Archives for July 2022

Bill to end Social Security’s ‘evil twins’ that cut benefits teed up for House floor vote

A bill to eliminate the “evil twins” that reduce or eliminate Social Security benefits for retired federal employees and their spouses is coming close to a House floor vote.

The Social Security Fairness Act, introduced by Rep. Rodney Davis (R-Ill.) and sponsored by Rep. Abigail Spanberger (D-Va.) now has more than 290 co-sponsors, more than enough to force a House floor vote.

The bipartisan legislation would eliminate two provisions of the 1935 Social Security Act…

A bill to eliminate the “evil twins” that reduce or eliminate Social Security benefits for retired federal employees and their spouses is coming close to a House floor vote.

The bipartisan legislation would eliminate two provisions of the 1935 Social Security Act that reduce or eliminate the Social Security benefits of more than 2 million retirees.

One is the Windfall Elimination Provision (WEP), which reduces the Social Security benefits of local, state and federal retirees who worked in Social Security-covered employment — i.e. private-sector jobs — and also received a government annuity from their non-Social Security-covered government employment.

The other provision is the Government Pension Offset (GPO), which reduces the Social Security benefits of spouses, widows and widowers with pensions from a federal, state or local government job.

Both provisions, more broadly, also affect public service professions, including teachers, firefighters and law enforcement officers.

Lawmakers expect a vote on the legislation may come as soon as September.

House rules allow any bill that receives 290 cosponsors to be placed on the House Consensus Calendar, which would tee it up for a vote if it maintains those 290 cosponsors or more for 25 legislative days.

Davis told reporters in a press conference Friday the bill to eliminate these “egregious provisions” has made it further in Congress than previous efforts.

“These provisions were put in place and they became punitive against the families who have served the American people throughout their entire career,” Davis said.

Spanberger said former public servants living on a fixed income don’t deserve to have their Social Security benefits reduced, “particularly during this time marked by uncertainty, challenges and high prices across the board.”

“No American should be penalized because of their public service. These public servants have been waiting decades for a solution to this issue. And now we are so close towards rectifying this problem,” Spanberger said.

The National Active and Retired Federal Employees Association (NARFE) has advocated for Congress to eliminate WEP and GPO from the Social Security Act for years.

“We’re trying to repeal the evil twins of the Social Security Administration,” NARFE President Ken Thomas said.

Thomas added the bill has “sat many times in the committee, and never got out. Now’s the time to get it done.”

Thomas said many former federal employees who also worked in the private sector are surprised by the reduction of their Social Security benefits when they retire.

“When it comes time to get their Social Security, they find out they moved the goalpost. And when they move the goalposts, it means they’re getting dinged at least $500 a month in benefits. Sometimes they’re not getting anything at all,” Thomas said.

Clyde Boatwright, president of the Maryland State Lodge of the Fraternal Order of Police, said the GPO creates a “real inequity” for law enforcement officers, who usually retire earlier than other government employees and often begin second careers, which require them to pay into the Social Security system.

Boatwright said retired law enforcement officers face as much as a 60% cut to their Social Security benefits.

“This is an issue of fairness to the public employees who have served their communities. When these public employees earn Social Security benefits through their work, they should receive the benefit in full without being penalized because of their public service,” Boatwright said.

Rep. Garret Graves (R-La.) said WEP and GPO are “disincentivizing people from going into these professions.”

“We need to be incentivizing people to go and be firefighters, to go into public service. These are honorable professions, and as a result of this 40-year-old, ill-advised provision … we’re penalizing people from going into public service, penalizing people from going into law enforcement,” Graves said.

The Social Security Administration currently estimates its ability to fully pay out benefits will run out in 2035, at which point it will be able to pay only 80% of benefits owed. Davis said he expects his legislation will lead to discussions in Congress “to ensure the long-term solvency of Social Security.”

“Will it cost? Absolutely it’s going to cost when you score this on a spreadsheet,” Davis said about the bill. “But what has been the cost to those families who have not been given the same benefits that every other family that did not choose public service have gotten over for decades?”

