Senate Committee Schedules Hearing

     The Senate Committee on Banking, Housing, and Urban Affairs, Subcommittee on Economic Policy has scheduled a hearing for Wednesday, March 12 at 2:30 on “The State of U.S. Retirement Security. Can the Middle Class Afford to Retire?” Among other things, the hearing will deal with the question of whether Social Security should be "strengthened."

They Want A Meeting

     Senator Charles Schumer and Congressman Brian Higgins have requested a meeting with Acting Social Security Commissioner Carolyn Colvin to discuss the closing of Social Security's Amherst, NY field office.

Actuary Estimates Effects Of UI Offset

     From a March 4, 2014 letter from Stephen Goss, Social Security's Chief Actuary, to the Office of Management and Budget:

I am writing in response to your request for estimates of the financial effects on Social Security of a proposal, included in the President’s FY 2015 Budget, to reduce Social Security Disability Insurance (DI) benefits, dollar for dollar, for any month in which a disabled-worker beneficiary receives unemployment insurance (UI) payments. ... 

We estimate that enactment of this proposal in January 2015 would reduce DI benefit payments by $ 2.67 billion in total for calendar years 2015 through 2024, assuming the DI benefit reduction applied for UI claims with payments starting in August 2016 or later (see enclosed Table 1) . Reduction in DI benefit payments through the end of Fiscal Year 2024 would be $2.57 billion (see enclosed Table 2). The proposal specifies that the DI offset would apply for UI claims with payments starting in months beginning at least 18 months after enactment. For the long-range actuarial status of the overall OASDI program, we estimate that enactment of the proposal would reduce the actuarial deficit by about 0.01 percent of taxable payroll. ...

     There are at least a couple of problems with this estimate. First, it doesn't factor in the not inconsiderable costs of implementation which will significantly reduce the value of this offset. $2.67 billion is a huge amount of money but it's spread over 10 years. The costs of implementation over the course of 10 years could easily be a billion dollars or more. Nobody ever considers the costs of implementing this sort of proposal. Second, many states already have an offset running in the opposite direction. What will be done about them? Will it be like workers compensation where Social Security doesn't offset if the state does? If so, that dramatically reduces the amount that Social Security can offset. And if you're adopting this offset, is it appropriate to limit it to disability recipients? Shouldn't it also apply to retirement and survivor benefit recipients? There would be a lot more money to offset there. Adopting this offset won't be nearly as simple a matter as OMB and the Chief Actuary seem to think.

President's FY 2015 Budget Released

     The President's proposed budget for Fiscal Year (FY) 2015, which begins on October 1, 2014, is out. The portion of the budget affecting Social Security begins at page 1,247, which is page 1,251 of the pdf.

     Update: Acting Commissioner Colvin has issued a statement on the President's proposed budget.

Proposed Regulations On Duty To Submit Or Notify -- Unworkable

     I have been taking some time to review Social Security's proposed regulations that would impose a duty on disability claimants to either submit or notify Social Security of all evidence that relates to their disability claims and, if they do obtain medical evidence, to submit the evidence in its entirety. I've already posted about the problems involved in demanding that medical evidence be submitted in its entirety.  I'll come back to that subject in another post but I'm writing today about the proposed duty to either submit or notify Social Security of all evidence. It's amazing.

     The problem with this proposal is that it's completely open ended. All that is said is that "You must inform us about or submit all evidence known to you that relates to whether or not you are blind or disabled." What does "all evidence" mean? What does "relates to" mean? The proposal says that "Evidence is anything you or anyone else submits to us or that we obtain that relates to your claim." That's not helpful since it only discusses evidence that Social Security already has, not evidence that Social Security doesn't even know about. However, the proposal goes on to say that "Evidence includes, but is not limited to" and then gives a list of certain things such as medical reports or statements that the claimant has made about his or her medical condition without any limitation as to whom the statement may have been made to.

