[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
CHALLENGES FACING THE NEW COMMISSIONER OF SOCIAL SECURITY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MAY 2, 2002
__________
Serial No. 107-83
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
83-375 WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California
AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa JOHN LEWIS, Georgia
SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California
WES WATKINS, Oklahoma KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas
JERRY WELLER, Illinois EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
Allison Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
------
Subcommittee on Social Security
E. CLAY SHAW, Florida, Chairman
SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona BENJAMIN L. CARDIN, Maryland
KENNY C. HULSHOF, Missouri EARL POMEROY, North Dakota
RON LEWIS, Kentucky XAVIER BECERRA, California
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
----------
Page
Advisories announcing the hearing......................2, 4, 5, 6, 7, 8
WITNESSES
Social Security Administration, Hon. Jo Anne B. Barnhart,
Commissioner................................................... 11
U.S. General Accounting Office, Barbara D. Bovbjerg, Director,
Education, Workforce, and Income Security Issues, accompanied
by David L. McClure, Director, Information Technology
Management Issues.............................................. 52
Social Security Administration, Office of the Inspector General,
Hon. James G. Huse, Jr., Inspector General..................... 69
Social Security Advisory Board, Hon. Hal Daub, Chairman.......... 73
______
AARP, Marie Smith................................................ 84
Consortium for Citizens with Disabilities, Marty Ford............ 88
National Committee to Preserve Social Security and Medicare, Hon.
Barbara Kennelly............................................... 97
SUBMISSIONS FOR THE RECORD
Alexander, LaJuana, Northwestern Technical College, Rock Spring,
GA, statement.................................................. 111
American Congress of Community Supports and Employment Services,
Steve H. Perdue, letter........................................ 111
Association of Administrative Law Judges, Bronx, NY, Ronald G.
Bernoski, statement............................................ 114
Association of Attorney-Advisors, Paducah, KY, Lisa Russell Hall,
letter......................................................... 124
Federal Bar Association, Social Security Section, Kathleen
McGraw, and Frederick R. Waitsman, letter...................... 126
Hepatitis C Action Movement, Saratoga Springs, NY, David Marks,
statement...................................................... 131
National Council of Social Security Management Associations Inc.,
Hackensack, NJ, Anthony T. Pezza, statement.................... 132
National Organization of Social Security Claimants'
Representatives, Midland Park, NJ, Nancy G. Shor, statement.... 136
National Treasury Employees Union, James A. Hill, statement...... 140
CHALLENGES FACING THE NEW COMMISSIONER OF SOCIAL SECURITY
----------
THURSDAY, MAY 2, 2002
House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:03 a.m., in
room B-318 Rayburn House Office Building, Hon. E. Clay Shaw,
Jr., (Chairman of the Subcommittee) presiding.
[The advisory and the revised, revised #2, revised #3,
revised #4, and revised #5 advisories announcing the hearing
follow:]
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
December 6, 2001
No. SS-11
Shaw and Herger Announce Joint Hearing on the
Challenges Facing the New Commissioner of
Social Security
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security, and Congressman Wally Herger (R-CA), Chairman,
Subcommittee on Human Resources, Committee on Ways and Means, today
announced that the Subcommittees will hold a joint hearing on the
challenges facing the new Commissioner of Social Security. The hearing
will take place on Thursday, December 13, 2001, in the main Committee
hearing room, 1100 Longworth House Office Building, beginning at 10:00
a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Subcommittees and
for inclusion in the printed record of the hearing.
BACKGROUND:
Jo Anne B. Barnhart was sworn in on November 14, 2001, as the 14th
Commissioner of Social Security in a ceremony at the agency's
headquarters in Baltimore. Her term will expire on January 19, 2007.
The mission of the Social Security Administration (SSA) is ``to
promote the economic security of the nation's people through
compassionate and vigilant leadership in shaping and managing America's
Social Security programs.'' Established to protect Americans against
the loss of income due to retirement, death, or disability, for almost
two-thirds of a century Social Security has been enormously successful,
reducing poverty among the nation's elderly by 62 percent in the last
30 years. Today, over 45 million Americans receive Social Security,
including almost 4 million children and over 5 million workers with
disabilities.
The Supplemental Security Income (SSI) program is a means-tested
Federal assistance program administered by SSA which falls within the
jurisdiction of the Subcommittee on Human Resources. It provides a
monthly benefit to people who have limited assets and income and who
are blind, disabled, or aged 65 or older. In 2001, 6.6 million disabled
and elderly Americans will receive over $30 billion in Federal payments
through the program. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (P.L. 104-193) required the Commissioner of
Social Security to report annually to Congress on the status of the SSI
program. In addition, P.L. 104-193 and related legislation included a
number of changes in SSI law to address problems of fraud and abuse and
control program growth.
In order to oversee and administer SSA's programs, SSA employs
approximately 63,000 workers nationwide. Services are delivered through
a decentralized nationwide network of regional offices, field offices,
hearing offices, teleservice centers, processing and data operations
centers, and State Disability Determination Services. This year, SSA's
workloads include paying benefits to more than 50 million people every
month, processing more than 6 million claims for benefits, issuing 16
million new and replacement Social Security numbers, posting 273
million earnings items to workers' earnings records, handling 59
million phone calls, and issuing 136 million Social Security Statements
to workers.
The U.S. General Accounting Office, SSA's Office of Inspector
General, and the bipartisan Social Security Advisory Board have each
issued reports summarizing the primary management challenges facing the
agency. These include: ensuring long-term solvency of the Social
Security system, improving disability determination and return to work
processes, further strengthening the integrity of the SSI program,
providing timely and accurate service delivery as workloads rise and
employee retirements increase due to the aging of the baby boom,
maintaining a sound information technology infrastructure to support
its operations, and addressing the misuse of the Social Security
number.
In announcing the hearing, Chairman Shaw stated: ``Social Security
touches the lives of just about every American, providing essential
income for workers and their families due to retirement, death, or
disability. Social Security employees are among the best in Federal
service. Yet the retirement of the baby boom generation will create
unprecedented challenges for the agency. Chief among these is saving
Social Security from bankruptcy. Second is the ability to deliver
effective service and stewardship, as workloads rise 50 percent and
more than half the agency's employees are eligible to retire in the
coming decade. Equally important is fixing a broken disability
determination and return to work process where workers with
disabilities wait far too long to receive the benefits they deserve.
Lastly, as we have seen in our numerous hearings on identity theft and
from the tragic events of September 11th, safeguards to protect Social
Security numbers must be enhanced.''
Chairman Herger stated: ``SSI provides a lifeline to the neediest
aged and disabled Americans. It is our responsibility to ensure
benefits reach those who need them and to protect both the
beneficiaries and taxpayers from fraudulent payments and wasteful
practices that threaten program integrity and public support for these
essential benefits.''
FOCUS OF THE HEARING:
The Subcommittees will examine the new Commissioner's vision and
action priorities for the agency. In addition, the Subcommittees are
particularly interested in hearing specific action recommendations from
the invited witnesses who are leading stakeholders in the successful
resolution of these challenges.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
(202) 225-2610 by the close of business, Thursday, December 27, 2001.
Those filing written statements who wish to have their statements
distributed to the press and interested public at the hearing should
deliver their 200 copies to the Subcommittee on Social Security in room
B-316 Rayburn House Office Building, in an open and searchable package
48 hours before the hearing. The U.S. Capitol Police will refuse
unopened and unsearchable deliveries to all House Office buildings.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record, or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. Due to the change in House mail policy, all statements
and any accompanying exhibits for printing must be submitted
electronically to [email protected], along with
a fax copy to (202) 225-2610, in WordPerfect or MS Word format and MUST
NOT exceed a total of 10 pages including attachments. Witnesses are
advised that the Committee will rely on electronic submissions for
printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a
statement for the record of a public hearing, or submitting written
comments in response to a published request for comments by the
Committee, must include on his statement or submission a list of all
clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the
name, company, address, telephone and fax numbers where the witness or
the designated representative may be reached. This supplemental sheet
will not be included in the printed record.
The above restrictions and limitations apply only to material being
submitted for printing. Statements and exhibits or supplementary
material submitted solely for distribution to the Members, the press,
and the public during the course of a public hearing may be submitted
in other forms.
Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.
* * * NOTICE--HEARING POSTPONEMENT * * *
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
December 7, 2001
No. SS-11-Revised
Postponement of Joint Hearing on the Challenges
Facing the New Commissioner of Social Security
Thursday, December 13, 2001
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security, and Congressman Wally Herger (R-CA), Chairman,
Subcommittee on Human Resources, Committee on Ways and Means, today
announced the Subcommittees' joint hearing on the challenges facing the
new Commissioner of Social Security, previously scheduled for Thursday,
December 13, 2001, at 10:00 a.m., in the main Committee hearing room,
1100 Longworth House Office Building, has been postponed and will be
rescheduled at a later date.
* * * NOTICE--HEARING RESCHEDULED * * *
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
February 7, 2002
No. SS-11-Revised #2
Rescheduled Joint Hearing on the
Challenges Facing the New Commissioner
Thursday, February 14, 2002
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security, and Congressman Wally Herger (R-CA), Chairman,
Subcommittee on Human Resources, Committee on Ways and Means, today
announced the Subcommittees' joint hearing on the challenges facing the
new Commissioner of Social Security, previously scheduled for Thursday,
December 13, 2001, will now be held on Thursday, February 14, 2002, at
10:00 a.m., in the main Committee hearing room, 1100 Longworth House
Office Building.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
202/225-2610 by the close of business, Thursday, February 28, 2002.
Those filing written statements who wish to have their statements
distributed to the press and interested public at the hearing should
deliver their 200 copies to the Social Security Subcommittee in room B-
316 Rayburn House Office Building, in an open and searchable package 48
hours before the hearing. The U.S. Capitol Police will refuse unopened
and unsearchable deliveries to all House Office Building.
All other details for the hearing remain the same. (See
Subcommittees' press release No. SS-11, dated December 6, 2001.)
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. Due to the change in House mail policy, all statements and any
accompanying exhibits for printing must be submitted electronically to
``[email protected]'', along with a fax copy to
202/225-2610, in Word Perfect or MS Word format and MUST NOT exceed a
total of 10 pages including attachments. Witnesses are advised that the
Committee will rely on electronic submissions for printing the official
hearing record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a
statement for the record of a public hearing, or submitting written
comments in response to a published request for comments by the
Committee, must include on his statement or submission a list of all
clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the
name, company, address, telephone and fax numbers where the witness or
the designated representative may be reached. This supplemental sheet
will not be included in the printed record.
The above restrictions and limitations apply only to material being
submitted for printing. Statements and exhibits or supplementary
material submitted solely for distribution to the Members, the press,
and the public during the course of a public hearing may be submitted
in other forms.
Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.
* * * NOTICE--HEARING POSTPONEMENT * * *
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
February 13, 2002
No. SS-11-Revised #3
Postponement of Joint Hearing on the Challenges
Facing the New Commissioner of Social Security
Thursday, February 14, 2002
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security, and Congressman Wally Herger (R-CA), Chairman,
Subcommittee on Human Resources, Committee on Ways and Means, today
announced the Subcommittees' joint hearing on the challenges facing the
new Commissioner of Social Security, previously scheduled for Thursday,
February 14, 2002, at 10:00 a.m., in the main Committee hearing room,
1100 Longworth House Office Building, has been postponed and will be
rescheduled at a later date.
* * * NOTICE--HEARING RESCHEDULED * * *
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
April 24, 2002
No. SS-11-Revised #4
Shaw Announces Rescheduled Hearing on the Challenges Facing the New
Commissioner
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee hearing on Challenges Facing the New Commissioner
of Social Security previously scheduled for February 14, 2002, will now
will take place on Thursday, May 2, 2002, at 9:30 a.m., in the main
Committee hearing room, 1100 Longworth House Office Building. The
hearing will end no later than 12:00 p.m.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Due to the change in House mail policy, any person or
organization wishing to submit a written statement for the printed
record of the hearing should send it electronically to
[email protected], along with a fax copy to
(202) 225-2610, by the close of business, Thursday, May 16, 2002. Those
filing written statements who wish to have their statements distributed
to the press and interested public at the hearing should deliver their
200 copies to the Subcommittee on Social Security in room B-316 Rayburn
House Office Building, in an open and searchable package 48 hours
before the hearing. The U.S. Capitol Police will refuse sealed-packaged
deliveries to all House Office Buildings.
All other details for the hearing remain the same. (See
Subcommittees' press releases No. SS-11, dated December 6, 2001, and
No. SS-11-Revised #2, dated February 7, 2002.)
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
witness, any written statement or exhibit submitted for the printed
record or any written comments in response to a request for written
comments must conform to the guidelines listed below. Any statement or
exhibit not in compliance with these guidelines will not be printed,
but will be maintained in the Committee files for review and use by the
Committee.
1. Due to the change in House mail policy, all statements and any
accompanying exhibits for printing must be submitted electronically to
[email protected], along with a fax copy to
(202) 225-2610, in Word Perfect or MS Word format and MUST NOT exceed a
total of 10 pages including attachments. Witnesses are advised that the
Committee will rely on electronic submissions for printing the official
hearing record.
2. Copies of whole documents submitted as exhibit material will not
be accepted for printing. Instead, exhibit material should be
referenced and quoted or paraphrased. All exhibit material not meeting
these specifications will be maintained in the Committee files for
review and use by the Committee.
3. Any statements must include a list of all clients, persons, or
organizations on whose behalf the witness appears. A supplemental sheet
must accompany each statement listing the name, company, address,
telephone and fax numbers of each witness.
Note: All Committee advisories and news releases are available on
the World Wide Web at http://waysandmeans.house.gov.
The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call (202) 225-1721 or (202) 226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.
* * * NOTICE--CHANGE IN TIME AND LOCATION * * *
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
April 30, 2002
No. SS-11-Revised #5
Change in Time and Location for Subcommittee
Hearing on Challenges Facing the New
Commissioner of Social Security
Congressman E. Clay Shaw, Jr. (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee hearing on Challenges Facing the New Commissioner
of Social Security scheduled for Thursday, May 2, 2002, at 9:30 a.m.,
in the main Committee hearing room, 1100 Longworth House Office
Building, will now be held at 9:00 a.m., in room B-318 Rayburn House
Office Building. The hearing will end no later than 11:00 a.m.
All other details for the hearing remain the same. (See
Subcommittees' advisories Nos. SS-11, dated December 6, 2001; SS-11-
Revised #2, dated February 7, 2002;
and SS-11-Revised #4, dated April 24, 2002.)
Chairman SHAW. Good morning. Today our Committee will
examine the challenges facing Commissioner of Social Security
Jo Anne Barnhart. The Commission faces a monumental job of
preparing the Social Security Administration (SSA) for the
heavy responsibilities it faces in the coming decade, as the
largest group ever of U.S. citizens turn from full-time workers
into retirees. We will also hear from the public overseers of
the Agency and from the representatives of those groups who
receive the essential services Social Security provides.
As we already know, the challenges facing the Social
Security Administration are many, from long-term financing, to
service delivery, to stewardship, to disability process
improvements to the operating budget. Each one of these issues
presents unique challenges and requires strong and decisive
leadership. This leadership rests not only with the Agency's
executives, but also with us here in the Congress and with the
cooperation of stakeholders both within and outside Social
Security.
The Agency's future workload is daunting. It faces over a
50-percent increase in retirement and disability work at the
same time it is scheduled to lose half of its seasoned workers
to retirement. Adequate resources for the Agency is one of my
top priorities, but money without good management will not
solve the overwhelming problems now beginning to break over the
bow at Social Security.
I was pleased to learn that the Commissioner is doing a
top-down assessment of the Agency and its future needs. With
this assessment in hand, I am sure we can work with the
Commissioner, on a bipartisan basis, in both the House and the
Senate, to give her the support she needs. Hopefully, we can
get together on one thing, and that would be it.
Certain issues of policy are also reaching a critical
phase. Most important is securing Social Security's future for
our children, our grandchildren, and generations to come. As
Congress determines how best to strengthen this vital program,
the importance of the Agency's assistance cannot be overstated.
Also, drawing national attention is a disability claims process
that simply does not work. In the delivery of services
programwide, the need for better information and access through
computer technology is one the public is quickly demanding from
government.
Finally, the events of September 11, have highlighted the
security threat to the United States from stolen Social
Security numbers. The Agency, the Inspector General, and this
Subcommittee have been aware of the rising tide of identity
theft and its precarious effect on its victims. Now, because of
the shocking revelations that many of the terrorists and
possibly many of the co-conspirators in the September bombing
held falsified Social Security numbers, the need to protect the
integrity of these numbers has become a matter of homeland
security.
Until we get this program under control, victims face
financial ruin and our population lives in the shadow of
another catastrophic event. We will act this year to further
protect the privacy of Social Security numbers, and I will be
calling on the Commissioner to help get this legislation
passed.
I look forward to hearing from the testimony of each of our
witnesses today, as we work together to ready the Social
Security Administration for its challenges in the 21st century.
[The opening statement of Chairman Shaw follows:]
Opening Statement of the Hon. E. Clay Shaw, Jr., a Representative in
Congress from the State of Florida, and Chairman, Subcommittee on
Social Security
Today, we have the opportunity to welcome the new Commissioner of
Social Security, Jo Anne B. Barnhart. Mrs. Barnhart is our 14th
Commissioner of Social Security and only the second Commissioner to be
sworn in since the Social Security Administration became an independent
agency in 1995. We appreciate having her appear before our Committee,
and look forward to hearing her articulate her vision for the agency
and outline her action priorities.
As you know, the Social Security Administration (SSA) was
established to provide an economic safety net against loss of income
due to retirement, death or disability. For almost two-thirds of a
century, SSA has successfully succeeded in reducing the poverty rate
among the nation's elderly by 62 percent in 30 years.
In addition to providing a retirement safety net, SSA administers
two disability programs--Disability Insurance and Supplemental Security
Income--which seeks to provide an economic safety net for workers who
become disabled. The disability programs along with the Social Security
trust fund face major solvency challenges as the baby boom generation
begins to age and places demands on Social Security's services.
Moreover, SSA's own workforce is facing retirement of approximately
half of its employees due to retirement further complicating the
predicted future demands on service delivery.
The General Accounting Office (GAO), SSA's Office of Inspector
General and the bipartisan Social Security Advisory Board have each
issued reports summarizing their views on the primary management
challenges facing the agency. Their primary concerns address the areas
of solvency, disability determination and return to work processing and
misuse of the Social Security number. Our Subcommittee has held many
hearings examining these issues and their challenges, and we will
continue to do so.
Never before has a Commissioner of Social Security faced more
challenges ranging from economic to workforce issues. We must waste no
time in addressing these program concerns if we are to ensure their
solvency and continuation for current and future generations.
Chairman SHAW. Mr. Matsui?
Mr. MATSUI. Thank you very much.
Thank you very much, Mr. Chairman, for holding this
hearing. I think this hearing, along with a few others, is
probably one of the most important hearings that we, as Members
of Congress, will have because obviously the results of what
Commissioner Barnhart and her staff will be doing over the next
few years will have a tremendous impact on each American, and
so I appreciate your holding this hearing, and certainly I
appreciate Commissioner Barnhart's appearance here today.
I might just say that I worked with the Commissioner when
she was in the Bush Administration, Bush 1 Administration, and
I really enjoyed that relationship, and I look forward to your
tenure as the Commissioner of Social Security. I appreciate the
fact that you are here again today.
I might, Mr. Chairman, if I may just take a moment to point
out that Hal Daub, a colleague of ours, formerly on the
Committee on Ways and Means, from Nebraska, will be testifying
on the second panel today. I just want to welcome him here
today. I think we came in together, if I am not mistaken. Maybe
you came in 2 years later.
Chairman SHAW. He came in 1980.
Mr. MATSUI. Okay, 1980.
Chairman SHAW. We also have Barbara Kennelly, another
former Member of the Committee on Ways and Means.
Mr. MATSUI. Representative Kennelly is here as well. She
just came in, and she just got a new job with the National
Committee to Preserve Social Security and Medicare, and we
obviously look forward to working with her.
Mr. Chairman, what you have said is absolutely correct, in
terms of the issue of the fact that over the next few years 40
million new Americans will go on the Social Security rolls.
That will not only create more work for the system, but also
probably create more disability claims as well and at a time
when we have an increase in the volume of processing of claims,
at the same time, in the 1980s, the budget constraints required
us to reduce the workload in the Social Security
Administration. So, now we have come to a point where we are
going to have to make some critical decisions over the next few
years. So, we look forward to finding out how we are going to
be able to achieve that.
I might also thank Commissioner Barnhart for her work on
the service delivery assessment issue. I know that she has some
preliminary numbers that she will give us today, and certainly
we look forward to working with her on that issue.
So thank you again, Mr. Chairman.
Chairman SHAW. Thank you, Mr. Matsui.
Ms. Barnhart, welcome back to this Committee. This is your
second time before us. You, as all of the witnesses, proceed as
you see fit. Your entire statement, without objection, and the
statements of all of the witnesses will be placed in the
record.
STATEMENT OF THE HON. JO ANNE B. BARNHART, COMMISSIONER, SOCIAL
SECURITY ADMINISTRATION
Ms. BARNHART. Thank you, Mr. Chairman, and Mr. Matsui. I
really appreciate this opportunity to be here today. It is very
important to talk about the challenges facing the Social
Security Administration because, as you both indicated in your
opening statements, they are many, and they are critically
important.
In my written testimony that I have submitted for the
record, I go into some detail outlining what I consider to be
the four basic and major challenges for the Agency.
First of all, providing service, adequate and good service
to the American people, particularly as baby boomers age and
move into the retirement and disability population, improving
program integrity through sound fiscal management and
stewardship, insuring financial solvency and sustaining that
solvency for future generations, and maintaining the quality of
staff that SSA needs to meet those goals. As you mentioned, Mr.
Chairman, we are expecting and projecting roughly one-half of
our employees will retire over the next few years. I call these
four challenges the four S's: service, stewardship, staffing,
and solvency.
I would like to use the remainder of my time this morning
not to read that statement, however, but rather to talk about
the disability program which, as you know, is perhaps the most
challenging and the most pressing issue that the Agency faces.
As Mr. Matsui indicated in his opening remarks, I have been
working on a service delivery assessment and budget which I
promised to Chairman Baucus during my confirmation and in
conversations with each of you shortly after being confirmed by
the Senate.
I would like to take this opportunity to summarize the
findings that I have----
Chairman SHAW. Excuse me. Are these people with you?
Ms. BARNHART. Yes, they are.
[Laughter.]
Ms. BARNHART. In the interest of time, I had given them a
verbal cue so they would know when to come up so we wouldn't
waste any of the Committee's time.
I am going to summarize the findings to date, and time
doesn't permit a complete technical explanation of this chart
before you, but I wanted you to see it because it is going to
provide the framework for the comments I want to make about the
disability program today. We have provided to each of you, in
blue binders, segmented copies on 8\1/2\ by 11 pieces of paper.
[The charts follow:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
----------
DISABILITY PROCESS TIME SUMMARY THROUGH THE APPEALS COUNCIL
FROM THE CLAIMANT'S PERSPECTIVE
Less than 1% (7 Days) |
Task Time
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
1,153 Days Total
The Pie Chart above shows the three components of time
reflected on the Disability Process Flowchart. The following
assumptions are made:
The claimant pursued the claim all the way
through the Appeals Council and was denied at each
step.
No internal DDS reviews or ROQA reviews were
conducted.
MER and CE were requested at the initial
claim, reconsideration, and hearing level.
The hearing was not rescheduled.
Process Time = Task Time + Delay Time + Queue
Time
Task Time is based on average task (hands on)
times.
Delay Time is time largely beyond SSA control
such as MER/CE time, 60-day appeal period, and so
forth.
Queue Time is ``in-box'' time (more resources
would decrease queue time).
Ms. BARNHART. Let me say, I did not intend to walk through
this chart. We have already done so with members of your staffs
earlier this week, but my staff would be happy to come up and
brief you or your staff, as you would desire, in the future. A
thorough briefing takes somewhere on the order of 2 hours, so
we don't have time for that this morning.
This chart shows what happens from the moment someone
contacts Social Security. On that far left-hand side, they can
contact us by calling the 800-number, calling the field office,
or walking into a field office. The chart goes on to show what
happens to what would be the average worst-case situation, and
by that I mean someone who is denied at every stage of the
system and goes all the way through the Federal court system,
which is the gray at that far end.
For Social Security's purposes, technically our
responsibility and our process ends at that moment, the blue
area there. The chart is color coded. The blue represents the
field offices, this green the State Disability Determination
Service (DDS) agencies. I am sitting in front of the Office of
Hearings and Appeals (OHA). The yellow is the Appeals Council,
and as I said, the gray is the court. We did that because it is
important to understand the hand-off of the cases and the back-
and-forth that occurs because that accounts for some of the
processing time delays that we experience.
You will also notice, and again I am not going to go into
the specifics, but there are actually little deltas, red
triangles throughout this process. What they represent are the
points in the process that we have identified where there are
delays, where backlogs start to happen, bottlenecks occur,
areas that we need to look at specifically to make
improvements. The improvements that we are looking at and
developing at this point fall into different categories. There
are those that are under our immediate control, things that I
have the authority to change, based on operating systems within
the Agency.
There are also internal policies we have that can be
changed by the Social Security Administration and regulations,
noncontroversial regulations, that can improve the processing
and the program. Beyond that, we will eventually look into the
longer term policy issues related to the program because I
believe that one of the things that has come through clearly is
that the issues that create such a very lengthy process and
complicated process are a combination, in fact, of all of those
factors.
Now, along the bottom here, you see calendars, little
calendars, and what those represent are the length of time that
it takes to get to that point in the process. For the average
case, in the year 2001--we used 2001 because that was the last
year for which we had complete data by the time the person
moves into the Office of Hearings and Appeals, they are on day
291. By the time they get out of the Office of Hearings and
Appeals, they are at day 653, and by the time they get through
the Appeals Council they are at day 1,153.
Now, again, I want to emphasize approximately 40 percent of
the millions of people who apply for disability each year are
decided favorably at the DDS level. There is what we call a
waterfall. Of the 60 percent that are not approved at the point
of entry, a percentage of those, 41 percent, go to the next
level, and so on and so forth. I would be happy to provide a
waterfall, I am sure your staff has it, but we would be happy
to provide our most recent so-called waterfall chart for you
for the record.
[The chart follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The people that you hear about, the people that we hear
about, that we read about, the sad, sad cases of individuals
who have disabilities and who ultimately are determined
favorable at the end of this process, right now they are
waiting 1,153 days. I want to acknowledge, first of all, the
employees of Social Security and the DDS do an outstanding job.
They are dealing with huge numbers of people. They work very
hard. They are a dedicated workforce and, in no way, am I
suggesting anything other than that. I am simply saying that,
unfortunately, I believe the cases that we hear about that
demand our attention are the so-called outlier cases, the cases
that do go all the way through to that level.
With that said, they can put the chart down, but I think it
provides a very important framework as we talk about this
issue.
Thank you very much, everyone.
These are the folks, by the way, who put this chart
together, by and large. It took a lot of work to do that. They
work with people throughout the Agency at every level, and many
of them are from our field, which is very, very important.
This is what I call the toothpick chart. If you look at
this chart, the entire circle represents the 1,153 days, which
was again the time from the point of entry through the Appeals
Council. I should mention, by the way, if the case goes on to
court, it adds another 18 months to the process. So, we are
talking 5 years if the case goes through the court system.
Back to this chart. If you look at this chart the yellow
area that is called Queue Time, 525 days, we have associated
that amount of time in the process with backlogs. The way we
calculate backlogs in the Agency is we determine how many cases
we need to have in the so-called pipeline. Basing that on ideal
service, processing cases at the DDS in 63 days, we need to
have 400,000 cases in the pipeline. Processing cases at OHA in
208 days, we need to have 300,000 cases in the pipeline.
We then take what our pendings are, subtract that pipeline
number from it, and get the backlog. The backlog now takes 525
days in that process. So, in other words, there are cases that
are waiting 525 days simply because of all of the cases in
front of them.
The delay time, the blue area, that is the area that we are
looking at specifically for improvements. Of that 621 days,
some of it we really do not have any control over, and I am not
sure we would want to change anyway. For example, throughout
this process, and included in that 1,153 days, are three
different periods of 60 days where claimants have the ability
to request the next step of appeal. There are also some other
notification requirements: the number of days we have to
provide when we schedule a hearing for them so they know the
hearing is I think that is 20 days. After the hearing, we leave
the record open for 22 days so that the claimant can submit
even further evidence, medical evidence or information for the
file.
So, all of those due process days are included in that as
well. That accounts for somewhere around 200 of the days in the
621. I could provide this for the record. We, in fact, did
explain to your staff when we briefed them earlier this week, a
complete accounting of the 621 days.
[The information follows:]
The 621 days displayed as ``Delay Time'' on the chart assumes that
the applicant is denied at each stage of SSA's adjudicative process,
appeals at each of the three opportunities, and thus goes through SSA's
entire administrative process. The times are estimated averages.
Approximately one third of the delay time is attributable to legal
requirements. This includes 180 days to allow for the statutorily set
time for filing appeals (60 days each). Another 20 days is included for
the legal notification requirement once a hearing is scheduled. Roughly
another third of the delay time occurs in securing the information
needed to make the disability determination. This includes over 180
days spent securing medical evidence of record and consultative
examination evidence at the initial, reconsideration and hearing levels
and another 22 days after a hearing during which a claimant or
representative may submit additional evidence. The remaining third of
the delay time is comprised of 21 days between the initial call to SSA
and an appointment to file an application, over 40 days mailing the
file between offices, almost 60 days locating the file, and about 80
days preparing the file for a hearing judge.
Of those days, also, 40 days are lost due to mail time, a
folder being mailed back and forth from the DDS to the field
office or that field office to OHA or that hearing office and
so forth. Approximately, 60 days are spent finding the folder.
Actually, I think we calculated 56, but I am kind of rounding
everything off. So, when you get the materials from us, you
will see that actually the numbers vary a little bit. You can
imagine, with millions of claims and hundreds of thousands of
cases moving through this system on a regular basis, it becomes
a real challenge when the folder is going back and forth
between those different offices to locate the folder in a
timely fashion. In fact, we have issues in the court system,
where our attorneys are being held in contempt of court because
we are unable to find the files within the time frame that the
judge sets the case.
So, those are things, quite frankly, we obviously can
address. We are looking at things like should we be using some
kind of expedited mail system, in the immediate term, as
opposed to just the U.S. mail? Should we be using Express Mail,
should we be using UPS, should we be using FedEx and what are
the costs of those kinds of things?
This chart, and the mapping out of this process has been an
evolving effort with the entire Agency working together to
provide the information. What it led to was a realization, on
the part of myself and my senior staff, some of the Deputy
Commissioners in the Agency, that we really must move toward an
electronic disability process. We really must have an
electronic file. We could eliminate the lost folder question
because there would be an electronic copy of the file.
We can virtually eliminate the mail issues because people
would have access to the files through the system. Right there
you would have 100 days that you could pick up of this 621. So,
that is the kind of analysis that we are doing. I mention that
simply as an example, not to go through all of the things that
we are looking at, but just for exemplary purposes.
It is a very complicated process. We are looking at it, as
I say, from all levels, to take immediate action, mid-term
action, what I call mid-term action, and what I call long-term
action. When you look at this chart and you see that of the
1,153 days, the actual hands-on time working the case is 7 days
of the 1,153 days, I think it is a striking symbol of the fact
that we need to change the entire dynamics of that circle. It
needs to become a pie chart. That toothpick needs to certainly
at least move out to a wedge of pie, and we need to change the
configuration of the circle from the standpoint of the total
number of days that we are looking at.
I have included in my testimony some of the decisions that
I have made to date in both the hearing process, as well as the
initial claims process. We are in the process now of beginning
to bargain with the union on impact and implementation of
those. So, many of them have not gone into effect yet, but I
would be happy to discuss those initiatives where I have made
decisions already or to answer any questions that you might
have.
Again, I just want to thank you very much for giving me
this opportunity to discuss the disability program and other
challenges this Agency faces.
[The prepared statement of Ms. Barnhart follows:]
Statement of the Hon. Jo Anne B. Barnhart, Commissioner, Social
Security Administration
Chairman Shaw, Representative Matsui and Members of the
Subcommittee:
I am pleased to be here today in my second appearance before you as
the Commissioner of Social Security to discuss the challenges facing
the Social Security Administration (SSA). For all of the people who
depend on Social Security and Supplemental Security Income (SSI), the
work we do matters greatly. We must provide the kind of service that
each and every claimant, beneficiary, and citizen needs and deserves.
I also want to thank you for holding this hearing at this time,
because it gives me the chance to discuss with you the wide range of
important issues facing Social Security early in my tenure. I've been
Commissioner just over five months now. When I think of the things I
want the agency to accomplish during my watch, it seems like the time
has flown by. I look forward to working with you and all the members of
the Subcommittee, as well as the experienced and dedicated employees at
SSA.
Today, Social Security faces great challenges: Giving the American
people the service they deserve, particularly as the number of
beneficiaries increases each year with the aging of the baby boomers;
improving program integrity through sound fiscal stewardship; ensuring
the program's financial solvency for future generations; and
maintaining the quality staff SSA needs to meet these goals. I think of
these challenges as the four S's: service, stewardship, staffing and
solvency.
Service
The Social Security Administration's programs touch almost every
person in the nation in one way or another--whether to get a social
security number, contribute through payroll taxes, apply for retirement
or survivors benefits, or apply for disability benefits. And,
generally, the agency does a good job of providing the kind of service
people need, but there are other areas where we must improve. The most
glaring of these areas is the disability process.
I know everyone is concerned about the length of time the
disability process takes. Quite frankly, I think the length of time the
disability claims process can take is unacceptable.
Over the last five years, through my work as a member of the Social
Security Advisory Board and now as Commissioner, I have had the
opportunity to visit SSA field offices, hearing offices, and State
Disability Determination Services (DDS). For the past 5 months I have
spent a lot of time getting different perspectives on the disability
process. I have talked to many people--employees and the public,
individually, in small and large groups, to hear about the concerns
they have with the disability process, at both the initial and appeals
levels.
In the weeks leading up to my confirmation, I was often asked what
additional resources would be required to get control over the delays
in the disability process, and address other areas of concern. I said
that I could not answer that question until I could analyze our current
processes, determine the optimal levels of service from the point of
view of both applicants and taxpayers--future applicants, and what was
necessary to get us there.
At my confirmation hearing before the Senate Finance Committee,
Chairman Baucus and I discussed my plan to develop a service delivery
budget, and I promised him that I would report back.
As I mentioned, it is clear that the disability process takes too
long.
Let me also say that I am not waiting to take steps to improve the
disability process where we can take action now. I feel very strongly
that we must move forward now and make decisions on what we can do
immediately to improve disability processing while laying the
groundwork for additional mid- and longer-term improvements.
For instance, SSA's prototype process has been in place in 10
States since 1999. In December, I issued a Federal Register notice that
the prototype would continue for six more months. That gave us time to
evaluate the prototype, to see what works and what does not. Now is the
time to make decisions and put them into effect nationwide.
For instance, the prototype confirmed the value of the single
decisionmaker (SDM) feature. This feature allows the claims examiner to
make the determination without a mandatory physician sign-off on many
claims (except for determinations for children and those with mental
impairments) and relies on the examiner to decide when to seek
consultant physician advice on difficult and complex claims. It lets
the DDS make more effective use of examiner and medical consultant
resources and provide faster determinations for some claimants. I have
decided to put the SDM into practice now, so that all States can take
advantage of it, as we continue to develop longer-term improvements.
I have also decided not to extend the formal claimant conference
feature of the prototype. This end of the line conference between
claimant and examiner added processing time (an estimated 15 to 20
days) and was not as effective as we had hoped in helping claimants
understand claims issues. Most prototype States found early and ongoing
contact with the claimant to be more effective.
There have also been concerns that the Hearings Process Improvement
project (HPI) has created even more bottlenecks in the process than it
was intended to fix. In addition, SSA's past inability to hire
Administrative Law Judges (ALJs) to make decisions at the hearing level
of the disability process has had a profoundly adverse effect on our
ability to provide timely service. Before I signed on, former Acting
Commissioner Larry Massanari started a group looking at the hearing
process. Thanks to their careful analysis and that of my own staff, I
have made some additional decisions on short- and near-term changes in
this area. We are required to bargain with employee unions before we
can implement some of these changes, and we certainly intend to meet
that obligation in good faith. The decisions include:
Including ALJs in early screening for on-the-record
decisions;
Developing a short form for fully favorable
decisions;
Allowing ALJs to issue decisions from the bench
immediately after a hearing;
Creating a law clerk position;
Expanding videoteleconference hearings;
Deploying speech recognition technology;
Ending the hearing office technician rotation
requirement; and
Digitally recording hearings.
More needs to be done and we are continuing to work in this area,
but these are important first steps. I also have some good news to
report with regard to hiring ALJs. In October we were able to bring on
board 126 new ALJs from a list of candidates that had been (and
continues to be) the subject of litigation. I want to thank the Social
Security Subcommittee for your interest in hiring the new judges, and
hope that we can continue to rely on your support.
One thing that has become clear is the need to accelerate
implementation of what we call e-DIB, an electronic disability
determination folder. This should organize, store, transmit, and track
claimant files and medical evidence electronically. I have formed a
committee of the deputy commissioners of the 3 offices most closely
involved with this. We have a plan in place to have this process up and
running in another 20 months. This will go a long way to speeding up
the process.
Staffing
As you are aware, many of SSA's employees are retirement-eligible
and many more will become eligible over the next few years. We need to
explore ways both to retain employees who may be eligible for
retirement and recruit employees as they first enter the workforce. I
believe part of that effort must be to reinforce the idea that pursuing
a career in the Federal Government is a noble and worthy cause. We can
even look creatively at this challenge as an opportunity for employment
of our own SSI and SSDI recipients.
Over the years, SSA has earned a well-deserved reputation as an
agency with a ``can-do'' attitude as it has taken on new
responsibilities, developed new technologies, and worked hard to meet
increasing workloads. With the support of talented and dedicated
employees, I believe that we can make service improvements at this time
within our available resources, and that we can improve the efficiency
of our processes as we fulfill our legislatively mandated duties.
Stewardship and Program Integrity
I mentioned earlier the importance of good stewardship, but I'd
like to elaborate a little bit on this theme. Providing true service to
the public includes an obligation to ensure sound financial management.
The people of America, who fund the Social Security program through
their payroll tax contributions, and SSI through their income tax
payments expect and deserve well managed programs. There is also a
strong economic incentive for doing so. In several areas, such as SSA's
continuing disability reviews, ensuring that disability beneficiaries
still meet eligibility criteria can reap significant savings.
But good stewardship involves more than money. The tragic events of
September 11, and reports that some of the terrorists had Social
Security numbers and cards, which may have been fraudulently obtained,
have brought home the need to strengthen safeguards in our enumeration
process. In response to those events, SSA formed a high-level response
team, which includes participation from our Office of the Inspector
General (IG), and from the New York and San Francisco Regions. We have
already begun implementing a number of process improvements to help
ensure that we are strengthening our capability to prevent those with
criminal intent from using Social Security numbers and cards to advance
their operations.
In all program integrity areas, not simply identity fraud and
enumeration but also in our efforts to improve our stewardship of the
SSI program, I am looking forward to working with SSA's Inspector
General. As a matter of fact, I met with the Inspector General during
my first days in office to begin a review of his recommendations. And
Deputy Commissioner Jim Lockhart and I met with the Comptroller General
recently to discuss the SSI program's high risk designation and develop
a plan for removing the designation from the SSI program. I have asked
Mr. Lockhart to take the lead on this important initiative.
With regard to September 11, although it has been several months
since the terrorist attacks, I want to take this opportunity to express
my pride in the response of SSA's employees to the terrorist attacks.
Particularly in New York, but also in northern Virginia and throughout
the country, they worked tirelessly to help those who lost family
members in spite of the chaos and highly charged emotions of those
first few days. They will always have my gratitude and respect for
their quick and compassionate action.
Solvency
Whatever their individual circumstances, the vast majority of
Americans will at some point in their lives be touched by Social
Security. By providing survivor benefits to children and spouses,
disability benefits, retirement benefits, and SSI benefits, SSA's
programs reach almost every single home. And for the millions of
Americans currently receiving benefits, be it a supplement to
retirement or critically needed income support, and for those who will
become eligible in the future, we must make sure that we can offer the
same assurances in the future.
During my tenure as a member of the Social Security Advisory Board,
one of the issues on which we pressed for action is to ensure the long-
term solvency and sustainability of Social Security. The combined
assets of the Old-Age and Survivors and Disability Insurance Trust
Funds are estimated to reach cash flow deficit in 2017 and become
exhausted in 2041 according to the latest report of the Social Security
Trustees. I believe it is important to act as far in advance of that
time as possible to make necessary changes to the program.
I also believe that the impetus for constructive improvements must
come from a bipartisan consensus. While I am not an economist, as
Commissioner I will work to help reach that consensus. The final report
of the President's Commission to Strengthen Social Security is the
beginning of public discussion to work toward that goal.
Conclusion
In conclusion, Mr. Chairman, I did not assume my duties as
Commissioner of Social Security in order to manage the status quo.
Through my work on the Social Security Advisory Board, I am convinced
that we can and must do better. In doing so, I will work within the
Administration, with the Congress, and with the dedicated and
experienced employees of the Social Security Administration to find the
best solutions.
Again, thank you for inviting me to be here today. As you know, in
order to meet the challenges I've described, and others, we will also
need the help and advice of the Congress, and your continued support to
obtain the needed funding for our operations. I look forward to working
with you to make Social Security's programs--especially disability--
more responsive to claimants and beneficiaries and more accountable to
the nation's taxpayers.
Chairman SHAW. Thank you for a very fine presentation. I
must say a very unusual chart.
[Laughter.]
Chairman SHAW. I have got a couple of questions; one with
regard to the retiring employees and how that would be impacted
by the introduction of electronic filing and electronic
handling of these entire matters. How much personnel time or
how many employees would this be able to replace?
Second, I want to inquire, too, as to what exactly are you
doing to phase-out maybe early retirement of some of these
employees so that you are not being impacted all at once with
new hires?
Ms. BARNHART. Well, first of all, if I may say, Mr.
Chairman, in terms of electronic disability, I wasn't looking
at it as a way to reduce employees. I was looking at it as a
way to improve service and to allow our employees----
Chairman SHAW. So you don't see it having any material
effect on the----
Ms. BARNHART. Well, I think there will absolutely be gains.
That is something we actually have just started looking at, in
terms of trying to do the cost-benefit analysis of it. There
are different methodologies for looking at that. I was just
talking about that earlier this week, in fact, a very timely
question, in terms of the dollar savings to the program, as
well as the so-called intangible cost-benefit to the program.
What I would appreciate is having the opportunity, after we
have completed that analysis, to provide that information to
you, but I was looking at it more from a service perspective.
Right now, what we have is we have employees who are more
senior employees who, unfortunately, have to spend time looking
for folders, and Xeroxing files and things like that, and that
simply is not a good use of their time. I am really much more
interested in having individuals doing more of the so-called
grade-controlling portion of their position descriptions than
engaging in lower level work.
With relation to your question about retiring employees, it
is correct that over the next 10 years we expect approximately
3,500 people to retire each year. We have actually used early
out and, in fact, are running early out right now in the
Agency, with the exception of administrative law judges (ALJ).
We use that to deal with that retirement peak. We have an
Agency where the average age is 47. I must say it is the first
time I have worked anywhere where I have been over the average
age, and it is a daunting thing.
Based on projections, we would have lost a huge number of
our employees all in a couple of years had we not used early
out. By using early out, what it has allowed us to do is to
flatten the wave. So, in other words, we didn't have a huge
number retiring all at once, and we had approximately a couple
of thousand people take early out every year, which has allowed
us now to back-fill those jobs and start training the people,
so that by the time other people retire, we have more trained
employees ready to take their place.
I must emphasize the work that the Social Security
employees do is very complicated work at many of the levels,
and it takes, I am told, anywhere from 1\1/2\ to 2 years to
become fully trained to be able to perform the responsibilities
of a claims representative, for example, a position most people
are familiar with.
So, it is very, very important, this whole idea of bringing
people in, on an ongoing basis, to train them and flattening
that retirement wave so that we are not all of a sudden in a
year or two losing a huge number of employees.
So, we are monitoring it, but we intend to continue to use
the early out process.
Chairman SHAW. Are you preparing a budget to bring back to
us to take a look at with regard to the electronics and
operating technology at Social Security?
Ms. BARNHART. In our budget submission, we included
information about our Information Technology (IT) activities.
To be perfectly honest, I wasn't working on a separate budget
on IT. I do, however, have a team of three deputies that are
working on electronic disability. One of the things I would
like to take this opportunity to mention is, when I came into
the Agency and asked about electronic disability, I was told we
would have it in 7 years. I told them that that would not do
because my term is only 5 years, and I would like to enjoy it
for at least a year before I leave.
So I asked, if resources were not an issue, if you did not
have to worry about resources, how quickly could we have
electronic disability? Our Deputy Commissioner for Systems came
back to me and said we could have it in 22 months. That was 22
months from March 1. Now, when he told me that, some of the
other people on the staff said did you clarify it was March 1,
2002, but we did.
[Laughter.]
Ms. BARNHART. Everyone is familiar with ``systems time,''
and particularly looking at some of the historical experience
in the Agency.
Anyway, now we are looking at in 20 months having an
electronic disability capability to roll out across the Nation.
We have estimated the cost of that is going to be somewhere
around $155 million. I think I have already slated $7 million
of this year's budget to begin the activities. What I have done
is set up a triumvirate, I call it, of the Deputy Commissioner
for Operations, for Systems, and for Disability and Income
Security Programs, and I have them meeting on a regular basis,
making decisions to move this process along because that is the
only way we are going to stay on this 20-month time frame, and
I am absolutely committed to doing it. I think it is so
critically important to making progress in this program.
In fact, I will tell you that most people are shocked when
I talk to them about what I am doing in this job, and they find
out we do not have an electronic disability process. The world
is really pretty astounded by that.
Chairman SHAW. Your employees, how technically trained are
they to get them into these type of systems? I mean, if I were
working for you, you would be in a world of trouble.
[Laughter.]
Ms. BARNHART. If I were doing the work, we would be in a
world of trouble, let me tell you. I understand.
Just last week, Mr. Chairman, I approved an additional $1.8
million for the Office of Systems to use for technical
training, specifically to keep our Systems employees up-to-
speed, from a technical perspective. The world changes weekly,
in terms of the information technology world and systems, and
so it is critically important that they stay up-to-speed, and
we work to do that. We also have a number of contractors who
are experts that help us support many of our systems activities
as well.
Chairman SHAW. I have one final question. You said the
average age down there is 47 years, I believe you said. How
does that compare to, one, other agencies or the private
sector, where they are doing similar type of work as your
employees do?
Ms. BARNHART. I can't give you the exact figure, but I know
I have been told repeatedly that we are an older workforce,
relative to the private sector and relative to other government
agencies. We definitely are an older workforce. There is no
question about it. I would be happy to submit those comparisons
to you, for the record. I just don't remember them.
[The information follows:]
The average age of SSA full-time permanent employees was 46.9 years
as of September 30, 2001. This compares to a government-wide average of
46.5 years. I'm unable to provide any comparable figure for any private
sector organizations.
Chairman SHAW. If you would, that be helpful to give us
some idea of exactly how much trouble we are in. Mr. Matsui?
Mr. MATSUI. Thank you, Mr. Chairman. Thank you for your
testimony, Commissioner.
I want to follow up on what Chairman Shaw was talking about
in terms of the employment, the workforce. I guess, from what I
understand, many of the employees will really start to retire
at a rapid rate from about 2007 on; is that kind of the
projection or am I mistaken about that number?
Ms. BARNHART. Well, the projection was that we were going
to have a huge retirement wave at that point. At this time, and
I just had discussions with our Deputy for Human Resources
about 3 weeks ago on this, it appears that we have, more or
less, leveled the retirement wave. You are correct, it is going
to become bigger over time, but my understanding is it averages
out to about 3,500 people per year over the next 10 years.
There may be some variation, but 35,000 people is a huge number
of people to lose out of 65,000.
Mr. MATSUI. I guess the challenge is, and if it is
flattened out, it does help it a lot, but then the baby-boom
population is due to begin its major retirement from about
2008. So, again, it creates that kind of compaction right there
around the late part of this decade, I guess.
Ms. BARNHART. You are absolutely right. In fact, estimates
are, I believe, that retirement claims will go up 20 percent
and disability claims will go up 30 percent with the aging of
the baby boomers, and so we are going to have the convergence
of our most experienced people leaving the Agency over this
band, this time band when the boomers start to retire, and this
huge influx of new claimants, whether it is for retirement
survivors or particularly disability. That is where we expect
the fastest growth.
Mr. MATSUI. Right. I guess that is, demographically, only
because they shorted the workforce and the retirement, that is
the part of the baby-boom population. It is something that
really can't be helped.
What I like, and I know in your service delivery assessment
study, I guess you really get into that aspect of it, too, kind
of the long-term aspects of this.
Ms. BARNHART. Oh, yes.
Mr. MATSUI. I guess that would be for another day we can
discuss that, but I would like some thoughts on that as to how
that is going to be addressed. I know you are working on that.
Ms. BARNHART. Yes, sir, we are. In fact, this is just the
first step in the service delivery budget. I started with
disability because it is obviously the program that affects
nearly 10 million people in this country, and more every year.
It is the program we hear the most about, and quite frankly
that I get the most letters and calls from members of this
Committee and others throughout Capitol Hill. With good reason,
because your constituents, in large numbers, are calling and
writing to you with concerns about the process, and employee
groups are concerned about the process.
The employees themselves are concerned about the level of
service. At every level we have concerns about it, but we are
now starting to move into other areas of the Agency, and it is
my full intention to look at every single activity of the
Agency and, obviously, staffing is one of those.
One of the challenges is going to be, quite frankly, to be
able to try to map out, as we engage in system improvements,
what effect is that going to have on being able to deal with
these increased workloads. I mean, obviously, that is something
the Office of Management and Budget (OMB) is looking at very
closely on behalf of the President because of his management
agenda, in terms of e-government, specifically. We are looking
at some things now trying to understand what the effects will
be.
Mr. MATSUI. My understanding, also, is that because the
workforce is aging, obviously, disability claims will begin to
increase or probably increasing now because, as you get older,
the probabilities of accidents or whatever it may be increase.
Obviously, you are doing the disability issues now, and I think
that is helpful for us, obviously, over the next 10 years as
well, and so there is a match there, and I appreciate that.
I would like to move over to the issue of the current flow
chart and the disability issue. Due to no fault of your own and
probably glitches in the system, we have, what, about a 500,000
backlog now in terms of disability claims, Supplemental
Security Income (SSI) or Social Security Disability Insurance
(SSDI). Perhaps you can comment.