TSP board shares ‘optimistic’ timeline for resolving call center issues

Many participants in the Thrift Savings Plan started to see a drop in call wait times when trying to reach a representative at TSP’s customer service center, ThriftLine.

There has been progress toward resolving issues with ThriftLine, said the Federal Retirement Thrift Investment Board, the agency managing TSP, at a July 26 board meeting. But there is still room for improvement to return everything to normal.

“We’re trending in the right direction, but we’re still…

Many participants in the Thrift Savings Plan started to see a drop in call wait times when trying to reach a representative at TSP’s customer service center, ThriftLine.

“We’re trending in the right direction, but we’re still not where we want to be,” Tee Ramos, FRTIB’s director of participant services, said at the meeting.

After FRTIB transitioned to a new recordkeeping system on June 1, a wave of challenges hit TSP participants, including issues setting up a new login, missing or incorrect information and technical problems. The frustrations dovetailed with many participants waiting hours on hold to reach a customer service representative for help, often unable to reach someone at all, as ThriftLine call volumes skyrocketed.

Optimistically, the board will return to “some degree of normalcy” by mid-August, Ramos said, but he’s waiting to see if the efforts to resolve issues at the call center will remain successful, before giving a firm timeline.

“I want to be able to say they have sustainably been able to maintain call center operations where we need them. They’ve made the changes … Now, I’m looking in this next month to see that those changes are sustainable,” he said.

Those changes include staffing up significantly at ThriftLine. Since the June 1 launch, call wait times have dropped 77%, Ramos said. The wait times started out at an average of more than two hours, but that’s now down to about 15 minutes.

“We’ve seen dramatic improvement over the course of the last two weeks, in their ability to answer calls,” Ramos said.

The board added 550 customer service representatives in June, and nearly 500 more in July. Even more representatives will come in by the end of this month. The number isn’t straightforward, though, because of high attrition rates at the call center, between 20% and 30%.

In June, TSP’s call center received an average of 34,000 calls per day, totaling nearly one million calls over the course of the month. Comparatively, ThriftLine had about 9,000 calls per day and 181,000 calls total last June.

“We expected an increase, but I don’t know that anybody could have expected an increase of that magnitude,” Ramos said.

Ramos said there are some upcoming changes that could affect the timeline to return to normal, including issuing statements to TSP participants about the transition. The board has a statement scheduled to be sent out soon, which could trigger more participant calls.

The transition to the new recordkeeping system under Accenture Federal Services has hit other bumps, too. For example, many participants said they cannot designate a beneficiary, or find their financial history on the platform. The board said despite the issues, the new system was necessary to protect investments, enhance cybersecurity and update the recordkeeper.

Some of the missing information in the new version of My Account was intentional. For 266,000 participants, beneficiary designations did not automatically roll over due to data issues. The board said affected participants should manually update their beneficiary information and call ThriftLine if they run into issues. Financial history more than 10 years old will not be readily available in the application, the board said. TSP participants who want to access those statements or other documents must call ThriftLine or make the request online.

The inability to create logins is no longer a major issue, the board added. The login process was streamlined soon after the launch, to help participants who initially struggled to set up new accounts. To date, about 1.1 million participants have successfully created accounts in the new My Account system, Ramos said.

The efforts to fix the TSP issues, though, are insufficient for some lawmakers on Capitol Hill. Del. Eleanor Holmes Norton (D-D.C.), a vocal advocate for TSP participants since the rollout, along with Rep. Abigail Spanberger (D-Va.), called on the Government Accountability Office to conduct a “comprehensive examination” of the new system. Reps. Don Beyer (D-Va.), Gerry Connolly (D-Va.), Jamie Raskin (D-Md.) and Jennifer Wexton (D-Va.) additionally signed the July 25 letter to GAO.

“I will continue to demand immediate fixes to the problems, but we need to understand how this debacle occurred, which is why I am requesting a comprehensive examination of the new system itself, its planning and its implementation,” Norton said in a July 25 press release.

