The Assault Continues

     From the Atlantic:

Imagine for a moment that Congress woke up one morning, realized that the United States was suffering from a paralyzing long-term unemployment crisis, and, in a moment of progressive pique, decided to create a welfare program aimed at middle-aged, blue-collar workers.

The one thing everybody could probably agree on is that it should help all those jobless 50-somethings find employment, right?

Well, as NPR's Planet Money argues in an eye-opening story, it turns out there already is a "de facto welfare program" for those struggling Americans. The problem is, instead of getting the unemployed back on their feet, it pays them to give up work for good. 

I'm talking about Social Security's disability insurance program, which over 20 years has quietly morphed into one of the largest, yet least talked about, pieces of the social safety net. Since the early 1990s, the number of former workers receiving payments under it has more than doubled to about 8.5 million, as shown in Planet Money's graph below. More than five percent of all eligible adults are now on the rolls, up from around 3 percent twenty years ago. Add in children and spouses who also get checks, and the grand tally comes to 11.5 million.

NPR Discovers Social Security Disability

     From a story on Social Security disability on National Public Radio:

In the past three decades, the number of Americans who are on disability has skyrocketed. The rise has come even as medical advances have allowed many more people to remain on the job, and new laws have banned workplace discrimination against the disabled. Every month, 14 million people now get a disability check from the government.

The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. Yet people relying on disability payments are often overlooked in discussions of the social safety net. People on federal disability do not work. Yet because they are not technically part of the labor force, they are not counted among the unemployed.

In other words, people on disability don't show up in any of the places we usually look to see how the economy is doing. But the story of these programs -- who goes on them, and why, and what happens after that -- is, to a large extent, the story of the U.S. economy. It's the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net....

In Hale County, Alabama, 1 in 4 working-age adults is on disability. On the day government checks come in every month, banks stay open late, Main Street fills up with cars, and anybody looking to unload an old TV or armchair has a yard sale. ...

Over and over again, I'd listen to someone's story of how back pain meant they could no longer work, or how a shoulder injury had put them out of a job. Then I would ask: What about a job where you don't have to lift things, or a job where you don't have to use your shoulder, or a job where you can sit down? They would look at me as if I were asking, "How come you didn't consider becoming an astronaut?" ...

But disability has also become a de facto welfare program for people without a lot of education or job skills. But it wasn't supposed to serve this purpose; it's not a retraining program designed to get people back onto their feet. Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then, one economist told me. ...

PCG is a private company that states pay to comb their welfare rolls and move as many people as possible onto disability. "What we're offering is to work to identify those folks who have the highest likelihood of meeting disability criteria," Pat Coakley, who runs PCG's Social Security Advocacy Management team, told me.

The company has an office in eastern Washington state that's basically a call center, full of headsetted women in cubicles who make calls all day long to potentially disabled Americans, trying to help them discover and document their disabilities: ...

There's a reason PCG goes to all this trouble. The company gets paid by the state every time it moves someone off of welfare and onto disability. In recent contract negotiations with Missouri, PCG asked for $2,300 per person. For Missouri, that's a deal -- every time someone goes on disability, it means Missouri no longer has to send them cash payments every month. For the nation as a whole, it means one more person added to the disability rolls. ...

Daytime TV in many places is full of ads from lawyers who promise to fight the government and win the disability benefits you deserve. There are tons of YouTube videos about getting disability -- one lawyer, one webcam. The standard form is a let's-get-real chat about how to win this thing. ...

Who is making the case for the other side? Who is defending the government's decision to deny disability?

Nobody.

"You might imagine a courtroom where on one side there's the claimant and on the other side there's a government attorney who is saying, 'We need to protect the public interest and your client is not sufficiently deserving,'" the economist David Autor says. "Actually, it doesn't work like that. There is no government lawyer on the other side of the room."

Fear Mongering?

     Would the Wall Street Journal engage in fear mongering on Social Security? Here's what they wrote today:

Q: Will I receive Social Security benefits?
A: That's a big "It depends." If you're over 65, no sweat. If you're 45-65, you might see some changes from the relatively generous benefits enjoyed by your parents. If you're under 45, you have plenty to worry about.

     Actually, I don't think this is fear mongering but only because I think they believe it. The problem is that they just don't get it. Social Security isn't protected by the trust fund. In and of themselves, the Social Security trust funds are more trustworthy than any of the country's financial institutions but they're still promises written on paper. Social Security has something far stronger going for it than the trust funds. Widespread, unshakeable public support. The writers at the WSJ are in the small minority that doesn't support Social Security. They think that eventually the rest of the country will see things their way. That hasn't happened in more than 75 years. I see no reason to think that will ever happen. 

