Tag Archives: Social Security

Social Security’s $300M IT project doesn’t work

We've already flushed enough...

Your tax dollars at work…

ABC News: After spending nearly $300 million on a new computer system to handle disability claims, the Social Security Administration still can’t get it to work. And officials can’t say when it will.

Six years ago, Social Security embarked on an aggressive plan to replace outdated computer systems overwhelmed by a growing flood of disability claims. But the project has been racked by delays and mismanagement, according to an internal report commissioned by the agency.

Today, the project is still in the testing phase, and the agency can’t say when it will be operational or how much it will cost.

In the meantime, people filing for disability claims face long delays at nearly every step of the process — delays that were supposed to be reduced by the new processing system.

“The program has invested $288 million over six years, delivered limited functionality and faced schedule delays as well as increasing stakeholder concerns,” said a report by McKinsey & Co., a management consulting firm.

As a result, agency leaders have decided to “reset” the program in an effort to save it, the report said. As part of that effort, Social Security brought in the outside consultants from McKinsey to figure out what went wrong.

They found a massive technology initiative with no one in charge — no single person responsible for completing the project. They issued their report in June, though it was not publicly released.

transparency is a lie

As part of McKinsey’s recommendations, acting Social Security Commissioner Carolyn Colvin appointed Terrie Gruber to oversee the project last month. Gruber had been an assistant deputy commissioner.

“We asked for this, this independent look, and we weren’t afraid to hear what the results are,” Gruber said in an interview Wednesday. “We are absolutely committed to deliver this initiative and by implementing the recommendations we obtained independently, we think we have a very good prospect on doing just that.”

The revelations come at an awkward time for Colvin. President Barack Obama nominated Colvin to a full six-year term in June, and she now faces confirmation by the Senate. Colvin was deputy commissioner for 3½ years before becoming acting commissioner in February 2013.

The Senate Finance Committee has scheduled a confirmation hearing for Colvin for July 31.

The House Oversight Committee is also looking into the computer program, and whether Social Security officials tried to bury the McKinsey report. In a letter to Colvin on Wednesday, committee leaders requested all documents and communications about the computer project since March 1.

The letter was signed by Rep. Darrell Issa, R-Calif., chairman of the Oversight Committee, and Reps. Jim Jordan, R-Ohio, and James Lankford, R-Okla. They called the project “an IT boondoggle.”

The troubled computer project is known as the Disability Case Processing System, or DCPS. It was supposed to replace 54 separate, antiquated computer systems used by state Social Security offices to process disability claims. As envisioned, workers across the country would be able to use the system to process claims and track them as benefits are awarded or denied and claims are appealed.

But as of April, the system couldn’t even process all new claims, let alone accurately track them as they wound their way through the system, the report said. In all, more than 380 problems were still outstanding, and users hadn’t even started testing the ability of the system to handle applications from children.

“The DCPS project is adrift, the scope of the project is ambiguous, the project has been poorly executed, and the project’s development lacks leadership,” the three lawmakers said in their letter to Colvin.

Maryland-based Lockheed Martin was selected in 2011 as the prime contractor on the project. At the time, the company valued the contract at up to $200 million, according to a press release.

McKinsey’s report does not specifically fault Lockheed but raises the possibility of changing vendors and says Social Security officials need to better manage the project.

Gruber said Social Security will continue to work with Lockheed “to make sure that we are successful in the delivery of this program.” Steve Field, a spokesman for Lockheed Martin, would only say that the company is committed to delivering the program.

Nearly 11 million disabled workers, spouses and children get Social Security disability benefits. That’s a 45 percent increase from a decade ago. The average monthly benefit for a disabled worker is $1,146.

The report comes as the disability program edges toward the brink of insolvency. The trust fund that supports Social Security’s disability program is projected to run out of money in 2016. At that point, the system will collect only enough money in payroll taxes to pay 80 percent of benefits, triggering an automatic 20 percent cut in benefits.

Congress could redirect money from Social Security’s much bigger retirement program to shore up the disability program, as it did in 1994. But that would worsen the finances of the retirement program, which is facing its own long-term financial problems.

Social Security disability claims are first processed through a network of field offices and state agencies called Disability Determination Services. There are 54 of these offices, and they all use different computer systems, Gruber said.

