Martin O’Malley is off to a bad start at Social Security
Facing a state budget crisis in 2007, Martin O’Malley, then Maryland’s governor, relied mainly on large tax increases instead of offending special interests and cutting unnecessary spending. Now, serving as commissioner of the Social Security Administration (SSA), O’Malley is taking a page from his 2007 strategy book to handle the agency’s major service crisis — asking Congress for a large increase in the agency’s operating budget instead of addressing the difficult underlying causes of the crisis.
Exposed to massive backlogs in the adjudication of disability claims at all levels of review, long wait times to answer the 800 number and plunging employee morale, O’Malley blames insufficient staff for the severe decline since 2021 in basic services to the public. He supports this assertion by comparing the number of employees at the SSA and at the state agencies that SSA funds to adjudicate claims, to the number of beneficiaries to whom SSA pays benefits. He says the former has declined somewhat since 2015, while the latter has increased massively. He makes a similar calculation of the ratio of SSA’s administrative expenses to benefit outlays and claims that the ratio has declined since 2017 and must be restored to prior levels.
But these comparisons are highly misleading. Nearly all of the recent growth in number of beneficiaries and amounts of benefit outlays has come from baby boomer retirees, who increasingly — and mostly — file their claims online and get service electronically. By contrast, the major proportion of the agency’s work is tied to managing exceedingly complex programs for disability claimants and beneficiaries, whose numbers have declined significantly since 2014. Indeed, the ratio of SSA and state agency employees to the number of beneficiaries in the Disability Insurance (DI) and Supplemental Security Income (SSI) programs administered by SSA has actually slightly increased in recent years, not declined.
SSA cynically used the excuse of its service crisis to propose several regulations that expand DI and SSI benefit eligibility and amounts (and costs to taxpayers by almost
$50 billion) by lowering standards. It asserts that it lacks the manpower to properly collect information from disability claimants and beneficiaries on their past jobs, living arrangements and food assistance. Similarly, SSA is making changes to its policies on asking for repayment of overpaid benefits from beneficiaries, in response to media and political pressure. While some policy changes and new data on earnings are indeed needed, the scope of O’Malley’s changes will likely cost taxpayers billions of dollars (the agency does not give an estimate to see if it meets budget PAYGO rules). The SSA’s own data, however, shows that the vast majority of fault lies with disability and other beneficiaries who neglect to follow instructions and report their earnings and other information to the agency.
At the same time that
Commissioner O’Malley is requesting a big increase in the SSA budget, he has told Congress that he is trashing the agency’s sponsorship of new and accurate data collected by the Bureau of Labor Statistics on occupational requirements. SAA needs this data to adjudicate disability claims in the modern economy, meant to replace 50-year-old data and rules. This updated database has cost the agency over $500 million over the last 10 or more years. He did not explain his reason for this remarkably poor stewardship of taxpayer resources, beyond expressing an apparently political concern for “winners and losers” from a proposed vocational regulation that has already been written but never released. This dereliction is compounded by the missed savings in administrative costs that would arise ultimately from a considerably simplified set of eligibility rules for disability benefits, and the resulting encouragement of work effort in the national labor force at a time of labor shortages.
What is the real cause of SSA’s service crisis? It is difficult to discern from the outside, but the timing indicates two possible causes. The shift of staff to work from home during the pandemic and the very slow return to the office at SSA because of union resistance may be the cause of a drop in productivity. The agency also added a step in the process of disability review in 2019 and 2020 when it believed it had sufficient resources. The advantages to the agency and the taxpayers from this additional step have never been disclosed, but now it seems it may have slowed the disability adjudication process down.
Commissioner O’Malley is still new to his job and it is not too late to correct these early mistakes. Congress should help him along here with more forceful oversight and direction.
At the same time that Commissioner O’Malley is requesting a big increase in the SSA budget, he has told Congress that he is trashing the agency’s sponsorship of new and accurate data collected by the Bureau of Labor Statistics on occupational requirements.