Former Maryland Governor Martin O’Malley Confirmed as SSA Commissioner

O’Malley says he will set his focus on employee morale and improving Social Security Administration response time.

The U.S. Senate confirmed Martin O’Malley, the former governor of Maryland, as the next commissioner of the Social Security Administration by a vote of 50 to 11 on Monday. O’Malley was nominated in July by President Joe Biden.

O’Malley takes over for Acting Commissioner Kilolo Kijakazi, who has been serving in the position since July 2021 after initially being appointed as deputy commissioner. O’Malley was mayor of Baltimore from 1999 to 2007 and governor of Maryland from 2007 to 2015.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The Senate Committee on Finance previously held a confirmation hearing for O’Malley in November, during which Chairman Ron Wyden, D-Oregon, and Ranking Member Mike Crapo, R-Idaho, emphasized administrative issues at the agency.

During the hearings, Crapo urged O’Malley to “make sure the trains run on time” and to work to fix backlogs and wait times at administration call centers.

According to Crapo, it takes the SSA seven months, on average, for an initial disability eligibility determination, and another seven months after that to get a re-determination on appeal. If the appellant asks for a hearing, that takes another 15 months on average. This means someone who is wrongfully denied disability benefits would wait an average of about 2 1/2 years to have that issue remedied, meaning longer waits are possible.

Crapo also highlighted issues of overpayments at the SSA, which can lead to clawbacks of excessive benefits. Crapo said that in 2021, the SSA paid $2.49 billion in retirement benefits and $4.91 billion in disability payments to which beneficiaries were not entitled, sometimes leading to large clawbacks after payments had already been made.

Wyden also emphasized low employee morale and retention at the SSA, as well as a lack of funding, as key issues. He explained that the SSA’s budget has been declining while the number of people it serves has been increasing.

O’Malley agreed with the critiques, saying that the SSA was facing a “customer service crisis.” He said the SSA is facing 50% more beneficiaries as compared with 1995, but with the same level of staffing, and added that average wait times at call centers are 37 minutes.

Though O’Malley cannot increase the SSA’s budget, he argued that his experience as mayor of Baltimore, as governor of Maryland and in other roles makes him well-suited to find greater efficiencies at the SSA through the use of technology and better organization.

The previous commissioner was businessman Andrew Saul, who was appointed by former President Donald Trump and fired by Biden in July 2021 after refusing to step down.

Doll Scores 50/50 on 2023 Predictions

The market prognosticator said the predictions for 2023 were among his ‘worst years,’ after a widely predicted recession did not materialize.

Bob Doll, the CIO of Crossmark Global Investments, said five of his 10 annual investment predictions for 2023 came true amid what he called a challenging year for investors.

Doll said his predictions for 2023 produced one of his “worst years,” below his average of 7.0 to 7.5 over 30 years of predictions.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

“Multiple expansion despite flattish earnings confounded most investors even as a much-anticipated recession did not materialize,” Doll wrote. “Investors enjoyed falling long-term interest rates in the back part of the year, even as the Fed raised rates multiple times reaching the 5 1/4% level.”

Half Wrong

The predictions Doll got wrong included:

  • Incorrect: Doll predicted a shallow recession in 2023, which ultimately did not occur. Stronger-than-expected consumer sentiment, driven by a robust, yet weakening labor market and leftover cash resources from the COVID-19 pandemic period allowed for sustained economic growth, according to Doll’s report. Yet cautionary signals from lead indicators of recession, such as the yield curve and money supply, persisted through the end of the year.
  • Incorrect: Doll said a major asset class would not change up or down by a double-digit percentage. In reality, stocks catapulted higher than that marker. The surge was led by the “Magnificent 7” stocks from Apple, Microsoft, Google, Amazon, Nvidia, Meta and Tesla, he noted.
  • Incorrect: Doll guessed that energy, consumer staples and financials would outperform utilities, technology and communication services, on the premise that value beats growth. But the prediction, he noted, was “way off the mark.” Instead, growth beat value, with technology and communication the year’s best-performing two sectors. Meanwhile, energy and consumer staples were down for the full year.
  • Incorrect: Doll’s expectation that the average active equity manager would outperform the index in 2023 was incorrect. The dominance of the “Magnificent 7,” coupled with underperformance by average stocks and a shift toward more equally weighted portfolios by active managers, disproved this prediction early in the year.
  • Incorrect: Doll’s projection that international stocks would outperform those from the U.S. for the second year in a row fell short due to the notable outperformance of mega-cap growth stocks in the U.S., coupled with a dollar rally and economic challenges in various parts of the globe.

Half Right

Doll did get 50% of his predictions correct, which, though lower than his usual average, showed some strong prescience in areas where others got it wrong. Those included:

  • Inflation fell substantially, in part due to stronger interest rates, but remained above the Federal Reserve’s target of 2%;
  • The federal funds rate reached 5% and remained there for the balance of the year;
  • Earnings fell short of expectations due to cost pressures and revenue shortfalls;
  • India surpassed China as the world’s largest population and is the fastest-growing large economy; and
  • A double-digit number of candidates announced they would run for U.S. president.

Doll will release his 2024 outlook on December 29, he wrote. One big question is whether the consensus view of the double-digit earnings growth, no recession and Fed rate cuts commencing early in the new year can all come together.

“We are dubious that all these good things can happen simultaneously,” Doll wrote.

«