Retirement Inequality

     From a study by the Center for Effective Government:

Company-sponsored retirement assets of just 100 CEOs are equal to those of more than 40 percent of American families. 

• The 100 largest CEO retirement funds are worth a combined $4.9 billion. That’s equal to the entire retirement account savings of 41 percent of American families (more than 50 million families and more than 116 million people).
• On average, the CEOs’ nest eggs are worth more than $49.3 million, enough to generate a $277,686 monthly retirement check for the rest of their lives. 
• David Novak of YUM Brands had the largest retirement nest egg in the Fortune 500 in 2014, with $234 million, while hundreds of thousands of his Taco Bell, Pizza Hut, and KFC employees have no company retirement assets whatsoever. ...
• Fortune 500 CEOs saved $78 million on their 2014 tax bills by putting $197 million more in these tax-deferred accounts than they could have if they were subject to the same rules as other workers. These special accounts grow tax - free until the executives retire and begin to withdraw the funds. 
• The Fortune 500 CEOs had more in their company-sponsored deferred compensation accounts than 53.8 percent of American families had in their deferred compensation accounts. ...

New Fraud Provision In The Grand Deal

     Let's take a closer look at some of the Social Security portions of the grand deal which is likely to be approved by Congress in the next few days. I'll start out with the fraud provision that I said earlier looked to me as if it makes it a crime to submit medical evidence in support of a disability claim. I didn't mean to suggest that was going to happen. I know this isn't the intent. This looks like a drafting error to me. Here's the statute involved as it will read after this is enacted, with the new portion bolded:

42 U.S.C. §1011 (a)  In general Whoever—

     (1) knowingly and willfully makes or causes to be made any false statement or representation of a material fact in an application for benefits under this subchapter; 

     (2) at any time knowingly and willfully makes or causes to be made any false statement or representation of a material fact for use in determining any right to the benefits; 

     (3) having knowledge of the occurrence of any event affecting—

          (A) his or her initial or continued right to the benefits; or

         (B) the initial or continued right to the benefits of any other individual in whose behalf he or she has applied for or is receiving the benefit,

conceals or fails to disclose the event with an intent fraudulently to secure the benefit either in a greater amount or quantity than is due or when no such benefit is authorized; or  

     (4) having made application to receive any such benefit for the use and benefit of another and having received it, knowingly and willfully converts the benefit or any part thereof to a use other than for the use and benefit of the other individual, shall be fined under title 18, imprisoned not more than 5 years, or both; or

      (5) conspires to commit any offense described in any of paragraphs (1) through (3) except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.’’.

     This doesn't make sense. The new language seems to make it illegal to submit evidence without specifying that it's only illegal to knowingly submit false or misleading evidence which was almost certainly the intent. I don't think anyone is going to be prosecuted under this even if they're guilty as sin because the language is so confusing.

     The right wing extremists in the Freedom Caucus have been demanding "regular order" in the House of Representatives, meaning that they want bills to progress from Subcommittee to Committee to the House floor with members having the opportunity to carefully study the bills and offer amendments. I agree with them on this if nothing else. Regular order helps prevent this sort of problem. Members of Congress, their staffs or outside individuals have a chance to study a bill and point out problems, including drafting errors. The problems can be sorted out before a bill becomes law. However, I've seen plenty of problems like this one in legislation signed by the President even when there is "regular order." Such problems are typically cleaned up with technical corrections acts but the Congressional sclerosis has gotten so bad that it's now difficult to even pass technical corrections acts.

More On Contracting For Rep Payee Reviews

     I had posted earlier today on Social Security's notice seeking a contractor to handle representative payee reviews. I received this e-mail in response:

Dear Mr. Hall,

We read your blog post Contractor Sought To Handle Representative Payee Reviews and agree with your assessment.

In 2009, the National Disability Rights Network (NDRN) and our members, the Protection and Advocacy System (P&A), became involved with representative payee reviews following the discovery of horrific abuse and neglect of thirty-two men with disabilities by Henry's Turnkey Service, an organizational representative payee in Iowa who also employed the beneficiaries.

Following the discovery of the abuse and financial exploitation by Henry's, SSA moved very quickly to determine whether other organizational payees were employing and exploiting the beneficiaries they were appointed to serve. As part of this effort, SSA turned to NDRN and the P&A agencies to conduct reviews of organizational representative payees who also employ beneficiaries.

