More On Tomorrow's Congressional Hearing On The Social Security 2100 Act

     Here's the list of witnesses for tomorrow's hearing before the House Social Security Subcommittee on the Social Security 2100 Act:

• Stephen C. Goss, Chief Actuary, Social Security Administration
• Nancy J. Altman, President Social Security Works
• Kelly Brozyna, Member, Job Creators Network’s National Women’s Coalition
• Abigail Zapote, Executive Director, Latinos for a Secure Retirement
• Shaun Castle, Deputy Executive Director, Paralyzed Veterans of America

     By the way, in case you're wondering whether this is a serious proposal that might move forward should Democrats actually control the White House and both houses of Congress after the next election, here's the list of the bill's cosponsors:

Mr. Larson of Connecticut for himself, Ms. Adams, Mr. Aguilar, Ms. Barragán, Ms. Bass, Mrs. Beatty, Mr. Bera, Mr. Beyer, Mr. Bishop of Georgia, Mr. Blumenauer, Ms. Blunt Rochester, Ms. Bonamici, Mr. Brendan F. Boyle of Pennsylvania, Ms. Brownley of California, Mr. Brown of Maryland, Mrs. Bustos, Mr. Butterfield, Mr. Carbajal, Mr. Cárdenas, Mr. Carson of Indiana, Mr. Cartwright, Mr. Case, Mr. Casten of Illinois, Ms. Castor of Florida, Mr. Castro of Texas, Ms. Judy Chu of California, Mr. Cicilline, Mr. Cisneros, Ms. Clark of Massachusetts, Ms. Clarke of New York, Mr. Clay, Mr. Cleaver, Mr. Clyburn, Mr. Cohen, Mr. Connolly, Mr. Correa, Mr. Courtney, Mr. Cox of California, Mrs. Craig, Mr. Crow, Mr. Cuellar, Mr. Cummings, Ms. Davids of Kansas, Mr. Danny K. Davis of Illinois, Mrs. Davis of California, Ms. Dean, Mr. DeFazio, Ms. DeGette, Ms. DeLauro, Ms. DelBene, Mrs. Demings, Mr. DeSaulnier, Mr. Deutch, Mrs. Dingell, Mr. Doggett, Mr. Michael F. Doyle of Pennsylvania, Mr. Engel, Ms. Escobar, Ms. Eshoo, Mr. Espaillat, Mr. Evans, Mr. Foster, Ms. Frankel, Ms. Fudge, Ms. Gabbard, Mr. Gallego, Mr. García of Illinois, Ms. Garcia of Texas, Mr. Garamendi, Mr. Golden, Mr. Gomez, Mr. Gonzalez of Texas, Mr. Green of Texas, Mr. Grijalva, Ms. Haaland, Mr. Hastings, Mrs. Hayes, Mr. Heck, Mr. Higgins of New York, Ms. Hill of California, Mr. Himes, Ms. Kendra S. Horn of Oklahoma, Mr. Horsford, Ms. Houlahan, Mr. Huffman, Ms. Jackson Lee, Ms. Jayapal, Mr. Jeffries, Ms. Johnson of Texas, Mr. Johnson of Georgia, Ms. Kaptur, Mr. Keating, Ms. Kelly of Illinois, Mr. Kennedy, Mr. Khanna, Mr. Kildee, Mr. Kilmer, Mr. Kim, Mrs. Kirkpatrick, Ms. Kuster of New Hampshire, Mr. Lamb, Mr. Langevin, Mr. Larsen of Washington, Mrs. Lawrence, Mr. Lawson of Florida, Ms. Lee of California, Mr. Levin of Michigan, Mr. Levin of California, Mr. Lewis, Mr. Ted Lieu of California, Ms. Lofgren, Mr. Lowenthal, Mr. Luján, Mr. Lynch, Mr. Malinowski, Mrs. Carolyn B. Maloney of New York, Mr. Sean Patrick Maloney of New York, Ms. Matsui, Ms. McCollum, Mr. McEachin, Mr. McGovern, Mr. McNerney, Mr. Meeks, Ms. Meng, Ms. Moore, Mr. Morelle, Mr. Moulton, Ms. Mucarsel-Powell, Mr. Nadler, Mrs. Napolitano, Mr. Neal, Mr. Neguse, Mr. Norcross, Ms. Norton, Ms. Ocasio-Cortez, Ms. Omar, Mr. Pallone, Mr. Panetta, Mr. Pappas, Mr. Pascrell, Mr. Payne, Mr. Perlmutter, Mr. Peterson, Ms. Pingree, Ms. Plaskett, Mr. Pocan, Ms. Porter, Ms. Pressley, Mr. Price of North Carolina, Mr. Quigley, Mr. Raskin, Miss Rice of New York, Mr. Richmond, Mr. Rouda, Ms. Roybal-Allard, Mr. Ruiz, Mr. Ruppersberger, Mr. Rush, Mr. Ryan, Mr. Sablan, Ms. Sánchez, Mr. Sarbanes, Ms. Scanlon, Ms. Schakowsky, Mr. Schiff, Ms. Schrier, Mr. Scott of Virginia, Mr. David Scott of Georgia, Mr. Serrano, Ms. Sewell of Alabama, Ms. Shalala, Mr. Sherman, Mr. Sires, Mr. Smith of Washington, Mr. Soto, Mr. Suozzi, Ms. Speier, Mr. Stanton, Ms. Stevens, Mr. Swalwell of California, Mr. Takano, Mr. Thompson of Mississippi, Mr. Thompson of California, Ms. Titus, Ms. Tlaib, Mr. Tonko, Mrs. Torres of California, Mrs. Trahan, Mr. Trone, Ms. Underwood, Mr. Vargas, Mr. Veasey, Mr. Vela, Ms. Velázquez, Ms. Wasserman Schultz, Ms. Waters, Mrs. Watson Coleman, Mr. Welch, Ms. Wexton, Ms. Wild, Ms. Wilson of Florida, and Mr. Yarmuth

