Proposal To Require That VEs Not Be Present In Person At Hearings

     Social Security has sent proposed new regulations on Setting the Manner for the Appearance of Parties and Witnesses at a Hearing to the Office of Management and Budget (OMB) for approval. If approved, the proposed regulations will be published in the Federal Register for public comment. Social Security will have to consider the comments before adopting final regulations. Here's Social Security's summary of the proposal:

We propose to revise 20 CFR parts 404 and 416 to establish a preference for the manner in which parties and expert witnesses appear at a hearing, including by video teleconference (VTC) or by telephone.  We also propose to require non-parties, including medical and vocational experts, to appear by telephone or VTC, unless circumstances in the case warrant a different manner of appearance. We would specify that although the adjudicator may identify facts that may impact an individual’s manner of appearance, it is ultimately the Agency’s responsibility to schedule the hearing and determine the manner in which individuals will appear.

Could Social Security ALJs Be Appointed Based On Their Politics?

     Because of President Trump's Executive Order, Administrative Law Judges (ALJs) will no longer be appointed through a process controlled by the federal Office of Personnel Management (OPM). Agency heads will be able to appoint the ALJs pretty much however they want to appoint them.

     Social Security and other agencies would never appoint ALJs on political criteria, would they? We'll see but take a look at what happened with Immigration Judges during the George W. Bush Administriation. Of course, the Trump Administration is too high minded to do anything like that.

CA6 Opinion On When Lucia Argument Must Be Raised

     After the Supreme Court found in Lucia v. SEC that the Administrative Law Judge (ALJ) appointment process was unconstitutional, the Solicitor General, who represents the federal government before the Supreme Court, told agencies that the Department of Justice would only defend ALJ decisions issued before the date that the ALJs were constitutionally appointed on the grounds that no objection was made while the case was pending before the agency.

     We've just gotten the first decision of a Court of Appeals on this issue and the Court wasn't buying that argument. In the case before the Sixth Circuit, Jones Brothers v. Secretary of Labor, the objection was filed before the Federal Mine Safety and Health Review Commission but not before the ALJ. Here's some language from the opinion:

... This administrative agency, like all administrative agencies, has no authority to entertain a facial constitutional challenge to the validity of a law. An administrative agency may not invalidate the statute from which it derives its existence and that it is charged with implementing. See Mathews v. Diaz , 426 U.S. 67, 76 (1976); Weinberger v. Salfi , 422 U.S. 749, 765 (1975); Johnson v. Robison, 415 U.S. 361, 368 (1974); Pub. Util. Comm’n v. United States, 355 U.S . 534, 539–40 (1958). 

Each of the three branches of the federal government, it is true, has an independent obligation to interpret the Constitution. But only the Judiciary enjoys the power to invalidate statutes inconsistent with the Constitution. See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177–78 (1803). 

We thus could not fault a petitioner for failing to a raise a facial constitutional challenge in front of an administrative body that could not entertain it. See McCarthy v. Madigan , 503 U.S. 140, 147 – 48 (1992). To hold otherwise would be to stretch forfeiture beyond its breaking point. We must read the statute in light of its constitutional setting: The Mine Act establishes an agency dispute - resolution scheme of limited scope. In that context, “questions of law” include only those legal claims the Commission is fit to decide and fix. See Plaquemines Port, Harbor & Terminal Dist. v. Fed. Mar. Comm’n , 838 F.2d 536, 544 (D.C. Cir. 1988) (Bork, J.); Motor & Equip. Mfrs. Ass’n v. EPA, 627 F.2d 10 95, 1114–15 (D.C. Cir. 1979). ...

     The Court went on to the more  complicated question of whether the petitioner forfeited the Lucia argument for not raising "as applied" constitutional challenge earlier but eventually concluded that the petitioner had not forfeited the argument. I see nothing in the opinion that would not apply to Social Security with at least as much force.

71% Overpayment Rate

     From Work-Related Overpayments of Social Security Disability Insurance Beneficiaries: Prevalence And Descriptive Statistics, a study by several researchers for the Mathematica Center for Studying Disability Policy:

Work-related overpayments occur when the Social Security Administration (SSA) issues a monthly benefit to which an individual is not entitled because of engagement in substantial gainful activity. ... 
We found that: 

• 1.9 percent of all DI [Disability Insurance] beneficiaries in our sample were overpaid due to work in one or more months during the three-year study period. 
• Among DI beneficiaries with sufficient earnings to put them at risk of a work-related overpayment, 71 percent were overpaid. 
• Work-related overpayments lasted for a median of nine months. 
• Work-related overpayments accrued to a median of over $9,000.

