A First Look At The President's Budget For SSA

     The President's recommended budget for fiscal year (FY) 2014, which begins on October 1, 2013, provides for a 7% increase in administrative funding for the agency over FY 2012 and "Establishes a dependable source of funding for Continuing Disability Reviews and Supplemental Security Income Redeterminations." I don't yet know what is meant by a "dependable source." Chained CPI is in the budget, of course.

     Update: I'd like to give you detailed budget information but I can't just yet. Social Security has tried to post this information on its budget website but the links aren't working. Perhaps it's a work in progress.
   Further Update: I can now see the detailed numbers on Social Security's website but only by switching from Foxfire to Internet Explorer. Some weirdness that I don't understand. At the bottom is an extracted page showing the most important numbers. You can click twice on the page to view it full size. Here are some other items I found, quoted in the order I came upon them:

• The language provides for the use of up to $1,000,000 derived from fees charged to non-attorneys who apply for certification to represent claimants.
• Beginning in FY 2014, the budget proposes to remove discretionary funding above the base amount of $273 million from the Limitation on Administrative Expenses (LAE) Account and instead, provide a mandatory appropriation for program integrity activities in a newly established Program Integrity Administrative Expenses (PIAE) account. These mandatory funds will be in addition to amounts provided to the Social Security Administration (SSA) in the LAE account and will be available for two years. In 2015 and beyond, the proposal would replace both base and cap funding for program integrity and the cap on discretionary appropriations would be lowered by a commensurate amount.
• Full funding of the FY 2014 President’s Budget will allow us to resume mailing Social Security Statements to all eligible workers 25 years old or older.
• Key Performance Targets: Initial Disability Claims Completed (thousands) FY 2012 3,207, FY 2013 2,970, FY 2014 2,851; Reconsiderations Completed (thousands) FY 2012 809, FY 2013 803, FY 2014 725; SSA Hearings Completed (thousands) FY 2012 820, FY 2013 836, FY 2014 807; Average Speed of Answer (ASA) [on Social Security's 800 number] (seconds) FY 2012 294, FY 2013 455, FY 2014 482
• The Budget proposes to amend the Social Security Act to limit access to the "Death Master File" to prevent this information from being used to file fraudulent claims for benefits or tax refunds. This proposal provides that death information that we maintain may be used by agencies, subject to such safeguards as the Commissioner of Social Security determines are necessary or appropriate for the purpose of public health or safety, law enforcement, tax administration, health oversight, debt collection, payment certification, disbursement of payments, and for the prevention, identification or recoupment of improper payments.
• The FY 2014 President’s Budget proposes a technical correction relating to when Social Security benefits stop due to divorce. A parent and stepchild may receive benefits on the record of a worker, but, if the marriage terminates in less than 10 years, they are no longer eligible for benefits. Currently when a stepchild’s parent is divorced and no longer eligible for benefits from a former spouse, benefits for the parent terminate in the month before the month in which the divorce becomes final. However, benefits for the stepchild terminate one month later, in the month the divorce becomes final. This proposal would provide equal treatment for the stepchild and his or her parent; both benefits would end in the month before the month in which the divorce becomes final.
• The FY 2014 President’s Budget takes other critical steps to finds savings in government programs by making smart reforms that root out duplicative or wasteful spending, such as reducing an individual's Disability Insurance (DI) benefit in any month in which that person also receives a state or Federal unemployment benefit. This proposal would eliminate dual benefit payments covering the same period a beneficiary is out of the workforce, while still providing a base level of income support. Enacting this offset would save $1 billion over 10 years.

A Spring Haiku

     Former Social Security Commissioner Michael Astrue submitted the following haiku via twitter to an NPR show that was celebrating National Poetry Month:

Early April. 

Winter drums cold tunes. 

The old word pile sheds its slush. 

What burns is unseen.

I Know! Public Service Jobs. That's The Answer!

     From Joe Klein writing in his blog at Time:

Back during the presidential campaign, Mitt Romney tried to make the argument that President Obam was soft on welfare reform. He missed the target. Welfare abuse has shifted to Social Security Disability. ...

Now, to be sure, there are workers who fit the program’s inevitable intent: older workers who suffer serious injuries and need support until they reach the age of eligibility for social security. There are others whose medical or mental disabilities make them clearly unable to work. But the government has gotten sloppy about admissions. ...

The 55-year-old construction who hurt his back has my sympathy—I’d be in favor of lowering the eligibility age for both Medicare and Social Security a few years in such cases. But there are plenty of non-back-breaking jobs that construction worker can hold in the interim.