Speak Up!

His Social Security Account Was Hacked; When He Reported It He Was On Hold For An Hour

     From Robert J. Samuelson, a columnist for the Washington Post:

I got hacked. It was scary. ...

My encounter with bad stuff began a few weeks ago when I received a letter from the Social Security Administration via “snail mail.” By itself, this was neither alarming nor threatening. If you’re 65 or over (I am 73), you receive regular notices from Social Security and its first cousin, Medicare.

The letter looked authentic — and was. “Thank you for using Social Security’s online services,” it said. “On June 28, 2019, you successfully created an online account with the Social Security Administration.” This, too, seemed innocuous, except for one troubling detail: I didn’t create an online account with the Social Security. ... I decided to call the 800 number in the letter. (The 800 number seemed legitimate, because the same number appeared on many SSA websites.) 

The wait was about an hour. I was repeatedly tempted to hang up. I’m glad I didn’t. The woman who answered was courteous and helpful. Yes, my personal data had been altered so that my monthly benefit would be diverted to someone else’s account ...

The existing approach to creating reliable identification numbers (say, Social Security cards or driver’s licenses) is known as “knowledge-based verification” (KBV). To prove you are who you say you are, you’re asked questions to which, presumably, only you know the answers: for example, your birth date, home address or Social Security number.
But the KBV “model has fallen apart online,” asserts the Better Identity Coalition, a group searching for more accurate approaches. KBV is hobbled because data breaches have made a lot of “secret” information widely available to cybercriminals. ...

Against this backdrop, I surmised that the SSA must be swamped with complaints like mine: benefits that were digitally hijacked. Wrong. Their number peaked at about 12,000 in 2013. For the first half of 2018, that number was down to about 200, estimates the Office of the Inspector General. Compared with the roughly 63 million Social Security recipients, that’s virtually nothing. ...

