OMB Clears Proposed Rule On Submission Of Evidence

     Just in time for tomorrow's hearing before the Senate Budget Committee, the Office of Management and Budget (OMB) has cleared Social Security's proposed rule requiring the submission of all evidence in Social Security disability claims. We can only hope that the agency made dramatic changes after this was originally published because the original proposal was completely unworkable.

     After OMB clears a regulatory proposal, the Commissioner has to sign off on it before it is published in the Federal Register. Typically, the Acting Commissioner has been taking a few weeks to review these before signing off on them. However, she can sign off immediately if she chooses. So far, the Office of Federal Register doesn't show the receipt of the final regulations. After publication, new regulations typically go into effect in 30 days. 

     I cannot emphasize too much how unworkable the original proposal was. Requiring the submission of "everything" sounds great but imposing this requirement without defining what "everything" means could bring about the collapse of representation of claimants. That would not just be bad for attorneys or their clients. The Social Security Administration is not prepared to cope with hundreds of thousands of unrepresented claimants, nor, for that matter, is Congress since that's where claimants turned before attorney representation of Social Security claimants became widely available. I speak from experience. I was around when there were few other attorneys doing this kind of work.

Senate Budget Committee Hearing

     The Senate Budget Committee has scheduled a hearing for Wednesday on "The Coming Crisis: Social Security Disability Trust Fund Insolvency.” Here's the witness list:

• Carolyn W. Colvin, Acting Commissioner of Social Security, Social Security Administration
• Dr. Mark Duggan, Wayne and Jodi Cooperman Professor of Economics, Stanford University
• Dr. Philip de Jong, Professor of Economics, University of Amsterdam - Amsterdam School of Economics
• Kate Lang, Staff Attorney, National Senior Citizens Law Center

Prospects For Disability Trust Fund Looking Up

     The Baltimore Sun is running an article claiming that "The number of people receiving disability insurance payments from the Social Security Administration declined last year for the first time since 1983 ..." I'm not sure how they figured that since the website of the Office of Chief Actuary at Social Security shows an increase of about 12,000 rather than a decrease. However the article is correct in showing that the number of claims filed and applications approved is down sharply over the last four years. The number drawing benefits has actually declined over the last four months and there's a good chance that this decline is a trend that will continue for several years as baby boomers who went on disability benefits a few years ago age into retirement benefits. Interestingly, Stephen Goss, Social Security's Chief Actuary, is quoted in the article as saying that "The disability applications we have coming in now are even lower than we were assuming", suggesting the possibility of some change in the next projection for the Disability Trust Fund, due out sometime later this year.

Social Security In 1940

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.