If your claim is rejected, you can ask the state agency to reconsider. If your claim is rejected again, you can appeal to an administrative law judge, who is employed by the Social Security Administration.

It takes more than 100 days, on average, to processing initial applications, according to agency data. The average processing time for a hearing before an administrative law judge is more than 400 days.

The new processing system is supposed to help alleviate some of these delays.

See also:

DCG

Is Social Security a Massive Ponzi Scheme?

I received an interesting email. Here it is:

THE ONLY THING WRONG WITH THE GOVERNMENT’S CALCULATION OF AVAILABLE SOCIAL SECURITY IS THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A SOCIAL SECURITY CHECK!!!

WHERE DID THAT MONEY GO?

Remember, not only did you and I contribute to Social Security but your employer did, too.

It totaled 15% of your income before taxes.

If you averaged only $30K over your working life, that’s close to $220,500.

Read that again.

Did you see where the Government paid in one single penny?

We are talking about the money you and your employer put in a Government bank to ensure you and me that we would have a retirement check from the money we put in, not the Government.

Now they are calling the money we put in an entitlement when we reach the age to take it back.

If you calculate the future invested value of $4,500 per year (yours & your employer’s contribution) at a simple 5% interest (less than what the Government pays on the money that it borrows) —

After 49 years of working you’d have $892,919.98 . If you took out only 3% per year, you’d receive $26,787.60 per year and it would last better than 30 years (until you’re 95 if you retire at age 65) and that’s with no interest paid on that final amount on deposit!

If you bought an annuity and it paid 4% per year, you’d have a lifetime income of $2,976.40 per month.

THE FOLKS IN WASHINGTON HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

Entitlement my foot; I paid cash for my social security insurance!

Just because they borrowed the money for other government spending, doesn’t make my benefits some kind of charity or handout!!

Remember Congressional benefits? — free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days.

Now that’s welfare, and they have the nerve to call my social security retirement payments entitlements?

They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives, and now,when it’s time for us to collect, the government is running out of money.

America’s Retirement Disaster: 50% of Boomers have less than $12k in retirement savings

A disaster is in wait for Americans in their retirement years.

Put simply:

Too many Americans are dependent on the government (Social Security and public pensions – more on that below), instead of putting aside savings to ensure our financial security in our “golden” years.

Jim Quinn of The Burning Platform blog, has put together a bar graph that shows how perilously little Americans have in retirement savings:

After a lifetime (presumably) of working, the median Boomer household (age 55 to 64), has managed to accumulate only $12,000 in retirement savings. $12,000 isn’t even enough to support one person, much less a household, for a year. Since “median” is that figure that divides a population into two halves, this means that 50% of Americans age 55 to 64 have less than $12,000 saved for their retirement.

As Quinn colorfully puts it: “These 55 to 64 year olds are up shits creek without a paddle. No wonder the percentage of over 55 people working is at an all-time high.”

But it’s not just the Boomers: Every age bracket has been living in a land of delusion. The median retirement savings of all non-retirement age Americans, 25 to 64 years old, is only $3,000. The entire country has bought into the ”live for today” mantra.

And if you think you can rely on government in your “golden” years, think again.

To begin, Social Security is broke. There is no “trust fund” because for years, the federal government has been dipping into that “trust fund” to make up for its budget deficits. The “trust fund” is an accounting fiction that exists only on paper.

To make matters worse, even if we go by the mythical “trust fund,” Social Security will go broke in 4 years, by 2017, when it will pay out more in benefits than it takes in. In the 1950s, there were roughly 5 workers for every retiree; today, it is roughly half of that. With 78 million Baby Boomers moving into retirement, the demands on Social Security will be even greater in the coming years ahead. With demographics heading in the wrong direction and a much slower-growth economy, the Social Security Administration has moved up its estimate that the Social Security Fund will be exhausted entirely by 2033.

The first Social Security program to go broke will  be Social Security Disability (SSD), which has seen the biggest number of recipients dependents in the 4 years 8 months of the Obama presidency. Today, more than 28 million Americans who are of working age claim to have a disability – a level higher than at any other time in recorded history. But there are good reasons for us to question how many of the 28 million SSD recipients are actually disabled. (See Many on Social Security Disability can but don’t want to work,” Aug. 3, 2013.)

