The Election Is Over -- We Can Now Talk Social Security

     With the election over, Social Security is starting to come up more frequently in public discussions. Ironic, isn't it, that Social Security is discussed more after the election than before. Here are some items I've noticed:

• Harry Reid, the Senate Democratic leader, has said emphatically since the election that "We are not going to mess with Social Security." 
• There was a rally featuring Democratic politicans and labor leaders yesterday in Philadelphia opposing Social Security cuts. 
• The AARP has sent a post-election letter to members of Congress and the President opposing the chained CPI concept. The chained CPI method is a sneaky way of cutting Social Security benefits by using a different less favorable method of computing the inflation adjustment in Social Security. Over time, this would amount to a significant reduction in Social Security benefits. 
• Peter Orszag, who was President Obama's first Director of the Office of Management and Budget (OMB) is talking up raising the normal retirement age even further and also cutting Social Securtiy benefits fairly dramatically -- but only years into the future. Easy for Orszag to propose. He's making millions of dollars a year on Wall Street.

Termination Determinations Not Always Being Implemented

     From a study by Social Security's Office of Inspector General (OIG) (footnotes omitted):

We identified populations of 25,564 DI [Disability Insurance] beneficiaries and 67,943 SSI [Supplemental Security Income] recipients who received medical cessation determinations during Calendar Years (CY) 2005 through 2010 but continued receiving monthly benefit payments more than 2 months after the medical cessation determination. We reviewed samples of 250 DI beneficiaries and 250 SSI recipients. We found some individuals who received improper payments because their disability benefits were not terminated 2 months after the cessation determination per SSA policy. Specifically, we found the following.
     • Of the 250 DI beneficiaries, 76 (30 percent) and their auxiliaries improperly received payments after their medical cessation determinations because benefits were not terminated timely. Accordingly, we project that 7,771 beneficiaries in our population received improper benefit payments of approximately $48.9 million.
     • Of the 250 SSI recipients, 41 (16 percent) improperly received payments after their medical cessation determinations because payments were not terminated timely. Accordingly, we project that 11,143 recipients in our population received improper payments of approximately $34.7 million. ...

Despite SSA’s [Social Security Administration's] actions to resolve the causes of untimely terminations, there were still instances where SSA continued improperly paying DI beneficiaries and SSI recipients because of additional systems limitations. In addition, according to SSA, in June 2009, resource limitations and other work priorities caused the Agency to stop routinely identifying cases where benefits were not terminated timely following a medical cessation determination. 

Field Offices To Start Closing At Noon On Wednesdays

     Social Security field offices are already closing a half hour early each day due to the agency's inadequate operating budget. The budget problems will just get worse over time even without the sequestration set to begin on January 1, 2013. Sequestration will dramatically cut the budget for Social Security and all other parts of the federal establishment. Now, the Social Security field office in Tuscaloosa is announcing that it will be closing at noon on Wednesdays beginning January 2, 2013. There has been no announcement yet that all Social Security offices will be closing at noon on Wednesdays but it would make sense. I doubt that this is a local thing in Tuscaloosa. I'm pretty sure that much more will be required if sequestration comes to pass.

     Update: And here's confirmation from the AARP that all field offices will be closing at noon on Wednesdays beginning January 2, 2013.

    Further update: And here's the Social Security press release on this. Normally, I receive e-mail notification of these but I either didn't get it yesterday or I missed it somehow. You too can get the press releases by e-mail.

I Hate To Be Gloomy, But ...

     A Republican sweep of the White House, House of Representatives and Senate might have had devastating effects on Social Security but the result we got -- basically the status quo -- leaves Social Security at great risk. Yes, the new Commissioner will be an Obama appointee. Yes, Democrats will have a somewhat increased majority in the Senate. However, the following problems remain:

• I have noted over the decades of following Social Security that the House Social Security Subcommittee seems to have more influence over the Social Security Administration than the White House and Senate combined. Republicans will continue to control the House Social Security Subcommittee. They are not big fans of the concept of social insurance.
• Republicans in the House of Representatives will continue to have a choke hold on Social Security's administrative budget. They have been extraordinarily irresponsible yet they too won re-election. Their irresponsibility is unlikely to change.
• The entire federal establishment, including Social Security, is facing even more dramatic appropriations cuts as a result of sequestration, scheduled to begin on January 1, 2013. That word, "sequestration," may seem foreign to you but you're going to hear it more and more over the next two months or so. Sequestration would cut Social Security's operating budget much further, to the point that furloughs would be inevitable. The only question is how the furloughs would be implemented. While no one expects sequestration to continue though the rest of the fiscal year, it is entirely possible, if not probable, that we will see sequestration for at least part of January and possibly for quite a bit longer.
• The Disability Trust Fund will temporarily run out of money in 2016. This is related to the baby boom population reaching its most disability-prone years. The inevitable solution is to allow borrowing from the Retirement and Survivors Trust Fund. This has been done before.  However, we have all seen Republican hostage-taking over the last two years. Will House Republicans try to take Disability Insurance Benefits hostage? I have seen no sign of a Republican agenda for the Social Security disability programs but they may be working on one. It would be great if inter-fund borrowing was included in the resolution of the "fiscal cliff" negotiations but are Democrats focused on this problem which will not come to a head for another three or four years? One frustrating thing for Republicans has to be the fact that there is report after report showing that large amounts of money are being wasted in the Social Security disability programs but almost all of this waste can be attributed to Republicans starving the agency's administrative budget! At the least, the Disability Trust Fund situation serves as a check on the new Commissioner. He or she will find it difficult to do anything that can be seen as benefiting the disabled since he or she will constantly be reminded that the Disability Trust Fund is going bankrupt.

Nomination And Confirmation Of Commissioner

     OK. The election is over. Barack Obama has been re-elected. So what's next for Social Security? Michael Astrue's term as Commissioner of Social Security will end in mid-January 2013. The most immediate questions are who will replace him and when will that person take office. There's no way yet to know who will be nominated to become the next Commissioner but here is what happened the last two times that Social Security Commissioners were nominated and confirmed:

• Jo Anne Barnhart was nominated to become Commissioner of Social Security on July 17, 2001, about six months after George W. Bush took office. She was confirmed by the Senate on November 2, 2001. Obviously, the new President Bush had a lot on his plate and he did not consider nominating a new Social Security Commissioner to be a high priority.
• Michael Astrue was nominated by President George W. Bush to become Social Security Commissioner on September 15, 2006, about four months before Jo Anne Barnhart's term as Commissioner ended. Astrue was confirmed on February 12, 2007. It helped that by 2006 George W. Bush was in the midst of his second term and not facing a re-election battle. Things could proceed in a more orderly fashion. There was less than a month between the end of Barnhart's term and Astrue assuming office.

     Also, the Deputy Commissioner's term is up at the same time as the Commissioner's. It would be nice if both could be nominated at the same time -- and soon --  but I'm not expecting it.

Office Closure Situation Improves

     From a Social Security Administration website:

The following Social Security Offices will be closed today, November 5, 2012:

Maryland
Cumberland

New Jersey
Brick
Hoboken     
New Brunswick

New York
Astoria      
Downtown
Manhattan Social Security Card Center    
White Plains

---

The following Social Security Offices are closed until further notice:

Massachusetts
Roxbury

New York
East Village
Far Rockaway

What Impact Does An Attorney Have At The Initial Level?

      From Filing for Social Security Disability Benefits: What Impact Does Professional Representation Have On The Process At The Initial Application Level, a report by the Social Security Advisory Board:

As we began this study, we had two very basic questions that we wanted to answer: 1) does representation increase the likelihood that an individual who is eligible will be awarded disability benefits, and 2) does representation increase the likelihood that the individual will receive a decision sooner. We were able to provide preliminary answers to these questions; for instance, we found evidence that processing times are longer for represented claims, particularly when represented by attorneys. Additionally, we found that represented cases have higher allowance rates, significantly so for SSI, but barely so for SSDI cases.

     I think there could be a connection between the two findings. Attorneys avoid weak cases. Weak cases are usually denied more quickly than strong cases.