Kim Weaver, FRTIB’s director of external affairs, said a GAO investigation is more likely than not.

“GAO doesn’t always do those sorts of things, they get lots of letters requesting investigations,” she said. “However, given the number of Congress [members] on the letter and the high-profile nature of this, it wouldn’t surprise me if GAO does, in fact, respond and come take a look.”

D.C. Rep. asks GAO to look into TSP’s bug-riddled website

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Rep. Eleanor Holmes Norton (D-D.C.) continues her push to hold the agency that manages the Thrift Savings Plan accountable, for ongoing complaints with the new TSP system. Norton, along with Rep. Abigail Spanberger (D-Va.), requested that the Government Accountability Office conduct a “comprehensive examination” of TSP’s new online platform. Following a major system update, participants have…

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Rep. Eleanor Holmes Norton (D-D.C.) continues her push to hold the agency that manages the Thrift Savings Plan accountable, for ongoing complaints with the new TSP system. Norton, along with Rep. Abigail Spanberger (D-Va.), requested that the Government Accountability Office conduct a “comprehensive examination” of TSP’s new online platform. Following a major system update, participants have been experiencing various issues with their accounts, including missing or incomplete account information and hours-long wait times to reach customer service.

Three decades in the making, $12 million dollars will go to Drug Enforcement Administration agents as part of a class-action settlement. The ink is drying on a sex discrimination case, after the Equal Employment Opportunity Commission approved a class-action settlement from 71 female DEA agents. The 30-year-old case stems from workers who cited discriminatory practices, alleging that the agency refused to assign female special agents to overseas posts. The law firm representing the employees said that the discrimination created barriers to career advancement for female special agents.

The Senate is expected to vote today on legislation meant to shore up the domestic supply chain for semiconductors. President Joe Biden urged lawmakers to pass the CHIPS Act during a virtual town hall meeting with corporate leaders yesterday. The bill would deliver $52 billion in grants and incentives to encourage companies to build chip fabrication facilities in the U.S. Those that do would also get a 25% federal tax credit. (Federal News Network)

The Justice Department announced charges in a multi-agency crackdown on health care fraud. DOJ is filing criminal charges against 36 defendants for more than a billion dollars in alleged fraudulent telemedicine, as well as cardiovascular and cancer genetic testing. The case involves providers billing Medicare for $174 million in false and fraudulent tests whose results weren’t used to treat patients. The alleged scheme also includes luring thousands of Medicare beneficiaries into getting unnecessary cardiovascular and genetic tests. The Veterans Affairs Department’s inspector general’s office supported the multiagency law enforcement effort.

House lawmakers show some love for two governmentwide IT modernization funds. The IT Oversight and Reform (ITOR) fund managed by the Office of Management and Budget and the General Services Administration’s Federal Citizen Services Fund are two big winners in the fiscal 2023 budget race so far. House lawmakers passed the Financial Services and General Government appropriations bill that includes huge increases for both programs. The Federal Citizen Services Fund received a $60.7 million dollar increase over its 2022 budget. The ITOR fund received a $5.7 million dollar plus-up over its 2022 appropriation. Meanwhile House lawmakers approved $100 million for the Technology Modernization Fund, which is $200 million below the Biden administration’s request. (Federal News Network)

The Transportation Security Administration is updating its cybersecurity rules for pipeline operators. TSA said it has learned a lot in the 14 months since the Colonial Pipeline ransomware attack. The agency released a revised security directive laying out cybersecurity requirements for oil and gas pipelines. After industry complained that the previous requirements were too prescriptive, TSA said the new rules are performance-based, giving industry more room to tailor their technologies to meet different security outcomes. Since last May’s disruption, TSA said the cyber threat posed to the oil and gas sector has only intensified.

