fraud

E-Verify Can Now “Lock” Social Security Numbers

Immigration reform is taking its time in Congress but the executive branch agencies charged with enforcing immigration laws have not been idle. Rather, they’ve been implementing bits and pieces of the reform package on their own – but not any of the good ones. 

Last month, the U.S. Citizenship and Immigration Services (USCIS) announced that it will “lock” a Social Security number when E-Verify or USCIS employees, based on new algorithms, believe the number is fraudulent or used fraudulently. The number is locked and a tentative non-confirmation (TNC) is issued to the applicant or applicants using the contested number – preventing any further E-Verify confirmations until the fraudulent user proves he or she is the lawful holder.

Although my colleagues and I have written extensively about the E-Verify system and its threat to liberties and economic growth, locking adds a newer negative dimension.   

“Locking” was proposed as part of the summer’s comprehensive immigration reform bill that was passed by the Senate and in the House’s Legal Workforce Act. Locking was a bad idea in those bills and remains a bad idea today when implemented by regulatory fiat.

Senate Committee Hearing on Disability Fraud

On Sunday, CBS’s 60 Minutes profiled Sen. Tom Coburn’s (R-OK) on-going investigation of fraud and abuse in the federal government’s two main disability programs: Social Security Disability Insurance and Supplemental Security Income (see Chris Edwards’ discussion here). Yesterday, the Senate Committee on Homeland Security & Governmental Affairs (Coburn is the ranking member) held a hearing on a particularly egregious example centered on the Social Security Administration’s Huntington, WV office. 

The case is a perfect example of what is quickly becoming known as the “disability-industrial complex”: specialty law firms overwhelming the system with dubious disability claims, doctors vouching for applicants with dubious claims, and federal administrative law judges awarding disability benefits to individuals with dubious claims.

 

The committee produced a 160+ page report that is jaw-dropping from beginning to end. If you’re pressed for time, at least check out the “findings” on pages 4-7. In the Huntington case, it’s pretty clear that the three points of the triangle were all in cahoots. It’s also quite similar to a still unfolding disability scandal in Puerto Rico that I discussed in August. In both cases, the public is now aware of the scandals thanks to the Wall Street Journal’s Daniel Paletta’s excellent investigative reporting. That begs two questions, however: what other major disability scandals are sitting out there waiting for a curious reporter discover? And what other ticking time-bombs are Social Security Administration bureaucrats aware of but doing little to defuse? 

Social Security Disability Fraud in Puerto Rico

In 2011, the Wall Street Journal’s Daniel Paletta reported on the rapid growth in individuals applying for and receiving Social Security disability benefits. Paletta found that Puerto Rico had become a particularly easy place to obtain benefits. Officials with the Social Security Administration (SSA) absurdly claimed that nothing was amiss. 

$10.3 Billion in Unemployment Insurance Improper Payments

The Washington Times noted this week that the 2012 improper payment rate for unemployment insurance benefits was 11.4 percent ($10.3 billion out of $90.2 billion), according to U.S. Department of Labor data. The good news is that the figure is down from 12 percent in 2011. The bad news is that it’s still a pathetic waste of money. 

The waste, fraud, and high administrative costs associated with the program are just some of the reasons why it should be scrapped. A Cato essay on the failures of the unemployment insurance system explains: 

When policymakers dream of ways to provide subsidies and safety nets to groups in society, they rarely take into account the large bureaucratic costs that are inevitably involved. The UI system is a complex and costly system for governments and businesses to administer. 

State governments must raise taxes from almost 8 million businesses, with tax bills specifically calculated for each firm’s experience rating. At the same time, the states dole out individually calculated benefits to millions of workers and monitor whether each person making a claim is currently eligible. Businesses and states need to adjudicate the many disputed claims for benefits, and states need to police UI tax evasion as businesses try to manipulate the system to get a lower tax rate. 

Federal and state UI administration cost taxpayers $5.9 billion in 2010. Despite this large cost, there is widespread concern among experts that the UI system is “in long-term decline” from an administrative perspective. UI computer systems are apparently far outdated in many states, and administrators say that they need more money to do their jobs competently. 

Six Reasons to Downsize the Federal Government

1. Additional federal spending transfers resources from the more productive private sector to the less productive public sector of the economy. The bulk of federal spending goes toward subsidies and benefit payments, which generally do not enhance economic productivity. With lower productivity, average American incomes will fall.

Subsidies for Electronic Medical Records Leads to Higher Medicare Bills

Government subsidies often produce unintended consequences. The latest example comes from the New York Times, which reports that federal subsidizes to encourage doctors and hospitals to use electronic billing and recording records are leading to larger Medicare bills. That means that taxpayers are taking a double hit even though policymakers claimed that electronic record-keeping would make health care delivery more efficient, and thus less costly.

Government Can’t Censor Book Promotion

This blogpost was co-authored by Cato legal associate Kathleen Hunker.

There’s a fine line between protecting the public from fraud and censoring unorthodox opinions—a line across which the government often stumbles. That was the case in September 2007, when the Federal Trade Commission filed a contempt motion against Kevin Trudeau, author of the best-selling book The Weight Loss Cure “They” Don’t Want You to Know About.

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