Arguments On Increasing Social Security Benefits

     Congressman John Larson, the Chairman of the House Social Security Subcommittee, is pushing the Social Security 2100 Act which would increase benefits by about 2%, change the Cost of Living Adjustment (COLA) formula to make it more favorable to those receiving benefits, set a minimum benefit level and cut taxes for some low income people. It would also increase taxes for most workers, particularly for those with wages over $400,000 a year. The net result would be to put Social Security into low term actuarial balance.

     John Biggs of the American Enterprise Institute, a right wing "think tank" has released an argument against any increase in Social Security benefits on the grounds that retirees are better off now than in the past, largely because of private pension plans. I think there's more than a little sleight of hand in his arguments on defined contribution plans. He uses the increase in defined contribution plan assets as proof that there is no "retirement crisis" even though there is no way around the fact that the increase in defined contribution plans has happened because of the decline in defined benefit plans which afford far greater retirement security than defined contribution plans. Still, he certainly marshals facts in support of the thesis that most retirees are better off today than they were in the past. I'm just not sure that's going to continue as defined benefit plans continue their decline and more workers shift into the "gig economy." I know that's not the case now for lower income workers.

OIG Report On Use Of Averaging When Determining SGA

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

When a disabled beneficiary has earnings from work activity, SSA conducts a work continuing disability review (CDR) to determine whether the beneficiary engaged in SGA. SGA describes a level of work activity and earnings. Work is “substantial” if it involves significant physical or mental activities and earnings exceed the SGA threshold. The Code of Federal Regulations states SSA can average earnings for a period of work when it determines whether a disabled beneficiary engaged in SGA. During the period for which SSA averages earnings, the beneficiary must have worked continuously, without a significant change in work pattern or earnings. SSA has not established a monetary earnings amount that represents a significant change. However, policy directs staff to consider whether the beneficiary changed positions, job duties, or hours when determining whether a significant change occurred. If SSA finds the beneficiary’s monthly earnings average is below the SGA threshold, it pays benefits for all months. ...

Of the 200 sampled beneficiaries, we identified 58 for whom SSA applied averaging inconsistently or incorrectly when it made SGA determinations. Of these, SSA made questionable payments to 51 based on its SGA determination. SSA issued or withheld payments totaling over $651,000 because it did not apply averaging provisions consistently. As a result of the questionable determinations, SSA

• paid benefits, totaling more than $607,000, to 40 beneficiaries and
• withheld benefits, totaling more than $44,000, from 7 beneficiaries. 

SSA’s policy allows employees to exercise their own judgment and discretion when deciding whether to average earnings. As a result, the policy for averaging earnings results in decisions that are not consistent and equitable among beneficiaries.We estimate SSA applied averaging provisions inconsistently tomore than 30,000 beneficiaries. This led to questionable benefit payments or withholding totaling almost $419 million.

     I'm sympathetic to the agency on this one. I don't see how they can come up with truly objective standards nor how they can ensure completely consistent application of any standard. These are just difficult to do. Almost always you have limited information about the exact dates of earnings. The earnings are often highly variable. The regulations have to give agency employees discretion to deal with the million and one situations that come up but whenever you give discretion you're going to have people applying the rules in differing ways. OIG can come in after the fact and say that you should have done something different in many cases but it's not like OIG's judgment is the gold standard. If anything, I'd trust the field office staff to make the right judgment calls more than I'd trust OIG personnel who don't do this kind of work on a regular basis.

Legislative Hearing On Social Security 2100 Act

     The House Social Security Subcommittee has scheduled a legislative hearing on the Social Security 2100 Act for July 25. I don't know what a "legislative hearing" is. Apparently, this isn't a markup session where Subcommittee members approve the final language of a bill. Will the Subcommittee be hearing from members of Congress who aren't on the Subcommittee?

     This bill won't be enacted in this Congress. It may never make it out of the full Ways and Means Committee and it will certainly won't get a vote in the Senate. This is about setting a Democratic agenda for the future, especially if Democrats gain the White House and Senate after the 2020 election.