Indeed, in all but the most severe cases, there are public service jobs that can be done as a way of paying back—and a way of culling the scam artists. All too often, the scammers find support on the left from people who believe that free enterprise is inherently unfair and the “victims,” even the unworthy poor,  deserve any help they can get. That sort of thinking is insidious and morally deficient.

"Ersatz Unemployment Insurance Or Welfare"

     Charles Lane writing in the Washington Post:

[Disability Insurance Benefits under the Social Security Act] spending has tripled since 1970, relative to the economy’s size, and it now approaches a full percentage point of gross domestic product. ...

An aging labor force explains some of the program’s growth; older workers are more likely to become disabled. But a growing body of economic and journalistic evidence suggests that SSDI reduces work incentives, because of its permissive eligibility criteria and relatively high benefits, as compared to low-wage workers’ potential earnings.

Once a backup plan for dying or incapacitated workers near retirement age, SSDI now serves as ersatz unemployment insurance or welfare — particularly attractive, and particularly hard to give up, in a sluggish economy. ...

The longer we wait to reform SSDI, the more it will drain the Treasury and erode the workforce.

     Here are some ideas that might be pursued:

• Make it crystal clear in the law that the mere inability to obtain a job is irrelevant. You have to be unable to perform a job whether it's there or not.
• Make the standards tough so that two-thirds of claims get turned down. Maybe a few more should get on benefits on appeal but make them wait a couple of years.
• Make benefits low. They shouldn't be anywhere near what a person was earning before becoming disabled. 
• Give huge incentives for the disabled to return to work. Let a person on benefits keep their full benefits for a full year after they return to work. Let them get back on benefits very easily for many years thereafter if they have to stop work. 
• Give people drawing benefits access to rehabilitation. We can call this Ticket to Work.

     Wait, I just described current law.

Kira's Story

Now We Know What's Wrong With Social Secuity Disability. It's A Case Of Hysteresis!

     From the Wall Street Journal:

The unexpectedly large number of American workers who piled into the Social Security Administration's disability program during the recession and its aftermath threatens to cost the economy tens of billions a year in lost wages and diminished tax revenues.

Signs of the problem surfaced Friday, in a dismal jobs report that showed U.S. labor force participation rates falling last month to the lowest levels since 1979, the wrong direction for an economy that instead needs new legions of working men and women to drive growth and sustain a baby boomer generation headed to retirement.

Michael Feroli, chief U.S. economist for J.P. Morgan, estimates that since the recession, the worker flight to the Social Security Disability Insurance program accounts for as much as a quarter of the puzzling drop in participation rates, a labor exodus with far-reaching economic consequences. ...

Former truck driver James Ottesen, who began receiving monthly payments in 2009, said, "I'm not real happy" about being on disability. "It kind of reminds me of welfare." He said he would "like to get re-educated to do something" because "my body is broke but my mind is not."

But even if the 53-year-old Ohio man learned of a job he could do with herniated discs, he said, the government disability program feels like "a blanket covering you, and to walk out from it…at my age, it's a little intimidating." ...

It is no longer a theoretical problem, said David Autor, a professor at the Massachusetts Institute of Technology, who has studied the disability program. The economy has a case of hysteresis, he said, created by the permanent transfer of workers to disability rolls.

Many newcomers to the disability roster are low-wage earners with limited skills, Mr. Autor said, and they are "pretty unlikely to want to forfeit economic security for a precarious job market."

Upated Fee Payment Numbers

     Social Security has issued updated numbers on payments of fees to attorneys and some others for representing Social Security claimants. These fees are withheld and paid by Social Security but come out of the back benefits of the claimants involved. The attorneys and others who have their fees withheld pay a user fee for this privilege. Since these fees are usually paid at the same time that the claimant is paid, these numbers show how quickly or slowly Social Security is able to get claimants paid after a favorable determination on their claims.

Month/Year	Volume	Amount
Jan-13	32,663	$96,690,734.65
Feb-13	35,508	$102,242,540.93
Mar-13	45,189	$130,690,281.94

Open Letter From Eight Former Social Security Commissioners

April 4, 2013 

An Open Letter from Former Commissioners of the Social Security Administration 

     As former Commissioners of the Social Security Administration (SSA), we write to express our significant concerns regarding a series recently aired on This American Life, All Things Considered, and National Public Radio stations across the U.S. ("Unfit for Work: The Startling Rise of Disability in America"). Our nation’s Social Security system serves as a vital lifeline for millions of individuals with severe disabilities. We feel compelled to share our unique insight into the Social Security system because we know firsthand the dangers of mischaracterizing the disability programs via sensational,anecdote-based media accounts, leaving vulnerable beneficiaries to pick up the pieces.           

