommittee will hold a hearing on the use of technology to improve the administration of the Supplemental Security Income (SSI) program’s financial eligibility requirements.  The hearing will take place on Friday, July 20, 2012 in 1100 Longworth House Office Building, beginning at 9:30 A.M.

      Update: This hearing has been postponed to July 25 at 2:00 p.m.

Fighting To Keep Field Office From Closing

     Local officials are still trying hard to keep the Clinton, IA Social Security field office open.

     Just think of how many field offices get closed if the House Republican appropriation for the Social Security Administration becomes law. Now, that I think of it, maybe Social Security should be putting out a press release on this subject now.

Death Master File Remains A Headache For Social Security

     Social Security's Death Master File is drawing more media attention, now with an article about the use of the Death Master File for fraudulent purposes titled Social Security Selling Dead Peoples' Identities For $10 A Pop.      

     If you are just encountering this issue for the first time, please note that Social Security would strongly prefer that no one outside the agency have access to the Death Master File but the Freedom of Information Act (FOIA) requires them to allow this access. Amending the FOIA to keep the Death Master File secret would not be easy. There are plenty of legitimate uses of the Death Master File, some of them of significant importance in preventing fraud. There are no easy answers and the Social Security Administration is caught in the middle.

Private Equity And Binder and Binder

     In June of last year, I posted that Binder and Binder, the largest entity representing Social Security claimants, had been acquired in 2010, at least in part, by HIG, a private equity firm based in Miami, in a leveraged buyout.

     At the time I knew essentially nothing about private equity firms. Since then, the publicity about Mitt Romney's involvement in Bain Capital, another private equity firm, has educated me a tiny bit on private equity companies. It appears that Bain was, in the main, acquiring troubled companies and trying to turn them around for resale at a tidy profit. Sometimes they were unable to turn the companies around and the companies were closed -- usually with Bain making a tidy profit despite the closure. 

     I suppose that there are different private equity models than those employed by Bain. Bain's operations were surely a good deal more complex than what has been described in the press. I have no idea how HIG operates or what triggered this acquisition or what has happened since HIG acquired at least part of Binder and Binder. Still, the involvement of a private equity firm in representing Social Security claimants still seems awfully weird and somewhat troubling to me.

     I am somewhat amused by the thought of HIG's MBAs digging deep into the guts of the business of representing Social Security claimants and being confronted again and again with roadblocks imposed by the Social Security Act and Social Security's regulations and policies. I have trouble imagining them actually reading client files and attending client hearings to truly educate themselves about this messy business. I wonder what those MBAs thought about those Wall Street Journal articles about Binder and Binder. Did they think they didn't matter since few Social Security claimants read the Wall Street Journal? Did they realize the problems those articles could cause Binder and Binder with Administrative Law Judges and Social Security in general -- problems that would inevitably affect the company's bottom line?As I say, the involvement of a private equity company in this business just seems awfully weird to me.

CBO Swings And Misses

     The Congressional Budget Office has put out a report on Policy Options for the Social Security Disability Insurance Program. The report deals mostly with the fact that the Disability Insurance Trust Fund is predicted to run out of money in about four years and how this fact might be dealt with.
     The CBO has a great reputation but I don't think this is one of their better efforts. Somehow, they fail to mention the option put forward by Social Security's Chief Actuary of temporarily raising the Disability Insurance program’s share of the FICA payroll tax rate from 1.8 to 2.2 percent for 2012 through 2024 and to 2.0 percent for 2025 through 2029. You would think that they would be aware of this proposal but it isn't mentioned. They list the people they consulted in producing the report and the Office of the Chief Actuary is not mentioned, which I find amazing. That should have been where they started.

     Here are some of the ideas that did make it into the report:

• Permanently raise the FICA tax by 0.2% -- which couldn't possibly solve the Disability Trust Fund problem in the short term
• Reduce all disability benefits by 15%
• Reduce disability benefits dramatically for those age 53 and older, an idea which is discussed at length
• Eliminate Social Security disability benefits entirely for those 62 and older, an idea which is linked with reducing disability benefits for those 53 and older.  CBO needs a reality check. Louie Gohmert may be the craziest member of Congress but I don't think even Gohmert would endorse this!
• Increase the waiting period from 5 months to 12-- another sign of a need for a reality check
• Introducing government representation -- indicating that CBO is unaware that this was tried in the past and did not reduce the number of people approved for Social Security disability benefits. By the way, as I have pointed out before, I can only link to an interim report on the government representative project. The experiment was such an embarrassing failure that Social Security quietly terminated it without ever writing up a final report! And yet, this idea keeps turning up in Very Serious Reports like this CBO study.

     By the way, the CBO estimated the effects of increasing the age ranges in the grid regulations by two years. That would only reduce disability benefit payments by 0.5% by 2022. This doesn't sound like something even worth considering since it would generate a ton of controversy and wouldn't save much money.
     The more you look at this, the more it looks like Steve Goss, Social Security's Chief Actuary, has a good handle on what is economically and politically feasible, regardless of who wins the 2012 and 2014 elections. CBO ought to be talking with him.

House Appropriations Bill Would Decrease Social Security's Administrative Budget

     A press release on the Chairman's mark of the House Appropriations Committee's Labor-HHS appropriations bill that would fund Social Security's administrative budget indicates that the agency's budget for fiscal year (FY) 2013, which begins on October 1, 2012, would be $10.7 billion, $287 million below FY 2012. This bill is to be marked up in subcommittee tomorrow.

     The Senate Appropriations Committee has already reported out its version of the Labor-HHS Appropriations bill and it provides $11.736 billion for Social Security's administrative budget, which was described as a $290 million increase over FY 2012. 

      Note that the difference in the amounts appropriated between the two bills is in excess of $1 billion yet if you add the $287 million decrease of the House Bill to the $290 million increase of the Senate bill you get a total difference between the two bills of $577 million. This is an excellent example of how bizarre and confusing the appropriations process is. I have no idea what accounts for the other $500 million of difference between the two bills.

Right On Ladies! I Love Your Signs!

     From the Napa Valley Register:

About two dozen women and their children gathered on the front steps of Napa’s Social Security office Monday morning for a “nurse-in” to raise awareness of their right to breast-feed in public.

Participants were upset that last Tuesday a security officer had told a breast-feeding mom to step outside to feed her baby, said Cherissa Lowgren, a mother who said she witnessed this event.

“I wasn’t even aware of what she was doing,” Lowgren said of the woman named Maria, who had started feeding one of her two children after the girl became fussy.

“The guard tapped her on the shoulder and said, ‘You can’t do that here,’” Lowgren said. “She didn’t speak English, so she looked confused and at the same time, humiliated.” ...

A spokesman for the Social Security Administration, Deogracias Santos, said the security officer was likely unaware of the law protecting breast-feeding. Guards are not employed by the administration, but are contracted through the Department of Homeland Security.
Santos said the administration is using the “unfortunate event” as an opportunity to educate all employees about the law that allows public breast-feeding. He said no one at the administration was notified of the incident when it happened and the woman would have been allowed to nurse inside had it been mentioned.

You Know It's A Hoax But You Still Have To Take It Seriously

     The Redding, California Social Security field office was evacuated yesterday when an envelope was opened that contained a white powdery substance.
     Update: The building has been reopened. The powder wasn't dangerous.