Ms. BARNHART. I was going to say we have pending at the
Office of Hearings and Appeals somewhere over 500,000 hearings.
If we look at what we think we need to have in the system at
any given point in time, it is somewhere around 250,000 that
have to have work, but when you look at initial claims, Mr.
Matsui, we have pending there somewhere on the order of 600,000
claims, and we think we should have 400,000, so we have a
backlog of 200,000. There are clearly backlogs. How you
characterize each stage of the system is more or less
technical, but, yes, there are definitely backlogs.
Mr. MATSUI. I would imagine that you are not taking these
backlog claims separately. I would imagine it is all being
processed, everybody is dealing with current claims, backlog
claims. Is that something that you are looking at? In terms of,
and for you to get a fresh start, you almost need to get these
behind you. On the other hand, if you do that, you are going to
get behind on your current claims. What is your strategy there?
Ms. BARNHART. I was hoping you would give me one because I
have asked that question----
[Laughter.]
Ms. BARNHART. To almost everyone, literally, that
question----
Mr. MATSUI. This is easy for us to ask you, I want you to
know.
Ms. BARNHART. To almost everyone I have come in contact
with and had this discussion about this program and this chart
in the last 2 weeks.
You are absolutely correct. Let me explain what one of the
greatest challenges is with regard to making improvements in
the system. With 525 days, approximately, being attributed to
the backlog, any system changes that I make, from minor to
important to significant changes, for a cohort of cases to move
all the way through the system and for me to tell if they had
an effect, I will no longer be Commissioner, based on that
chart. That is what it means.
Mr. MATSUI. Right.
Ms. BARNHART. I said, for example, when Commissioner Apfel
put the prototype into effect several years ago, the first
cohort of prototype cases has still not moved through the
system. So, if you want to have actual, hard data about the
effects of those planned process improvements that are
implemented during that test phase, we don't have them yet
because we haven't gotten all of the cases through the system.
So, that is one of the great frustrations for me, as my
staff comes up with ideas and as we talk to people outside the
Agency, and I have reached out to various groups and interest
organizations, affected organizations throughout the country.
As I consider putting things into effect, if I want to put them
in and see how it is going in 6 months or a year, I won't have
any information.
So, that is one of the things that drives me to say we
really need to separate out the backlog. The other thing is
obviously these people have been waiting a very long time. If
we look at the Appeals Council, for example, where the average
time for a case to move through the Appeals Council is 447 days
right now, actually, we have made a lot of progress in the
Appeals Council Improvement Project, and we think we are going
to have the pending there down to what would be the ideal
pipeline of roughly 40,000 cases by the end of this year.
The 447 days comes from the fact that some of these cases
have literally been waiting 2 years to be considered. So, this
whole issue of the backlog is a tremendously frustrating,
complicated, and challenging one, and I am looking at how we
can deal with that issue. Is it possible to pull out the
backlog and look at it separately and still ensure due process
requirements that we must meet?
What I basically told the staff just yesterday is I don't
want to end up with a situation we have all experienced at the
grocery store. We have been waiting in line for 20 minutes, a
new checker opens, and the people at the back of the line move
over to that checker, and those who are toward the front of the
line get frustrated because we should have been next. So, that
is the challenge in looking at that, but it is very important.
Mr. MATSUI. Are you, through your assessment, kind of
working on how you can--I know my time is up--deal with that
issue or is that something you just have to take on a case-by-
case basis?
Ms. BARNHART. I have actually got my lawyers looking at
that now to see what the legal requirements are because,
obviously, we always want to meet the legal requirements. I
have the policy folks looking at it, and I have the operations
folks looking at the range of possibilities. It may end up
there are none, other than to continue the way we are and just
work them in order.
I would certainly hope there are ways to improve, not only
for those who are waiting in the backlog, but for all. These
are all people. That is the other thing I must emphasize. When
we talk about these numbers, these are people. These aren't
just numbers. They are Americans, former workers, and disabled
people in this country. We should not forget that human
quality, the human element of all of this.
Mr. MATSUI. Thank you.
Chairman SHAW. It is also important to remember, as I am
sure you do, that this is an earned benefit. By paying into
Social Security, this is something that you have paid for. Just
like if it were with an insurance company or anything else,
these people have, the ones that have a legitimate claim are
entitled to receive these benefits, and it is really terrible
if they do have to wait.
Mr. Collins?
Mr. COLLINS. Thank you, Mr. Chairman.
Thank you, Commissioner. Your chart was very impressive and
very informative. I appreciate the fact that you have broken it
down into four areas that you are working toward. The service
and staff go hand-in-hand. You have to have the staff to be
able to provide the service.
In the area of the disability, I understand that you have
been able to acquire more ALJs, but in order to help with this
backlog and keep the system moving forward with additional
claimants coming in, how many additional ALJs do you think you
will need?
Ms. BARNHART. If I may take just a moment to say we have
approximately 1,100 on board at this time. I believe a full
complement of ALJs in the Agency has been considered to be
1,300. I haven't done a precise calculation at this time, the
reason being we have the Azdell case that is pending, and as
you know because we have discussed it, the Merit System
Protection Board (MSPB) prevented us from hiring ALJs for over
a year.
We finally got an exception last August to hire 126 ALJs,
which helped to some extent, but we were down to an all-time
low of below 900 ALJs. That, obviously, added to the backlogs
and the processing time, no question about it. Adding to the
problem even more is the fact that we are the largest corps of
ALJs in the government, and so everyone uses us as their
recruiting ground. The ALJs come to Social Security, get
established as ALJs, and the other agencies recruit from our
ALJs because they are not allowed to hire outside either due to
this pending personnel case with the MSPB. So the inability to
hire ALJs certainly has a detrimental effect on the workload,
but I would say, at this point, I would consider approximately
1,300 a full complement.
I haven't looked at that issue as closely. Since I can't
hire them, it hasn't been an issue, quite frankly.
Mr. COLLINS. As you move through the staffing in the
Service, of course, you have to deal with the employees' union.
I hope that the employees' union understand that all of this is
to benefit the constituency that we all serve and work for.
As you move toward the information technology, I see where
you are shooting for 22 months to have that fully implemented
and the costs being several million dollars, but has there been
a comparison cost of money saved, as far as the snail mail
versus the information technology?
Ms. BARNHART. We are currently engaging in that right now,
Mr. Collins. Again, I would be happy to provide the results of
that cost-effectiveness analysis to the Committee when it is
completed. I do think it is important, though, as we look at
the methodologies, we are going to look at it from a pure cost
savings point of view, but then also the so-called intangible.
I forget, there is, as there is for everything, there is a
jargon term for the methodology that one uses to capture the
intangibles, but for us the intangible is service, which is I
think a really important intangible in this program, in terms
of being able to speed up the processing time. So, we will be
looking at it from that perspective as well.
Mr. COLLINS. We refer to that as public good. I do, anyway.
[Laughter.]
Mr. COLLINS. It is interesting that you were talking about
when you first came they said 7 years for this implementation
of the IT. I found it interesting that that compares to the
length of time that they said it would take to rewrite a letter
informing people that they have been denied or you could expect
a check in the mail or such, on a temporary basis. That, too,
was going to take 7 years, under the previous Administration. I
am not throwing rocks at Ken or Bill Halter, but I think that
again is the bog-down within the system, and oftentimes maybe
the staff or the union not working as closely with management
as they should to rewrite letters and such.
I offered Mr. Halter at that time if he would rewrite a
letter on that particular basis and send it to me, I would
critique it for him and see if we couldn't get it down to a lot
less than four pages. He did, and we did, and I never heard
from him again. So, he must not have liked the south Georgia
advice that I gave him.
[Laughter.]
Mr. COLLINS. You can say a whole lot in just a few words,
if you so desire.
We appreciate the fact that I think you are doing an
excellent job, as you review and as you move forward with
regulatory change. As we have discussed before, I am a strong
promoter of regulatory change. Regulations are easier to change
than if we, as Congress, put things down in policy as law. As
you know, and as we all know, in order for us to change that
type of policy, it takes an act of Congress. Then when you get
into 435 experts on this end and 100 on the other end, that
sometimes gets to be a total mess before it is over with.
So I hope, Mr. Chairman, if you will give this Commissioner
ample time to address all of the issues that she faces, the
delays and as she so properly put forth and appropriately put
forth, addressing the issue of integrity of numbers. That was
part of your testimony, and we appreciate that very much.
Ms. BARNHART. Thank you.
Mr. COLLINS. I have something that I want to extend to you.
It is something I know you don't use. I know that, and I feel
that you are strong enough to do so, but I think your husband
enjoys it as he mows the grass on Saturdays, and so I'll walk
around and present it to you, and then I have to go on to a
deputy whip meeting.
Thank you, Mr. Chairman, and thank you very much for what
you are doing. I am so well pleased to hear someone who has the
will, the drive, and the fortitude to move forward with what
needs to be done for the constituency of this country when it
comes to the Social Security Administration and SSI.
Thank you.
Ms. BARNHART. Thank you very much, Mr. Collins. I
appreciate your kind words.
Chairman SHAW. While Mr. Collins is making his
presentation, we will call on Mr. Hayworth.
Mr. HAYWORTH. Mr. Chairman, I thank you, as the attention
of the assembled multitude turns to my colleague from Georgia
for this very special presentation.
[Laughter.]
Mr. HAYWORTH. I don't know if some of the public health
folks care to weigh in. Commissioner, I would like to thank
you, and I am sorry I don't come bearing gifts, but other than
the----
[Laughter.]
Mr. HAYWORTH. I hope there is no restriction on that, by
the way.
Chairman SHAW. I can assure you, if Mr. Collins gave it to
her, it is well under the gift limit.
[Laughter.]
Mr. HAYWORTH. Let me simply offer the price lists and the
commodity of praise, Commissioner. Thank you for coming to
Arizona and joining with me in issuing the first Tickets to
Work to Members of our disability community. We appreciate the
work done there. With that, we could have the same type of
success, in short order, on what you have talked about today
with the processing of disability cases. You noted your term in
office, it is worth commenting that our Founders give each of
us in this constitutional role but 2 years, renewable at the
bar of public opinion on the first Tuesday following the first
Monday in even-numbered years. I think there is something like
that coming up in a few months. So, I appreciate the challenge
that we confront there.
Commissioner, with your indulgence, I would like to turn to
another topic that really one of the tasks in government is to
distinguish the urgent from the important, and in the wake of
September 11, we really have to turn to border security.
I just wanted to check with you and ask if the Agency is
still processing the Social Security number applications of
foreign nationals without verifying Immigration and
Naturalization Service (INS) documentation? Is that continuing
today?
Ms. BARNHART. It is continuing at this moment, but I assure
you we have several efforts underway. If I may take a moment to
describe those.
I have been working very closely with our Inspector General
who is going to testify a little later today, on this issue,
and he actually wrote to the Inspector General at the U.S.
Department of Justice, emphasizing the importance of having the
ability to do the enumeration and entry project and having
access to INS data.
We were basically scheduled for INS to assume the
enumeration and entry responsibility. However, due to systems
issues there, and of course as you read the papers and
obviously the action you have taken in this body in recent
days, that has been delayed until roughly October of this year.
As of May 25 of this year, however, we are supposed to be
able to get online access to what is called the NIIS system,
which is the nonimmigrant database at INS. Let me explain what
nonimmigrant means. It means individuals who have other than
permanent resident alien status in this country; so people on
limited visas, time-limited visas, those kinds of things,
temporary authority to be in the country.
That will be a huge, huge improvement for us because we
will be able to check that database which is very up-to-date.
There are not the delays there have been in the past with the
Systematic Alien Verification for Entitlements (SAVE) system
and some of the other INS data that have been provided. We are
very, very encouraged at being able to do that, and that should
be happening just later this month.
Mr. HAYWORTH. That is reassuring, but I think what we saw
this morning in the realm of disability claims with the chart
that rivaled the intricacy of the Sistine Chapel and perhaps
took almost as long to process or put together as the actual
thing, it tends to typify, no matter the intent, what we
studied about in political science as students, bureaucratic
inertia, where things kind of get set in motion, but we just
never quite get to task completion. So, I appreciate your
intent to move toward closure and results because we still
confront a very serious situation. I am glad to have your
report, and we will continue to work with you and scrutinize
that on behalf of the American people.
One other question, Commissioner, does your Agency ask for
a picture ID when an individual applies for a Social Security
number?
Ms. BARNHART. We do not ask for a picture ID.
Mr. HAYWORTH. Why not?
Ms. BARNHART. We oftentimes ask for a driver's license, if
people have it, and they tend to have photographs on them. To
be honest, I don't really know what the specific history of
that is, other than the fact that photo IDs generally haven't
been available, other than through a driver's license. I mean,
if you are a student or something you might have a photo ID,
but really the driver's license is the main way to obtain one.
One of the other things that we are doing is I have
convened an Enumeration Task Force. It has people from all
across the Agency working on it, specifically as a result of
the September 11 tragedy. One of the things they are looking at
is this whole question of biometrics and what we ought to do to
ensure that people are who they say they are. They have not
made recommendations to me. We have had some preliminary
discussions, but they are looking at all kinds of things,
including requiring that people provide photo ID when they
apply for a Social Security card.
Mr. HAYWORTH. Well, I thank you, Commissioner, and again
would simply point out that with the restrictions placed on
travel, as we climb on jetliners, as many of us do, week in and
week out, we must have picture ID. It seems to me it would be a
simple step that transcends not only Social Security
applications, but even for the right to exercise the franchise
of voting. However, that is another topic for another hearing.
Commissioner, thank you for your time and your indulgence.
Mr. Chairman, I thank you for the time.
Chairman SHAW. Mr. Lewis?
Mr. LEWIS OF KENTUCKY. Thank you, Mr. Chairman. Good
morning, Commissioner.
Ms. BARNHART. Good morning.
Mr. LEWIS OF KENTUCKY. I have found, and continue to find,
that a lot of people in this country do not understand the
Social Security program. In fact, I had a group of people,
folks in my office yesterday that should have known, but I
don't think they understood how the program operates and what
it is all about.
What is the Agency doing to educate, to instruct the public
of what the program is all about, the benefits and so forth?
Ms. BARNHART. Actually, there are several things that we
do. One of the most important things we do every year is we
send out a Social Security statement to all current workers. I
have just completed making changes on that statement, and now
it is being updated. It is going through a final check with the
actuary just to make sure that all of the dates, and numbers,
and information in it is absolutely correct because we were
updating it based on the 2002 trustees report.
That is one way, and that goes into an explanation of the
status of Trust Funds, how you receive your benefits, how they
are calculated. It lists what your earnings are. You are
supposed to look at it so that you know that you play a role in
determining your Social Security benefit, ultimately, based on
how much you earn and making sure those earnings are reported
correctly. It explains the tax rate for Social Security, the
maximum salary that one pays Social Security on, those kinds of
things. It is really a very informative document.
We also have public affairs specialists (PAS) throughout
the country. I don't have the exact number, but working under
each regional communications director, and there are 10 of
those, we probably have at least 100 PASs, I would guess,
working around the country who attend community events, speak,
as requested by various community organizations, and work to
try to provide information, answer questions, and discuss any
facet of Social Security people request.
In addition to that, we have over 100 publications that we
produce that describe various elements of the program that we
make available to people. In fact, I spoke just recently to an
organization, a women's group, on what women need to know about
Social Security. I took copies of a really excellent
publication we have that explained the effect of Social
Security on women and the things they need to be concerned
about specifically. I know that is of great interest to this
Committee, from my prior appearance here.
So, we have a number of things that we do. We also develop
public service announcements (PSA), but of course unless you
happen to be a late-night person like me, you may never see
them because, obviously, SSA PSAs don't get prime time, given
the cost of advertising these days, when you are asking people
to run them for free, but we do all of those things.
I actually have our Deputy for Communications working to
come up with a public information campaign for us, looking at
all of these elements to see if there are holes in things we
need to be doing and then to augment that.
Mr. LEWIS OF KENTUCKY. That is great. It seems to always be
the situation, whether it is a townhall meeting or wherever I
am and talking about Social Security, that a lot of people see
Social Security as a retirement account, that their Social
Security number is their account number, and that they are
paying into a fund, and it is drawing interest, and they are
going to get that money, plus their interest back when they
retire.
When I explained to them how the system actually works,
they are pretty surprised. So just getting to the heart of what
Social Security really is would, I think, help a lot of people
understand that system.
Ms. BARNHART. I agree. It is a very important program. It
touches so many people in this country, more than any other
program that we have in the government. So, I think it is very,
very important that people understand it. I find people who
have the same kind of confusion. I have had phone calls since I
have been in this job, quite frankly, expressing that kind of
confusion.
Mr. LEWIS OF KENTUCKY. Thank you.
Chairman SHAW. Mr. Pomeroy?
Mr. POMEROY. Thank you, Mr. Chairman. I thank you for
holding this hearing. Obviously, the situation of people
needing to have case review and not having these kinds of
delays is of great concern and hardship to them and an
appropriate matter for this hearing. I appreciate it.
Commissioner, the survey of the Advisory Board seemed to
come up with the conclusion that these delays, the managers'
evaluation of these delays are attributed to five factors, four
of which relate to staffing limitations, reduction in the
number of supervisory management staff, reduction or
elimination of case reviews, decrease in staff training time,
and staff shortcuts.
The other reason given was the increasing complexity of the
workload. Basically, you have got, in light of the limitations
of resources for the Agency's administrative purposes, you have
got people just straining to the limit and trying to do as best
they can, but overwhelmed by workload. Is that the thrust of
your conclusion about these delays?
Ms. BARNHART. I think people are straining to the limit in
the Agency. I absolutely agree with that. I think we have very
hardworking people at the front lines and at headquarters, and
I think the people at the frontlines are perhaps under greater
stress because they are actually dealing with the public.
They are the people who sit and talk to the claimants and
the applicants, and I don't think there is any question they
work very hard. I have visited a number of district offices
myself, talked to the claims reps, the tele-service centers,
talked to the service reps and find the same thing, our phone
lines are always busy.
We took over 59 million calls this year. We had expected 61
million but it looks like 59 million. That actually is
important. I should talk about that for just a moment because,
for that reason, we are trying to do more through e-government.
That, obviously, is one part of the President's management
agenda, but the Agency has been working on it, and we are even
more dedicated and committed to it under the President's
initiative.
We have actually seen less phone calls than we anticipated
coming into our 800-number, and to deal with the 800-number
phone calls, we have employees who perform what we call spike
activities. I know this Committee is well familiar with that,
people who normally perform other functions, but at certain
peak days are pulled off of that to answer the telephones,
which clearly adds to the pressure for those employees.
What we believe is happening is the reason we are getting
less phone calls is because more people are doing things
through the Internet. They are actually going to the Internet
for service, and that is very important. We are trying to
figure out how to quantify that, quite frankly, to be able to
tell did they go to the Internet, instead of making the phone
call, and if they went to the Internet, did they get the
service that they needed? That is not an easy thing to
necessarily quantify, but we are looking at ways of doing that.
The Office of Management and Budget is very interested, too, in
us being able to quantify people doing business from an e-
government perspective.
Going back to your original question and the thrust of it,
yes, I think people are working very hard in the Agency.
Mr. POMEROY. Your calls are running maybe 4 percent below
projection or something.
Ms. BARNHART. Something like that.
Mr. POMEROY. It is nice, but it is certainly not the
solution to what we are looking at in terms of people
basically--what worries me is you have got career
professionals, many of whom, a bunch of them reaching the end
of their public service, soon to be retiring, at the very time
you have got the demographics of the country changing in ways
that, in all likelihood, will place more and more demand on the
Agency in this way. I think we can look down the road and not
very far in the very foreseeable compounding of this problem,
in light of administrative capability and capacity.
Ms. BARNHART. You are absolutely right. There are many
factors that are contributing to it. When I mentioned the e-
government, you know, providing services that way, I just think
that is something we obviously must do. There is a whole
generation coming along behind us that is going to be able to,
and prefer to do business over the Internet. That is not true,
certainly, of my mother's generation, although my mother is
getting there, but it is more true of ours. I wasn't
suggesting----
Mr. POMEROY. I am just about out of time, Commissioner. I
agree with you. I think it is terrific, and one answer and a
question that has many answers or a problem that has many
answers.
I do think we ought to continue to evaluate whether or not
the funding for the Agency ought to come from the Social
Security Trust Fund, as opposed to general fund revenues. Now,
with the funding shortfall, you worry about taking those kinds
of steps. On the other hand, it seems to me only very rational
that you would have the administrative costs of the program
coming from the Trust Fund itself, and over time that might
lead toward a better ability to put in place the kinds of
resources to competently manage the program.
Do you have any thoughts on that?
Ms. BARNHART. As you rightly point out, SSI has been
limited by the administrative cap. Our Limitation on
Administrative Expenses (LAE) account, our Limitation on
Administrative Expenses is part of that overall governmental
cap.
One of the issues that I have talked about related to that
cap specifically is the whole issue of program integrity. There
are many areas where we could actually save program dollars if
we spent Administration dollars, for example, engaging in
certain kinds of activities, but we have to spend funds within
the cap to save funds outside of the cap. I do think that, as a
result, while we always want to accomplish a balance between
good service, program integrity, and fiscal stewardship,
obviously, when the Agency doesn't ``benefit'' from that return
in a direct way, I think it does make those areas less
attractive to move into and puts the pressure on for doing
those in a different place.
I just wanted to make one follow-up comment to your prior
comment, that I stopped talking on my second-to-the-last answer
because I didn't want to use up your time, but now that it is
not technically your time----
[Laughter.]
Ms. BARNHART. I would like to add something, if I may, and
that is your point about it is going to take many answers. One
of the things that I have tried to emphasize to the constituent
groups that I have spoken to, organizations and individuals, to
the field staff I have spoken to, to the staff here, to the
members here, and in the Senate that I have spoken to is this
is sort of going to be death by a thousand cuts, for lack of a
better term. There is no silver bullet. I cannot wave a magic
wand, no one can. It is going to be a whole series of things,
and therefore I am willing to look at very small things and
very big things.
Mr. POMEROY. Yes.
Ms. BARNHART. I consider e-dib a very big thing, in terms
of helping deal with staffing issues, taking some of the
pressure off, having staff doing more of the work, the higher
level work, as opposed to the lower level work, providing
service. At the same time, if we need to look at different ways
of getting Xeroxing done in the Agency, for example, I don't
think it is a good use of a GS-11 or GS-12's time to have them
standing and doing Xeroxing. It is not their fault. That is the
way the system is right now.
I think it is basically inexcusable, when it is taking us
over a year, but based on the way the service is being provided
right now and due to the backlogs, to get a hearing transcript
typed so that the case can move forward. So, there are going to
be all different kinds of things we are going to look at. So, I
really appreciate you sharing that perspective because some
things may seem very insignificant, compared to others, but I
really believe it is going to be the combination of all of
those things that are going to help us make a difference.
Chairman SHAW. Mr. Brady?
Mr. BRADY. Thank you, Commissioner, for your testimony
today. I know you have a lot on your plate, but I really
appreciate the focus you have given today on disability
process, and more importantly just accelerating that program
because people really ought not to have to wait that long to
get a fair, you know, and timely hearing on their case.
I think the Agency should be commended for the work it has
done in trying to break the logjam in hiring new ALJs. The 126
extra ones are a huge help. I understand we could hire another
120 and still only be back to 1998 levels. So, it looks like we
have a lot----
Ms. BARNHART. If I may thank you for your personal
involvement in that and assistance on that. I really, really
appreciate that. It made a huge difference for us.
Mr. BRADY. You are welcome. Again, the Agency did great
work coordinating everything, and you need to let the
Subcommittee know how we can help in that process. I think we
work well together.
In addition to hiring more judges to accelerate appeals, it
seems like, at least in looking at the systems in our State and
our area, that we need to have applications that include more
complete information up front. That seems to be a key in making
accurate decisions early in the process, better-trained State
examiners that will make more accurate initial rulings.
It seems, looking at the trend, we have fewer and fewer
disability cases where you can have a medical expert simply say
this person isn't physically able to work, and there are more
and more cases where it is really a case of talking to an
occupational expert who can say this person can work in this
case in these types of jobs. That means more gray areas, more
gray decisions and why I think a focus on training those
examiners early on could be a big help, better communications
with the claimants. They feel lost in the process in this
length of time, it is one time to have it take forever in their
minds, and in truth, it is nothing, they don't even know what
is going on with their case.
Finally, it just seems like over the 30 years, since the
Federal disability law was written, we have had a number of
contradictory and conflicting legal rulings that, at some point
perhaps this Committee, Mr. Chairman, may need to take a hard
look at rewriting the disability portion of Federal law and
just try to clarify some of these issues.
That being said, State-to-State the number of appeals times
and their allowances, approvals, and disapprovals, seem to vary
a great deal. In Texas, we seem to be slower making decisions
and less accurate in doing that. Now we have gotten better in
the last year because the Agency's focus, the public's focus,
and congressional focus, which is really helpful, but still can
you explain why the differences exist so dramatically, it seems
like, from State-to-State on a Federal program that ought to
have pretty consistent, both timing and rulings.
Ms. BARNHART. You make an excellent point. As you know,
this has been a longstanding challenge for the Agency. I
remember when I went to work in the Senate in 1977, the very
first U.S. General Accounting Office (GAO) report I ever read
in my life had to do with the variation among State DDSs in
making disability determinations. I think that report has been
updated at least a couple of times.
I have had this discussion as a Member of the Social
Security Advisory Board, with the policy folks at Social
Security, and since becoming Commissioner. I am told that we
can actually sort out and account for some of the variation
based on economic factors. For example, in some States,
percentagewise, you may get more actual disability applications
as a result of the economics in the State, and for that reason,
obviously, if you have more people, you are having to deal with
more claims per worker kind of thing, and so that affects the
way that you make the determinations.
I wish I had a complete answer for you. I don't. I am going
to be thoroughly briefed by my policy staff on this analysis
that they have done, that they say actually can account for a
substantial part of the variation from State-to-State, and I
would be more than happy to extend the offer to your staff, if
you would like for us to come up and brief them on that as
well----
Mr. BRADY. Great.
Ms. BARNHART. To provide you with the information that we
have. As optimistic as the staff sounds, however, I am not sure
it is going to explain it all away. I think, when you have more
people applying in a State, relatively speaking, then odds are
you are going to have more people that probably aren't
necessarily eligible for it, for disability, for example, and
that is one of the things that I think creates the variation,
but we would be happy to pursue this discussion with you.
Mr. BRADY. I just want to point out, I had recently made a
request of your office to come down to Houston, Texas, to look
at our problems firsthand, and my understanding is you
immediately said, absolutely, we will work it out. So, I
appreciate it. That type of responsiveness is really very
helpful. Thanks.
Ms. BARNHART. Thank you. I appreciate the invitation. I am
looking forward to making that trip.
Mr. BRADY. Thank you, Mr. Chairman.
Chairman SHAW. Thank you. Mr. Doggett?
Mr. DOGGETT. Thank you, Mr. Chairman.
Commissioner, I regret a conflicting meeting prevented my
hearing some of your earlier comments, and I am sure you
discussed your efforts to address delay, but some of these
delays really are troubling.
I understand, for example, that it was determined that
through a computer error of some type that there were a number
of people, perhaps as many as 500,000 disability recipients who
should have been disability recipients, but because of a
computer error, they were denied their benefits. How long will
it take you to resolve that problem?
Ms. BARNHART. We are working on that plan right now. Let me
tell you where we are on that, and you are absolutely correct.
Our estimate right now is approximately 505,000 individuals
affected by what we call the special disability workload. That
is, for other people who may not be aware of it, a situation
where individuals who were eligible for SSI may have been
eligible actually for Title II disability, but it was not
discovered at the point of entry at application. Others, over
time, because they were working, even though in relatively low-
paying jobs, they were earning quarters of coverage, and they
became eligible for Title II, and benefits did not occur.
That is the issue. So, there are several categories of
individuals that we are looking at comprising that 505,000. We
are looking at how we ought to do that, how we ought to work
that. To be honest, the Agency thought it was a much lower
number of people last year. They were operating under the
assumption it was somewhere around 130,000 or 200,000 people
total, and it is only in recent weeks that we have discovered
it is actually over half a million cases.
So, the approach that was being pursued before may no
longer be appropriate, quite frankly, given the increase in the
number of cases. What we are looking at doing is having our
most senior people, our highest level people in the staff level
work those cases. They are very complicated cases. We did have
a sample done of cases. People thought the cases might take
around 4 hours apiece. It turns out, my understanding is, they
take about 12.5 hours apiece to work.
So, we have looked at doing the calculations on how many
work years that will take, how long it could take, and to be
perfectly candid, even if I started trying to shift as many
people as I could today who could do that workload and still be
able to maintain doing other work in the Agency, I think it
would take a minimum of 3 years to get through that workload
because it requires a level of expertise that all of the
workers in the Agency simply don't have.
Mr. DOGGETT. These are people that are probably disabled.
Ms. BARNHART. They are.
Mr. DOGGETT. A half a million?
Ms. BARNHART. Yes.
Mr. DOGGETT. They are going to have to wait, they may have
waited now for months or years, but they will have to wait,
some of them, as much as 3 years more to get their claim
processed.
Ms. BARNHART. That is my best estimate. We are working on
it. Let me just say I realize how critically important this is
because it is 500,000 cases.
Mr. DOGGETT. Next week, perhaps as early as next week, we
have a supplemental appropriations bill coming over here. I
understand that it has been estimated that, since time is
money, as well as delay for these folks, that the cost could be
as much as $339 million additional to get these cases resolved.
How much have you asked to be included in the appropriations
bill to take care of this problem?
Ms. BARNHART. We originally had some funds in our 2002
budget that was supposed to be designated to special
disability. I don't remember that precise amount, but we had
some, but obviously that is when we thought it was a much lower
number of cases.
I haven't made a request yet, the reason being that even if
I were to ask for, and receive, the $339 million tomorrow, I
could not begin using it immediately because I don't have the
people who can do that work at that level and take them out of
other parts of the Agency, again. So, what I have the staff
working on, and we just had a meeting on this, frankly, just a
couple of days ago, is to chart this out for me year-by-year.
In other words, we think it is basically the work value, the
hours it would take to work those cases, that would equal $339
million, with some money in for support, too, and equipment,
and those kinds of things.
I have asked the staff to plot out for me, based on the
number of people that we think we have that can do this work
that we could shift over to doing this work, and we are asking
for volunteers, first. You know, we are not planning to do
directed reassignments or anything like that. We are going to
use a variety of plans. Some people will stay in their own
office, other people might move to cadres. We have to bargain
all of this with the union, and we will be doing that on impact
and implementation, but I have asked them to provide for me
what we could use on a year-by-year basis. I don't have that
number yet, but believe me, we are working feverishly on trying
to get there.
Mr. DOGGETT. You expect some additional appropriations will
be essential to allowing you to complete the job, even within 3
years?
Ms. BARNHART. I know that we don't have any funds in our
budget for next year at all for special disability because we
had anticipated that based on the number of cases we thought it
was we would be finished with that workload, and we
specifically wrote in our budget justification we did not
include funds for special disability because we expected to be
completed with it, and we won't be.
Mr. DOGGETT. Thank you. Thank you, Mr. Chairman.
Chairman SHAW. Ms. Barnhart, in going through the testimony
and the questioning process, it became perhaps that at some
particular point, when you are ready, and Mr. Matsui and I have
briefly discussed this, that perhaps you might want to come in
and have some type of a workshop just sitting around the table
trying to figure out what we can do. After you get your ducks
in a row down there and figure out exactly the direction that
you want to go, come back and talk further with the Committee
because we are very encouraged by what you are doing, but we
know that you are, at some point, are going to need the
cooperation of the Congress, and that is something that we
would like to help out with.
Ms. BARNHART. Thank you very much. I would really look
forward to doing that. I would really appreciate that
opportunity.
Chairman SHAW. We are delighted that you are down there,
and you are doing what you are doing, and keep it up, and we
look forward to working with you over the next 5 years.
Ms. BARNHART. Thank you. Again, I appreciate the
opportunity today, and I just want to say, too, I really
appreciate the Committee's ongoing support. You have done many
things for this Agency over the years, and have ever since I
have been there, and I really appreciate that.
[Questions submitted by Chairman Shaw to Ms. Barnhart, and
her responses follow:]
L1. What efforts have been made to ensure the integrity of the Social
Security number enumeration process since the September 11th
attacks?
After the September 11th terrorist attacks, SSA chartered an
executive level Enumeration Response Team (ERT) which has met regularly
since September 11th to explore and track progress toward completion of
a range of policy and procedural changes to further enhance the
integrity of its enumeration processes. Initially, the ERT provided
eight recommendations that could be accomplished quickly. Below is a
list of the recommendations and the status of each.
1. Provide refresher training on enumeration policy and procedures,
with emphasis on enumerating non-citizens, for all involved staff.
The SSA quickly provided refresher training to all field office
employees and management on existing enumeration procedures, with
emphasis on enumeration of non-citizens. We conducted the original
training on December 19 and 20, 2001 and rebroadcast it on June 5 and
14, 2002.
2. Convene a joint task force between SSA, Immigration and
Naturalization Service (INS), the Department of State (DoS) and Office
of Refugee Resettlement (ORR) to resolve issues involving enumeration
of non-citizens, including working out procedures for verifying INS
documents before Social Security number (SSN) issuance.
The SSA has been working with INS, the DoS and the ORR to establish
a procedure for full collateral verification of all alien status
documentation, including INS authorization to work. We are trying to
devise a process that will minimize negative impact on many thousands
of aliens who enter this country legally, with permission to work. In
February 2002 we began verifying the documentation of all refugees. In
May 2002 we gained access to INS's Non-Immigrant Information System to
electronically verify the documents of non-immigrants. We began
verifying documents with INS in July and will gradually phase-in full
collateral verification of alien documentation by September 2002.
3. Eliminate driver's licenses as a reason for issuing a non-work
SSN. In March 2002 we eliminated driver's licenses from the definition
of a valid nonwork reason to assign an SSN.
4. Provide an alternative to giving out SSN printouts (for SSN
verification) to number holders that contain personal information.
In February 2002 we began providing an abbreviated SSN printout to
persons who ask for SSN verification. The document provides the
required verification, but contains far less information about the
individual to whom the SSN is assigned than did the document we
provided previously.
5. Conduct a mandatory interview for all applicants for original
SSNs over the age of 12. Verify the birth records of all applicants for
original SSNs over the age of 1 and require evidence of identity for
all children, regardless of age.
In June 2002 we began verifying birth records for U.S.-born SSN
applicants age 1 or older with the custodian of records. (Under former
rules, we verified birth records for applicants age 18 and older.) We
are drafting regulations to require a face-to-face interview for SSN
applicants age 12 or older and eliminate the waiver of evidence of
identity for SSN applicants under age 7.
6. Determine the feasibility of photocopying (or scanning) all
documentary evidence submitted with SS-5 applications. A pilot was
started February 25, 2002 and completed March 22, 2002. Evaluation of
the pilot results and recommendations are under way.
7. Change the Modernized Enumeration System (MES) to provide an
electronic audit trail for all processing modes. As of mid-December
2001, new audit records for SSN applications were established.
8. Implement online Social Security Number Verification System
(SSNVS). In April 2002 a pilot of an online version of the existing
Employer Verification System was started with nine participants. See
the response to question 3 for more information.
L2. The American public is becoming increasingly aware of the
importance of keeping their SSN secure, including not routinely
providing it for frivolous reasons. In this vein, can you tell
us what SSA is doing to keep the SSN secure? For example, does
SSA place an individual's SSN on correspondence they send out?
If so, why? Are there any plans to modify this practice? If
not, then why?
For many years, encouraging members of the public to protect their
Social Security number has been a key message in the Agency's public
information efforts. Information on how people should protect their
number, as well as advice to victims of identity theft, is available in
the Agency's publications, news releases and on its website
www.ssa.gov.
To minimize the occurrence of SSN misuse/identity theft, SSA
maintains strict confidentiality of individual records, disclosing only
where authorized by law; reconciles earnings when we learn that someone
is working under another person's SSN; and contracts with third parties
to verify SSNs for specific reasons.
The annual Social Security Statement helps workers verify their
earnings and alerts them to the possibility that someone else is
working using their number. This is sent yearly to all working persons
age 25 or older who are not yet receiving benefits, using address
information provided to IRS by tax filers. (The statement shows only a
truncated version of the recipient's SSN to safeguard the number should
the address information no longer be current. The first page of the
Statement also bears this reminder: Prevent identify theft--protect
your Social Security number.)
While many Federal, State and private organizations routinely use
and display SSNs in their mailings, SSA recognizes that it has a
special responsibility to protect the privacy of individuals with
regard to information contained in the agency's records. Such open
display increases the risk of someone using a person's name and SSN for
fraudulent purposes.
In correspondence, SSA does not show the addressee's SSN on the
envelope and ensures that the number is not visible through the window
of the envelope. The SSA does not include the full SSN on the annual
cost of living adjustment notices that are mailed to Social Security
beneficiaries who receive their monthly benefits by direct deposit;
only the last four digits of the Social Security number are shown. The
SSN is not displayed on checks so that it is visible through envelope
windows.
L3. The SSA is undertaking a pilot program in which companies can
verify their employees' Social Security Numbers (SSN). Can you
describe this program?
Employers already can validate their employees' names and SSNs
against information in SSA's records, and SSA encourages them to do so.
The Social Security Number Verification Service (SSNVS) will allow
employers to validate SSNs via the Internet. The objective of the SSNVS
project is to provide employers and payroll professionals with online
real-time or next-business-day name and SSN verification services
electronically, which will improve the accuracy of the annual wage
report submission (Forms W-2 Annual Wage and Tax Statement).
Under SSNVS, employers can verify up to 10 names and SSNs and get
immediate results via interactive verification, or can verify large
numbers of employees, by uploading files for batch processing with
next-day response. Data that an employer supplies to SSA for
verification will be annotated with a match/no match indicator and will
be returned to the employer. The SSA will retain an audit record of all
supplied data. In addition, the data collected will be used as part of
the evaluation of the SSNVS process. None of the information provided
by employers will be used for any other purpose.
The SSA currently provides this SSN verification by telephone,
paper and magnetic media. It is anticipated that the new Internet
service will enable employers to verify name/number combinations more
easily than the options that are currently available.
L4. What information is exchanged with the Immigration and
Naturalization Service regarding SSNs and applicants entering
the United States? Can you explain the process by which
information is exchanged?
All applicants for original SSN cards must provide evidence of age,
identity and citizenship or alien status. The SSA exchanges information
with INS when verifying the information on the INS document presented
as evidence of alien status. There are several circumstances under
which these exchanges occur.
The first step is the INS' Systematic Alien Verification for
Entitlements (SAVE) online verification system to determine the status
of a noncitizen who has applied for an SSN. All SSA offices have online
access to certain INS information for immigrants and nonimmigrants.
When the INS document presented shows an alien registration number (A
number) or admission number from the INS Form I-94 (Arrival-Departure
Record), the SSA employee queries SAVE, entering the appropriate
number. The query response will determine whether the document is
valid.
When this electronic process does not yield results, SSA prepares a
written request that is mailed to INS requesting verification. When INS
returns the form to SSA, INS indicates the validity of the document and
the alien's immigration status or work authority (e.g., ``the document
appears valid and relates to a lawful permanent resident alien of the
United States'').
L5. As you know, the earnings suspense file contains earnings that
could not be posted to an individual's account due to a
mismatch of the name and SSN. Can you tell us what happens when
an SSN has multiple earnings from different individuals posted
to it?
An SSN that has multiple earnings from different individuals posted
to it is considered a possible scrambled earnings record. We may become
aware of scrambled earnings 1) while processing W-2s; 2) through
follow-ups to the yearly Social Security Statement that we send to
every wage earner 25 years or older showing the wage earner what is on
SSA records; 3) in our day-to-day processing of SSN applications or
claims for benefits; and 4) IRS inquiries concerning two or more
individuals with the same surname who used the same SSN on their income
tax returns.
The earnings remain on the record until we investigate and take
corrective action to remove the erroneous postings. We request
appropriate identifying information to determine the number holder's
true identity. To locate the individuals using the wrong SSN we use
employer records, changes of addresses, Department of Motor Vehicles'
records and state employment office records. If we determine to whom
the earnings rightfully belong, we post them to the appropriate record.
If we are unable to determine to whom the earnings belong, the earnings
are then placed in the earnings suspense files.
L6. Can you provide what safeguards and internal controls SSA employs
when issuing SSNs?
Maintaining the integrity of the enumeration process has always
been a top priority for SSA. Historically, we have tried to anticipate
potential susceptibility to fraud and have implemented early measures
to eliminate opportunities for exploitation. Our measures include
requiring proof of age, citizenship or alien status, and identity for
an original Social Security card. We also require proof of identity and
may require evidence of age, citizenship or alien status for duplicate
or corrected Social Security cards. (See responses to questions 1 and 2
for additional safeguards to protect the SSN and minimize the
occurrence of SSN misuse/identity theft.) Our efforts to eliminate SSN
misuse within SSA's business processes focus on preventing the
assignment of valid SSNs to fictitious individuals as well as to those
who do not legitimately meet the requirements for the SSNs.
The SSA's efforts to eliminate its reliance on customer-presented
paper documents and increase the detection of fraudulent documents in
field offices include the Enumeration-at-Birth (EAB) process in which
SSA assigns SSNs to nearly 4 million newborns annually, as part of each
State's birth registration process. The process is quick, easy and
convenient since parents can apply for the baby's SSN when filling out
birth certificate information at the hospital.
As of March 2001, when an application for an original SSN is
received for a child under the age of 18, the system performs numerous
checks. It verifies parent's name and SSN and does not allow a card to
be issued if certain confidential age and death status checks indicate
potential fraud. In December 2001 we have an improved electronic audit
trail in which ``Suspect'' SSN application records are identified, and
a description of evidence for all SSN applications is maintained.
As of June 2002, before assigning a new Social Security number to
an individual that is born in the U.S. who is 1 year or older, we
contact the office that issued the birth certificate to make sure that
the record provided is valid.
In July 2002, we began implementing procedures to verify documents
submitted by noncitizens requesting a SSN with the INS as explained in
the response to question 4.
We also guard against employee fraud. We allow only qualified field
office employees to make input to the enumeration system and use a
Comprehensive Integrity Review Process (CIRP) which detects,
identifies, and thus, deters both potential employee and client fraud.
Based on certain characteristics of the information input to the
enumeration system, CIRP identifies potentially invalid applications.
Applications identified by CIRP are referred to the OIG for
investigation.
L7. The President has called for discussion about ways to strengthen
the Social Security system. In addition, the President's
Commission to Strengthen Social Security released its final
report recommending several options for reform. What is your
agency's role relative to the Social Security debate? Does the
agency plan to conduct comparative analyses of the effects of
various reform proposals on beneficiaries, the budget, and the
economy?
The Social Security Administration intends to play an active role
in the solvency debate. Solvency is one of four priority areas in the
Agency's strategic plan and the lead on this issue has been assigned to
Deputy Commissioner James Lockhart.
In addition, the Office of the Chief Actuary has provided, and will
continue to provide, independent actuarial assessments of comprehensive
proposals to modernize Social Security. In addition to assessing
effects on the financial status of the trust funds, the actuary's
analysis of recent proposals, including the President's Commission
models and your own proposal, have included estimates of the effects on
unified budget balances, under the intermediate assumptions of the
trustees.
L8. Several members of Congress have introduced legislation requiring
SSA to provide information in the Social Security Statement on
1) the date Social Security will first experience a cash flow
deficit 2) the date the trust funds are exhausted 3) the ratio
of taxes collected to benefits paid 4) rate of return
information 5) an explanation of the nature of the Trust Funds.
Since you have been Commissioner, have you made any changes to
the Social Security Statement to include additional information
or make these pieces of information more prominent? Do you
intend on making future improvements to the Social Security
Statement? Are there any of these pieces of information that
you think should not be included in the Social Security
Statement, and why?
We have updated the important solvency dates based on the estimates
in the 2002 Trustees Report and deleted some words that did not add
factual information to the Statement. We plan to make some additional
changes to the Social Security Statement in the near future. The
Statement serves as a factual document that informs workers about how
the Social Security program operates and how it is funded. First and
foremost, it is a tool for Americans to use to plan their retirement.
We always work to improve the quality of information we provide through
the Social Security Statement and will keep the Subcommittee apprised
of the changes made to the Statement in the future.
Communicating complicated technical information in a way that is
understandable to a diverse public can be difficult, but SSA has worked
diligently to ensure that the message in our Social Security Statement
is clear. We want to reiterate our commitment to ensure that the
Statement remains a factual document that informs workers about how the
program operates and how it is funded. This is important information
that the public needs to have from its government.
L9. Last fiscal year, GAO reported your agency spent about $741 million
on information technology and systems. In recent reports
requested by me in my capacity as chairman, it has been noted
that while progress has been identified, GAO found weaknesses
in five key areas, and recommended actions to improve SSA
information technology management practices. As automation is
the key to your effective service delivery in the future, what
efforts are you making to address these recommendations?
GAO made a number of recommendations for improvement in its report,
``Information Technology Management: Social Security Administration
Practices Can Be Improved.'' Below is a discussion of the
recommendations and our efforts to address these recommendations.
We were asked to develop and implement a process guide that
establishes the policies, procedures and key criteria for conducting
the information technology (IT) investment management process and
guiding executive staff operations. The SSA has had a documented
Information Technology (IT) Capital Planning and Investment Control
(CPIC) process in place for years. As part of SSA's continuing effort
to refine its IT CPIC process, the Agency is testing and evaluating
promising changes to that process. These potential improvements include
the use of the Information Technology Investment Portfolio System (I-
TIPS) investment management software and Expert Choice decision-support
software as well as recommendations for other process improvements from
higher monitoring authorities and consultants.
GAO requested that we develop and maintain selection criteria that
include explicit cost, benefit, schedule and risk criteria to
facilitate the objective analysis, comparison, prioritization and
selection of information technology investments. These selection
criteria were defined and tested using Expert Choice decision-support
software. The Agency continues to refine its selection process and will
document a final model in its CPIC process guide.
Another recommendation was that we analyze and prioritize all IT
investments based on the predefined selection criteria and make
selection decisions according to the established process. We are
adopting an IT planning and portfolio selection process that includes
predefined selection criteria. This new process includes the
development of a documented prioritized IT plan (based on predefined
selection criteria) for each senior executive's area of responsibility.
These plans will be provided to the CIO-chaired Executive-level
Information Technology Advisory Board (ITAB). That board will annually
perform enterprise-wide IT planning and prioritization using the
established evaluation criteria (qualitative and quantitative factors
including strategic alignment, mission effectiveness, organization
impact, risk and return on investment) to produce a single, integrated
Agency IT project portfolio.
It was recommended that we establish and annually review cost,
benefit, schedule and risk life-cycle expectations for each selected
investment. Our IT planning and budgeting process will establish this
for each selected investment. The CIO-chaired, Executive-level ITAB
will review these expectations on an annual or more frequent basis.
GAO asked that we revise the information technology oversight
process so that the executive staff oversees the comparison of actual
cost, benefit, schedule and risk data with original estimates for all
investments to determine whether they are proceeding as expected and,
if not, to take corrective actions as appropriate. The CIO-chaired,
Executive-level ITAB and senior Office of Systems managers will oversee
these comparisons to determine whether they are proceeding as expected
or require corrective action. The ITAB will review these projects on a
quarterly basis. The Office of Systems will review major projects on a
monthly basis.
We were asked to regularly perform post-implementation reviews of
information technology investments and develop lessons learned from the
process. The agency is developing procedures to guide future post-
implementation reviews (PIR) that include criteria for designating
projects for PIR.
Another recommendation included developing, managing and regularly
evaluating the performance of a comprehensive information technology
investment portfolio containing detailed and summary information
(including data on costs, benefits, schedules and risks) for all IT
investments. In concert with the Agency's planning, budgeting,
acquisition, systems development and assessment processes, ITAB will
develop, manage and regularly evaluate the performance of the Agency's
comprehensive information technology investment portfolio.
Finally, we were asked to implement investment process benchmarking
so that measurable improvements may be made to Agency information
investment management processes based on those used by best in-class
organizations. The Agency has investigated some of these issues in
discussions with other agencies concerning their implementation of I-
TIPS and Expert Choice. This is an ongoing activity. In addition, the
Agency has acquired the support of experts in areas such as CPIC best
practices, electronic service value measurement, program management,
project management and IT cost allocation strategies. Procedures for
benchmarking will be included in the CPIC processing guide.
L10. What efforts are underway to recruit new employees? How are these
efforts progressing?
The SSA is actively recruiting new employees around the nation.
Recruiters regularly visit college campuses, participate in job fairs
and disseminate job information in local communities. Recruiters are
continually seeking out qualified applicants of diverse backgrounds
with an interest in public service.
To assist our recruiters in attracting applicants with an interest
in serving the public, the Agency developed and implemented a new
marketing plan in 2002. Using the theme ``Make a difference in people's
lives and your own,'' new tabletop exhibits, posters, electronic
images, CD-ROM ``business cards'' and professional signage were
created. With these recruitment tools, SSA recruiters have a wide range
of resources comparable to the best in the private and public sectors.
As part of the Agency's marketing campaign, the Career
Opportunities webpage on SSA's Internet site was redesigned. Through
the SSA Internet site, the public has the opportunity to learn about
SSA, its mission and the vast array of benefits the Agency offers. In
addition, information is provided about career opportunities in the
fields of public contact, information technology, legal, law
enforcement and other occupations (actuary, economist, and so forth.).
Information for students and college graduates is also highlighted.
Most important, the website shows actual job vacancies and information
for applying are provided.
To further strengthen and coordinate our recruitment efforts around
the nation, the first in a series of national recruitment strategy
conferences was held by SSA in April 2002 in Philadelphia. The
conference brought the Agency's recruitment officers together to
discuss `best practices' and implementation of the new recruitment
strategy and marketing campaign.
The Agency's recruitment efforts are progressing very well. Over
the last 4 fiscal years (FY 98-FY 01), we have hired 11,600 employees.
With the retirement of SSA's ``baby boomers'' to continue through 2010,
the Agency is expected to hire approximately 3,500 employees a year. We
are well positioned to ensure that our recruitment efforts meet the
projected hiring targets.
In the months and years ahead, SSA will ensure that its recruitment
strategies and marketing campaigns are effective and designed to
attract a talented workforce committed to serving the public and
fulfilling the Agency's mission.
L11. GAO recommended in their testimony that SSA prepare a detailed
plan for how service will be delivered in the future. Have you
completed such a plan?
The SSA is committed to assessing the level of service that SSA
should be providing Americans. GAO has asked us to ``spell out who will
provide what types of services in the future, where these services will
be made available and the steps and timetables for accomplishing needed
changes.''
