Two Congressional Hearings On September 27

     From a press release:

House Ways and Means Social Security Subcommittee Chairman Sam Johnson (R-TX) announced today that the Subcommittee will hold a hearing titled, “The State of Social Security’s Information Technology,” on Thursday, September 27 at 11:00 AM ...

To deliver services to frontline employees and to the public, the SSA relies on a massive IT infrastructure.  The SSA’s systems are housed and supported by two modern data centers and more than 7,000 physical and virtual servers.

However, many of the SSA’s core IT systems and databases are more than 30 years old. Many of these also rely on tens of millions of lines of antiquated programming languages, such as COBOL, FORTRAN, and PowerBuilder.  To overhaul its systems, in October 2017, the SSA began a multi-year $691 million IT modernization effort.  As part of the FY 2018 Omnibus appropriations bill (P.L. 115-141), Congress appropriated $280 million in dedicated funding.

At the same time, the SSA is in the third year of a second attempt to develop the Disability Case Processing System (DCPS) to replace the legacy case processing systems used at the state-run, federally funded Disability Determination Services.  Since the reboot in 2015, DCPS has faced development delays and recently increased its cost estimate for completion of the project by more than 25 percent due to a failure to adequately identify the scope at the outset.

This will be Chairman Johnson’s final hearing as Subcommittee Chairman.

     Ignore the language about "antiquated programming languages." Those programs actually work. The real issue here is DCPS which isn't working. Unless the agency can find a way to turn DCPS around, it's heading rapidly towards debacle status.
     In other Congressional hearing news, the Senate Finance Committee has rescheduled the hearing on the nomination of Gail Ennis to become Inspector General at Social Security for 10:00 the same morning.

From The Republican Fantasy World

     From The Hill:

Rep. Todd Rokita (R-Ind.) introduced a bill that addresses many of the [Social Security disability] program’s functional shortfalls. His Making DI Work for All Americans Act of 2018 (H.R. 6352) would also make the program solvent over the long run, setting the stage for a significant payroll tax cut. ...

[T]he bill would add reviews for “outlier” administrative law judges (something that would have applied to a now-imprisoned administrative law judge). And to promote a more equitable determination process, it would subject SSDI judges to a code of ethics similar to those applied to other judges.It would also empower disability applicants by cutting the SSA out of the representative/client relationship. Instead, applicants would be in charge of their own money. ...

In terms of the standards for determining who’s eligible for benefits, the bill would require the SSA to update the archaic list of jobs that exist in the national economy ...

The bill seeks to improve return-to-work rates by having the SSA conduct more frequent and more comprehensive continuing disability reviews, using the most appropriate standards available to determine continued disability status.Finally, the bill would help restore the program to its original goal of preventing poverty without tapping the regular Social Security trust fund. To this end, it establishes a flat, anti-poverty benefit for all new SSDI beneficiaries. ...

     By the way, Rokita isn't running for re-election in the House of Representatives. Instead, he's running for the Senate. An old poll showed him running way behind incumbent Democrat Joe Donnelly.

Identity Theft Change

     From some television station that wants to be known as "ABC15":

All Jill Carlon wanted was a new Social Security number for her daughter. The girl was the victim of ongoing identity theft problems. For seven years, Carlon said the Social Security Administration's Phoenix office denied her requests, even after Carlon changed the girl's name on advice from a Social Security caseworker.  

In April, ABC15 aired the story of Carlon's daughter and the fight to clear the credit history attached to her Social Security number even though she was just 14 years old. Two days later, Carlon said, the Social Security Administration called her and offered to issue the child a new number. 

The story caught the attention of Rep. Kyrsten Sinema (D) 9th District. Sinema had recently introduced a bill that would streamline the Social Security verification process for obtaining credit, making it harder for people to commit synthetic identity theft. 

The bill eventually passed and was signed into law by President Trump. After seeing Carlon's story, Sinema sent a letter to the Social Security commissioner. ...

Sinema said the agency has now instructed all of its local offices to never advise someone to change their name in order to get a replacement number. Also, Sinema said regional experts are now assigned to provide guidance to local offices and caseworkers with complex cases. Also, she said caseworkers will have more leeway in determining when a new number is warranted. ...

