I mean, it absolutely does no good to have cheap products when people do not have decent jobs to be able to to buy the products. I think part of the problem is free trade versus fair trade. In other words, our competitors like in china, they dont have epa requirements and everything that we have to follow here. And im curious, tell me, what do you think the impact of trade deficits, you know, with other countries . I mean, were constantly losing this trade war and also the impact of having h1b 1 visas with open borders with regards to jobs and open borders in this country in regards to jobs. I think our experience with trade is that it improves the Living Standards of our competitors and the elite in this country but not, not the common person here guest well, ray, i mean, again, i sympathize a little bit with your comments. I do think overall trade remains good for the economy. Thats another area where theres been dozens of studies by economists. Historically, trade has been a positive thing. It raises our Living Standards, and as i said, it raises exports as well as imports. Thousand, you do raise some reasonable points. We have been running persistent trade deficits for many years now. Part of that reflects the overvalued dollar, and so i support efforts trying to level that Playing Field to headache the trade fairer to make the trade fairer. Other things in the economy, you know, trade is not the source of most of the problems weve had. And most of the problems weve had do reflect the recession and other things going on, new technologies that make it easier for companies to replace workers, especially workers without a lot of education that to fairly routine kinds of work. So youre lumping a lot of things together and blaming them all on trade. And i think thats only responsible for a small part. And the other thing you talked about was the h1b visa. People can debate about immigration and whether less educated immigrants are good or bad for the u. S. Economy. I think theres a fair amount of consensus that people with ph. D. S, people with we engineering degrees, thats a good thing for the u. S. Economy. It builds more innovation, it creates more startups, more new patents and products. All of that is the best thing that can possibly happen for thest economy. Now, theres possible reforms in the process that might make that process even better and fairer, but overall immigration has mixed effects, but immigration at the top is mostly a very good thing. And i would be cautious about labeling or lumping all those things together and blaming our current economic problems. Host as you said, we have a line for up employed americans, 2025853883. Pat calling in on that line from cam depp, new jersey. Good morning, pat. Caller good morning, everyone. Im excited to be on. I just wanted to tell you my story. So my story is i am 58 years old, Associates Degree in computer science. My industry is Health Insurance, and since 2005 ive been in and out of employment. So i tried to [inaudible] i disagree that Community College [inaudible] when i was unemployed, i did whatever they told me, so i went to school and took a certification for medical billing and coding. That doesnt get you in the door to do it even though i come from Health Insurance and have a solid knowledge. I reinvented myself again, and i became a substitute teacher in new jersey. Theyre crushing the union, and now you go to an agency, and you can work all over jersey. But to make 100 per diem as a substitute, we have to work in the hardest, toughest cities like camden and trenton, and ive done both. And then the last thing because i have Health Insurance background, ive been to temp agencies, and i got my license to be an independent insurance agent, and they wanted to pay me, and i took it, and i went an hour from camden, i thanked them for the opportunity because the licensing helped me, but im 58, im a person of color. Its hard to create leads as an independent insurance agent. I dont even know where to start, you know . In the 80s when i first started working, i worked for a wonderful corporation. Prudential. Aarp operations. They trained us on how to do the jobs they wanted. Host professor holzer, want to let you comment on pats transition. Guest first of all, i credit pat and people like her. It kind of shows the resilience of americans under difficult circumstances, that every time a job ends or gets in trouble, pat finds another pathway to try to make it. But for about nine years it sounds like pat and people like her have been swimming against the tiled. And interestingly, pats difficult actually started before the recession really hits, and, again, it reflects the situation that some of the problems are due to recession, longerterm trends that make it easier for American Companies to eliminate jobs and replace their workers. So what do we do about that . Again, we try to, we try to help those transitions, and its interesting because we send a lot of people to college in america including Community Colleges. And sometimes a lot of people drop out and dont finish. Then theres people like pat who finish, and pat did everything right. She not only went to Community College, she finished her Degree Program and got a degree in a field that seemed to be growing, and thats sort of the best advice we try to give people. And even that sometimes isnt enough. The American Economy moves very fast, and an area with a strong growth one year can be shedding workers a year or two later. So its hard. Its hard, and the only thing i can say is that policy has to work harder to help people like pat in the short term, to help them get into college and get those degrees. Not just degrees in general, but in the high demand fields. I think we can do more to encourage that. But once she finishes, we need to have more assistance getting her into the job market. If she cant get Health Insurance through the job, thats why obamacares important. You know, and for all of the bashing that obamacare gets from the right, really theres very good numbers, probably over ten million americans are newly insured right now. So we help, the government helps subsidize people like pat to get their own insurance on federal or state exchanges. So thats what we can do. We can help people get the skills we need, help them transition to new jobs. If theyre still in lowwage or lowbenefit jobs, we can supplement their low earnings, help them get health care and thats the pest we can do to help people best we can do to help people in whats going to continue to be a very dynamic economy. And i dont think we can stop firms from eliminating those jobs. Technology is a powerful force. Each if we wanted to, we couldnt stop firms from doing that if we tried to. Theyd probably pack up and and move somewhere else or replace those jobs each faster with machines. Its the world were going to live in, a very Dynamic World with a lot of uneachness, and the best unevenness, and the best we can do is try to help workers make the transitions and try to supplement to at least provide the basics we need. Host you bring up the Affordable Care act, a different take from charles koch in a recent column in the usa today. Charles koch, of course, chairman and ceo of koch industries. He writes in that piece we should e will imnate the artificial costs of hiring Government Policies such as obamacare have given businesses a powerful incentive to hire two parttime people to do one fulltime job. This trend was reflected in junes unemployment data, he writes, which included the loss of half a million fulltime jobs. That number now stands at 7. 