According to a Social Security trustees report released in April 2012, SSD will run out of cash in three years, by 2016, when incoming payroll-tax revenue will cover only 79% of SSD benefits. Because the plan is barred from running a deficit, disability aid would have to be cut, which means SSD recipients will get only about 80% of the monthly payments they used to get.

Then there’s public or government pension, whether federal, state, or local.

As I explained in my post of August 18, 2013 (“Why there will be many more Detroits – in one chart”) and as the graph below shows, public employees pensions are, without exception, severely underfunded because they are based on the expectation that whatever money that’s paid into those funds gets 7% to 8% interest. The only problem is the Federal Reserve is and has been suppressing interest rates to an anemic 1-2% because if the Federal Reserve lets interest rates go up, our already gargantuan national debt of nearly $17 trillion (some say it’s actually $70 trillion) will balloon even quicker.

underfunded pensionsJim Quinn grimly concludes:

“We have trillions in unfunded Social Security obligations that won’t be paid. Cities and States have trillions in unfunded pension and health benefits that won’t be paid. The government and its citizens have lived above their means for decades and haven’t saved for a rainy day or their futures. […] There is no possible scenario where this ends well or can be solved by another government solution. It’s too late.”

Is it too late?

The one chance we have is if we get a pro-growth leader in the White House and a pro-growth party in both houses of  Congress.

America is rich in energy resources. We can be independent in energy if we want to, instead of being reliant on oil imports from the troublesome Middle East.

If we give free rein to oil exploration and development — instead of the Obama regime’s obstruction and hampering, in pursuit of the chimera of “green” energy by wasting millions of taxpayer dollars on unprofitable, corrupt, and ultimately bankrupt solar energy ventures like Solyndra (which alone received $535 million in never-repaid “loans” from the POS) — we can not only become energy independent but also create millions of jobs. The economy will grow and with that, we can grow ourselves out of our unfunded liabilities and our national debt.

We had that chance in 2012 with Mitt Romney. :(

See also:

~Eowyn

Wednesday Morning Quickie.

This Just In!!!   Check Your Mail..

Just wanted to let you know – today I received my 2013 Social Security
Stimulus Package. It contained two tomato seeds, cornbread mix, two
discount coupons to KFC, an ‘Obama Hope & Change’ bumper sticker, a prayer rug, a machine to blow smoke up my arse and a ‘Blame it on Bush’
poster for the front yard. The directions were in Spanish.
Yours should arrive soon.

~Steve~

H/T   Jean

Social Security benefits: pay more for less

Is Social Security still a good deal for workers?

WASHINGTON (AP)People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.

Previous generations got a much better bargain, mainly because payroll taxes were very low when Social Security was enacted in the 1930s and remained so for decades.

“For the early generations, it was an incredibly good deal,” said Andrew Biggs, a former deputy Social Security commissioner who is now a scholar at the American Enterprise Institute. “The government gave you free money and getting free money is popular.”

If you retired in 1960, you could expect to get back seven times more in benefits than you paid in Social Security taxes, and more if you were a low-income worker, as long you made it to age 78 for men and 81 for women.

As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn’t do quite as well as their parents and grandparents.

Not anymore.  A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank.

Social Security benefits are progressive, so most low-income workers retiring today still will get slightly more in benefits than they paid in taxes. Most high-income workers started getting less in benefits than they paid in taxes in the 1990s, according to data from the Social Security Administration.

The shift among middle-income workers is happening just as millions of baby boomers are reaching retirement, leaving relatively fewer workers behind to pay into the system. It’s coming at a critical time for Social Security, the federal government’s largest program.

The trustees who oversee Social Security say its funds, which have been built up over the past 30 years with surplus payroll taxes, will run dry in 2033 unless Congress acts. At that point, payroll taxes would provide enough revenue each year to pay about 75 percent of benefits.

To cover the shortfall, future retirees probably will have to pay higher taxes while they are working, accept lower benefits after they retire, or some combination of both.

“Future generations are going to do worse because either they are going to get fewer benefits or they are going to pay higher taxes,” said Eugene Steuerle, a former Treasury official who has studied the issue as a fellow at the Urban Institute.