We have formed a group to conduct a service delivery budget
assessment, matching up resource needs against the level of service we
would like to deliver. This is a fresh approach to how Social Security
works. We are drilling down into our processes. We are getting the
data, defining what we do now, how it works and what it costs.
We are looking at enumeration, retirement claims, disability case
processing, appeals and major post-entitlement workloads, including
continuing disability reviews, SSI non-disability redeterminations, as
well as other workloads.
Upon completion of this assessment, SSA will be able to relate the
desired level of service to current service levels, determine required
action, including further automation and process improvement, to
provide the appropriate level of service.
L12. President Bush is to be congratulated for making full
implementation of the Ticket to Work legislation a focus of his
New Freedom Initiative for People with Disabilities. Full and
effective implementation of TWWIIA is central to our efforts to
address the 70% unemployment rate among people with severe
disabilities. The issuance of the final regulations on December
28, 2001 and the implementation in several States are major
steps in reaching that goal. Can you give us indication of the
reaction to how the Ticket is working in those States in which
the program has been implemented?
We are implementing the Ticket to Work program in three phases, for
full implementation by January 2004. Over a 5-month period, we mailed
tickets to eligible beneficiaries in the 13 States we selected for
Phase One. In February 2002, we mailed tickets to 10 percent of
eligible beneficiaries in those States, accompanied by an informational
package explaining the Ticket to Work program.
We did not mail any tickets in March, so that we could study the
effects of the first mailing. We mailed 20 percent of tickets and
informational packages to eligible beneficiaries in April, 30 percent
in May and the remaining 40 percent were mailed in June. Beneficiaries
who are eligible for a ticket in these States could also request the
Program Manager, MAXIMUS, to mail their tickets before they would
receive them based on the schedule described above. Almost 6,000
beneficiaries have taken advantage of this ``ticket on demand''
feature.
After consultation with officials in New York State, we decided not
to mail any tickets to beneficiaries in their State during April 2002.
After jointly considering with them the effect of the February mailing,
we decided to mail tickets to another 10 percent of the eligible
beneficiaries in New York in May and to again suspend the mailing in
June. We are jointly considering with them how to release the remaining
80 percent of the tickets to beneficiaries in New York State.
Through June 14, 2002, we have approved 378 organizations to serve
beneficiaries as Employment Networks (ENs) in the Phase One States, and
there are another 66 applications awaiting approval. We have awarded
contracts to ENs in each of the 13 States, ranging from 96 in New York
State to 6 in Vermont. In addition, there are seven ENs that serve
beneficiaries either nationally or in more than one State.
MAXIMUS is continuing to market the Program to organizations who
can serve beneficiaries in the Phase One States and is expanding their
efforts to organizations in the 20 States and the District of Columbia
that will be included in the implementation of Phase Two of the
program. So far, the reaction of beneficiaries, as expressed via
Maximus' toll-free number, has been overwhelmingly favorable.
Through June 17, 2002, in the 13 States in Phase One\1\ out of 1.15
million tickets mailed, 2,152 tickets have been assigned to State
Vocational Rehabilitation agencies or Employment Networks.
---------------------------------------------------------------------------
\1\ Because of the newness of the program and the time frames
involved in the provision of employment supports, job placement and job
retention, the Ticket assignment numbers should be viewed as very early
indicators of outcomes to be expected over the initial Ticket roll-out.
---------------------------------------------------------------------------
L13. An effective quality assurance system is necessary, and the agency
has talked about the need to revamp its quality review systems
since 1994. Is anything being done, and if so can you describe
what has been done?
In April 2002, we formed the Quality Management Workgroup under the
leadership of one of SSA's Senior Managers. The group was tasked with
developing a proposal on what quality should look like for each of the
Agency's business processes such as claims, post-entitlement actions,
informing the public, enumeration, earnings and all support activities.
The goal is to begin implementation by the end of FY 2002.
In developing the proposal, the workgroup has been gathering
information through interviews with executives, background research
from oversight groups, briefings on initiatives in process and focus
groups with managers and employee associations. While the workgroup is
still formulating the proposal, the areas identified for quality
improvement include new in-line reviews in the disability and SSI
programs, training initiatives, policy improvement processes and
systems/management information enhancements.
Certain activities are already in process: plans for national
automation training, new Program Service Center quality reviews, the
acceleration of the electronic disability folder and process
improvements that target SSI program issues. Working in conjunction
with the responsible components, specific short, mid, and long-term
activities in these areas will be identified, monitored and
communicated throughout the Agency.
L14. Two of your agency's goals are to deliver customer-responsive
world-class service and to make sure program management the
best in the business, with zero tolerance for fraud and abuse.
In your view, are these two goals being effectively balanced?
Yes, these two goals represent the core business of our Agency and
we are effectively balancing them. World-class service also includes
sound stewardship.
Providing world-class service encompasses the full range of
services that we provide the public in all our programs and through all
modes of delivering that service--telephone, in-person, the Internet,
automated self-service, mail and through third parties.
Making sure program management is the best in the business, with
zero tolerance for fraud and abuse, includes our responsibility to pay
benefits accurately and be a good steward of the money entrusted to us.
To do this we establish and maintain records of individual's earnings
for use in determining entitlement to benefits; make accurate
eligibility and entitlement decisions, prevent, detect and collect
overpayments; deter, identify and combat fraud; and ensure efficient
operations.
To improve our service to the public and at the same time ensure
that our program management is the best in the business, we have taken
to significantly upgrade and refresh our systems infrastructure.
Employee desktop computers are being replaced every 3 years. We are
also upgrading our computer network, telecommunications and security
infrastructure. Taken together, these enhancements not only allow us to
better serve the public but also help us operate efficiently, make
accurate decisions and detect fraud and abuse.
Further, we developed a Service Vision, which is our guide to how
we will manage our work and provide service a decade from now and an
Internet service delivery mechanism. The SSA's website, Social Security
Online, provides the American public with one-stop shopping for
information and services regarding our programs. Our Market Measurement
Program routinely collects information from the public which helps us
decide where to best focus our limited resources and make improvements
in areas that will have the greatest public impact.
While doing all this we have initiated an aggressive antifraud
program. This antifraud program 1) enhances our systems and operations
to better detect fraud; 2) eliminates wasteful practices that erode
public confidence in the Social Security program; and 3) vigorously
prosecutes individuals or groups who damage the integrity of the
programs.
The SSA's National Anti-Fraud Committee, under the leadership of
top SSA executives, continues to oversee the implementation and
coordination of SSA's strategies to eliminate fraud. Regional Anti-
Fraud Committees coordinate antifraud strategies at each of our
regional offices and identify new projects at the local level. Best
practices are shared among the regional Committees and with the
national committee.
Chairman SHAW. Thank you. Thank you very much.
The next panel, we have Barbara Bovbjerg, who is the
Director of Education, Workforce and Income Security Issues,
U.S. General Accounting Office, and she did a great job
testifying before us down in Lakewood, Florida.
David McClure is the Director of Information Technology
Management Issues at the U.S. General Accounting Office.
We also have the Honorable James Huse, the Inspector
General of the Social Security Administration; the Honorable
Hal Daub, particularly delighted to welcome him back to this
Committee, a former Member of the Committee on Ways and Means,
and now Chairman of the Social Security Advisory Board. This
will be Hal's first time appearing before this Subcommittee.
We have Marie Smith, who is the President-Elect of the
Board of Directors of AARP, and all of us in the Congress are
very sensitive to the words coming from the AARP, so we
certainly look forward to your testimony.
Marty Ford, who is the Co-Chair of the Social Security Task
Force Consortium on Citizens with Disabilities, and also one of
my favorites, the Honorable Barbara Kennelly, former Member of
this Committee, former Ranking Member, I believe, of this
Subcommittee, so we have to be careful what we ask her because
she may know more about it than we do. She is now President of
the National Committee to Preserve Social Security and
Medicare.
You and I have had conversations over the years, when you
were with the Clinton Administration, and we certainly look
forward to hearing from you. Ms. Bovbjerg?
STATEMENT OF BARBARA D. BOVBJERG, DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING
OFFICE, ACCOMPANIED BY DAVID L. MCCLURE, DIRECTOR, INFORMATION
TECHNOLOGY MANAGEMENT ISSUES
Ms. BOVBJERG. Thank you, Mr. Chairman.
Mr. Chairman, Members of the Committee, thank you for
inviting me back before you, this time to discuss management
challenges at the Social Security Administration. I am pleased
the Agency can look to the experienced leadership of
Commissioner Barnhart and look forward to working with her, and
with you, in facing these challenges.
The SSA oversees programs that last year provided more than
$450 billion in benefits to more than 50 million recipients. As
the administrator of these programs, SSA has shown many
strengths. The Agency is considered a leader in Federal service
delivery, and it has a long tradition of strategic planning. In
addition, it produces timely and accurate financial statements
and is a leader among government agencies in accountability
reporting.
However, since 1995, when SSA became an independent Agency,
GAO has called for sustained management attention to a
relatively constant set of unresolved challenges. Although
restoring solvency and sustainability to the Social Security
programs themselves represents one of the major policy
challenges facing our Nation, the challenges I will describe
today are managerial in nature. My testimony is based on our
previous and ongoing work, much of it performed for this
Subcommittee.
Let me begin with the challenge of disability determination
and appeals, which we heard a lot about this morning. As the
Commissioner noted, the Agency has been working for years to
improve its disability claims process, yet ensuring the quality
and timeliness of its disability decisions remains one of its
greatest challenges.
The SSA faces some difficult decisions about its next steps
in this area and may need, in our view, to consider more
fundamental changes to the process, rather than continuing to
focus on changing its steps and procedures. At the same time,
SSA should also seek to integrate return-to-work strategies
into all phases of its disability determination process. While
the Agency has taken some positive steps to return people with
disabilities to work, a more comprehensive approach to the
Agency's process and its underlying philosophy is needed.
Management and oversight problems in the SSI Program also
continue to challenge the Agency. We labeled this program high
risk in 1997 because of its susceptibility to fraud, waste,
abuse, and mismanagement. Since that time, SSI has taken a
number of steps to improve the integrity of the program.
However, some of these actions are still in the early stages
and have yet to yield significant results. We believe more can,
and should, be done, including simplifying program
requirements, which are often error prone and a major source of
overpayments.
Future service delivery represents another challenge. Three
factors pertain--as you noted, the expected increase in demand
for services as the boomers retire, the imminent retirement of
a large part of SSA's own workforce and changing customer
expectations. These together have the potential to cripple
SSA's service delivery system.
Even though SSA has several human capital initiatives
underway to help it prepare its workforce for the future, it
lacks a detailed plan for service delivery by that workforce.
Absent a detailed blueprint, the Agency cannot ensure that its
human capital efforts will fully support its vision for future
service delivery and that it is effectively marshaling its
resources.
Let me turn now to information technology, one of the
greatest challenges for the Agency. The SSA is relying heavily
on IT initiatives to cope with its growing workloads and plans
increasingly to use web-based technologies to meet its service
delivery goals and changing customer expectations. However, the
Agency's past experience with IT initiatives has been mixed. As
SSA transitions to electronic processes, it will be challenged
to think more strategically about its IT investments and to
ensure their effectiveness by linking them to service delivery
goals and performance.
Finally, let me speak to the challenge of protecting
personal information. In light of the terrorist events of
September 11, the Nation has a heightened awareness of the need
to protect such information. The SSA will need to continue to
take steps to ensure that only individuals who are eligible for
Social Security numbers (SSN) receive them and to ensure that
its information on deceased SSN holders is accurate and timely.
However, once SSA has issued a number to an individual, the
Agency realistically has little control over how these numbers
are used by other government agencies and by private sector
entities. We will continue to work with SSA, this Subcommittee,
and the Inspector General to better protect SSN's as part of
our ongoing evaluation of this issue.
In conclusion, SSA has taken a number of steps to address
its management challenges. However, the challenges remain, and
the Agency is running out of time before expected workload
increases overwhelm its operations. Although some of SSA's
actions show promise, it is too early to tell how effective
they will be and other actions SSA has taken have not produced
the desired results. In almost all cases, the Agency has much
more to do, and I welcome the energy and commitment that
Commissioner Barnhart has shown in addressing these issues.
That concludes my statement. Mr. McClure, who is here from
our IT side of GAO, and I would be happy to answer any
questions.
[The prepared statement of Ms. Bovbjerg and Mr. McClure
follow:]
Statement of Barbara D. Bovbjerg, Director, Education, Workforce, and
Income Security Issues, and David L. McClure, Director, Information
Technology Management Issues, U.S. General Accounting Office
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me here today to discuss the challenges
facing the Social Security Administration (SSA). SSA oversees three
major programs that in fiscal year 2001 provided more than $450 billion
in benefits to more than 50 million recipients. One or more of the
three programs--Old Age and Survivors Insurance (OASI), Disability
Insurance (DI), and Supplemental Security Income (SSI)--touches the
lives of almost every American family at one time or another.
SSA has many strengths. The agency is considered to be a leader in
federal service delivery, and it has a long tradition of strategic
planning. In addition, SSA produces timely and accurate financial
statements and is a leader among government agencies for its
accountability reporting.
However, since 1995, when SSA became an independent agency, we have
called for effective leadership and sustained management attention to a
relatively constant set of unresolved management challenges.\1\ These
challenges include the need to redesign its disability claims process
and heighten the focus on work for claimants, address management and
oversight problems with its SSI program, meet its growing future
service delivery demands, effectively implement its information
technology initiatives, and strengthen its research and policy
development capacity. Solutions to these challenges are difficult but
necessary because they are linked to profound changes in our nation.
The baby boom generation is nearing retirement age, people are living
longer, technology and its applications are changing rapidly, and
public expectations for faster and better service from government are
growing. The implications of these changes create some management
challenges and make others more difficult to overcome.
---------------------------------------------------------------------------
\1\ See U.S. General Accounting Office, SSA's Management
Challenges: Strong Leadership Needed to Turn Plans Into Timely,
Meaningful Action, GAO/T-HEHS-98-113 (Washington, D.C.: Mar. 12, 1998);
Social Security Administration: Information Technology Challenges
Facing the Commissioner, GAO/T-AIMD-98-109 (Washington, D.C.: Mar. 12,
1998); Social Security Administration: Significant Challenges Await New
Commissioner, GAO/HEHS-97-53 (Washington, D.C.: Feb. 20, 1997); Social
Security Administration: Effective Leadership Needed to Meet Daunting
Challenges, GAO/HEHS-96-196 (Washington, D.C.: Sept. 12, 1996); and
Social Security Administration: Leadership Challenges Accompany
Transition to an Independent Agency, GAO/HEHS-95-59 (Washington, D.C.:
Feb. 15, 1995).
---------------------------------------------------------------------------
Today, I will discuss SSA's progress in meeting these and other
challenges. The information I am providing is based on our previous and
ongoing work, much of it performed for these subcommittees. (See
Related GAO Products at the end of this statement.)
In summary, SSA has taken a number of varied steps to address its
management challenges; however, the challenges remain, and some are
becoming ever more pressing. In certain instances, SSA's actions show
promise, but it is too early to tell how effective they will be; in
others, SSA's efforts have not produced the desired results. In almost
all cases, the agency has much more to do and will likely need to take
bolder action or make more fundamental changes to existing programs or
procedures.
SSA has been working for years to improve its
disability claims process; yet, ensuring the quality and
timeliness of its disability decisions remains one of the
agency's greatest challenges. The agency faces some difficult
decisions about its next steps in this area and may need to
consider more fundamental changes to the process. In addition,
although SSA has taken some positive steps to return people
with disabilities to work, a more fundamental change to the
agency's process and underlying philosophy is needed. Since
1996, we have called for SSA to integrate return-to-work
strategies into all phases of its disability determination
process to help disabled workers who can return to work to do
so.
In 1997, we designated the SSI program as high risk
because of its susceptibility to fraud, waste, abuse, and
mismanagement. Since that time, SSA has taken or begun to take
a number of concrete and appropriate steps to improve the
integrity of the program. However, some of these actions are
still in the early stages and have yet to yield significant
results. We believe more can be done, including moving forward
on proposals to simplify program requirements, which are often
error prone and a major source of SSI overpayments.
The combination of three factors--the expected
increase in demand for services as the baby boomers reach
retirement age, the imminent retirement of a large part of the
agencies workforce, and changing customer expectations--has the
potential to cripple SSA's future service delivery system. Even
though SSA has a number of human capital initiatives under way
to help it prepare for the future, it lacks a service delivery
plan that lays out a detailed blueprint for how service will be
delivered in the future. Without such a plan, the agency cannot
ensure that its human capital efforts fully will support its
vision for service delivery and that it is effectively
marshalling its scarce resources.
SSA is relying heavily on information technology
initiatives to cope with its growing workloads, and it plans to
increasingly use Web-based technologies to meet its service
delivery goals. For fiscal year 2001, SSA estimated spending
about $741 million on information technology systems and
projects. Sound policies and procedures are fundamental to
effectively managing information technology initiatives, and in
a prior review, we found that SSA had not consistently
implemented some key policies and procedures to guide its major
information technology functions, including information
security. Doing so is imperative, given that the agency has
experienced mixed success in carrying out prior information
technology initiatives.
Regarding the need to strengthen its ability to
conduct research and contribute to policy development, SSA is
well positioned to contribute vital information to policymakers
on the overarching problem of ensuring the long-term solvency
of the Social Security Trust Funds. The agency also has a
responsibility to review and identify other areas where policy
changes are needed, such as in its disability programs. SSA has
recently increased the level of staff and resources available
to support these activities; however, many of the agency's
efforts are in the early stages, and it is not yet clear how
the agency will use them and what their ultimate effect on SSA
program policy will be.
Finally, in light of the terrorist events of
September 11th, the nation has a heightened awareness of the
need to protect sensitive information. SSA will need to
continue to take steps to ensure that only individuals who are
eligible for social security numbers (SSN) receive them and to
ensure that its information on deceased SSN holders is accurate
and timely. However, once SSA has issued an SSN to an
individual, the agency has little control over how SSNs are
used by other government agencies and the private sector. As we
complete our review of how federal, state, and local programs
and agencies use SSNs and how well they protect them, we look
forward to exploring with you additional options to better
protect SSNs.
Background
SSA administers three major federal programs. OASI and DI, together
commonly known as Social Security, provide benefits to retired and
disabled workers and their dependents and survivors. In fiscal year
2001, SSA provided OASI retirement benefits totaling more than $369
billion to over 38 million individuals and DI benefits of more than $59
billion to 6.8 million individuals. These benefits are paid from trust
funds that are financed through payroll taxes paid by workers and their
employers and by the self-employed. The third program, SSI, provides
income for aged, blind, or disabled individuals with limited income and
resources. In fiscal year 2001, 6.7 million individuals received almost
$28 billion in SSI benefits.\2\ SSI payments are financed from general
tax revenues.
---------------------------------------------------------------------------
\2\ Some DI and OASI benefit recipients have incomes low enough to
qualify them for SSI, and they, therefore, receive benefits from both
programs.
---------------------------------------------------------------------------
To administer these programs, SSA must perform certain essential
tasks. It must issue SSNs to individuals, maintain earnings records for
individual workers by collecting wage reports from employers, use these
records and other information to determine the amount of benefits an
applicant may receive, and process benefit claims for all three
programs.
To meet its customer service responsibilities, SSA operates a vast
network of offices distributed throughout the country. These offices
include approximately 1,300 field offices, which, among other things,
take applications for benefits; 138 Offices of Hearings and Appeals;
and 36 teleservice centers responsible for SSA's national 800 number
operations.\3\ The agency's policy is to provide customers with a
choice in how they conduct business with SSA. Options include visiting
or calling a field office, calling SSA's toll-free number, or
contacting SSA through the mail or the Internet. To conduct its work,
SSA employs almost 62,000 staff. In addition, to make initial and
ongoing disability determinations, SSA contracts with 54 state
disability determination service (DDS) agencies under authority of the
Social Security Act.\4\ Although federally funded and guided by SSA in
their decision making, these agencies hire their own staff and retain a
degree of independence in how they manage their offices and conduct
disability determinations.\5\ Overall, SSA relies extensively on
information technology to support its large volumes of programmatic and
administrative work.
---------------------------------------------------------------------------
\3\ Other SSA facilities include 10 regional offices, 7 processing
centers, and 1 data operations center.
\4\ These agencies exist in each state, the District of Columbia,
Guam, Puerto Rico, and the Virgin Islands.
\5\ The state DDS sites employ a total of more than 14,000 staff.
---------------------------------------------------------------------------
The process for obtaining SSA disability benefits under either DI
or SSI is complex, and multiple organizations are involved in
determining whether a claimant is eligible for benefits. As shown in
figure 1, the current process consists of an initial decision and as
many as three levels of administrative appeals if the claimant is
dissatisfied with SSA's decision.
Figure 1: SSA's Disability Claims Process
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Each level of appeal involves multistep procedures for evidence
collection, review, and decision making. Generally, a claimant applies
for disability benefits at one of SSA's 1,300 field offices across the
country. If the claimant meets certain nonmedical program eligibility
criteria, the field office staff forward the claim to the DDS. DDS
staff then obtain medical evidence about the claimant's impairment and
determine whether the claimant is disabled. Claimants who are initially
denied benefits can appeal by requesting the DDS to reconsider its
initial denial. If the decision at the reconsideration level remains
unfavorable, the claimant can request a hearing before a federal
administrative law judge at an SSA hearings office and, if still
dissatisfied, a review by SSA's appeals council. After exhausting these
administrative remedies, the individual may file a complaint in federal
district court.
The agency's ability to continue providing Social Security benefits
over the long term is strained by profound demographic changes. The
baby boom generation is nearing retirement age. In addition, life
expectancy has increased continually since the 1930s, and further
increases are expected. This increase in life expectancy, combined with
falling fertility rates, mean that fewer workers will be contributing
to Social Security for each aged, disabled, dependent, or surviving
beneficiary. Beginning in 2017, Social Security's expenditures are
expected to exceed its tax income. By 2041, without corrective action,
experts expect the combined OASI and DI trust funds to be depleted,
leaving insufficient funds to pay the current level of benefits. Unless
actions are taken to reform the social security system, the nation will
face continuing difficulties in financing social security benefits in
the long term. Over the past few years, a wide array of proposals has
been put forth to restore Social Security's long-term solvency, and in
December 2001, a commission appointed by the president presented three
alternative proposals for reform.
This solvency problem is part of a larger and significant fiscal
and economic challenge facing our aging society. The expected growth in
the Social Security program (OASI and DI), combined with even faster
expected growth in Medicare and Medicaid, will become increasingly
unsustainable over time, compounding an ongoing decline in budget
flexibility. Absent changes in the structure of Social Security and
Medicare, there would be virtually no room for any other budget
priorities in future decades. Ultimately, restoring our long-term
fiscal flexibility will involve reforming existing federal entitlement
programs and promoting the saving and investment necessary for robust
long-term economic growth.\6\
---------------------------------------------------------------------------
\6\ For more information, see U.S. General Accounting Office,
Social Security: Issues in Evaluating Reform Proposals, GAO-02-288T
(Washington, D.C.: Dec. 10, 2001).
---------------------------------------------------------------------------
LAdditional Progress Is Needed to Improve SSA's Disability
Determination Process and to Return People to Work
The disability determination process is time-consuming, complex,
and expensive. Individuals who are initially denied benefits by SSA and
appeal their claim experience lengthy waits for a final decision on
their eligibility, and questions have been raised about the quality and
consistency of certain disability decisions. Since 1994, SSA has
introduced a wide range of initiatives intended to address long-
standing problems with its disability claims process. However, the
agency's efforts, in general, have not achieved the intended result,
and the problems persist. Because SSA's DI and SSI programs are
expected to grow significantly over the next decade, improving the
disability determination process remains one of SSA's most pressing and
difficult challenges requiring immediate and sustained attention from
the new commissioner. Additionally, in redesigning its disability
decision-making process, SSA still needs to incorporate into its
eligibility assessment process an evaluation of what is needed for an
individual to return to work. We have recommended developing a
comprehensive return-to-work strategy that focuses on identifying and
enhancing the work capacities of applicants and beneficiaries.
Improvements to the Disability Determination Process Have Been Limited
SSA's complex disability claims process has been plagued by a
number of long-standing weaknesses that have resulted in lengthy
waiting periods for claimants seeking disability benefits. For example,
claimants who wish to appeal an initial denial of benefits frequently
wait more than 1 year for a final decision. We have reported that these
long waits result, in part, from complex and fragmented decision-making
processes that are laden with many layers of reviews and multiple
handoffs from one person to another. The cost of administering the DI
and SSI programs reflects the demanding nature of the process. Although
SSI and DI program benefits account for less than 20 percent of the
total benefit payments made by SSA, they consume nearly 55 percent of
annual administrative resources.
In addition to its difficulties in processing claims, SSA has also
had difficulty ensuring that decisions about a claimant's eligibility
for disability benefits are accurate and consistent across all levels
of the decision-making process. For example, our work shows that in
fiscal year 2000, about 40 percent of applicants whose cases were
denied at the initial level appealed this decision and about two-thirds
were awarded benefits. This happens in part because decision makers at
the initial level use a different approach to evaluate claims and make
decisions than those at the appellate level. The inconsistency of
decisions at these two levels has raised questions about the fairness,
integrity, and cost of SSA's disability programs.
In 1994, SSA laid out a plan to address these problems, yet that
plan and three subsequent revisions in 1997, 1999, and 2001 have
yielded only limited success. The agency's initial plan entailed a
massive effort to redesign the way it made disability decisions. Among
other things, SSA planned to develop a streamlined decision-making and
appeal process, more consistent guidance and training for decision
makers at all levels of the process, and an improved process for
reviewing the quality of eligibility decisions. In our reviews of SSA's
efforts after 2 years, 4 years, and again in 2001, we found that the
agency had accomplished little.\7\ In some cases, the plans were too
large and too complex to keep on track, and the results of many of the
initiatives that were tested fell far short of expectations. Moreover,
the agency was not able to garner consistent stakeholder support and
cooperation for its proposed changes.
---------------------------------------------------------------------------
\7\ U.S. General Accounting Office, SSA Disability Redesign: Focus
Needed on Initiatives Most Crucial to Reducing Costs and Time, GAO/
HEHS-97-20 (Washington, D.C.: Dec. 20, 1996); SSA Disability Redesign:
Actions Needed to Enhance Future Progress, GAO/HEHS-99-25 (Washington,
D.C.: Mar. 12, 1999); and Social Security Disability: Disappointing
Results From SSA's Efforts to Improve the Disability Claims Process
Warrant Immediate Attention, GAO-02-322 (Washington, D.C.: Feb. 27,
2002).
---------------------------------------------------------------------------
Despite the overall disappointing progress, the agency did
experience some successes. For example, it conducted a large training
effort to improve the consistency of decisions, which agency officials
believe resulted in 90,000 eligible individuals' receiving benefits 500
days sooner than otherwise might have been the case over a 3-year
period. In addition, the agency issued formal guidance in a number of
areas intended to improve the consistency of decisions between the
initial and appellate levels.
Overall, however, significant problems persist and difficult
decisions remain. For example, SSA is currently collecting final data
on the results from an initiative known as the Prototype, which was
implemented in 10 states in October 1999. Although interim data
indicated that the Prototype resulted in more awards at the initial
decision level without compromising accuracy, it also indicated that
the number of appeals would increase. This, in turn, would result in
both higher administrative and benefit costs and lengthen the wait for
final decisions on claims. As a result, SSA decided that the Prototype
would not continue in its current form. Recently, SSA announced its
``short-term'' decision to revise some features of the Prototype to
improve disability claims processing time while it continues to develop
longer-term improvements. It remains to be seen whether these revisions
will retain the positive results from the Prototype while also
controlling administrative and benefit costs.
Even more pressing in the near term is the management and workload
crisis that SSA faces in its hearings offices. The agency's 1999 plan
included an initiative to overhaul operations at its hearing offices to
increase efficiency and significantly reduce processing times at that
level; however, this nationwide effort not only has failed to achieve
its goals but, in some cases, has made things worse. The initiative has
suffered, in part, from problems associated with implementing large-
scale changes too quickly without resolving known problems. As a
result, the average case-processing time slowed and backlogs of cases
waiting to be processed approached crisis levels. We have recommended
that the new commissioner act quickly to implement short-term
strategies to reduce the backlog and develop a long-range strategy for
a more permanent solution to the backlog and efficiency problems at the
Office of Hearings and Appeals.\8\ According to SSA officials, they
have recently made some decisions on short-term initiatives to reduce
the backlogs and streamline the process, and they are preparing to
negotiate with union officials regarding some of these planned changes.
---------------------------------------------------------------------------
\8\ GAO-02-322.
---------------------------------------------------------------------------
Finally, SSA's 1994 plan to redesign the claims process called for
the agency to revamp its existing quality assurance system. However,
because of disagreement among stakeholders on how to accomplish this
difficult objective, progress in this area has been limited. In March
2001, a contractor issued a report assessing SSA's existing quality
assurance practices and recommended a significant overhaul to encompass
a more comprehensive view of quality management. We agreed with this
assessment and recommended that SSA develop an action plan for
implementing a more comprehensive and sophisticated quality assurance
program.\9\ Since then, the commissioner has signaled the high priority
she attaches to this effort by appointing to her staff a senior manager
for quality who reports directly to her. The senior manager is
responsible for developing a proposal to establish a quality-oriented
approach to all SSA business processes. The manager is currently
assembling a team to carry out this challenging undertaking.
---------------------------------------------------------------------------
\9\ GAO-02-322.
---------------------------------------------------------------------------
The disappointing results of some of these initiatives can be
linked, in part, to slow progress in achieving technological
improvements. As originally envisioned, SSA's plan to redesign its
disability determination process was heavily dependent upon these
improvements. The agency spent a number of years designing and
developing a new computer software application to automate the
disability claims process. However, SSA decided to discontinue the
initiative in July 1999, after about 7 years, citing software
performance problems and delays in developing the software.\10\
---------------------------------------------------------------------------
\10\ U.S. General Accounting Office, Social Security
Administration: Update on Year 2000 and Other Key Information
Technology Initiatives, GAO/T-AIMD-99-259 (Washington, D.C.: July 29,
1999).
---------------------------------------------------------------------------
In August 2000, SSA issued a new management plan for the
development of the agency's electronic disability system. SSA expects
this effort to move the agency toward a totally paperless disability
claims process. The strategy consists of several key components,
including (1) an electronic claims intake process for the field
offices, (2) enhanced state DDS claims processing systems, and (3)
technology to support the Office of Hearing and Appeals' business
processes. The components are to be linked to one another through the
use of an electronic folder that is being designed to transmit data
from one processing location to another and to serve as a data
repository, storing documents that are keyed in, scanned, or faxed. SSA
began piloting certain components of its electronic disability system
in one state in May 2000 and has expanded this pilot test to one more
state since then. According to agency officials, SSA has taken various
steps to increase the functionality of the system; however, the agency
still has a number of remaining issues to address. For example, SSA's
system must comply with privacy and data protection standards required
under the Health Information Portability and Accountability Act, and
the agency will need to effectively integrate its existing legacy
information systems with new technologies, including interactive Web-
based applications.
SSA is optimistic that it will meet its scheduled date for
achieving a paperless disability claims process--anticipated for the
end of 2005--and has taken several actions to ensure that its efforts
support the agency's mission. For example, to better ensure that its
business processes drive its information technology strategy, SSA has
transferred management of the electronic disability strategy from the
Office of Systems to the Office of Disability and Income Security
Programs. In addition, SSA hired a contractor to independently evaluate
the electronic disability strategy and recommend options for ensuring
that the effort addresses all of the business and technical issues
required to meet the agency's mission. According to an agency official,
SSA is currently implementing the contractor's recommendations. As SSA
proceeds with this new system, however, it is imperative that the
agency effectively identify, track, and manage the costs, benefits,
schedule, and risks associated with the system's full development and
implementation. Moreover, SSA must ensure that it has the right mix of
skills and capabilities to support this initiative and that desired end
results are achieved.
Overall, SSA is at a crossroads in its efforts to redesign and
improve its disability claims process. It has devoted significant time,
energy, and resources to its redesign initiatives over the last 7
years, yet progress has been limited and often disappointing. SSA is
not the only government agency to experience difficulty in overhauling
or reengineering its operations. According to reengineering experts,
many federal, state, and local agencies have failed in similar efforts.
Frequent leadership turnover, constraints on flexibility posed by laws
and regulations, and the fact that government agencies often must serve
multiple stakeholders with competing interests all constrain progress.
Yet, it is vital that SSA address its claims process problems now,
before the agency experiences another surge in workload as the baby
boomers reach their disability-prone years. To date, the focus on
changing the steps and procedures of the process or changing the duties
of its decision makers has not been successful. Given this experience,
it may be appropriate for the agency to undertake a new and
comprehensive analysis of the fundamental issues impeding progress.
Such an analysis might include reassessing the root causes contributing
to its problems and would encompass concerns raised by the Social
Security Advisory Board, such as the fragmentation and structural
problems in the agency's overall disability service delivery system.
The outcome of this analysis may, in some cases, require legislative
changes.
LSSA Lacks a Comprehensive Strategy to Return People with Disabilities
to Work
The number of working-age beneficiaries of the DI and SSI programs
has increased by 61 percent over the past 10 years. We have reported
that as the beneficiary population has grown, numerous technological
and medical advances, combined with changes in society and the nature
of work, have increased the potential for some people with disabilities
to return to, or remain in, the labor force. Also, legislative changes
have focused on returning disabled beneficiaries to work. The Americans
with Disabilities Act of 1990 supports the premise that people with
disabilities can work and have the right to work, and the Ticket to
Work and Work Incentives Improvement Act of 1999 increased
beneficiaries' access to vocational services. Indeed, many
beneficiaries with disabilities indicate that they want to work, and
many may be able work in today's labor market if they receive needed
support. In 1996, we recommended that SSA place a greater priority on
helping disabled beneficiaries work, and the agency has taken a number
of actions to improve its return-to-work practices. But even with these
actions, SSA has achieved poor results in this arena, where fewer than
1 in 500 DI beneficiaries and few SSI beneficiaries leave the
disability rolls to work.
Even in light of the Ticket to Work Act, SSA will continue to face
difficulties in returning beneficiaries to work, in part owing to
weaknesses, both statutory and policy, in the design of the DI program.
As we have reported in the past, these weaknesses include an either/or
disability decision-making process that characterizes individuals as
either unable to work or having the capacity to work. This either/or
process produces a strong incentive for applicants to establish their
inability to work to qualify for benefits.
Moreover, return-to-work services are offered only after a lengthy
determination process. Because applicants are either unemployed or only
marginally connected to the labor force at the time of application and
remain so during the eligibility determination process, it is likely
that their skills, work habits, and motivation to work deteriorate
during this wait. Thus, individuals who have successfully established
their disability may have little reason or desire to attempt
rehabilitation and work. Unlike some private sector disability insurers
and foreign social insurance systems, SSA does not incorporate into its
initial or continuing eligibility assessment process an evaluation of
what is needed for an individual to return to work. Instead of
receiving assistance to stay in the workforce or return to work--and
thus to stay off the long-term disability rolls--an individual can
obtain assistance through DI or SSI only by proving his or her
inability to work. And even in its efforts to redesign the decision-
making process, SSA has yet to incorporate into these initiatives an
evaluation of what an individual may need to return to work.
Moreover, SSA has made limited strides in developing baseline data
to measure progress in the return-to-work area. In June 2000, we
reported that many of SSA's fiscal year 2001 performance measures were
not sufficiently results oriented, making it difficult to track
progress. SSA's fiscal year 2002 performance plan shows that SSA has
begun to incorporate more outcome-oriented performance indicators that
could support their efforts in this area. Two new indicators, in
particular, could help SSA gauge progress: the percentage increase in
the number of DI beneficiaries whose benefits are suspended or
terminated owing to employment and the percentage increase in the
number of disabled SSI beneficiaries no longer receiving cash benefits.
However, SSA has not yet set specific performance targets for these
measures.
Nevertheless, SSA has recently stepped up its return-to-work
efforts. For example, it has (1) established an Office of Employment
Support Programs to promote employment of disabled beneficiaries; (2)
recruited 184 public or private entities to provide vocational
rehabilitation, employment, and other support services to beneficiaries
under the Ticket to Work Program; (3) raised the limit on the amount a
DI beneficiary can earn from work and still receive benefits to
encourage people with disabilities to work; (4) funded 12 state
partnership agreements that are intended to help the states develop
services to increase beneficiary employment; and (5) completed a pilot
study on the deployment of work incentive specialists to SSA field
offices and is currently determining how to best implement the position
nationally.
While these efforts represent positive steps in trying to return
people with disabilities to work, much remains to be done. As we have
recommended previously, SSA still needs to move forward in developing a
comprehensive return-to-work strategy that integrates, as appropriate,
earlier intervention, including earlier and more effective
identification of work capacities, and the expansion of such capacities
by providing essential return-to-work assistance for applicants and
beneficiaries. Adopting such a strategy is likely to require
improvements to staff skill levels and areas of expertise, as well as
changes to the disability determination process. It will also require
fundamental changes to the underlying philosophy and direction of the
DI and SSI programs, as well as legislative changes in some cases.
Policymakers will need to carefully weigh the implications of such
changes. Nevertheless, we remain concerned that the absence of such a
strategy and accompanying performance plan goals may hinder SSA's
efforts to make significant strides in the return-to-work area. An
improved return-to-work strategy could benefit both the beneficiaries
who want to work and the American taxpayer.
LLongstanding High-Risk SSI Issues Require Sustained Management and
Oversight
The SSI program is the nation's largest cash assistance program for
the poor. In fiscal year 2000, the program paid 6.6 million low-income
aged, blind, and disabled recipients $31 billion in benefits. During
that year, newly detected overpayments and outstanding SSI debt totaled
more than $3.9 billion. In 1997, after several years of reporting on
specific instances of abuse and mismanagement, increasing overpayments,
and poor recovery of outstanding SSI debt, we designated SSI a high-
risk program. The SSI program poses a special challenge for SSA
because, unlike OASI and DI, it is a means-tested program; thus, SSA
must collect and verify information on income, resources, and recipient
living arrangements to determine initial and continuing eligibility for
the program. Our prior work, however, shows that SSA has often placed a
greater priority on quickly processing and paying SSI claims with
insufficient attention to verifying recipient self-reported
information, controlling program expenditures, and pursuing overpayment
recoveries once they occur.
In response to our high-risk designation, SSA has made progress in
coordination with Congress to improve the financial integrity and
management of SSI, including developing a major SSI legislative
proposal with numerous overpayment deterrence and recovery provisions.
Many of these provisions were incorporated into the Foster Care
Independence Act, which was signed into law in December 1999. The act
directly addresses a number of our prior recommendations and provides
SSA with additional tools to obtain applicant income and resource
information from financial institutions; imposes a period of
ineligibility for applicants who transfer assets to qualify for SSI
benefits; and authorizes the use of credit bureaus, private collection
agencies, interest levies, and other means to recover delinquent debt.
SSA also obtained separate legislative authority in 1998 to recover
overpayments from former SSI recipients currently receiving OASI or DI
benefits. The agency was previously excluded from using this cross-
program recovery tool to recover SSI overpayments without first
obtaining debtor consent. As a result of this new authority, SSA has
recently begun the process of recovering overpayments from Social
Security benefits of individuals no longer on the SSI rolls. The agency
has also issued regulations on the use of credit bureaus and drafted
regulations for wage garnishments. We have been told that the draft
regulations are currently under review by the new commissioner and by
the Office of Management and Budget.
In addition to establishing the new legislative authorities, SSA
has initiated a number of internal administrative actions to further
strengthen SSI program integrity. These include using tax refund
offsets for delinquent SSI debtors, an action that SSA said resulted in
$61 million in additional overpayment recoveries last year. SSA also
uses more frequent (monthly) automated matches to identify ineligible
SSI recipients living in nursing homes and other institutions. As of
January 2001, SSA's field offices were also provided on-line access to
wage, new-hire, and unemployment insurance data maintained by the
Office of Child Support Enforcement. These data are key to field
staff's ability to more quickly verify employment and income
information essential to determining SSI eligibility and benefit
levels. SSA also increased the number of SSI financial redeterminations
that it conducted, from about 1.8 million in fiscal year 1997 to about
2.2 million in fiscal year 2000. These reviews focus on income and
resource factors affecting eligibility and payment amounts. SSA
estimates that by conducting more redeterminations and refining its
methodology for targeting cases most likely to have payment errors, it
prevented nearly $600 million in additional overpayments in fiscal year
1999.
SSA's Office of Inspector General (OIG) has also increased the
level of resources and staff devoted to investigating SSI fraud and
abuse; key among the OIG's efforts is the formation of Cooperative
Disability Investigation teams in 13 field locations. These teams are
designed to identify fraud and abuse before SSI benefits are approved
and paid. Finally, in response to our prior recommendation, SSA has
revised its field office work credit and measurement system to better
reward staff for time spent thoroughly verifying applicant eligibility
information and developing fraud referrals. If properly implemented,
such measures should provide field staff with much-needed incentives
for preventing fraud and abuse and controlling overpayments.
SSA's current initiatives demonstrate a stronger management
commitment to SSI integrity issues and have the potential to
significantly improve program management; however, our work shows that
SSA overpayments and outstanding debt owed to the program remain at
high levels. A number of the agency's initiatives--especially those
associated with the Foster Care Independence Act--are still in the
early planning or implementation stages and have yet to yield results.
In addition, at this stage, it is not clear how great an effect the
impact of SSA's enhanced matching efforts, online access tools, and
other internal initiatives has had on the agency's ability to recover
and avoid overpayments. The same is true for the agency's efforts to
improve the accuracy of SSI eligibility decisions.
SSA also has not yet addressed a key program vulnerability--program
complexity--that is associated with increased SSI overpayments. In
prior work, we have reported that SSI living arrangement and in-kind
support and maintenance policies used by SSA to calculate eligibility
and benefit amounts were complex, prone to error, and a major source of
overpayments. We also recommended that SSA develop options for
simplifying the program. Last year, SSA's policy office issued a study
that discussed various options for simplifying complex SSI policies.
Although SSA is considering various options, it has not moved forward
in recommending specific cost neutral proposals for change.
We believe that sustained management attention is necessary to
improve SSI program integrity. Thus, it is important that SSA move
forward in fully implementing the overpayment deterrence and recovery
tools currently available to it and seek out additional ways to improve
program management. Accordingly, we have a review under way that is
aimed at documenting the range of SSI activities currently in place;
their effects on program management and operations; and additional
legislative or administrative actions, or both, necessary to further
improve SSA's ability to control and recover overpayments. A particular
focus of this review will be to assess remaining weaknesses in SSA's
initial and ongoing eligibility verification procedures, application of
penalties for individuals who fail to report essential eligibility
information, and overpayment recovery policies.
SSA Lacks a Plan to Help It Cope with Future Service Delivery
Challenges
Among federal agencies, SSA has long been considered one of the
leaders in service delivery. Indeed, for fiscal year 2001, SSA reported
that 81 percent of its customers rated the agency's services as
``excellent,'' ``very good,'' or ``good.'' SSA considers service
delivery one of its top priorities, and its current performance plan
includes specific goals and strategies to provide accurate, timely, and
useful service to the public. However, the agency faces significant
challenges that could hamper its ability to provide high-quality
service over the next decade and beyond. Demand for services will grow
rapidly as the baby boom generation ages and enters the disability-
prone years. By 2010, SSA expects worker applications for DI to
increase by as much as 32 percent over 2000 levels. Determining
eligibility for disability benefits is a complex process that spans a
number of offices and can take over a year to complete. As we have
observed earlier in this statement, SSA already has trouble managing
its disability determination workload; adding additional cases without
rectifying serious case processing issues will only make things worse.
Furthermore, by 2010, SSA projects that applications for retirement
benefits will also increase dramatically--by 31 percent over the 2000
levels.
SSA's ability to provide high-quality service delivery is also
potentially weakened by challenges regarding its workforce. First,
SSA's workforce is aging, and SSA is predicting a retirement wave that
will peak in the years 2007 through 2010, when it expects about 2,500
employees to retire each year. By 2010, SSA projects that about 37
percent of its almost 62,000 employees will retire. The percentage is
higher for employees in SSA's supervisory or managerial ranks. In
particular, more than 70 percent of SSA's upper-level managers and
executives (GS-14, GS-15, and SES level) are expected to retire by
2010. Second, SSA will need to increase staff skills to deal with
changing customer expectations and needs. SSA's staff will need to
obtain and continually update the skills needed to use the most current
technology available to serve the public in a more convenient, cost
effective, and secure manner. At the same time, some aspects of SSA's
customer service workload will likely become more time consuming and
labor intensive, owing primarily to the growing proportion of SSA's
non-English speaking customers and the rising number of disability
cases involving mental impairments. Both situations result in more
complex cases that require diverse staff skills.
SSA has a number of workforce initiatives under way to help it
prepare for the future. For example, as we recommended in 1993, and as
required by law, SSA developed a workforce transition plan to lay out
actions to help ensure that its workforce will be able to handle future
service delivery challenges. In addition, recognizing that it will
shortly be facing the prospect of increasing retirements, SSA conducted
a study that predicts staff retirements and attrition each year, from
1999 to 2020, by major job position and agency component. SSA also
began to take steps to fill its expected leadership gap. We have long
stressed the importance of succession planning and formal programs to
develop and train managers at all levels of SSA. As early as 1993, we
recommended that SSA make succession planning a permanent aspect of its
human resource planning and evaluate the adequacy of its investments in
management training and development. SSA created three new leadership
development programs to help prepare selected staff to assume mid- and
top-level leadership positions at the agency. Overall, many of the
efforts being made today are consistent with principles of human
capital management, and good human capital management is fundamental to
the Federal Government's ability to serve the American people. For this
reason, we have designated strategic human capital management a high-
risk area across the Federal Government.\11\
---------------------------------------------------------------------------
\11\ U.S. General Accounting Office, Major Management Challenges
and Program Risks: A Governmentwide Perspective, GAO-01-241
(Washington, D.C.: Jan. 2001).
---------------------------------------------------------------------------
However, SSA is taking these human capital measures in the absence
of a concrete service delivery plan to help guide its investments. We
recommended as long ago as 1993 that SSA complete such a plan to ensure
that its human capital and other key investments are put to the best
use.\12\ In 1998, the agency took a first step by beginning a multiyear
project to monitor and measure the needs, expectations, priorities, and
satisfaction of customer groups, major stakeholders, and its workforce.
In 2000, SSA completed a document that articulates how it envisions the
agency functioning in the future.\13\ For example, SSA anticipates
offering services in person, over the telephone, and via the Internet;
its telephonic and electronic access services will be equipped with
sophisticated voice recognition and language translation features, and
work will be accomplished through a paperless process. In this service
vision document, SSA also states that it will rely heavily on a
workforce with diverse and updated skills to accomplish its mission.
Although this new vision represents a positive step for the agency
toward acknowledging and preparing for future service delivery
challenges, it is too broad and general to be useful in making specific
information technology and workforce decisions. We have stressed that
this document should be followed by a more detailed service delivery
plan that spells out who will provide what type of services in the
future, where these services will be made available, and the steps and
timetables for accomplishing needed changes. SSA officials told us that
they are working on such a blueprint. Without this plan, SSA cannot
ensure that its investments in its workforce and technology are
consistent with and fully support its future approach to service
delivery.
---------------------------------------------------------------------------
\12\ U.S. General Accounting Office, Social Security: Sustained
Effort Needed to Improve Management and Prepare for the Future, GAO/
HRD-94-22 (Washington, D.C.: Oct. 27, 1993). Also, see GAO/T-HEHS-98-
113 and GAO/HEHS-96-196.
\13\ This document was originally called ``2010 Vision'' but
subsequently was renamed ``SSA's Service Vision.''
---------------------------------------------------------------------------
LSSA's Future Success Is Linked to Effectively Managing Information
Technology Initiatives
SSA also plans to rely heavily on information technology to cope
with growing workloads and to enhance its processing capabilities. To
this end, the agency has devoted considerable time and effort to
identifying strategies to meet its goal of providing world-class
service. For example, SSA has begun expanding its electronic service
delivery capability--offering retirees the option of applying for
benefits on-line as well as pursuing other on-line or Internet options
to facilitate customer access to the agency's information and services.
Yet, SSA's overall success in meeting its service delivery challenge
will depend on how effectively it manages its information technology
initiatives. As SSA transitions to electronic processes, it will be
challenged to think strategically about its information technology
investments and to effectively link these investments to the agency's
service delivery goals and performance. Furthermore, its actions and
decisions must effectively address dual modes of service delivery--its
traditional services via telephone, face-to-face, and mail contacts
that are supported primarily by its mainframe computer operations, as
well as a more interactive, on-line, Web-based environment aimed at
delivering more readily accessible services in response to increased
customer demands.
SSA has experienced mixed success in carrying out prior information
technology initiatives. For example, the agency has made substantial
progress in modernizing workstations and local area networks to support
its work processes, and it has clearly defined its business needs and
linked information technology projects to its strategic objectives.
Moreover, our evaluation of its information technology policies,
procedures, and practices in five key areas--investment management,
enterprise architecture, software development and acquisition, human
capital, and information security--found that SSA had many important
information technology management policies and procedures in place.\14\
For instance, SSA had sound policies and procedures for software
development that were consistent with best practices.
---------------------------------------------------------------------------
\14\ U.S. General Accounting Office, Information Technology
Management: Social Security Administration Practices Can Be Improved,
GAO-01-961 (Washington, D.C.: August 21, 2001).
---------------------------------------------------------------------------
However, SSA had not implemented its policies and procedures
uniformly and had not established several key policies and procedures
essential to ensuring that its information technology investments and
human capital were effectively managed. We noted weaknesses in each of
the five key areas and recommended actions to improve SSA's information
technology management practices in each area. In total, our report
included 20 specific recommendations for more effectively managing the
agency's information technology. In responding to our report, SSA
agreed with all of the recommendations.
Let me illustrate some of the weaknesses that formed the basis for
our recommendations. In making decisions on technology projects, SSA
lacked key criteria and regular oversight for ensuring consistent
investment management and decision-making practices. It also did not
always consider costs, benefits, schedules, and risks when making
project selections and as part of its ongoing management controls.
Without such information, SSA cannot be assured that its investment
proposals will provide the most cost-effective solutions and achieve
measurable and specific program-related benefits (e.g., high-quality
service delivered on time, within cost, and to the customer's
satisfaction). Furthermore, given competing priorities and funding
needs, SSA will need such information to make essential tradeoffs among
its information technology investment proposals and set priorities that
can maximize the potential for both short- and longer-term improvements
to services provided to the public.