5 million up 275,000 people in june. [laughter] guest well, mr. Koch is not exactly a neutral observer. He and his brother have very, very strong views which they up state. And, again, were mixing apples and orange toes together. I believe as the economy picks up more steam, employers when they create jobs will be more willing to commit to fulltime employment and to the higher wages and benefits that entails. Its funny that he blames obamacare. The obamacare positions dont even kick in until 2015 and 2016. Now, it may be that some businesses are anticipating that can and creating parttime jobs in advance, but i think theres a lot of Different Reasons for those numbers. If youre going to say we should eliminate obamacare or the employer mandate, as an economist, i was trained to look at the benefits as well as the costs. And i think there are substantial, huge benefits created from obamacare. Now, we could have done obamacare without creating a mandate on employers with 50 or more fulltime employees, and people have debated that. Thats something to keep watching. I will not blame obamacare for all the growth in parttime work. I dont think thats warranted by the facts. And, again, weve got to look at the benefits as well as the costs. Im hoping that as recovery pucks up steam, more of those involuntary parttime workers will be able to get fulltime jobs. Host just a few minutes left with harry holzer, professor at georgetown university. Well go to mike in oklahoma op our line for independents. Good morning, mike. Caller good morning, gentlemen. First of all, your speakers totally out of touch with whats going on in america as far as obamacare. Its evident, certainly down in oklahoma, that employers are hiring people 29 hours per week or less. Period. Take a look over the last four years the number of total parttime jobs versus fulltime jobs created, and i think maybe youll wake up and figure out what obamacare has done to the labor market. Youre just totally out of tune. You sound silly out there. Host mike, we talked about some of those numbers, but if you want to respond. Guest well, mike, frankly, i think youre overstating your case. It might well be that obamacare is leading some fulltime jobs to become parttime jobs. Im not saying thats a zero effect. What im trying to tell you, and maybe you should be better in touch with the ten Million People who are now insured. Why is america the only Major Industrial country in the world with a massive uninsured population . Every other industrial country has figured out how to provide insurance to their population. Obamacare takes us in a positive direction. Now, i understand there might be some costs to that. In the world i live in, theres always costs as well as benefits, and some of the growth for part time doesnt reflect that. I think it does reflect a generally weak job market. If that comets to be the case, as i said, maybe we loosen the employer mandate at some point. But we, again, my sense is that every problem in the health care and in the job market somehow gets attributed to obamacare, and i think thats a little out of touch as well. We have to be honest about the costs and benefits if we could figure out a better way to do it, we can think about that. But americans need to be insured, and we also have to try to rein in those costs which are burdening everybody, and i think those things should be high on the policy ageneral da. Host agenda. Host michael in kansas city, missouri. Good morning. Caller good morning. Host go ahead, michael . Caller how you doing today . Guest im good. Nice the hoe hear from you nice to hear from you. Guest im all right. My thing is the common sense in anything people do, its just, its just a shame people dont use which happens. Host what do you mean, michael . Caller you know, in life. You talk about all these people unemployed and all this, common sense tell you dont shut down the government. Just do what youre supposed to do. You know . Youve got a ba, degrees and all this stuff, and its just common sense. Host michael asking for more common sense from lawmakers. Guest you know, i think common sense as a commodity we do need a little more of. And, you know, theres one point in michaels comment that i think is correct, we often do stupid things like government shutdowns, like a refusal to think about raising any new tax revenues that shoot us in the foot sometimes. So i think a little more common sense and a little less rabid ideology and partisanship would help us, but common sense isnt going to some of these problems really are complex and difficult, and the world is changing very rapidly, and keeping up with those changes and having kind of the right kinds of policies to deal with them, i think, is a big challenge. I think more common sense in this town would certainly help, but thinking carefully about the new policies we need would help as well. Host montgomery, alabama, eric on our line for democrats. Good morning. Caller good morning. How are you doing today . Is. Guest im good, how are you . Caller my question is kind of twoparted. For one, i would like to ask does the inability of congress to be able to act on the american people, have that, has that negatively affected our job market and wage inequality . And do you foresee any actions on raising the minimum wage, tax reform or the new bubble student lope debt . Guest loan debt . Guest you know, eric, i think that the paralysis in the washington right now and especially coming out of some of the very extreme positions taken by a lot of the people in the house of representatives, that clearly hurts the economy. It clearly makes inequality worse because there are some things we could do to make the tax system even more progressive and to help people who need more help. And i think raising the minimum wage modestly i wouldnt support huge increases, but modest, gradual increases to the minimum wage, things of that nature, would help. Its hard the get anything done in this town. We have this crisis of children flowing over the border. We have to do something about that, and the paralysis in congress get everybody, congressional people left on vacation without doing anything sensible on that. So its hard to be optimistic looking at the current land scape. Its hard