What Is Going On In Pittsburgh?

    Just a few days ago, the Pittsburgh Post-Gazette ran a bizarre op ed piece that baldly stated that all one had to do to get on Social Security disability benefits was to go to one psychiatric exam and feign mental illness, which is simply untrue. Now the Pittsburgh Tribune-Review is running this article:

Few of the petitioners who appear before Administrative Law Judge Manny Smith hear the word “no.”

Smith grants benefits in close to 80 percent of the Social Security disability claims he hears, nearly twice as often as other administrative judges in Western Pennsylvania and much higher than the national average of 58 percent, federal data show. ...

“If we don’t do something, in four years it won’t be able to pay full benefits,” said Sarah Swinehart, a spokeswoman for the House Ways and Means Committee. Its Social Security Subcommittee has held five hearings on disability insurance over the past year. ...

“The whole procedure may have made sense 20 years ago, when most people were honest and didn’t know about” the disability program, said James Bukes of Mt. Lebanon, who retired in January after two decades as an administrative law judge. “But now it’s become such a big business.” ...

Legislation to change the system might emerge this fall. Lawmakers want to ensure Social Security keeps paying those who need help while safeguarding taxpayer dollars, Swinehart said. ...

The rise in disability applications to 2.88 million in 2011 stems from a half-dozen sources, including the economic downturn and a surge in legal representation for applicants, Pierce said. He said lawyers earn about $1.4 billion a year by representing disability appellants, about 85 percent of whom have private counsel. ...

The Social Security Administration has moved toward more standardized decision-making, said Assistant Deputy Commissioner Jim Borland. He said the number of judges who allow nearly all claims has fallen by more than half since 2007.

“We have created new tools to focus on quality,” Borland said. “Each quarter, we train our adjudicators on the most complex, error-prone provisions of law and regulation.” ...

[Richard J.] Pierce [a George Washington University law professor who has been harshly critical of ALJs] has suggested the government drop law judges from the process. He estimates their salaries and benefits cost more than $2 billion a year.

      A few points:

• The article does not once mention the aging of the baby boomer generation as a reason for the problems of the disability trust fund even though no one with any knowledge of the situation would deny that this is far and away the most important reason.
• The House Social Security Subcommittee may report out legislation in the next month to do something about Social Security ALJs.
• A Social Security Assistant Deputy Commissioner is bragging that the agency has found a way to "train" ALJs so that they allow fewer disability claims.
• Professor Richard Pierce thinks that Social Security's ALJs cost $2 billion a year. Since there are about 1,500 ALJs at Social Security, Pierce must think that pay and benefits for each ALJ are over $1.3 million a year. The real figure is less than one-tenth of that.
• The Pittsburgh Tribune-Review is owned by Richard Mellon Scaife. Scaife is best known for promoting bizarre ring wing conspiracy theories about President Bill Clinton, including accusing Clinton of murder and drug smuggling. In a bizarre twist, Scaife later endorsed Hillary Clinton when she was running for President. The Tribune-Review and Post-Gazette newspapers are bitter rivals.

Password Delays

     I and others have been experiencing significant and annoying delays in the transmission of the passwords necessary to obtain access to our clients' files through Social Security's Electronic Records Express system. Does anyone know what's going on?

     By the way, the whole second password as a text message process seems pointless to me. You don't need the second password to change the cellphone to which the text message is sent. If I were up to no good and had the user name and first password, I would just change the cellphone number, which defeats the point of the second password. How does the second password via text message add anything other than delay and annoyance to the system?

Gloom And Doom From The Associated Press

      From the Associated Press:

As millions of baby boomers flood Social Security with applications for benefits, the program's $2.7 trillion surplus is starting to look small. ...

Since 2010, Social Security has been paying out more in benefits than it collects in taxes, adding to the urgency for Congress to address the program's long-term finances.

"To me, urgent doesn't begin to describe it," said Chuck Blahous, one of the public trustees who oversee Social Security. "I would say we're somewhere between critical and too late to deal with it." ...

Social Security Commissioner Michael J. Astrue said he is frustrated that little has been done to solve a problem that is only going to get harder to fix as 2033 approaches. If changes are done soon, they can be spread out over time, perhaps sparing current retirees while giving workers time to increase their savings.

"It won't be easy but it's just going to get harder the longer they wait," Astrue said.  ...

     The article does not mention the fact that lifting the cap on earnings subject to the F.I.C.A. tax would solve the problem. It sounds as if Charles Blahous regards that idea as being unworthy of any consideration.

We're Frugal

     From the Associated Press:

Compared with most public pension systems in Europe, Social Security is downright frugal.

On average, European pensions are more much generous than Social Security, providing retirees with benefits that come closer to matching the wages they earned when they were working. Americans are expected to rely more heavily on private pensions and savings when they retire.

European workers also have been able to retire earlier than American workers, though many European countries are retreating from those policies, a subject that has caused more than a little unrest.

Taxes also are higher in most European countries and some of their retirement systems are facing worse financial problems than Social Security.

Battle Of The Op Eds

     The recent op ed pieces attacking the Social Security disability programs are stirring up a spirited response. Here's one from the Jacksonville Times-Union.

The Ryan Plan On Social Security

     Paul Ryan's budget plan would:

• Means test Social Security
• Raise full retirement age to 70
• Allow workers the right to divert one-third of their F.I.C.A. taxes to optional private Social Security accounts
• Alter the way in which average wages are computed for determining the Primary Insurance Amount (PIA), the amount one receives upon retirement, in such a way as to reduce benefits for all but the lowest wage workers

Educational Loans Eating Into Social Security Benefits

     From Smart Money:

According to government data, compiled by the Treasury Department at the request of SmartMoney.com, the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees' Social Security checks on those grounds. That's nearly double the pace of the department's enforcement in 2011; it's up from around 60,000 cases in all of 2007 and just 6 cases in 2000. ...

Many of these retirees aren't even in hock for their own educations. Consumer advocates say that in the majority of the cases they've seen, the borrowers went into debt later in life to help defray education costs for their children or other dependents.

Spending Money To Save Money -- Is It Really So Hard To Understand?

     Social Security's Office of Inspector General (OIG) has done a study using a database of persons who are receiving Social Security retirement benefits but who have not used Medicare in the preceding three years even though they are 96 years of age or older. OIG estimates that if Social Security contacted or attempted to contact these people, that they would find that the agency is paying benefits to several hundred deceased individuals. OIG estimates that $99 million could be saved if this were done.

     Unfortunately, it takes manpower to do this sort of thing and Social Security has less manpower and more and more work to do. Projects like this which would save money are deferred because the agency has to answer its telephones and deal with people filing claims. 

     There's no way around it. It comes up all the time. You have to spend a little money at Social Security to save a lot of money in benefit payments. Republicans in Congress have a hard time understanding a concept that any businessperson can quickly grasp.