As SSA pursues Internet and Web-based applications to better serve
its customers, it must ensure that these efforts are aligned with the
agency's information technology environment. A key element for
achieving this transition is the successful implementation of SSA's
enterprise architecture. An enterprise architecture serves as a
blueprint for systematically and completely defining an organization's
current (baseline) and desired (target) environment and is essential
for evolving information systems, developing new systems, and inserting
emerging technologies that optimize their mission value. It also
provides a tool for assessing benefits, impacts, and capital investment
measurements and supporting analyses of alternatives, risks, and trade-
offs. Nonetheless, we found that SSA had not completed key elements of
its enterprise architecture, including (1) finalizing its enterprise
architecture framework, (2) updating and organizing its architectures
and architecture definitions under the framework, and (3) reflecting
its future service delivery vision and e-business goals. In addition,
it had not ensured that enterprise architecture change management and
legacy system integration policies, procedures, and processes were
effectively implemented across the agency.
As SSA moves forward in implementing electronic services and other
technologies, its architecture will be critical to defining, managing,
and enforcing adherence to the framework required to support its
current and future information processing needs. Moreover, without
effective enterprise architecture change management and legacy system
integration processes, SSA will lack assurance that (1) it can
successfully manage and document changes to its architecture as
business functions evolve and new technologies are acquired and (2) new
software and hardware technologies will interoperate with existing
systems in a cost-effective manner. In surveying 116 agencies across
the Federal Government, we found the use of enterprise architectures to
be a work in progress, with much left to be accomplished.\15\ We
assessed SSA at a relatively low level of maturity in enterprise
architecture management.
---------------------------------------------------------------------------
\15\ U.S. General Accounting Office, Information Technology:
Enterprise Architecture Use Across the Federal Government Can Be
Improved, GAO-02-6 (Washington, D.C.: Feb. 19, 2002).
---------------------------------------------------------------------------
SSA plans to rely extensively on software-intensive systems to help
achieve processing efficiencies and improved customer service. Because
SSA is an agency in which software development continues to be
predominantly an in-house effort, in 1997, its Office of Systems
established the Software Process Improvement program, in which new
policies and procedures were created to enhance the quality of the
agency's software development. However, our evaluation of these
policies and procedures found that SSA was not consistently applying
them to its software development projects. In particular, SSA had not
applied sound management and technical practices in its development of
the electronic disability system. This poses a significant risk given
SSA's history of problems in developing and delivering the critical
software needed to support its redesigned work processes.\16\ The use
of sound, disciplined software development processes is critical to
ensuring that SSA delivers quality software on schedule and within
established cost estimates. Until SSA consistently and effectively
implements its software development policies and procedures, it will
lack assurance that it can meet its goal of developing a technological
infrastructure to support its service delivery vision.
---------------------------------------------------------------------------
\16\ GAO/T-AIMD-99-259.
---------------------------------------------------------------------------
As SSA places increased emphasis on using information technology to
support new ways of delivering service, it must ensure that it
effectively manages its human capital to anticipate, plan for, and
support its information technology requirements. However, SSA had not
taken all of the necessary steps to ensure the adequacy of its future
information technology workforce. For instance, we found that although
SSA had begun evaluating its short- and longer-term information
technology needs, these efforts were not complete. Specifically, SSA
had not linked its information technology staff needs to the
competencies it would require to meet mission goals. Doing so is
necessary, however, to ensure that SSA's plans project workforce needs
far enough in advance to allow adequate time for staff recruitment and
hiring, skills refreshment and training, or outsourcing considerations.
Furthermore, SSA lacked an inventory identifying the knowledge and
skills of current information technology staff, which is essential for
uncovering gaps between current staff and future requirements. Without
such an inventory, SSA has no assurance that its plans for hiring,
training, and professionally developing information technology staff
will effectively target short- and long-term skills needed to sustain
its current and future operations. These shortcomings in SSA's
information technology human capital management could have serious
ramifications as the agency moves toward making larger investments in
new electronic service delivery options, such as Internet applications.
Developing Internet applications represents a new era for SSA--one in
which the agency must ensure that is has enough of the right people and
skills to bring its electronic service delivery plan to fruition.
As SSA proceeds with the development and implementation of Internet
and Web-based initiatives, the need for a strong program to address
threats to the security and integrity of its operations will grow.
Without proper safeguards, these initiatives pose enormous risks that
make it easier for individuals and groups with malicious intentions to
intrude into inadequately protected systems and use such access to
obtain sensitive information, commit fraud, disrupt operations, or
launch attacks against other organizations' sites.
SSA has made progress in addressing the information protection
issues raised in prior years. Specifically, during fiscal year 2001,
the agency
conducted a risk assessment to identify critical
assets and vulnerabilities as part of the Critical
Infrastructure Protection project;
issued a final security policy for the state
Disability Determination Service sites in accordance with the
information security requirements included in the National
Institute of Standards and Technology Special Publication 800-
18;
established and published technical security
configuration standards for operating systems and servers;
completed updates for accreditation and certification
of key systems; and
further strengthened physical access controls over
the National Computer Center.
Nonetheless, weaknesses in SSA's information security program
continue to threaten its ability to effectively mitigate the risk of
unauthorized access to, and disclosure of, sensitive information. For
example, although the agency has made improvements to its entity-wide
security program and standards, control weaknesses continue to expose
key elements of its distributed systems and networks to unauthorized
access to sensitive data. The general areas where exposures occurred
included implementation, enforcement, and ongoing monitoring of
compliance with technical security configuration standards and rules
governing the operation of firewalls; monitoring controls over security
violations and periodic reviews of user access; and physical access
controls at nonheadquarters locations. These exposures exist primarily
because SSA has not completed implementation of its enterprise-wide
security program.
Until a complete security framework is implemented and maintained,
SSA's ability to effectively mitigate the risk of unauthorized access
to, and modification or disclosure of, sensitive SSA data will be
impaired. Unauthorized access to sensitive data can result in the loss
of data as well as trust fund assets, and compromised privacy of
information associated with SSA's enumeration, earnings, benefit
payment processes, and programs. The need for a strong security
framework to address threats to the security and integrity of SSA
operations will grow as the agency continues to implement Internet and
Web-based applications to serve the American public.
LProgram Challenges Require SSA to Play an Active Role in Research,
Evaluation, and Policy Development
In the past, we have reported that SSA has not undertaken the range
of research, evaluation, and policy analysis necessary (1) to identify
areas where legislative or other changes are needed to address program
weaknesses and (2) to assist policymakers in exploring and developing
options for change.
The long-term solvency of the Social Security system is a critical
issue facing the nation and SSA. As the debate on Social Security
reform proceeds, policymakers and the general public need thoughtful,
detailed, and timely analyses of the likely effect of different
proposals on workers, beneficiaries, and the economy. SSA is well
positioned to assess the programmatic impacts of economic and
demographic trends and to identify areas where policy changes are
needed to ensure that recipients' needs are met efficiently and cost
effectively.
At the same time, SSA needs to prepare for the implementation of
whatever programmatic changes are eventually made. Many of the reform
proposals currently under debate will likely affect not only SSA but
other government agencies as well. As part of their debate,
policymakers need to understand the administrative aspects of each
proposal, including the amount of time and money necessary to implement
the proposed changes. SSA has information that could be central to the
implementation and administration of proposed Social Security reforms
and should be providing this information in a timely and accurate
manner.
SSA also faces a wide range of pressing challenges with its
disability programs, including how best to 1) ensure the quality and
timeliness of its decisions, 2) integrate return-to-work strategies
into all phases of its disability determination process, and 3) address
program complexity problems that have contributed to vulnerability in
the SSI program. To address these challenges, SSA will need to target
its research and conduct analyses that will allow the agency to play a
key role in proposing and analyzing major policy changes. However, in
the past, we have noted SSA's reluctance to take the actions needed to
fulfill its policy development and planning role in advance of major
program crises, particularly when they require long-term solutions,
legislative change, or both.
In recent years, SSA has taken action to strengthen its research
and policy development role in these and other areas. It has initiated
several reorganizations of its policy component to strengthen its
capacity. The agency has also significantly increased the level of
staff and resources available to support research activities and has
several analyses planned or under way to address key policy issues.
Specific to the long-term solvency issue, SSA's Office of the Actuary
has long provided key information on the financial outlook of Social
Security and projections of the effects of different reform proposals
on trust fund finances. In addition, SSA has expanded its ability to
use modeling techniques to predict the effects of proposed program
changes, and it has established a research consortium to conduct and
advise on relevant research and policy activities. With respect to its
disability programs, SSA has established a separate disability research
institute and has submitted to the Congress its first major SSI
legislative proposal aimed at improving program integrity. However,
many of the agency's actions and studies are in the early stages, and
it is not yet clear how the agency will use them and what their
ultimate effect on SSA program policy will be.
The Need to Protect Personal Information Has Gained New Urgency
The Social Security Administration is responsible for issuing SSNs
to most Americans.\17\ The agency relies on the SSN to record wage
data, maintain earnings records, and efficiently administer its benefit
programs. In addition, the SSN is used by other government agencies as
well as the private sector. This widespread use offers many benefits;
however, combined with an increase in reports of identify theft, it has
raised public concern over how this and other personal information is
being used and protected. Moreover, the growth of the Internet, which
can make personal information contained in electronic records more
readily accessible to the general public, has heightened this concern.
Finally, the terrorist attacks of September 11th and the indication
that some of the terrorists fraudulently obtained SSNs have added new
urgency to the need to assess how SSNs are used and protected.
---------------------------------------------------------------------------
\17\ Since 1982, SSA has provided SSNs only to U.S. citizens,
noncitizens authorized to work in the United States, and noncitizens
with an approved nonwork reason for needing a number.
---------------------------------------------------------------------------
We have recently testified on work we are completing at the request
of Chairman Shaw and others to review the many uses of SSNs at all
levels of government and to assess how these government entities
safeguard the SSNs.\18\ We found that SSNs are widely used across
multiple agencies and departments at all levels of government. They are
used by agencies that deliver benefits and services to the public as a
convenient and efficient means of managing records. More importantly,
these agencies rely on SSNs when they share data with one another, for
example, to make sure that only eligible individuals receive benefits
and to collect outstanding debt individuals owe the government.
Although these agencies are taking steps to safeguard the SSNs from
improper disclosure, our work identified potential weaknesses in the
security of information systems at all levels of government. In
addition, SSNs are widely found in documents that are routinely made
available to the public, that is, in public records. Although some
government agencies and courts are trying innovative approaches to
prevent the SSN from appearing on public records, not all agencies
maintaining public records have adopted these approaches. Moreover,
increasing numbers of departments are considering placing or planning
to place documents that may contain SSNs on the Internet, which would
make these numbers much more readily available to others, raising the
risk of their misuse.
---------------------------------------------------------------------------
\18\ U.S. General Accounting Office, SSNs Are Widely Used by
Government and Could Be Better Protected, GAO-02-619T (Washington,
D.C.: Apr. 29, 2002).
---------------------------------------------------------------------------
We also found that SSNs are one of three personal identifiers most
often sought by identity thieves and that SSNs are often used to
generate additional false documents, which can be used to set up false
identities. What is harder to determine is a clear answer on where
identify thieves obtain the SSNs they misuse. Ultimately, in light of
the recent terrorist events, the nation must grapple with the need to
find the proper balance between the widespread and legitimate uses of
personal information such as SSNs, by both government and the private
sector, and the need to protect individual privacy.
There are no easy answers to these questions, but SSA has an
important role to play in protecting the integrity of the SSN. Given
the widespread use of SSNs, the agency needs to take steps to ensure
that it is taking all necessary precautions to prevent individuals who
are not entitled to SSNs from obtaining them. Currently, the agency is
reexamining its process of assigning SSNs to individuals. This may
require the agency to find a new balance between two competing goals:
the need to take time to verify documents submitted during the
application process and the desire to serve the applicant as quickly as
possible. In addition, the agency is studying ways to make sure it
provides accurate and timely information to financial institutions on
deceased SSN holders. However, once SSA has issued an SSN, it has
little control over how the number is used by other government agencies
and the private sector. In this light, we look forward to exploring
additional options to better protect SSNs with you as we complete our
ongoing work in this area.
Concluding Observations
We have outlined a number of difficult challenges, most of them
long-standing, that the SSA Commissioner faces. These are, in general,
the same challenges we have been highlighting since SSA became an
independent agency. In some cases, SSA has begun to take positive steps
to address its challenges. Specifically, SSA's efforts to strengthen
its research, evaluation, and policy development activities show
promise. Likewise, SSA has made considerable progress in addressing
weaknesses in the integrity of the SSI program. However, more can be
done in these areas. As new pressures inevitably arise that will also
demand attention from the commissioner and her team, it will be
important for the commissioner to sustain and expand on the agency's
actions to date.
We are particularly concerned, however, about other challenges
where SSA's efforts to date have fallen short and where the agency
faces increasing pressures in the near future. The commissioner faces
crucial decisions on how to proceed on several of these challenges. SSA
has made disappointing progress on (1) its efforts to improve its
disability claims process, (2) the need to better integrate return-to-
work strategies into all phases of the disability process, and (3) the
need to better plan for future service delivery pressures and changes.
These challenges will be exacerbated by growing workload pressures as
the baby boom generation ages. After almost a year without a long-term
leadership structure in place, the commissioner and a SSA team have an
opportunity to take a fresh look at these longstanding challenges and
the fundamental issues impeding faster progress in these areas. Again,
focused and sustained attention to these challenges is vital, as the
agency is running out of time to make needed changes before the
expected increases in workload overwhelm its operations.
Mr. Chairman, this concludes my statement. I would be pleased to
respond to any questions that you or other member of the subcommittees
may have.
Contacts and Acknowledgments
For further information regarding this testimony, please contact
Barbara D. Bovbjerg, Director, or Kay E. Brown, Assistant Director,
Education, Workforce, and Income Security at (202) 512-7215.
Individuals making key contributions to this testimony include Michael
Alexander, Yvette Banks, Daniel Bertoni, Alicia Puente Cackley, Ellen
Habenicht, Carol Langelier, Valerie Melvin, Angela Miles, Carol Dawn
Petersen, and William Thompson.
Related GAO Products
Social Security Reform
Social Security: Issues in Evaluating Reform Proposals. GAO-02-
288T. Washington, D.C.: December 10, 2001.
Social Security: Program's Role in Helping Ensure Income Adequacy.
GAO-02-62. Washington, D.C.: November 30, 2001.
Social Security: Evaluating Reform Proposals. GAO/AIMD/HEHS-00-29.
Washington, D.C.: November 4, 1999.
SSA's Management Challenges: Strong Leadership Needed to Turn Plans
Into Timely, Meaningful Action. GAO/T-HEHS-98-113. Washington, D.C.:
March 12, 1998.
Social Security Disability Programs
Social Security Disability: Disappointing Results From SSA's
Efforts to Improve the Disability Claims Process Warrant Immediate
Attention. GAO-02-322. Washington, D.C.: February 27, 2002.
SSA Disability: SGA Levels Appear to Affect the Work Behavior of
Relatively Few Beneficiaries, but More Data Needed. GAO-02-224.
Washington, D.C.: January 16, 2002.
SSA Disability: Other Programs May Provide Lessons for Improving
Return-to-Work Efforts. GAO-01-153. Washington, D.C.: January 12, 2001.
Social Security Disability: SSA Has Had Mixed Success in Efforts to
Improve Caseload Management. GAO/T-HEHS-00-22. Washington, D.C.:
October 21, 1999.
SSA Disability Redesign: Actions Needed to Enhance Future Progress.
GAO/HEHS/99-25. Washington, D.C.: March 12, 1999.
SSA Disability: SSA Return-to-Work Strategies From Other Systems
May Improve Federal Programs. GAO-HEHS-96-133. Washington, D.C.: July
11, 1996.
Supplemental Security Income Program
High Risk Series: An Update. GAO-01-273. Washington, D.C.: January
2001.
Supplemental Security Income: Additional Actions Needed to Reduce
Program Vulnerability to Fraud and Abuse. GAO/HEHS-99-151. Washington,
D.C.: September 15, 1999.
Supplemental Security Income: Long-Standing Issues Require More
Active Management and Program Oversight. GAO/T-HEHS-99-51. Washington,
D.C.: February 3, 1999.
Supplemental Security Income: Action Needed on Long-Standing
Problems Affecting Program Integrity. GAO/HEHS-98-158. Washington,
D.C.: September 14, 1998.
Service Delivery to the Public
SSA Customer Service: Broad Service Delivery Plan Needed to Address
Future Challenges. GAO/T-HEHS/AIMD-00-75. Washington, D.C.: February
10, 2000.
Information Technology
Information Security: Additional Actions Needed to Fully Implement
Reform Legislation. GAO-02-470T. Washington, D.C.: March 6, 2002.
Information Technology: Enterprise Architecture Use Across the
Federal Government Can Be Improved. GAO-02-6. Washington, D.C.:
February 19, 2002.
Information Technology Management: Social Security Administration
Practices Can Be Improved. GAO-01-961. Washington, D.C.: August 21,
2001.
Information Security: Serious and Widespread Weaknesses Persist at
Federal Agencies. GAO/AIMD-00-295. Washington, D.C.: September 6, 2000.
SSA Customer Service: Broad Service Delivery Plan Needed to Address
Future Challenges. GAO/T-HEHS/AIMD-00-75. Washington, D.C.: February
10, 2000.
Social Security Administration: Update on Year 2000 and Other Key
Information Technology Initiatives. GAO/T-AIMD-99-259. Washington,
D.C.: July 29, 1999.
Information Security: Serious Weaknesses Place Critical Federal
Operations and Assets at Risk. GAO/AIMD-98-92. Washington, D.C.:
September 23, 1998.
SSNs and Personal Information
Social Security: Government and Commercial Use of the Social
Security Number Is Widespread. GAO/HEHS-99-28. Washington, D.C.:
February 16, 1999.
Chairman SHAW. Do you have testimony, Mr. McClure?
Mr. MCCLURE. No, sir.
Chairman SHAW. Okay, fine. Mr. Huse?
STATEMENT OF THE HON. JAMES G. HUSE, JR., INSPECTOR GENERAL,
OFFICE OF THE INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION
Mr. HUSE. Good morning, Mr. Chairman, Mr. Matsui. It is a
pleasure to be here with Ms. Barnhart to discuss some of the
challenges that face her as Commissioner of Social Security.
Certainly no Commissioner has ever entered office facing
greater challenges.
The first wave of baby-boomers is on the cusp of
retirement, increasing the Social Security Administration's
workload, even as it decreases SSA's workforce and threatens
the solvency of the Trust Fund. Demand for increased service
delivery requires speed, while the need for fiscal
responsibility and program stewardship requires care, and both
demands must be met under a restrictive budget. Add to this the
national spotlight brought on by discussions of solvency,
personal retirement accounts and what Social Security will look
like in the future, and the challenges threaten to become
overwhelming.
Then, on September 11, all of these challenges took a back
seat to homeland security and the dawning realization that
protection of the Social Security number is a key element not
only in protect against fraud, but in protecting lives.
Commissioner Barnhart's plate is full, and I pledge my
support and the support of the entire Office of the Inspector
General in helping her meet these many challenges in a
cooperative effort.
When the President's budget was released in February, it
included the Office of Management and Budget's evaluation of
SSA's progress in meeting the President's Management Agenda.
The OMB noted that while SSA received one of the best
evaluations in the Federal Government, there remains room for
improvement in a number of areas. The challenges identified by
OMB closely track the Top Ten Management Issues identified by
my office in our most recent Semiannual Report to Congress. I
would like to touch briefly on several of these specific
challenges.
The first issue to be identified both by my office and by
OMB is payment accuracy. Working together with SSA, we have
made great strides in reducing all benefit payments to
prisoners and Supplemental Security Income payments to fugitive
felons over the past several years, and those efforts continue.
Erroneous payments, including those to deceased beneficiaries,
students, and individuals receiving State Worker's Compensation
benefits, continue to drain the Social Security Trust Fund,
even as solvency becomes an overarching issue.
A second closely related area in need of attention is the
accuracy of the earnings reporting process. In fiscal year
2001, SSA received about 274-million wage reports from
approximately 6.5 million employers. One of the longstanding
issues at SSA has been the large number of wage reports that
are posted to the ``Suspense File'' because the records cannot
be associated with a valid SSN.
Third, the integrity of the Representative Payee process is
a serious issue identified both by my office and by Congress.
Representative Payees are appointed by SSA to manage the
benefits of children and others incapable of managing their own
funds. While most Representative Payees are honest, some are
not. In some cases, benefits should not be paid at all; in
others, the benefits never reach the actual beneficiary.
Fourth, SSA has long struggled with redesigning the
disability process, and I think that has been adequately
brought out by the testimony you have heard so far this
morning.
Next, Commissioner Barnhart will need to confront issues of
system security. Our own audit work, as well as audit work
conducted by outside sources, has recognized SSA's efforts to
provide for system security, but has also revealed systems
security weaknesses that still threaten both the sensitive data
SSA stores and the business operations of the Agency.
Finally, the events of the past 8 months make it impossible
to overstate the importance of protecting the integrity of the
SSN. Because the SSN has become such a vital aspect of American
life, the process by which SSA issues SSNs needs immediate
attention. I have testified on this point several times in
recent months, so I won't go any further into that.
The SSA is justifiably proud of its record of outstanding
service to the public, but to the extent that this commitment
to service emphasizes speed over accuracy and quantity over
quality, we are doing a disservice to the American people. I
know that this Commissioner recognizes that true service
delivery has two components--speed and accuracy. There is a
balance to be struck between the two.
I look forward to meeting the challenges ahead with
Commissioner Barnhart, but clearly she has a formidable job
leading SSA into the future. All of the recommendations we
advance to address SSA's issues require the application, or
redirection of precious Agency resources in this time of
serious budget strictures. There are no easy answers. I believe
that it is in resolving this dilemma, and making these critical
choices, that Commissioner Barnhart faces her most difficult
challenge.
Thank you, and I would be pleased to answer any of your
questions.
[The prepared statement of Mr. Huse follows:]
Statement of the Hon. James G. Huse, Jr., Inspector General, Office of
the Inspector General, Social Security Administration
Good morning. It is a pleasure to be here today with Ms. Barnhart
to discuss some of the challenges that face her as Commissioner of
Social Security. Certainly no Commissioner has ever entered office
facing greater challenges:
The first wave of baby boomers is on the cusp of
retirement, increasing the Social Security Administration's
(SSA) workload even as it decreases SSA's workforce and
threatens the solvency of the Trust Fund.
Demand for increased service delivery requires speed,
while the need for fiscal responsibility and program
stewardship requires care, and both demands must be met under a
restrictive budget.
Add to this the national spotlight brought on by
discussions of solvency, personal retirement accounts, and what
Social Security will look like in the future, and the
challenges threaten to become overwhelming.
Then, on September 11th, all of these challenges took a back seat
to homeland security and the dawning realization that protection of the
Social Security number (SSN) is a key element not only in protecting
against fraud, but in protecting lives. Commissioner Barnhart's plate
is full, and I pledge my support and the support of the entire Office
of the Inspector General, in helping her meet these many challenges in
a cooperative effort.
When the President's budget was released in February, it included
the Office of Management and Budget's (OMB) evaluation of SSA's
progress in meeting the President's Management Agenda. OMB noted that
while SSA received one of the best evaluations in the Federal
Government, there remains room for improvement in a number of areas.
The challenges identified by OMB closely track the Top Ten Management
Issues identified by my office in our most recent Semiannual Report to
Congress. I would like to touch briefly on several of these specific
challenges.
The first issue to be identified both by my office and by OMB is
payment accuracy. Working together with SSA, we have made great strides
in reducing all benefit payments to prisoners and Supplemental Security
Income payments to fugitive felons over the past several years, and
those efforts continue. But erroneous payments, including those to
deceased beneficiaries, students, and individuals receiving state
workers' compensation benefits, continue to drain the Social Security
Trust Fund even as solvency becomes an overarching issue. Because these
overpayments continue to bedevil our benefit disbursement operations,
we have made numerous recommendations, many of which SSA has already
adopted, and we look forward to working with the new Commissioner to
further strengthen our efforts to reduce erroneous payments.
A second, closely related area in need of attention is the accuracy
of the earnings reporting process. In FY 2001, SSA received about 274
million wage reports from approximately 6.5 million employers. One of
the long-standing issues at SSA has been the large number of wage
records that are posted to the ``Suspense File'' because the records
cannot be associated with a valid SSN. This file affects SSA's
operations in that wages that cannot be associated with an employee's
earnings record can affect the employee's future Social Security
benefits, and also affects SSA's operating costs. SSA has made
important strides in this area, but again, much remains to be done.
Third, the integrity of the Representative Payee process is a
serious issue identified both by my office and by Congress.
Representative Payees are appointed by SSA to manage the benefits of
children and others incapable of managing their own funds. While most
Representative Payees are honest, some are not. In some cases, benefits
should not be paid at all; in others, the benefits never reach the
actual beneficiary. SSA has made some progress, but both legislative
changes and adjustments to SSA's policies and practices must still be
made to protect SSA's most helpless beneficiaries and protect against
waste of Trust Fund monies.
Fourth, SSA has long struggled with redesigning the disability
process. The present system by which disability claims are considered
and decided is so overloaded as to be virtually unworkable. On average,
it takes SSA 106 days to make an initial determination on a claim.
Worse still is the appeals process, which despite numerous failed
attempts at improvement, is still so backlogged that a claimant who
files a request for a hearing must then wait an average of 308 days for
a notice of decision. These never-diminishing backlogs require a
visionary approach to break through deeply imbedded bureaucratic
processes to bring about true change.
Next, Commissioner Barnhart will need to confront issues of systems
security. Our own audit work, as well as audit work conducted by
outside sources, has recognized SSA's efforts to provide for systems
security, but has also revealed systems security weaknesses that still
threaten both the sensitive data SSA stores and the business operations
of the Agency. SSA needs to take steps to strengthen its information
security framework and improve its overall critical information
infrastructure. As we come to rely more and more on technology, and as
the demand for service delivery makes online services more and more
tempting, it is absolutely critical that SSA's systems be protected
from cyber-fraud.
Finally, the events of the past 8 months make it impossible to
overstate the importance of protecting the integrity of the SSN.
Because the SSN has become such a vital aspect of American life, the
process by which SSA issues SSNs needs immediate attention. I have
testified on this point several times in recent months, so I will not
belabor the issue now, but the growing use of SSN violations to indict
and convict individuals known or believed to be associated in some way
with terrorism is a testament to the need to act, and act quickly to
improve and protect the enumeration process.
The enumeration process, as well as every issue I've mentioned
today, presents us with a choice--a choice between increased service
delivery, which means speed, and increased accuracy, which means
security and stewardship. SSA is justifiably proud of its record of its
outstanding service to the public, but to the extent that this
commitment to service emphasizes speed over accuracy and quantity over
quality, we are doing a disservice to the American people. I know that
this Commissioner recognizes that true service delivery has two
components--speed and accuracy. There is a balance to be struck between
the two, and for all of the reasons I have discussed, we have reached a
time where striking that balance properly is more important than ever.
I look forward to meeting the challenges ahead with Commissioner
Barnhart, but clearly she has a formidable job leading SSA into the
future. All of the recommendations we advance to address SSA's issues
require the application, or redirection of precious Agency resources in
this time of serious budget strictures. There are no easy answers. I
believe it is in resolving this dilemma, and making these critical
choices, that Commissioner Barnhart faces her most difficult challenge.
Thank you and I would be pleased to answer any of your questions.
Chairman SHAW. Mr. Daub?
STATEMENT OF THE HON. HAL DAUB, CHAIRMAN, SOCIAL SECURITY
ADVISORY BOARD, AND FORMER MEMBER OF CONGRESS
Mr. DAUB. Mr. Chairman, Mr. Matsui, good friends, members
of this Subcommittee, I appreciate the opportunity to speak to
you this morning on behalf of the Social Security Advisory
Board. We commend you for taking time to examine the condition
of the Social Security Administration and to consider what
changes are needed.
My statement reflects the extensive work of the Board over
the last 5 years. During that time, we have consulted with
hundreds of employees in the Social Security Administration and
State disability offices throughout the country. We have
collected and analyzed data and held many public hearings.
I am proud to say that I am associated with a group of
people that is composed of two former Members of Congress, a
former public Trustee, two former Commissioners, and two very
distinguished Social Security and benefits scholars. So, we
have a group of people that have been assembled that serve,
without pay that are really interested in the subject matter
that we are here to talk about today and very interested in
helping the Subcommittee understand what changes can be made.
As my statement emphasizes, the Social Security
Administration's problems are serious, and the need to be
addressed I think is clear to everyone. The Agency will have to
make major changes in the way it conducts its business, and it
will also need additional resources if major service shortfalls
are to be averted.
Commissioner Barnhart is a former member of our Board,
where she made an outstanding contribution to our work. We know
her well, and we know that she has the knowledge, experience,
and personal qualities to lead the Agency through a period of
rapid change. She will need the support of Congress, the
President, and our Board. For our part, we intend to work with
her and the Agency on the many changes that are urgently
needed.
To summarize, there are three primary areas where the
Commissioner needs to focus her attention.
The first is on improving the quality of the Social
Security Administration's service to the public, where problems
are large and growing. In our reports, we have documented
critical service shortfalls in field offices and on the Social
Security Administration's 800-number, as well as throughout the
disability application and appeals process. Service levels in
all of these areas are unacceptably low.
A second, and related, area is improving the Agency's
stewardship, ensuring that the public's funds are responsibly
collected and expended. The Board issued a report on this
subject in March, and each of you have a copy. Particularly
after the events of September 11, the Social Security
Administration's inability to ensure the integrity of the
enumeration process is extremely disturbing. Employees in
Social Security field offices are aware that many applicants
for Social Security cards are presenting fraudulent documents.
Validating documents with other sources, such as INS, either
works poorly or does not work at all. Employees lack the time,
training, and the tools they need to determine authenticity for
themselves.
The area of greatest difficulty is documents submitted by
individuals who are foreign born, but there are problems with
fraudulent U.S. documents as well. Far too many replacement
cards are being issued, and many of them are unquestionably
being used for illegal purposes. I want to underscore the high
level of concern that many of the Social Security
Administration's frontline workers feel about this problem.
The third major area where improvement is needed is in the
Agency's capacity to develop Social Security and SSI policy so
that it can provide the comprehensive research and analysis
that policymakers need to address complex issues like Social
Security financing and disability. These problems will not be
easy to address. They will require new ways of thinking, new
practices, and changes in the culture of the Agency.
Facing growing workloads, the Social Security
Administration needs a plan that clarifies how it will meet
service delivery needs in the future. It needs a budget that
provides the resources that will carry out its objectives. We
commend the Commissioner for moving forward to develop a more
coherent work-based budget that will give the Congress the
information it needs to make judgments about the funding levels
that are required to serve the public appropriately.
The Agency's current performance measures are seriously
flawed. They emphasize process, rather than outcomes, speed, at
the expense of quality, and skew performance in inappropriate
ways. They are breeding cynicism in the field about the
Agency's objectives and motives. The Social Security
Administration needs more balanced measures of performance, a
management information system that ensures quality performance,
and better measures the type and quality of service that the
public wants and needs.
As we have emphasized in our reports, disability is at the
heart of the Social Security Administration's many challenges.
It accounts for two-thirds of the Agency's administrative
budget, about $5 billion this fiscal year. Disability benefits
will account for nearly $100 billion in spending this year or
nearly 5 percent of our Federal budget.
The current disability structure is seriously flawed, as we
have seen today from a very clear indication of the 1,153 days
that it takes, on average, to process claims. This structure,
with its flaws, needs to be reformed, and this would be in the
interests of both claimants and the taxpayers.
Institutional problems also need to be addressed. Over the
years, the Social Security Administration has developed a
culture that discourages open discussion of problems.
Communication between headquarters and operations in the field,
I think, is poor and teamwork among various components,
although improving, is demonstrably inadequate. Addressing
these issues of Agency culture will require strong leadership.
Finally, maintaining a skilled and experienced staff ranks
near the top of the most difficult challenges for the Agency.
The Social Security Administration needs to develop ways to
attract and retain a skilled workforce, it needs to hire new
employees before older ones leave so that there is time to
train, mentor, and pass on to a new generation the Agency's
very positive traditions. Weakness in human capital can
undermine public support for and confidence in the ability of
government to perform. Social Security's programs are too
important to allow this to happen.
In conclusion, Mr. Chairman, I hope that the Congress will
continue to hold regular oversight hearings on issues that we
are discussing here today. It is extremely valuable to the
Social Security Administration to have thoughtful, balanced,
and consistent oversight by the Congress. These hearings force
the Agency, and all of us, to focus on the important problems
that need attention. The public is well served when the
critical issues are forthrightly addressed.
I ask that the document I am holding in my hand, which we
wrote and as a Board issued to you in December of this past
year, entitled, ``Challenges Facing the New Commissioner of
Social Security,'' be included in the record. The document lays
out, in much greater detail, the matters that I have summarized
for you this morning.
[The information follows:]
CHALLENGES FACING THE NEW COMMISSIONER OF SOCIAL SECURITY
Over the last 4 years, the Social Security Advisory Board has laid
out a set of issues and recommendations that are basic to the health of
the Social Security Administration. This paper summarizes the major
issues the Board has identified and the recommendations the Board has
made to address them. Most of the issues we have raised in our reports
have not yet been adequately addressed, and some have not been
addressed at all.
The Congress created the Board to provide an independent and
objective source of information and advice to the President, the
Congress, and the Commissioner. All of our reports have been issued by
consensus and without dissent. I would make the point that the kind of
in-depth analysis of SSA's problems that we have provided in our
reports has never before been available to a new Commissioner. In that
regard, I believe the Board has met the expectations of the Congress as
to the role of the Board.
The SSA's new Commissioner, Jo Anne Barnhart, is facing many
difficult challenges. SSA has reached a critical time in its history.
For nearly 20 years the agency has been asked to absorb large cuts in
staffing while workloads have grown. Staff in the field have been cut
by nearly 30 percent and the number of managers and supervisors in
field offices and teleservice centers by nearly one-half.
In response to severe human resource constraints, SSA has struggled
to maintain quality of service. Improving systems and changing the way
it conducts its business, while helpful, have not been adequate to make
up for the loss of personnel. Service is poorer than in earlier years
and is no longer measuring up to the agency's own historically high
standards.
The employees who work in SSA offices and in the State disability
agencies have made extraordinary efforts to meet the agency's
challenging workloads. Their rapid and professional response to the
events on September 11 demonstrated once again their dedication to
public service and their compassion for those who need their help. But
every day there are thousands of individuals across the country who
come to SSA for help in dealing with their own major life events--
retirement, disability, or death. Too often there are too few employees
with too little time to respond appropriately to their needs.
The extensive work the Board has done over the last four years has
convinced us that SSA's employees are being asked to do too much with
too little. As a consequence, the agency's capacity to carry out its
mandated responsibilities is increasingly at risk. The situation will
worsen rapidly as the population continues to age and baby boomers
begin knocking at the door of the Social Security Administration
seeking help in filing their claims for disability and retirement
benefits.
The time to remedy the shortfalls is now.
THREE CRITICAL AREAS WHERE IMPROVEMENT IS NEEDED
In its reports the Board has described the many aspects of the
agency's work where we believe improvement is urgently needed. Three
areas merit particular emphasis: service to the public, safeguarding
the public's funds, and SSA's capacity to develop sound policy.
Service to the Public
The problem of the quality of SSA's service to the public is the
one that the public is most aware of, and which is most likely to come
increasingly to the attention of the Congress.
The most obvious gaps in SSA's service delivery system are in the
agency's frontline--the 800 number and the 1300 local offices. For
example:
L Many callers to SSA's 800 number are not getting the help
they need. The agency's longstanding goal of answering 95
percent of calls within 5 minutes is far below private sector
standards. Because of lack of resources, even this inadequate
95-percent goal has had to be reduced. The goal now is to
answer only 92 percent of calls within 5 minutes. In 2001, of
those who finally got through to the 800 number, 20 percent
gave up while waiting for an agent to handle the call or before
using the agency's lengthy automated message system.
When the Board recently visited the agency's largest teleservice
center in Auburn, Washington, employees there expressed serious concern
about the quality of service they are able to provide. They told us
they are hearing more complaints than ever about the difficulty callers
to the 800 number are having in getting through to a real person who
can answer their questions. They are frustrated that the pressures to
keep calls short limit their ability to provide more help to those who
do get through.
Field offices, particularly those in urban areas, often are
overcrowded and waiting times are too long. SSA estimates that there
are about 85 million telephone calls to field offices each year. But
field offices are not adequately staffed to answer this volume of calls
in a timely way. When we talked to a group of field office managers in
California earlier this year they stated that the situation in their
offices was worse than it was in 1999, when the Board issued its first
report assessing SSA's service to the public. At a hearing several
months ago in Philadelphia, a witness from the Mayor's Commission on
Services to the Aging described to the Board the inadequate assistance
and tedious waits that visitors to a field office were experiencing,
and recommended that SSA staff be given the tools and training they
need to deliver good service.
There is broad recognition that those who bear the brunt of field
office and telephone service delivery deficiencies usually have the
greatest need of assistance. These are primarily individuals who have
mental or physical impairments, or who lack the education needed to
navigate SSA's complex application and appeals system. A witness at the
Board's public hearing in Seattle observed that ``SSA has failed to
adopt a policy and procedures to effectively serve people with mental,
developmental and cognitive disabilities.'' Other witnesses told the
Board that SSA is not equipped to serve the growing numbers of
claimants who do not speak English.
Service delivery problems extend beyond the field office and the
800 number. Every component of the disability application and appeals
process lacks the highly trained and experienced staff needed to
process cases both accurately and timely. In 2000, it took on average 4
months for an SSI claim to go through the initial stage of the process.
Those filing for reconsideration of the initial decision waited another
2 months for a decision. An appeal to the administrative law judge
level took nearly an additional year. Average processing time at the
next level of appeal, the Appeals Council, was well over a year.
Claimants who go through SSA's administrative appeals process may thus
wait for two, three, or more years before getting a final
determination. This is simply not adequate service.
Finally, increasing public understanding of Social Security is
another aspect of service to the public where improvement is needed. In
earlier years the agency had a large cadre of employees in field
offices around the country whose major function was to communicate with
workers, employers, and beneficiaries in their communities. Because of
downsizing, employees no longer have adequate time to do this kind of
work. The agency has taken a number of steps to address this deficit,
including sending out an annual Social Security Statement to all
workers. But surveys show that the public's knowledge of Social
Security remains relatively weak, and much more needs to be done.
Safeguarding the Public's Funds
The second critical area where improvement is needed is in the
safeguarding, or stewardship, of the public's funds--the work that
needs to be done to ensure that taxpayer contributions are
appropriately expended. Stewardship is integral to good service to the
public. Taxpayers who support SSA's programs want and deserve to know
that their tax dollars are being accurately dispensed. Beneficiaries
want their payments to be accurate so that they do not have the
inconvenience or hardship of dealing with either an overpayment or an
underpayment.
The Board's reports have cited a number of areas where more careful
stewardship is warranted.
SSI overpayments and underpayments provide one example. In fiscal
year 2000, SSA processed 3.3 million SSI overpayments, more than twice
as many as in 1990. Despite this large number of clearances, the number
of SSI overpayments pending in field offices at the end of fiscal year
2000 was two and a half times what it was at the end of 1990,
increasing from 101,000 in 1990 to 260,000 in 2001. SSA's stewardship
review shows that the amount of SSI overpayments in 2000 was $2
billion. Underpayments were estimated to be more than $440 million.
In our observation, many of the problems that are associated with
inaccurate benefit payments stem from the fact that too often employees
in the field lack the time they need to process their workloads with
proper care. As one agency executive told us: ``Employees no longer
have the time to cross the t's and dot the i's.''
We have heard many examples of this. For instance, overworked
employees in field offices have told us that they sometimes do not
pursue certain lines of questioning, such as the details of an
individual's living arrangements, because it takes too long to resolve
the issues that may be raised. Agency employees have also told us that
they are not processing reports of earnings or changes in living
arrangements as promptly as they should because interviewing claimants
who are sitting in overcrowded waiting rooms is--understandably--a
higher priority.
Agency employees report that they do not have time to investigate
properly the quality and reliability of the representative payees whom
they assign to manage payments on behalf of beneficiaries who are
physically or mentally impaired. According to SSA data, between 1990
and 2000 the number of work years devoted to representative payee
activities decreased by a fifth, while the number of beneficiaries with
representative payees increased by a third.
We have heard similar concerns about the impact of inadequate
resources from employees in State disability agencies, where examiners
are pressed to meet processing times that make it difficult or
impossible for them to gather all the evidence that is needed to make
accurate and fully substantiated disability determinations. Too often
decisions are pushed out the door prematurely in the drive to meet
production goals.
One area in which the agency has been greatly assisted by the
Congress in carrying out its stewardship responsibilities is in the
conduct of continuing disability reviews (CDRs). The special funding
that the Congress provided has enabled the agency to expand greatly the
number of CDRs that it has conducted. The SSA actuaries estimate that
the present value of future benefits saved from CDR activity in fiscal
year 2000 alone is $6 billion, at a cost of only $609 million, a pay-
off ratio of almost 10 to 1. Dedicated funding for CDRs in future years
will be critical to the agency's ability to continue this important
stewardship work.
CDRs represent one example of how additional administrative dollars
can be used to save program dollars. Conducting more frequent and
careful SSI redeterminations and making more effective use of data
exchanges are others. The competition across the government for
discretionary administrative dollars has made it difficult for the
agency to build the case for funds for these kinds of stewardship
activities, but the case can and should be made.
Like the Congress and SSA's Inspector General, the Board has become
increasingly concerned about the growing fraudulent use of the Social
Security number. We have been examining the unauthorized use of Social
Security numbers, vulnerabilities in SSA's enumeration process, and the
role that Social Security numbers play in identity-related crimes. One
of our concerns is that the agency's heavy workload, combined with
processing time goals, may be discouraging employees in the field from
exercising the degree of care in the processing of applications that
would otherwise be done.
SSA's Capacity to Develop Sound Policy
The third major area where improvement is needed is in the agency's
capacity to develop sound Social Security and SSI policy.
In SSA, the responsibility for developing policy is divided. The
Office of Policy is responsible for research and analysis regarding
broad policy issues, while the Office of Disability and Income Security
Programs is responsible for what the agency calls ``program policy,''
the development of regulations, rulings, and other agency instructions
needed to give employees guidance on how to implement statutory
requirements.
Currently, there are serious weaknesses in both of these areas.
With respect to broad policy issues, SSA needs greatly enhanced
capacity to provide the comprehensive research and analysis that policy
makers need to address complex issues regarding long-term financing of
the Social Security program. Another area that deserves prompt study
relates to helping individuals who are disabled find and retain
employment.
In the area of program policy, the needs of the disability program
are particularly acute. Although the agency has tried in recent years
to increase the level of its technical expertise by hiring additional
staff, problems persist.
For many years there have been too many sources of disability
policy. Adjudicators in State agencies and in SSA's quality assurance
system are bound by detailed instructions presented in SSA's Program
Operations Manual System (the POMS). The POMS is supplemented by other
administrative issuances from SSA. Administrative law judges and the
Appeals Council, on the other hand, are bound only by the statute,
along with regulations and rulings that have been published in the
Federal Register. They also have their own operating instructions in a
Hearings, Appeals, and Litigation Law Manual (HALLEX).
In its 1994 plan for redesigning the disability process SSA made
development of a single statement of policy a high priority. Because of
limited resources, however, this effort has not been pursued with the
vigor that was originally intended and that the Board believes is
necessary.
The development of sound disability policy requires greater medical
and vocational expertise than the agency currently has. Physicians and
others in the system have advised us that important medical listings
have not been kept sufficiently up to date to reflect advances in
medical diagnosis and treatment. Similarly, SSA's vocational guidelines
do not take into account the changes that have occurred in the
workplace.
Also of great concern is the fact that the Department of Labor's
Dictionary of Occupational Titles (DOT) is no longer being updated.
This document, which describes the types of jobs that are available in
the national economy, has long served as a primary tool for
adjudicators in determining whether a claimant has the capacity to
work. SSA currently has no replacement for the DOT, leaving a critical
policy vacuum at a time when program rules require more and more
decisions to be made on the basis of vocational factors.
WHAT THE COMMISSIONER WILL HAVE TO DO TO BRING IMPROVEMENT
SSA's problems will not be easy to address. We have emphasized the
need for more adequate resources because the situation is urgent and
without them substantial improvement in performance in the short term
is unlikely. But additional resources will not be enough and in the
longer term the major issues relate to the institutional aspects of the
agency. The new Commissioner and her staff will have to make many major
changes if the agency is to be able to handle its growing workloads.
This will require a combination of approaches, including changes in the
agency's strategies and practices, improvements in technology, and
changes in organizational arrangements. The culture of the agency also
has to be changed. The Board has urged the agency to undertake a number
of major initiatives.
Develop a Plan and a Budget That Implements the Plan
First, to guide the agency's course into the future, SSA should
develop a plan that describes how it expects to meet its workload
needs, both in the short term and the long term. As indicated above,
the plan should address the changes that need to be made in the areas
of human resources, technology, work processes, and institutional
arrangements.
Among the most urgent issues that need to be resolved are how the
agency will meet the needs of the growing numbers of disability
claimants, how it will handle its telephone service, and how it will
handle the workload related to the implementation of the new Ticket to
Work program.
Looking to the future, we know that the way the agency delivers
service will inevitably change. There will be changes in the law and in
beneficiary characteristics, and there will be advances in technology.
All of these changing factors argue for the establishment of a
permanent planning process that will enable the agency to adapt to new
circumstances and needs.
Equally important, SSA should have a budget that reflects the
agency's objectives and provides the resources that will be needed to
meet these objectives. Commissioner Jo Anne Barnhart has made a
commitment to develop a budget along the lines that the Board has
recommended. This is a challenging undertaking in that it will require
the agency to adopt a new way of thinking about how its budget should
be constructed. The Commissioner is to be commended for moving forward
promptly in this critically important effort.
Strengthen the Policy Infrastructure
Second, strengthening SSA's capacity to analyze and develop policy
should be one of the highest priorities of the Commissioner and the
agency. In some respects the agency has made significant strides since
the Congress enacted legislation in 1994 making SSA independent of the
Department of Health and Human Services. In 1997 SSA created a new
Office of Policy with a Deputy Commissioner who reports directly to the
Commissioner. New staff have been hired, boosting the agency's ability
to conduct policy research and evaluation.
But given the importance of the policy issues facing Social
Security, much more needs to be done. There is a large need for deeper
analysis of the many issues related to Social Security financing that
has yet to be met. The capacity of the Office of Policy to identify
issues, develop options, and provide information and analysis to the
Congress and the administration on this subject should be dramatically
enhanced. Similarly, there is a need for more research and analysis
regarding the application of SSA's definition of disability and how it
affects work. More comprehensive research on ways to improve incentives
for rehabilitation and employment early in a period of disability is
also needed.
In the area of disability program policy, SSA needs to strengthen
its capacity to issue the thoughtfully crafted regulations and rulings
that adjudicators need to guide their decisionmaking. Developing sound
disability program policy requires individuals who have extremely high
levels of technical and analytical skills. The Board has urged the
agency to create a permanent policy unit that combines the knowledge
and experience of employees who have worked in all parts of the system,
including the Office of Disability, the State disability agencies, and
the Office of Hearings and Appeals. If individuals with experience in
these offices participate in writing the agency's policy, it is more
likely to take into account the important differences in the
perspectives and needs of adjudicators in both State agencies and
hearing offices.
A single presentation of policy that will be followed by all of the
agency's adjudicators is critical to the objective of ensuring
consistent and fair decisions for all claimants, and the agency should
proceed with this effort as quickly as possible.
The Board has expressed its deep concern about the agency's
longstanding inability to explain why disability decisional outcomes
show such a high degree of variance over time, between levels of
adjudication, and among different regions of the country. The agency
should institute a quality management system that will provide the
ongoing and comprehensive information that is needed to understand why
these large variances exist. Policy makers need far better information
than is now available in order to develop and implement the kinds of
changes in policies and procedures that are needed to improve accuracy
and consistency in decisionmaking. Administrators also need this
information in order to detect problems promptly and correct them
appropriately.
Improve Service Delivery Practices and Strategies
Third, it is a truism within the agency that what the leadership
chooses to measure is what the agency will do. If the agency
establishes a performance measure for a particular work process, such
as the number of days it should take to issue a Social Security number,
managers and employees in the field will do whatever is necessary to
meet the agency's goal.
Many within the agency think that the way SSA currently measures
its service performance is seriously flawed. They believe there is too
much emphasis on process rather than outcomes, that speed is emphasized
at the expense of quality, and performance is skewed in inappropriate
ways. The thoughtful comments that we have heard from employees in the
field give credence to these criticisms. The current measures appear to
be breeding cynicism about the agency's objectives and motives, an
outcome that is clearly counterproductive.
The agency must reassess the way it measures performance, giving
close attention to how its measures are affecting the overall quality
of service that is being provided to the public. It should seek the
advice of the most successful public and private entities and solicit
the views of SSA and State agency employees in the field who have a
frontline view of the strengths and weaknesses of the current
performance measurement system.
The public needs to have a stronger voice in setting the agency's
priorities. Last year the agency accepted the Board's proposal for
joint sponsorship of a forum on how to measure and use customer service
information. This forum brought together experts from the private
sector and academia to advise the agency on ways it can improve its
measurement and use of customer service information so as to improve
the quality of service that it is providing. The agency should build on
the beginning steps that it has already taken to build a customer
information system that will be instrumental in agency decisionmaking.
One area in which better information is needed regarding the views
of the public is the nature and quality of the agency's telephone
service. SSA needs a strategy for meeting the growing demand for
telephone service. Basic questions need to be answered. For example,
are SSA's current 800 number standards adequate to address the public's
needs and expectations? Would extending the hours of service provided
by the 800 number result in significantly higher public satisfaction
with its service? Should SSA's field offices assist in taking 800
number calls?
The volume of telephone calls made to SSA is enormous. In 2001,
about 85 million calls were placed to the 800 number and a similar
number went to field offices. As noted earlier, getting through to
someone who can answer a question is often difficult whichever approach
is tried. A witness at a hearing the Board held recently in Seattle
described the field offices in that area as ``virtually impenetrable''
by phone. SSA will have to put into place improved technologies and,
most likely, increased staffing as well if it is to meet the growing
demand.
The agency's steadily increasing workload will also require the
development and implementation of major systems improvements. There is
a particularly urgent need for rapid systems improvements throughout
the disability determination system. Today, the claims that are filed
in the field offices and continue through the State agencies and the
hearings and appeals process are all stored on paper and the volume of
documents is huge. Although the technology is now available to
transform this cumbersome system into a paperless system that will
speed up the flow of claims and avoid lost files, the development and
implementation of the software and the hardware needed to support the
system have been proceeding very slowly. This should be made one of the
agency's highest systems priorities.