They chose us because P&A agencies are a nationwide network of legal services agencies who provide services specifically to people with disabilities. Our mission is to advocate for and protect the basic rights of individuals with a wide range of disabilities. The services that P&A agencies are created to provide squarely positioned us to carry out SSA s representative payee reviews and we have been awarded the reviews every year since 2009.

Unfortunately, SSA's recent announcement that the Representative Payee monitoring project going forward would only be performed by a small business forecloses the ability of the NDRN and the P&A agencies from competing to perform this work in the future because NDRN is a nonprofit organization and cannot compete for a small business set aside contract.

SSA has already spent extensive resources to clear 261 P&A monitors in every state, the District of Columbia and the Native American P&A. P&A agencies have done 3,415 reviews which included interviews with 15,974 beneficiaries. It is baffling to us why now they would choose to exclude us in favor of an untested small business who may have no experience working with the disability population. Beneficiaries are all across the country and sometimes in different states than their representative payee.  Is a small business going to be a capable monitor in this nationwide environment?

Your observation that  this is the sort of thing best done by experienced personnel who are located in the communities where the representative payees live  is exactly correct. And being a nationwide network of disability advocates, we are those experienced personnel who have been doing it with great success.

Of the reviews that have already taken place, 84% of the NDRN and P&A identified reviews discovered problems, while only 65% of the other SSA initiated reviews found problems. This is a clear indication to us that our knowledge and expertise on disability related issues are necessary for the representative payee project to be successful in protecting beneficiaries. 

Excluding NDRN from applying for this contract would be a grave disservice to an already vulnerable population.

Please feel free to use any or all parts of this letter on your blog.

Sincerely,

Curt Decker

Executive Director

National Disability Rights Network

Gruber On Backlogs

     Terrie Gruber was recently appointed to head Social Security's Office of Disability Adjudication and Review (ODAR). The agency's Administrative Law Judges (ALJs) work at ODAR. Gruber spoke today at the National Organization of Social Security Claimants Representatives (NOSSCR) conference in Denver. I am not attending this conference but I'm told by someone who is attending that Gruber told those attending the NOSSCR meeting that ODAR would begin to reduce its hearing backlog in Fiscal Year (FY) 2017 which begins on October 1, 2016. She thought the agency could eliminate the hearing backlog by FY 2020. She said "We can't hire our way out of this."

     First, ODAR could definitely hire its way out of the backlog if it were given enough money. It's just that there's no prospect of this happening. Second, it would be a big step forward if ODAR could just keep the backlog from growing in the current FY. I don't know how likely this is. ODAR would need a lot of money for overtime and it would need permission to aggressively use the Senior Attorney program and to encourage ALJs to issue on the record reversals. They would also need the cooperation of other components of the agency for a strong re-recon program. I'm not going to explain Senior Attorney, re-recon and on the record reversals here. Let's just say that these are ways of diverting strong cases for special reviews which can result in the strongest claims being approved quickly. To do this, the agency will have to get over its fear of being accused of paying down the backlog. Gruber has said things to the Washington Post indicating the agency is getting past this concern but we'll have to see what actually happens on the ground. Finally, talk of eliminating the backlog by 2020 is almost pathetic. I'm sure that there's plenty of desire to do so. Given the means, I'm sure the agency will do so. It's just that achieving this goal will take plenty of hiring which takes money and no one can fully predict the agency's operating budget for the current FY much less its operating budget for FY 2020.

Contractor Sought To Handle Representative Payee Reviews

     Social Security is seeking a contractor to handle representative payee reviews. Representative payees handle Social Security benefits for claimants who lack the mental capacity to do so. Sadly, some representative payees fail to do their jobs properly or simply steal from the people they are supposed to be helping. Having a contractor handle representative payee reviews would be new, wouldn't it? 

     My gut feeling is that this is questionable, that these reviews aren't rote work or a specialized or technical service which should be contracted out. This is the sort of thing best done by experienced personnel who are located in the communities where the representative payees live. What do you think?

How Republican Congressional Leaders Deal With Their Rank And File

     Monday night there were press reports that the budget deal recently being announced would include dramatic changes in Social Security disability. There would be $168 billion in cuts which would be around a 10% cut. Actually, the cuts were tiny. What happened? From what I've been able to piece together the $168 billion figure came from a fact sheet that Republican Congressional leaders released to their members. Conventionally, in preparing this sort of document, increases or decreases in spending are stated for a ten year time period. About $150 billion a year are paid in Social Security Disability Insurance Benefits. A $168 billion cut over ten years would be a dramatic 10% cut in benefits. However, the $168 billion wasn't for ten years. It was for 75 years! A 75 year time frame is occasionally used in discussing Social Security's long term financing but I don't think I've ever seen such a time frame used in discussing budgets. Republican leaders released only the fact sheet until late Monday night when the actual bill was posted. I would call the Republican fact sheet deliberately misleading.

