Higher Taxes Alone Won’t Save Social Security – Inside Sources

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With a national election months away, Social Security is in the news. Sen. Tommy Tuberville, R-Alabama, recently said many Americans might not see a penny of their Social Security.

During a Health, Education, Labor and Pensions Committee hearing in February, Tuberville said, “There’s going to be about 150 million people coming up here (to Washington) saying, ‘Where’s our damn money that we paid in? I could have put my Social Security money, 40 years in tax, in the (stock) market and probably be worth $8-to-$10 million today, but the federal government wasted it.’”

Stock market investments are risky. Stocks fluctuate in value. While Tuberville’s “$8-to-$10 million” investment return from stocks could be high, he is on target about the federal government wasting money.

A top-ranking administration official agrees with Tuberville about the federal government wasting billions of dollars. The Social Security Administration’s commissioner, Martin O’Malley, recently told a Senate panel that SSA bureaucrats have lost $23 billion by overpaying beneficiaries.

O’Malley said the massive overpayments were “the agency’s fault.” O’Malley, a former governor of Maryland, should have said the overpayments were the fault of bureaucrats at his agency. Overpaid, uncaring, careless bureaucrats made the mistake of overpaying Social Security recipients.

For years, the SSA policy for recovering overpayments was to stop payments until the overpayment was paid back. This was called “claw-back.” In many cases, this policy left seniors and the disabled with no income and, possibly, no health insurance. This policy could have contributed to homelessness and untreated illnesses.

O’Malley said the claw-back policy was “cruel.” In the future, he said, Social Security recipients with overpayments will be paid their full monthly benefit check, less 10 percent to be applied to their overpayment. Effectively, O’Malley is writing off the $23 billion. It will never be repaid. 

It could quickly be repaid.

Seniors and the disabled with Social Security overpayments need compassion.  According to O’Malley, their Social Security benefits were stopped “when it was the agency’s fault.” Taxpayers, too, need compassion from the government, especially the Internal Revenue Service.

Politicians regularly argue about Social Security benefits. In an election year, arguments can get heated. Some politicians are accused of seeking higher taxes to fund an inefficient system. Other politicians are accused of heartlessly wanting to reduce benefits to seniors. There are different options, like reducing benefits to incompetent bureaucrats. The waste, fraud, abuse and mismanagement of the SSA is nearly as stunning as its huge overpayment scandal.

Higher taxes on workers are always the first solution offered when it comes to the solvency of the Social Security Trust Fund. Higher taxes will never be sufficient to pay for massive bureaucratic errors like overpayments. Taxpayers should not have to pay for incompetent bureaucrats.

Since bureaucrats can’t be fired, they have no incentive to prevent future overpayments. Taxpayers need a better-managed and professional federal workforce. Congress should consider other options until federal utopia arises from its utter mediocrity.

Before allowing O’Malley to write off $23 billion as a loss, Congress should determine how much, if any, of the $23 billion was fraud. People who defrauded the SSA should be held accountable. If they aren’t, then more fraud will occur. Unknown millions of “newcomers” who illegally cross the border should be barred from receiving disability income under Social Security.

Second, since O’Malley acknowledged that his employees were at fault for making $23 billion in overpayments, Congress should hold his agency accountable. A part of SSA’s budget should be applied to the overpayment.

Third, Congress should determine if any part of the overpayment was caused by federal unions. If union members and their lawyers cheated or misrepresented facts to Social Security administrators, they should be held accountable for overpayments.

Fourth, Congress should determine if other federal agencies were responsible for Social Security overpayments. If personnel at federal agencies gave federal workers incorrect or false information in calculating Social Security benefits, then federal agency budgets should be charged for overpayments. This may be a surprise, but incompetent bureaucrats work at multiple federal agencies.

Federal salaries increase annually. Social Security overpayments remain high. For the last fiscal year, SSA reported an overpayment of $11.1 billion. O’Malley has a huge job managing his out-of-control workforce. Americans deserve better.

If Congress should force a hiring freeze to bring the SSA under control, it likely fears the agency would further spin out of control. When constituents complain of SSA’s poor customer service, Congress would authorize more funding for the agency.  Such political circularity is a virtual certainty.

Unless the SSA is better managed, Tuberville’s prediction could come true: Americans might never see a penny of their Social Security.