     As I've written before, the concept of Social Security started with Bismarck in Germany well over a century ago. Social Security has persisted in Germany despite its devastating loss in World War I, hyperinflation during the Weimar Republic, Germany's devastating loss in World War II, the division of the country after the Second World War, the Cold War and the eventual reunification of the country after the fall of the Berlin Wall. If all that couldn't destroy Social Security in Germany what sort of catastrophe would take to destroy Social Security in this country? Nuclear holocaust?

Disability Decisions 2012

Representative Payee Embezzles From 23 In New Hampshire

     From the Concord, NH Monitor:

A Weare woman has been sentenced to 13 months in federal prison for embezzling more than $52,000 in Social Security and veterans benefits.

Heidi Lacerte stole the funds from 23 people while she was employed at the Office of Public Guardian, a nonprofit that serves hundreds of legally incapacitated people across the state, according to a release from the U.S. attorney’s office. According to court documents, the 48-year-old woman embezzled funds that had been paid to her office and placed in an account where they could be used for clients’ medical and financial needs.

ODAR Backlog Report

     This is a report from Social Security's Office of Disability Adjudication and Review (ODAR) showing the state of the backlog of cases waiting to be heard at each of its offices. Click twice on each image to see full size. This report was printed in the newsletter of the National Organization of Social Security Claimants Representatives (NOSSCR). The newsletter is not available online.
     Note the persistence of extreme variations between offices. Also, note the national trend line on the backlogs:

• February 29, 2008 -- 511 days
• March 8, 2009 -- 499 days
• July 5, 2010 -- 415 days
• February 1, 2011 -- 371 days
• July 27, 2012 -- 357 days
• February 22, 2013 -- 382 days

     The backlog has gone up by almost a month just in the last seven months. That's a scary trendline -- and that was before sequestration began.

CR Doesn't Cut Any Breaks For Social Security

     The Senate has passed a Continuing Resolution (CR) that will fund government operations through the rest of the fiscal year, subject to the sequestration. It is likely to be adopted by the House of Representatives intact. Here are the provisions relevant to Social Security, which I won't even try to interpret other than to say it seems clear to me that the agency didn't catch any breaks:

SEC. 1517. Notwithstanding section 1101, the level for ‘‘Social Security Administration, Supplemental Security Income Program’’ for research and demonstrations under sections 1110, 1115, and 1144 of the Social Security Act shall be $17,000,000.

SEC. 1518. Of the funds made available by section 1101 for ‘‘Social Security Administration, Limitation on Administrative Expenses’’, $23,000,000 shall be for section 1149 of the Social Security Act and $7,000,000 shall be for section 1150 of the Social Security Act.

SEC. 1519. Of the funds made available by section 1101 for ‘‘Social Security Administration, Limitation on Administrative Expenses’’ for the cost associated with continuing disability reviews under titles II and XVI of the Social Security Act and for the cost associated with conducting redeterminations of eligibility under title XVI of the Social Security Act, $273,000,000 is provided to meet the terms of section 251(b)(2)(B)(ii)(III) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, and $483,052,000 is additional new budget authority specified for purposes of section 251(b)(2)(B) of such Act. ...

SEC. 3004. (a) If, for fiscal year 2013, the amount of new budget authority provided in appropriation Acts exceeds the discretionary spending limits set forth in section 251(c)(2) of the Balanced Budget and Emergency Deficit Control Act on new budget authority for any category due to estimating differences with the Congressional Budget Office, the Director of the Office of Management and Budget shall increase the applicable percentage in subsection (c) with respect to that category by such amount as is necessary to eliminate the amount of the excess in that category. ...

     (c) For purposes of subsection (b), the applicable percentage shall be—

          (1) for budget authority in the nonsecurity category (as defined in section 250(c)(4)(A) of the Balanced Budget and Emergency Deficit Control Act of 1985), 0 percent; ...
(e) This section shall not apply to— ...

       (2) the amount made available by division C of this Act for ‘‘Social Security Administration, Limitation on Administrative Expenses’’ for continuing disability reviews under titles II and XVI of the Social Security Act and for the cost associated with conducting redeterminations of eligibility under title XVI of the Social Security Act.

What About Alan Simpson As Chairman?

From the Associated Press:

The Senate's No. 2 Democrat said Wednesday that he's preparing a plan to create a commission to study Social Security's fiscal problems and send a proposed solution to Congress for guaranteed votes in both House and Senate. 

Illinois Democrat Dick Durbin says he's got bipartisan backing for the idea, which is patterned after President Barack Obama's 2010 deficit commission. ...

"You would basically say to a commission, within a very limited time frame, to come up with a proposal for 75-year solvency of Social Security and then — and this is important — it would be referred to both chambers on an expedited procedure," Durbin told reporters ...

Durbin's proposed 18-member commission would contain an equal number of Republicans and Democrats but require 14 votes to send a plan to Congress.