By SAM HANANEL, Associated Press Writer Sam Hananel, Associated Press Writer – Fri Jul 31, 1:21 pm ET
WASHINGTON – Social Security officials say they expect an even larger spike in new disability claims than they had predicted, as aging, injured baby boomers tumble out of the work force and need income.

Officials estimate they’ll receive 3.3 million new disability claims over the next year, up from their previous estimate of 3 million projected just five months ago.

The unprecedented wave of new applications raises questions about the agency’s ability to curb historic backlogs and cut processing delays, a problem that has plagued the agency for years. Officials had been making progress in reducing a massive backlog of disability appeals cases.

Also adding to the problem are recent moves in at least 10 states to furlough hundreds of employees who process initial benefit claims.

Agency officials say the extraordinary increase is driven by the recession and an aging baby boomer work force reaching their most injury-prone years. Long waits for the agency to process claims and resolve appeals can leave some claimants struggling to make ends meet.

Since October, the number of people waiting to have a claim processed has jumped a stunning 30 percent, from about 556,000 eight months ago to more than 736,000 in July.

“We’re going to be moving backwards this year, the question is how much,” Social Security Commissioner Michael Astrue said in an interview. “The trend line isn’t good.”

Social Security disability benefits are available to people who can no longer work due to injury or illness. The disability program has been the fastest rising part of Social Security, with spending on disability benefits growing at almost twice the rate of spending on retirement benefits.

Astrue said he is frustrated that some states coping with budget shortfalls have decided to furlough state employees that include workers who process claims. Although the workers are employed by the state, their salaries are paid by the federal government, so Astrue said the states save no money by requiring them to take unpaid furloughs.

“At a time when the case load is surging like that, it just makes the task that much more difficult,” Astrue said.

Last week, New Jersey became the latest state to furlough thousands of its employees, including 10 days off for more than 300 employees who review disability claims. California has furloughed more than 1,400 such workers for three days a month through June 2010.

Other states ordering furloughs for some or all employees who review benefit claims include Connecticut, Hawaii, Ohio, Oregon, Wisconsin, Maine, Michigan and Nevada.

The Social Security Administration denies nearly two-thirds of initial claims, but claimants disputing a decision can appeal to an administrative law judge. That process is so cumbersome, nearly 750,000 people are waiting for a hearing. Some wait years to resolve their claim, but about 61 percent of those who appeal are ultimately approved for benefits.

The economic stimulus package gave the agency $500 million to help cut the appeals backlog. The agency is hiring hundreds more judges and staff to reduce the case load. The number of cases awaiting a hearing has gone down six months in a row.

Astrue had predicted earlier this year that the agency would cut the appeals backlog to normal levels by 2013 and says he remains confident of meeting that deadline. But the sharp rise in new claims may knock that schedule off track, especially if congressional funding doesn’t keep pace with the increase.

“The tsunami hasn’t hit … yet, but it will unfortunately,” said Alan Cohen, senior budget adviser for the Senate Finance Committee, in remarks at a recent meeting of Social Security judges.

Some Social Security judges have openly complained about Astrue’s method for addressing the backlog. They say agency directives that each judge should resolve 500-700 cases a year give more work than they can reasonably handle. The judges’ union has also cited inconsistent review standards and Astrue’s decision to experiment with video hearings.

“More staff and judges only addresses temporary rises and falls in intake,” said Randall Frye, president of the judges’ union. “We’ve advocated systemic changes.”

Astrue calls his changes reasonable and says some judges are “not holding their weight.”

If you are in the West Kern area and have a hearing pending in Bakersfield, you may be surprised to hear that your case has been assigned to a Judge in San Francisco.  That’s actually good news.  The Fresno hearing office is our closest office and has been handling the Bakersfield cases at a remote site for years.  The backlog has been getting bigger, so the smart people in Fresno decided to move these cases to a hearing office with less of a backlog — i.e, more judges.  So expect to get a hearing much quicker.

If you live in East Kern, Mono or Inyo County these cases are assigned to the Long Beach hearing office and are heard in person in Palmdale.  There is no change here, but it looks like we might get a larger and more efficient office in the future for the remote hearings.

If you are on the Central Coast I heard a couple of weks ago, directly for the Hearing Office Chief in Santa Barbara, that they have hired a new person to help with the backlog. I don’t know if it is another judge or Senior Attorney or support staff…but that office is very efficient and things are moving along at a good pace.  Stay tuned for more updates this Summer — Diana

Subject:  Economic Stimulus Bill

President Obama has just signed the American Recovery and Reinvestment Act of 2009, commonly referred to as the stimulus bill.  I’d like to take a few minutes of your time to explain what I think this legislation means for SSA in both the short run and long run.

In the short run, our most immediate task is to issue the $250 stimulus payments to our beneficiaries and recipients as soon as possible.  The legislation is complex and requires extensive coordination with other agencies to avoid duplicate payments, but I am optimistic that we will issue payments to the public by late May—about three weeks earlier than the statute requires.  We are working on a communication plan and guidance for field offices so that we can handle the inevitable questions that will arise.

The legislation provides $90 million for the administrative cost of the stimulus payments and an additional $500 million to process the additional work that we are receiving as a result of the economic downturn.  However, we are still under a continuing resolution, so we must continue to operate cautiously.  We believe that when Congress passes the FY 2009 appropriation in March or April, we will have an opportunity to hire between 5,000 and 6,000 new employees before the end of the year.  If you have hiring responsibilities, please do not let the legislative situation translate into inaction.  Post the jobs, interview the candidates, plan for training, and hope Congress provides the money to pull the hiring trigger in the next 30 – 45 days.

As part of the legislation, Congress is investing about $20 billion in health information technology across the Federal government which has important strategic implications for us.  Our pilot testing at Beth Israel-Deaconess Hospital in Boston demonstrates that we can become significantly more timely, efficient, and accurate if our field and DDS staff can access complete electronic medical records early in the process.  We are running additional pilots in Virginia and expect to expand into many other locations in the next three years.

Congress has also provided a critical $500 million for replacement of the National Computer Center (NCC).  When I first started as Commissioner, I was disturbed to learn that the NCC was physically fraying and was increasingly at risk of failure from electrical interruption or other facility issues and that we had no plan in place to address the problem.  Replacement of the NCC will allow us to provide 24/7 service and avoid outages and slowdowns that disrupt service delivery.  Building the new NCC with today’s technology will, in three to five years, make your lives easier and greatly improve our service to the public.

The kind of progress we have made in the past few months doesn’t happen by accident.  We started planning early and extensively for the possibility of additional funding, and we have had excellent support from President Obama’s transition team and the new officials at the Office of Management and Budget.  This teamwork allowed us to make an effective case to Congress in a difficult time. 

We should all be grateful to the people who worked with us and for us on this bill. 

                                                            Michael J. Astrue, Commissioner