More On Social Security Overpayments

     Another CNN Money piece on Social Security overpayments:

The Social Security Administration is overpaying big sums of money to disability beneficiaries -- and lawyers, consumer advocates and watchdogs say the agency's own missteps are to blame.

Long after notifying Social Security that they have either started working again or earn too much income to qualify for benefits, some disability recipients continue to receive payments for months or even years. It's not until a notice from Social Security shows up that they discover they now owe tens of thousands of dollars to the agency due to these overpayments.  ...

The Government Accountability Office [GAO], which oversees the Social Security Administration, says that budget constraints and huge backlogs of people applying for disability have delayed the reviews of income information that alert the agency to remove beneficiaries who no longer qualify. As a result, the Social Security Administration has made $1.3 billion in overpayments in just two years, according to a recent GAO audit....

We think that they need to devote more resources to this," said Steve Lord, director of forensic audits and investigative services at the GAO. "Right now getting people off the [disability] rolls is secondary -- they have to balance their resources between getting people off the rolls and getting people on the rolls." 

While the Social Security Administration said its accuracy rate is nearly perfect, it acknowledges that funding has been an issue. The agency said it has lost more than 11,000 employees since 2011. At the same time, its workload has been increasing as baby boomers near retirement and enter "their disability prone years," a spokeswoman said.
"[O]ur administrative budget has been significantly reduced, resulting in three straight years of funding levels nearly a billion dollars below the President's budget requests," a spokeswoman said. "We have had to prioritize our workloads given our limited budget and resources."

Is Social Security Sending Out $75,000 Checks To Random Claimants?

     From CNN Money:

Americans dealing with injuries, mental illnesses and other impairments are being notified out of the blue that they’ve been overpaid by the Social Security Administration and now owe thousands of dollars.

One 33-year-old veteran began receiving Social Security disability payments after his left foot was amputated following an explosion in Iraq in 2007. After going through rehab for his prosthetic leg, he began working full-time for a defense contractor in 2009. As soon as he started collecting a paycheck, the veteran, who asked to remain anonymous, reported his roughly $100,000 annual salary to the Social Security Administration.

When recipients of disability benefits reenter the workforce, they have a nine-month trial period in which they continue to receive benefits. Once the trial period ends and their earnings exceed a certain level — currently $1,040 a month — the payments are supposed to stop. And that’s exactly what happened in his case.

But then, last July, he noticed a $75,000 deposit in his checking account. Three days later, a letter arrived from the Social Security Administration saying it had reinstated his benefits because he had not been “gainfully employed” during the past three years. ...

It turns out Social Security overpayments like these are surprisingly common.

A recent audit conducted by the Government Accountability Office found that Social Security made $1.3 billion in potential overpayments to disability recipients in just two years. While some of that amount can be attributed to fraudsters who game the system, many innocent people are also receiving overpayments and then being asked to pay the agency back. Some continue being paid even after they notify the administration that they are no longer eligible for benefits, while others have no idea they are being overpaid.

     I can't say what happened in the vet's case. I can say that the work incentives that Congress has provided for recipients of Social Security disability benefits are so complicated that mistakes are inevitable but not a $75,000 mistake of this sort. That's unusual.
     The Government Accountability Office (GAO) report referenced by this article is seriously misleading. It assumed that any work performed by a person who had applied for Social Security disability benefits made that person permanently ineligible for Social Security disability benefits. That's just wrong. That's not the way the law is written. For instance, many people who have applied for Social Security disability benefits attempt to return to work but are only able to last a short time on a job. This is what Social Security calls an Unsuccessful Work Attempt (UWA) and has no effect upon the person's entitlement to benefits. If anything, a UWA makes a Social Security disability claimant look more credible. GAO would have a person who has engaged in a UWA ineligible for Social Security disability benefits for the rest of their life! You probably didn't notice it but there was no Congressional hearing on the GAO report. Even Republicans figured out that the GAO report was a crock.
     If you're of a mind to believe that all government benefits programs do nothing but waste money you may want to believe that Social Security wastes billions of dollars just sending large checks to people at random but that's not the way the program works. Mistakes happen. Usually the mistakes take away money rather than bestowing it. Usually, the mistakes don't involve much money. Most of the mistakes are just the inevitable result of overworked human beings making mistakes running a complicated program. There's only so much you can expect Social Security to do about that especially when you the size of the agency's workforce is declining while its workforce is increasing.
    

A Manageable Problem

Alabama Sheriff Acquitted On Social Security Fraud Charge

     I had reported in August that Washington County, Alabama Sheriff Richard Stringer had pleaded not guilty to Social Security fraud. It was alleged that Stringer had conspired with others to get Social Security benefits for a friend.

     The case went to trial. Mr. Stringer was acquitted.

Democrats And Republicans Support Positions At Odds With Their Bases

     From Ronald Brownstein writing for the National Journal:

One reason a serious budget negotiation seems unlikely this fall is that any meaningful assault on the federal deficit would require each party to confront the contradictions between its fiscal agenda and its electoral coalition. ...

The GOP presidential nominee has carried most white seniors in four consecutive presidential elections, and by greater margins each time....

These older whites deeply resist any changes in Social Security and Medicare, which most consider insurance they have paid for, not a government benefit ...

But the demands from GOP leaders to squeeze middle-class entitlements such as Medicare in any budget deal still collide with the preferences of both older and blue-collar whites ...

Democrats face the opposite dilemma. For decades, they have watched expanding entitlements tilt federal spending toward the elderly. In 1960, children and seniors each consumed around one-fifth of federal domestic spending, the Urban Institute calculates. Today, children receive less than one-third as much as seniors, a trend reinforced by the sequester ...

Entering negotiations, many Democrats have made opposition to entitlement cuts a litmus test. But with the senior population projected to double through 2040, rejecting all entitlement reductions ensures both more pressure on discretionary investments like education that help young people and unsustainable tax burdens on future workers. That leaves Democrats confronting their own contradiction: They are now favoring programs that benefit predominantly white seniors who lopsidedly vote against them over policies that benefit the heavily diverse young people who strongly support them. Even a near-term trade of trimming entitlements to restore sequester-starved domestic investment could make sense for Democrats.

Quite A Comedown

     The House Ways and Means Committee has traditionally been of key importance to Social Security and to the nation. However, at the moment, according to Stacy Kaper at the National Journal, Ways and Means is barely functioning.

Charlie Binder Responds To Sixty Minutes

     Charlie Binder has posted something of a response to the Sixty Minutes piece on Social Security disability.

Getting A New Government Program Off The Ground Is Tough

     The start-up problems that the Health Care Exchanges are experiencing are not without precedent. As Arthur Delaney writing for the Huffington Report notes there were serious start-up problems with Social Security. Early on, a management expert told the nascent Social Security Board that it should notify Congress that it couldn't run the program! The management expert was told to get back to work. I think you can guess the rest of the story.