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Social Security Program Fraying

FILE - In this Aug. 5, 2010, photo, Social Security Administration Commissioner Michael J. Astrue speaks at a news conference on the Social Security and Medicare Trustees report  at the Treasury Department in Washington. Astrue has some parting shots for Congress, the White House and advocates for seniors. He says they have all "really walked away from Social Security," leaving the program "fraying because of inattention to its problems." (AP Photo/Charles Dharapak)

FILE - In this Aug. 5, 2010, photo, Social Security Administration Commissioner Michael J. Astrue speaks at a news conference on the Social Security and Medicare Trustees report at the Treasury Department in Washington. Astrue has some parting shots for Congress, the White House and advocates for seniors. He says they have all "really walked away from Social Security," leaving the program "fraying because of inattention to its problems." (AP Photo/Charles Dharapak)

Washington — Outgoing Social Security Commissioner Michael J. Astrue has some parting shots for Congress, the White House and advocates for seniors. They have all “really walked away from Social Security,” he says, leaving the program “fraying because of inattention to its problems.”

Instead of making the hard choices to fix Social Security’s financial problems, policymakers “use it as a tool of political rhetoric,” Astrue said.

Astrue, 56, has headed the federal government’s largest program since 2007 — he was nominated by former President George W. Bush. By law, Social Security commissioners serve six-year terms, so President Obama will now have the opportunity to choose his own nominee, who must be approved by the Senate. Astrue’s last day on the job was Wednesday.

The trustees who oversee Social Security say the program’s trust funds will run dry in 2033, leaving Social Security with only enough revenue to pay about 75 percent of benefits. Already the program is paying out more in benefits than it collects in payroll taxes.

As commissioner, Astrue served as a trustee. He regularly urged Congress to address Social Security’s long-term financial problems but refrained from publicly weighing in on various options to cut benefits or raise taxes — until now.

In an interview with The Associated Press, Astrue said benefit cuts and tax increases are inevitable — despite fierce opposition to both. Yet he questions whether Congress is up to the task.

Question: The president and Republican leaders in Congress have both embraced changes to Social Security as part of negotiations to reduce government borrowing. Should Social Security be part of the deficit and debt discussions?

Answer: My general perspective is that Washington broadly, and I include the Congress, both parties, the executive branch, the major interest groups, have really walked away from Social Security. … I think that Social Security is a gem. I think it is the most successful domestic program in the history of the United States government and it is fraying because of inattention to its problems. And I think it’s a shame that Washington cannot get its act together to look at Social Security in detail in isolation and say, What do we need to do?

Q: There are some in Congress who say only benefit cuts should be considered — no tax increases. Others say benefit cuts should be off the table. Where do you come down?

A: Nothing is going to happen if you establish preconditions for the conversation. I do think that for the people who simply want to tax more, you need to be very mindful of the fact that that tax will fall disproportionately on the younger generation and that if you’re not careful, that could be a huge economic drag.

Q: One of the few issues that the president and Republicans in Congress agree on is changing the way the government measures inflation. As you know, this would reduce the annual cost-of-living adjustment, or COLA, for Social Security recipients. Advocates for seniors hate the idea. They want bigger COLAs, not smaller ones. What do you think?

A: As a general matter I do think that the president and the Congress are right that before you start talking about increases in the retirement age and things like that it’s appropriate to try to have a conversation about what we might be able to do in terms of COLA adjustments.

Q: Social Security payroll taxes only apply to the first $113,700 of a worker’s wages. There have been proposals to increase this threshold or even eliminate it, applying the tax to all wages. What do you think of those ideas?

A: I think there’s some historic inevitability on at least some lifting of the (payroll tax) cap. I think that most politicians and I think most economists I’ve talked to generally think that that would have less of a negative impact on the economy than raising the rate itself.

Q: Applications for disability benefits increased dramatically when the economy went bad. Why did that happen?

A: I think a lot of people applied out of economic desperation. Very few of those people actually ended up getting benefits. If you look at the numbers, it’s one of the reasons why our approval rates have dropped dramatically in the last few years.

Q: Aren’t most disability claims initially denied?

A: Yes.

Q: Why?

A: Because the statutory standard is so stringent.

Q: If your claim is denied, you can appeal to an administrative law judge, but the process can take a year or more. Tell me about your efforts to reduce these backlogs.

A: We’ve done, I think, some yeoman’s work in reducing the backlogs. … If you look at time to a hearing, what we call average processing time, it peaked very shortly after I started at 542 days and it got down to about 340 (days) and then drifted up a little bit with all the budget cuts in the last couple of years. But it’s still about a year on average, and that’s a big improvement.