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Mike Conrad ‏@mikeconrad1 5h5 hours ago

Social Security projected to hit 100 year mark in good shape. This will also mark 100 years of opponents' constant claims of impending doom.

Is PEBES Worth The Cost?

     The Center for Retirement Research at Boston College has issued a report asking "Does the Social Security 'Statement' Add Value"? The Social Security "Statement" they're talking about is what the agency calls the Personal Earnings and Benefit Estimate Statement (PEBES). 

     Most people say they remember receiving PEBES and found the information helpful. However, there is little evidence that PEBES affects claiming behavior and there's little evidence that people remember the amount they will receive when they retire. See the chart below.

     For what it's worth, my clients often ask how much they'll receive a month if their disability claim is approved. I seldom have easy access to this information until close to the hearing. When I'm asked this question, I ask the client if they remember receiving the PEBES -- describing it in a way such that they'll understand what I'm talking about. They generally remember receiving it and say they have saved it. I tell them that the PEBES tells the approximate amount that their disability benefit will be. They're always surprised to hear this.

The "Testing" Goes On Without End

     Social Security is once again extending the "testing" of the use of a single decision maker and the elimination of reconsideration. This testing has been going on for many years. Everyone knows they both work. However, the single decision maker system results in a really tiny increase in the number of disability claims approved so it can't go forward and eliminating reconsideration funnels more cases to hearings before Administrative Law Judges which would increase backlogs at that level so it can't go forward either. So Social Security just keeps extending the "testing" indefinitely.

Social Security Not Doing Data Match With Federal Workers Comp

     The Government Accountability Office (GAO) has done a study on whether Social Security is properly reducing Disability Insurance Benefits by workers compensation benefits paid to former federal employees and found problems. GAO found that the agency was not detecting 13% of the cases where there should have been an offset and that there were probably more cases but GAO could not say for sure due to limitations in Social Security's data. The underlying cause of this problem is Social Security's failure to do a data match with federal workers compensation records. Social Security has felt that such a match would not be cost effective. I was under the impression that the agency was already doing data matches with state workers compensation records. I don't understand why they wouldn't do the same with the federal workers compensation records.

Just Tell Me What You Want!

     Senator Orrin Hatch went to the Senate floor today to talk about the bills that he has put forward on Social Security disability. It's worth watching the recording of his speech on the issue. Hatch is clearly concerned that any disability proposal that he and other Republicans come up with will be criticized as cutting Social Security. He really, really wants the President and other Democrats to propose cuts in Social Security disability while he sits back and keeps saying, "Not good enough -- give me more." However, Hatch has yet to propose anything that would extend the life of the Disability Insurance Trust Fund. All he and his Republican counterparts in the House come up with are dubious small bore proposals that would do virtually nothing to extend the life of the Disability Insurance Trust Fund. Specifically, they are avoiding putting forward a plan to transfer income or assets from the Retirement Insurance Trust Fund to the Disability Insurance Trust Fund. We have no idea what their price for doing so really is.

     There's no reason for the President to accommodate Hatch and other Republicans on this issue. The President has a plan. Republicans control the Congress. They should come up with their own plan. If they don't want this to be an election issue in 2016 they need to convince Democrats, including the President, to accept their plan. If Hatch and his Republicans can't even say what they want, it's impossible to negotiate with them.

     And, I keep saying, there's a simple solution for this problem. The President can do it without help from Congress. Somehow, I think that Senator Hatch might be privately relieved if the President just took care of the problem.

Small Bore Proposals From Hatch

     A press release:

Senate Finance Committee Chairman Orrin Hatch (R-Utah) today announced another trio of bills designed to improve the Social Security Disability Insurance (SSDI) program.  The bills put beneficiaries first by establishing new methods to prevent fraud, improve accountability, and provide more opportunities to current and future beneficiaries. The trio of bills join other SSDI bills Chairman Hatch introduced earlier this year as part of a broader package to address pending depletion of the SSDI trust fund.

“For some time now, the SSDI program has been in need of adjustments and updates to the services it provides,” Hatch said. “These bills are yet another step in that process and will help modernize SSDI making it more efficient and effective for both beneficiaries and taxpayers.  The SSDI trust fund will be depleted as early as next year and Congress must continue to search for avenues to address the financial challenges facing the program while continuing to improve on how the program works for beneficiaries.” 

The Promoting Opportunity for Disability Benefit Applicants Act, S. 1923, authorizes the Social Security Administration (SSA) to give denied DI applicants information on employment support services, from public and private non-profits, preventing workers from cycling through the application process and allowing them to re-enter the workforce. Additional background available here.

The Improving the Quality of Disability Decisions Act of 2015, S. 1922, requires the SSA to review Administrative Law Judge disability decisions and report the results annually to Congress to ensure judges are following the law and Social Security’s rules and regulations. Additional background available here.

The Disability Fraud Reduction and Unethical Deception (FRAUD) Prevention Act, S. 1929, updates and builds upon tools to deter and punish fraudsters by imposing civil monetary penalties and felony charges to criminals who defraud Social Security.  The bill also requires a regular review of major claimant representatives to ensure compliance. Additional background available here.

Joining Hatch on the bills as cosponsors are Senators Roy Blunt (R-Mo.), Dan Coats (R-Ind.) and James Lankford (R-Okla.).   

GOP Doesn't Know What It Will Do About Disability Trust Fund

     The Fiscal Times is running an article on Republican efforts to come up with a plan for the looming shortfall in Social Security's Disability Insurance Trust Fund. The bottom line is that Republicans don't have a clue what they'll do. While they might love to cut any type of Social Security, they don't want their fingerprints on any plan to cut Social Security in any way so they work on small bore plans that would have virtually no effect on Social Security disability costs. However, it's clear that many Republicans in Congress will oppose any fix because they want to make their "Social Security is broken" mantra come true.

     By the way, the article advances the myth that there is a "growing number" of people seeking Social Security disability benefits. There used to be true but that's certainly not the case now. The number claiming benefits has gone down dramatically. The number actually drawing benefits has declined modestly over the last year. I can't understand why this point isn't being raised more by Social Security's supporters. Maybe some of these supporters have been taken in by the constant Republican repetition of the "Social Security disability is out of control" meme.

     By the way, I intend to keep pointing out that the administration can solve this problem rather simply without Congressional help. I still haven't heard any reason why my plan won't work.

Fewer People Drawing Disability Benefits

     The number of people drawing Disability Insurance Benefits from Social Security declined in July. This number has declined in nine of the last ten months. There has been a decline of 0.3% from the peak in September of last year.