     I think that Social Security's attitude may be: Your problem is with credit reporting agencies who are reporting phony information. Why are you asking us to solve the problem? Why is it easier for Social Security to solve the problem than the credit reporting agencies?

Glad The Pigeon Is OK

     From the Washington Post:

A woman who yelled at Social Security Administration workers, hit a security guard in the head with her fanny pack that had a small pigeon inside and then pulled a knife on him has been arrested and charged in Northern Virginia. ... 

The pigeon was taken to a local animal shelter and was not harmed, officials said. No one was hurt during the incident. ... 

The pigeon will be “returned to the wild after the investigation is complete,” according to a police statement. ...

I Can't Say That I've Seen This Problem

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

... In Fiscal Years (FY) 2015 and 2016, SSA [Social Security Administration] issued approximately 1.1 million claimant representatives’ direct-fee payments totaling approximately $2.6 billion. We identified 39,024 beneficiary claims where SSA may have collected an incorrect user fee. From this, we selected a random sample of 50 beneficiary claims for review. ...

SSA technicians applied an incorrect user fee for 26 (52 percent) of our 50 sampled beneficiary claims. Generally, this occurred because technicians’ authorization of claimant representative fee payments involved manual, complex, and error-prone postings to the electronic records. We estimate d SSA incorrectly applied user fees for 20,292 beneficiary claims, which resulted in SSA over-assessing $338,916 and under- assessing $603,133 to claimant representatives.

And The Beat Goes On

     From the Lexington Herald-Leader:

Former clients of disbarred Eastern Kentucky attorney Eric C. Conn will have to wait a little longer to get access to files in his defunct office that might be of use in hearings on whether they’ll continue to receive disability benefits.

The Kentucky Bar Association refused to appoint a receiver for the files earlier, a federal prosecutor said in a court motion.

Because of the “complete abdication of responsibility by the KBA” for the files, prosecutor Darren L. McCullough asked U.S. District Judge Danny C. Reeves to appoint someone to take charge of getting the records to Conn’s former clients.

There are 6,000 to 8,000 files at the office, McCullough said in the motion.

Reeves scheduled a hearing on the request for Oct. 12.

The issue is important because the Social Security Administration last month began holding hearings on whether nearly 2,000 former clients of Conn will get to keep their disability benefits. ...

[T]he files in Conn’s former office may contain evidence from other medical professionals not suspected of wrongdoing, meaning it could still be used in proving eligibility, [Ned] Pillersdorf said.

Pillersdorf said he has learned that Conn did not file key medical evidence in many cases. ...

Read more here: https://www.kentucky.com/news/state/article218390780.html#storylink=cpy     I

Read more here: https://www.kentucky.com/news/state/article218390780.html#storylink=cpy

      I am representing some of Conn's former clients. I've heard it from them. They gave Conn medical records but Conn never gave the records to Social Security. Conn had it all figured out. Why bother with traditional lawyering? Don't bother collecting your clients' medical records. Even if your clients give you copies of their records, don't do anything with them. Just send your clients to your own pet physicians and psychologists and submit only those records. That way was so much easier for Conn.
     I and other attorneys can now try to collect old medical records on Conn's former clients but it's tough. Our clients' memories have dimmed. They may not remember all the doctors they saw years ago. Some of those medical practices have gone out of business in the intervening years. We need access to Conn's old files.

     I'm not a member of the Kentucky bar so I hate to criticize the KBA but I will. They've been completely irresponsible. I'd like to think Conn couldn't have happened in North Carolina but if he had, I'm certain the N.C State Bar would have behaved far differently than the KBA. When even the prosecutors are more sympathetic to Conn's former clients than the KBA, something is wrong.
     Why is Social Security plowing ahead with hearings when they know that Conn's former clients can't get access to their files?

