Changes at the Social Security Administration
By Bruce D. Schobel
In the Public Interest, November 2021
Summer was exciting at the Social Security Administration (SSA). On July 9, President Biden demanded the resignation of Commissioner of Social Security Andrew Saul, who refused to resign and was fired by the president, effective immediately. To understand how surprising—but in some ways unsurprising—this event was, we need to review a lot of history.
The original Social Security Act of 1935 (Public Law 74-270) created the Social Security Board, an independent agency within the Executive Branch that administered the Social Security program. In 1939, the Board was merged into the Cabinet-level Federal Security Agency, which also included the Public Health Service and the Civilian Conservation Corps, among other governmental units. In 1946, the Social Security Board was renamed the Social Security Administration, a name that the agency has retained to this day. In 1953, SSA was moved into the newly created Department of Health, Education and Welfare (HEW). In 1980, after the stand-alone Department of Education was spun off, the rest of HEW was renamed the Department of Health and Human Services, which retained authority over SSA for 14 years.
On Aug. 15, 1994, President Clinton signed into law the “Social Security Independence and Program Improvements Act of 1994" (Public Law 103-296). That lengthy and complicated law established SSA as an “independent” agency once again—i.e., independent of any other Executive Branch department—reporting directly to the president. The stated goal was to make SSA and Social Security policymaking, in general, much less political. On its very first page, section 102 of the law established the office of Commissioner of Social Security, with a new six-year term. Of course, that position had existed since 1935, but the commissioner previously served at the pleasure of the president, without a fixed term and subject to replacement at any time for any reason (or no reason at all). The new law attempted to protect the commissioner from political influence in the following way (emphasis added):
Commissioner of Social Security
[Social Security Act] SEC 702(a)(1) There shall be in the Administration a Commissioner of Social Security (in this title referred to as the 'Commissioner') who shall be appointed by the President, by and with the advice and consent of the Senate.
(2) The Commissioner shall be compensated at the rate provided for level I of the Executive Schedule.
(3) The Commissioner shall be appointed for a term of 6 years, except that the initial term of office for Commissioner shall terminate January 19, 2001. In any case in which a successor does not take office at the end of a Commissioner's term of office, such Commissioner may continue in office until the entry upon office of such a successor. A Commissioner appointed to a term of office after the commencement of such term may serve under such appointment only for the remainder of such term. An individual serving in the office of Commissioner may be removed from office only pursuant to a finding by the President of neglect of duty or malfeasance in office. …
Andrew Saul is a New York businessman who was nominated to be Commissioner of Social Security by President Trump in April 2018. During the George W. Bush Administration, he chaired the Federal Thrift Investment Board, which helps to administer the Thrift Savings Plan, a 401(k)-like retirement plan for Federal employees. He was also a major contributor to President Trump’s inauguration events. The Senate failed to act on Saul’s first nomination to become commissioner before the end of that Congress in 2018, so he was renominated on Jan. 22, 2019, and ultimately confirmed by the Senate on June 4, 2019, by a 77–16 vote. His six-year term was expected to end on Jan. 19, 2025. The situation at the beginning of the Biden Administration seemed to parallel that of 2009, when incoming President Obama had as Commissioner of Social Security Michael J. Astrue, who was appointed by President George W. Bush in 2007 to a six-year term that ended on Jan. 19, 2013. President Obama never did name a confirmed commissioner but had two long-serving acting commissioners during his second term.
Most observers expected Andrew Saul to remain in his position until the scheduled end of his term, like Michael Astrue did, but there were hints that Saul might not last so long. On Jan. 21, 2021, President Biden’s second day in office, his Administration issued a list of “acting” officials who should be regarded as placeholders until replacements could be nominated by the president and confirmed by the Senate. Commissioner Saul was on that list, even though he had been confirmed by the Senate two years before and was certainly not “acting” in the usual sense of the word. Moreover, he had the protection of Social Security Act section 702(a)(3), which allowed his removal only for neglect of duty or malfeasance in office.
The situation changed dramatically on June 23, with the United States Supreme Court’s issuance of a decision in Patrick J. Collins et al. v. Janet L. Yellen, case number 19-422. The case revolved around statutory provisions (in the Recovery Act) limiting the president’s ability, except for cause, to remove and replace the head of an obscure Treasury Department unit called the Federal Housing Finance Agency (FHFA). The court’s opinion was fragmented but essentially unanimous. Here is the relevant part:
The Recovery Act’s for-cause restriction on the President’s removal authority violates the separation of powers. Indeed, our decision last Term in Seila Law is all but dispositive. There, we held that Congress could not limit the President’s power to remove the Director of the Consumer Financial Protection Bureau (CFPB) to instances of “inefficiency, neglect, or malfeasance.” We did “not revisit our prior decisions allowing certain limitations on the President’s removal power,” but we found “compelling reasons not to extend those precedents to the novel context of an independent agency led by a single Director.” “Such an agency,” we observed, “lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor insulated from Presidential control.”
A straightforward application of our reasoning in Seila Law dictates the result here. The FHFA (like the CFPB) is an agency led by a single Director, and the Recovery Act (like the Dodd-Frank Act) restricts the President’s removal power. Fulfilling his obligation to defend the constitutionality of the Recovery Act’s removal restriction, amicus attempts to distinguish the FHFA from the CFPB. We do not find any of these distinctions sufficient to justify a different result.