SSA has been working intensively to transfer as much of its work as
possible to the Internet and is anticipating that a significant portion
of its future workload can be handled in this way. But SSA's programs
are complex and many of the public's interactions with the agency
require personal attention. SSA will have to define carefully the
functions that are suitable for handling by Internet. It will also have
to address issues relating to privacy and program integrity.
Another new and potentially very useful tool is videoconferencing.
SSA has begun to use videoconferencing on a pilot basis to conduct
administrative law judge hearings and is finding that it can save
significant travel time and expense on the part of both judges and
claimants. As the technology improves and becomes cheaper and more
accessible, videoconferencing has substantial promise for improving
service to the public in other ways--for example, by conducting
interviews with disability claimants in distant locations and providing
translation services in field offices that lack the particular
expertise a claimant may need. SSA should continue to evaluate the use
of videoconferencing with special emphasis on the added value in
serving the public and the quality of outcomes.
Consider Ways to Improve Accountability
Over the last 20 years the number of functional components in the
agency has proliferated, leading to a dispersion of responsibility and
an erosion of accountability. Many of the components have overlapping
lines of authority, requiring a great deal of coordination. Disability
is of particular concern. Under the current administrative structure,
nearly every component of the agency has a role. Each has its own
mission and interests, and no one other than the Commissioner has the
authority to bring them together. With so many individuals and offices
involved, decisionmaking is slow and creativity is stifled. One of the
Commissioner's most difficult challenges will be to establish clearer
lines of responsibility and accountability so that she will receive the
high quality of information and analysis that she needs to lead the
agency.
Over the longer term, the Commissioner will have to look at the
organizational issue in an even more fundamental way. Critical
questions need to be confronted regarding SSA's basic service delivery
structures. How much and what type of work should be conducted in face-
to-face settings? By telephone? By Internet? By outside third parties?
In making these choices, what are the tradeoffs in cost, in quality of
service to the public, and in program integrity?
Change the Disability Adjudication Process
Since the Disability Insurance program was enacted in 1956, the
Federal-State administrative structure that was established at that
time has had to accommodate a dramatic and unforeseen increase in
program size and complexity. Today, the disability determination
structure is in need of major change.
In the report issued by the Board earlier this year, Charting the
Future of Social Security's Disability Programs: The Need for
Fundamental Change, the Board discussed the problems in the current
arrangements and why we think change is needed. We recommended ways to
strengthen the Federal-State relationship and reform the hearing
process. We urged careful study of how the Appeals Council can be made
to function more effectively, and we recommended that the Congress and
the Social Security Administration study whether a Social Security
Court or a Social Security Appeals Court should replace existing
arrangements for judicial review.
Comprehensive hearings by the Congress on the disability programs
can be an important first step in the discussion that needs to take
place on this subject. The Commissioner and SSA must determine the
kinds of changes they believe need to be made, but they will need the
help of a broad public discussion that the Congress can lead to assist
in their analysis and to build support.
Address Long-Standing Institutional Problems
In the September 1999 report on improving service to the public,
the Board identified three underlying institutional problems that only
the leadership of the agency can effectively address:
An agency culture that discourages open discussion
and timely resolution of problems;
Weaknesses in communication between SSA's
headquarters and operations in the field; and
Inadequate teamwork among various components with
parallel responsibilities.
As we noted in our report, SSA's resistance to open discussion has
existed for many years, and may have grown out of the agency's historic
``can do'' approach. But this resistance to openness is particularly
inappropriate today, given the scope and magnitude of the agency's
problems.
A related problem is a feeling of misunderstanding between SSA's
managers in headquarters and employees in the field, including in State
disability agencies. Many employees in the field have expressed concern
that management in headquarters appears unaware of the problems they
are having in serving the public and uninterested in hearing their
suggestions for how these problems might be resolved.
Over the years the problems related to agency culture and lack of
good communication have been exacerbated by an absence of close
teamwork among various parts of the agency whose missions overlap.
Disability is the area where the need for better teamwork is most
apparent. Administrative arrangements are fragmented, and the working
relationships among various parts of the disability system have
historically been weak.
These interrelated problems are likely to be highly resistant to
change. Since the Board's 1999 service to the public report was issued,
the agency's leadership has begun to address them, emphasizing the need
for a ``one agency'' culture. But it will require a convincing and
consistent message from the new Commissioner and others who work with
her to bring about real and lasting change.
Attract and Retain Highly Qualified Staff to Build for the Future
Over the present decade, SSA expects to lose more than half of its
most valuable asset--its experienced and dedicated staff. By 2010 over
28,000 of the agency's 64,000 employees will retire and another 10,000
will leave for other reasons.
Maintaining a strong staff to carry out the many complex
responsibilities of the agency will require careful planning, and ranks
near the top of the most difficult challenges the Commissioner must
address. Although the events of September 11 and the aftermath
reportedly have increased the appeal to young people of working in the
Federal Government, it is unlikely that there will be a dramatic
difference over the long run in the numbers who will turn to Federal
service as their first employment option. SSA needs to do everything it
can to attract and retain a skilled workforce. The agency is aware of
this need and has been in the forefront of government agencies in
planning how this should be done.
But there are forces beyond the agency's control and it will need
help. The Administration and the Congress must provide the funds that
are necessary to hire new employees before older ones leave so that
there is time to train, mentor, and pass on to a new generation the
agency's positive traditions. If the agency needs more flexibility than
is available under present rules to adjust pay scales to attract and
keep the quality of employees that it needs, it should be given it.
Much more attention needs to be given to providing employees in SSA
and in the State disability agencies with high quality, ongoing
training. The need is particularly urgent for those who are involved in
adjudicating disability claims. At the present time training for these
employees is highly fragmented and varies greatly from one part of the
disability structure to another. SSA should have an ongoing training
program where the thousands of individuals in State disability
agencies, hearing offices, and quality assurance offices can receive
in-depth training on how to apply the agency's disability policy rules.
An institutionalized training program, perhaps conducted under the
auspices of a prestigious medical institution, would be extremely
helpful in addressing the serious problem of inconsistency in
decisionmaking and would help to assure higher quality disability
determinations throughout the system.
The reality is that weaknesses in human capital can undermine
public support for and confidence in the ability of government to
perform. Social Security's programs are too important to allow this to
happen.
Conclusion
Some of the most important challenges that Commissioner Barnhart
and the agency are facing are highlighted here. Addressing them will
require making difficult decisions and setting new directions. The
Commissioner is in a unique position to lead the process of change,
having been a Member of the Board and having participated in our study
of SSA's administrative and policy issues over the last four and a half
years. Her colleagues on the Board stand ready to work with her and to
assist in any way we can.
One thing is very clear. Disability is at the heart of SSA's many
challenges. It accounts for two-thirds of the agency's budget and
dominates the work of the agency at all levels. Disability benefits
will account for nearly $100 billion in spending this year, or nearly 5
percent of the Federal budget. Disability will have to be the primary
focus of the Commissioner's attention and that of her top management
staff for many years to come.
Finally, the Congress should hold regular oversight hearings on the
many important issues facing the Commissioner and the Social Security
Administration. It is extremely valuable to SSA and other agencies of
government to have thoughtful, balanced, and consistent oversight by
the Congress. These hearings force the agency and all of us to focus on
important issues that need attention. The public is well served when
critical issues are forthrightly addressed.
Mr. DAUB. I will be happy to answer questions that you
have, and I assure you of our continued commitment from the
Board to help you in the conduct of your work.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Daub follows:]
Statement of the Hon. Hal Daub, Chairman, Social Security Advisory
Board, and former Member of Congress
Mr. Chairman, Mr. Matsui, and Members of the Subcommittee, I
appreciate the opportunity to speak to you this morning on behalf of
the Social Security Advisory Board. We commend you for taking time to
examine the condition of the Social Security Administration and to
consider the changes that are needed.
My statement reflects the extensive work that the Board has done
over the last five years. During that time we have consulted with
hundreds of employees in SSA and State disability offices throughout
the country. We have collected and analyzed data, and held public
hearings.
As my statement emphasizes, SSA's problems are serious and need to
be addressed as promptly as possible. The agency will have to make
major changes in the way it conducts its business and it will also need
additional resources if major service shortfalls are to be averted.
Commissioner Barnhart is a former member of the Board, where she
made an outstanding contribution to our work. We know her well, and we
know that she has the knowledge, experience, and personal qualities to
lead the agency through a period of rapid change. She will need the
support of the Congress, the President, and the Board. For our part, we
intend to work with her and the agency on the changes that are urgently
needed.
To summarize there are three primary areas where the Commissioner
needs to focus her attention.
The first is on improving the quality of SSA's service to the
public, where problems are large and growing. In our reports we have
documented critical service shortfalls in field offices and on SSA's
800 number, as well as throughout the disability application and
appeals process. Service levels in all of these areas are unacceptably
low.
A second and related area is improving the agency's stewardship--
ensuring that the public's funds are responsibly collected and
expended. The Board issued a report on this subject in March. Each of
you was sent a copy.
Particularly after the events of September 11, SSA's inability to
ensure the integrity of the enumeration process is extremely
disturbing. Employees in the field are aware that many applicants for
Social Security cards are presenting fraudulent documents. Processes
for validating documents with other sources, such as the INS, either
work poorly or do not exist at all. Employees lack the time, training,
and tools they need to determine authenticity for themselves. The area
of greatest difficulty is documents submitted by individuals who are
foreign born, but there are problems with fraudulent U.S. documents as
well. Far too many replacement cards are being issued and many of them
are unquestionably being used for illegal purposes. I want to
underscore the high level of concern that many of SSA's frontline
workers feel about this problem.
The third major area where improvement is needed is in the agency's
capacity to develop Social Security and SSI policy so that it can
provide the comprehensive research and analysis that policy makers need
to address complex issues like Social Security financing and
disability.
These problems will not be easy to address. They will require new
ways of thinking, new practices, and changing the culture of the
agency.
Facing growing workloads, SSA needs a plan that clarifies how it
will meet service delivery needs in the future. It needs a budget that
provides the resources that will carry out its objectives. We commend
the Commissioner for moving forward to develop a more coherent, work-
based budget that will give the Congress the information it needs to
make judgments about the funding levels that are required to serve the
public appropriately.
The agency's current performance measures are seriously flawed.
They emphasize process rather than outcomes, speed at the expense of
quality, and skew performance in inappropriate ways. They are breeding
cynicism in the field about the agency's objectives and motives. SSA
needs more balanced measures of performance, a management information
system that ensures quality performance, and better measures of the
type and quality of service that the public wants and needs.
As we have emphasized in our reports, disability is at the heart of
SSA's many challenges. It accounts for two-thirds of the agency's
administrative budget --about $5 billion this fiscal year. Disability
benefits will account for nearly $100 billion in spending this year, or
nearly five percent of the Federal budget. The current disability
structure is seriously flawed and needs to be reformed in the interests
of both claimants and taxpayers.
Institutional problems also need to be addressed. Over the years,
SSA has developed a culture that discourages open discussion of
problems. Communication between headquarters and operations in the
field is poor, and teamwork among various components, although
improving, is demonstrably inadequate. Addressing these issues of
agency culture will require strong leadership.
Finally, maintaining a skilled and experienced staff ranks near the
top of the most difficult challenges for the agency. SSA needs to do
everything it can to attract and retain a skilled workforce. It needs
to hire new employees before older ones leave so that there is time to
train, mentor, and pass on to a new generation the agency's positive
traditions. Weaknesses in human capital can undermine public support
for--and confidence in--the ability of government to perform. Social
Security's programs are too important to allow this to happen.
In conclusion, Mr. Chairman, I hope that the Congress will continue
to hold regular oversight hearings on the issues we are discussing here
today. It is extremely valuable to SSA to have thoughtful, balanced,
and consistent oversight by the Congress. These hearings force the
agency and all of us to focus on the important problems that need
attention. The public is well served when critical issues are
forthrightly addressed.
I ask that a document entitled ``Challenges Facing the New
Commissioner of Social Security'', December 2001 be issued in the
record. This document lays out in much greater detail matters that I
have summarized.
I will be happy to answer any questions that you may have, and I
assure you of the continued commitment of the Board to be of help to
you as you conduct your work.
Chairman SHAW. Thank you. Ms. Smith?
STATEMENT OF MARIE SMITH, PRESIDENT-ELECT, AARP
Ms. SMITH. Thank you, Mr. Chairman, Mr. Matsui.
My name is Marie Smith, and I am the new President-Elect of
AARP. We appreciate the opportunity to present our views on the
challenges facing the new Commissioner of Social Security. I
was particularly interested to hear the new Commissioner's
remarks and happy that she has been able to drill through to
some of the major problems because I am a former Social
Security Manager and spent 25 years with that Agency, and I
know the value of the Agency.
It administers both the Social Security program and
Supplementary Security Income, SSI Programs, which are crucial
to the economic well-being of millions of Americans of all
ages. It is important that the Agency maintains complete and
adequate records, responds quickly and courteously to
information requests, and safeguards the program's financial
integrity. If SSA falls short, then public confidence in the
Agency, and in the Social Security program itself, will be
undermined.
The AARP members still report problems reaching the 800-
number, particularly during peak hours. They feel frustrated at
not being able to speak with knowledgeable and sympathetic
staff. Since the 800-number is the primary point of access, the
Agency needs to do a better job training staff and providing
them with accurate and complete information. Access to local
offices must remain an option for those who prefer to do
business in person or are uncomfortable using the telephone.
Service delivery problems are particularly evident in the
disability program, which we have been discussing today. The
backlog of applications and appeals places many applicants in
economic jeopardy because they have few resources to sustain
themselves until benefits begin. The Agency has a fiduciary
responsibility to safeguard the trust funds, yet it should
provide benefits in a timely manner to those who are eligible.
The SSA must address its current service delivery problems
and anticipate future service delivery needs brought on by the
retirement of the boomers. The SSA must be prepared to deliver
service in a way that satisfies all groups of boomers. Despite
the increased familiarity with technology that will
differentiate many boomers from past beneficiaries, some
segments of the boomer population will require personalized
service. The Agency will face the challenge of the boomer
retirement at a time when many of its own senior-level managers
will be retiring as well, as we have heard.
The SSA devotes considerable resources to the SSI Program,
but has been criticized for providing benefits to some who are
not eligible and for erecting barriers for those who could
qualify. The SSA's overall service delivery problems are
exacerbated by inadequate funding. While the Agency's
administrative expenses are paid with Social Security Trust
Funds, Congress continues to include these costs within the
annual discretionary spending limits it sets for non-Social
Security programs.
The AARP will continue its strong support for removing
SSA's administrative costs from these spending limits. This
change can help ensure that the Agency will have the resources
to provide the American people with the quality service they
deserve.
The SSA touches Americans from the time of birth, and the
issuance of a Social Security number, through entrance and
departure from the workforce and into retirement. Many people
will have limited contact, while others will interact with the
Agency often. Even if only a small percentage of people
experience problems with SSA, it will represent a sizable
number of people.
Regardless of the amount of contact, the Agency should
strive to provide the highest quality of service and ensure
that no matter who you are, you will be treated courteously,
receive accurate and timely information, and have your problem
resolved expeditiously. Thank you.
[The prepared statement of Ms. Smith follows:]
Statement of Marie Smith, President-Elect, AARP
AARP appreciates the opportunity to present its views regarding the
challenges facing the new Commissioner of Social Security. The Social
Security Administration (SSA) has provided quality service throughout
most of its history, but as it enters into the 21st century it will
face new problems that need to be addressed in a timely manner. At her
confirmation hearing before the Senate Finance Committee, Commissioner
Barnhart identified some of the key issues awaiting her: ensuring the
program's long-term solvency for future generations; providing quality
service to the public at the same time as the number of beneficiaries
rises because of the aging of the Boomers; and improving program
integrity through solid fiscal stewardship. These areas were identified
at the 1998 confirmation hearing for the prior Commissioner. The agency
has made some improvements, but more can and needs to be done. SSA
would be better able to improve service if its administrative costs,
funded with trust fund dollars, were removed from congressionally-
mandated spending caps that apply mostly to programs funded from the
non-Social Security budget.
SSA administers the Old Age, Survivor and Disability Insurance and
the Supplemental Security Income (SSI) programs, which provide monthly
income support to more than 45 million Americans of all ages. The
agency also maintains wage records for over 150 million workers and
provides annual statements of worker earnings and estimated benefits,
as well as issuing new Social Security cards. It is important that the
agency respond quickly and courteously to information requests,
communicate clearly to the public it serves, maintain complete and
adequate records, and safeguard the programs from fraud and abuse. If
SSA falls short, public confidence in Social Security could be
undermined.
I. SERVICE DELIVERY
A. Staffing
SSA has always prided itself on its service to the public. For much
of the agency's history, those who sought assistance and information
found employees who took the time and had the interest and expertise to
help them. Today, SSA employees remain dedicated, but in some offices
staff shortages or inadequate resources may hinder the performance of
even the most well-intentioned individual and could have a significant
impact on long-term delivery.
SSA underwent an over twenty-percent staff reduction from 1985 to
1990, which was largely accomplished through attrition. While SSA was
undergoing this downsizing, federal legislation added to SSA's
responsibilities by requiring the widespread distribution of Social
Security benefit and earning statements and changing the status of some
individuals receiving Social Security and SSI benefits. This further
strained the agency's already limited resources and hampered its
ability to maintain consistent and quality service.
By 2015 the first wave of Boomers will be in their 60s, and SSA's
retirement and survivor beneficiary population will reach about 50
million. As the agency prepares for the influx of retiring Boomers, it
will have proportionately fewer resources but greater responsibilities.
The situation could worsen because many senior-level managers will be
retiring. The Boomers' familiarity with technology and the internet and
their service delivery expectations differ from current beneficiaries.
Despite the increased familiarity with technology that will
differentiate these beneficiaries from previous ones, some Boomers will
continue to require more personalized service. SSA must be prepared to
deliver service in a way that satisfies the various clients it serves.
B. The 800 Number and Accurate Information
Claimants continue to experience difficulty accessing SSA by phone
and obtaining accurate information from the agency. SSA set up the 800
number to improve service. While a toll-free number is convenient for
simple matters, it does not necessarily work for complex ones. And, if
the caller is unable to speak to an SSA employee and gets repeated busy
signals, even the simplest matter is not being handled.
Although the public reports overall satisfaction with SSA's
customer service, we continue to hear about 800 number access and
service problems. SSA sometimes reassigns staff to handle calls during
peak hours, but that means other duties are being neglected. AARP
believes the 800 number should be used for basic transactions, and 800
number staff should receive sufficient training and/or information to
answer basic questions on the phone.
Even an easily accessible 800 number poses hardships for SSA's most
vulnerable claimants--many of whom lack the physical ability, language
skills, or mental acuity to use the telephone for certain types of
information. Those who are unaccustomed to doing business by phone may
find it upsetting to use the telephone to complete a transaction that
will have a significant impact on their lives. Local office visits must
continue to accommodate individual needs and preferences as well as to
deal with complicated matters.
C. The Disability Program
SSA has been unable to keep up with the dramatic increase in its
disability caseload. In particular, the agency has a significant
backlog of initial applications and those appealing a denial must wait
a long period of time before their case is heard. The agency has taken
steps to speed up initial disability application processing time and
reduce backlogged appeals. If the complaints we receive are an
indicator, the problem persists. SSA should resolve these problems
since those with disabilities are less likely to be able to work or
have the resources to sustain themselves until they begin receiving the
benefits to which they are entitled.
It is critical that those who are eligible for benefits receive
them in a timely and efficient manner. At the same time, the agency is
the guardian of the trust funds and must consistently and accurately
evaluate initial and ongoing eligibility for those who have a
disability. In particular, SSA has not conducted the required
continuing disability reviews for disabled beneficiaries because of
competing demands and limited resources. Consequently, some
beneficiaries continue to receive Social Security disability benefits
although they no longer are qualified. Not only do the trust funds lose
money, but also individuals who have been overpaid may have
considerable difficulty repaying the program.
II. SUPPLEMENTAL SECURITY INCOME
The SSI program, that serves 5 million people of all ages, is the
largest cash assistance program for low-income individuals. Since
recipients must prove their income and assets fall below certain
thresholds, SSA must devote considerable resources and staff time to
verifying eligibility on an initial and ongoing basis. SSA's
administration of the program has been criticized in two areas:
providing SSI to some who are not eligible and failing to provide
benefits to those who legitimately qualify but do not know about the
program and/or how to properly file an application to get benefits.
SSA must continue its efforts to recoup SSI overpayments and reduce
fraud and abuse. The SSI program has been put on the General Accounting
Office's (GAO) list of high-risk programs. The GAO faulted SSA for
failing to adequately verify recipients' initial and continuing
eligibility, to effectively recover SSI overpayments, to aggressively
combat fraud and abuse, and to proactively develop SSI policies or an
overall program management plan.
While the SSI program must be carefully monitored to prevent
ineligible individuals from defrauding the government, the agency
should not erect barriers for those who could qualify for benefits.
Receipt of SSI is critical to the economic well being of very
vulnerable individuals and is a gateway to other public benefits. AARP
has undertaken many projects to educate potentially eligible
individuals about the availability of SSI and assist them in applying
for benefits. These are highly intensive, one-to-one activities
undertaken by dedicated volunteers. Some AARP projects were in
collaboration with SSA and many others required interaction with agency
personnel. While these programs help many individuals to learn about
and potentially qualify for SSI, they are not a substitute for an
effective SSA-sponsored outreach program.
A sizeable number of individuals do not qualify for SSI on initial
application. Our volunteers report that agency explanations of a denial
are confusing and did not clearly describe the appeals process.
Fortunately, our volunteers are familiar with these procedures and
could assist in the appeal. Thus, many more people ultimately received
benefits because they had assistance. AARP believes that SSA should do
a better job of recognizing the differing backgrounds and cultures that
it serves and make additional efforts to meet their needs.
III. SSA's ADMINISTRATIVE EXPENSES
SSA's administrative expenses are paid with trust fund dollars but
are included in congressionally determined, annual, discretionary
spending caps. As a result, the agency does not always receive
sufficient funding to address its service delivery needs. AARP supports
removing the administrative expenses from the congressional spending
caps as a way of ensuring that current and future service needs are
fully funded. In any event, any savings from constraining SSA's
expenses accrue to the trust funds and are not directly available to
finance the operations of other agencies
IV. HELPING SECURE LONG-TERM SOLVENCY
Although the Social Security Administration itself will not
determine how to restore long-term solvency to the Social Security
program, the agency will play a significant role in the process. Social
Security Administration actuaries and research staff provide the
technical expertise to evaluate solvency proposals and their impact on
workers, beneficiaries and the economy. This is a less visible role
than the one the agency plays in educating the public about the program
and its financing.
Polls show the American public is not aware of the many options
that could help restore long-term solvency, and does not understand the
trade-offs among them. Over the last few years, the Social Security
Administration has undertaken an extensive public education campaign
about the options. We hope the agency will continue to engage Americans
of all ages in the national dialogue about the value and future of
Social Security as well as the importance of having other savings for
retirement. This information can help forge the consensus that can lead
to a bipartisan solution to strengthen Social Security and enhance
overall retirement security.
VI. CONCLUSION
The Social Security Administration touches the lives of all
Americans from the issuance of a Social Security number at birth
through entrance and departure from the workforce. Many people will
have limited contact with the agency, while others will have greater
interaction. Regardless of the level of contact by each person, the
agency should strive to provide the highest quality of service and
ensure that no matter who you are, you will be treated courteously,
receive accurate and timely information, and have your problem resolved
expeditiously.
Chairman SHAW. Thank you, Ms. Smith. Ms. Ford?
STATEMENT OF MARTY FORD, CO-CHAIR, SOCIAL SECURITY TASK FORCE
AND WORK INCENTIVES IMPLEMENTATION TASK FORCE, CONSORTIUM FOR
CITIZENS WITH DISABILITIES
Ms. FORD. Chairman Shaw, Representative Matsui, and Members
of the Subcommittee, thank you for this opportunity to testify
on the challenges facing Commissioner Barnhart.
From the perspective of people with disabilities and as we
have heard a lot this morning, there are obviously numerous
challenges, and we look forward to working with the
Commissioner and with this Subcommittee in meeting them.
In our experience with SSA, we have learned that there is
great value in working together to address concerns before they
reach crisis proportions. We hope to continue this approach
under Commissioner Barnhart's leadership. We may not always
agree, but we can certainly avoid unintended consequences with
open dialogue early on.
I will discuss several of the challenges identified in our
more complete written testimony.
Social Security Trust Fund solvency is an overarching
issue. The disability community has raised numerous concerns
about the potential impact of Social Security reform proposals
on people with disabilities who receive benefits throughout the
Old-Age Survivors and Disability Insurance programs. The SSA
will need to play a major role in the evaluation of reform
proposals for their impact on people with disabilities. We have
urged that Congress request a beneficiary impact statement from
SSA on every major proposal under serious consideration.
There are several work-related issues that require
attention. The chronic problem of overpayments to beneficiaries
in both the Title II and Title XVI disability programs is a
major barrier to beneficiaries' ability to use the work
incentives. If not addressed, beneficiaries will continue to be
fearful of attempting to work. To address this, SSA must
establish a reliable, efficient, beneficiary-friendly method of
collecting and recording, in a timely manner, information
regarding a worker's earnings when they are reported. In
addition, SSA must adjust benefits in a timely manner. We have
also recommended that Congress require SSA to forgive
overpayments if the beneficiary is not notified within a
reasonable period of time.
We most definitely appreciate the inclusion in H.R. 4070 of
the requirement that SSA provide a receipt to the beneficiary
whenever a change in earnings or work status is reported. This
could go a long way in helping to resolve some of the problems
with earnings reports.
Consumers have also raised numerous issues about the final
regulations regarding the Ticket to Work program. The SSA has
stated in those final regulations that it will monitor and
evaluate many of the potential pitfalls that had been
identified by advocates. We urge Commissioner Barnhart to
ensure that the Agency lives up to these promises and takes
action where policies are creating barriers to increased
independence and self-sufficiency. We pledge to work with the
Commissioner in identifying those areas that continue to prove
problematic and in recommending changes. In fact, some of those
discussions have already begun.
In the meantime, there are several important related issues
that also need attention. They include the adequacy of
incentives study and the earnings offset demonstration built
into the Ticket to Work law. These are critical parts of the
law and should be implemented as soon as possible.
Also, several issues have surfaced regarding the treatment
of disabled adult children under the Ticket legislation, and we
urge the Commissioner to work with us in identifying and
clarifying those issues and to resolve them through
regulations.
Now, I want to turn to some process issues. As we have
heard over and over today, the backlog of cases waiting for ALJ
and Appeals Council decisions is unacceptably long. We support
efforts to reduce unnecessary delays and make the process more
efficient, so long as they do not affect the fairness of the
process. Numerous proposals have come forward that, in fact, do
not reflect consumer concerns. We believe that the right to a
full and fair hearing before an Administrative Law Judge should
be preserved. The record must be kept open for new evidence.
The Appeals Council should continue to review cases, and
judicial review of cases should remain in the Federal court
system. We urge Commissioner Barnhart to take these consumer
concerns into account in efforts to reduce the backlog.
We support the provisions in H.R. 4070 to strengthen SSA's
ability to address abuses by representative payees, and we urge
SSA to pay particular attention to government agencies who
serve as representative payees and to ensure that government
agencies are not chosen over family or friends who are
available, willing, and capable to serve as payees.
We also appreciate and support your inclusion in H.R. 4070
of the program to establish a voluntary attorneys' fee payment
system in SSI.
We also have serious concerns about SSA's workload. That
has been mentioned several times. We strongly support removing
SSA's limitation on administrative expenses from any domestic
discretionary spending caps.
I thank you for this opportunity to testify and look
forward to working with the Subcommittee and the Commissioner
on these issues.
[The prepared statement of Ms. Ford follows:]
Statement of Marty Ford, Co-Chair, Social Security Task Force and Work
Incentives Implementation Task Force, Consortium for Citizens with
Disabilities
Chairman Shaw, Representative Matsui, and Members of the
Subcommittee, thank you for this opportunity to testify regarding the
challenges facing the new Commissioner of the Social Security
Administration.
I am Director of Legal Advocacy for The Arc of the United States. I
am testifying here today in my role as co-chair of the Social Security
Task Force and the Work Incentives Implementation Task Force of the
Consortium for Citizens with Disabilities. CCD is a working coalition
of national consumer, advocacy, provider, and professional
organizations working together with and on behalf of the 54 million
children and adults with disabilities and their families living in the
United States. The CCD Social Security and Work Incentives
Implementation Task Forces focus on disability policy issues in the
Title XVI Supplemental Security Income program and the Title II
disability programs.
CCD welcomes the opportunity to testify here today and appreciates
your holding a hearing at the beginning of Jo Anne Barnhart's service
as Commissioner. From the perspective of people with disabilities,
there are numerous issues that we believe pose challenges for
Commissioner Barnhart and her staff. We look forward to working with
the Commissioner and the Subcommittee in meeting these challenges.
In our experience with the Social Security Administration, we have
learned that there is great value in working together to address
problems and concerns before they reach crisis proportions. We want to
continue this approach with SSA under Commissioner Barnhart's
leadership. We expect that there will be times when we are in
disagreement over an issue; however, working with input from consumer
advocates, SSA would be in a better position to devise solutions which
work to the greatest extent possible to meet the needs of people with
disabilities.
Social Security Trust Fund Solvency
The disability community has raised numerous concerns about the
potential impact of Social Security reform proposals on people with
disabilities. In January 2001, the General Accounting Office issued a
report which reinforces our concerns about the negative impacts many of
the reform proposals would have on people with disabilities, Social
Security Reform: Potential Effects on SSA's Disability Programs and
Beneficiaries, GAO-01-35 (Jan. 2001).
In December 2001, the President's Commission to Strengthen Social
Security published its final report. The Commission chose not to hear
formal testimony from people with disabilities. However, the CCD Task
Forces met with about half of the members of the Commission to discuss
the interests of people with disabilities. We are disappointed that the
report failed to deal with many of the important issues that we raised.
Furthermore, the Commission acknowledged that applying their
recommended retirement program changes to the Social Security
Disability Insurance program could result in reduced benefits for
people with disabilities. The Commission recommended that the President
and Congress further study how to address the DI program issues. At the
same time, the report failed to address the issues for dependents and
survivors with disabilities whose benefits come from the retirement and
survivors programs, rather than the DI program, and whose benefits too
would suffer cuts under the Commission's proposals. In fact, in all of
the proposals, the benefit reductions would impact people with
disabilities regardless of which Trust Fund pays the benefits.
The Commission's decision to leave people with disabilities out of
the public hearings was based on the members' belief that the
Commission's charge did not include the disability programs. At the
meeting with the Commissioners, we emphasized that people with
disabilities benefit from all parts of Title II, not just the
Disability Insurance program. Categories and sources of benefits
include:
disabled workers, and their families, receive
benefits based on the workers' work histories, from the DI
program;
retirees with disabilities receive benefits based on
their own work histories from the retirement program;
disabled adult children who are dependents of
disabled workers and retirees receive benefits from the DI and
retirement programs, respectively;
disabled adult children who are survivors of deceased
workers/retirees receive benefits from the survivors program;
and
disabled widow(er)s receive benefits from the
survivors program.
Beneficiaries with disabilities depend on Social Security for a
significant proportion of their income. The more limited capacity of
beneficiaries with disabilities to work and to save for the future and
the reality of their higher rates of poverty must be taken into
consideration in any efforts to change the Title II programs.
The nature of the OASDI programs as insurance against poverty is
essential to the protection of people with disabilities. The programs
are unique in providing benefits to multiple beneficiaries and across
multiple generations under coverage earned by a single wage earner's
contributions. Proposals that partially or fully eliminate the current
sharing of risk and replace it with the risks of private investment
will be harmful to people with disabilities who must rely on the OASDI
programs for life's essentials. Diversion of Social Security revenues
to private investment accounts would shift the risks from the Federal
Government back to the individual. This could have a devastating impact
on people with disabilities and their families as they try to plan for
the future. The basic safety nets of retirement, survivors, and
disability insurance would be substantially limited and individuals,
including those with limited decision-making capacity, would be at the
mercy of fluctuations in the financial markets.
For these and other reasons, the CCD Task Forces have urged that
Congress request a beneficiary impact statement from SSA on every major
proposal, or component of a proposal, under serious consideration. SSA
will need to play a major role in the evaluation of reform proposals
for their impact on people with disabilities.
Earnings Reports
The chronic problem of overpayments to beneficiaries in both Title
II and Title XVI is a major barrier to beneficiaries' ability to take
advantage of the work incentives programs, including the new incentives
of the Ticket to Work and Work Incentives Improvement Act (TWWIIA). If
not addressed, beneficiaries will continue to be fearful of working.
As the system now operates, chronic overpayments to beneficiaries
result from significant delays in, and sometimes complete failure of,
SSA personnel recording earnings reports for working beneficiaries. We
believe that part of the problem may be that SSA workers do not get any
credit for this work in their work evaluations. In addition, there is
not a well-defined process for beneficiaries to use in reporting
earnings. Beneficiaries often tell us that they are very conscientious
in reporting their earnings, but the overpayments still occur over
significant periods of time. When that happens, beneficiaries are not
equipped to know whether the benefit amount they are receiving is
correct or whether SSA has made an error or failed to record earnings.
Over time, overpayments build and it is not unusual for beneficiaries
to be told to pay back tens of thousands of dollars. Beneficiaries are
so fearful of overpayments and the inadequate notices from SSA that go
with them that the Ticket program and other work incentives could fail.
We urge SSA to establish a reliable, efficient, beneficiary-
friendly method of collecting and recording, in a timely manner,
information regarding a worker's earnings. In addition, SSA must adjust
benefits in a timely manner. CCD has further recommended that Congress
require SSA to forgive overpayments if the beneficiary is not notified
within a reasonable period of time. We appreciate the inclusion in the
Social Security Program Protection Act of 2002, H.R. 4070, of a
requirement that SSA provide a receipt to the beneficiary whenever a
change in earnings or work status is reported. This could go a long way
in helping to resolve some of the problems with earnings reports.
Work Incentives
1. Ticket to Work Program
As you know, the CCD Task Forces supported the Ticket to Work and
Work Incentives Improvement Act on behalf of people with disabilities
who wanted to work but were prevented from doing so by the barriers
that existed in the Title II and SSI programs and Medicare and
Medicaid. We believe that the purpose of the bill was to ensure that
people with severe disabilities would not permanently lose needed
supports if they attempted to work and to expand their opportunities to
make those attempts.
However, after the proposed regulations were published last year,
we testified that certain significant changes must be made to the
proposed regulations if the purposes of the program are to be
fulfilled. We urged that speedy implementation not come at the expense
of ensuring that the program works for the intended purpose. While we
were pleased to see that President Bush included the implementation of
the new work incentives in his New Freedom Initiative early last year,
we were still concerned that speedy implementation of problematic
regulations could create new barriers rather than eliminate barriers to
work. Our concerns included, among others, the limitation on one ticket
per period of disability; the measures for timely progress on a work
plan; and the structure of the outcome and milestone payment systems.
SSA must seriously consider the issues raised by advocates if the
program is expected to accomplish its purpose. Although SSA responded
somewhat to a few of the concerns expressed over the proposed rules,
the agency left in place many policies that advocates felt could be
problematic for successful implementation of the Ticket to Work
Program. SSA has chosen to maintain eligibility criteria for the ticket
that will deny entrance to the program to many beneficiaries who are
legitimately entitled to its opportunities. In addition, it appears
that an attempt to work must ultimately be successful or the individual
will not be able to receive another ticket to try again at some point
in the future. While we are pleased that SSA increased the number and
the amount of milestone payments, the current payment systems--in
particular, the milestone payment system--are still considered
inadequate and threaten the success of the Ticket to Work program.
Adequate payment systems will help ensure the program works as this
Committee intended.
Leaving in place a dispute resolution process that favors
employment networks over beneficiaries, SSA insists that beneficiaries
will still have access to protection and advocacy services--even as the
agency has severely restricted the services that the Protection and
Advocacy Systems (P&As) are allowed to offer. SSA appears not to
understand the structure, authority, and role that Protection and
Advocacy systems should play in providing independent legal advocacy
services within the new Protection and Advocacy for Beneficiaries of
Social Security (PABSS). SSA has restricted the scope of both the types
of cases and the remedies available to resolve issues and has
prohibited P&As from working on appeals involving overpayments,
continuing disability reviews, plans for achieving self-support,
subsidies, and impairment related work expenses. While the P&As are
allowed to offer assistance or advice in filling out necessary
paperwork, for example, to request a reconsideration or a waiver of an
overpayment, they are not allowed to provide representation in those
matters. This raises a number of issues, one of which is an ethical
dilemma for the attorneys. They are permitted to provide some advice
and counseling regarding certain problems, but at some point must
refuse to provide representation to the client as the issue progresses.
We want to thank the Subcommittee for addressing some of these concerns
through language included in H.R. 4070.
We want to thank Commissioner Barnhart for resolving the recent
dispute regarding funding of the P&A systems by restoring the funding
allocation to the full amount. This is critical in ensuring that
individuals will be able to navigate their way through the system.
In the final rule, SSA asserts that it will ``monitor'' and
``evaluate'' many of the potential pitfalls identified by advocates. We
urge Commissioner Barnhart to ensure that the agency lives up to these
promises and takes action where it is determined that the policies are
denying beneficiaries the possibility of increased independence and
self-sufficiency. We pledge to work with the Commissioner in
identifying those areas that continue to prove problematic and in
recommending changes to make the system work for individuals who want
to become more independent.
2. Studies
We believe that SSA must design an Adequacy of Incentives study (as
required by TWWIIA) that includes the best information in the field
about employment for people with significant disabilities. The AOI
report is critical for: people with a need for ongoing supports and
services; people with a need for high-cost accommodation; people who
earn a sub-minimum wage; and people who work and receive partial cash
benefits. Advocates urge SSA to ensure that this is a strong and
effective study that will lead to alternative payments for people with
significant disabilities. SSA must move quickly on this so that any
deficiencies in incentives may be addressed by the time the Ticket
program is fully implemented.
In addition, we believe that the earnings offset ($1 benefit offset
for $2 earned) demonstration is a critical part of the law,
particularly for those whose earnings will remain low, and that it
should be implemented as soon as possible. Again, the demonstration
must be designed to reflect realities for people with severe
disabilities in their attempts to work and to maintain an income over
the course of their lives. We have had numerous discussions with SSA
staff regarding these issues. In addition, the Work Incentives Advisory
Panel convened an expert panel to address some of the issues involved.
Based on the discussions at that meeting, many advocates are very
concerned about the possibility of a mandatory assignment of
beneficiaries to a demonstration program that may deprive them of
benefits to which they are entitled (for instance, a mandatory
demonstration where the earnings offset begins below the SGA level).
Furthermore, there are concerns about the possibility of beneficiaries
in the demonstration being rejected by employment networks because of
the longer time that it will take for ENs to be reimbursed. We urge SSA
to consider these concerns in refining its plans for the demonstration
and to move quickly towards its implementation.
3. Disabled Adult Child Issues
There are several issues which have surfaced regarding the
treatment of disabled adult children under the Ticket to Work and Work
Incentives Improvement Act. It is important that these issues get
resolved if the work incentives are to operate as intended by TWWIIA.
First, we are concerned that people with disabilities who are disabled
adult children (DAC) in the Title II program should be able to move on
and off the program to the same extent that other people with
disabilities are able to under TWWIIA. Since the rules regarding DAC
eligibility have some unique requirements, it is important that the
regulations clearly outline the impact of work on disabled adult
children who use a ticket.
There is also a concern about how work supports are treated for a
disabled adult child, depending on whether the beneficiary receives
such supports from his/her employer or whether the supports are
provided by a third party, such as a supported employment provider. SSA
has made some efforts to address this issue through the Program
Operations Manual System (POMS), however, it appears that the issue has
not been fully resolved. If disabled adult children are to be
encouraged to use the new work incentive provisions, there must be a
cohesive, understandable policy, embodied in regulations, upon which
disabled adult children and their advisors may rely in making
employment decisions. We urge the Commissioner to work with us in
identifying and clarifying these issues and to resolve them through
regulations.
Disability Backlog/Hearings and Appeals
The backlog of cases waiting for ALJ and Appeals Council decisions
is unacceptably long. People with severe disabilities who by definition
have limited earnings from work are often forced to wait years for a
final decision from the time of application through the final Appeals
Council decision. This is damaging not only to the individual with a
disability and his/her family, but also to the public perception of and
integrity of the program.
Bringing the waiting times down in these two areas must be a high
priority. We urge commitment of resources and personnel to resolve the
exorbitant waiting times and make the process work better for people
with disabilities. First, SSA must be provided with the resources to
fully meet its administrative responsibilities. As noted later in this
testimony, this requires that SSA's Limitation on Administrative
Expenses budget authority be removed from the domestic discretionary
spending category.
We strongly support efforts to reduce unnecessary delays for
claimants and to make the process more efficient, so long as they do
not affect the fairness of the process to determine a claimant's
entitlement to benefits.
1. The right to a full and fair hearing before an Administrative
Law Judge. The key aspect of the adjudication process for a claimant is
the right to a full and fair hearing by an Administrative Law Judge
(ALJ), who is an independent decision-maker, providing impartial fact-
finding and adjudication. The ALJ asks questions of and takes testimony
from the claimant, may develop evidence when necessary, and applies the
law and agency policy to the facts of the case. Claimants have the
right to present new evidence in person to the ALJ and to receive a
decision from the ALJ that is based on all available evidence. This
should be preserved.
2. Keeping the record open for new evidence. Many recent proposals
to change the disability determination process recommend that the
record be closed to new evidence either after the DDS decision or, at
least, after the ALJ level. In the past, both Congress and SSA have
recognized that such proposals are neither beneficial to claimants nor
administratively efficient for the agency.
We strongly support the submission of evidence as early as
possible. The benefit is obvious: the earlier a claim is adequately
developed, the sooner it can be approved and the sooner payment can
begin. However, there are a number of reasons why closing the record is
not beneficial to claimants including: (1) possible worsening of the
medical condition which forms the basis of the claim; (2) the fact that
the ability to submit evidence is not always in the claimant's or
representative's control, e.g., providers delay sending evidence; and
(3) the need to keep the process informal. Early submission of evidence
also is necessary under current law which limits the ability to submit
evidence and have it considered at the Appeals Council (must be ``new
and material'' and relate to pre-ALJ decision period) and federal court
(record closed; remand possible if evidence ``new and material'' and
``good cause'' for failure to submit earlier).
Filing a new application is not a viable option because it does not
improve the process and may in fact severely jeopardize, if not
permanently foreclose, eligibility for benefits. A claimant should not
be required to file a new application merely to have new evidence
considered where it is relevant to the prior claim. If such a rule were
established, SSA would need to handle more applications, unnecessarily
clogging the front end of the process.
3. Representing the agency at the ALJ level. We do not support
efforts to have SSA represented at the ALJ hearing because past
experience shows that it does not result in better decision-making and
reducing delays, but instead injects a level of adversity, formality
and technicality in a system meant to be informal and nonadversarial.
In the 1980's, SSA tested, and abandoned, a pilot project to have the
agency represented. It was terminated following Congressional criticism
and a judicial finding that it was unconstitutional and violated the
Social Security Act. In the end, the pilot did not enhance the
integrity of the administrative process.
4. Retain review by the Appeals Council. We oppose the elimination
of a claimant's right to request review by the Appeals Council. The
Appeals Council currently provides relief to nearly one-fourth of the
claimants who request review of ALJ denials, either through outright
reversal or remand back to the ALJ. Review by the Appeals Council, when
it is able to operate properly and in a timely manner, provides
claimants, and SSA, with effective review of ALJ decisions. Given the
low percentage of appeals to federal court, it appears that claimants
largely accept decisions by the Appeals Council as the final
adjudication of their claims. As a result, the Appeals Council acts as
the initial screen for ALJ denials, a position for which the district
courts are not equipped, given their other responsibilities.
5. Access to judicial review in the federal court system. We
believe that both individual claimants and the system as a whole
benefit from the federal courts deciding Social Security cases. Over
the years, the federal courts have played a critical role in protecting
the rights of claimants. The system is well-served by regular, and not
specialized, federal judges who hear a wide variety of federal cases
and have a broad background against which to measure the reasonableness
of SSA's practices.
We urge Commissioner Barnhart to take these concerns into account
in efforts to reduce the backlog in disability cases.
SSI Childhood Disability / Examination of Disability Determination
Process
Over the last few years, SSA has engaged in a deliberate process to
study how it assesses children with disabilities for purposes of the
SSI program. These efforts have resulted in important clarifications
and streamlining of the process, embodied in final regulations
published in September 2000 which became effective in January 2001. SSA
continues to evaluate its procedures regarding such things as the kind
of evidence necessary to assess disability, including appropriate
tests, and the kind of consultative examinations which will yield the
most useful evidence. Knowledge gained through this evaluation,
conducted in partnership with disability assessment experts through the
Association of University Centers on Disabilities, can help inform
SSA's future policy decisions regarding the childhood SSI program. We
urge that this work continue. In addition, we urge that SSA consider
adopting a similar approach to evaluate the way in which adults are
assessed for purposes of eligibility in the disability programs.
Improvements for Surviving Spouses with Disabilities
We support the provisions in the Social Security Benefit
Enhancements for Women Act of 2002 (H.R. 4069) to repeal the seven year
restriction on eligibility for widow's and widower's insurance benefits
based on disability. We believe that this provision and others intended
to better protect widows and widowers are important improvements
Supplemental Security Income Improvements
1. SSI Modernization Act of 2001
The CCD Task Forces believe it is time to make important
improvements in the SSI program and we support passage of the SSI
Modernization Act of 2001, H.R. 739. This bill is an important and much
needed step in increasing the ability of people with disabilities and
the elderly to improve the quality of their lives. Many people with
disabilities must rely on the Supplemental Security Income program for
basic income support and the access it provides to critical medical
services through Medicaid. Despite severe, lifelong disability
requiring on-going support, many beneficiaries attempt to improve the
quality of their lives through earnings. Others receive some income
from their past employment efforts. Increasing the value of the small
amounts of earned and unearned income to be disregarded by SSI will
assist beneficiaries in improving their overall situation and will also
reduce the administrative burden of dealing with small adjustments in
payments. In addition, removing barriers to education will provide
beneficiaries opportunities for further growth and potential for future
work.
The SSI Modernization Act addresses several important areas
designed to encourage work, savings, and education. These include: an
increase in the general income exclusion; increase in the earned income
exclusion; increase in the resource limits; and an increase in the
irregular or infrequent income disregard. Each of these exclusions,
limits, or disregards would be indexed for inflation so that the buying
power of beneficiaries' income is protected. The bill would also ensure
that children who are still in school, including those receiving
special education services, would be allowed to finish their education
prior to their assessment as adults for the SSI program. Finally, the
bill would exclude the entire amount of educational grants from income
and, for 9 months, from resources.
We believe that these modest, but important, improvements to the
SSI program will assist beneficiaries while encouraging work, savings,
and educational efforts. We believe that these improvements could also
help people better meet their ongoing obligations, providing vital
resources to fall back on for housing repairs and the like. We urge
that SSA and Members of the Subcommittee support these improvements.
2. Medicaid Retention
There is another issue also needing attention regarding retention
of Medicaid when SSI benefits are lost upon entitlement to early
retirement benefits. The Social Security Act requires SSI recipients to
apply for any and all other benefits to which they may be entitled.
Included in this group are a small number of recipients who are not
eligible for Social Security Disability Insurance benefits because they
were not currently insured at the onset of their disability but who are
fully insured for retirement benefits, either on their own account or
on the account of a spouse or ex-spouse. These SSI beneficiaries are
required to apply for retirement benefits at age 60 or 62. Some of them
have earnings records that result in a high enough monthly retirement
benefit that renders them financially ineligible for SSI. The loss of
eligibility for SSI for these recipients also results in a loss of
eligibility for Medicaid, which is only partially averted where some
states provide coverage for the elderly and people with disabilities
with an income up to 100% of the federal poverty level. Because the
beneficiaries are under 65 years of age, they are not entitled to
Medicare benefits and often do not have the financial ability to pay
for private health insurance. This result is particularly devastating
to these former SSI recipients who are still disabled and are
experiencing further deterioration in their health as a result of their
increasing age.
The Act allows widows and widowers who lose SSI benefits upon
entitlement to early retirement benefits to retain Medicaid coverage.
42 U.S.C. Sec. 1383c(d). This protection should be extended to all SSI
recipients who lose Medicaid upon entitlement to early retirement
benefits. The number of individuals who would benefit from this
extension is relatively small but the protection it would provide them
is enormous. We urge the Commissioner and Members of the Subcommittee
to support closing this gap through which they fall.
3. Expanding SSI Eligibility for Noncitizens
The 1996 welfare law severely restricted the SSI eligibility of
noncitizens lawfully residing in the United States. While legislative
changes in 1997 and 1998 helped some individuals who entered before
August 22, 1996, eligibility remains extremely limited for individuals
who entered on or after that date. TANF reauthorization provides an
opportunity for the Subcommittee on Human Resources to consider
restoring equal access to SSI benefits, such as eligibility for
lawfully residing immigrants with disabilities, with appropriate
safeguards. We urge Commissioner Barnhart and Members of the
Subcommittee to support these efforts.
Attorneys Fees in SSI
In previous testimony (May 2001), the CCD Social Security Task
Force urged the Subcommittee to support a statutory change, similar to
the provision in Title II, that would allow SSI claimants to
voluntarily enter into agreements with attorneys for SSA to withhold
and provide direct payment of attorneys fees from their past due SSI
benefits. We support such a provision because it will help ensure that
claimants have adequate representation to appeal their cases. The
reasons behind the withholding and direct payment of attorneys' fees in
Title II cases apply with equal force to SSI cases.
We appreciate and support your inclusion, in H.R. 4070, of
provisions to establish a similar mechanism in SSI. We also thank the
Commissioner for increasing the maximum fee cap in Title II cases, an
adjustment which had not occurred since 1990.
Representative Payee Improvements
Approximately 6 million Social Security and Supplemental Security
Income beneficiaries have representative payees, often family members
or friends, who receive the benefits on behalf of the beneficiaries and
have a responsibility to manage the benefits on behalf of these
beneficiaries.
As favorably reported by the Subcommittee last week, H.R. 4070
includes provisions strengthening SSA's ability to address abuses by
representative payees. The provisions would: require non-governmental
fee-for-services organizational representative payees to be bonded and
licensed under state or local law; provide that when an organization
has been found to have misused an individual's benefits, the
organization would not qualify for the fee; allow SSA to re-issue
benefits to beneficiaries whose funds had been misused; allow SSA to
treat misused benefits as ``overpayments'' to the representative payee,
thereby triggering SSA's authority to recover the money through tax
refund offsets, referral to collection agencies, notifying credit
bureaus, and offset of any future federal benefits/payments; and
require monitoring of representative payees, including monitoring of
organizations over a certain size and government agencies serving as
representative payees.