to see how were going to come out of this election with a more functional congress than we have right now, and and thats a big source of concern. And i dont think were going to go back to one party. I mean, maybe in 2016 if we elect a president and two houses of congress all from the same party and i have other concerns about that happening. There are its very discouraging, and i just wish there could be a little less ideology ask partisanship in congress and a little more focus on the problems that really do need some action right now. Host ending with your 30,000foot view again, has the u. S. Economy learned the lessons of the great recession, or are some old habits starting to slip back in . Guest i guess youre talking mostly about the Housing Market and Financial Markets where big bubbles developed, and when those bubbles burst, we had a massive recession. We learned some lessons from that. I think the doddfrank legislation does some things right to try to correct that problem, prevent new bubbles from occurring. I fear that in some places the legislation may not have been Strong Enough or theres so much latitude for how those rules get implemented. So right now the banks are required to come up with these plans for how they would be resolved if theyre threatened with bankruptcy, we dont have to bail them out again. Fdic and the Federal Reserve recently rejected a lot of their proposals as not going far enough in the right direction. So doddfrank was a step in the right direction, but a lot of those problems still exist. The problem of banks that are too big to fail that we might still need to bail out, but theres still time to try to correct that. And i hope the Federal Reserve remains strong and pushes those banks more in the needed direction. Host harry holzer with georgetown university, always appreciate you coming by. Guest thank you. The pentagon has announced a briefing later today. Well have that live for you starting at 2 30 p. M. Eastern on our companion network, cspan. Join us later today for more from the American Institute of cert tied Public Accountants and and their conference on accounting and auditing practices. The twoday practice includes a discussion with officials from the office of management and budget expected to talk about key Financial Management issues and future challenges. Thatll be live starting at 2 50 eastern on cspan. Well continue to monitor congressional tweets, and well try to bring more to you throughout the day. All week watch booktv in prime time. Tonight at 8 30 p. M. Eastern and tuesday through friday at 8, booktv features a wide range of topics including foreign policy, law and legal issues, iran, coverage of book fairs and festivals from across the country and the bestsellers from this year. And let us know what you think about the programs youre watching. Call us at 2026263400 or you can email us at comments cspan. Org. Join the cspan conversation. Like us on facebook, follow us on twitter. While congress is on break this month, cspans prime time features a wide range of political views and topics. This week a debate on americas greatness, Veterans Health care and detectives from the cdc. We visit the Atlanta Press club for the future of news, and we take a history tour looking at the civil war. Cspan prime time monday through friday at 8 p. M. Eastern. And let us know what you think about the programs youre watching. Call us at 2026263400 or you can email us at comments cspan. Org. Join the cspan conversation. Like us on facebook, follow us on twitter. Join us tonight on cspan3 for American History television. At eight, well hear advice from the Founding Fathers personal letters with author william kristol. An hour later well focus on Alexander Hamilton and the concept of a mans honor. At 9 40 its lectures in history. Tonights theme is political unrest in the early american republic. And at 10 30 more lectures in history with a discussion on alcohol use in early america. In this next washington journal segment, well take a look at the status of the disability Case Processing system. A cuterbased system computer orbased system designed to track payments for the Social Security administration. From todays washington journal, this is about 45 minutes. Host each week in this segment we take a look at how your money is at work in a different federal program. This week were joined by the steven ole macker of the Associated Press to take a look at a Computer System that after six years and nearly 300 million in Development Costs still is nowhere near ready. What is this Computer System that were going to be talking about today . Guest well, this is a Computer System that helps the Agency Process disability claims. So when a person first applies for disability benefits, they go to a state agency, and these agencies are affiliated with the Social Security administration, but theyre run by the states, and there are 54 separate agencies across the country. And each one has their own individual Computer System. And six years ago the Social Security administration embarked on this plan to replace all 54 of these Computer Systems with one massive system that would help them process applications coming into the system and track them as they work their way through the system. Host and so on the benefits of what this was supposed to do, were the benefits going to be financial benefits . Wait time reductions . What were we supposed to see from this Computer System . Guest really all of the above. Right now there, if you apply for Social Security benefits, there are long delays at every step of the process, and there are a lot of inefficiencies. So this Computer System was supposed to reduce those wait times and increase efficiency, increase the accuracy of judgments whether theyre approving benefits or ea jekylling or rejecting them and, hopefully, make the system more efficient. Host so six years, nearly 300 million later, its been described by some members of congress as an i. T. Boondoggle, thats their words. Why . Guest well, because it doesnt work. The agency cannot say when it will work, and the agency cannot say how much it will ultimately cost. Host and what went wrong along the way . Guest well, so a few months ago the agency hired an outside Consulting Firm to find that out. They realized they had a rob and theyd spent an awful hot of money on a system that budget working, so they wanted to find out what went wrong and how to the fix it, so they hired mckenzie and cane, and they did an and company, and they did an internal report finished in june. Essentially, they found a Massive Technology program with no one in charge, no Single Person responsible for getting the job done. They found that there were they didnt give the contractor enough details throughout the process on exactly the kind of capabilities that they needed, and there budget enough what they there wasnt enough what they call shared risk. Meaning the contractor