     Immediately, there's a problem with this definition of evidence, to the extent that it is a definition. The average claimant will have talked to many people about his or her medical condition and not just doctors -- family members, friends, neighbors, co-workers, strangers met in a doctor's waiting room, a pastor, etc. When people talk they constantly make statements. On its face a requirement that the claimant, without being asked, reveal anything that he or she has ever said to anyone about his or her medical condition or anything else that might relate in any way to their disability claim is impossibly overbroad. No one can possibly comply with this.

     But the proposal is even broader than this. The "definition" of evidence says that it isn't limited to statements the claimant has made. It extends to knowledge that the claimant has. If the claimant knows something that "relates" in any way to their disability claim, they must, without being asked, disclose that knowledge to Social Security. Let me list some pieces of knowledge that a claimant might possess and ask which of these you think the claimant should be required to reveal to Social Security without even being asked:

• Claimant was convicted of driving while impaired eight years before becoming disabled.
• Claimant alleges disability due to depression. Claimant was sexually abused as a child. She has not revealed this fact even to her psychiatrist.
• Claimant was sent for a Functional Capacity Evaluation (FCE) by the insurance company defending his workers compensation claim. (Different vendors have tried to sell Social Security on their FCE products. Social Security has always declined and has explicitly said that it regards FCEs as unreliable.)
• The claimant goes to a new age healer who uses crystals to adjust the claimant's chakras. 
• Water aerobics were recommended by one of the claimant's physicians. Claimant attended briefly.
• Claimant had some massages in hopes of easing her back pain. It helped a little but it was too expensive to do regularly.
• The claimant had a conversation with her doctor about whether she should stop work. The doctor encouraged the claimant to keep working, saying that he thought she would get better. The claimant decided to stop work anyway. There is nothing about this conversation in the doctor's records. (Is this a patient-physican privilege issue? Can there be any right to patient-physican privilege in a Social Security disability claim?)
• The claimant has a meeting with his pastor and reveals his anguish about why God has afflicted him with so much pain. He wonders whether he is being punished for his past sin of drug dealing. The pastor says he doesn't think that God is punishing him and urges him to pray for forgiveness of his sins. (We have pastor-penitent privilege as well as self-incrimination involved if the claimant has to reveal this.)
• On some days the claimant feels like he could work but most of the time he feels like he can't.
• The claimant does some babysitting for her grandson but not on a regular basis.
• The claimant, who has a bad knee, occasionally tries to take a walk. He doesn't get far.
• The claimant suffers from bipolar disorder. Sometimes he goes out to eat with his father and mother.
• The claimant is taking an online class in hopes of becoming a computer programmer eventually.
• Claimant smokes marijuana from time to time.
• Ten years ago, the claimant was accused of abusing her infant son. Ultimately, the charge was dismissed.
• The claimant visits his sick mother on a regular basis. He helps with some of her housework.
• The claimant went bowling once since becoming disabled.
• The claimant went to the emergency room after accidentally cutting his hand. The wound was sutured and healed without incident.
• In the course of an argument, the claimant's father in law said "You're not sick. You're just lazy. What kind of man won't even try to support his wife and child?"
• The claimant recently baked a cake to help celebrate her daughter's birthday.

     To be honest, though, your opinion or mine on whether any one or all of these should be revealed is irrelevant. There is always someone who will think that any one or all of these must be revealed sua sponte, to use a legal term. As long as anyone thinks they're relevant, the claimant is at risk of civil penalty or criminal prosecution for failing to reveal any one of these. It puts the onus on the claimant to identify anything that might affect his or her chances of being approved for Social Security disability benefits and to reveal that information to Social Security even without being asked.
     In ordinary civil litigation, there is discovery. In discovery, the party you're suing or who is suing you has the right to ask you questions or to ask you to produce documents in your possession that relate to the case. However, your adversary has to pose the question or make the request for some specific document or category of documents before you have an obligation to respond. There is no open ended, undefined responsibility to identify and turn over everything that might conceivably relate to the lawsuit. Here, Social Security is making an amorphous demand that the claimant identify anything which could affect their case and turn it over. If the claimant fails to identify something or thinks it's irrelevant when Social Security thinks otherwise, the claimant may be punished.

