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Special Report

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In late January of this year the Inspector General released his report on the scandal. It was damning. The report estimates "that 19,212 individuals will receive $110 million in spousal benefits annually to which they may not be entitled. Over their lifetime, they will potentially receive about $2.2 billion in spousal benefits." The report examines seven Texas school districts, finding that the "school districts collected approximately $7.4 million in fees from their one-day workers, while only paying them about $900,000."

The report further noted that five of the districts had agreements with the Social Security Administration that precluded them from providing Social Security to part-time workers. The Inspector General was not impressed with the districts' claim that the 1-day jobs were full-time jobs: "Although school district officials stated they hired the 1-day workers for full-time positions, we found there was no intent or expectation by either party that the employment would last longer than one day."

UNFORTUNATELY, THE OVERALL REACTION to this scandal has been a collective yawn. Other than a few press stories, the media have largely ignored it. No one in Congress is calling for an investigation. And the Social Security Administration seems determined to ignore its own Inspector General and sweep the matter under the rug. In an interview with the Waco Tribune-Herald, Social Security Administration spokesman Mark Hinkle "stressed the agency doesn't anticipate finding problems." (Neither Hinkle nor anyone else at the Social Security Administration returned calls seeking comment for this article.)

According to the Tribune-Herald article, the Social Security Administration will only review whether the school districts had valid participation agreements with Social Security. The agency will not investigate to determine if those agreements were misused or if individual teachers are receiving benefits they are not entitled to. "We're not even getting down to that level," Hinkle said. "We're just looking at [the agreement] on file and seeing that everything is in order."

Fried sees it differently. "Can you imagine if this was a private company?" he asks. "In the Tyco scandal, CEO Dennis Kozlowski stole $600 million from private investors, and the media and prosecutors were all over it. This is over $2 billion bilked from the taxpayers and no one seems to care."

Fried also notes that a new Social Security Commissioner, Michael J. Astrue, was just approved by Congress. Says Fried, "Whether Astrue takes this scandal seriously is the first true test of his leadership." Indeed, it is.

David Hogberg is a senior analyst at the National Center for Public Policy Research. He also hosts his own website, Hog Haven.

topics:
Social Security, Law