     There may have been another deception. The bill awaiting Congressional approval transfers part of the FICA tax revenues from the Retirement and Survivors Trust Fund to the Disability Trust Fund for only three years. That means the Disability Trust Fund problems are solved for only three years, until 2019, when Republicans get another crack at the program, right? Take a look at today's New York Times. It says that the Disability Trust Fund problem is solved until 2022. How can that be? The bill will increase the portion of FICA that goes to the Disability Trust Fund from 1.8% to 2.37% for only three years. However, it appears that this reallocation for only three years will be enough to solve the problem for six years. If they had been trying to solve the problem for only three years, the reallocation would have been smaller. Of course, it would be better to solve the problem for the indefinite future but six years is a lot better than three years. Maybe there was some other reason for drafting the bill like this but it looks to me like Congressional Republican leaders wanted to make it appear that they'd get another crack at Social Security disability sooner than they will.

Statement From Social Security Works

     A statement from Social Security Works, a major advocacy group:

“Last night, the Republican leadership agreed to release their hostages: the need to raise the debt limit, the need to keep the government operating, and the need to ensure that all Social Security benefits can continue to be paid in full and on time beyond 2016.  When hostage takers release their hostages, we are, of course, relieved that the hostages are no longer in harm’s way, but this is nothing to celebrate.  That the ransom isn’t steeper is also not something to celebrate.

Among the ransom is a diversion of Social Security resources towards virtually nonexistent fraud.  Those provisions will likely require workers with disabilities to wait longer to receive their earned benefits and may prevent some from receiving their earned benefits completely.  That is wrong.  The legislation has some good provisions, along with the ransom.  It does ensure that Medicare beneficiaries will not experience drastically large premium increases.  It also closes a loophole that was introduced in the law relatively recently that allows wealthier Americans to game the system by claiming extra benefits inconsistent with the goals of the program.  Though some provisions are positive, Social Security legislation, as a matter of principle, should go through regular order, in the light of day.

If that were done, Social Security would be expanded. As the overwhelming majority of Americans recognize, Social Security’s one shortcoming is that its benefits are too low. Congress should follow the will of the people by expanding those modest but vital benefits and restore the program to long range actuarial balance by requiring the wealthiest among us to pay their fair share.”

The Actual Language From The Big Deal -- Doesn't Look Dramatic But Hard To Understand

     The reporting from various media sources last night on the Social Security provisions of the deal between the White House and Congressional leaders varied from confused to inadequate to completely wrong. We have the actual bill now. Here is some of the actual text of the bill with my interpretation, or maybe I should say questions, in brackets and bolded:

• Not later than October 1, 2022, the Commissioner of Social Security shall take any necessary actions, subject to the availability of appropriations, to ensure that cooperative disability investigations units have been established, in areas where there is co-operation with local law enforcement agencies, that would cover each of the 50 States, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa. [Congress demands that Social Security extend cooperative disability reviews to every state and even to the Northern Mariana Islands but limits this to the extent that Congress appropriates money, dramatically undercutting the demand]
  
• Section 3 811(a) of such Act (42 U.S.C. 1011(a)) ... is further amended by striking the period at the end and inserting ‘‘, except that in the case of a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this title (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination, such person shall be guilty of a felony and upon conviction thereof shall be fined under title 18, United States Code, or imprisoned for not more than ten years, or both.’’. [I don't understand. It's now a crime to submit medical evidence in support of a disability claim? This doesn't make sense to me.]
• Section 1140(b) of such Act (42 U.S.C. 15 1320b-10(b)) is amended by inserting after the second sentence the following: ‘‘In the case of any items referred to in subsection (a)(1) consisting of Internet or other electronic communications, each dissemination, viewing, or accessing of such a communication which contains one or more words, letters, symbols, or emblems in violation of subsection (a) shall represent a separate violation’’. [Even viewing an inappropriately used Social Security symbol is a crime?]
  
