On Tuesday, May 30, the Wall
Street Journal published an editorial that criticized administrative law
judges of the Social Security Administration for finding claimants disabled in
70% of cases in which the claimant appealed the initial, and most often also a
reconsidered, determination that he or she is not disabled. On the very next day, the Journal published an editorial
criticizing the whole idea of having administrative law judges, the agencies
most affected by their decisions are the same agencies that the judges are
dependent on for their jobs and paychecks.
As the Journal points out, the
administrative law judges are chosen by unelected bureaucrats and therefore
have at least subtle pressure to make decisions favorable to the bureaucracy. A vast majority of administrative law judges
are employed by the Social Security Administration, which has more administrative
law judges than the entire federal court system has judges. At first glance, that would seem to mean that
a majority of administrative law judges actually mostly make decisions that are
adverse to the agency that employs them.
Although the fact that the administrative law judges of the
Social Security Administration find such a high percentage of claimants to be
disabled appears to contradict the notion that administrative law judges do not
bite the hand that feeds them, it is not a contradiction at all, and can be
explained by distinguishing between program costs and administrative costs. Regarding disability benefits, program costs
are the amount of the disability payments made.
Administrative costs are what it costs the agency to administer the
program. In theory, the distinction
should make no difference to administrative law judges of the Social Security
Administration. An administrative law
judge is nearly impossible to fire and gets the same pay regardless of what
percentage of claimants he or she finds to be disabled and regardless of how
many or few decisions he or she makes.
In practice, it makes a lot of difference.
When an administrative law judge is first employed by the
Social Security Administration, the judge has almost no control over the hearing
office to which he or she is assigned.
From their point of view, location is a very important part of working
conditions. Some locations are more
desirable than others. Before I retired
from the Social Security Administration, I worked as an attorney in a few of
its hearing offices. Once, when one of
my colleagues had applied to become an administrative law judge, I jokingly
asked him that when he became an administrative law judge to send me a picture
postcard from Fargo, North Dakota. As I
knew he would, he did become an administrative law judge, but he did not go to
Fargo. He went to Paducah, Kentucky. I don’t mean to insult either city, but both
rank low on the list of cities that prospective administrative law judges would
consider to be prime locations. The way
for an administrative law judge to get assigned to a preferred location is to
please the management of the Social Security Administration, and the way to
please management of the Social Security Administration is to generate as many
decisions per month as possible and to keep the average age of cases pending to
a minimum. In other words, their
employment with the Social Security Administration tends to be more pleasant
when they keep administrative costs under control. When they do that, they get to work at the
locations that they prefer and to get praised.
If they generate few decisions and let the cases that were assigned to
them get old, they get social pressure. Every
month, a report is generated and circulated among the hearing offices of the Social
Security Administration that ranks judges by number of decisions issued and
average age of cases pending. Ranking high
on the list is a more pleasant experience than ranking low.
Being productive and keeping the average time down that
claimants must wait for decisions is a good thing, but the most obvious and
tempting way to issue many decisions and to keep them from getting too old is
to find disability claimants to be disabled, whether they are truly disabled or
not. Issuing a favorable decision is
relatively easy and tends to make everyone directly involved with the case
happy. Often, a favorable decision can
be made without even conducting a hearing. Issuing a decision that is unfavorable or
partially favorable (that although the claimant is disabled, he or she was not
disabled for the entire period alleged) tends to be much more time consuming
and to involve considerably more administrative expense. A hearing must be scheduled. Often a medical expert and/or a vocational
expert (each of which is a contractor who gets paid by the number of hearings
attended) must be hired as a witness. An
unfavorable or partially favorable decision is much longer and more complex
than a favorable decision because it must go into greater detail explaining the
law and analyzing the evidence. The
decision may be appealed and the appeals decision may remand the case back to
an administrative law judge to start the process again. No court ever criticizes the Social Security
Administration for erroneously finding a claimant disabled. The courts don’t even see those cases. If a court criticizes the decision of an
administrative law judge, it is either for not finding a claimant disabled whom
the court perceives as being disabled or for not having enough evidence to
support the decision.
Many claimants who have been waiting a long time for a
hearing or a decision, contact their members of Congress for help in expediting
their case. Typically, the thing the
member of Congress wants is for the case to be processed as soon as possible,
preferably in a way that make the constituent happy. Since Congress determines how much money to
appropriate to the Social Security Administration each year, the agency is very
motivated to keep members of Congress happy, which usually involves trying to
satisfy the wants and needs of the claimants who ask the members of Congress
for help. When Congress does appropriate
money to the Social Security Administration each year, the money it
appropriates is all for administrative expenses, and the Social Security
Administration cannot spend more money than was appropriated. However, the Social Security Administration
has no effective incentive to keep program costs under control. Since there is considerable pressure to keep
cases reduce the backlog and keep processing time down and very little pressure
to avoid finding persons disabled who are not really disabled, the fact that
administrative law judges of the Social Security Administration issue decisions
favorable to the claimant 70% of the time, on average, should not be
surprising.
I am well aware that, even with all the incentive to find
people disabled, the Social Security Administration denies benefits to many
people who are genuinely disabled and makes many of those whom it eventually finds
entitled to benefits wait an obscene amount of time for a final decision, but
until something is done to limit the program costs, the combination of disability
benefits and other entitlements and the rising costs of interest on the
national debt threaten to consume the entire federal budget long before the end
of the century.