How can you get a better return on your Social Security taxes?

Live longer. Benefit estimates are based on life expectancy. For those turning 65 this year, Social Security expects women to live 20 more years and men to live 17.8 more.

But returns alone don’t fully explain the value of Social Security, which has features that aren’t available in typical private-sector retirement plans, said David Certner, legislative policy director for AARP.

Spouses can get benefits even if they never earned wages. Children can get benefits if they have a working parent who dies. People who are too disabled to work can get benefits for life.

Because of spousal benefits, most married couples with only one wage earner will continue to get more in benefits than they pay in taxes for the foreseeable future.

“You are buying this lifetime inflation-protected benefit that you can never run out of and that will always be there for you,” Certner said. “It protects your spouse, protects your family and protects you from disability.”

Certner noted that private pensions, retirement savings and home values took a big hit when the economy collapsed, putting a dent in the retirement plans of many Americans.

“When you have that combination of factors, Social Security becomes more and more important,” Certner said. Social Security is financed by a 12.4 percent tax on wages. Workers pay half and their employers pay the other half. Self-employed workers pay the full 12.4 percent.

The tax is applied to the first $110,100 of a worker’s wages, a level that increases each year with inflation. For 2011 and 2012, the tax rate for employees was reduced to 4.2 percent, but is scheduled to return to 6.2 percent in January.

The payroll tax rate was only 2 percent in 1937, the first year Social Security taxes were levied. It didn’t surpass 6 percent until 1962.

About 56 million people now collect Social Security benefits, a number that is projected to grow to 91 million in 2035. Monthly benefits average $1,235 for retired workers and $1,111 for disabled workers.

I’m not holding my breath that I may ever see any of my Social Security benefits.  In four years, by 2016, the first of the Social Security funds — SS disability — will be in full collapse.

DCG

See any seniors?

SEE ANY GRAY HAIR ? ?

See any gray or white hair or any older retired folks amongst the crowd?
Social Security Office In Milwaukee

A friend went to the social security office this week to file for Medicare because it is the only way to keep medical insurance when you turn 65. He took a picture of the waiting room. Please tell me if you can find a retired person in the place!

It’s called “disability” insurance! You no longer have to wonder why SS is broke!
These people do not pay into the system nor are they disabled!

Our country is going broke on this fraud! Go down to your SS office and check it out!

Remember in November 2012!

h/t Anon

DCG

America is in a Depression, not a Recession

The Liberal Establishment Media keep singing their happy tune that the U.S. economy is improving, albeit slowly. But a liberal economist says otherwise.

Paul Krugman is a Nobel Prize-winning economist, an op-ed columnist at the New York Times, and an Obama supporter. And Paul Krugman thinks we are in a depression.

On December 11, 2011, Krugman wrote: “It’s time to start calling the current situation what it is: a depression.” Most recently, in his column of May 10, 2012, Krugman thinks matters have not improved. As he puts it: “How did we get stuck in what now can only be called a depression?”

When we think “depression,” images of the Great Depression’s soup and bread lines in the 1930s automatically spring to mind. We don’t see people lining up in those lines today, so this must mean America is not in a depression!

Wrong.

The reason why we don’t see those lines is because those who otherwise would be standing in those lines are getting food from the welfare state’s profusion of programs — food stamps, unemployment benefits, Aid to Families with Dependent Children, Social Security Disability, student loans…. Americans’ dependency on Government programs currently makes up as much as 35% of personal incomes.

In other words, what we have is a Hidden Depression.

Lance Roberts writes in his article on the Hidden Depression for StreetTalkLive, May 14, 2012:

Behind the mainstream media’s attention to the daily economic numbers there is a hidden economic depression running along the underbelly of the country.  High levels of unemployment have kept pressures on wages even as work hours have lengthened.  This, of course, is assuming full time employment.  In reality many individuals are working but either part-time at one or more jobs to make ends meet or working full-time as a temporary hire at reduced wage levels.  The declines in real income are evident.  The burgeoning labor pool and demand for work is suppressing wages as companies opt for increasing productivity and streamlining employment to protect corporate profit margins.  However, as the cost of living is affected by the rising food, energy and healthcare prices without a compensatory increase in incomes – more families are forced to turn to assistance in order to survive.

