Social Security Underpaying Some Older Disabled People

     From a recent report by Social Security's Office of Inspector General:

SSA needs to improve its controls to ensure it notifies disabled beneficiaries when they are eligible for higher retirement benefits. Based on our random sample, we estimate that 17,137 disabled beneficiaries were eligible for higher retirement benefits totaling approximately $105.6 million. This occurred because SSA employees did not inform disabled beneficiaries when they were eligible for the higher retirement benefits or document the reasons beneficiaries did not elect higher retirement benefits, as required.

Number Of People Drawing Disability Benefits Declines For Fourth Straight Month

     Social Security has released an updated table which shows that the number of people drawing Disability Insurance Benefits declined in January. This is the fourth straight month of decline. Here is the number of people drawing the disability benefits for the last four months and from a year ago: 

• Jan 2014      8,930,246
• Sep 2014     8,958,415
• Oct 2014     8,957,699
• Nov 2014    8,956,269
• Dec 2014    8,954,518
• Jan 2015     8,943,579

2014 Waterfall Chart

Republicans Praise Coburn Bill

     From BloombergView:

Before leaving office last year, former Republican Senator Tom Coburn of Oklahoma introduced legislation with that goal. His bill called for intervention programs to spot and help people when injury or illness first threatens their livelihood. Medical and therapeutic technology has improved dramatically over the past two decades, but those advances aren't always available to everyone, especially those in low-skill, low-wage professions. Offering medical help, rehabilitation or other benefits can encourage workers to stay employed.

Coburn's measure also proposed to withdraw disability payments less abruptly for those who can still work, even if it's in a lower-wage job or only part time. In effect, their wages would be topped up with payments akin to the earned income tax credit.  The most pernicious incentive in the current system is the "cash cliff" that halts benefits to those who earn any meaningful income. When people try to support themselves, they deserve to be encouraged, not punished.

Republican Senator Orrin Hatch of Utah, the new Finance Committee chairman, has supported this approach to reforming disability insurance. Democrats have resisted the idea, arguing that it's wrong to save money at the expense of the disabled. In fact, the Coburn-Hatch approach to promoting employment would aim to save money, if at all, more by raising revenues (thanks to taxes on higher employment) than by cutting benefits.

     I am unaware of any statement by Senator Hatch to the effect that he supports the Coburn bill. However, I learned about this piece from a tweet by Sam Johnson, the Chair of the House Social Security Subcommittee, who seemed to express approval. Also, this piece is a serious misrepresentation of the Coburn bill which is almost exclusively aimed at punishing the disabled.
     Republicans should be realistic. There's no way the Coburn bill gets a majority of Republican votes in either house of Congress much less any Democratic votes. I'm not sure that calling the bill draconian goes far enough.

Social Security Gets A Good Report Card

     The Center for Plain Language has issued its 2014 report card and Social Security got an "A" for compliance with the Plain Language Act (yes, plain language is required by statute), an "A" for writing and a "B" for information design. Only the Department of Homeland Security and the Securities and Exchange Commission scored as high. No agency got an "A" for information design.
     Social Security isn't being shy about telling people that it thinks it's doing a good job. From the Baltimore Sun:

"Some organizations have a safety culture because it's very critical to their mission," said Steven Patrick, associate commissioner of the SSA's Office of Public Inquiries, a leader in the agency's effort to communicate clearly. "In many ways I think of plain language as critical to our mission." ...

Patrick said an eight-person team at Social Security screens a wide range of communications, including marketing materials, forms and even letters the agency sends to lawmakers on Capitol Hill. Officials also use software to analyze writing samples for style and clarity.

     Now, if the agency could just rewrite the letter it's been sending to claimants after they request a hearing, the letter that unintentionally misleads many of them into believing that their hearing is coming up in 20 days. How many decades has that letter been in use?

A Small Item

     This is from the President's budget proposal for the next fiscal year:

The Budget will require OASDI [Old Age, Survivors and Disability Insurance] recipients seeking overpayment waivers to grant SSA [Social Security Administration] authority to certify financial information. This new authority would extend the current practice of requiring SSI [Supplemental Security Income] recipients to provide SSA authorization to access data from their financial institutions to determine their available resources. Currently, there is no verification of financial assets for overpayment waiver claims for OASDI

The Bottom Line

     I realize that I didn't give the bottom line on the President's budget proposal for the Social Security Administration for Fiscal Year (FY) 2016, which begins on October 1, 2015. The President proposes a 5% increase in the agency's operating budget from $12,173 million this year to $12,791 million next year.

What The Acting Commissioner Is Requesting

     The Commissioner of Social Security is required by statute to prepare a budget request for the agency and the White House cannot block its release -- not that there's usually that much difference between the Commissioner budget request and the President's. Here's a summary table from the Acting Commissioner budget request for fiscal year (FY) 2016, which begins on October 1, 2015.