Social Security's Martin O'Malley to the Rescue! He's Promising to End the Agency's "Cruel-Hearted and Mindless" Clawbacks!

Social Security's new commissioner Is promising to take action to clean up the system's decades of Financial Malfeasance. But does he really mean business?

Social Security’s new Commission, Martin O’Malley, just stated, in an interview with KFF Health News, his determination to “address the injustice we do to too many Americans because of overpayments, the rather cruel-hearted and mindless way that we recover those overpayments.”

At last we have a Commissioner — it’s been decades — who is actually focused on doing their job. I’ve been writing about Social Security horror stories (I coined the term.) for well over a decade. In one article after another, I literally begged the then Commissioner or Acting Commissioner — by name — to address the specific outrage I was documenting as well as the general problem.

No response unless the case was too embarrassing for Social Security to ignore. Then it got fixed in hours.

Anyway, things may finally be changing.

A year back, renowned journalist, Terry Savage, and I decided to start soliciting Social Security clawback horror stories. They arrived in droves. Then we decided to publish them in a book called, Social Security Horror Stories — Protect Yourself from the System and Avoid Clawbacks.

Next, Terry, who has been appearing on CBS in Chicago for decades, contacted a pal high up on CBS’ food chain and she, bless her heart, passed the story to 60 Minutes’ top producer. On its November 5th show, Anderson Cooper interviewed me and Terry and three clawback victims.

What happened next is telling. Social Security’s Acting Commissioner, Kilolo Kijakazi, refused to appear on the show. But she did waive the clawbacks of the three victims Anderson interviewed — waiting until she knew the show would air and she’d be embarrassed. Anderson announced the waivers at the very end of the segment with a look of relief and disgust.

This was just Social Security’s latest outrageous behavior — waive “cruel-hearted and mindless” clawbacks of just three victims simply to save face, a point that 60 Minutes’ vast audience immediately understood. The three victims’ appearances on 60 Minutes was, after all, entirely random. They were just three of the hundreds of devastated and terrified people who had written to me and Terry — cases we passed on to the 60 Minutes’ producers.

Ms. Kijakazi provided justice for 3 people while continuing to let her agency issue over 5000 clawbacks a day (over 2 million per year) — day after endless day until she was booted a few weeks back by the appointment of a new Commissioner — former Maryland Governor, Martin O’Malley.

The Commissioner is making the right noises. But he can’t act quickly enough. The clawbacks are ongoing. Another 5,000 plus clawback letters were issued, when? Today! One may be sitting in your mailbox or that of your parents, grandparents, sister, brother, or child!

Whether it was the 60 Minutes show, our ongoing articles, KFF’s reporting, or the House Subcommittee on Social Security’s October 18th hearing on clawbacks, Social Security is finally feeling the heat. Secretary of Treasury, Janet Yellen, has also turned the temperature way up. The Treasury Secretary is, after all, Social Security’s Chief Trustee.

Since December, Terry and I have been briefing top Treasury officials appointed by the Secretary. We’ve been laying out the full scope of Social Security’s abuse, including its terrible scams, which we describe in our book. Some of these scams can be instantly fixed — at no costs! The Treasury officials have, in turn, been speaking with their counterparts at Social Security.

The Commissioner pledge is, by itself, highly important. Thousands of clawback-issuing claims reps are now on notice not to act in cruel-hearted and mindless ways, which so many do on a daily basis. The Commissioner has also taken steps to streamline and clarify the process of appealing clawbacks and requesting waivers. Best of all, he’s indicated that clawback victims who are in significant need may be able to settle their claims via a reduction in their benefits of just $10 a month.

Hopefully, the Commissioner will turn his strong words, including his promise to impose a stature of limitations on clawbacks — one of many policies we proposed in our book, into immediate action. But as you can read below in Terry’s latest terrysavage.com column, we are far from ready to declare full victory.

A Victory in Social Security Horror Stories

by Terry Savage

At last some good news for victims of Social Security clawbacks!   These Social Security Horror Stories revolve around the individual pain caused by Social Security’s mistaken benefit calculations and demands for repayment going back as far as 30 years.

 The Agency has been in the process of clawing back $21.6 billion of “overpayments”  -- some over $100,000 -- from the retired elderly and disabled.   These sudden and  unexplained demands – and their threats  to completely stop ongoing  benefit payments – caused panic among the elderly.

Now all that is about to change under new Social Security Commissioner Martin O’Malley, who just this past week called the changes “cruel-hearted and mindless”!

Social Security Horror Stories

Famed economist Larry Kotlikoff and I detailed these horror stories on 60 Minutes last November – and in our book Social Security Horror Stories.   Anderson Cooper was astounded at the cruel actions of Social Security as he interviewed some of our victims.  At the end of the show, Cooper announced that the clawbacks had been waived for the three families that were featured.

But that wasn’t enough to help the nearly 2 million Americans caught in this unfeeling bureaucratic clawback.  Benefits clerks routinely denied waivers, and the appeals process was one-sided, with judges paid by Social Security.

During the program we advocated for an 18 month clawback limitation, a suspension of clawback demands until reviewed, using due process, by a higher level committee, and a resumption of benefits that had been stopped.

Behind the Scenes

Since that 60 Minutes story aired,  Larry and I have been meeting with Treasury officials.   (The Secretary of the Treasury is chair of the Social Security board of trustees.)   We detailed our plan for restoring “equity and good conscience” to the Agency, as required by its bylaws, including the steps outlined above.

This past week the  Kaiser Family Foundation Health News, which had also been demanding change,  quoted new Social Security Commissioner Martin O’Malley as telling them: “In the coming days he would propose changes to help people avoid crushing debts that have driven some into homelessness and caused financial hardships for the nation’s most vulnerable — the poorest of the poor and people with disabilities or persistent medical conditions or who are at least age 65.”

And the headlined article goes on to quote the new Commissioner: “He said he has concrete steps in mind, such as establishing a statute of limitations, shifting the burden of proof to the agency, and imposing a 10% cap on clawbacks for some beneficiaries.

That is very close to what we proposed in our book Social Security Horror Stories — and in our interview with Anderson Cooper on 60 Minutes last November!

What’s Next?

For the many hundreds of you who wrote to us, and posted on our website – www.SocialSecurityHorrorStories.com – this is very welcome news!  But where does it leave people still caught in the  clawback process. 

What will happen to:

·       The 94 year-old with dementia, who has $9K to her name?  Will she now receive the $10 per month repayment plan they offered, or will she have to repay the $14K they are still demanding?

·       Will the disabled nurse who earned a bit too much by risking her life to work overtime during COVID be forced to pay back $34K, which will leave her penniless? 

·       Will the blind disabled lady (featured in Larry’s most recent Substack column) be forced to pay back $34K for disability overpayments alleged, with no proof, to go back 23 years.

The Commissioner’s announcement was a welcome first step.  We thank him, and Treasury Secretary Janet Yellen, who were obviously moved to act quickly when they were made aware of this outrageous bureaucracy run amok.

But now we need more than words. We need specific and quick actions to restore benefits and lift the threat of clawbacks from the lives of the disabled and elderly.  So, we will keep pushing for an action plan, and  keep you updated at our website — www.SocialSecurityHorrorStories.com.

That’s The Savage Truth.