got paid each though the system doesnt work even though the system didnt work, and so there werent enough incentives across the whole project management to insure that this thing would get done. Host what are the similarities youve seen between this and the very high profile problems with healthcare. Gov during its development and rollout . Guest well, the one big difference is they never rolled this out. This system is still in the testing phase. In fact, after six years and almost 300 million, its never actually been employed. So youre not seeing the results in the public that you did with healthcare. Gov. Host were talking with steven from the Associated Press whos been following this investigation into the sos administration into the Social Security administrations disability i. T. Program investment of about 300 million inics years, and in six years, and and its still not working. If you have questions or comments, republicans call 2025853881. Democrats, 2025853880. Independents, 2025853882. I used the word investigation. Members of congress are looking into this now. How was congress made aware of this, and how much oversight are they bringing to this . Guest well, im told that the House Oversight committee, the House Oversight and Government Reform Committee is looking into this. They found out about this. Im not sure who tipped them off initially, and they actually got ahold of this report which had not been publicly released at the time. Theyve requested information from the Social Security administration on about this contract and about this project, and they are looking into it. Host and what has this meant forcare lip colvin who Carolyn Colvin who is going through the process of being confirmed as the head of the Social Security administration . Guest well, this comes at an awkward time for her because she was just recently nominated by president obama for a full sixyear term as Social Security commissioner. Shes right now the acting commissioner. She took over last year when the former commissioner finished his term. Now, the Social Security commissioner serves a sixyear term, and so whoever, you know, if she were to be confirmed, she would serve beyond the obama presidency. And so right now shes going through that process. One of the last weeks that congress was in session in july, she had a confirmation hearing. This issue was mentioned but barely talked about, and right now i dont see any big roadblocks to her getting confirmed, but this could raise some issues with other senators as she goes forward. Host is this the Biggest Issue shes going to face . Whats on her plate . Guest oh, theres a lot on her plate. So this is a big deal. This is almost 300 million. But when you look at how massive Social Security really is, you know, i had some numbers, 58 Million People get Social Security benefits. Now, most of those are Retirement Benefits. Thats almost one out of five americans. About 11 million get disability benefits. And so, you know, last year Social Security paid out over 600 billion in Retirement Benefits and 140 billion in disability benefits. One of the problems with the Disability Program is that its, the finances are not secure right now. In two years the trust fund that supports the Disability Program is scheduled to run out of money. And at that point disability will only collect enough in payroll tacks to pay about taxes to pay about 81 of benefits. So if congress would do nothing, that would result this an automatic 19 percent cut in just two years. Congress can do a simple fix, and theyve done this many times in the past. Social security is supported by payroll taxes, 6. 2 directly from you, 6. 2 that come from your employer. And a portion of that goes toward Retirement Benefits, and a portion goes toward disability benefits. Congress could redo that formula and transfer money from the retirement system to the disability system. Theyve done it before, and it wouldnt be that big of a deal except for the fact anything touching Social Security and anything, you know, touching a hot button issue in this congress is not necessary hi going to be necessarily going to be easy to do. Host weve got steven covering chick issues for the associated Economic Issues for the Associated Press and covering tax policy issues as well. Hes with us for about the next 35 minutes or so. Were going to take your questions and calls. Glenn from franklin, new jersey, on our line for democrats. Good morning. Caller good morning. Host go ahead, glenn. Caller id like to know why these contractors are getting paid if it doesnt work . Guest well, thats a good question, and that is, in fact, an issue that was brought up in the report that was done by the Consulting Firm. The way they describe it, they talk about shared risk. If this thing doesnt work, who has to pay . And what they said is that the contractor probably should have had, should have made the contract. The contractors a large Government Contractor out of maryland called hock lead lockheed martin. The report does not specifically fault the contractor, although it does raise the issue that maybe Social Security would think about switching contractors although the agency tells me theyre not currently doing that. So the way the contract was set up, they were getting paid each though the system wasnt even though the system wasnt working. Host renee is next from e middle, oklahoma, on our line for independents. Good morning. Caller hello. And how are you doing this morning . Host good, renee, go ahead. Caller i have a question. I am a person who is disabled, not of my own doing. And [inaudible] its never to be revisited again. Because of this, i have a disability. But when i ask questions about it and how its formulated, i find out that its a 1940 tomorrow lair for formulary for a Median Income fam ily of four being utilized. How does a 1940 income convert to a 2014 income . I dont get it. Benefits are calculated, you start off with the basis for how theyre calculated for retirees. For them, you get wages over the course of your lifetime and the agency then takes your 30 years of your highest wages and averages it. They bring those up to today and they come up with an average monthly wage and then apply a formula to that to determine it. They replace about 40 percent of wages on average when you retire. So you take that and if you get disabled and if you get disabled and youve been working, the Social Security administration uses a formula, say youve so you are invested in the program and youve worked that if you are disabled and a little bit younger, you dont have to work quite the years. But they make a calculation to figure out what your earnings based on what the past earnings are over the courier and they use a formula to come up with the benefit would be. Granted its not much. The average disability benefit is 1,146. Thats more than 13,000. Post co. We want to know about the impact of the delay about the Processing System that we are talking about on the money segment of the washington journal. Will this strike people spiraling for benefits . Guest this is the Disability Program. Retirement benefits is a much simpler process. Once you decide youre going to retire, 62 is when you are eligible and right now the full retirement is 66. Its a Pretty Simple calculation. They have a history of the wages and determine what the benefits are. This ability is difficult to figure out if someone qualifies for benefits or not. Last year 2. 