We support these provisions, including establishing the definition
of ``misuse'' in the statute, rather than leaving it solely to
administration policy. We believe that such provisions should be
enacted. In addition, we believe that SSA should address the
accountability of state or federal agencies who serve as representative
payees and ensure that governmental agencies or institutions are not
selected as representative payees where family or friends are
available, willing, and capable to serve as payee.
Limitation on Administrative Expenses
SSA workloads are projected to begin increasing rapidly within the
next decade as the baby boom generation begins to reach its peak
disability years just prior to reaching early retirement age beginning
in 2008. In addition, the SSA workforce is also aging and will begin to
lose significant numbers of staff, including senior and leadership
staff. About 3,000 employees are expected to retire per year from 2007
through 2009. SSA is also taking on new or more complex
responsibilities such as providing increased rehabilitation and
employment services for people with disabilities, completing and
maintaining an appropriate schedule of continuing disability reviews
and other eligibility reviews, and new approaches to prevent fraud and
abuse. In FY 1985, SSA's staffing levels were 80,844 FTEs and 83,406
workyears. The President's budget requests for FY 2003 include 63,464
FTEs and 64,730 workyears, for a reduction of 17,380 FTEs and 18,676
workyears over the last 18 years.
The CCD Social Security Task Force has voiced concern for some time
over the continued long-term downsizing of the SSA workforce. We
believe that failure to conduct appropriate and timely CDRs and other
eligibility reviews could lead to decreased trust in the integrity of
the Social Security and SSI programs. In addition, the new efforts to
assist people with disabilities to go to work, through the Ticket to
Work and Work Incentives Improvement Act of 1999, require new and
expanded approaches for SSA interaction with beneficiaries. Adequate
staffing levels are critical for these and other efforts to be
successful, especially given the coming disability and retirement years
of baby boomers.
For these reasons, we strongly support removing the Social Security
Administration's Limitation on Administrative Expenses (LAE) budget
authority from any domestic discretionary spending caps. Even if the
LAE were removed from the domestic discretionary caps, SSA's LAE would
still be subject to the annual appropriations process and Congressional
oversight. Currently, SSA's administrative expenses total less than 2%
of benefit payments paid annually. Congress would still maintain its
role in ensuring continued administrative efficiency.
Most importantly, removal of the LAE from the domestic
discretionary spending caps would remove it from competition with other
health, education, and human needs programs for limited funds. It would
allow for growth that is necessary to meet the needs of the coming
baby-boomer retirement years (including the retirement of SSA and state
DDS personnel); continue the efforts to improve the processing time for
initial applications and appeals; continue the efforts to ensure
integrity in the program through CDRs and other redeterminations; and
allow for replacement of staff in a timely manner to allow for adequate
training and mentoring.
__________
Thank you for this opportunity to testify on the challenges facing
the Commissioner of Social Security. We look forward to working with
the Subcommittee and Commissioner Barnhart in addressing these
challenges affecting people with disabilities.
Chairman SHAW. Thank you, Ms. Ford. Ms. Kennelly?
STATEMENT OF THE HON. BARBARA KENNELLY, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, NATIONAL COMMITTEE TO PRESERVE SOCIAL
SECURITY AND MEDICARE, AND FORMER MEMBER OF CONGRESS
Ms. KENNELLY. Good morning, Chairman Shaw and Congressman
Matsui.
I am Barbara Kennelly, and I am the new President of the
National Committee to Preserve Social Security and Medicare. We
have millions of members and supporters across this country. We
are a grassroots advocacy group, and we are an educational
organization.
Mr. Chairman, Congressman Brady, also, and of course
Ranking Member Matsui, thank you for your leadership on Social
Security issues. I really appreciate the opportunity to testify
this morning.
I have just begun a new job, as the other new President I
think has, too, and I had planned to come and ask you to see me
individually because I really value your expertise. However,
getting this invitation to appear before a Committee that I
served on for 16 years, I just could not turn it down.
I am pleased to be here, also, with Social Security
Commissioner Jo Anne Barnhart. I have known her in her other
life, as she has known me, and I wish her success at the helm
of the Social Security Administration. I anticipate working
with the Commissioner, as I anticipate working with this very
important Subcommittee.
As a former Ranking Member of this Subcommittee, and more
recently counselor to Commissioner Apfel, and Associate
Commissioner of Retirement Policy, some of the staff here that
I have worked with, I have a strong sense of challenge facing
and understanding what is facing Commissioner Barnhart.
Chairman Shaw, I know that under your leadership the
Subcommittee has had a very full agenda, and we share your
concern about the misuse of personal data held by Social
Security, and we applaud your efforts to highlight the
continuing response of SSA to those who were directly affected
by the events of September 11.
The SSA remains one of the most effective agencies in the
Federal Government. Each year, SSA efficiently tracks the
lifetime wages of almost every American worker and then sees
that 46 million of these Americans get their benefits. In the
short-term, Commissioner Barnhart faces the challenge of
ensuring that the Agency continues the success. In the longer
term, the Commissioner faces a demographic, technological, and
management policies that face the Agency. May I speak to a few
of these pending SSA retirements?
We know that by 2009, half of the workforce of Social
Security will be eligible for retirement. Even more
importantly, the senior management at the end of this decade,
practically half of the senior management, will also be
eligible for retirement, and of course this means a great
change in the leadership of the Agency.
I also want to speak about streamlining access to benefits.
The burden on SSA is lightened when the public accesses
benefits and information electronically, through e-mail, the
Internet, and direct deposit for beneficiaries. These new
technologies can also add convenience. However, we have to be
very careful that those people who are seeking help from Social
Security know that they also can speak to somebody personally
if, in fact, it is necessary. For a variety of reasons, direct
human contact is important, particularly when so many of these
people are elderly, bereaved or disabled.
Having said that, we have to be very careful about how we
move into the electronic age, and knowing that the Committee
should not have goals so high that they can't be reached, let
me please join with the Commissioner in her commitment to
processing disability claims. I will never forget the first day
I went to one of the offices where the claims are processed,
never forget seeing the overloaded file cabinets, never forget
seeing the files from floor to ceiling, bins full of files.
I can't tell you the number of calls I got from the
administration, from old friends, who were so delighted that
the new Commissioner had decided to make the disability claim
operation one of her priorities. I really feel, unless it is a
priority, nothing can really happen to improve it. More
importantly, I don't think, if we didn't have the technology
changes we have, that we could ever address the situation. So,
I salute the Commissioner, and I know I could hear from all you
had to say this morning and what the Congressmen said, that you
are willing to back her completely because we all know this is
a very serious problem.
Privacy. It is because Social Security has been such a
successful universal program that the number has become
overused for identity purposes. We applaud the Agency for its
tremendous support of the investigative efforts, following the
recent attacks on our Nation. Balancing national security
interests, however, with personal privacy will be a big
challenge for SSA, and you will have to determine what the role
is in the new implementation of the USA Patriot Act, which is a
whole other subject.
Inequities in the current system. We applaud the efforts of
this Subcommittee to address existing inequities in the present
Social Security benefit structure. Thank you, Mr. Chairman, for
your leadership in repealing the earning limit for seniors over
65. That was absolutely wonderful. Talked about for years, but
you and your Committee did it, and I thank you, and the people
across this country thank you.
Another major challenge will be to address the real
disadvantages women face under our current system, and this is
one of the reasons that I took the present job that I am
holding. Women remain our society's primary family care-givers
and spend more time of their working years outside the
workforce. When they are working outside the home, they still
earn less than men, on average, even for a similar job. For
similar reasons, women generally do not have the same access to
pensions. One sensible reform would be to leave out the benefit
calculations any years where an individual had zero earnings
due to family care-giving responsibility. A higher benefit for
surviving spouses should also be enacted, and we are all
pleased to see some promise in this improvement in the area
because of your introduction with Mr. Matsui of H.R. 4069.
Social Security solvency. The greatest challenge facing
Social Security is the need to ensure the long-term solvency
for future generations. As you have this hearing today talking
about the day-in/day-out work of the Social Security Agency and
how you, as a Committee, can back that work of the Agency, we
have to know that the National Committee understands that
really the major emphasis has to be, for all of us, the whole
solvency question.
We are going to have debates over this, but these are for
another day, and we will have honest disagreements. The fact of
the matter is, I think we have been given another opportunity.
When I was in the Congress, we had the Commission that came in
with a report and had three answers, and now we have a new
Commission that comes in with three answers. So, we have
another opportunity to debate the whole question of solvency.
There are, as I said, disagreements. However, what we can all
agree on is that we do it sooner rather than later. We
remember, we were on the Committee when we had the 1983
reforms, and we remember some of the drastic things that had to
happen, the first time to attack Social Security, the first
time the young people who are collecting Social Security and
then went to college, after 18, it was shut off, and that was
no longer there. Of course, we know we had the raising of the
age from 65 to 67.
I also trust our new Commissioner will work to ensure that
Americans of all ages become better educated about the value of
Social Security in their lives. Too many people believe that
myth that it won't be there when I get older. The fact of the
matter is that the actuaries have come in and said we can be
fiscally sound to 2041 now. So, I hope we can all come together
to understand how we can make sure that people know any
developed country in this world has to have a core retirement
program.
So thank you, Chairman Shaw and Members of the
Subcommittee, for having this hearing. I feel like I have come
home. I look forward to being again active in Social Security.
Thank you very much.
[The prepared statement of Ms. Kennelly follows:]
Statement of the Hon. Barbara Kennelly, President and Chief Executive
Officer, National Committee to Preserve Social Security and Medicare,
and former Member of Congress
Good morning Chairman Shaw, ranking Member Matsui and distinguished
members of the Subcommittee. I am Barbara Kennelly, President and Chief
Executive Officer of the National Committee to Preserve Social Security
and Medicare. With millions of members and supporters across America,
the National Committee is a grassroots advocacy and education
organization devoted to the retirement security of all citizens--from
the ``twenty-something'' generation and baby boomers to the nation's 34
million seniors.
Mr. Chairman, Ranking Member Matsui, thank you for your leadership
on Social Security issues. I appreciate the opportunity to testify
today. This is a fitting debut in my new position, and an ideal way to
begin my tenure at the helm of the National Committee. I look forward
to working closely with both of you and all of the Members of the
Committee. Hopefully you will allow me to visit with each of you. Your
expertise is invaluable to me.
I am also pleased to be here with Social Security Commissioner, Jo
Anne Barnhart. I wish her success in leading the Social Security
Administration (SSA) upon which millions of people rely for their
earned benefits, and that most others look to as a financial safety net
that will be there when they need it. We anticipate working with the
Commissioner and with this important Subcommittee to ensure that Social
Security continues to meet the needs of working Americans and their
families.
As a former Ranking Member of this Subcommittee, and more recently
Counselor to Commissioner Apfel and Associate Commissioner on
Retirement Policy at SSA, I have a strong sense of the challenges
facing Commissioner Barnhart. Those challenges include the following:
Pending retirements at SSA;
Streamlining and modernizing access to benefits and
information;
Eliminating unnecessary delays in the disability
claims process; and
Ensuring the long-range solvency of the Old Age,
Survivors and Disability Insurance programs.
Chairman Shaw, I know that under your leadership, the Subcommittee
has had a full agenda. We share your recent concern about the misuse of
personal data held by Social Security, the misuse of benefits by
representative payees, and we applaud your efforts to highlight the
continued response of SSA to those directly affected by the tragedies
of September 11.
SSA has many strengths. It is one of the most effective agencies in
the Federal Government. Each year, SSA efficiently tracks the lifetime
wages of nearly every American worker. Each month, the agency sends out
benefits for over 46 million Americans with clockwork efficiency. All
this, including the claims processing, is done with administrative
costs of less than 1 percent. SSA provides service to the American
people with a level of success that rivals the performance of the best
companies in the private sector.
Americans not receiving a check still benefit from the program's
disability and survivor insurance provisions. Each year, 135 million
working Americans rely on Social Security for disability insurance. In
fact more than 30 percent of Americans receiving a monthly check from
SSA are non-retirees. Each month, about 4 million children and 5
million disabled workers receive benefits.
In the short term, Commissioner Barnhart faces the challenge of
ensuring that the agency continues to efficiently provide benefits that
keep millions of people out of poverty. In the longer term, the
Commissioner faces the demographic, technological and management
challenges I mentioned earlier. I would like to discuss those
challenges in greater detail.
Pending SSA Retirements
One major reason for the success of SSA is its skilled and
dedicated workforce. By 2009, over half the agency's 63,000 employees
will be eligible for retirement. SSA may also lose most of its senior
management to retirement by the end of this decade, just as the
agency's workload is expected to dramatically increase. Initiatives are
underway to prepare for this, but the agency needs additional resources
to remain ahead of the curve and ensure seamless public service.
Streamlining Access to Benefits
The burden on SSA is lightened when the public accesses benefits
and information electronically, through e-mail, the Internet, and
direct deposit for beneficiaries. These new technologies and new ways
of reaching beneficiaries provide cost savings to the agency and
convenience for those who are served. We need to improve on the fact
that only 3.5 percent of retirement claims are handled over the
Internet. However, I urge the Administration not to set an overly
ambitious goal. Many seniors are adept at using the web, but for many,
there is a reluctance to embrace the new technology. The goal of
raising the level of Internet or automated telephone service delivery
to 67 percent by 2005 should be reviewed.
For a variety of reasons, conventional means of accessing benefits,
assistance and information should always be an option for those who
choose it. Beneficiaries should be able to speak or write to an agency
representative in person about a problem if they need to do so. This
kind of access puts a human face on the agency and enhances public
confidence in the program. Hence, it is imperative that resources
continue to be directed toward this type of personal service, including
maintenance of existing local and regional offices.
Eliminating Unnecessary Delays
The excessive lag time in processing disability claims,
particularly appeals from a denial of a disability claim, is clearly an
issue that demands attention. The process of evaluating a claim is
inherently complex and the current system is antiquated. We can all
agree that lag time in handling these claims is an issue that needs our
attention now before it becomes more acute. This is one area where I
believe that new technologies will be of great help. Mr. Chairman, we
salute you and your staff who have devoted considerable time and effort
to address this problem. We are pleased to see that these efforts to
improve in this area are a high priority for the Administration as
well.
Privacy
Thank you also for your efforts to ensure the integrity of
beneficiary information and to prevent the misuse of the Social
Security number. It is because Social Security has been such a
successful universal program that the number has become overused for
identity purposes. Use of Social Security cards must be limited to the
accounting and records purposes of the Treasury Department and
activities that are related to the mission of SSA. We salute the agency
for its tremendous support of the investigative efforts following the
recent attacks on our nation. Balancing privacy with broader public
needs remains a big challenge as SSA considers its important role in
the implementation of the USA PATRIOT Act.
Inequities in the Current System
We applaud the efforts of this Subcommittee to address existing
inequities in the present Social Security benefits structure. Thank you
Mr. Chairman for your leadership in repealing the earnings limit for
seniors over age 65. We also appreciate your efforts in advancing the
debate on the Government Pension Offset. The reform of the Government
Pension Offset would address a long-standing unfairness.
In addition to the Government Pension Offset, there is a second
issue that is particularly sensitive to women: the Windfall Elimination
Provision. As you know, Congress created a modified formula for
determining monthly Social Security benefits to eliminate any windfall
to individuals who worked in jobs that were not covered by Social
Security, but receive benefits that were computed as if they were long-
term, low-wage workers. We believe that the Windfall Elimination
Provision should be modified.
It is my hope that we can move to address the real disadvantages
women face under our current Social Security system. Women remain our
society's primary family caregivers, and they still earn less than men
on average, even for similar work. Also, for the same reasons, women
generally do not have the same access to pensions or other types of
retirement income. One sensible reform would be to leave out of the
benefit calculation any years during which an individual had zero
earnings due to family caregiving responsibilities. An increase in the
benefit for surviving spouses should also be considered as well as a
restoration of the minimum benefit. We are pleased to see promise for
improvement in some specific women's benefit issues through the
introduction of your legislation, H.R. 4069, the Women's Benefits
Improvement Act.
Social Security Solvency
I hope that we all can agree that the greatest challenge facing the
new Commissioner is her role in the effort to ensure the long-term
solvency of the retirement and disability trust funds for future
generations.
Assuming no changes, Social Security will be fiscally strong for
the next 39 years. Beyond 2041, however, tough choices will need to be
made to close the projected 29 percent solvency gap. Every generation
must be guaranteed full benefits. The National Committee does not
support efforts to partially privatize Social Security. We oppose the
transformation of Social Security from an insurance program that offers
everyone a defined benefit to an investment vehicle based on a defined
contribution that favors those with higher incomes and uninterrupted
work histories. We share the Administration's desire to create new
opportunities for younger workers to save and invest. But we believe
that personal savings and investment must be in addition to the current
baseline benefit provided by Social Security.
There are honest disagreements over how best to ensure the future
solvency of the Social Security program, but I can safely say there is
at least one point on which we can all agree: the sooner decisions are
made, the easier they will be to implement and the less painful they
will be for all stakeholders. We also believe that the debate over how
improve the solvency of the Social Security program should include the
broadest possible range of alternatives. The Commissioner of Social
Security must be an integral part of this debate as well.
Public Education
I trust that our new Commissioner will work to ensure that
Americans of all ages become better educated about the value of Social
Security in their lives. Too many younger Americans are encouraged to
question whether Social Security be there for them when they retire,
without understanding that it is there for them now, as insurance
should they or their parents die or become severely disabled. Social
Security not only lifts more than half of our nation's retirees above
the poverty line, it provides protection and financial relief to
Americans of all ages against the ``hazards and vicissitudes of life.''
I feel confident that Commissioner Barnhart's agenda will include an
educational endeavor to help current and future beneficiaries
understand the value of the Social Security program in our daily lives.
Thank you Mr. Chairman for holding this hearing and extending this
opportunity to speak. I also want to thank you for your strong
leadership on this Subcommittee and your sustained work to improve the
performance of the agency. On behalf of the millions of members and
supporters of the National Committee to Preserve Social Security and
Medicare we look forward to working with you, your colleagues, and
Commissioner Barnhart as you move forward in the 107th Congress to
accomplish your mission.
Chairman SHAW. I might add you look very comfortable in
this room.
[Laughter.]
Chairman SHAW. Mr. Matsui?
Mr. MATSUI. Thank you very much, Mr. Chairman. Thank you
for yielding to me.
I want to, first of all, thank all of you for your
testimony, and I want to thank Mr. Shaw for having this hearing
today. I am going to have to leave, so I will not be able to
ask questions and stay for the balance of it, but I thank all
of you very much.
Thank you, Mr. Shaw.
Chairman SHAW. Yes, sir. Mr. Brady?
Mr. BRADY. Thank you, Mr. Chairman.
First, I want to thank the panel not just for being here
today, but reading through the testimony ahead of time, it is
clear that you identified not only problems that we need to
work on, challenges, but solutions as well, and that is really
very helpful for this Committee and the staff as we try to move
forward on this.
I really had wanted to inquire of our two former Members of
Congress and our President-Elect for AARP, Ms. Smith, and our
Co-Chair, Marty Ford. It seems to me that we have got a number
of challenges before us. Some of them are emerging challenges
that are a part of a process improving Social Security the way
it works today, the other are longstanding problems, the
solvency of Social Security, how to preserve it once and for
all.
My question to you is, in a Congress so evenly divided in
both chambers or evenly balanced, however you look at it, how
important is it or maybe the reverse is true, what are the
chances of Congress successfully improving and reforming
preserving Social Security? How likely is that to happen if
both parties won't work together to do it? It seems to me that
it is not just election-year politics any more, it is 24/7
politics that seems to be the biggest single obstacle for us
really working together to reform Social Security.
It seems to me there are some good ideas out there on how
we can really address this in a good, thoughtful debate, but
they get no air. They get no oxygen. There is no chance for
real scrutiny and debate, and my people back home, they want to
talk about these options. They want to hear about them, they
want to think about them, and they want to give it back to us.
So, my question to you is what are the chances of us
succeeding in improving and preserving Social Security without
us working together to do it? I would open it up to the floor.
Ms. KENNELLY. I will begin. First of all, we know that no
major legislation can ever get really passed if there isn't
some kind of bipartisan coming together. I think everyone here
understands calendars, and there is probably nothing obviously
going to happen, other than a lot of talk, between now and
Election Day. Having said that, we also continue to understand
calendars, and I think there is an understanding that in a
Presidential election year, it might not happen. So, you have
that window of opportunity after your next election to truly
address this issue.
All of us who have been so familiar with Social Security
are very familiar with the list of incremental changes that can
be taken to try to put out the years when the Social Security
needs additional funding. We are very familiar with them. So, I
wouldn't have taken this job, Congressman, if I despaired. I
really think in that year after the election, of this coming
election, that there is an opportunity, with all of the
information and the interest, that we can address or you can
address this thing and work together. As I said, I remember
1983 when it did happen.
Mr. BRADY. Thank you.
Ms. SMITH. I would like to respond.
I remain optimistic because I think that, at the end of to
day, no matter what party you belong to, you will remember that
we are dealing with people. We are dealing with human lives. We
are dealing with our frail elderly, our disabled. I know, I
have total confidence that, when all else fails, we are going
to come to that point and say we are going to take an action.
We will be strong.
As has been mentioned already, we know all of the possible
solutions to this. It is just a matter of grabbing a hold to
one or two, however you want to handle it, but it is the
people, and they are going to badger us. They are going to
badger AARP. They are going to badger their representatives,
and you know how it is like a bull dog----
Mr. BRADY. Yes, we know that.
[Laughter.]
Ms. SMITH. We will come to you and all of the agencies that
represent the different groups because the voices are getting
louder, and louder and louder.
Mr. BRADY. Thank you.
Mr. DAUB. I think you asked the $64-million question. I am
not so sure it would be any less difficult if the partisan
division were skewed, given the nature of this issue. So, I
have three suggestions for you and for the Committee.
First of all, I think that Members of Congress themselves,
and I say this having been one, need to address the issue by
understanding Social Security better than many do, and
therefore be less inclined to emotionally respond to a
constituent or to a media source when they discuss terms like
lockbox or the meaning of the trust fund or that there is
really no money there, it is just a bunch of paper and IOUs,
and so forth, and so forth. That is an indication of being
misinformed, and that, in turn, I think creates a
misunderstanding in the public. I think that creates some of
the gridlock then that ultimately afflicts the congressional
ability to legislate.
Mr. BRADY. So, we are part of the problem.
Mr. DAUB. I think that Members of Congress who often get
asked in their townhall meetings about Social Security need to
work harder at understanding the system of the Certificate of
Indebtedness and that the document that represents the earnings
record really can be found in a safe, in a vault in the Bureau
of Public Debt in the hills of West Virginia, that it does
exist, there is an accounting system and that it is dependable.
So, I think that is the first recommendation.
The second one is that any effort that Congress makes,
particularly because of the even division between parties,
needs to be comprehensive. This is a very complex set of
issues, and they are all interrelated. The four Trust Funds
relate to Old-Age Survivors and Disability, part A Medicare,
and part B Medicare. part B Medicare is financed by general
fund revenues, plus a premium. Medicaid is a Federal-State, 60-
40 match, and SSI, is fully funded by general revenue of the
U.S. Department of the Treasury. They all interrelate. These
programs represent a huge amount of outlay, in terms of the
totality of the Federal budget, so there should be a
comprehensive solution, rather than a picking away at it.
The third and last one, is stewardship. This is a 67-year-
old program. Some people a long time ago summoned the courage
to make sure it worked well for many decades ahead. We need
now, as is said, sooner, rather than later, to summon the
courage, in a bipartisan way, to act comprehensively rather
than let the problems get worse.
Mr. BRADY. Mr. Chairman, do you think I could get 1 minute
for Ms. Ford to respond real quick?
Chairman SHAW. Yes, please be brief. We were instructed to
conclude this hearing by 11:00 by the Chairman, but perhaps he
won't know.
[Laughter.]
Ms. FORD. My response will be brief.
I just want to say that, in the history of disability law
and policy, we have never had any real progress on any issue,
unless it has been bipartisan. So, we definitely have hope that
we will get there in a bipartisan way. We think it is the only
way to approach it.
Chairman SHAW. I have been asked, both by friends and foe
alike, about why I haven't pushed the agenda forward, and the
problem is that we have not, as of this date, put together the
bipartisan spirit that is going to be necessary to solve this
problem. I am particularly pleased to see Barbara where she is,
and Hal where he is, as Members of Congress, understanding the
politics of the situation.
I would also like to say that, as Mr. Daub said, I would
venture to say over half the Members of Congress do not
understand how the Social Security system works. I would have
to say that I have learned a lot, since I have been Chairman of
this Subcommittee, that I would like to share with the other
Members of Congress because it is very important and vital that
we do understand it.
Any thought or any discussion regarding privatization of a
Federal obligation is pure nonsense. Social Security is a
Federal retirement program, and it is going to stay a Federal
retirement program run by the Federal Government. We need to
add onto it, but we do not, in any way, and I will not stand by
and allow the integrity of the basic system to be, in any way,
interfered with. It needs help. We need to add to it, but we
need to keep the basic system totally in place, as the ultimate
safeguard for tomorrow's retirees, as well as today's retirees.
I look forward to that private meeting that you are talking
about, Barbara. I would like very much to discuss this with
you.
Ms. KENNELLY. Thank you, Congressman.
Chairman SHAW. You mentioned, in your comments, that the
young people are, more or less, saying in despair it is not
going to be there for them. They ought to be madder than hell
about it, and they ought to be on our doorsteps demanding, the
young people in this country, demanding that we do something
about it because they will be members of AARP. The AARP not
only represents today's seniors, but they also have a
conscience for tomorrow's seniors.
You are coming here, Ms. Smith, from Hawaii----
Ms. SMITH. That is right.
Chairman SHAW. Is certainly great evidence of your concern
for this. I know that AARP does not want to take sides in a
debate. However, I would hope that you would add your voice to
those that demand Congress do its job and get this done.
Ms. SMITH. We plan to do that.
Chairman SHAW. Unfortunately, I am afraid that we are not
going to be able to get the bipartisanship that is necessary
until after the next election. I would be delighted if I could
get that, but it just doesn't seem to be in the cards for
between now and November.
As Chairman of this Subcommittee, I may very well, if we
haven't moved the ball, I may very well call back and ask the
Members of the Subcommittee to come back in November and start
the dialog that is necessary. We cannot afford to wait. There
is a very narrow window of opportunity. Once we get over into
2004, it is going to be chaos in trying to get something done.
So, we have got to do it either the end of this year or the
very beginning of next year, and that is my intention for this
Subcommittee, as I feel this is vitally important.
We do not have a cash problem until 2017. However, the
longer you wait, the more difficult it is going to be to find
the solution and hold the benefits exactly where they are,
which is my intention, and that is the intention I think of
most of the Members of Congress.
We do not need to adjust the cost of living. We do not need
to, in any way, affect the age of retirement at this particular
time. That is something that this Congress should not, and will
not, have to face, and neither will the next Congress, if I
have my way about it, but it is time I think for us to sit down
and really work for it.
The purpose of this hearing was to be able to streamline
and to offer better service to the people we all work for, and
I think this is something I am very encouraged by your presence
and each of your testimony. It was very clear and succinct, and
I appreciate your taking the time to be here.
Chairman SHAW. Thank you very much. This hearing is
concluded.
[Questions submitted by Chairman Shaw to the panel, and
their responses follow:]
Social Security Administration
Office of the Inspector General
Baltimore, Maryland 21235
June 24, 2002
The Honorable E. Clay Shaw, Jr., Chairman,
Subcommittee on Social Security
Committee on Ways and Means
House of Representatives
Washington, D.C. 20515
Dear Mr. Shaw:
Thank you for the opportunity to testify before the Subcommittee on
Social Security regarding challenges facing the Commissioner of Social
Security. Please find enclosed our responses to the following questions
posed in your May 28, 2002 letter.
The Agency has taken several steps to improve the Social Security
numbering process and provide for secure claims over the Internet. We
will continue to monitor the Agency's efforts in both of these
projects.
If you have any questions about our response, please call me or
your staff may contact H. Douglas Cunningham, Special Assistant, at
(202) 358-6319.
1. Are you satisfied with the progress the Agency is making
relative to improving the Social Security numbering process? What
progress is being made with other agencies, particularly the
Immigration and Naturalization Service (INS), in addressing the
documentation for immigrants entering our country?
We are encouraged by the steps the Agency is taking to improve its
enumeration process, and we believe Commissioner Barnhart is committed
to strengthening related policies and procedures.
For example, the Social Security Administration (SSA) has
implemented verification of birth records before enumeration for all
applicants age 1 and over for original Social Security numbers (SSNs).
Also, SSA lowered the age tolerance from 18 to 12 for mandatory
interview procedures. Further, in July 2002, the Agency plans to begin
verifying all noncitizen evidentiary documents before issuing SSNs,
with full implementation by the end of the year.
We are also encouraged by the progress SSA is making with other
agencies in addressing the documentation for immigrants. SSA continues
to work with INS and the Department of State (DoS) to resolve issues
involving enumeration. SSA has taken steps to expand document
verification by providing its field offices (FO) manual access to DoS'
Refugee Data Center and is working to provide its FOs online access to
INS' Non-Immigrant Information System (NIIS). SSA is working with INS
and DoS to implement the initial phase of the Enumeration at Entry
program, which would reduce the probability of SSA improperly assigning
SSNs to immigrants.
The Agency has formed several enumeration-related workgroups and
continues to explore other areas to improve the integrity of the SSN.
We will continue to monitor the Agency's efforts to ensure it meets all
established milestones and that no significant delays occur.
2. There is potential for fraud when the Agency is dealing with
``faceless'' persons across the Internet. As pressures to deliver
service through the Internet grow, how is SSA protecting the process
from fraud? How can the Agency be sure when a person on the Internet
claims to be an eligible individual and applies for benefits, that they
are dealing with the right person and won't send benefits to the wrong
person?
We agree with your assessment that the Internet will be the
foundation of the Agency's future information technology initiatives.
The United States is the world's leading Internet nation, with over 110
million users. By some estimates, worldwide Internet traffic is
doubling every 100 days. The baby-boomer generation is more
technologically aware than any previous generation. It is estimated
that three-quarters of Americans under the age of 60 use the Internet
at work or at home. We are only beginning to see the extent of changes
that it will bring.
Advances in technology, public expectations, Congress' mandate in
the government Paperwork Elimination Act \1\ (GPEA) and the President's
Management Council, all require that SSA move expeditiously to adopt
electronic processes. By 2005, SSA expects to make 60 percent of its
customer-initiated services available electronically through automated
phone services or the Internet. Presently, the Agency allows customers
to key in portions of their title II retirement and disability claims
electronically. However, once the claimants complete their keying, they
are required to print out, sign and mail to SSA their application with
necessary proofs. Some of the internal controls regarding this process
are as follows,
---------------------------------------------------------------------------
\1\ P.L. 105-277, sections 1701-1710
SSA requires that these Internet applicants elect
direct deposit. This allows the Agency to ``share the burden''
with the financial institutions and the Department of the
Treasury. The name on the incoming electronic funds transfer
payment must match the name on the financial institution's
account. Most banks require some form of picture identification
to open an account. This provides additional assurances about
---------------------------------------------------------------------------
the applicant's identity.
SSA checks the SSN against its Numident file. If the
name or date of birth on the incoming Internet claim does not
match the Numident, SSA investigates the matter.
SSA still requires a birth certificate, military
service papers, wage report (W2), marriage certification, etc.
A substantial number of the Internet applications do
still involve contact with an SSA employee. In addition, if SSA
has any concerns about the validity of the application, they
are supposed to make personal contact with the applicant.
SSA has an automated Earnings Enforcement Operation
(EEO) which identifies incorrect benefit payment situations
under the Retirement and Survivors Insurance (RSI) programs
that result from a beneficiary's earnings. If SSA is paying
benefits to a non-disabled beneficiary and wages are posted to
that record, SSA will determine if an overpayment or
underpayment exists and make the necessary adjustments to the
record. Additionally, SSA has a Continuing Disability Review
Enforcement Operation (CDREO) which is designed to identify
disabled beneficiaries that have potentially substantial
earnings after disability onset. SSA investigates these cases
to determine whether cash benefits and/or disability
entitlement should end.
If there is any indication of fraud, SSA will refer the
matter to the OIG.
Furthermore, when SSA converts or adopts new procedures to perform
specific business processes electronically, it conducts a risk
assessment, as prescribed in the Office of Management and Budget's
(OMB) Procedures and Guidance for Implementation of the GPEA. In
planning and selecting appropriate procedures and electronic signature
technologies, SSA policy calls for it to consider factors associated
with traditional paper-based processes, such as originator
authentication, message integrity, non-repudiation, and
confidentiality. SSA procedures also call for the consultation of
outside privacy experts to opine on the Agency's ability to maintain
the privacy of its beneficiaries' data.
We have asked SSA to consider one additional safeguard concerning
the verification of claimants. Because the application of benefits/
taking of claims and the verification of a claimant are at the heart of
the Social Security system, we have asked SSA officials to consider
requiring claimants to prove their identity in person before payment of
benefits begins. Because we believe this safeguard, like others, should
be assessed based on its merits, we have asked SSA to consider this
aspect of identification as part of its overall risk assessment of the
claims taking process.
As SSA and other agencies proceed toward adopting electronic
transmission and storage of information, the importance of legal
considerations also increases dramatically. As a result, the Department
of Justice (DoJ) has issued a guide \2\ for Federal agencies to assist
them with the legal considerations in designing and implementing
electronic processes into their systems. We strongly believe and have
recommended to SSA officials that the Agency follow, to the extent
practicable, DoJ's Guide. The Guide explains the legal issues the
Agency is likely to face in designing electronic-based processes,
examines four overarching legal issues that should be considered with
respect to converting any given type of system or operation, and
discusses general and specific steps agencies should consider in
converting to electronic processes.
---------------------------------------------------------------------------
\2\ Legal Considerations in Designing And Implementing Electronic
Processes, A Guide For Federal Agencies, United States Department of
Justice, November 2000.
---------------------------------------------------------------------------
There are always risks, however, in conducting electronic commerce,
despite the Agency's efforts to identify and mitigate them. SSA will
have to keep privacy and security concerns at the forefront of its
planning efforts by continuing to work closely with privacy experts and
consultants. SSA will have to use a variety of tools to protect the
public's information, such as data matching, personal identification
number/password, public/private key tools, encryption, firewalls,
digital signatures and biometrics. Secure access to SSA's facilities
and its multiplatform environment, as well as secure electronic access
to SSA's records, will be a top priority to ensure it complies with the
Presidential Decision Directives 63 \3\, which deals with critical
infrastructure protection, and 67 \4\, which is concerned with
continuity of government operations.
---------------------------------------------------------------------------
\3\ Issued May 22, 1998
\4\ Issued October 21, 1998
---------------------------------------------------------------------------
GPEA seeks to preclude agencies from systematically treating
electronic documents and signatures less favorably than their paper
counterparts, so citizens can interact with the government
electronically (S.Rep. 105-335). GPEA states that electronic records
and their related electronic signatures are not to be denied legal
effect, validity, or enforceability merely because they are in
electronic form. SSA has taken a proactive position regarding the
future use of electronic signatures and is evaluating the use of
digital signature, under a limited proof of concept basis, in areas
other than benefit claims.
The Office of the Inspector General (OIG) has also
taken a proactive position with respect to the Agency's use of
electronic commerce and electronic signature in the following
manner
Provided training on Internet and Web Security to the
OIG's System's team and key SSA officials and their staffs.
Directed OIG personnel to sit on numerous Committees
at SSA that initiate and approve electronic commerce system
development projects and implement policies and procedures that
use electronic commerce.
Advised SSA officials and their staffs on security
requirements impacting electronic commerce.
Asked my legal staff to be available to consult with
SSA on matters of electronic commerce and signature
requirements.
Directed our financial statement audit contractor to
conduct an audit of the internal controls of SSA's Web-based
systems over the last 2 Fiscal Years.
Conducted on-going audits involving systems security
that will include a review of SSA's system development life-
cycle management practices of its Web-based systems.
Sincerely,
James G. Huse, Jr.
Inspector General
AARP
Washington, DC 20049
June 24, 2002
E. Clay Shaw, Jr., Chairman
House of Representatives
Ways and Means Committee
Subcommittee on Social Security
Rayburn House Office Building B-317
Washington, DC 20515
Dear Chairman Shaw:
I was pleased to testify on behalf of AARP at the May 2, 2002
Subcommittee hearing on the challenges facing the Social Security
Commissioner. I also appreciate the opportunity, in response to your
May 28th follow-up letter, to provide you with additional information
regarding our members' views on the Social Security Administration's
(SSA) 800 number service and public awareness about the Social Security
program. Since AARP Membership begins at 50 and many of our members are
in their nineties, there are age-based differences among our members in
both areas. When necessary, I will differentiate among them.
1. You discuss AARP's concerns for telephone service. Can you tell
us more about what your members are experiencing, how important this
service is to them and any suggestions for change you may have?
AARP's younger members are accustomed to securing information via
the telephone and generally find SSA's 800 service useful--unless they
experience delays. Some older members are less familiar with accessing
information over the phone and have difficulty navigating through the
system. As well, some people are hearing impaired or have physical or
mental difficulties that prevent them from using the 800 number. Some
AARP members, particularly those over age 65, have commented on the
need for greater courtesy (e.g., that some 800 number staff are rude or
curt).
A well functioning 800 number requires that SSA receive sufficient
funding. Inadequate resources lead to staff shortages and incomplete
training for those who answer the phone. AARP urges that SSA's
administrative expenses be removed from any congressionally
established, discretionary spending cap. The agency's administrative
costs are paid with Social Security trust fund dollars, not the general
revenues that finance other programs, and therefore should not be
subject to the spending cap.
2. In order for us to reach bipartisan agreement on how best to
strengthen Social Security, the views of our constituents are so
important. Their knowledge about the challenges Social Security faces
and the options for change is extremely important to advance the
debate. Based on your experiences with your members, where are the
information gaps? How do you see SSA addressing those information gaps,
and what recommendations would you have for ways SSA could better
educate the public?
In general, AARP members are better informed than the rest of the
public about how Social Security works. This could reflect coverage of
Social Security issues in our publications and AARP's public education
efforts throughout the country. Knowledge about Social Security among
AARP members (and the public) is directly related to age, with younger
members having less knowledge. Our younger members, especially those
who work, may have less interest in and/or time to learn the
fundamentals about Social Security and less experience with the
program.
Regardless of age, the biggest information gap involves the current
financial status of the program and the Social Security trust funds. A
minority of our members understand Social Security's financing, but
most members are unaware of Social Security's true financial health
(e.g., that Social Security has sufficient assets to pay full benefits
until 2041 and over seventy percent for decades thereafter).
Many older members confuse Social Security and Supplemental
Security Income (SSI) benefits. They mistakenly believe that some who
did not contribute for themselves (and their dependents) are receiving
Social Security benefits. We have long worked to explain the
eligibility differences between the two programs and their distinct
revenue sources, but the information gap persists.
Working AARP members underestimate the program's value for
themselves and their dependents and are largely unaware of Social
Security's survivor and disability benefits. While SSA's annual
statement provides workers with useful information about retirement,
survivor and disability benefits, not all workers read the material.
Without sufficient resources, SSA has had to curtail some of its
public outreach programs. SSA's website has helpful information for
Internet users, but many individuals do not have access to the
worldwide web and others do not know about the site and what it
provides. Moreover, an Internet site is not a substitute for face to
face contact with an SSA representative.
As part of its outreach effort, SSA has been emphasizing the
importance of supplementing Social Security with additional savings.
This is an important message that hopefully will encourage today's
worker to put aside some or more money for their retirement.
Just as SSA's 800 number service would be improved with additional
resources, the agency could upgrade its public education efforts with
additional funding. A better-informed public would not only know more
about the program itself but could help in forgoing a bipartisan
consensus to strengthen Social Security for future generations.
I hope my response is helpful. If you need additional information,
please feel free to contact me, or Evelyn Morton of the Federal Affairs
staff at (202) 434-3760.
Sincerely,
Marie Smith
President-elect
Consortium for Citizens with Disabilities
Washington, DC 20006
June 24, 2002
The Honorable E. Clay Shaw, Chairman
Subcommittee on Social Security
U.S. House of Representatives
Washington, DC 20515
Dear Chairman Shaw:
This is in response to your letter of May 28 requesting additional
information regarding challenges facing the Commissioner of Social
Security. Specifically, you asked:
1. You raise a number of concerns about implementation of the
Ticket to Work program in your testimony. Some to these have been
addressed in recent legislation moving through the Committee. This
Subcommittee will continue its close oversight of this important
program and will want to work with you to identify improvements needed
in the law. What cooperation have you received from SSA under the
Commissioner's new leadership? Have you met with the new Commissioner?
Have you shared your concerns? Has she been responsive?
2. In order for us to reach bipartisan agreement on how best to
strengthen Social Security, the views of our constituents are so
important. Their knowledge about the challenges Social Security faces
and the options for change is extremely important to advance the
debate. Based on your experiences with your members, where are the
information gaps? How do you see SSA addressing those information gaps,
and what recommendations would you have for ways SSA could better
educate the public?
The CCD Task Forces on Social Security and Work Incentives
Implementation applaud your work in introducing H.R. 4070, the Social
Security Program Protection Act of 2002 and addressing some of the
Ticket to Work issues in the bill. We also appreciate your intention to
have the Subcommittee continue its close oversight of this important
program and the CCD Task Forces will want to work with you to identify
improvements needed in the law. We met with Martin Gerry, Deputy
Commissioner for Disability and Income Security Programs, in February.
He and others in SSA have been available to hear our concerns and
respond to inquiries about numerous issues. It is too soon to know
whether the concerns that we have raised will find their way into
decision- and policy-making in SSA. We also have a meeting scheduled
with Commissioner Barnhart for mid-July.
Regarding Social Security reform, the general public sees the
debate as a retirement program debate and most are unfamiliar with the
other benefits paid by Social Security, including the disability and
survivors' programs. SSA should engage in public information outreach
activities to ensure that the general public, particularly those paying
FICA taxes, have a clear understanding of all Social Security programs,
and the basics of the insurance coverage they provide.
Much is understood about retirement benefits. However, few people
seem to realize the scope of the additional coverage provided by the
Social Security programs: survivors' coverage, including coverage of
disabled adult children and disabled and elderly surviving spouses;
dependents' coverage, including coverage of disabled adult children;
and disabled workers' coverage, including coverage for their
dependents. SSA could produce explanations of this coverage, along with
examples, that could be disseminated through its available media
resources. The personal earnings and benefits estimate statement
(PEBES) made many people aware of the value of the benefits of Social
Security system. Simple documents that primarily focus on the non-
retirement benefits of the program could similarly go a long way in
creating a broader understanding of the coverage provided.
In addition to basic information about the programs and their
benefits, SSA should play a lead role in helping all stakeholders and
policymakers to understand the implications of the various proposals
for change. Unless there is a broader understanding of the programs and
the potential changes, the debate will continue to create confusion.
Acceptance of a final reform product will require that people
understand what exists and what may be changing. Without such public
understanding, there is great potential for public outcry over
unexpected and unwanted results. Therefore, I believe that a sincere
attempt to educate the general public must be combined with clear
statements about the impact of various proposals on beneficiaries.
These beneficiary impact statements should be based on agreed-upon use
of consistent baseline and economic assumptions. While the stakes are
so high for people with disabilities, few people understand the issues;
therefore, it is incumbent upon policymakers to ensure that this
information is widely available.
Thank you for this opportunity to provide comment on these issues.
I would be happy to respond to any further questions.
Sincerely,
Marty Ford
Co-Chair
CCD Social Security Task Force
[Whereupon, at 11:10 a.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of LaJuana Alexander, Director of Counseling and Assessment,
Northwestern Technical College, Rock Spring, Georgia
To the Subcommittee on Social Security:
It is my understanding that this is the committee to whom I should
address my concerns.
Teachers and educational employees in 14 states who are covered by
alternative state retirement plans (no SS withheld) are currently being
adversely affected by a Social Security regulation which will penalize
up to 60% of our SS benefits that were earned in other states or in
other professions outside these education employee benefit plans.
Organizations such as our Department of Technical and Adult Education
actively recruit outstanding professionals in business and industry to
teach in their areas of expertise. I doubt there are any who understand
that they are going to pay a financial price for their cooperation. If
they were, they would not be anxious to enter these educational fields.
I personally worked in various educational and non-profit
foundation organizations for most of my adult life which had supposedly
earned for me a small SS pension. After my husband left me, I realized
I had to get busy and secure my old age benefits, so I went back to
school for my master's and eventually entered the career counseling
field at a technical college. I will be 10 year-vested next year which
will also coincide with my 65th birthday. When I attended a retirement
seminar, I was shocked to discover that I would not draw my full SS
benefits (on which I was depending) because of my small 10 year pension
at DTAE. It sounded as though my penalty would be about the same as
those who had worked longer and had larger pensions. NO ONE TOLD US
when we took these positions that this was going to happen.
It makes no sense to allow those 65 and older to draw their SS
benefits and continue to work without penalty, while those of us who
legitimately earned social security benefits in other professions are
going to be penalized.
A recent article in the newspaper mentioned two bills--HR2638 and
the Senate version SB1523--as fixes for this inequity. I would
appreciate anything this committee can do to get those bills passed
without delay. We may not be a great number of people, but this policy
is hurting us just the same and many are going to suffer unnecessarily
unless it is changed.
Thank you.
American Congress of Community Supports and Employment Services
Washington, DC 20006
February 14, 2002
House Committee on Ways and Means
The Honorable E. Clay Shaw, Jr., Chairman
Subcommittee on Social Security
B-316 Rayburn House Office Building
Washington, DC 20515-6353
House Committee on Ways and Means
The Honorable Wally Herger, Chairman
Subcommittee on Human Resources
B-317 Rayburn House Office Building
Washington, DC 20515-6351
Chairman Shaw and Chairman Herger:
Thank you for giving me the opportunity to submit my written
statement on the challenges facing the Social Security Administration
(SSA) and new Commissioner. As chairmen of your respective
subcommittees, I am sure that you can appreciate that the lives of
individuals with disabilities are greatly impacted by the programs
administered by SSA.
I am submitting my statement on behalf of the American Congress of
Community Support and Employment Services (ACCSES). ACCSES is a
national, nonprofit organization of providers of vocational
rehabilitation and community supports committed to maximizing
employment opportunities and independent living for individuals with
mental and/or physical disabilities.
I will focus my statement on the ongoing implementation of the
Ticket to Work and Self-Sufficiency Program (hereafter referred to as
the Ticket program), which is part of the historic Ticket to Work and
Work Incentives Improvement Act (TWWIIA) of 1999. Considering that many
individuals with disabilities want to work, but do not for fear of
losing their Social Security Disability Insurance (SSDI) and
Supplemental Security Income (SSI), the Ticket program presents a clear
opportunity for success. The success of the Ticket program will
undoubtedly be measured in many ways, such as the number of
beneficiaries discontinuing their Federal disability benefits,
community rehabilitation programs (CRPs) providing quality services,
and the potential savings to the Social Security Trust Fund.
The Ticket program embodies the desire that individuals with
disabilities have in wanting to forego disability benefits and become
self-sufficient. Since currently less than one half of one percent of
SSDI beneficiaries and approximately one percent of SSI beneficiaries
ever realize the dream of becoming self-sufficient, it is crucial that
the legislative intent of the TWWIIA is maintained during the
implementation process. Removing disincentives to work and barriers to
access quality health care are the cornerstones of this landmark piece
of legislation. Anything short of SSA achieving these goals will result
in lost confidence in the system by both beneficiaries and community
providers alike.
Despite congressional intent, in publishing its final regulations
on the Ticket program SSA has created new and distinct barriers to
employment for SSDI and SSI beneficiaries. ACCSES feels that the
exclusion of beneficiaries who have impairments that are expected to
improve and for whom SAA has not yet conducted at least one continuing
disability review (CDR) is troublesome. The ``medical improvement
expected'' (MIE) designation is ambiguous. Reliable evaluations are
hard to obtain and subject to interpretation by disability
determination officials. SSA's decision is clearly based more on
administrative convenience than sound public policy since many
beneficiaries remain on the rolls well after their first CDR. All
beneficiaries deserve an equal opportunity to participate in the Ticket
program and access the services being offered by community providers
that will enable them to gain self-supporting employment.
In fact, SSA acknowledges the weakness of its standard in its own
response to comments under Section 411.125. In its response, SSA
stated, ``. . . we plan to conduct an evaluation of the methodology for
the classification system to assess possible ways to improve the system
for use in identifying those beneficiaries for whom near-term medical
improvement should preclude the immediate receipt of a Ticket.''
In maintaining the MIE exclusion in the final regulations, SSA
stated that using ``the medical improvement diary system is the most
practical and efficient means available to identify those beneficiaries
with impairments that are expected to improve within a relatively short
period of time so as to permit the individual to engage in SGA
.'' The diary system, however, will not
assist beneficiaries who have been improperly classified as MIE but
continue to need ongoing rehabilitative support services (i.e. there
were 2200 individuals with diagnosed schizophrenia in 1994--a medical
condition that often involves relapses). Clearly these individuals need
more than a diary to benefit from the resources available under the
Ticket program. Instead of being fearful that some beneficiaries with
near-term medical improvements might use such resources to obtain
employment and engage in SGA, SSA should focus their attention on
granting beneficiaries maximum access to them.
Changing the final regulations to reflect the intent of the
legislation is also consistent with the purpose of the Rehabilitation
Act of 1973, as amended. Both the Ticket-to-Work program and the
Rehabilitation Act of 1973, as amended, aim to offer the needed
resources and opportunities for individuals with disabilities who want
to enter or reenter the workforce. More importantly though, both stress
the importance of informed consumer choice and self-determination in
accessing rehabilitative and support services. By denying beneficiaries
designated as MIE, SSA is essentially denying beneficiaries from
exercising their right to choose the best and most appropriate options
available in ending their dependency on cash benefits.
Along the same lines as the MIE exclusion, SSA has created an
additional disincentive with its timely progress standards toward self-
supporting employment. Though ACCSES recognizes that these standards
only apply to CDR protection (and not participation in the Ticket
program), beneficiaries will be wary of participating if they fear a
negative CDR determination will end their cash benefits prior to
obtaining self-supporting employment. Basically, there is no incentive
for beneficiaries to participate in the Ticket program without an
unambiguous CDR protection.
The standards in the final regulations are clearly too rigid and do
not take into consideration the different abilities of beneficiaries
who have different disabilities. In other words, a ``one-size-fits-
all'' approach to the timely progress standards assumes that
beneficiaries with physical and mental disabilities require the same
rehabilitative services and supports. This approach may be easier to
administer and monitor, but it will make it harder for beneficiaries
with severe, persistent, and complex disabilities to enter or re-enter
the workforce. Individuals with psychiatric, developmental, physical,
and/or multiple disabilities require different services and supports
and, therefore increased flexibility not only recognizes individual
differences, but also accommodates them, thus assuring an increased
opportunity for success.