     Approximately 1 in 5 of our fellow Americans live with disabilities, but only those with the most significant disabilities qualify for disability benefits under Title II and Title XVI of the Social Security Act. Title II Old Age, Survivors, and Disability Insurance (DI) benefits and Title XVI Supplemental Security Income (SSI) benefits provide critical support to millions of Americans with the most severe disabilities, as well as their dependents and survivors. Disabled beneficiaries often report multiple impairments, and many have such poor health that they are terminally ill: about 1 in 5 male DI beneficiaries and 1 in 7 female DI beneficiaries die within 5 years of receiving benefits. Despite their impairments, many beneficiaries at tempt work using the work incentives under the Social Security Act, and some do work part-time. For example, research by Mathematica and SSA finds that about 17 percent of beneficiaries worked in 2007. However,their earnings are generally very low (two-thirds of those who worked in 2007 earned less than $5,000 for the whole year), and only a small share are able to earn enough to be self-sufficient and leave the DI and SSI programs each year. Without Social Security or SSI, the alternatives for many beneficiaries are simply unthinkable. 

     The statutory standard for approval is very strict, and was made even more so in 1996. To implement this strict standard, Social Security Administration (SSA) regulations, policies, and procedures require extensive documentation and medical evidence at all levels of the application process. Less than one-third of initial DI and SSI applications are approved, and only about 40 percent of adult DI and SSI applicants receive benefits even after all levels of appeal. As with adults, most children who apply are denied SSI, and only the most severely impaired qualify for benefits. 

     Managing the eligibility process for the disability system is a challenging task, and errors will always occur in any system of this size.But the SSA makes every effort to pay benefits to the right person in the right amount at the right time. When an individual applies for one of SSA’s disability programs, the agency has extensive systems in place to ensure accurate decisions, and the agency is home to many dedicated public servants who take their ongoing responsibility of the proper stewardship of the programs very seriously. Program integrity is critically important and adequate funds must be available to make continued progress in quality assurance and monitoring. In the face of annual appropriations that were far below what the President requested in Fiscal Year 2011 and Fiscal Year 2012, the agency has still continued to implement many new system improvements that protect taxpayers and live up to Americans’ commitment to protect the most vulnerable in our society. 

     It is true that DI has grown significantly in the past 30 years.The growth that we’ve seen was predicted by actuaries as early as 1994 and is mostly the result of two factors:baby boomers entering their high -disability years, and women entering the workforce in large numbers in the 1970s and 1980s so that more are now "insured" for DI based on their own prior contributions. The increase in the number of children receiving SSI benefits in the past decade is similarly explained by larger economic factors, namely the increase in the number of poor and low-income children. More than 1 in 5 U.S. children live in poverty today and some 44 percent live in low-income households. Since SSI is a means-tested program, more poor and low-income children mean more children with disabilities are financially eligible for benefits. Importantly, the share of low-income children who receive SSI benefits has remained constant at less than four percent. 

     Yet, the series aired on NPR sensationalizes this growth, as well as the DI trust fund’s projected shortfall. History tells a less dramatic story. Since Social Security was enacted, Congress has "reallocated" payroll tax revenues across the OASI and DI trust funds–about equally in both directions – some 11 times to account for demographic shifts. In 1994, the last time such reallocation occurred, SSA actuaries projected that similar action would next be required in 2016. They were right on target. We are deeply concerned that the series “Unfit for Work” failed to tell the whole story and perpetuated dangerous myths about the Social Security disability programs and the people helped by this vital system. We fear that listeners may come away with an incorrect impression of the program — as opposed to an understanding of the program actually based on facts. 

     As former Commissioners of the agency, we could not sit on the sidelines and witness this one perspective on the disability programs threaten to pull the rug out from under millions of people with severe disabilities. Drastic changes to these programs would lead to drastic consequences for some of America's most vulnerable people. With the lives of so many vulnerable people at stake, it is vital that future reporting on the DI and SSI programs look at all parts of this important issue and take a balanced, careful look at how to preserve and strengthen these vital parts of our nation’s Social Security system. 

Sincerely, 

Kenneth S. Apfel 

Michael J. Astrue 

Jo Anne B. Barnhart 

Shirley S. Chater 

Herbert R. Doggette 

Louis D. Enoff 

Larry G. Massanari 

Lawrence H. Thompson