6 Million People applied for benefits. The system is getting swamped with applications. Only about a third gets approved and the standard is high to get the disability benefi benefit te law says you have to be disabled for a year or your disability has to be projected to last a year or result in death and it has to be so severe you can find no new job in the economy anywhere. Host dan is calling on the line for republicans. Caller i understand that Social Security income cap seems a bit ridiculous. It seems that it is all subject to the Social Security tax that would take care of the solvency problem and number two, what is being done to root out the fraud, waste and abuse that seems to be rampant . Guest hes right about that. When you pay Social Security taxes if you make more than 117,000 in wages because the taxes are taken out of the wages any amount you make above 117,000 is not taxed. Originally you think about Social Security retirement system is not meant to be the entire income per person when you retire and so for people who make more than that, they have other income coming in, so the amount of the taxes are capped but the benefits are capped as well. Dan makes a good point if they were to take the caps of people making more than 117,000 a year would pay Social Security taxes on all of their income it wouldnt even raise the deficit but it would e. Race a chunk of it. The question becomes if those people are paying more taxes do they then get more in benefits and that would reduce the solvency as well because the program would pay out even more money and the way the system is set up if you are a little wage worker you get more of your wages replaced by Social Security benefits than if you are a high wage worker. That Social Security is an insurance policy that helps people stay out of poverty when you retire and if you are making more than 117,000 a year you will not be in poverty when you retire so they are not getting as much return on their money and that is an issue that has come up in a lot of democrats in congress have talked about the need to perhaps raise the cap. Republicans are less reluctant to do so because they dont want to raise taxes on anyone. Host Miami Florida is next on the line for democrats. Good morning. Caller good morning. The 6. 5 tax funds the largest Social Security fund with the disability the Social Security fund one of the solutions is to take a small percentage of the 6. 5 and reallocate it to the disability and that would shore up another 20 years to make it in line with the larger Social Security. Is the opposition against that they dont think its fair that people that work should support people that dont work even though quite a people who are on disability really need to be on even though the fraud and abuse or is that not a fair right because there is no tax increase it is simply a reallocation. The Social Security people paid into it and then a piece of that goes into it. How do you compare that to the similar problem they took a transfer payment from the larger fund separate from the payroll tax piece . Guest its the amount of money that comes out of your pay is 6. 4 of that fund the entire program. Its supposed to be 6. 2 directly from the pay and the employer contributes. They will tell you they are paying the present because the employer share tv employer share at the reduced wages. So right now about 85 of the attacks goes to the Retirement Program and 15 goes to the Disability Program. There is no opposition to rework the formula so that the life of the Disability Program would be extended so if you look at the trustees that oversee Social Security they said the Disability Trust fund is scheduled to run out of money in 2016 and the retirement is scheduled in 2034. If they simply combined the two funds or rework the formula as one big system the whole system trustrust funds would be exhausd in 2033 so it wouldnt have that much effect on the Retirement Program because it is so much bigger than the Disability Program. Its not so much as the opposition that if you think about the way the Congress Works right now, congress doesnt do much work well unless there is a deadline and they are forced to do something. Some folks that want to see the program in the longterm come into the longterm is more than 20 years because when you are looking at this many people and its going to keep growing and growing as the baby boomers retire, they would like to shore up the programs sooner rather than later and some people would like to use the 2016 deadline shoring up the Disability Program to tackle the larger issue so its not so much the opposition to making a simple transfer its just a debate whether they can use the deadline to look at the bigger problems. Host what about people that want to see the disability Case Processing system come online . When are they going to see the system come to fruition after so much investment . Theres a chart from one of those reports you were talking about on the delay showing consistently theres been a 24 to 32 month estimate of the time remaining on the creation of the system that happened in 2008, 2010, 201113 and although they still somewhere between 24 to 32 months away. One of the consultants told Social Security you need to have somebody in charge. One person responsible for this entire project and so he appointed an assistant Deputy Commissioner to be in charge of the program. And i talked to her and asked her that question and she couldnt give me an answer right now she said she didnt own the whole system was going to be up and running. Host are their estimates for the more than 300 million . Guest the answer is no there are no estimates. Right now they spent 288 million. Host we are talking to the ap and its your money segment of the washington journal. We will take your calls and questions. Charles is in huntersville North Carolina on the line for independence. Good morning. Also thank you for taking my call. I had to comment on the it projects across the board in the federal government and i think the federal government has one of the worst it records in the world for the completing projects and that annually they know that millions of dollars were wasted in the seals it in the federal government and why this one project is being investigated by the subcommittee when they know there are enormous waste of the federal government in the it that they are so bad