The timely progress standards should be directly related to how
beneficiaries are accomplishing their employment goals as outlined in
their approved Individual Work Plans (IWPs). Connecting the timely
progress standards to the IWPs puts the beneficiaries in control of
their own progress--thus, ensuring a greater probability of success.
This approach, if adopted by SSA, would, again, be consistent with the
emphasis placed on informed consumer choice and self-determination by
the Ticket program and the Rehabilitation Act of 1973, as amended. As
long as beneficiaries are actively engaged in working toward their
employment goal, and the community providers are furnishing services
(employment, vocational rehabilitation, or other support services as
outlined in Subpart E in the final regulation) then their level of
success should not be adversely measured using ``administrative''
standards.
It appears that SSA has sided, again, with administrative
convenience in establishing its standards for CDR protection instead of
the congressional intent to remove barriers and disincentives. In
responding to comment, SSA stated, ``. . . if we allowed the individual
and the EN or State VR agency to define timely progress, it would not
be possible to develop a consistent and standardized method to
determine timely progress for program administration and integrity
purposes.'' Considering that the IWP is basically the contract between
beneficiaries and community providers--with clearly required and
defined components already approved by SSA Program Managers--SSA has
the documentation needed to maintain the program administration and
integrity it references.
The final regulations already show a willingness by SSA to
recognize unforeseen events, which may cause beneficiaries to suspend
their work efforts. By granting an unassigned or inactive ticket status
during the initial 24-month period, SSA is allowing beneficiaries to
temporarily suspend their employment plan. Also, the months in which
their tickets are inactive do not count toward the time limitations for
making timely progress toward self-supporting employment. Clearly, if
beneficiaries are working toward achieving their employment goals
outlined in their IWPs, then it stands to reason that they are meeting
the timely progress standards. SSA should not penalize beneficiaries
with inflexible standards.
SSA has also modified its standards in the final regulations to
allow for ``banking'' of work during the initial 24-month period to
meet work requirements of the first 12-month progress review period if
the work was at the requisite level. If SSA is willing to accommodate
beneficiaries and their unique needs by allowing the banking of work,
then SSA should also be willing to modify their standards to maximize
beneficiaries' self-determination.
Finally, the success of putting beneficiaries back to work will, in
large part, depend on the availability of employment services,
vocational rehabilitative services, and other support services in the
community. Most community providers fully recognize that the program
does not come without risks and therefore will be looking for
incentives to make their participation justifiable as an Employment
Network (EN). ACCSES is concerned that by only allowing community
providers to change their desired payment system every 18 months, the
final regulations will hinder the recruitment of ENs. Community
providers will be looking for flexibility to help ease their
apprehension over the risks associated with their participation.
Granted, community providers are not obligated to accept tickets
that they feel are beyond their service expertise. However, since the
Ticket program is outcome-based in nature, community providers will
have to wait an extended period of time before seeing a return on their
investment (i.e. furnishing services to beneficiaries). And though
community providers can elect to choose the milestone-outcome payment
system--which begins making payments sooner once milestones are
achieved--the total net worth of the payments is less than the outcome
payment system. By making what amounts to a simple infrastructure
change, SSA will go a long way in appeasing provider apprehension.
In addition, many potential community providers are not-for-profit
organizations that lack the resources to deliver services without some
cost reimbursement prior to job placement. Few of these organizations
can afford to wait for a year or longer before recovering at least some
of their costs. The current payment system will prevent the majority of
community providers from participating in the program and will result
in a lack of choice for beneficiaries and in a service delivery system
with insufficient capacity. Furthermore, by shifting all of the risk to
community providers, it is reasonable to expect that beneficiaries with
higher abilities will be targeted for services with the most in need
viewed as to great a risk.
On a related issue, SSA decided not to narrow the gap in net
payment amounts between the outcome and milestone-outcome payment
systems. Currently, under the milestone-outcome payment system in the
final regulations, SSA will only pay 85 percent of the total payments
under the outcome payment system. The concept is in keeping with
congressional intent and the statutory language, but the size of the
gap is questionable.
The milestone-outcome payment system was added to the statute
because community providers expressed their reluctance to participate
in the Ticket program with the proposed outcome-only based payment
system. The addition of the milestone-outcome payments aimed to entice
community providers to enroll as ENs and offer service to
beneficiaries. By only paying 85 percent, SSA essentially created a
roadblock for community providers who are considering accepting the
risk associated with the program. Though community providers will
receive some up-front monies, the total amount not materialized (15
percent) is a high price to pay.
Considering that to date SSA has had difficulties in recruiting
community providers to enroll as ENs, the concerns expressed over the
payment systems should be taken under advisement.
In closing, ACCSES appreciates the opportunity to submit its
written statement to the House Ways and Means Subcommittees on Social
Security and Human Resources. ACCSES urges the new Commissioner of SSA
to incorporate these important changes as the ongoing implementation of
the Ticket program moves forward. Thank you in advance for your
consideration and attention to this issue. Should you desire additional
information, please feel free to contact me at 231-922-4886, or Brandon
Macsata in our Washington, DC office at 202-466-3355. I am
Sincerely,
Steve H. Perdue
President
Statement of Ronald G. Bernoski, President, Association of
Administrative Law Judges, Bronx, New York
Mr. Chairman and Members of the Subcommittees:
I. INTRODUCTION
Thank you for the opportunity to testify before you today. My name
is Ronald G. Bernoski. I am an Administrative Law Judge (``ALJ'') who
has been hearing Social Security disability cases at the Office of
Hearings and Appeals (``OHA'') of the Social Security Administration
(``SSA'') in Milwaukee, Wisconsin, for over 20 years.
This statement is presented in my capacity as the President of the
Association of Administrative Law Judges (``AALJ''), which represents
the ALJs employed in the SSA OHA and the Department of Health and Human
Services (``DHHS''). One of the stated purposes of the AALJ is to
promote and preserve full due process hearings in compliance with the
Administrative Procedure Act for those individuals who seek
adjudication of program entitlement disputes within the SSA.
I will address the challenges facing the new Commissioner of SSA in
improving the disability determination appellate process at the ALJ
hearing and Appeals Council administrative review levels. First, I will
list the challenges at each of the appellate levels and then I will
offer short and long term solutions that may be implemented to resolve
these challenges. This discussion presumes familiarity with the
structure of the SSA OHA and the initiatives by the SSA management to
change or improve the functioning of OHA, including the Process
Unification Training (``PUT''), the Hearing Process Improvement Plan
(``HPI''), and the Appeals Council Improvement Plan (``ACPI'').
II. CHALLENGES FOR THE NEW SSA COMMISSIONER
A. Challenges at the ALJ Hearing Level: In brief, the
Commissioner's challenges at this level is to have a large and growing
volume of cases heard and decided by SSA's ALJs in a timely and high
quality manner that preserves the claimant's due process rights under
the Social Security Act and Administrative Procedure Act (``APA'').
Several specific challenges that now confront the new Commissioner are
as follows:
1. The Need to Reduce the Number of Cases that Require an ALJ
Hearing and Thus Get the Claimants a Correct Final Administrative
Result Sooner: The burgeoning caseload at the ALJ hearing level has
been growing unabated in recent years. Prior to HPI, the SSA OHA heard
and decided over 500,000 cases annually, and surpassed 600,000 in one
recent year. SSA is projecting that the annual case load will climb to
about 726,000 by 2005. This has strained the current structure of OHA
to timely handle the volume with quality because nothing effective has
been done to either reduce the number of cases that require an ALJ
hearing or change the structure of OHA to better address the huge
caseload:
L (a) OHA's structure and process for hearing cases has not
changed significantly to adjust to the large scale of the
operation since the APA went into effect in 1947. There is no
mechanism for settling cases without a hearing, other than
granting a claim on the record, because SSA has no
representative to assert its interests at the hearing level.
Cases endlessly are remanded back to the ALJ level for
rehearing because the record remains open without limits, new
issues may be raised at all levels of appeal, and the quality
of the Appeals Council review is poor.
L (b) The reversal rate of the DDS decisionmakers'
determinations by the ALJs remains high. In order to reduce the
number of ALJ reversals of DDS determinations, in 1996, the SSA
conducted the PUT training to have the DDS decisionmakers use
the same rules to decide cases as the ALJs. This did not result
in fewer cases requiring a hearing.
LThere are several steps that SSA can take that do not require
legislation to reduce the number of ALJ hearings.
2. Challenges from the ALJ Level HPI Reorganization of OHA: There
is a consensus that HPI, which SSA implemented in 2000, has both
exacerbated the case disposition time problems that it was intended to
solve and created new problems that have caused work flow bottlenecks,
reduced the quality of decision drafts by some decision writers, and
increased the case backlog. The several HPI challenges are as follows:
L (a) One purpose of HPI was to reduce the amount of
processing time it takes to obtain the evidence for the record
by doing it more completely before the ALJ hearing, so that
fewer cases would need post-hearing development. The practice
of HPI did not result in a reduction of cases that require
post-hearing development.
L (b) HPI also was expected to reduce overall case processing
time, ostensibly by reducing the need for post-hearing
development. Instead, case processing time steadily has
lengthened under HPI beyond what was considered to be
unacceptable at the time that HPI was implemented. The creation
of teams to handle cases was intended to decrease the number of
people who have to work on each case and increase individual
responsibility for the quality of work within the group, which
were expected to reduce case processing time and increase work
quality. Instead, HPI process has resulted in an increase of
the ``hand offs'' of the files and the sense of individual
responsibility for work quality has vanished. The cases are
assigned to judges later in the process and the responsibility
for early pre-hearing case development has been transferred to
the staff.
L (c) The quality of decision drafts has declined because, as
part of the HPI plan, SSA has promoted to Paralegal Specialist
positions as ALJ decision writers clerical staff members, many
who do not have the skills to perform the job adequately. HPI
created promotion opportunities for the clerical staff, which
boosted the morale of those receiving the promotions. However,
the implementation of HPI resulted in the promotion of clerical
staff to approximately 350 writer positions without the need to
show that they have the skills to do the job. This promotion
process resulted in positions being filled by clerical staff,
some of whom who have not been successful in performing the
job.
L (d) A huge backlog of case files that need to be prepared
for hearing has accumulated as a result of the SSA promoting
about 350 clerks to writer positions and about 300 clerks to
case technician positions as part of the HPI plan without
replacing the vacated clerical positions. (The process of
organizing and marking exhibits to prepare a case for hearing
is called ``pulling,'' which is a clerical task.) As a result,
the backlog of unpulled cases has ballooned from about 34,000
to 216,000 since HPI has been implemented. The shortfall in
``pulled'' cases has resulted in an insufficient number of
cases being scheduled for ALJs to hear in many offices and adds
to the case processing time.
L (e) The lack of acceptance of the failure of HPI by the SSA
administrators is a challenge that the new Commissioner
confronts. At a hearing before the House Subcommittee on Social
Security in June 2001, Mr. Stanford Ross, Chair of the SSAB,
testified that the HPI did not improve the hearing process and
in some circumstances it had made the situation worse. Without
acknowledgment of the failure of HPI, new strategies will not
be considered seriously and implemented by SSA administrators.
3. The Challenge of Preserving Due Process While Achieving Greater
Efficiency:
I have a strong concern with recent information that I have seen
relating to proposals to transfer the SSA administrative law judge
hearing to the DDS, non-ALJ hearing officers within OHA, and/or non-ALJ
personnel within the District Offices. Any plan to deny Social Security
claimants the right to a full due process hearing under the
Administrative Procedure Act (``APA'') before an administrative law
judge will result in a denial of basic constitutional rights to the
American people. The preservation of APA due process for the claimants,
including the hearing and decision of their claims by ALJs who are
appointed pursuant to the APA, is essential as the new Commissioner
devises ways to more efficiently address the agency's large and growing
caseload.
The APA was adopted by Congress in 1946 to ensure that the American
people were provided hearings that are not prejudiced by undue agency
influence. The securing of fair and competent hearing adjudicators was
viewed as the heart of the Administrative Procedure Act.
The APA was enacted primarily to achieve reasonable uniformity and
fairness of the administrative process in the Federal Government for
members of the American public with claims pending before Federal
agencies. The APA sets forth a due process administrative procedure for
the hearing and decision by administrative law judges of cases brought
before the Federal agencies to which the APA applies. The APA provides
the minimum standards for federal administrative due process in the
Executive Branch, and delineates procedures for adjudicative
administrative proceedings, namely individual case decisions about
rights or liabilities as an agency's judicial function. This includes
uniform standards for the conduct of adjudicatory proceedings,
including the merit appointment of administrative law judges. U.S.
Justice Dept., Attorney General's Manual on the Administrative
Procedure Act 9 (1947) (the ``Manual''). The APA, Pub. L. No. 79-404,
60 Stat. 237 (1946), as amended, is codified at 5 U.S.C. Sec. Sec. 551-
559, 701-706, 1305, 3105, 3344, 4301(2)(E), 5335(a)(B), 5372, and 7521.
By APA mandate, the administrative law judge is an independent,
impartial adjudicator in the administrative process and there is a
separation of the adjudicative and prosecutorial functions of an
agency. The administrative law judge is the only impartial, independent
adjudicator available to the claimant in the administrative process,
and the only person who stands between the claimant and the whim of
agency bias and policy. If SSA returns to using subordinated employees
who would be an instrument and mouthpiece for the SSA, we will have
returned to the days when the agency was both prosecutor and judge.
There is a close relationship between the APA and the Social
Security Act. In the case of Richardson v. Perales, 420 U.S. 389
(1971), the U.S. Supreme Court stated that the APA was modeled upon the
Social Security Act.
It is clear that Congress intended the APA to apply to hearings
conducted under the Social Security Act. The Attorney General's Manual
on the Administrative Procedure Act, which is recognized by the U.S.
Supreme Court to be part of the legislative history of the APA, states
that ``the residual definition of `adjudication' in section 2(d) was
intended to include . . . [t]he determination of . . . claims under
Title II (Old Age and Survivor's Insurance) of the Social Security Act.
. . .'' Manual at 14-15 (emphasis added), citing, Senate Judiciary
Committee Hearings on the APA (1941) at 657, 1298, 1451 and S. Rep. No.
752 at 39; 92 Cong. Rec. 5648. (The other programs did not then exist.)
In the case of Butz v. Economou, 438 U.S. 478, 513-514 (1978), the
U.S. Supreme Court defined the role of a Federal Administrative Law
Judge as follows:
L There can be little doubt that the role of the modern
hearing examiner or administrative law judge within this
framework is ``functionally comparable'' to that of a judge.
His powers are often, if not generally, comparable to those of
a trial judge. He may issue subpoenas, rule on proffers of
evidence, regulate the course of the hearing, and make or
recommend decisions . . . . More importantly, the process of
agency adjudications is currently structured so as to assure
that the hearing examiner exercises his independent judgment on
the evidence before him, free from pressures by the parties or
other officials within the agency. Prior to the Administrative
Procedure Act, there was considerable concern that persons
hearing administrative cases at the trial level could not
exercise independent judgment because they were required to
perform prosecutorial and investigative functions as well as
their judicial work . . . and because they were often
subordinate to executive officials within the agency . . . .
Since the securing of fair and competent hearing personnel was
viewed as ``the heart of formal administrative adjudication,''
. . . the Administrative Procedure Act contains a number of
provisions designed to guarantee the independence of hearing
examiners. They may not perform duties inconsistent with their
duties as hearing examiners . . . . When conducting a hearing
under the APA, a hearing examiner is not responsible to or
subject to the supervision or direction of employees or agents
engaged in the performance of investigative or prosecution
functions for the agency . . . . Nor may a hearing examiner
consult any person or party, including other agency officials,
concerning a fact at issue in the hearing, unless on notice and
opportunity for all parties to participate . . . . Hearing
examiners must be assigned to cases in rotation so far as
practicable . . . . They may be removed only for good cause
established and determined by the Civil Service Commission
after a hearing on the record . . . . Their pay is also
controlled by the Civil Service Commission.
The Congress has reviewed the function of the administrative law
judge in the Social Security Administration. In 1983, a Senate
Subcommittee on Oversight of Government Management of the Committee on
Governmental Affairs conducted a hearing that inquired into the role of
the administrative law judge in the Title II Social Security Disability
Insurance Program. S. PRT. 98-111. The Committee issued its findings on
September 16, 1983, which provided in part as follows:
L The APA mandates that the ALJ be an independent impartial
adjudicator in the administrative process and in so doing
separates the adjudicative and prosecutorial functions of an
agency. The ALJ is the only impartial, independent adjudicator
available to the claimant in the administrative process, and
the only person who stands between the claimant and the whim of
agency bias and policy. If the ALJ is subordinated to the role
of a mere employee, and instrument and mouthpiece for the SSA,
then we will have returned to the days when the agency was both
prosecutor and judge.
The decisionmaking independence provided by the APA is not for the
benefit of the judge, but instead is provided for the protection of the
American people. The protections are intended to ensure that the
American people receive a full and fair due process hearing with a
decision based on the evidence in the hearing record. This is a right
protected by the Constitution. ``The APA creates a comprehensive
bulwark to protect ALJs from agency interference. The independence
granted to ALJs is designed to maintain public confidence in the
essential fairness of the process through which Social Security
benefits are allocated by ensuring impartial decisionmaking.'' Nash v.
Califano, 613 F.2d 10, 20 (2nd Cir. 1980). Despite these protections,
the Social Security Administration has a history of attempting to
assert undue influence on the decisionmaking of its administrative law
judges. This abuse occurred in the 1980's after the agency had
implemented the Bellmon Review Program. The Senate Subcommittee on
Oversight of Government Management (referred to above) issued findings
on September 16, 1983, on this improper agency conduct that provided in
part as follows:
L The principal findings of the subcommittee is that the SSA
is pressuring its ALJs to reduce the rate at which they allow
disabled persons to participate in or continue to participate
in the Social Security Disability Program.
The Bellmon Review Program also was challenged in the courts in
Association of Administrative Law Judges v. Heckler, 594 F.Supp. 1132
(1984). In that case, a Federal district court judge found in part as
follows:
L In sum, the Court concludes, that defendant's unremitting
focus on allowance rates in the individual ALJ portion of the
Bellmon Review Program created an untenable atmosphere of
tension and unfairness which violated the spirit of the APA, if
no specific provision thereof. Defendants' insensitivity to
that degree of decisional independence the APA affords to
administrative law judges and the injudicious use of phrases
such as ``targeting'', goals and ``behavior modification''
could have tended to corrupt the ability of administrative law
judges to exercise that independence in the vital cases that
they decide.
The efforts of the administrative law judges of the Social Security
Administration to protect the Social Security hearing process and the
rights of Social Security claimants was recognized in an award
presented to the judges of the agency by the President of the American
Bar Association in August 1986. The award acknowledged the efforts of
the Social Security administrative law judges in protecting the
integrity of the hearing system. The award specifically stated:
L That the American Bar Association hereby commends the Social
Security Administrative Law Judge Corps for its outstanding
efforts during the period from 1982-1984 to protect the
integrity of administrative adjudication within their agency,
to preserve the public confidence in the fairness of
governmental institutions and uphold the rule of law.
On January 9, 2001 Commissioner Kenneth S. Apfel affirmed the
relationship between the Administrative Procedure Act and the Social
Security Act for Social Security hearings. He stated as follows:
L The Social Security Administration (SSA) has a long
tradition, since the beginning of the Social Security programs
during the 1930s, of providing the full measure of due process
for people who apply for or who receive Social Security
benefits. An individual who is dissatisfied with the
determination that SSA has made with respect to his or her
claim for benefits has a right to request a hearing before an
Administrative Law Judge, an independent decisionmaker who
makes a de novo decision with respect to the individual's claim
for benefits. As the Supreme Court has recognized, SSA's
procedures for handling claims in which a hearing has been
requested served as a model for the Administrative Procedure
Act (APA). Congress passed the APA in 1946 in part to establish
uniform standards for certain adjudicatory proceedings in
Federal agencies, in order to ensure that individuals receive a
fair hearing on their claims before an independent
decisionmaker. SSA always has supported the APA and is proud
that the SSA hearing process has become the model under which
all Federal agencies that hold hearings subject to the APA
operate. SSA's hearing process provides the protections set
forth in the APA, and SSA's Administrative Law Judges are
appointed in compliance with the provisions of the APA.
In a recent study prepared for the Social Security Advisory Board
by Professors Paul Verkuil and Jeffrey Lubbers, entitled Alternative
Approaches to Judicial Review of Social Security Disability Cases, the
authors recommended the establishment of an Article I court for Social
Security cases. The report favorably refers to the over 1000
administrative law judges in the Social Security Administration as an
objective source of decisionmaking that can be effectively integrated
into an article I court review structure. This recommendation seeks to
improve and strengthen the Social Security disability process, not to
diminish the system as would result from abandoning the administrative
law judge hearing. In fact, articles recently have been published that
recommend that the Veterans disability appeals system be improved by
modeling it after the Social Security administrative law judge hearing
process. James T. O'Reilly, Burying Caesar: Replacement of the Veterans
Appeals Process Is Needed to Provide Fairness to Claimants, 53 Admin.
L. R. 223 (2001); William F. Fox, Jr., A Proposal to Reform the VA
Claims Adjudication Bureaucracy: One Law Professor's View, FBA Veterans
Law Sec., Tommy: A Lawyer's Guide to Veterans Affairs, 1 (Issue 3,
2001).
Any retreat from this long and proud tradition of the Social
Security Administration with regard to the manner in which it conducts
hearings will have a substantial adverse effect on Social Security
claimants and will deny them basic constitutional rights. American
citizens will have less rights than they had prior to the enactment of
the APA.
We urge Congress to protect the constitutional rights of the
American people and to continue to provide the Social Security
claimants the full range of due process rights for a Social Security
hearing under both the APA and the Social Security Act.
B. Challenges at the Appeals Council Level: Several specific
challenges that now confront the new Commissioner are as follows:
L 1. Long Case Processing Time: The long case processing time
at the Appeals Council often is measured in years, rather than
months.
L 2. Poor Decision Quality: The chronically poor quality of
the Appeals Council decisions has declined further in recent
years. The decisions rarely have legal citations of authority
or rationales for the positions taken, and often are factually
inaccurate regarding what the record shows. The informality of
the decisions does not give the impression of the careful
deliberation to which the claimants are entitled.
L 3. Excessive Number of Lost Hearing Record Tapes and Files:
The chronic loss of hearing record tapes and files by the
Appeals Council requires a lengthy rehearing process for the
claimants. Anecdotal evidence suggests that thousands of
hearing tapes and files have been lost. This reportedly is
caused by three problems: (a) the repeated crashing of the
Appeals Council's antiquated computer case tracking system and
loss of case names from the database that are not recoverable,
(b) a large backlog of cases that have not been entered into
the case tracking system, and (c) separating hearing tapes from
the hearing file to save storage space
L 4. Achieving Acceptance of the Failure of the Appeals
Council Level ACPI Reorganization of OHA: Acceptance by SSA
administrators of the failure of the ACPI that was implemented
in 2000 to correct these three chronic challenges of the
Appeals Council operation also is a challenge that the new
Commissioner confronts. Without acceptance of the failure of
ACPI, new strategies will not be considered seriously and
implemented by SSA administrators.
LIII. PROPOSED ACTIONS TO MEET THE CHALLENGES FOR THE NEW SSA
COMMISSIONER
A. Overview of Needed Reforms for the SSA Hearing Process
1. Reorganize the Hearing Office Process: Because of the failure of
HPI, SSA should reorganize the hearing office process. The
reorganization should correct the defects in HPI. We propose that the
recommendations of the Commissioner's HPI Steering Committee be used as
a guide for the reorganization. The reorganization should consist of
both short term and long term changes. The short term changes should be
structured in a manner that permits easy transition to the long term
reforms. The objective should be to immediately return to the
efficiency and level of case production that existed in the hearing
offices immediately before the introduction of HPI (over 500,000 cases
a year). The long term reform should then build on that base. There is
no single change that will accomplish this objective. It instead must
be accomplished by a series of coordinated changes in several different
areas. The changes will allow the agency to improve the service
provided to the American public.
We recommend that the short term changes should include the
following elements:
L (a) The process must be simple, and administrative law
judges should be assigned to cases from master docket according
to law.
L (b) Each administrative law judge should have adequate and
properly trained support staff. The support staff should
include a clerical worker, paralegal and attorney/writer.
L (c) The support staff should be assigned to perform the work
product of a particular administrative law judge according to
the instructions and guidance of the judge.
L (d) The administrative law judge should have control of all
case development.
L (e) The administrative law judge should have the
responsibility to determine when a case decision is legally
sufficient and the judge should have the authority to return
the decision for rewrite to achieve the same.
L (f) Case files of each administrative law judge should be
maintained separately.
L (g) The assigned support staff of each administrative law
judge should be under the supervision of the hearing office
management staff for personnel actions.
L (h) Staff members should be accountable for their work
product. Case work should be assigned on an individual basis to
support staff to provide for accountability and enhance the
employees' sense of ownership.
We recommend that the long term changes should include the
following elements:
L (a) Close the hearing record after the administrative law
judge hearing.
L (b) Assignment of Social Security Administration
representatives to represent the agency at administrative
hearings. Such representatives would be responsible to defend
the position of the agency at the hearing, recommend favorable
cases, exercise settlement authority, and assist unrepresented
claimants.
L (c) Create a case manager and law clerk position for the
support staff of each administrative law judge (as
recommended by the Commissioner's HPI Steering Committee).
L (d) Allow administrative law judges to issue bench decisions
and short form decisions.
L (e) Adopt regulations for issue exhaustion as suggested by
the United States Supreme Court in the case of Sims v. Apfel,
530 U.S. 103 (2000).
L (f) Reform the Appeals Council to issue decisions in some
cases, limit the scope of appeal for claimants who have
received the requested relief from the administrative law judge
and support the administrative law judge in ``no-show''
dismissals.
L (g) Implement a sustainable agency policy on the issue of
pain and the treating physician rule and defend the same if
challenged.
L (h) Require the DDS to follow disability law and
regulations.
L (i) Improve the use of technology in the hearing process
(i.e. voice to print software, improved equipment for recording
hearings, etc.).
L (j) Adopt rules of procedure for the hearing process.
L (k) Reorganize the Office of Hearings and Appeals.
LB. Strategies to Reduce the Number of Cases Heard at the ALJ Hearing
Level That May Be Effected in the Short Term by Regulation
Changes and Preserve Due Process
1. Require DDS Decisionmakers to follow the Law and Regulations:
SSA should issue regulations that require DDS decisionmakers to
adjudicate cases pursuant to the law and regulations. This can be
implemented on a short term basis that would immediately serve to
reduce the number of cases appealed to the ALJs.
2. Close Record After Administrative Law Judge Hearing: The
amendment of SSA's regulations to close the record at the end of the
ALJ hearing would reduce the number of cases that ALJs must hear upon
remand from the Appeals Council and courts based upon new evidence. New
evidence is one of the most common reasons for remand of cases. This
adds to the ALJ case load and greatly delays a final administrative
decision for the claimants. This change will place the responsibility
upon the claimants' representatives for producing all relevant and
material evidence at the hearing.
By SSA regulation, the hearing record in the Social Security
disability system is not closed at any stage in the appeals process.
This system precludes administrative finality and allows the claimant
to introduce new evidence at each step of the process, including the
Appeals Council level. 20 C.F.R. Sec. Sec. 404.900(b), 404.976(b). This
is true even when the evidence was in existence and available during
the prior stage of the appeal. The reason the SSA keeps the record open
at the administrative levels is that the Social Security Act authorizes
the courts to remand a case to SSA when a claimant shows that there is
material new evidence and there is good cause for not including it in
the record earlier. 42 U.S.C. Sec. 405(g).
In a recent report, the Social Security Advisory Board (``SSAB'')
stated that ``Congress and SSA should review again the issue of whether
the record should be fully closed after the ALJ decision.'' Charting
the Future of Social Security's Disability Programs: The Need for
Fundamental Change, January 2001, p. 20. This change will bring
administrative finality to the Social Security disability case and will
encourage all known relevant and material evidence to be produced at
the hearing.
New documentary medical evidence of disability based upon treatment
that occurred before the date on which the ALJ hearing closed should be
admitted into evidence by the Appeals Council only upon a showing that
the new evidence is material and that there is good cause for the
failure to incorporate such evidence into the record in a prior
proceeding. This standard is in keeping with the standard that the
Social Security Act allows for the courts. Unrepresented claimants
should be excepted from the requirement to show good cause.
3. The SSA Should Have a Representative At the ALJ Hearings: After
conducting a pilot program to work out the details in practice, the SSA
should amend its regulations to provide for a government representative
at the ALJ hearing. This change would permit SSA to complete the
documentary record faster, enter into settlements without the need for
a hearing in some cases, and present the government's position on each
case. SSA representation will allow the SSA to present its evidence,
present the type of expert witnesses it deems necessary, and advance
its legal theories in the case. The government representative also
should provide assistance and advice to claimants in unrepresented
cases.
In order to meet the requirements of due process, the APA provides
that ``[a] party is entitled to appear in person or by or with counsel
or other duly qualified representative in an agency proceeding.'' 5
U.S.C. Sec. 555(b). Therefore, the SSA, as a party, has the right to
appear on its own behalf at the proceedings before the OHA. However,
the Social Security Administration is not represented at the disability
hearing before an administrative law judge. SSA regulations long have
stated that it ``conducts the administrative review process in an
informal, nonadversary manner,'' 20 C.F.R. Sec. 404.900(b), so SSA thus
has waived its right to appear at the ALJ hearings. The present system
worked well when most claimants in Social Security cases were not
represented at the hearing. However, there has been a dramatic rise in
the number of claimants who are represented at the hearing. Presently,
well over 80% of the claimants are represented at the hearing. The
Social Security Advisory Board has noted that ``[t]he percentage . . .
of claimants represented by attorneys at ALJ hearings has nearly
doubled [between] 1997 [and 2000].'' SSAB, Disability Decision Making:
Data and Materials, Chart 56--Attorney and Non-attorney Representatives
at ALJ Hearings Fiscal Years 1997-2000, p. 73 (January 2001).
In its recent report, the SSAB recommended that the SSA have
representation at the Social Security disability hearing: ``We think
that having an individual present at the hearing to defend the agency's
position would help to clarify the issues and introduce greater
consistency and accountability into the adjudicative system.'' Charting
the Future of Social Security's Disability Programs: The need for
Fundamental Change, January 2001, p. 19.
The SSA had a pilot program for its representation at the hearing
in 1982. This pilot program was discontinued after an unfavorable court
decision on the project. Salling v. Bowen, 641 F. Supp. 1046 (W.D.Va.
1986). The past pilot program on the government representative project
was not an adequate test of this system. The SSA should implement a new
test program for agency representation at the hearing. This pilot
project should be implemented in coordination with the claimants' bar,
SSA employee organizations, our Association, and other interested
groups. The pilot program should address the issues raised by the court
in Salling. The objective is to establish a hearing process that
provides a full and fair hearing for all parties who have an interest
in the case.
In addition, in the current non-adversarial setting, the SSA ALJ
has the legal responsibility to ``wear three hats'' in each case. The
ALJ legally is bound to ensure that all of the claimant's relevant and
material evidence is made part of the record and the claimant's
interests are protected, to protect the interests of the government in
the hearing, and to make a fair decision which is based on the evidence
in the record. Additionally, the judge must take care to not become
overly protective of the interests of the government for fear that the
case will be reversed on appeal on a claim of bias against the
claimant. The inherent conflict in all of these roles is patent and
would be resolved by having the government represented at the hearing.
4. If the SSA Provides for a Government Representative at the
Hearing, Require Issue Exhaustion at the Appeals Council Level for
Represented Claimants: As the Supreme Court stated in Sims v. Apfel,
530 U.S. 103, 120 S.Ct. 2080, 147 L. Ed. 2d 80 (2000), there is no
statute or regulation that requires that a claimant must list the
specific issues to be considered on appeal on the request for review by
the Appeals Council of an ALJ's decision, in order to preserve those
issues for judicial review. Although agencies often issue ``regulations
to require issue exhaustion in administrative appeals,'' which are
enforced by the courts by not considering unexhausted issues, ``. . .
SSA regulations do not require issue exhaustion.'' Id. at 2084. The
Supreme Court refused to impose a judicially inferred issue exhaustion
requirement in order to preserve judicial review of the issues upon a
claimant for Title II and Title XVI Social Security Act benefits
because the issues in SSA hearings are not developed in an adversarial
administrative proceeding and the ``[Appeals] Council, not the
claimant, has primary responsibility for identifying and developing the
issues.'' Id. at 2086. However, the Court, deferring to the agency,
noted that ``. . . we think it likely that the Commissioner could adopt
a regulation that did require issue exhaustion.'' Id at 2084. The
Supreme Court thus explicitly invited SSA to draft new regulations.
Unrepresented claimants should be excepted from the requirement to
show good cause. Expecting unrepresented claimants to bear the burden
of preserving specific legal issues for judicial review does not
comport with a sense of fair play and keeping the claims process
claimant-friendly.
Issue exhaustion would bring finality to the administrative process
and it is consistent with the general principles of administrative law
and the procedure of other agencies in the Federal Government.
LC. Strategies to Reduce Case Processing Time and Increase Quality of
Service at OHA While Preserving Due Process
1. Administratively Reform the HPI Process: SSA should change the
HPI process by assigning cases to ALJs at an earlier point in the
process, such as when the cases are entered into the computerized
master docket. This would return the control of pre-hearing case
development to the ALJs, leave the ALJ in control of the hearing, and
support the ALJ's responsibility for determining when a draft decision
is legally sufficient. SSA also should return individual accountability
for work product to the employees by assigning staff employees to work
with each ALJ, which should consist of a clerical person, paralegal,
and staff attorney. This will enhance morale through a sense of
ownership by employees working on particular cases for an individual
judge. These changes are needed to permit the ALJs to provide full and
fair hearings for the American public in an efficient and timely
manner. SSA may effect these changes administratively on a short term
basis.
2. Redefine Paralegal Specialist Job To Include Clerical Duties:
SSA OHA may redefine the GS-0950 Paralegal Specialist ALJ decision
writer job across a broad band of General Schedule levels to permit the
assignment of appropriate clerical duties to the people promoted to
this position who have not performed the ALJ decision writing function
well. The clerical work could include the case pulling and other
clerical work that has been accumulating. This permits the necessary
clerical work of the agency to get done while permitting the promoted
staff to stay at their new grade levels and experience satisfaction
from a job well done.
3. Enhance the Appeals Council Case Tracking System: SSA should
install a modern computerized case tracking system to prevent loss of
files by the Appeals Council.
4. Reorganize the Office of Hearings and Appeals
(a) Proposed Legislation to Reform the Office of the Chief Judge:
Current Status:
L The adjudication of administrative claims by the SSA is
currently done by administrative law judges who are part of the
Office of Hearings and Appeals. The function for both
administrative law judge hearings and the appellate process for
the review of administrative law judge decisions by the Appeals
Council are located in the Office of Hearings and Appeals. The
Office of Hearings and Appeals is under the dual leadership of
a Chief Administrative Law Judge and an Associate Commissioner.
The Position Description of the Chief Administrative Law Judge
places the Chief Judge in charge of the hearings function and
hearings field operation of the agency. The Associate
Commissioner is placed in charge of the Appeals council and
major policy making responsibilities of the Office of Hearings
and Appeals. The Chief Judge reports to the Associate
Commissioner who reports to the Deputy Commissioner for
Disability & Income Security Programs.
Problems with Current System:
L In the current organization of SSA the Office of Hearings
and Appeals is buried in the bureaucracy and is far removed
from the Commissioner. This structure prevents the Commissioner
from having effective oversight of the agency hearing process.
The administrative law judge adjudication function should not
be treated as a staff responsibility in the agency. The
administrative law judge adjudication function is a major
program of the agency with every individual in this nation
being a potential claimant within the system. The SSA
administrative law judge hearing system protects a
constitutional right of our citizens and provides a
constitutionally protected due process hearing to the American
public. This vital process should have direct oversight from
the Commissioner and the Chief Judge should have direct
interaction with the Commissioner. Another major defect in the
Office of Hearings and Appeals is created by the dual
leadership responsibilities of the Chief Judge and the
Associate Commissioner. Frequently these two leaders are
competing for power to control the administrative and/or policy
decisions for this component of SSA which has deprived OHA of
strong effective leadership. The lack of effective leadership
and direction of the Office of Hearings and Appeals has
resulted in an organization that has been deteriorating. During
the past 10 plus years several reforms have been imposed on the
SSA hearing process. Each attempt has resulted in failure.
Subsequent to a recent change in the hearing office process
that was implemented in January 2000 (HPI), the number of case
depositions have dropped while the case processing time and the
case backlog have increased. The result has been poorer service
for the American public. Within the past several years, the
Associate Commissioner attempted to reorganize the
responsibilities of the Chief Judge and divest the Chief Judge
of most of the powers of that office leaving the Chief Judge
with some minor duties relating to judicial education and staff
support for the Associate Commissioner. This scheme was
thwarted by the efforts of interested individuals and
organizations together with the oversight action of the
Congress.
L The problem has now returned with the present Associate
Commissioner of the Office of Hearings and Appeals. He has
striped most of the power from the Office of the Chief Judge.
He treats the Chief Judge as a staff person instead of a vital
policy maker who is in charge of the field operations for the
hearings function of the agency as provided for in the Chief
Judge's position description. This action of the Associate
Commissioner has led to a crisis within the Office of Hearings
and Appeals with the last Acting Chief Judge leaving the
position after having served for only a few weeks in office.
The Chief Judge position for the agency is now vacant. This
position has not been filled since the last Chief Judge left
over a year ago.
Proposed Reform:
L This system requires basic reform which places an
established Chief Judge in charge of the agency hearing process
with reporting responsibility directly to the Commissioner. We
propose legislation that separates the agency hearings function
from the Appeals Council and places the hearing component under
the control of a Chief Judge who reports directly to the
Commissioner.
The following improvements in service to the American public will
result from the proposed legislation:
L a. The Commissioner will have direct oversight of the
hearing component of the agency which is necessary to
effectively administer this important program which provides
constitutional due process hearings for the American public.
L b. Improved leadership and efficiency in the hearings
component will permit the SSA to provide better service for the
American public by increasing case dispositions, reducing
processing times and reducing case backlogs.
L c. The change will improve the SSA hearing process and will
continue to ensure that the American public receives a fair
constitutional due process hearing.
L d. The proposed legislation creates an Office of
Administrative Law Judges in the Social Security
Administration.
L e. The Office of Administrative Law Judges headed by the
Chief Judge who reports directly to the Commissioner. The Chief
Judge is appointed by the Commissioner for a term of 6 years.
L f. The administrative law judge hearing component of SSA is
regarded as an organization that is responsible for
administering a major agency program which reports directly to
the Commissioner. It will be no longer organized as a staff
function within the agency.
L g. The Office of Administrative Law Judges will have one
individual, the Chief Judge, responsible for administrative
operations and policy making. This will result in effective
leadership of the administrative law judge function.
L h. The Associate Commissioner of the Office of Hearings and
Appeals will continue to head the Appeals Council.
L i. This change is endorsed by the Social Security Advisory
Board (``SSAB''). The SSAB recently prepared a report on the
Social Security disability system that states that ``[m]any
believe that the Office of Hearings and Appeals is buried too
low in the agency and should be elevated so that the head of
the office would report directly to the agency leadership.
Others believe that there should be independent status for an
administrative law judge organization'' Charting the Future of
Social Security's Disability Programs: The need for Fundamental
Change, January 2001, p. 19.
L j. The change is a reorganization within the agency and will
not result in any additional costs to the agency.
(b) In the Alternative, Reorganize OHA to Have the Chief ALJ Report
Directly to the Commissioner and Replace the Appeals Council with a
Right of Appeal to Appellate Panels Staffed by ALJs that Would Be
Administered by the Chief ALJ: This proposal is identical to AALJ's
proposal for an independent adjudication agency that would provide a
hearing before an ALJ with a right of appeal from the individual ALJ's
decision to an appellate panel staffed by ALJs, which is explained in
suggestion 6(b) below, except that the Chief ALJ would report to the
Commissioner rather than be the head of an independent agency. Such a
reorganization may be effected by the SSA without legislation.
(c) As an Alternative to Reorganizing OHA, Create A New Independent
Agency within SSA to Issue the Final Administrative Decisions of Social
Security Act Claims, Including Medicare Claims: AALJ recommends the
creation of a new ALJ-administered independent adjudication agency for
Social Security Act claims that would provide a hearing before an ALJ
with a right of appeal from the individual ALJ's decision to an
appellate panel staffed by ALJs. The panels would consist of three ALJs
who would review the cases locally. A Chief ALJ would administer the
agency. The Social Security Act hearing process should be reformed by
the transfer of the authority to make final administrative
adjudications of Social Security Act claims, which currently are made
at the ALJ and SSA Appeals Council levels, from the Social Security
Administration to a new independent adjudication agency. This agency
may be called the United States Office of Hearings and Appeals
(``USOHA''). This agency is to be located within the SSA.
This proposal would provide the claimants with timely, high
quality, impartial and fair decisions of their claims pursuant to the
Social Security Act and Administrative Procedure Act (``APA'') by
adjudicators who are in an agency independent of, but within, the SSA.
The USOHA would have the exclusive jurisdiction to make the final
administrative decisions of Social Security Act Title II and XVI
claims. The USOHA would have permissive jurisdiction over other classes
of cases, including Medicare cases under Social Security Act Title
XVIII.
On December 4, 2001, the House passed the Medicare Regulatory and
Contracting Reform Act of 2001, H.R. 3391, section 401 of which
authorizes the transfer of the ALJ function from SSA to the Department
of Health and Human Services by October 1, 2003, to hear and decide
Medicare cases pursuant to Title XVIII of the Social Security Act.
AALJ's proposal advocates placing all of the ALJs hearing Social
Security Act cases into one independent agency, including Medicare
cases.
The ALJ appellate panels would be akin to the Bankruptcy Court
appellate panels and is one of the key features that makes the ALJ
self-administration model superior to the current SSA Appeals Council
model, which is a small body that cannot timely and effectively handle
a heavy caseload. Based upon the Bankruptcy Court experience, the
appellate panel model (1) is an appellate system that can handle a
large caseload, (2) results in a shorter disposition time because the
large pool of about 1,000 ALJs throughout the United States permits the
timely determination of appeals that cannot take place with a small
body such as the Appeals Council or a Commission or Board, (3) results
in higher quality decisions because of expertise, (4) results in
substantially fewer appeals to the courts and a substantially lower
reversal rate by the courts because of the confidence in the high
quality of the decisions, which reflects a higher degree of decision
accuracy, (5) results in a substantially reduced federal court
caseload, and (6) affords the claimants access to a local
administrative appellate process.
This proposal requires legislation that would amend the Social
Security Act.
A detailed version of the features of the proposed new agency and
the rationales for such a new agency is presented in the AALJ's
Statement that is published in the Report for the June 28, 2001, First
Hearing in the Series on Social Security Disability Programs'
Challenges and Opportunities, House Subcommittee on Social Security,
No. 107-35, 107th Cong., 1st Sess., pp. 80-93. A very detailed version
of the features of the proposed new agency and the rationales for such
a new agency is presented in the AALJ's ``Report and Recommendations
for the Transfer of the Authority to Make Final Administrative
Adjudications of the Social Security Act Claims from the Social
Security Administration to a New Independent Regulatory Agency,'' which
is available on the AALJ website, www.aalj.org.
(d) As an Alternative to Reorganizing OHA, Create A New Independent
Agency outside SSA to Issue the Final Administrative Decisions of
Social Security Act Claims, Including Medicare Claims: Another
alternative is to create a separate adjudication agency to hear Social
Security Act claims, including Medicare claims. This agency would have
the same organization structure as is described in section 4(c)
immediately above, but it would be a separate agency outside the SSA.
Submitted respectfully,
Ronald G. Bernoski
President
Association of Attorney-Advisors
Paducah, Kentucky 42003
To: The Subcommittee on Social Security
Of the Committee on Ways and Means
Subject: Submission of Comments related to Hearing on May 2, 2002
I am the President of the Association of Attorney-Advisors, an
organization comprised of attorneys throughout OHA, and includes in its
membership both GS-12 Attorney-Advisors and GS-13 Senior Attorney-
Advisors, as well as some attorneys who are members of management and
some Administrative Law Judges. We have been reading with great
interest the submissions of some of our fellow professionals who are
concerned with the future direction of OHA. This paper is not designed
to exhaust all of issues currently facing OHA, but to comment on some
of the proposals which have been presented.
1. DDS receipt of hearing functions. It has been proposed that the
hearing functions be removed from OHA, thereby dissolving the
organization, and be added to the responsibilities of the state
agencies. The Association of Attorney-Advisors is very much against
that plan. It is the DDS position that disability determinations are
solely a medical evaluation. The DDS believes that the ultimate
arbitrator of disability should be the state agency physicians who
review the medical records. This is contrary to existing law and
regulation. The Social Security Act, related Regulations, Rulings and
case law set forth the legal framework for analyzing the medical
evidence of record. The ultimate decision regarding disability is
reserved for the Commissioner, rather than any physician including a
treating physician, much less a non-examining medical source. The law
recognizes the need to evaluate multiple pieces of evidence from
multiple sources and assign weight to each. Intangible aspects of a
case, such as the credibility of a claimant's complaints of pain,
require more analysis than a review of objective tests alone can give.
(see 20 CFR 404.1512, 20 CFR 416.912, 20 CFR 404.1527. 20 CFR 416.927,
Social Security Ruling 96-2p, Social Security Ruling 96-5p and Social
Security Ruling 96-6p.
Several years ago, the Agency underwent Process Unification
Training (PUT) to help bring the state agencies into line with the
legal requirements for determining disability. No substantive change
has occurred in the state processing of claims. Little effort is made
to properly evaluate a claimant's credibility. Further, in many cases,
development is not near completion when files are turned over to OHA.
The state agencies have not shown the capacity for managing the legal
requirements of our joint business. Turning the hearing process over to
the state agency would dramatically change the claimant's due process
rights and would eliminate his ability to receive a proper legal
determination regarding whether entitlement to benefits.
The Association is also concerned with the timelines promised in
proposal. One of the challenging aspects of disability determinations
is ensuring reasonable development of the record has occurred. Many
medical sources take longer to respond to requests for records than the
proposed time frames would allow. One reason for the disparity among
cases denied at the DDS level but paid at the OHA level is the
additional development that OHA accomplishes. The ``fair hearing''
proposed by the DDS is fair only if adequate development has occurred.
A ``fair hearing'' is fair only, if after being apprised of his rights,
a claimant has sufficient time to obtain representation and opportunity
to ensure the record is as complete as possible.
2. Elimination of reconsideration reviews. One of the programs
which has been tested is the elimination of the reconsideration level
of review at the state agency level. We recommend this be considered
for a nationwide test. As a general rule, the reconsideration level of
evaluation does not add value to the process. Little new development is
performed at that step. If the funds that were used to carry out the
reconsideration process were used for better development at the initial
level of consideration or to increase fees paid to medical consultants,
the claimant would be much better served.
3. Consideration of a Government Representative Program. The
government representation program would have many advantages.
Administrative Law Judges would be relieved of the burden of case
development and could assume a more traditional judicial role. They
could focus on hearing and deciding cases, rather than performing the
ongoing reviews required in current efforts to schedule cases.
Attorneys assuming the duties of government representative would have
the opportunity to more fully utilize their skills as advocates. Many
of the OHA attorneys have backgrounds as former prosecutors and civil
litigators who are more than capable of evaluating a case, ordering
development, negotiating settlements, and making presentations during
the hearing. The job of the Administrative Law Judge would be made much
easier by having issues defined and ready for evaluation at the
hearing, thus expediting the process for the claimant. For those
attorneys who do not want these additional duties, there will still be
a need for competent attorneys to engage solely in decision writing for
the Administrative Law Judges. It makes sense for the Agency to fully
utilize the experience and skill of its staff. The Association of
Attorney-Advisors feels this program has a long-term promise.
4. The ``old'' Senior Attorney Program. The only program which has
thus far demonstrated the ability to speed up the processing of
favorable decisions is the prior Senior Attorney Program. The Agency is
well aware of the success of the program in cutting down the backlog of
cases and reducing average case processing times. Serious consideration
should be given to returning signature authority to the Senior
Attorneys.
5. Two other recommendations for immediate relief. There were
numerous problems with HPI, which have been addressed in depth in other
documents. At the heart of the failure was the lack of trust the Agency
had in its management and employees. Local management had minimal imput
in the implementation in HPI. Forcing a ``one size fits all'' approach
will not bring about further improvement. Prior to bringing about any
change, the Agency needs to collectively take a deep breath and look at
the progress of individual offices. Some offices are fully staffed in
judges, others are woefully short. Some offices need more managers to
handle the workload, others may need to decrease the management team.
Some offices are overstaffed in writers, others need more. Almost every
office needs some degree of supplemental support staff. We need to
avoid any approach where manning edicts are made across the board
ranging from full-time receptionists to additional case technicians.
Local management should be given a voice to individual office manning
concerns.
A) Support Staff--Funding needs to be made available to be able to
hire adequate support staff to manage all the administrative functions
associated with hearing cases. Local management needs to ensure there
staff is doing its best to work up cases, however, in some offices
workload far exceeds the available staff. It is inexcusable that a
claimant would have to wait months just to have a case technician work
up his case.
B) Administrative Law Judge support--In some offices, the staffing
of Administrative Law Judge slots is significantly less than needed to
adequately hear cases. While many offices report the need for more
Administrative Law Judges, hiring could be delayed indefinitely due to
the litigation with OPM in regards to the Azdell case. Pending
resolution of Azdell, some measure must be taken to get additional
cases heard. The time has come for serious consideration of some form
of magistrate's program, where claimants could opt to have their cases
heard by an attorney magistrate in lieu of a judge. Unlike the
Adjudication Officer program, the attorney magistrate would need to be
empowered to hold full hearings and issue unfavorable as well as
favorable decisions. Although increasing the number of Administrative
Law Judges would be preferred, until that is possible, the position of
magistrate would enable additional cases to be heard and give
claimant's final resolution in the disability process.
Thank you for your attention. This is intended to be a general
overview of our position. We welcome the opportunity to discuss any
plans in further detail. We hope that a process can be worked out to
enable OHA to better serve the needs of the claimants and the general
public.
Lisa Russell Hall
President
Federal Bar Association, Social Security Section
Washington DC 20037
May 16, 2002
The Honorable Clay Shaw, Jr.
