Some Straight Talk On The Trust Funds

Andy Landis writing for Market Watch at the Wall Street Journal, of all places, has an excellent Q&A piece addressing the recently released report of Social Security's trustees. It's refreshingly honest and straightforward. Here's an excerpt:

How much does Social Security waste in bureaucracy?

SSA's operating overhead is 0.8% of total expenditures, about the same as a discount mutual fund, and that includes Medicare. It's been a fraction of 1% for decades.

What about the 2% payroll tax "holiday"? Didn't that further erode Social Security finances?

No. During the "holiday" in 2011 and 2012, government made up the missing income with direct grants from general revenues. It was the first time SSA was not self-funded and depended on government money. Grants have stopped now that the "holiday" has ended.

Is this Social Security's worst financial report ever?

Far from it. In the late 1970s and early 1980s Social Security ran deficits. Trust fund insolvency loomed in July 1983. With mere months of solvency left, Congress acted to bolster finances on April 20, 1983. SSA still operates under the 1983 funding arrangement, generating surpluses every year since.

WSJ On Unemployment And Disability

     From the Wall Street Journal's Economy Stream Blog:

The sharp rise in federal disability rolls in recent years has sparked worry that able-bodied workers are using the system to hide from the weak job market. But new research suggests those fears may be overblown. ...

University of California, Berkeley economist Jesse Rothstein set out to test [that] theory. He reasoned that if the increase [in disability claims] is being driven by unemployed workers gaming the system, there ought to be a correlation between expiring jobless benefits rising disability claims. After all, there’s no need to file for disability insurance — often a long, involved process — if you can still draw an unemployment check.

When Mr. Rothstein looked at the data, however, he found no such correlation. When the unemployment rate started rising in 2008 and 2009, the government extended unemployment benefits, leading to a drop in the number of people exhausting their payments. Yet the number of people filing for disability kept on rising. In more recent years, the government has cut back unemployment benefits, leading to an increase in expirations, but the number of disability applications has remained flat or even slowed. ...

Federal disability rules allow workers to get benefits only if they have an “impairment” that prevents them from working. But Mr. Rothstein notes that the ability to work isn’t necessarily independent of the labor market.

A construction worker who hurts his back, for example, might be able to get a desk job during good economic times; when unemployment is high, however, making such a career switch could be much harder. Moreover, companies are much more likely to make accommodations for existing workers who become disabled than to hire a disabled worker — so a person with a disability who loses a job might well struggle to find a new one.

Mr. Rothstein says his findings suggest that “really what’s going on is that there are people who are disabled who may in good markets be able to get jobs but in difficult market can’t.”

You Can't Separate Body From Mind

     From Ritchie King at Quartz (whatever that is):

A recent German study shows that a middle-aged worker who develops arthritis is much more likely to take a disability pension and retire early if she is feeling depressed than if she is struggling physically to perform her job but isn’t suffering mentally. Overall, musculoskeletal disorders such as arthritis are the most common cause (pdf) of early retirement in Europe.

     There are those who theorize about disability without having any real experience with the medical records of those who file disability claims. One of the most important things that these people miss is the complex interplay between physical illness and mental illness. Significant physical illness almost inevitably leads to depression of varying degrees. The depression tends to make the perception of pain and other symptoms worse -- and there is no meaningful difference between pain and its perception. Pain cannot exist without a person perceiving it. It shouldn't be hard to understand how this could produce a negative spiral. On the other hand, serious mental illness is associated with physical illness and early mortality. Again, it shouldn't be hard to understand that it can be impossible to separate out the strands of physical and mental illness in one individual. Dealing with this complexity is, for me anyway, one of the most interesting things about Social Security disability claims.

Fees Rebound After Slow April

     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
Apr-13	33,178	$92,566,832.32
May-13	42,841	$122,781,135.03

New Policy On Gender Reassignments

     From the National Center for Transgender Equality:

In June 2013 [actually just yesterday], the Social Security Administration (SSA) announced a new policy to for updating Social Security records to reflect a person’s gender identity. Under the new policy, a transgender person can change their gender on their Social Security records by submitting either government-issued documentation reflecting a change, or a certification from a physician confirming that they have had appropriate clinical treatment for gender transition. This policy replaces SSA’s old policy, which required documentation of sex reassignment surgery.

     Note that this new policy does not increase or decrease anyone's Social Security benefits.

The Octopus At Work

     Iowa Watchdog, Kansas Watchdog, Colorado Watchdog and New Mexico Watchdog have each released state-specific pieces decrying the growing number of people receiving disability benefits in each of these states. I don't know how many state-specific "Watchdog" organizations there are. They are all supported by the Franklin Center for Government and Public Integrity.  Exactly who is behind the Franklin Center is unclear but it's clearly a right wing political organization. There's an excellent chance that it's a Koch Brothers front organization.
     Standard Oil used to be pictured as an octopus. That would also be an excellent metaphor for the Koch brothers political operations, which include multifarious efforts against Social Security.

Hearing On Protecting Seniors From Online Fraud

     The Senate Special Committee on Aging has scheduled a hearing for June 19 on "Social Security Payments Go Paperless: Protecting Seniors from Fraud and Confusion."

     This hearing stands to be far more useful than the House Social Security Subcommittee's upcoming annual hearing on disability work incentives. It's clear. Work incentives just don't work. However, something has to be done and something will be done to protect Social Security benefits from online fraud.

Get Over It Guys!

     The National Review really wants to prove that fraud is rampant at Social Security. They offer as proof the bizarre case of Charles Fisher. After Fisher died of natural causes his mentally ill daughter decided to put him on ice, not a freezer but ice, so she could keep getting his Social Security checks. At some point she decided to cut off her deceased father's hands since it would make it harder to identify him once she disposed of his remains in a more permanent way. The ice didn't work too well. Fisher's body was decaying. The police eventually came around the house since friends and neighbors wondered what happened to Fisher.The fraud was revealed.

     This sad case demonstrates that people, particularly mentally ill people, can do some very weird things. I don't think it proves anything of consequence about Social Security. Of course, there's some degree of fraud at Social Security. Tens of millions of people receive benefits. How could there be no fraud involved? There's no proof of rampant fraud at Social Security.
     The right wing needs to get over its obsession with Social Security. They've used the same arguments against Social Security for more than 75 years and they've gotten nowhere.  The American people love Social Security. There's nothing the right wing can do to make it go away.