at. Guest if you think about it, the federal government is a huge purchaser of it. There are Computer Systems that run domestic agencies whether it is health and human services, the Veterans Affairs canada healthcare. Gov Social Security administration. So i do think that there are problems across the government that they found and the reason why they are looking at this one is because this is what congressional investigators have found and they feel like they have to start somewhere. Host kathy on the line for independence. Caller i have a comment and then a question. My comment is my husband and i that have been together for over 30 years filed our taxes this year the same way we always do with the same account in that we have had for 14 plus years and low and behold someone had already filed our taxes for us and got no refund. My husband and i both work very hard and we are just everyday middleclass americans. So what i want to know is excuse me, im a little winded. If the irs cant even process refunds from Everyday Americans whom theyve been processing my husband and i have been doing this for over 30 years then how do we expect the Social Security administration to run any program especially like the new Obamacare Program and i will take my answer off the air. Guest very sorry that happened to you. Ive covered the tax policy as well and this is a growing problem. Identity theft. One of the things these identity thieves do is if they can get your Social Security number and there are a lot of different places they need that and your birthday as well what will happen as early in the filing season, soon after the irs starts ticking tax returns they will file a fake return, get a refund antherefund and when thee person go to meet cocos to file they will come back and say some of these are already filed and have already gotten a refund. This is a growing problem and has been for a number of years. Host is that an improper payment clicks guest its in the billions of dollars. I cant put an exact number on it. I can tell you that its a growing problem that they are trying to address. The irs takes great pride in turning around and issuing refunds quickly and often the issue refunds before all of the paperwork comes from your employer or bank or broker if you have investment. And only then after that paperwork comes in do they realize that they have issued a false refund. So they are taking steps to try to shore the system up to get faster reporting from the employee or independent and things like that but as long as they are trying to get the refund after you file the return and they dont have the ability to get this kind of a Third Party Reporting they are going to have this issue. Host Kansas City Missouri on the line for democrats. Caller yes i have a question and a comment. The question is this. The irs tells you that 52 you can retire but then they put a limit of 15,000 you can make over the Social Security you get. And you are left practically living on welfare and food stamps if you are 62 and if you have no kind of pension or anything. We are retiring and a lot of us dont have pensions so we have to liv live under 15,000 if we retire at 62 were we can wait until we are 66 and collect the full amount where we can wait until they are 70 and get 138 . Why dont they take the limit off the 15,000, let us wait until we are 66, select the Social Security and then wait until w they are 70 and collect the 138 . Rather than having to go to welfare or food stamps. My comment is this is getting to be a thing where we are retiring at big amounts of baby boomers and what is the government going to do . Guest she raises a very good issue. I look at some of these numbers and more than half of all people applying for Retirement Benefits do so at the earliest possible moment they can when they turn 62. Delay the retirement system is set up. If you wait until 66 to retire today. They are reduced benefits because you are taking them early and what people really need to do is they need to do a hard calculation and his is a hard thing to do how do you think you are going to live and how much money do you think you are going to need as you grow old. Some people have no choice but to take the benefits as soon as they can. You can find a job, you are destitute and apply for benefits. Other people perhaps retiring too early because they are not realizing they are going to live another 25 years that they are inevitably going to get less money out of the system because the retire early. Yes there have been some talk about raising the retirement age again raising the full retirement age or the early retirement age. There is a lot of opposition to that on capitol hill. Folks like us i said at a desk or a runner out at the capitol for my job and other people work outside with their hands they do physical work. Its hard. Its not easy to work until you are 67, 68 or 69yearsold that is a difficult issue they do have to address. People have to be honest with themselves about how long they think they are going to live and how much money they need to retire. Host on the line for independence. Good morning. Caller good morning. Im speaking from the references of someone thats been involved in Public Service for a very long time. I think the biggest problem is why we are having the problem here that the rest of the government in terms of procurement in all phases. Government work is looked upon as liability and not as a resource. The problem thats very important is the people that do the hiring from the government have to know more than the contract and the consultants that they hire because they have to prepare contracts and requests for proposals and be able to coordinate the work of the various contractors. They have to be experts in technology and legal and be able to supervise the work of many contractors. Where the bottom line is they have to be more knowledgeable than the contracts that they hire. And i think that is the basis of the problem. Congress feels they want to hire and pay the ability that they pass we are going to keep running in these problems people have been overrun on everything. Host is scrutinizing the probleproblem a disability in te Processing System . Guest is a plus. Excuse me. I daughter brought me home a something from daycare last week im starting to shake. One of the problems is the way the Consulting Firm pointed out was that as they went along there wasnt enough scrutiny going on with the contract. They didnt give them enough detail of the capabilities that they needed. They didnt have a Single Person overseeing the broad scope of the project. And hes absolutely right that the agencies need to have people that understand the projects and the needs to oversee the budget. Host how much competition was there in this contract in the Actual Development of the contract was this how Many Companies were bidding on the contract . Guest i dont know. I wasnt around when the contract