Why Do They Even Bother?

     Social Security's Office of Chief Actuary is fighting back against an accusation that it has been too optimistic in its projections for the future of the Retirement and Survivors Trust Fund issuing two papers on the matter.

     The future is inherently unpredictable. Social Security's actuaries don't claim anything close to 100% accuracy. They give ranges. It's hardly their fault that everyone treats their midrange estimate as if it was gospel. How can anyone really expect that advances in human longevity will follow a predictable course? Who can reliably predict the future course of economic growth?

     The dispute is of no consequence anyway. No one would know about it except for right wing operatives spreading the word about an article in an obscure scholarly publication. Almost no one really cares. A difference of a year or two in the exhaustion date of the Trust Fund hardly matters since what really keeps Social Security going isn't a trust fund but the political will of the American people and that is unshaken.

     Republicans argue on the one hand that Social Security will fail because the Trust Fund isn't really real since it only contains U.S. government IOUs and on the other hand argue that Social Security will fail because the Trust Fund will eventually run out of money. These are contradictory arguments. If the Trust Fund isn't really real, what difference does its theoretical exhaustion date make? These arguments have been made for 80 years and have gotten Republicans nowhere. Why do they even bother?

Colvin Endorses Increase In Full Retirement Age -- Apparently Not

     Carolyn Colvin, Social Security's Acting Commissioner, has given an interview to Government Executive magazine. Unlike just a couple of months ago Colvin seems to not be expecting re-nomination for a term as Commissioner. She had been nominated in the last Congress but the Senate never voted on the nomination. She can continue as Acting Commissioner until a Commissioner is nominated and confirmed. Whatever chances she might have had of being nominated and confirmed take a big hit in the last paragraph of the Government Executive piece where Colvin appears to endorse an increase in Social Security's full retirement age.

     Update: To explain what happened after I posted this, you need to understand how all Commissioners of Social Security have dealt for decades with questions about the future financing of Social Security. They always say something like "There are a variety of ways of dealing with the long term financing of Social Security." When asked about a specific way of dealing with the long term financing issues, such as increasing the retirement age or lifting the F.I.C.A. cap, they say "That's one of many ways of dealing with the long term financing issues." Commissioners never express a preference for one technique over another. As much as possible, they want to keep themselves and their agency out of the political crossfire. I expect that they must make firm promises on this score to the White House and to various Senators before nomination and confirmation.
     In the original Government Executive article, Colvin was reported to have mentioned increasing the retirement age as a possible solution (and it would only be a partial solution) for Social Security's long term financing issues without mentioning other possible solutions. If Colvin actually said that, it would have been a massive departure from normal practice which would worry a lot of people.
     The last paragraph in the Government Executive article has been changed and now reads:

In the long term, said the acting commissioner with 20 months to go, “We hope Congress will [take a bipartisan approach], as was done in 1983 under the Greenspan Commission. Our agency’s role is to provide data and analysis to the White House and Congress on the impact of the various proposals.”

     The fact that this appeared in the last paragraph of the piece to begin with suggests that the reporter didn't understand the significance of what he was reporting and that he may not have been as careful in reporting exactly what he had been told as he should have been.

OIG Studies DDS Processing Times

     From a report by Social Security's Office of Inspector General (OIG):

We analyzed DI [Disability Insurance] and SSI [Supplemental Security Income] average claims processing times at 51 DDSs [Disability Determination Services] for FY [Fiscal Year] 2013 (we excluded the Puerto Rico DDS from our analysis since it only processed DI claims). In FY 2013, DDS average processing times ranged from 45 to 140 days for DI claims and 49 to 157 days for SSI claims. We mapped the processing times for all 51 DDSs to identify processing times outside the typical range. In doing so, for the DI and SSI programs, we found 44 (86 percent) of 51 DDSs had processing times between 60 and 120 days.

We identified seven DDSs that fell outside of 60- to 120-day ranges for DI and SSI processing times. Specifically, the Florida and Idaho DDSs had DI and SSI processing times shorter than 60 days while the California, Virginia, Nevada, Colorado, and Hawaii DDSs had DI and SSI processing times longer than 120 days. Despite differences in processing times, the seven DDSs had allowance rates comparable to the national average and accuracy rates at or above SSA ’s goal.

No Surprise Here

     From a letter from Social Security's Chief Actuary to the Chairmen of the House Social Security and Human Resource Subcommittees:

I am writing in response to your request for an estimate of the financial effects on Social Security of H.R. 2135, “ Promoting Opportunity for Disability Benefit Applicants Act , ” introduced on April 30. This Bill would allow the Commissioner of Social Security to provide information on appropriate public or private entities that provide employment services, vocational rehabilitation services, or other support services to applicants for disability benefits under Title II or Title XVI who are denied benefits based on an adverse determination of disability.  ...

We conclude that enactment of this Bill would most likely have a very small net effect on Title II, Old Age, Survivors, and Disability Insurance (OASDI), benefit cost and Title XVI, Supplemental Security Income (SSI), cost ...

News From NOSSCR

     I received a question from a reader who wanted to know why I hadn't posted news from last week's conference of the National Organization of Social Security Claimants Representatives (NOSSCR), held in Arlington, VA, just outside D.C. The answer is simple. There really wasn't much news. Here's the little I gleaned.