• The Commissioner shall carry out a demonstration project ...[A]ny such benefit otherwise payable to the individual for such month (other than a benefit payable for any month prior to the 1st month beginning after the date on which the individual’s entitlement to such benefit is determined) shall be reduced by $1 for each $2 by which the individual’s earnings derived from services paid during such month exceeds an amount equal to the individual’s impairment-related work expenses for such month [OK, we're only talking about a benefits offset demonstration project.] ... For purposes of paragraph (2)(A) and except as provided in subparagraph (C), the amount of an individual’s impairment-related work expenses for a month is deemed to be the minimum threshold amount. [This sounds like a stringent offset. Any earnings over impairment-related work expenses are subject to the offset. That would strongly discourage work by Social Security disability recipients]... In this paragraph, the term ‘minimum threshold amount’ means an amount, to be determined by the Commissioner, which shall not exceed the amount sufficient to demonstrate that an individual has rendered services in a month, as determined by the Commissioner under section 222(c)(4)(A). [What are you saying here? There is a threshold amount beyond the impairment-related work expenses? I don't understand what you're trying to say.] The Commissioner may test multiple minimum threshold amounts.[So lots of thresholds will be tried. Good.] ... An individual who has authorized the Commissioner of Social Security to obtain records from a payroll data provider under subsection (c) shall not be subject to a penalty under section 1129A for any omission or error with respect to such individual’s wages as reported by the payroll data provider.’’.  [You're going to enforce the benefit offset by getting electronic records from employers and you won't punish the claimant if these records are mistaken. Sounds fine if these electronic records are accurate. Are they? I don't think my firm is reporting wages to anyone other than the IRS. What about self-employment?]
  
• If an individual is eligible for a wife’s or husband’s insurance benefit (except in the case of eligibility pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), in any month for which the individual is entitled to an old-age insurance benefit, such individual shall be deemed to have filed an application for wife’s or husband’s insurance benefits for such month. ... If an individual is eligible (but for section 202(k)(4)) for an old-age insurance benefit in any month for which the individual is entitled to a wife’s or husband’s insurance benefit (except in the case of entitlement pursuant to clause (ii) of subsection (b)(1)(B) or subsection (c)(1)(B), as appropriate), such individual shall be deemed to have filed an application for old-age insurance benefits. [I think they're ending file and suspend.]
  
• An initial determination under subsection (a), (c), (g), or (i) shall not be made until the Commissioner of Social Security has made every reasonable effort to ensure—  ‘‘(1) in any case where there is evidence which indicates the existence of a mental impairment, that a qualified psychiatrist or psychologist has completed the medical portion of the case review and any applicable residual functional capacity assessment; and ‘‘(2) in any case where there is evidence which indicates the existence of a physical impairment, that a qualified physician has completed the medical portion of the case review and any applicable residual functional capacity assessment.’’. [This ends the Single Decision-Maker project. This modestly slows down disability determinations.]
  
• Section 201(b)(1) of the Social Security Act (42 U.S.C. 401(b)(1)) is amended by striking ‘‘and (R) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and so reported’’ and inserting ‘‘(R) 1.80 per centum of the wages (as so defined) paid after December 31, 1999, and before January 1, 2016, and so reported, (S) 2.37 per centum of the wages (as so defined) paid after December 31, 2015, and before January 1, 10 2019, and so reported, and (T) 1.80 per centum of  the wages (as so defined) paid after December 31, 12 2018, and so reported,’’. [This would end the Disability Trust Fund problem but only for three years, at which point we may have to go through the same "crisis" again.]
  
• The Commissioner of Social Security shall annually submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the number of work-related continuing disability reviews conducted each year to determine whether earnings derived from services demonstrate an individual’s ability to engage in substantial gainful activity. [Is work supposed to trigger a continuing disability review, that is, if you do any work, is Social Security supposed to review your medical records to see if you're still disabled? If that were the case it would be a big deterrent to any attempt to return to work. I think, or maybe hope, that they are just talking about using employment records to determine whether a beneficiary's status under the work incentives.] 
  
• Notwithstanding any other provision of law, the Office of Personnel Management shall, upon request of the Commissioner of Social Security, expeditiously administer a sufficient number of competitive examinations, as determined by the Commissioner, for the purpose of identifying an adequate number of candidates to be appointed as Administrative Law Judges under section 3105 of title 5, United States Code. The first such examination shall take place not later than April 1, 2016 and other examinations shall take place at such time or times requested by the Commissioner, but not later than December 31, 2022. Such examinations shall proceed even if one or more individuals who took a prior examination have appealed an adverse determination and one or more 1 of such appeals have not concluded ...[This is strong pressure on the Office of Personnel Management to assure that enough Administrative Law Judge candidates are available to be hired by Social Security. Why do I suspect that this problem won't go away?]