Read more here: https://www.kentucky.com/news/state/article218390780.html#storylink=cpy

Office of Chief Actuary Scores Social Security Plans

     Social Security's Office of Chief Actuary has put out an update to its set of financial estimates for various options to change Social Security programs, mostly options that would reduce Social Security's long term financing problems. Here are some of the more popular options expressed in the percentage of long term financing deficit eliminated (positive number) or increased (negative number):

• Starting December 2019, reduce the annual COLA by 1 percentage point +64%
• Starting December 2019, add 1 percentage point to the annual COLA for beneficiaries who have lived past a "specified age". -3%
• Price indexing of PIA factors beginning with those newly eligible for OASDI benefits in 2025: Reduce factors so that initial benefits grow by inflation rather than by the SSA average wage index  +98%
• Provide an increase in the benefit level of any beneficiary who is 85 or older at the beginning of 2020 or who reaches their 85th birthday after the beginning of 2020  -5%
• Give credit to parents with a child under 6 for earnings for up to five years. The earnings credited for a childcare year equal one half of the SSA average wage index (about $25,947 in 2018). The credits are available for all past years to newly eligible retired-worker and disabled-worker beneficiaries starting in 2019. -8%
• After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, increase the NRA 1 month every 2 years until the NRA reaches 68 +13%
• Increase the payroll tax rate (currently 12.4 percent) to 15.4 percent in 2019 and later. 100%
• Eliminate the taxable maximum in years 2019 and later, and apply full 12.4 percent payroll tax rate to all earnings. Do not provide benefit credit for earnings above the current-law taxable maximum. +83%
• Expand covered earnings to include employer and employee premiums for employer-sponsored group health insurance (ESI). Starting in 2022, phase out the OASDI payroll tax exclusion for ESI premiums. Set an exclusion level at the 75th percentile of premium distribution in 2022, with amounts above that subject to the payroll tax. Reduce the exclusion level each year by 10 percent of the 2022 exclusion level until fully eliminated in 2031. Eliminate the excise tax on ESI premiums starting in 2022. +32%

Why Do People Retire Early?

     From Accounting For Social Security Claiming Behavior by Svetlana Pashchenko and Ponpoje Porapakkarm, a paper published by the Center for Retirement Research at Boston College:

The paper examines why most individuals claim Social Security benefits before the full retirement age. Early claiming results in a substantial reduction in pension income, yet many people claim as early as possible, age 62, or soon thereafter. Since delaying claiming is equivalent to purchasing additional annuity income, this behavior is consistent with the so-called annuity puzzle....

The paper found that:

• One of the important factors accounting for the low demand for public annuities is a significant discrepancy between : (i) th e individuals’ subjective discount rate, and (ii) the discount rate im plied by the implicit price of the Social Security annuity.

• Two of the commonly named impediments to private annuitization – mean -tested benefits and medical expenditures – are not important drivers of individuals’ decisions for when to claim Social Security benefits.

  Pre-annuitized wealth and bequest motives play a major role in the decisions to collect Social Security benefits. Our counterfactual experiments show that if the amount of basic Social Security benefits is scaled down or if the strength of the bequest motive is diminished, significantly more people will postpone claiming.

The policy implications of the findings are: 

• Given that many people consider themselves sufficiently annuitized even when they claim at age 62, late claimer s should be awarded not with higher pension income but with lump -sum payments. 

• We show that the policy of providing lump-sum payments instead of increasing Social Security benefits is very effective in inducing individuals to delay claiming.

     It should be noted that this is an entirely theoretical work. No new real life data was collected.
     You've got two economists who are disturbed by the fact that real people don't behave like the billiard balls that their theories suppose them to be so they try to come up with new theories that square with reality. That's perfectly appropriate as a matter of economics and it's an approach that may pay dividends but it's not proof of anything. Maybe lump sum payments would work. Maybe they wouldn't work.
     I think the economists need to consider two possibilities more closely. One is that as people get older, on average, their health declines making it harder for them to work. The other is that as people get older, they become more interested in enjoying the benefits of retirement. People don't look at things in the same way when they're 62 that they did when they were 32. People aren't billiard balls. Maybe, we should let them make the decisions they want to make without prodding them to make decisions that other, younger people (as these economists almost certainly are) think they ought to make.