Another NY Field Office To Close

     Social Security plans to close its office in Ulster County, NY even though 39% of the county's population receives either Social Security or Supplemental Security Income (SSI) benefits. Local politicians are unhappy. These office closures are an inevitable consequence of the limited funding being given to the agency.

Service Contract Inventory

     As required by law, the Social Security Administration has published its annual inventory of service contracts. Notable on the list is Lockheed Martin, which received over $100 million in contracts over the last year. Northrup Grumman received over $60 million in contracts. In glancing through the list I was a little surprised by the number and amount of contracts with Brookfield Relocation, apparently for employee relocation services. It's a small matter in the overall picture but I didn't think there would be that many Social Security employees being relocated at agency expense or that the costs, often over $100,000, would be that high.

Disability Trust Fund Doing Better Than Projected

     The final 2013 numbers are in for Social Security's Disability Insurance Trust Fund. Here's a summary (in billions) for both the actual results and the projections that had been made for the year:

Receipts
Actual: $111.5
Intermediate Projection: $111.4
Low-Cost (optimistic) Projection: $112.5

Expenditures
Actual: $143.5
Intermediate Projection: $144.8
Low-Cost (optimistic) Projection: $142.8

Amount of Decline in Trust Fund Balance:
Actual: $32.3
Intermediate Projection: $33.5
Low-Cost (optimistic) Projection: $30.3

Trust Fund Balance at end of year
Actual: $90.4
Intermediate Projection: $89.2
Low-Cost (optimistic) Projection: $92.

     The key question is when, if ever, the Disability Insurance Trust Fund runs out of money. You might think it obvious that the Disability Insurance Trust Fund will run out of money in 2016 but you'd be wrong. While the most recent Intermediate projection was that the Disability Insurance Trust Fund will run out of funds in 2016, it is projected to be only a narrow shortfall in 2016 -- $3.4 billion. Note that the actual results in 2013 were $1.2 billion better than anticipated by the Intermediate Projection. It's impossible to say for sure but the slightly better than expected results in 2013 suggests that the projections for 2014-2016 should be more optimistic as well. The methodology will certainly be more sophisticated but if you multiply $1.2 billion times four years you find that instead of running out of money in late 2016, the Disability Insurance Trust Fund squeaks into 2017. My expectation is that the Intermediate Projection in the next Trustee's report coming out this Spring will show an exhaustion date of 2017. Of course, unfavorable economic news or even a small uptick in benefit payments could change this. 

     The difference between 2016 and 2017 may be politically crucial. It's three years off but 2017 looks like a better year for Democrats than 2016.

     Note that I indicated above that it is uncertain whether the Disability Insurance Trust Fund runs out of money at all. How can that be? Both the Intermediate and Low-Cost projections show that the declines in trust fund balance will be decreasing in coming years. They differ on how quickly the receipts and expenditures move towards each other.  The most recent Low-Cost projection was that the decline in Trust Fund balance will be rapid enough to keep the Disability Insurance Trust Fund in the black as far as the eye can see and that the Trust Fund balance actually starts rising in 2020.The Low-Cost projection was a bit less accurate for 2013 than the Intermediate projection. There's no telling what the next Low-Cost projection will look like. In any case, projections become less reliable the further you extend them into the future. It's more likely than not that the Disability Insurance Trust Fund runs out of money at some point but it's not a certainty. If it does happen, it'll probably be after 2016.

     By the way, Social Security's actuaries also made a High-Cost or pessimistic projection that the Disability Insurance Trust Fund would run out of money in 2015. I've omitted that from the summary above since it was so far off from what actually happened in 2013.

New Addresses For Service Of Process

     Social Security has posted a new list of addresses for service of process. This is essential information if you're suing the agency.

Blast E-Mail From Acting Commissioner

I want to share with you the good news about our operating budget for fiscal year (FY) 2014. 

We began FY 2014 without an appropriation, which was followed by continuing resolutions.  I am pleased to report that Congress has approved, and the President has signed, legislation that provides funding for the remainder of the fiscal year.  With this funding, we will be able to expand our capacity to complete more of our cost-effective continuing disability reviews (CDR), improve our service to the American public, and enhance our vigorous fraud prevention efforts. 

Our FY 2014 funding will allow us to bolster our program integrity activities that reduce improper payments and help combat fraud, waste, and abuse.  Protecting taxpayer dollars has always been a priority, and the recent budget debates have magnified its importance.  While program integrity is a priority, service to the public is, of course, job one.  We will use our funding to increase overtime and restore some staffing losses in critical frontline positions.  This will help us reduce backlogs and wait times in many of our workloads. 

I commend you for enduring the last few years of uncertainty and difficult circumstances.  Through it all, you continued to provide the compassionate services that Americans depend on at the most critical times of their lives.  It is because of your steadfast commitment that we find ourselves in better circumstances today.  Our approved funding indicates that Members of Congress recognize all that you do and that they can count on you to use this funding to enforce greater program integrity and improve our world-class public service. 

Thank you for your hard work, dedication, and patience.  You have always been, and always will be, our most valuable asset.  I know I can count on you to continue your unwavering commitment to serve the American public.

Carolyn W. Colvin
Acting Commissioner

Partial Layoffs At Allsup

     From the Belleville News-Democrat:

Belleville-based Allsup Inc. [which represents Social Security disability claimants, mostly at the behest of long term disability insurance companies] will reduce the number of hours some of its employees work as the Social Security Administration is witnessing fewer disability claims reviews, a spokeswoman said.

In a statement released Monday, Rebecca Ray, the company's director of corporate public relations, said the move will not mean layoffs and all employees will continue to receive health insurance benefits and retirement. But some employees' work weeks will be cut to fewer than 40 hours.

The number of hours cut will be specific to an individual's job and work load and may not be the same across the board.

Ray said the hours reduction will go into effect next month. She could not comment on how many of the company's 700 employees will be affected.

Read more here: http://www.bnd.com/2014/01/27/3025748/allsup-cutting-some-employees.html#storylink=cpy

Out Of Control Bureaucracy

     The Social Security Administration had 3,500 employees at its Baltimore offices near the Lexington Market in 2001. That's down to 1,600 employees now. They'll soon be moving to a newer, smaller office complex in uptown Baltimore. A local merchant remembered that at noon there used to be "massive amount of people" coming out of the current buildings. It's down to a "little trickle" now.

     The reduction in staffing didn't happen because Social Security moved those employees elsewhere. It happened because Social Security's workforce declined.

A Quad's View Of Social Security's Work Incentives

     A working quadriplegic talks with the Washington Post about Social Security's work incentives. By the way, it's naive to think that if a quadriplegic can work, anybody can work regardless of their impairments. Pain and mental illness are different ball games. Age reduces the ability to make vocational adjustments. People with lowered intellectual capacity have diminished ability to make vocational adjustments. The biggest factors, though, are pain and mental illness. I'd rather be a quad than a schizophrenic or to suffer from chronic, severe pain. Most Social Security disability claims involve mental illness or chronic pain.