    Here's a summary of the Social Security 2100 Act from the Chairman of the Subcommittee, John Larson of Connecticut:

• Benefit bump for current and new beneficiaries – Provides an increase for all beneficiaries that is the equivalent of 2% of the average benefit. The United States faces a retirement crisis and a modest boost in Social Security benefits strengthens the one leg of the retirement system that that is universal and the most reliable. [Sec. 101]

• Protection against inflation – Improves the annual cost of living adjustment (COLA) formula to better reflect the costs incurred by seniors through adopting a CPI-E formula.  This provision will help seniors who spend a greater portion of their income on health care and other necessities.  Improved inflation protection will especially help older retirees and widows who are more likely to rely on Social Security benefits as they age.  [Sec. 102]

• Protect low income workers – No one who paid into the system over a lifetime should retire into poverty.  The new minimum benefit will be set at 25% above the poverty line and would be tied to wage levels to ensure that the minimum benefit does not fall behind.  [Sec. 103]

• Cut taxes for beneficiaries – Over 12 million Social Security recipients would see a tax cut[ii].  Presently, your Social Security benefits are taxed if you have non-Social Security income exceeding $25,000 for an individual or $32,000 for couples.  This would raise that threshold to $50,000 and $100,000 respectively. [Sec. 104]

• Holding SSI, Medicaid, and CHIP Beneficiaries Harmless – Ensures that any increase in benefits from the bill do not result in a reduction in SSI benefits or loss of eligibility for Medicaid or CHIP. [Sec. 105]

• Have millionaires and billionaires pay the same rate as everyone else – Presently, payroll taxes are not collected on wages over $132,900. This legislation would apply the payroll tax to wages above $400,000.  This provision would only affect the top 0.4% of wage earners. [Sec. 201, 202]

• 50 cents per week to keep the system solvent – Gradually phase in an increase in the contribution rate beginning in 2020 so that by 2043, workers and employers would pay 7.4% instead of 6.2% today. For the average worker this would mean paying an additional 50 cents per week every year to keep the system solvent. [Sec. 203]

• Social Security Trust Fund Established – Social Security provides all-in-one retirement, survivor, and disability benefits funded through the dedicated FICA contribution paid by workers. There are technically two trust funds, Old-Age and Survivors (OASI) and Disability Insurance (DI), and that are usually referred to as the Social Security Trust Fund. This provision combines the OASI & DI trust funds into one Social Security Trust Fund, to ensure that all benefits will be paid.  [Sec. 204]

Banks To Get Easier Access To Social Security Number Database

     From Bloomburg:

Banks fighting the fastest-growing financial crime in the U.S. have found an unlikely ally: the Social Security Administration.

Banks have spent years lobbying Congress for better access to the agency’s data as a way to fight costly forms of identity theft. Now, the agency has invited lenders and other firms to join a planned real-time electronic system for verifying that credit applicants’ names match their Social Security numbers.

The system would help banks eliminate sham identities created when fraudsters apply for credit cards using Social Security numbers that aren’t in use. Known as synthetic identity fraud, it is the fastest-growing financial crime in the U.S., according to a report this month by the Federal Reserve. U.S. lenders lost $6 billion from this type of fraud in 2016, according to consultant Auriemma Group. ...

The Social Security Administration has long required handwritten consent from consumers to allow lenders to confirm identities. Under that system, banks pay a one-time $5,000 enrollment charge plus a fee every time they look up someone. ...

Action On Two Sets Of Listings Changes

     The Office of Management and Budget (OMB), which is part of the White House, has finished work on two proposals for changes in Social Security's Listing of Impairments, used in determining disability. One set of changes for "Digestive Disorders, Cardiovascular Disorders, and Skin Disorder" was cleared by OMB. Expect to see it published in the Federal Register in the near future for public comments. Another, just for Cardiovascular Disorders, was withdrawn by the Social Security Administration. It could have been withdrawn because it faced opposition at OMB or because the agency changed its mind. There's no way of knowing. There's also no way of knowing at the moment what is or was in either set of proposals.