Small businesses bidders on the FirstSource III procurement from the Homeland Security Department are waiting with bated breath. That’s because DHS announced it will make a decision for phase one of the downselect by August 3. These are the companies that will move into phase 2 of the procurement that will end with award notices. DHS received 637 proposals from 325 offerors in September 2021 for the $10 billion multiple-award IT-products contract. DHS initially planned to make the awards in February, but protests and the large number of proposals pushed back their timeline.

By early 2023, agencies will have a common standard to report cyber incidents. Homeland Security Secretary Alejandro Mayorkas directed the new Cyber Incident Reporting Council with creating rules and regulations for incident reporting across federal agencies. The council will need to provide a report to Congress by January 21. Leaders from 15 agencies serve on the council, including from the FBI, and the departments of Defense, Justice, and Health and Human Services. The committee was created by Congress in the Cyber Incident Reporting for Critical Infrastructure Act and met Monday for the first time to discuss common standards for incident reporting.

NASA’s Goddard Center is on the hunt for a new leader, as longtime Director Dennis Andrucyk announced he’ll be retiring after more than 36 years working in the federal government. He stepped into the Goddard Center lead role in January 2020. As director, Andrucyk oversaw the launch of the James Webb Space Telescope and the release of its first images earlier this month. He’ll stay on as director until NASA has selected and trained a new executive.

The office of the White House National Cyber Director continues to grow in numbers. The White House announced Camille Stewart will serve as deputy national cyber director for technology and ecosystem security. Stewart was most recently Global Head of Product Security Strategy at Google. She’ll be joined by Jay Healey, who has been detailed to the White House from the Cybersecurity and Infrastructure Security Agency to help write the Biden administration’s cyber strategy.

The General Services Administration has gained new climate expertise, as it names Jetta Wong, a former senior fellow at the Information Technology and Innovation Foundation, to serve as senior adviser to the administrator on climate. Wong previously worked at the Energy Department and helped launch its Office of Technology Transitions to support the long-term commercial impact of DOE’s research. Wong also served on the House Science, Space and Technology Committee.

TSP millionaires club: Brace for a hit!

Somewhere, some place, there has got to be a sports book or group that tracks the world’s biggest 401k, the federal Thrift Savings Plan. Especially the rise and fall of how many members — current and retired feds and military personnel — have built TSP accounts worth at least $1 million. In some cases a lot more! And they did it the old-fashioned way. While the club has expanded and shrunk over the last 30 years due to the stock market and economic trends, mostly it’s getting bigger. Up until now. Feds are likely to get the word, this week, that membership in the club has plunged. And it’s a big drop. But not unexpected after a spectacular record-long run of the stock market. Considering the state of the world today — a changing pandemic, real war in Europe, inflation at a 40 year high and fuel prices skyrocketing — the pending dip is no surprise.

Peak membership in the seven-figure TSP Millionaires Club was December last year. At that time there were 112,880 people with accounts ranging from $1 million to $8.4 million. The Club shrank to 100,364 as of March this year. A downturn to be sure. But not bad for government workers and military personnel who are now among the nation’s salary elite.

The $8.4 Million Dollar Man/Woman is probably a member of Congress, political appointee, somebody on the Supreme Court or a member of the House or Senate, where millionaires abound. But the magic of the TSP is that thanks to the miracle of compounding, and the 5% match investors get, the vast majority of the club’s members are rank and file feds: postal inspectors, IT experts, NASA scientists, researchers at the National Institutes of Health, VA lawyers and doctors. People who invested for the long haul (an average of 29 years) and who stuck with the TSP’s three stock index funds (C, S and I) which cover the U.S. stock market along with an international fund. They stuck with them and continued to buy more during good times, but their smart move was to keep buying shares on sale because of various bear markets (a 20% dip). And especially those who kept buying C and S shares biweekly during the 2008-2009 Great Recession when stocks, we know now, were on sale.

The runup following the comeback (starting in March 2009) of the stock market kept adding more and more members to the Millionaires Club.

But while tracking the population boom of self-made millionaires, the real story is the numbers covering the rest of the TSP membership. The 6-million plus federal and military investors who are NOT in the club. But who — most of the time — have moved up a lot more often and for much longer periods of economic improvements which eclipsed, in the long run, current losses in the market.