     Glenn Sklar, the head of Social Security's Office of Disability Adjudication and Review (ODAR), said that things were going to get better because the agency was hiring more Administrative Law Judges (ALJs). However, Sklar couldn't give a clear answer when asked if there would be any net improvement after the expected attrition of ALJs retiring, quitting and dying.

     Senator Sherrod Brown gave a nice speech, promising to fully support Social Security, including disability benefits but Brown's support was never in question. The problem is on the other side of the aisle.

     Ellen Nissenbaum of the Center on Budget and Policy Priorities (CBPP) gave a depressing talk about the challenges affecting the Social Security Disability Insurance Trust Fund. Nothing she said would be news to any regular reader of this blog. I thought she was overly pessimistic, talking almost exclusively about the negative while failing to mention the positive -- that Democrats, to this point, are solidly against significant changes in Social Security disability benefits and Republicans haven't produced a bill. Nissenbaum seemed to think that Republicans might get away with saying they would cut "disability" but not Social Security. I wouldn't bet on that working if I were a Republican running in anything other than an extremely safe district. I can see the TV ad now accusing a Republican of cutting, let's say, $100 billion from Social Security. Would it really work for the Republican to go around complaining that the ad is misleading because the $100 billion would be "disability" instead of Social Security?

     Barbara Silverstone, NOSSCR's Executive Director, noted that the attendance at the conference was under 700. In recent years, conference attendance, particularly in D.C., has been around 1,000. The reason the attendance was off wasn't the date or the location or the hotel or anything else like that. It's the fact that it has become extremely challenging to practice Social Security law these days. A fair number of Social Security attorneys are dropping out of the practice. Fewer who are still practicing Social Security law can afford to attend a conference. The next conference is scheduled for the end of October in Denver. That may be the sort of intimate gathering that NOSSCR hasn't seen in decades.

Stop The Gaming

     From Alicia Munnell, writing for Market Watch:

In 2009, we published three briefs under the title “Strange but True” that described Social Security claiming strategies that allowed individuals to get more benefits. The idea was to show how they worked, who was most likely to benefit, and how much they could cost. Our hope was that publicity would compel Congress to close down these options.

We had mixed success. The immediate result is that these strategies continued to gain in popularity with financial planners, and individuals increasingly approached their Social Security offices asking for arrangements that some staff had never heard of. Today people are writing best-selling books about how to get the maximum out of Social Security. ...

Under Social Security, married individuals are entitled to a retired worker benefit based on their own earnings and/or to a spousal benefit equal to one half of their spouse’s benefit claimed at the Full Retirement Age (currently 66). If a married individual claims before the Full Retirement Age, the SSA assumes that the individual is claiming both types of benefits, compares the worker and spousal benefits, and awards the highest. This procedure is called “deeming.”

After the Full Retirement Age deeming does not apply, and individuals can choose which benefit to receive. As a result, married individuals can claim a spousal benefit at 66 and switch to their own retired worker benefit at a later date. This approach allows a worker to begin claiming one type of benefit while still building up delayed retirement credits, which will result in a higher worker benefit later. ...

The final strategy – “claim and suspend” – allows people who have already claimed Social Security to re-enter the labor force and continue to build their retirement benefits. However, it also offers couples a claiming advantage. For example, a husband who reaches the Full Retirement Age can claim and immediately suspend his benefits, allowing his wife to receive a spousal benefit based on his earnings record. The husband is then free to continue working and receive delayed retirement credits, which increases not only his monthly benefit but also his wife’s.

     Munnell argues that Congress should pass legislation requiring deeming even after full retirement age.

Wasted Effort

       Some Harvard researchers are arguing that Social Security's Office of Chief Actuary is being too optimistic in predicting the future of Social Security's Retirement and Survivor's Trust Fund. Right wing operatives are spreading the news. I'm not going to bother trying to understand the arguments on both sides because they're completely irrelevant. Let me clue you in to a secret. The future of Social Security has almost nothing to do with the actuarial future of the Retirement and Survivor's Trust Fund. What supports Social Security retirement benefits isn't really the Trust Fund but the political will of the American people who overwhelmingly support the continued existence of Social Security retirement benefits. If that political will were lacking, there would be no legal impediment to abolishing Social Security next week regardless of the balance in the Trust Fund. With that political will present, it wouldn't matter if the Retirement and Survivor's Trust Fund were running out of money next week. There would be hell to pay for any politician who refused to keep Social Security going. Republicans argue on the one hand that the Trust Fund is a meaningless abstraction but then try to invest the Trust Fund with an almost talismanic quality, thinking that any remote threat to the Trust Fund will bring down Social Security. Republicans can keep whining about the Trust Fund for the next 80 years the same way they have for the last 80 years and it won't threaten Social Security in the slightest. 

Most Popular Baby Names

     From Social Security, the most popular names for babies in 2014:

Boys

1. Noah
2. Liam
3. Mason
4. Jacob
5. William
6. Ethan
7. Michael
8. Alexander
9. James
10. Daniel 

Girls

1. Emma
2. Olivia
3. Sophia
4. Isabella
5. Ava
6. Mia
7. Emily
8. Abigail
9. Madison
10. Charlotte