The long decision goes on to list other Executive Branch agencies with similar restrictions on removing the director. One of them is the Social Security Administration. Obviously, one can infer that the restrictions in Social Security Act section 702(a)(3) would also be regarded as an unconstitutional limit on the president’s power and a violation of the separation of powers. Thus, the president was immediately free to remove Commissioner Saul at any time, without having to establish neglect or malfeasance. On Friday, July 9, President Biden fired Saul. An interesting footnote to that event is Saul’s public statement that he could not be fired and would be logging in to work on Monday, July 12. Apparently, he was conducting virtually all business remotely, either from his NY home or from a hotel suite in Washington, D.C. The IT staff at SSA did not allow former Commissioner Saul to log in on July 12.
Even though the president’s authority to fire the commissioner is now unfettered, there was no shortage of reasons given to justify Saul’s firing. From The New York Times, July 9:
Democrats have sought to oust Mr. Saul from his position since the early days of Mr. Biden’s administration. Those calls grew in the wake of the $1.9 trillion stimulus package that Democrats passed in March, which included $1,400 direct payments to individuals. Lawmakers have said Mr. Saul helped to delay payments to retirees by not transmitting necessary files to the Internal Revenue Service.
Mr. Saul’s agency said it did not receive funding to do that work.
Ohio Senator Sherrod Brown, the chairman of the Senate Finance Committee’s Subcommittee on Social Security, Pensions, and Family Policy, called for Mr. Saul’s resignation in February, saying Mr. Saul had sought to issue regulations meant to reduce access to Social Security disability benefits — including denying benefits to an estimated 100,000 potential recipients who do not speak English fluently.
“Social Security is the bedrock of our middle class that Americans earn and count on, and they need a Social Security commissioner who will honor that promise to seniors, survivors, and people with disabilities now and for decades to come,” Mr. Brown said on Friday. “Instead, Andrew Saul tried to systematically dismantle Social Security as we know it from within.”
A White House official, speaking anonymously because he was not authorized to discuss the firing publicly, said the administration believed that Mr. Saul had undermined Social Security’s disability benefits, terminated a telework policy at the agency and alienated federal employee unions over work force safety planning amid the pandemic.
Mr. Saul did not immediately respond to a request for comment.
So, who is in charge at SSA? In addition to creating the office of Commissioner of Social Security, the 1994 law also created the office of principal Deputy Commissioner. That position had been held by another Trump appointee, David Black. He was asked to resign on July 9 and did so. At the beginning of the Biden Administration, in January, the president directed the appointment of several lower-level staff at SSA (but clearly not selected by Commissioner Saul), including Chief of Staff Scott Frey, who had been deputy commissioner for legislation and congressional affairs during the Obama Administration, and deputy commissioner for retirement and disability policy Kilolo Kijakazi, who came from the Urban Institute and had early government experience working on the Food Stamp program. Deputy commissioner Kijakazi was named acting commissioner, effective July 9. According to Federal News Network:
…The White House said Kijakazi will lead SSA on an acting basis until the search for a new commissioner and deputy commissioner is complete.
“Today, President Biden made the decision to change agency leadership and has asked me to serve as the acting commissioner,” Kijakazi, said in an email, which Federal News Network obtained. “Over the past several months, I have gained great appreciation for SSA and I have witnessed the commitment you bring to public service each day.”
At the time of this writing, in November, the president has neither nominated her to fill the position on a permanent basis nor nominated anyone else. SSA has a long history of acting commissioners serving for extended periods of time, lasting years. Whenever President Biden nominates a new commissioner, the nominee will need to be confirmed by the Senate and will fill the remaining years of Commissioner Saul’s term.
In other news—or non-news—the two, critically important positions of public members of Social Security’s Board of Trustees remain vacant, as they have been since 2015. When they exist, the public trustees provide valuable continuity and stability to the annual trustees reports. Although their terms are nominally four years, the public trustees actually serve, by law, until the issuance of the next trustees report following the date on which their four-year terms would otherwise have ended. Thus, they can serve up to five years or so and frequently bridge presidential administrations. Moreover, the law requires that the two public trustees be from different political parties, so historically the Board has had one Democrat and one Republican in the two public trustee positions. This mandatory political diversity and bridging of presidential terms prevents wide, partisan swings from one trustees report to another. That reinforces public confidence in their conclusions. President Biden has not yet nominated anyone to fill those positions.
The Social Security Advisory Board (SSAB), which was created by the 1994 legislation that made SSA an independent agency, is designed to have seven members: three appointed by the president (but only two can be from the same political party), subject to Senate confirmation; two appointed by the House of Representatives, one by the Republicans and one by the Democrats; and two appointed by the Senate, again one by the Republicans and one by the Democrats. Each member serves a six-year term, and the terms are staggered so that one (or sometimes two) ends in each year, allowing for new appointments to be made. The authorizing legislation, Social Security Act section 703, requires that “[t]he members shall be chosen on the basis of their integrity, impartiality, and good judgment, and shall be individuals who are, by reason of their education, experience, and attainments, exceptionally qualified to perform the duties of members of the Board.”
The president designates one of the seven SSAB members to serve as chair for four years, and the designated chair is ordinarily one of the president’s three appointees. At present, however, all three presidential positions on the SSAB are vacant. President Trump named as chair Kim Hildred, who was appointed by the House Republicans in 2016. She was a long-time Republican staff director of the House Ways and Means Committee—which has jurisdiction over Social Security—until her retirement in 2015. Bob Joondeph, who was appointed by Senate Democrats to the Board on Oct. 1, 2018, was named chair, replacing Hildred in that role, by President Biden soon after he took office. President Biden has not, however, nominated anyone to fill the three positions that are his to fill.
Bruce D. Schobel, FSA, MAAA, is located in Winter Garden, Fla. He can be reached at bdschobel@aol.com.