On last week’s Your Turn radio show, financial planner Arthur Stein talked about the overall performance of the TSP since inception and how the stock markets suffered their worst January through June performance since the 1970s. He also talked about what feds, young and old, should be doing with their TSP accounts during these down times. Below are two charts that show the status of TSP accounts on Dec. 31, 2021 versus the numbers as of March 31. We’ll have the new numbers tomorrow. Meantime:

And these are the numbers at the end of last year:

Nearly Useless Factoid

By Daisy Thornton

Panama hats originated in Ecuador. They got their name because hat-makers in the 1850s found a more successful market for them in Panama, a major international trade center. Travelers would tell people they purchased the hat in Panama, and the name stuck.

Source: Wikipedia

A busy week for Congress with a Chips Bill that keeps growing

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The Senate this week will continue debating the so called CHIPS Bill that would heavily subsidize the semiconductor industry, but the bill has grown from amendments. The National Science Foundation and the Commerce Department would get tens of billions of new dollars. Bloomberg Government Deputy News Director Loren Duggan joined the Federal Drive with Tom Temin to discuss…

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Tom Temin Loren, let’s start with that bill. I guess the amendments came from Republicans and Democrats via Chuck Schumer that sort of quadruples the spending under this bill.

Loren Duggan That’s right. So this bill is a piece of what was the China Competition Legislation that had passed both the House and the Senate. Broad, sweeping legislation was part of a House Senate conference committee that more or less stalled out a few weeks ago. There was an effort to revive one of the key pieces of it, and that was the $50 billion or so in appropriated funding for semiconductor production in the U.S. Most of that money will be going into the Commerce Department, but there’s some other pools of money as well that will help DoD and everything. So that was where they started when they talked about doing just to the CHIPS portion of that China legislation. What we have now is what’s being called CHIPS+ by many people. Its CHIPS plus this package of science and energy funding that had been negotiated in the past by the Senate, and was at the heart of their initial version of what became the China Competition bill. So you know, this bill broadened and then shrank and then got a little broader again. So what we have is 1,000 plus page bill that has direct funding for this chips production, a tax credit for semiconductor production as well and then authorizations over many years for [the] National Science Foundation (NSF), National Institute of Standards and Technology (NIST), the Energy Department and other research programs. So that’s not money that will flow today, but by setting up these authorizations, and as they write appropriations bills in the future, that money will start to flow out. So it’s a big bill. It’s, I think, a win that a number of Democrats and Republicans will take and have some bipartisan support in the procedural votes last week, and we should see that again, I would imagine, this week as they try to wrap that up in the Senate, kick it to the House and the House may try to do that before they leave as well. So by the end of this week, we could see that legislation on its way to President Biden and a win that he wants as well and will undoubtedly tout.

Tom Temin Interesting. I guess, well, that could be a good sell with the public, if they don’t know the details, that “Oh good. We can’t get cars because there’s no chips. This helps the chip industry.”

Loren Duggan Right. I mean chips are in everything now right. Even refrigerators and cars and everything else under the sun. So, getting this production going is going to be important. Now, it might not happen right away, but there was some concern that if this bill didn’t start getting wrapped up and this money didn’t start flowing at some point, that some of the plans that companies had to build factories might be called back. So that was one of the emphasis behind people trying to get this through as soon as possible, and certainly before they left for the August recess.

Tom Temin All right. And then in other matters on the Hill, there is a bill for the burn pit issue for veterans. That’s been smoldering for a long time with Veterans Affairs. What would the legislation do?