     There is a special problem for claimants represented by an attorney. The proposal says that it is not intended to abrogate the attorney-client privilege. The problem is that while I, as an attorney, cannot reveal a confidence given to me by a client, I also cannot continue to represent a client who is engaging in continuing illegal behavior related to the representation. If the claimant's duty is to reveal anything that anyone might conceivably consider relevant to consideration of the disability claim, the claimant must reveal to Social Security anything that he or she tells me, since, clearly, either I or the claimant considered the information I received to be relevant to the case. If the claimant refuses to turn over to Social Security whatever they have told me, I have no alternative but to withdraw from the case since otherwise I am participating in what is arguably an ongoing fraud. As Social Security correctly points out in this proposal, merely telling an attorney something doesn't exempt a client from ever having to reveal that information. Under this proposal, telling it to an attorney just identifies it as something that should be revealed to Social Security sua sponte. My opinion is that this proposal effectively removes not just the attorney-client privilege but any meaningful right to legal representation.
     You may rightly say that Social Security couldn't possibly have intended anything as extreme as what I'm describing and you'd be right. They just never thought through what they were proposing. Their only real goal was to get Republicans in the House of Representatives off their back. Unfortunately, it doesn't matter what Social Security thought it was doing. Regulations can have unintended consequences. Anyone considering this proposal, including Social Security, has to do a worst case analysis since no one can now know how such an expansive set of regulations would be interpreted.

     Social Security could try to limit a claimant's duty to reveal statements or facts but they actually say in the notice in the Federal Register that they wished to do the exact opposite because they wanted to "minimize the extent to which a claimant or his or her representative must make subjective judgments as to the legal relevance of particular evidence." They did this by making the obligation limitless. The lack of limits isn't an accident; it's intrinsic to the design of the proposal.
     If Social Security does think up some limits on the duty to reveal, is it appropriate to just go immediately to final regulations without allowing the public to comment on the limitations first? Aren't those limitations so integral to the proposal that it is impossible to offer fully meaningful comments on the proposal without knowing what those limitations are?

Central Offices Open On Tuesday

     Social Security's central offices in the Baltimore area will be open on a regular schedule on Tuesday. Those offices were closed by a snowstorm on Monday.

House Budget Committee Attacks Child SSI

    The Republican-controlled House Budget Committee has issued The War on Poverty: 50 Years Later, which is, of course, critical of federal anti-poverty efforts. The major part of discussion in the report of programs run by the Social Security Administration has to do with children's disability benefits under the Supplemental Security Income (SSI) program. The report tells us that "SSI has become a more general welfare program that in large part targets able-bodied single mothers ..." No, actually it targets sick children. With or without SSI, the mothers of seriously ill children usually aren't working anyway. The question is whether we assist them and their children. The report goes on to note that most child SSI recipients don't go on to work and many don't get a high school diploma. What do you expect? If they're seriously ill as children, shouldn't we expect them to have trouble getting a high school diploma and working as adults? If the evidence were the exact opposite, that child SSI recipients were getting high school diplomas and going to work as adults, wouldn't this report say that this shows that the child SSI recipients weren't that sick?

AALJ Lawsuit Dismissed

     The Association of Administrative Law Judges (AALJ) the labor union, yes, labor union, that represents Social Security's Administrative Law Judges (ALJs) sued Social Security in the U.S. District Court for the Northern District of Illinois alleging that the agency imposed an illegal quota requiring that the ALJs decide 500-700 cases per year and that this quota infringed upon the ALJs' right to decisional independence. The Court has now dismissed the AALJ lawsuit on jurisdictional grounds, saying that the AALJ would have to exhaust its remedies under the Civil Service Reform Act before proceeding to federal court.