[…] Without government largesse many individuals would literally be living on the street.  The chart [below] shows all the government “welfare” programs and current levels to date.  The black line represents the sum of the underlying sub-components.  While unemployment insurance has tapered off after its sharp rise post the financial crisis, social security, Medicaid, Veterans’ benefits and other social benefits have continued to rise.   The government “safety net” is already under tremendous strain as the number of “workers” supporting the system has fallen markedly over the last 30 years.

[…] For the average person these social benefits, however, are critical to their survival as they make up more than 22.5% of real disposable personal incomes.  With 1/5 of incomes dependent on government transfers it is not surprising that the economy continues to struggle as recycled tax dollars used for consumption purposes have virtually no impact on the overall economy.

More disturbing is that this huge increase in demand on “welfare” support in its various forms does not include the more than 46 million Americans which are dependent on the Supplemental Nutrition Assistance Program (SNAP), or more affectionately known as “food stamps.” Without this assistance the basic needs of survival for many families can not be met. 

[…]the reality is that recycled tax dollars have been proven to generate little or no economic growth which is evident from recent GDP data.  Astoundingly the total benefits in 2011 rose above $71 Billion which was a 107% increase from 2008.  Yet we are told the economy is improving?

[…] As the ability to source income from traditional support programs becomes limited or exhausted – individuals can become very creative.  Two of the most interesting areas that have been tapped to support basic consumption needs since the beginning of the “great recession”is student loans and disability insurance.

The number of individuals claiming disability has surged to the highest levels on record since beginning of the last recession. What is most notable, however, is when the surge of individuals claiming disability began – exactly two years from the beginning of the financial crisis. This is when the 2 years of extended unemployment insurance began to run out. […] Today, more than 28 million Americans who are of working age have a disability – a level higher than at any other time in recorded history.

However, if you cannot claim disability why not just say you are going back to school?  […] The chart [below] shows only the federal student loan program which has surged 400% since the end of the last recession and is now the federal governments largest financial asset comprising 31% of its balance sheet.  However, in reality, student loan debt in total, which including private label loan programs, has now reached $1 trillion.

[…] Even as the media trumpets that the Fed has saved the economy from a “depression,” it might just be a statistical victory at best.  The government may say this is not the 1930’s where bread lines formed outside the corner soup kitchen, however, for many American’s the only difference is that they are found at the mailbox and online instead.

~End of Lance Roberts’ article~

+++

America’s national debt now exceeds our GDP and is closing in on $16 trillion. It doesn’t take an Albert Einstein to know that our super-extended welfare state cannot continue as it is. Indeed the danger signs are already visible.

In four years, by 2016, the first of the Social Security funds — SS disability — will be in full collapse.

Brian Faler reports for The Washington Post, May 30, 2012:

“The disability program pays benefits averaging $1,111 a month, with the money coming from the Social Security payroll tax. The program cost $132 billion last year, more than the combined annual budgets of the departments of Agriculture, Homeland Security, Commerce, Labor, Interior and Justice. That doesn’t include an additional $80 billion spent because disability beneficiaries become eligible for Medicare, regardless of their age, after a two-year waiting period. The disability program is projected to exhaust its trust fund in 2016, according to a Social Security trustees report released last month. Once it runs through its reserve, incoming payroll-tax revenue will cover only 79% of benefits, according to the trustees. Because the plan is barred from running a deficit, aid would have to be cut to match revenue.”

It is anticipated that by 2016 when the Social Security disability program runs out of cash, this will trigger a 21% cut in benefits to 11 million Americans — people with disabilities, plus their spouses and children — many of whom rely on the program to stay out of poverty.

By 2017, one year after its disability program goes bust, the main Social Security program itself will be in trouble, paying out more in benefits than it takes in. In the 1950s, there were roughly 5 workers for every retiree; today, it is roughly half of that. With 78 million Baby Boomers moving into retirement, the demands on social security will be even greater in the coming years ahead. With demographics heading in the wrong direction and a much slower growth economy, the Social Security Administration has moved up its estimate that the Social Security Fund will be exhausted entirely by 2033.

~Eowyn