Articles from prior issues of The Advocate

May/June 2001

SSA Retreats from Roll-out
by Donna Hilton, Publications Director

IN A SUDDEN REVERSAL, SSA recently announced that plans for national implementation of the new disability process (Prototype) have been deferred. Details were to be discussed at the SSA Forum in Chandler, AZ later this month.

SSA’s original timeline for Prototype called for a final implementation regulation by this September and then the first phase of States to start the new process in April 2002. This was based on results from full process model tests showing that more people who should be paid are paid at the DDS level, that the numbers of appeals to OHA after dropping reconsiderations are about the same as before, and people who do want to appeal get to OHA faster. Preliminary data has raised questions about program costs of a national roll-out of the Prototype as it is currently being implemented in the ten test states. Apparently, final decisions about rollout will be reserved until more complete data are available, and the 2002 Budget submission does not show prototype rollout beyond the ten states already under Prototype.

Significant program costs for national rollout have emerged as it becomes very apparent that additional people are being paid at the initial level who might not have appealed to the OHA level and been paid by OHA under the old process. SSA intends to enact changes to policies impacted by recent court decisions, process changes or other influences that may be needed to realign the process with congressional intent of the program. These changes to listings, other regulations, and possibly statutory language, when combined with the expected impact of prototype changes, are expected to result in more balanced overall program costs. SSA plans on implementing process changes to assure the new process can be carried out administratively within the resources freed up by dropping the reconsideration step.

According to Associate Commissioner Ken Nibali, SSA will be laying out specific plans by this summer for policy changes and updated data on what their analyses are showing program cost impacts to be, as well as on all other measures of the prototype process. At this point, there are no plans, nor supporting data, to implement prototype in any additional states in FY 2002.

In an effort to modernize the Social security program, President Bush recently announced the establishment of a Social Security Commission, which will be composed entirely of people who are receptive to the controversial idea of hinging some of the nation’s retirement system on the earning power of the stock market.

The purpose of this commission is to devise a plan that would fundamentally change Social Security by allowing Americans to invest part of their payroll taxes in private retirement accounts and strengthen Social Security. Unlike earlier federal commissions, this panel has been given a relatively narrow range of options to consider, a narrower mission and an early deadline date for filing a report. According to a May 2, 2001 Washington Post article, the White House is hoping to avert a reprise of the last Social Security commission, which studied potential reforms for two years before concluding its work in early 1997, splintered into three factions. Both sides of the aisle proclaimed the new panel as a pro-privatization group.

The Commission has been asked to develop a bipartisan proposal to modernize and restore fiscal soundness to Social Security.

The Commission was charged with offering changes along the following principles:

Social Security benefits for retirees or near-retirees must not be changed;

The entire Social Security surplus must be dedicated only to Social Security;

Social Security payroll taxes must not be increased;

The government must not invest Social Security funds in the stock market;

Social Security’s disability and survivors insurance must be preserved; and

Modernization must include individually controlled, voluntary personal retirement accounts to augment Social Security.

These principles are in keeping with promises made by President Bush during his presidential campaign when he proposed privatizing Social Security and promoted allowing individual personal accounts to supplement Social Security.

The Commission is being asked to submit an interim report describing the challenges facing the Social Security system and the factors affecting reform proposals. The final report, due in the fall, will include recommendations on how to strengthen Social Security with personal accounts. However, Congress must approve any changes to the program before there can be any implementation of the proposed changes.

The 16-member Commission, appointed by the President, consists of eight Republicans and eight Democrats with a member from each party as a co-chair. The co-chairs are former Senator Daniel Patrick Moynihan and Richard Parsons, Chief Operating Officer of AOL/Time Warner.

The other members of the Commission include Sam Beard, Founder and President of Economic Security 2000; John Cogan, former OMB Deputy Director; Robert Deposada, Executive Director, Hispanic Business Roundtable and President and CEO of ONE Research and Marketing, Inc.; Bill Frenzel, former U.S. Representative; Estelle James, Consultant with the World Bank; Robert Johnson, CEO of Black Entertainment Television; Gwendolyn King, former Commissioner of Social Security; Olivia Mitchell, professor at the University of Pennsylvania’s Wharton School; Gerry Parksky, former Assistant Secretary of the Treasury; Tim Penny, former U.S. Representative; Robert Pozen, Vice Chairman of Fidelity Investments; Thomas Saving, current Social Security Public Trustee; Fidel Vargas, Vice President of Reliant Equity Investors; and Carolyn Weaver, resident scholar at the American Enterprise Institute.