Opting Out Of The Workers Compensation Offset In Texas

     Let me explain first why I'm writing about a development in workers compensation law. Claimants receiving Social Security disability benefits as well as workers compensation benefits are subject to an offset. Usually, Social Security disability benefits are reduced because of the receipt of workers compensation benefits. Sometimes the offset works in the opposite direction. 

     The states of Texas and Oklahoma now allow employers to opt out of workers compensation. You read that right -- opt out of workers compensation. The employers have to set up benefits that parallel workers compensation but they can arrange things in ways that save money, such as refusing to pay for carpal tunnel syndrome or refusing to pay benefits unless a worker reports an injury by the end of his or her work shift or cutting off all benefits after two years. 

     In terms of workers rights, these plans are very worrisome but I'm writing about the Social Security implications. Social Security has decided that benefits under the company plans that substitute for workers compensation aren't subject to the workers compensation offset. This development is already costing Social Security's Disability Insurance Trust Fund money. Other states are studying what Texas and Oklahoma have done. There may be significant effects upon Social Security. Employers are trying to shift the burden of providing for workers injured on the job to Social Security and Medicare. This needs Congressional scrutiny.

Senate Hearing Postponed

     The Senate Homeland Security and Governmental Affairs Committee hearing on Understanding Social Security’s Long-Term Fiscal Picture that had been scheduled for October 20 has been postponed. No new date has been announced.

The Sad Situation In Kentucky

     The Lexington Herald-Leader has an op ed from Ned Pillersdorf, the attorney who has brought class actions both against Eric Conn seeking damages for his representation of claimants before the Social Security Administration and against the Social Security Administration for its efforts to cut 1,787 of Conn's former clients off disability benefits. 

      It's a sad situation. It's surprising that we're still waiting for a decision from a federal District Court Judge. It's surprising that Social Security has started holding hearings in these cases. It may only be days before some benefits are terminated. Without intervention from the federal courts within a few months hundreds will have lost benefits.

Senate Committee Schedules Hearing

     The Senate Homeland Security and Governmental Affairs Committee has scheduled a hearing for October 20 on Understanding Social Security’s Long-Term Fiscal Picture. Here's the witness list:

• Stephen C. Goss, Chief Actuary U.S. Social Security Administration 
• Jagadeesh Gokhale, Ph.D.,  Director of Special Projects Penn Wharton Public Policy Initiative 
• Dean Baker, Ph.D., Co-Director Center for Economic and Policy Research

Andrew Biggs Is Still Annoying -- And Wrong

     When George W. Bush campaigned for the partial privatization of Social Security, Andrew Biggs, a Social Security employee, was at his side. That rankled me. I felt it was deeply inappropriate for a Social Security employee to take on such a politicized role. Bush later nominated Biggs to become Deputy Commissioner of Social Security. Senate Democrats blocked that nomination, suggesting that I wasn't the only one rankled by what Biggs did.
     After his stint at Social Security, Biggs landed a job at the American Enterprise Institute, a Koch brothers front organization.
     Biggs has a blog at the Forbes website on which he's posted a response to the Social Security discussion at the Democratic Presidential debate Tuesday night. The ideas of expanding Social Security and lifting the cap on wages covered by FICA both came up in the debate. Biggs makes the point that lifting the FICA cap wouldn't generate enough revenues to fund an increase in Social Security benefits. This is accurate but it's also rich coming from someone who campaigned for completely undermining Social Security's finances. President Bush never released a plan for partially privatizing Social Security but he was promising to keep paying benefits to everyone already drawing benefits or near retirement age, to not increase the FICA tax and yet to divert much of the FICA tax receipts to private accounts. Put all of that together and it would cost trillions of dollars. Did Biggs and Bush ever put forward a plan for paying for this? Of course not. Republicans never have to pay for their Social Security plans. Only Democrats have to pay for their plans.

     Biggs points out that raising the FICA cap wouldn't be enough to assure that no further change would have to be made anytime in the next 75 years to protect Social Security's funding. He seems to believe that means there's no point in raising the FICA cap. Right. Lifting the FICA cap would only assure program funding until 2080 so obviously that idea is worthless. In fact, if you remove the FICA cap, you could do some modest benefit increases and still assure the future of the Trust Fund well into the future. That was what the Democratic Presidential candidates were talking about.
     I think that Biggs will have to come up with some better arguments to convince the American people that it's a bad idea to raise taxes on the wealthy in order to give higher Social Security benefits to many.

No COLA This Year

     As expected, there will be no Cost Of Living Adjustment (COLA) this year for Social Security recipients. This is the third time this has happened since 2010. It had never happened before 2010.
     Unfortunately, unless there's a change in the law, Medicare premiums will be increasing dramatically for almost one-third of Social Security recipients. Since the Medicare premiums are deducted from Social Security benefits that means that a lot of Social Security recipients will see a significant drop in the payments they receive.

Colvin Heading To Florida

     Carolyn Colvin, the Acting Commissioner of Social Security, will be in Sarasoto, FL for a town hall discussion on Thursday. Representative Vern Buchanan invited her. Buchanan, a Republican, is a member of the Social Security Subcommittee of the House Ways and Means Committee.

GOP May Demand Social Security Cut

     From CNN Politics:

... [Senate Majority Leader] Mitch McConnell privately wants the White House to pay this price to enact a major budget deal: Significant changes to Social Security and Medicare in exchange for raising the debt ceiling and funding the government. ...

McConnell is seeking a reduction in cost-of-living adjustments to Social Security recipients and new restrictions on Medicare, including limiting benefits to the rich and raising the eligibility age, several sources said. ...