      71% of the time that a Social Security Disability Insurance Benefits recipient returns to work for long enough at enough pay that his or her benefits should be reduced those benefits aren't actually reduced and there's an overpayment of benefits? That's terrible. It's obvious that there are systemic problems. You can't just blame claimants for this high a rate of overpayments. There are undoubtedly many reasons for this situation but the incredible complexity of the rules applied in cases where beneficiaries return to work have to be a major part. I also think it's too difficult to report return to work.
     I'll make one simple suggestion which would probably help and it could be implemented without changing any laws. Send a yearly mailer to each person drawing disability benefits each January asking whether they have earned money in the preceding year. If they reply that they have, follow up with them to get the details. If they have worked but remain eligible for benefits at the time, send them quarterly mailers for at least the next couple of years and follow up on the responses. I'll admit that there's one huge problem with my suggestion. Social Security lacks the manpower to deal with the responses they would receive. I'll admit that it's also possible that it wouldn't be cost efficient since only 1.9% o benefits recipients are affected. Got any better ideas?

SSA Failing To Recover Net Out Some SSI Overpayments And Underpayments

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

... To recover an outstanding SSI overpayment, SSA can withhold the entire prior-month underpayment due a recipient up to the balance of the overpayment. SSA defines underpayments that are due for months before the month SSA identifies them as prior-month underpayments. ...

SSA did not always follow its policy of withholding SSI prior-month underpayments from outstanding SSI overpayments. Specifically, SSA did not appropriately withhold more than 6,000 prior-month underpayments to recover outstanding overpayments. This occurred because SSA employees did not take the necessary manual actions in SSA’s systems to ensure overpayment recovery. Had SSA followed its policy, we estimate it could have recovered approximately $44 million in outstanding overpayments from nearly 125,000 prior-month underpayments it paid to SSI recipients during CYs 2015 and 2016. ...

Lucia Doesn't Pose A Catastrophic Threat

     The prospect of huge numbers of Appeals Council remands as a result of the Supreme Court decision in Lucia v. SEC worries a lot of people. It would certainly add to the severe backlogs at the hearing level but let's not get carried away. As of the end of June there were 89,157 cases pending at the Appeals Council. So far this fiscal year, Administrative Law Judges are disposing of an average of 60,746 cases per month. This means that if every case pending at the Appeals Council is remanded for a new hearing as a result of Lucia, the backlog at the hearing level would increase by about one and a half months. Certainly, any increase in the backlog is undesirable but a one and a half month increase in the backlog is hardly catastrophic. Ending the backlog at the Appeals Council level would be a good side effect. Appeals Council employees who suddenly lack regular job duties could help with the decision writing backlog at the hearing level. Large numbers of Lucia remands wouldn't destroy the system -- not that the system is anything to brag about.

Are ALJs A Bunch Of Liberal Democrats?

     Based on limited experience, Paul Mirengoff believes almost all Administrative Law Judges (ALJs) are liberal Democrats, a group he certainly doesn't want hearing cases.

     Some real ALJs beg to differ.

     I don't talk much with ALJs about politics and never at a government office. I rarely interact with ALJs other than at a Social Security office. My impression is that the veterans preference assures that ALJs as a group aren't particularly liberal, particularly for lawyers. Of course, it's more than possible that Mr. Mirengoff regards anyone who doesn't wear a MAGA cap regularly as a liberal Demicrat.

SSA Failing To Initiate Overpayment Withholding On A Timely Basis In Some Cases

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

SSA did not always appropriately withhold overpayments from individuals receiving OASDI [Old Age, Survivors and Disability Insurance] or SSI benefits. We reviewed a sample of 50 OASDI beneficiaries and 50 SSI recipients who were receiving a monthly benefit and had a total outstanding overpayment balance greater than $1,000. We found SSA missed opportunities to recover overpayments from 31 of these individuals’ benefits (28 OASDI beneficiaries and 3 SSI recipients). ...

Had SSA initiated withholding timely, we estimate it could have already collected over $114 million in overpayments from almost 25,000 individuals. ...