Loren Duggan So this would make it easier for people who were exposed overseas to burn pits or other toxins, not just from the most recent conflicts, but there’s also provisions even going back to the Vietnam era. But the idea here is let’s make more veterans have access to some of the benefits, including disability and health care, that are available. This legislation has bipartisan support. It’s actually been passed by the House and Senate with nearly identical language in the past. But this one issue with tax language that got inserted by the Senate had to be addressed before they could do it. So it’s kind of come down to just floor time at this point to get it across the line. There’s broad bipartisan support, Jon Tester and Jerry Moran, who are the Democrat and Republican in charge of Veterans Affairs in the Senate, both back it. I would expect when they can get it to the floor have this vote, it should also be on its way to President Biden’s desk. This is a bill that’s gotten a lot of attention to from Jon Stewart who made it one of his top issues in recent years. We also saw him have success with 9/11 issues in the past, but he turned to this veterans burn pits issue and has been on the Hill many times pushing for it. So that should be done as well this week.

Tom Temin We’re speaking with Loren Dugan, deputy news director at Bloomberg Government and a hodgepodge in the House this week.

Loren Duggan That’s right. When you get towards one of these recesses, especially in election years, it feels like they’re clearing out the cupboards of a lot of things that don’t seem to go together. That’s sort of the way it is this week. A lot of bills that are important, some bipartisan, some will be big for individual member. We’re gonna see action this week on a 500 and some odd page wildfire bill that would authorize funding for wildfires, change some of the pay rules for the people hired by Interior and Agriculture to take care of fires on particularly western lands but you know, looking at fires around the country. There’s a bill that Mike Quigley has introduced, it’s come up before to regulate big cats, lions and tigers and who can own them, which is a big issue that came up in Tiger King — the series you’ll remember from earlier in the pandemic on Netflix. One of the main people in that, Carole Baskin, has been advocating for that bill. We’ll likely see a vote on that this week as well. And then you know anything else that they can get over the line before they leave for their break, which is scheduled to start this Friday in the House. We’ll see if they stick to that. If there’s something to stick around for, something to come back for, maybe they will. But there’s a lot of bills they’re going to try to tackle in the four days that they’re scheduled to be here this week.

Tom Temin And I guess outside of the federal bureaucratic issue, concern. [The] North Atlantic Treaty Organization, NATO, is on the burner these days because of what’s been going on with Russia and Ukraine.

Loren Duggan That’s right, the treaty that would allow Finland and Sweden to join NATO has to be agreed to by all the member countries. That is pending before the Senate after the Foreign Relations Committee approved it last week. There’s a lot of bipartisan interest in doing that. I think that’s another one of those can they get it to the floor and get the time. But I think we’ll see a broad bipartisan vote in support of adding those two countries to the alliance. They haven’t been in it and with things going on, as you say, with Russia and Ukraine, they have great interest in joining and I think the Senate will support that.

Tom Temin All right. And I guess we have to ask every week, what about budget for 2023? The plain old garden variety, appropriations.

Loren Duggan Right. Well, we saw the House pass six bills and one package last week, which is half of the dozen that have to be passed every year. There’s six more pending. Not clear that we’ll see votes on those before they leave for their August recess. The Senate Appropriations Committee hasn’t reported anything yet. Maybe we’ll see some draft bills before the end of July, before they leave for recess, that are kind of their points in negotiation. But still hanging over at all is there’s no agreement on how much to spend in total. Makes it hard to figure out how to spend that individually across the 12 bills. So a lot to go. Continuing resolution (CR) talk will definitely heat up at some point here and certainly when they come back in September, given that September 30 isn’t that far away.

Tom Temin And I guess the final hanging thing is the National Defense Authorization Act passed the House. What is the Senate status?

Loren Duggan The Senate’s bill is ready to be taken up at some point. It’s been reported out by the committee, it’s there. Again, floor time is always difficult. And that can take a lot of floor time, depending on what agreement that can reach on amendments. We might see that, I think, come up more likely in September than now. But that’ll be one of the priorities to wrap up by the end of the year if they can, because it’s been some 60 plus years that they’ve done that and no one wants to be the armed services chairman that doesn’t get that done.

Tom Temin Lauren Duggan is deputy news director at Bloomberg Government. As always, thanks so much.

Loren Duggan Thank you.

Archives for July 2022

Nearly Useless Factoid

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