was first awarded. I read some of the documents about that. I dont know that it was competitive and i dont have the information on that. Host waiting in new york on the line for independence. Good morning. Caller thank you for having me. Two points. One is a question. Does the regular Social Security account that go to people that are retired or those accounts affected by the people that will not be able to get disability from Social Security in the future . Thats the first thing. The other thing is something that im thinking. Shouldnt contractors in the industry be more directly involved in supporting the framers for people that work for them and i can see this might be some kind of a ruling or a law. The question is how many disability claims are valid on 60 minutes that possibly 30 of the people that claim were claiming falsely and i can see this because people are starving in these parts tha but they were showing in West Virginia who need money because there is no other welfare system for them. So we have a problem with an balance in the country. Who are the managers and who are the people supposed to be in Congress Looking at these equations and trying to balance in the proper ways. It seems like a headless government in this country. Guest he raises a couple of interesting issues. One of them is that in fact two thirds of the people that apply for Social Security disability are denied at their initial application. As i said before when you first apply for disability benefits you go to a state agency. Two thirds of those are denied. 2. 6 Million People applied last year. If you get the night you can go back and reapply to the agency and if you are denied again thad then you can appeal to the Administrative Law judge appointed. Thats different than a regular judge in administrative judge that works for the agency and they make a determination on your case. This whole process can take from start to finish more than two years. Administrative law judges interestingly tend to approve about half of the cases they get. Theres a couple reasons for this. Sometimes people start off with disabilities that get worse over time so perhaps they can really be disabled at that point. Other times there might be flaws in the system they need to look at so this is an ongoing issue and one of the big reasons so many people have been applying for benefits and we see this anytime theres an economic downturn the number spikes. Back in 2010 is almost 3 Million People a year so it started to level off a little bit. This number has been growing for a couple reasons. The demographics, the baby boomers. You are more than likely to be disabled or get a disability if you are 50 to 65yearsold as opposed to younger. A huge group of people approaching the retirement age all moved into the tail end of the baby boomers turning 50 this year. Historically more women have been in the workforce. This is not a new phenomenon but going back 20, 30, 40 years whose female workers have now publicly for benefits if they get disabled. That has increased over time. And also, just thats happening recently with the economy. If you think about it a lot of these people probably are not provided to get to benefits when the economy gets bad and they apply for the benefit but some people may be disabled and have a job and an employer that makes accommodations for them they have no place else to turn into the turn to Social Security. Host we will get to as many calls as we can. Becky is in michigan on the line for democrats. Good morning. We will go to bruce waiting in illinois. Good morning. Caller . I was laid off in 2009. Im 59yearsold now. I have disabilities and they keep getting worse. Applying for disability could be a twoyear process. I have no income. My unemployment ran out two years ago. The fact i live with my mother and i care giver for her. What are we supposed to do, where are we supposed to turn . You are a reporter it would seem to me that there should be some investigations into the people between the ages of 55 and 62 that have been laid off, or terminally unemployed still need to try to file for unemployment. Guest when you first apply for benefits that last phase lasts for more than 100 days so that isnt two years were quite a year. A third of those people get benefits. The standard for getting the disability benefits is high. As a Legal Standard is you have to have a disability that is expected to last at least a year or result in death and be so severe that you can find no job in the economy whatsoever and that is a very High Standard its not necessarily the jobs you had before. Its any job in the economy. Host on the line for independence. Good morning merry. Caller im 53yearsold and on disability. And it took me six years to get disability. I was the ninth twice and went before judge moore advocates and within two weeks i got disability. I didnt have a lawyer. I kept notes on everything and they had me having an alleged aneurysm and i have a huge aneurysm and i had to have it cold and a stint. Guest is one of those claims that would be processed under the new system that we talk about in this segment. It is to handle the claims that go through the state agencies and eventually into the cases that are appealed to the Administrative Law judges. So as i said a multistep process if you are denied you go to a state agency and to get denied and reapply the same agency and get the night again and apply to the Administrative Law judge that is the first step in the process and right now as it is envisioned that will eventually include that part of it, but as we are not even Touching Base with that. Good morning. My question is why cant the congress of the United States of america replace the cash or the securities in Social Security if they withdrew and replaced them with treasury notes were returned notes of some sort basically worthless paper . I would like to know why they cant replace that and i will take my call here. I hear this a lot from folks that talk about is the trust fund real. Back in 1983 when the congress and the work and revamped Social Security they created a system to workers paid more in taxes and benefits athan benefits as r the course of about 30 years. So the trust fund was built up and has about 2. 8 trillion. They do what they are required by law to be but the Treasury Bonds in the Social Security trust fund so when the rest of the federal government however as we know has been spending more money than it takes in and so we have been borrowing from the trust funds and the first places they go to Social Security trust fund. Theyve been running huge deficits in the Social Security trust fund and of course spent it. It is there in the sense that the Social Security administration has the Treasury Department have 2. 8 trillion in Treasury Bonds payable to the Social Security beneficiaries. The rest of the federal government owes the money to Social Security so if someone is standing outside of the government you might say thats one part of the government owing it to another part of the government and thats true. A different way of looking at that is as long as there is a balance in the trust funds, the Social Security administration has the Legal Authority and obligation to pay the full scheduled benefits. The trust funds are still growing even though right now the system is taking less in tax dollars than it spends and benefits. However they are still growing because the interest of their earning just like the other bonds. That will stop sometime in the 2020s that will reverse and the trust funds will start to shrink unless the congress acts. Around 2033 or 2034 they will run out of money and the system will have to survive on the incoming taxes. The importance of those balances are that as long as there is a balance in the trust fund that the agency has the Legal Authority and obligation to pay the full scheduled benefits once the balances go to zero because only pay the benefits are supported by the payroll taxes which would mean a significant cut in the benefits. Host what is next for the Processing System when it comes to congressional oversight . Is the congress staying on top of this . Guest the folks at the House Oversight committee tell me that they are looking into this. Theyve made a request to the agency for the communications regarding this contract and computer program. I dont know that there is good to be hearing this but i wouldnt be surprised if there are even people see where that leads. Host thanks so much for joining us in the money segment today. Guest thank you. Joined us on this mornings washington journal. This is about five minutes. Host i wanted her to Anthony Capaccio joining us by phone. Good morning. I want to start with the situation in baghdad the report being thrown out what is happening in the city this morning . Guest there isnt a lot of major News Organization coverage because they dont have a major presence at the moment. Its confusing but its going to add to the whole notion that the iraq he government is not worthy of u. S. Support and we should focus on aiding the kurds. I think this will play out in the next day or two but clearly ballot he is holding on and that is going to strengthen the resistance of the u. S. Citizens and lawmakers and feel that it isnt worth any pilot being shut down basically. Host hes staying in power on the deadline. Can you explain whats actually happening there and what the legal status of Nouri Al Maliki is . Guest the party was meeting this weekend to name a new prime minister. He obviously is finding that decision that had been laid out of the recent elections in the timetable had been endorsed by millions of iraqis. You get the sense that this is a final from your nose at the sunni population, the United States. He had been a good ally for a number of years but this may be the final throw of resistance, his final way of saying im not going out quietly but it has no tv and political implications. Host Anthony Capaccio is the Bloomberg News correspondent. Lets turn to the u. S. Is doing right now. What is the latest on the strikes of where they happen and what are they targeting now . Guest we have not had an announcement since yesterday morning. It looks like thereve been seven or eight different strikes and we put out these announcements but you have to read them carefully because they lay out one or two or three individual strikes in the Northern Iraq he area. Pretty interesting is that my sources are telling me 90 to 100 planes are circling around with tankers into various Navy Air Force aircraft looking for targets of opportunity kind of waiting in place. Thats Pretty Amazing is the release so far we are talking about hitting individual targets like the mortar positions, the mobile artillery trucks, armored personnel carriers z. The United States is a pretty good picture of what is on the ground. They take the individual feeding or stationary targets almost at will because we have the air supremacy over there. There is no air defense threat. People need to realize we are not writing the Close Air Support these are the United States u. S. Is picking out individual isil targets that appear to be threatening to go into the refugees in the mountains. We did so precisely as a testament to the investment of billions of dollars of tactics over the years. But its also a testament to the 50 or so intelligence flights that have been going on for the last month and a half over there barely are getting a pretty good picture of the ground. Host earlier you mentioned the Kurdish Forces from the front page of usa today. The airstrikes bring an early gain and nothing but a senior Kurdish Military officials said the troops have gained control in the towns of Northern Iraq that they had previously captured. What is the strike meant for the kurdish fighters . Guest what they meant is this is the first time isil has gotten their nose bloodied nonetheless and the first thing you can do is individual small groups have to shake the confidence of the fighters and leadership that the United States can basically. And its hard to tell from washington about this but i think in the next day or two we will get information in those areas where the u. S. Has been striking into these are shortterm tactical victories and by no means is it going to imply that the United States or iraq can dislodge isil from the games that its made in the last year and a half those are going to be painful. But the tactical victories on the ground of pitting targets here and there, letting them know the free ride just going through and hitting the artillery, that may be over at the moment. Host as we said yesterday some lawmakers and former u. S. Diplomats talking about whether the United States should keep the troops in iraq on the ground now. Is that happening among the law makers and diplomats or are you seeing that the pentagon and sources on the ground in iraq . Guest bush read the marker in 2003 that we were going to get. Obama and the maliki government couldnt agree on the Legal Protections for u. S. Troops. This is history going to iraq in the first place which seems to be not part of the debate. This is all shifted to blaming the Current White House rather than the Bush Administration for going at it in the first place. The iraq he army that we left behind was about 220,000 strong. We ha have spent 25 billion on helping build the military up. Theres 400,000 or so state police and local police and national police. A huge force against 10,000 albeit a very powerful force. So you have to wonder what we got from the investment and whether we stay there or not. Host Bloomberg News correspondent thank you for joining us from washington journal this morning. Host the pentagon announced a briefing and we will have that live it 2 30 on our companion network, cspan
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