Chairman
Subcommittee on Social Security
U.S. House of Representatives
B-316 Rayburn House Office Building
Washington, D.C. 20015
Re: Challenges Facing the New Commissioner of Social Security
Dear Chairman Shaw:
Thank you for holding the hearing on May 2, 2002 on the challenges
facing the new Commissioner of Social Security. Those challenges are of
considerable interest to the membership of the Social Security Section
of the Federal Bar Association (FBA), and we request that this
correspondence be entered into the hearing record. The comments
presented herein are exclusively those of the Social Security Section
of the FBA and do not represent the official views of the Social
Security Administration, in whose employment we serve as Administrative
Law Judges.
As you know, the Federal Bar Association is the foremost
professional association for attorneys engaged in the practice of law
before federal administrative agencies and the federal courts. Fifteen
thousand members of the legal profession belong to the Federal Bar
Association. They are affiliated with over 100 FBA chapters across the
nation. There are also over a dozen sections organized by substantive
areas of practice such as the Social Security Section, of which I am
the Chair.
Unlike other organizations associated with Social Security
disability practice that tend to represent the narrow interests of one
specific group, the Federal Bar Association's Social Security Section
encompasses all attorneys involved in Social Security disability
adjudication. Our members include:
Attorney Representatives of claimants
Administrative Law Judges (ALJs)
Administrative Judges at the Appeals Council
Staff Attorneys at the Office of Hearings and Appeals
Attorneys at the Social Security Administration's
Office of General Counsel
U.S. Attorneys
U.S. Magistrate Judges, District Court Judges and
Circuit Court Judges
The primary interest of the FBA's Social Security Section is in the
effectiveness of the adjudicatory processes associated with hearings in
the Office of Hearings and Appeals (OHA), the appeal process at the
Appeals Council, and judicial review in the federal courts. It is the
Section's collective view that the Social Security disability program
is under considerable strain. Current delays in the processing of
claims are unacceptable and the quality of decisions at all levels is
less than ideal. The Commissioner is faced with a daunting task. It is
with that in mind that we offer the following comments.
1. Fully Implement Process Unification at All Levels of Adjudication
Process unification is essential to an efficient, timely and
accurate disability adjudication system that ensures disabled claimants
will be paid as early in the process as possible.
In the mid-1990's the Social Security Administration (SSA)
acknowledged the inconsistency created by the Disability Determination
Services (DDS) applying one set of rules for determining eligibility
through the Program Operations Manual (POMS), and its Administrative
Law Judges, Appeals Council, and the federal courts applying another
through statute, regulations, rulings and case law. Consequently, in
1996 SSA initiated Process Unification Training for all DDSs, ALJs, and
the Appeals Council. The training was based on a set of rulings--the
``Process Unification Rulings''--that were designed to guide all
adjudicators at every level. It was anticipated that the DDSs would no
longer rely exclusively on POMs, and that they would begin to write an
analysis of their decision-making. This rationalized determination, in
turn, would be granted some deference by reviewing ALJs and Appeals
Council.
This plan for a unified process never came about, however.
Unfortunately, the DDSs did not follow through and continued to apply
the narrow standards of POMs, giving mere lip service to claimants'
subjective complaints. Today they continue to fail to provide any
meaningful analysis of their decisions, leaving unclear what
standard(s) they are applying to their review of disability claims.
We submit that SSA had it right the first time when it recognized
the need for process unification. Fairness requires that all
adjudicators assess a disability claim using the same legal standards
and requirements.
A fundamental premise of the SSA process unification effort was
that disability benefits should be awarded to claimants as soon as
their disability has been determined under the law. The burden of long
delays to claimants before the statute, regulations, rulings, and case
law are applied is unacceptable and does not serve the interests of
justice. Quite simply, it can wreak havoc in the lives of claimants.
The Commissioner recently announced that in an effort to deal with
the backlog and delays at OHA, ALJs would begin to review raw, unpulled
files as they arrived from DDS. The purpose of the review is twofold:
to allow those claims that can be allowed on the record without a
hearing, and to undertake immediate development of cases requiring
additional development.
On its face, this initiative attests to the failure of process
unification. If such an initiative can be productive and result in a
significant number of dispositions or significant additional
development, then the cases were either: (1) not decided correctly
under the law at the DDS; or (2) not adequately developed at the DDS.
L2. Preservation of the Due Process Hearing Before an Administrative
Law Judge
It is our understanding that various proposals are being made that
would eliminate a hearing before an Administrative Law Judge. The FBA
strongly opposes any such effort for the following reasons.
In 1983, a Senate Subcommittee on Oversight of Government
Management of the Committee on Governmental Affairs conducted a hearing
that inquired into the role of the ALJ in disability hearings. The
report provided in part:
L The principal finding of the Subcommittee is that the SSA is
pressuring its ALJs to reduce the rate at which they allow
disabled persons to participate in the Social Security
Disability Program . . . . [The Subcommittee found that the SSA
was limiting the decisional independence of ALJs through its
Rulings, its non-acquiescence to federal court decisions, and
its increasing of case quotas that reduced the time an ALJ
could spend on each case to develop additional evidence that
may support an allowance decision, among other things.] The APA
mandates that the ALJ be an independent, impartial adjudicator
in the administrative process and in so doing separates the
adjudicative and prosecutorial functions of an agency. The ALJ
is the only impartial, independent adjudicator available to the
claimant in the administrative process, and the only person who
stands between the claimant and the whim of agency bias and
policy. If the ALJ is subordinated to the role of a mere
employee, an instrument and mouthpiece for the SSA, then we
will have returned to the days when the agency was both
prosecutor and judge.
Sen. Rep. No. 98-111 (September 16, 1983).
The Administrative Procedure Act requires that independent
administrative law judges be selected on a merit basis and insulated
from agency bias and pressure in performing the adjudicative function.
See Butz v. Economu, 458 U.S. 478, 513 (1978). Regretfully, as noted in
the Senate Report, SSA has in the past attempted to subvert the
statutory independence of its administrative law judges. It has sought
overtly and at other times more subtly to influence the decisions of
its ALJs to achieve some predetermined acceptable allowance rate or
altogether cease payment of benefits to a particular class of disabled
beneficiaries. In one well-publicized episode in 1982, SSA attempted to
terminate benefits to thousands of Americans with mental disabilities,
triggering the reversal in many cases of that policy decision by SSA
ALJs who applied the law and restored the benefits. The American Bar
Association in fact honored the SSA ALJ corps for their outstanding
efforts during the period from 1982-84 to protect the administrative
adjudication within their agency, to preserve the public confidence in
the fairness of governmental institutions and to uphold the rule of
law.
A due process hearing conducted by an ALJ is a protection against
potential agency bias and policy that may at times run contrary to the
law as mandated by Congress. Disability claimants should not be
deprived of this step in the disability process. That being said, there
remains the critical issue of unacceptably long delays at OHA. The
causes of these delays are many, but most obvious is the abject failure
of the Hearing Process Improvement (HPI) initiative. Prior to HPI, in
FY 1998, ALJs issued 618,578 decisions. In FY 2001, with full
implementation of HPI, that figure plummeted to 465,228.
The defects in HPI, both in design and implementation, are legion
and need not be enumerated here. Suffice it to say, a fundamental
problem was the de-legalization of the adjudicative process, which
included the removal of judges from the case development function. Over
350 employees, primarily from the clerical ranks, were promoted to the
position of ``paralegal''. Their promotion left OHA bereft of employees
trained in ``pulling cases'' in preparation for adjudication by
administrative law judges. This created fewer cases ready for judges to
hear and decide. The employees who have been promoted to the
``paralegal'' position, in almost all cases, have had no legal training
whatsoever and in their promotion were not even required to demonstrate
an ability to write; yet, they are tasked with writing draft decisions
for the judges--decisions that are subject to judicial review in U.S.
District Court. Attorneys could have filled the positions encumbered by
these ``paralegals'' as the two positions are at the same grade level.
Instead, SSA made the conscious choice to fill these slots with
clerical workers rather than trained lawyers. It goes without saying
that under this new arrangement the review time required for judges to
edit and revise their decisions has increased exponentially further
delaying disposition of claimants' cases.
OHA performs an adjudicative function and its procedures and
support systems need to be designed and implemented to facilitate that
function. Clearly, with proper and adequate support, ALJs are capable
of expediently adjudicating the cases before them while providing
claimants with due process. In addition, OHA should be under the
direction of a Chief Administrative Law Judge who is provided
appropriate administrative assistance in carrying out the adjudicative
function. The administrative and support system should not be dictating
to the judges how the adjudicative function should be accomplished.
L3. Extension of Fee Withholding to Supplemental Security Income (SSI)
Cases
Attorneys who practice Social Security disability law
overwhelmingly endorse the extension of withholding attorney fees in
SSI cases, due to the high risk of nonpayment for services rendered.
This is reflected in SSA's FY 2000 statistics at the OHA level, which
show that 74.9% of Title II claimants were represented while only 45.9%
of title XVI claimants were represented. Many attorneys simply decline
to handle SSI cases, and this appears to be a growing trend. Those who
do accept such cases tend to do so out of a sense of obligation and
often in the spirit of pro bono work. SSI claimants should not have to
rely upon the collective good conscience of a few attorneys for
representation.
While Administrative Law Judges are charged with protecting the
interests of pro se claimants and do their best to meet that
obligation, it is done in the context of a very heavy caseload. ALJs
carry hundreds of cases on their dockets. The reality is that a
represented claimant, by virtue of the time, attention and expertise
that a representative can provide, has a better chance of prevailing in
his appeal. This is recognized by the Consortium for Citizens with
Disabilities (CCD), as reflected in Marty Ford's testimony at the May,
2001 hearing of your Subcommittee. While resources such as legal
services and pro bono attorney work are invaluable, they are limited in
their availability. As the CCD pointed out, the potential denial of
benefits for SSI claimants, due to lack of experienced legal
representation, far outweighs the burden of having reasonable attorney
fees withheld from their back benefits.
It is our understanding that SSA now supports this provision and we
applaud that decision. We believe attorney fee withholding in SSI cases
will benefit SSA by increasing attorney representation which will, in
turn, serve to screen cases, educate claimants regarding the
eligibility criteria, aid in the production of evidence, and further
the goal of insuring that the proper decision is made as soon as
possible.
L4. Establishment of a Comprehensive Quality Assurance Program
Throughout the Disability Program
The General Accounting office has repeatedly reported that SSA
needs to implement a comprehensive and meaningful quality assurance
system. SSA announced a plan to revamp its existing quality assurance
system in 1994. Yet, in 2001 SSA acknowledged that its quality
assurance system needed to more effectively promote uniform and
consistent disability decisions across all geographic and adjudicative
levels. GAO has made specific recommendations as to the content of such
a plan.
The Commissioner has appointed a Regional Commissioner to lead an
effort to establish a quality assurance program. We commend this action
and encourage the development of a comprehensive quality assurance
program that establishes quality standards at all levels of the claims
process. The disability program is a nationwide program and it is not
acceptable to have allowance rates at the DDS level on Title II
disability claims in FY 2000 ranging from a low of 31% in one state to
a high of 65% in another state.
A quality assurance plan should, for example, set the standard for
the collection of evidence at all levels of review, including DDS. Much
of the delay in the life of a disability claim is due to the time
needed to collect relevant evidence. For example, if a claimant alleges
disability due to severe injuries in an automobile accident and DDS
only obtains the primary care physician records of general care and
fails to obtain the records of the trauma surgeon and hospital, it will
not have the relevant evidence needed to make an accurate
determination. While a denial based on the primary care physician
records may be technically correct, given the record as developed, that
record is wholly inadequate. The claimant is then forced to appeal the
denial until someone develops the complete and relevant record. If the
correct record were obtained at the DDS level, the accuracy of the DDS
decision could be realistically measured. It is a meaningless statistic
to say the DDS made the right decision, when it was rendered on an
inadequate record.
Similarly, delays at the ALJ level occur while the relevant
evidence is obtained and the file is assembled. One of SSA's redesign
initiatives, the Adjudication Officer (AO), sought to accomplish the
generation of evidence and file assembly at the DDS level. The AO
developed the record and granted eligible claims, forwarding the
ineligible claims to an ALJ for further review. In those cases that
were denied, the AO prepared a summary of the evidence, and certified
that the record was complete. The case was then heard by an ALJ
generally within 60 to 90 days of its receipt and little or no further
development of the record was required. Concerns were raised about the
AO project because a higher percentage of claims was being paid at the
DDS level, and administrative costs for assembling a complete record
and providing a summary were high. The project, however, resulted in
correct decisions earlier in the process and savings of administrative
costs and time at OHA.
A Quality Assurance Program should measure the adequacy of the
file, the quality of the analysis, and the correctness of decisions at
all levels. It should also undertake to measure the accuracy of both
allowances and denials of claims. At the DDS level, quality review work
currently performed by SSA's Disability Quality Branch focuses on
allowances of claims rather than denials. This creates systemic
pressure on the DDS examiner to avoid erroneous allowances, but not
necessarily erroneous denials. Since an erroneous denial is much less
likely to be scrutinized by quality control, a denial represents a far
more attractive and safer decision option for the DDS examiner. At the
ALJ level, the opposite is true. To be effective, without subtly
influencing the outcome of decision-making, a quality assurance program
should be neutral and refrain from pushing the process toward allowing
or disallowing claims. The QA program must measure the accuracy of both
allowances and denials.
L5. Electronic Folders (E-DIB) Must be Adequately Funded, Closely
Monitored, and Not Viewed as the Complete Answer to Disability
Adjudication Problems
The Commissioner has announced that the entire record at all levels
will be contained in an electronic folder (E-DIB) by January, 2004. The
E-DIB initiative has the potential to provide significant improvement
in the speed of claims adjudication. However, given SSA's track record
in the conceptualization and implementation of HPI and other redesign
initiatives, we strongly encourage the application of significant care
and attention to the testing and introduction of E-DIB.
Very few details concerning the plan have been announced, and there
are innumerable questions relating to the implementation of this
initiative. We urge extensive testing at the pilot stage and vigilant
monitoring of its rollout. Given the shortage of personnel within DDS
and OHA to handle the current caseload, careful attention also should
be devoted to staffing plans for those who will maintain the systems
and scan the documents included in the electronic folder. Attention
should also be devoted to whether E-DIB coverage will extend to claims
pending at the time of conversion or whether this will include only
claims filed after January, 2004. The Social Security Administration
needs to work with the representative community to insure the
confidentiality of the claimant's record, while also assuring safety
and security of the internet system itself. Access to the claimant's
record by those on the other side of the digital divide, who lack
compatible equipment, also should be considered.
L6. Elimination of Reconsideration and Reorganization of the Appeals
Council
The FBA seriously questions whether the current processes of DDS
level reconsideration and Appeals Council review are serving their
intended purposes. Thoughtful scrutiny should be devoted to whether the
time spent on these two review processes contributes to the effective
adjudication of disability claims and the interests of justice.
A claimant who is initially denied benefits may request DDS
reconsideration of the denial decision. Reconsideration is widely--and
correctly--viewed as little more than a rubber stamp of the initial
denial. During FY 2001, of an average 100 claims processed by DDS, 40
were approved at the initial level and 4 at the reconsideration level.
Time spent at the reconsideration level was 69 days. Given the few
requests for reconsideration that ultimately are successful, concerns
can be deservedly raised whether reconsideration represents a
meaningful step in the disability process.
Similar attention should be devoted to the role and effectiveness
of Appeals Council review. Upon receipt of an adverse claims decision
by an ALJ, a claimant may appeal to the Appeals Council, which then
undertakes a review on the record. While the Appeals Council serves a
valuable purpose in screening out many cases that should not reach
federal court due to deficiencies in the ALJ decisions, the Appeals
Council is overwhelmed by its staggering workload. It has taken steps
to shorten its appeal time, and according to the General Accounting
Office, reduced the amount of time to process an appeal from 458 days
in FY 1999 to 447 days in FY 1999. This is still an unduly long period
of time.
The substantive legal correctness of the decisions of the Appeals
Council has also been frequently challenged. In a mounting number of
cases appealed to U.S. District Court after denial of review by the
Appeals Council, the Office of General Counsel and U.S. Attorneys have
asked the Appeals Council to agree to a ``voluntary remand.'' These
requests are prompted by concerns over the ability to defend the
underlying ALJ decision--the decision that had already been affirmed by
the Appeals Council. The frequency of such ``voluntary remands''
indicates that in its rush to process appeals, the Appeals Council is
not getting it right the first time. The record the Appeals Council
agrees to take back in a voluntary remand is usually identical to the
record it initially reviewed. If the ALJ decision is indefensible, it
should have been caught by the Appeals Council before the case
proceeded to federal court. That after all is the role of the Appeals
Council in the request for review process.
Therefore, we believe that the Commissioner should review and study
the role and responsibility of the Appeals Council, with special
attention devoted to: the usefulness and necessity for the request for
review function; the merits of redesign of the Appeals Council mission
to focus on quality review; and the establishment of a time-limit for
the processing of requests for review, permitting cases not reached
within the allowable time to go directly to court.
In closing, we thank the Subcommittee for taking favorable action
on fee withholding for SSI cases and for holding this important hearing
on the challenges facing the new Commissioner. The Social Security
Section of the Federal Bar Association looks forward to working with
you on this and future issues relating to Social Security disability
case adjudication. Please contact Bruce Moyer, our government relations
counsel (301-270-8115) if you have any questions. Thank you for your
consideration.
Sincerely,
Kathleen McGraw
Chair
Frederick R. Waitsman
Chair, Legislative Committee
Statement of David Marks, West Coast Director, Hepatitis C Action
Movement, Saratoga Springs, New York
On behalf of the Hepatitis C Action Movement, I would like to
express my concerns with the Social Security Administration's current
standing on awarding disability benefits on Hepatitis C related claims.
Because there was no effective method for detecting the Hepatitis C
Virus until 1992, the severity of this epidemic is still greatly under-
estimated and the U.S. Government has yet to provide adequate relief to
those who are suffering from this virus. We are hopeful that
Commissioner Barnhart will lead the Social Security Administration into
the 21st Century and the visions of this new administration will
include relief for the growing number of people who are only now being
diagnosed with a virus contracted a quarter century ago.
When the HIV epidemic struck America in the 1980s, the Social
Security Administration realized the burden having a potentially fatal
virus has on the body and updated the disability impairment listings to
include HIV. However, since the SSA does not yet recognize Hepatitis C,
a person suffering from HCV is not judged by the same standards. The
policy of not awarding disability benefits for HCV victims until they
are in end stage liver failure is the equivalent of waiting until a
person with HIV is dying of end stage pneumonia before approving their
disability claim. The number of people infected with HCV out numbers
those with HIV nearly 5 to 1 and the number of deaths from HCV will
triple in the next 5 years, out numbering that of AIDS. Just as the SSA
was quick to adapt the system to include the needs of a new generation
when faced with the HIV epidemic, the current administration must once
again adapt to include the needs of those with HCV.
The current position adopted by the Social Security Administration
is to review all Hepatitis C related disability claims based on the
guidelines set forth under Section 5.05 of the List of Impairments
titled ``Chronic Liver Disease.'' However, the guidelines under this
heading were not written with the Hepatitis C infection in mind and do
not consider the myriad of disabling symptoms which accompany the
Hepatitis C infection. These guidelines do not adequately reflect the
current needs of the five million known American's who are inflicted
with this insidious virus.
HCV has many disabling effects in addition to chronic liver
failure, which are not currently recognized by the SSA. The Hepatitis C
virus lives in the body for 10-20 years before showing any outward
symptoms, so the infected go undiagnosed for decades. However, during
these years, the liver becomes an unwilling host for the virus and the
liver deteriorates. Once obvious symptoms begin to appear, the damage
is irreversible and quite debilitating. Yet, the end stage liver
failure required by the SSA to qualify for disability claims may not
occur for several years after the virus begins to actively destroy the
liver and kidneys.
The liver is the body's largest internal organ and provides many
critical functions needed to sustain a healthy lifestyle and when the
HCV attacks the liver, performing everyday tasks becomes difficult.
However, the Hepatitis C virus affects more than just the liver.
Symptoms a person with HCV may suffer before qualifying for Social
Security disability include: Extreme debilitating fatigue, memory loss,
confusion, nausea, painful swollen muscles and joints, depression,
anxiety, numb and tingling limbs, enlarged spleen, inflammation or
bleeding in the stomach and esophagus and heptocellular carcinoma.
The result of the current SSA review policy leaves people too sick
to work and not sick enough to receive assistance. Currently, there are
people infected with HCV on the liver transplant list that still do not
meet the strict criteria under the current SSA guidelines. Because most
health insurance policies are contingent upon their employment, when
their job is lost, so are their health benefits. The current cost of
treatment for Hepatitis C is $32,000 a year as there are no generic
options available. The unfortunate result is the choice between
spending their life savings on medicine or life itself.
Even when the HCV patient is able to continue their health
insurance, the side effects of the treatment are often more severe than
the infection itself. The side effects of the Interferon combination
therapy are similar to chemotherapy and include nausea, fever,
insomnia, swollen and painful muscles and joints, depression,
confusion, thyroid disease and flu-like symptoms, just to name the most
common. Working a full time job while undergoing the 12 to 36 month
regiment is nearly impossible.
This epidemic can not continue to be ignored any longer. It is time
that the Social Security Administration realizes the devastating
effects of their policy and updates their current policy to include the
5 million Americans infected with HCV. We are hopeful the Social
Security Administration under the new vision of Commissioner Barnhart,
will take on the new challenges facing today and will be granted the
proper resources to be able to meet their responsibilities to the 5
million Americans infected with HCV.
Respectfully,
David Marks
West Coast Director
Statement of Anthony T. Pezza, President, National Council of Social
Security Management Associations Inc., Hackensack, New Jersey
Chairman Shaw and Members of the Subcommittee, my name is Anthony
T. Pezza and I am submitting this statement for the record on behalf of
the National Council of Social Security Management Associations
(NCSSMA).
As you know, Mr. Chairman, the NCSSMA is a membership organization
of more than 3000 Social Security managers and supervisors who work in
SSA's 1400 field offices and teleservice centers throughout the nation.
It is most often our members who work with your staffs when problems
and issues arise with Social Security recipients in your Congressional
Districts. Since our organization was founded thirty-two years ago, the
NCSSMA has been a strong advocate of locally delivered services
nationwide to meet the variety of needs of beneficiaries, claimants and
the general public. We, like you, consider our top priority to be a
strong and stable Social Security Administration that delivers quality
services to our clients and your constituents.
The new Commissioner of Social Security faces a myriad of
challenges as she assumes her new responsibilities. This is a critical
time for the Social Security Administration and the programs it
administers. Demographic, economic, technological and cultural forces
are combining to stress and test an agency that has, since its
inception during the Great Depression, been a paragon of service to the
American public. Now SSA will be tested as never before and it will be
the new Commissioner who will have to lead the agency in meeting the
challenges ahead.
In discussing the challenges facing the Commissioner, we will do so
from the perspective of SSA's front-line managers and supervisors. We
experience first hand the impact of SSA's programs and processes on the
lives of our citizens and consequently are in a prime position to
identify and assess the challenges ahead.
SSA is, in a manner of speaking, a growth industry. With the aging
of the 76 million strong ``Baby Boomers'' will come a burgeoning in the
agency's workloads. Between now and the year 2010, SSA's actuaries
project that the number of retirement and survivor beneficiaries will
increase by 16 percent, the number of disability beneficiaries by a
staggering 50 percent and the number of SSI recipients by almost 15
percent. At the same time, SSA estimates that 28,000 of its employees
will be eligible to retire and another 10,000 will leave for other
reasons. This amounts to more than half the current workforce and could
result in a significant loss of experienced people and a drain of
institutional knowledge. Additionally, it has been estimated that if
SSA attempts to process its projected workload in the year 2010 using
the methods it currently employs there will be a 20,000 shortfall in
workyears.
With this as background we see the following as among the major
challenges facing the new Commissioner:
Resources and Service Levels
One of the first issues and challenges facing the Commissioner is
the question of whether SSA has the resources appropriate to the levels
of service it must deliver to the American public. The Social Security
Advisory Board in its September, 1999 report entitled: ``How The Social
Security Administration Can Improve Its Service To The Public''
summarized this issue by saying, ``. . . the agency has a serious
administrative deficit at present in that the level of service that is
being provided is less than is required to meet the needs of the
public.'' Over the two years since that was written, the situation has
not improved. Agency resources have not kept pace with the growth in
workloads. SSA simply does not have enough staff to deliver the level
of service currently expected of the agency.
This leads inexorably, to the issue of how SSA's administrative
costs are funded. SSA's administrative costs like its program costs are
funded by the Social Security Trust Funds through an account entitled
the ``Limitation on Administrative Expenses'' (LAE). As pointed out by
the Social Security Advisory Board in its February, 2001 report
entitled, ``Agenda For Social Security: Challenges For The New Congress
And The New Administration'': ``Both workers and employers contribute
to the self-financed Social Security System, and are entitled to
receive service that is of high quality.'' We agree with the Board that
SSA's administrative spending should be set at a level that fits the
needs of Social Security's contributors and beneficiaries. Under no
circumstances should SSA be required to compete for funding with
health, education and other human services functions.
Citizens contributing over their working lives to the Social
Security Trust Funds are paying not only for their benefits, but also
for the service necessary to process their claims, answer their
questions, send them their payments and the myriad other functions
performed by SSA to administer the Social Security programs. Each
citizen has a right to expect the best service possible.
We urge that SSA's budget requests be considered separate from
others in the HHS/Labor appropriations process. Because the LAE is
funded by the Social Security Trust Funds its budget should be
considered outside of the discretionary budget allocation, although we
recognize the importance of continued Congressional oversight of this
account.
Current Service
The issue of funding SSA's administrative costs notwithstanding,
the service SSA is providing today is, in our judgement, the most
important challenge facing the Commissioner. SSA needs to provide the
best service possible to those who seek service now, no matter how they
choose to seek that service. The Staffing Survey released by the
National Council of Social Security Management Associations early last
year, as well as recent reports issued by the Social Security Advisory
Board have raised troubling questions about whether adequate resources
are being allocated to the direct service being provided by SSA's
network of field offices and teleservice centers. As a direct result of
its survey, the NCSSMA called for an increase in frontline staffing in
SSA's network of field offices. It asked that SSA's budget establish a
base of 33,500 full-time equivalents (FTEs) in SSA's field offices, an
increase of approximately 5000 FTEs over current staffing levels.
Short of obtaining more resources, the Commissioner will be faced
with the challenge of apportioning current scarce resources among SSA's
various components. In our judgement, this should be done with a view
toward allocating direct service components first. There is nothing
more important than the service SSA provides our citizens today.
Disability
SSA's disability programs have been under severe stress for a
number of years. As reported by the Social Security Advisory Board in
its January 2001 report entitled, ``Charting the Future of Social
Security's Disability Programs: The Need for Fundamental Change'',
SSA's actuaries project that between now and 2010 the number of Title
II disability beneficiaries will increase by 50% and the number of SSI
disability recipients by 15%. This tremendous increase in disability
claims workloads will further strain a system that is already at the
breaking point. Disability claims workloads are rising around the
country. It was reported a few months ago that 134,000 disability cases
were waiting to be assigned to Disability Examiners in various
Disability Determination Services. This is just the ``tip of the
iceberg''. SSA has been attempting to deal with its problems in the
disability area for many years, but when all is said and done, from the
claimant's perspective, little has changed. The root causes of the
disability dilemma were accurately described by the Social Security
Advisory Board when it reported: ``. . . the structural problems of the
agency's disability determinations and appeals process . . . are at the
heart of many of the agency's service delivery problems.''
While we believe that it is appropriate and desirable for the
Commissioner to develop a proposal to revamp our national disability
program, we also believe that given the burgeoning workload (which is
unrelenting) and the political realities (which will be difficult and
time-consuming to deal with), it would not be prudent to count on a new
national disability program in time to avoid a service delivery
meltdown in the current program.
The challenge for the Commissioner will be to move quickly to
improve performance under the current system. The experience and data
obtained from the many pilots and studies over recent years should be
used to make necessary adjustments in the current process pending a
more expansive solution.
Workforce Transition
The impending ``Retirement Wave'' presents the Commissioner with
the immediate and critical challenge of replacing experienced personnel
with new hires who must be trained and mentored while workloads and
service demands are increasing. More than half of SSA's current
workforce could leave by the year 2010. Many of the people leaving will
be those with years of priceless experience in administering the most
complex laws and regulations on the federal books. It is tempting to
think that technological aids can be developed to guide employees
through the complexities to the right answer or course of action in any
particular case or situation. It is also tempting to think that a
combination of technological aids and new training protocols will make
our new employees more productive more quickly. But consider this, it
literally takes years for a Claims Representative (SSA's chief
technical/direct service operative) to become a fully competent
journeyman. It takes about the same length of time to develop a
journeyman Disability Examiner. The luxury of time to deal with the
workforce transition issue diminishes daily.
We urge the Commissioner to seek from the Administration and the
Congress the authority and funding to do advance hiring, in significant
numbers, of ``replacement'' personnel so that workforce transition can
take place in a measured and effective manner. SSA needs to be in a
position to take advantage of the opportunity of having the new
workforce trained and mentored by the experienced people who will be
retiring in increasing numbers over the next few years.
Organizational Framework
The Social Security Advisory Board has recommended that SSA
consider organizational changes in order to create a more service-
oriented organization. We believe that this is a challenge facing the
Commissioner. Increased pressure and demand for SSA's essential public
services have exacerbated the need for change. SSA's organizational
structure must be revamped to put its operational mission first.
SSA needs an organizational structure that pares support functions
to realistic levels. While support functions performed at the central
office, regional and area levels are often essential, they should not
be staffed at the expense of direct public service.
In addition, SSA needs to ensure that a larger percentage of its
key executives, especially those with operational responsibilities,
bring with them the knowledge and experience that comes from having
spent significant time working in SSA's direct service facilities.
Manager/Supervisor Ratios
More than ample evidence exists to suggest that SSA went too far in
the delayering of its managers and supervisors. According to former
Acting Commissioner Massanari, as a result of the delayering effort
initiated by the now defunct NPR, SSA has suffered a net loss of 1423
supervisory positions since 1993. The vast majority of these losses
came in SSA's front-line field offices and teleservice centers. The
impact of these losses in terms of diminished public service cannot be
overstated.
In its September, 1999 report entitled ``How the Social Security
Administration Can Improve Its Service to the Public'' the Social
Security Advisory Board wrote: ``As implemented by SSA, the reduction
in the number of managers and supervisors is particularly
problematic.'' SSA achieved the management-staff ratio recommended by
the NPR, but in the view of the Board, this achievement came at a
``high price.'' More recently, the National Council of Social Security
Management Associations Staffing Survey released in March, 2001
revealed quality, training and service delivery problems attributed in
large measure to the decline in the number of management and
supervisory positions in SSA's field offices. As a pertinent aside, OMB
Director Mitch Daniels has defined direct service positions as
``positions that interact with citizens.'' By that definition, every
management and supervisory position in every field office and
teleservice center is a direct service position. They all interact with
citizens on a daily basis and consequently, by the definition applied
by the current OMB Director, each manager and supervisor lost to
delayering was a loss in direct service to the American public.
The need to address these cutbacks so as to achieve and maintain
adequate levels of quality, training and public service will be another
challenge facing the Commissioner.
Organizational Culture
The Social Security Advisory Board in both its September, 1999
report and in its February, 2001 report made reference to the need for
the agency's leadership to address what they termed ``long standing
institutional problems.'' In both reports the Board states that ``. . .
SSA has a strong institutional resistance to open discussion of the
agency's problems. Although this attitude has apparently persisted for
many years and may be related to the agency's historic ``can do''
approach, it is particularly inappropriate and troubling today, given
the scope and magnitude of the agency's problems.''
Related to this problem is a belief among field office and
teleservice center management that their offices are being
micromanaged. There appears to be a strong emphasis on top down
management. There is a proliferation of numeric goals that are
increasingly remotely monitored. A negative consequence of this
approach is that onsite mangers are restricted in their use of
judgement and initiative and are constrained in their use of resources
to obtain optimum public service given local circumstances.
The challenge for the Commissioner is to be sensitive to these
issues and to the perceptions arising therefrom.
Public Awareness
For a long time there has been recognition of the fact that there
is a critical need to strengthen public understanding of Social
Security programs. The agency has set a strategic objective of
increasing public awareness of Social Security programs in five
critical areas: (1) Basic program facts, (2) Financial value to
individuals, (3) Economic and social impact of programs, (4) How
programs are financed today, (5) Financing issues and options. The goal
is to have 9 out of 10 Americans knowledgeable in these areas by 2005.
This is a desirable goal and represents a significant challenge for the
Commissioner.
If this challenge is to be met, it is essential that SSA
reinvigorate the role and capacity of our local community based field
offices in the area of public information.
Technology
SSA's Service Vision details a very impressive array of
technological enhancements that are intended to enable the agency to
deal with increased workloads and public demand within assumed
budgetary constraints. These enhancements are desirable and arguably
essential to the future viability of SSA's service. But technology is
only effective if used and used correctly by employees. The challenge
for the Commissioner is to make that happen.
The Commissioner needs to examine how technology is utilized in
SSA. Does the agency have the skilled programmers required to develop
needed software timely and efficiently? Does the agency have in place
the skilled resources necessary to ensure the effective maintenance and
updating of its computer systems? And, importantly from the viewpoint
of field management, does that agency effectively provide for systems
support in field offices and teleservice centers?
Regarding this last question, we feel there is a definite need to
take a fresh look at systems support at the field office and
teleservice center level. Line employees need to receive ongoing, hands
on training in the effective use of available software. Managers and
supervisors should not have the prime responsibility for handling
hardware maintenance and problems. The challenge here for the
Commissioner is to develop a comprehensive, effective and uniform
approach, which may extend to the development of new positions to
fulfill these needs.
Special Title II Disability Workload
SSA is currently faced with a huge and essentially unanticipated
workload in the form of literally hundreds of thousands of cases that
have come to be termed Special Title II Disability cases. These involve
situations wherein there was a failure to properly identify SSI
recipients who, after becoming entitled to SSI payments, subsequently
became potentially eligible for Title II benefits. At that point an
application for Title II benefits should have been solicited and
processed. Having now identified these cases, SSA is now obligated to
secure and process applications. This will involve a very significant
and unanticipated expenditure of SSA's frontline field office
resources. This is a very difficult challenge for the Commissioner
because it will take a significant number of SSA's best and brightest
frontline Technical Experts to handle this workload. These people will
not be available to help handle the normal and expected workload, which
continues to grow. This is also not a situation that can be resolved
with additional money alone. The Commissioner needs the option and
authority to hire additional frontline field office Claims
Representatives to help ease the additional burden that will result
from using the afore mentioned ``experts'' on this unanticipated
workload. Without this option and authority, service to the public, in
terms of current service, will undoubtedly suffer.
Summary
As indicated at the beginning of my statement, the challenges
discussed are from the perspective of SSA's frontline managers and
supervisors. They are by no means comprehensive, but they are, in our
judgement, directly related to the level and quality of service SSA
provides to our citizens on a daily basis. The NCSSMA is anxious to
work with and help SSA's new Commissioner as she tackles the difficult
challenges ahead.
We have every hope and confidence that she will be successful and
that SSA will continue to be among the premier organizations in
government.
Again Mr. Chairman, I thank you for this opportunity to address the
Subcommittee. I would welcome any questions that you or your colleagues
may have.
Statement of Nancy G. Shor, Executive Director, National Organization
of Social Security Claimants' Representatives, Midland Park, New Jersey
This statement is submitted on behalf of the National Organization
of Social Security Claimants' Representatives (NOSSCR). NOSSCR's
current membership is approximately 3,450 attorneys and others from
across the country who represent claimants for Social Security and
Supplemental Security Income (SSI) benefits. Collectively, we have many
years of experience in representing claimants at every level of the
administrative and judicial process. NOSSCR is committed to providing
the highest quality representation and advocacy on behalf of persons
who are seeking Social Security and SSI benefits.
During my more than twenty-year tenure as the NOSSCR Executive
Director, SSA Commissioners and other officials at the Social Security
Administration have been willing to meet with us and other advocacy
groups to discuss issues important to our membership and to claimants.
This has proven to be an effective way of addressing our concerns
before they become serious problems requiring other types of
intervention and we look forward to continuing this dialogue with the
new Commissioner and her management staff. I am very encouraged by
Commissioner Barnhart's recent decision to adjust the maximum amount
payable to representatives in the fee agreement process, which was a
topic at the Subcommittee on Social Security's hearing in May 2001. I
want to thank her for taking this action since, despite the statutory
authority to do so, no other Commissioner since the legislation's
inception in 1990 had adjusted the amount for inflation.
On November 1, 2001, the Subcommittee on Social Security held a
hearing on SSA's response to the September 11 terrorist attacks. The
testimony presented at the hearing reaffirmed the important and vital
role that the Social Security Administration plays in the lives of
people in this country. The challenges faced by the Commissioner are
not insurmountable. This Statement for the Record will discuss NOSSCR's
major concerns, focusing on the disability programs.
SOCIAL SECURITY SOLVENCY AND REFORM
As the debate on Social Security solvency and reform proposals
progress, the impact on people with disabilities must be considered.
More than one-third of all Social Security benefit payments are made to
nearly 17 million people who are not retirees. People with disabilities
are paid benefits not only from the disability program but also from
many other Social Security programs. We support efforts to require a
beneficiary impact statement from SSA on every major proposal under
consideration.
In addition, the agency has a role to play in educating the public
about the Social Security program. Because the debate on reform focuses
on the retirement program, many people are unfamiliar with the other
benefits paid by Social Security, including the disability and
survivors' programs. SSA should engage in public information outreach
activities to ensure that people have a clear understanding of all
Social Security programs.
LPROVIDING SSA WITH ADEQUATE RESOURCES TO MEET CURRENT AND FUTURE NEEDS
NOSSCR is concerned about SSA's readiness to deal with the
impending increase in its workload as the ``baby boom'' generation
approaches the peak age for onset of disability and, subsequently,
retirement. At Subcommittee on Social Security hearings in 2000,
testimony painted a bleak picture regarding SSA's ability to deal with
the increased work, at the same time that its own workforce will reach
peak retirement numbers. To exacerbate this problem, SSA's budget
continues to be cut from levels that would allow it to adequately
address current and future service delivery needs.
Most cases handled by NOSSCR members are at the ALJ hearing and
Appeals Council levels, where current processing times are unacceptably
high. Thus, while their medical and financial situations are
deteriorating, claimants are forced to wait for many months, if not
years, before receiving a decision.
To improve delays, better develop cases and implement technological
advances, SSA requires adequate staffing and resources. NOSSCR strongly
agrees with the Social Security Advisory Board's unanimous and
bipartisan recommendation that SSA's administrative budget, like its
program budget, be removed from the discretionary domestic spending
caps. Legislation such as H.R. 5447, a bipartisan bill introduced in
2000 by Chairman Shaw and Representative Cardin, would have
accomplished this by allowing Congress to approve funding for SSA to
address current service delivery needs and planning for the future.
THE DISABILITY DETERMINATION PROCESS
The vast majority of cases handled by NOSSCR members are claims for
Social Security and SSI disability benefits. NOSSCR strongly supports
efforts to reduce unnecessary delays for claimants and to make the
process more efficient, so long changes do not affect the fairness of
the process to determine a claimant's entitlement to benefits.
1. Improve full development of the record earlier in the process
Developing the record so that relevant evidence from all sources
can be considered is fundamental to full and fair adjudication of
claims. Unfortunately, very often the files that denied claimants bring
to our members show that little development was done at the initial and
reconsideration levels. Claimants are denied not because the evidence
establishes that the person is not disabled, but because the limited
evidence gathered cannot establish that the person is disabled.
The key to a successful disability determination process is having
an adequate documentation base and properly evaluating the
documentation that is obtained. Unless claims are better developed at
earlier levels, other procedural changes will not improve the
disability determination process.
NOSSCR supports full development of the record at the beginning of
the claim so that the correct decision can be made at the earliest
point possible. Claimants should be encouraged to submit evidence as
early as possible. The benefit is obvious: the earlier a claim is
adequately developed, the sooner it can be approved and the sooner
payment can begin. However, the fact that early submission of evidence
does not occur more frequently is usually due to reasons beyond the
claimant's control. Recommendations to improve the development process
include:
SSA should do a better job explaining to the
claimant, at the beginning of the process, what evidence is
important and necessary.
DDSs need to obtain necessary and relevant evidence.
Representatives often are able to obtain more detailed medical
information because they use letters and forms that ask
questions relevant to the disability determination process. DDS
forms usually ask for general medical information (diagnoses,
findings, etc.) without tailoring questions to the Social
Security disability standard. The same effort should be made
with nonphysician sources (therapists, social workers) who see
the claimant more frequently than the treating doctor and have
a more thorough knowledge of the limitations caused by the
claimant's impairments.
Improve provider response rates to requests for
records, including more appropriate reimbursement rates for
medical records and reports.
Provide better explanations to medical providers, in
particular treating sources, about the disability standard and
ask for evidence relevant to the standard.
L2. Streamline the process without impairing a claiman;ts right to a
full and fair hearing
Current processing times at the ALJ and Appeals Council levels are
unacceptably high. We agree with the Commissioner that reducing the
backlog and processing time must be a high priority. We urge commitment
of resources and personnel necessary to reduce delays and make the
process work better for the public.
Recently, a number of proposals to change the disability
determination process have been put forward. However, these proposals
contain some recommendations that we believe would undermine a
claimant's right to a fair adjudication process. Key features of a full
and fair process include the following:
Retain the right to a de novo hearing before an
Administrative Law Judge.
A claimant's right to a hearing before an Administrative Law Judge
(ALJ) is central to the fairness of the adjudication process. This is
the right to a full and fair administrative hearing by an independent
decisionmaker who provides impartial fact-finding and adjudication,
free from any agency coercion or influence. The ALJ asks questions of
and takes testimony from the claimant, may develop evidence when
necessary, and considers and weighs the evidence, all in accordance
with relevant law and agency policy. For claimants, a fundamental
principle of this right is the opportunity to present new evidence in
person to the ALJ, and to receive a decision from the ALJ that is based
on all available evidence.
Keep the record open for new evidence.
Many recent proposals to change the disability determination
process recommend that the record be closed to new evidence either
after the DDS or, at least, after the ALJ level. In the past, both
Congress and SSA have recognized that such proposals are neither
beneficial to claimants nor administratively efficient for the agency.
Under current law, an ALJ hears a disability claim de novo. Thus,
new evidence can be submitted and will be considered by the ALJ in
reaching a decision. However, the ability to submit new evidence and
have it considered becomes more limited at later levels of appeal. At
the Appeals Council level, new evidence will be considered by only if
it relates to the period before the ALJ decision and is ``new and
material.'' 1 At the federal district court level, the
record is closed and the court will not consider new evidence. However,
the court may remand the case to allow SSA to consider new evidence but
only if (1) it is ``new and material'' and (2) there is ``good cause''
for the failure to submit it in the prior administrative
proceedings.2
---------------------------------------------------------------------------
\1\ 20 C.F.R. Sec. Sec. 404.970(b) and 416.1470(b).
\2\ 42 U.S.C. Sec. 405(g).
---------------------------------------------------------------------------
As noted earlier, NOSSCR strongly supports the submission of
evidence as early as possible. Full development of the record at the
beginning of the claim means that the correct decision can be made at
the earliest point possible. The benefit is obvious: the earlier a
claim is adequately developed, the sooner it can be approved and the
sooner payment can begin.
There are a number of legitimate reasons why claimants are unable
to submit evidence earlier in the process and, as a result, why closing
the record is not beneficial to claimants. Such reasons include: (1)
worsening of the medical condition which forms the basis of the claim;
(2) the fact that the ability to submit evidence is not always in the
claimant's or representative's control, e.g., providers delay sending
evidence; and (3) the need to keep the process informal.
Filing a new application is not a viable option because it does not
improve the process and may in fact severely jeopardize, if not
permanently foreclose, eligibility for benefits. A claimant should not
be required to file a new application merely to have new evidence
considered where it is relevant to the prior claim. If such a rule were
established, SSA would need to handle more applications, unnecessarily
clogging the front end of the process. Further, there would be more
administrative costs for SSA since the cost of handling a new
application is higher than reviewing new evidence in the context of a
pending claim.
SSA should not be represented at the ALJ level.
We do not support proposals to have SSA represented at the ALJ
hearing. In the 1980's, SSA tested, and abandoned, a pilot project to
have the agency represented, the Government Representation Project
(GRP). First proposed by SSA in 1980, the plan encountered a hostile
reception at public hearings and from Members of Congress and was
withdrawn. The plan was revived in 1982 with no public hearings and was
instituted as a one-year ``experiment'' at five hearing sites. The one-
year experiment was terminated more than four years later following
congressional criticism and judicial intervention.3
---------------------------------------------------------------------------
\3\ In Sallings v. Bowen, 641 F. Supp. 1046 (W.D.Va. 1986), the
federal district court held that the Project was unconstitutional and
violated the Social Security Act. In July 1986, it issued an injunction
prohibiting SSA from holding further proceedings under the Project.
---------------------------------------------------------------------------
Based on the stated goals of the experiment, i.e., assisting in
better decisionmaking and reducing delays, it was an utter failure. The
GRP caused extensive delays in a system that was overburdened, even
then, and injected an inappropriate level of adversity, formality and
technicality into a system meant to be informal and nonadversarial. In
the end, the GRP experiment did nothing to enhance the integrity of the
administrative process.
Retain review by the Appeals Council.
NOSSCR opposes the elimination of a claimant's right to request
review by the Appeals Council, which SSA is still testing in the ten
``prototype'' states. The Appeals Council currently provides relief to
nearly one-fourth of the claimants who request review of ALJ denials,
either through outright reversal or remand back to the ALJ. The Appeals
Council, when it is able to operate properly and in a timely manner,
provides claimants with effective review of ALJ decisions and acts as a
screen between the ALJ and federal court levels. Elimination of Appeals
Council review could have a serious negative impact on the federal
courts. We agree with the Judicial Conference of the United States'
1994 statement opposing this plan when first proposed as ``likely to be
inefficient and counter-productive.''
Retain access to judicial review in the federal court
system.
NOSSCR supports the current system of judicial review. Proposals to
create either a Social Security Court to replace the federal district
courts or a Social Security Court of Appeals to provide appeal of all
Social Security cases from district courts have been considered, and
rejected, by Congress and SSA over the past twenty years.
We believe that both individual claimants and the system as a whole
benefit from the federal courts deciding Social Security cases. Over
the years, the federal courts have played a critical role in protecting
the rights of claimants. The system is well-served by regular, and not
specialized, federal judges who hear a wide variety of federal cases
and have a broad background against which to measure the reasonableness
of SSA's practices.
Creation of either a single Social Security Court or Social
Security Court of Appeals would limit the access of poor disabled and
elderly persons to judicial review. Under the current system, the
courts are more geographically accessible to all individuals and give
them an equal opportunity to be heard by judges of high caliber.
Rather than creating different policies, the courts, and in
particular the circuit courts, have contributed to national uniformity,
e.g., termination of disability benefits, denial of benefits to persons
with mental impairments, rules for the weight to give medical evidence,
evaluation of pain. The courts have played an important role in
determining the final direction of important national standards,
providing a more thorough and thoughtful consideration of the issues
than if a single court had passed on each. As a result, both Congress
and SSA have been able to rely upon the court precedent to produce a
reasoned final product.
Finally, the financial and administrative costs of creating these
new courts must be weighed against their questionable effectiveness to
achieve the stated objectives. The courts, if created, would involve
new expenditures. Should limited resources be committed to that purpose
instead of increasing resources at SSA? Further, from an administrative
perspective, should the focus be on the end of the appeals process
rather than on the front end?
3. Technological improvements
The Commissioner has announced an initiative to expand the use of
video teleconference ALJ hearings. This allows ALJs to conduct hearings
without being at the same geographical site as the claimant and
representative and has the potential to reduce processing times and
increase productivity. NOSSCR members have participated in pilots
conducted by SSA and have reported a mixed experience, depending on the
travel benefit for claimants, the quality of the equipment used, and
the hearing room set-up.
In 2001, SSA published proposed rules on video teleconference
hearings before ALJs. 66 Fed. Reg. 1059 (Jan. 5, 2001). In general, we
support the proposed rules and the use of video teleconference hearings
so long as the right to a full and fair hearing is adequately protected
and the quality of video teleconference hearings is assured.
RETURN TO WORK EFFORTS
NOSSCR supports efforts that encourage disabled beneficiaries to
return to work. Successful implementation of the Ticket to Work and
Work Incentives Improvement Act of 1999 is an ongoing process. As a
member of the Consortium for Citizens with Disabilities, we endorse the
written statement and testimony on this issue presented by Marty Ford.
ANTIFRAUD ACTIVITIES
Recently passed legislation requires SSA to take steps to prevent
fraud in the Social Security and SSI programs. The integrity of the
Social Security and SSI disability programs must be protected and cases
of true fraud should be uncovered. However, we are increasingly
concerned about reports that cases involving very questionable
allegations of fraud are being referred for investigation and possible
criminal prosecution. While we support efforts that maintain the
integrity of the programs, such activities must protect the due process
and privacy rights of individuals since they may lead to serious
sanctions. To avoid harming vulnerable individuals with disabilities,
guidelines and criteria must be sufficiently detailed to ensure that
only legitimate and appropriate cases are identified.
In December 2000, NOSSCR and other advocates met with officials
from SSA and the Office of Inspector General to raise our concerns and
to suggest ways to improve the process. We hope to continue the
dialogue in this area.
NOTICES
Over the past decade, the Subcommittee on Social Security has
addressed the serious problems caused by the poor quality of key SSA
notices provided to beneficiaries. Despite efforts to improve notices,
many of the same problems raised at a 1994 hearing continue to exist,
based on testimony at a September 2000 hearing. As noted by the GAO at
that hearing, notices continue to be written in complex and archaic
language that even experienced advocates, not to mention claimants and
beneficiaries, find difficult to decipher. They are written at reading
levels beyond the ability of the average person. Moreover, the notices
fail to adequately explain the basis for the action taken by SSA. As a
result, the poor quality of SSA's notices leads to erroneous and
unnecessary loss of benefits and relinquishment of important rights,
such as the right to appeal.
The poor quality of notices also affects SSA. Notices that
claimants and beneficiaries do not understand cause more work for
already overburdened SSA workers including: more telephone calls or in-
person visits for explanation of the agency's action; more appeals
filed; and more new applications filed.
CONCLUSIONS
We commend the Subcommittee for holding this hearing to look at the
challenges facing the new Commissioner of Social Security. NOSSCR is
committed to working with Commissioner Barnhart to improve the Social
Security and SSI programs which are so vital to millions of people in
this country.
Statement of James A. Hill, President, Chapter 224, National Treasury
Employees Union
Chairman Shaw and Members of the Subcommittee:
My name is James A. Hill. I have been employed by the Office of
Hearings and Appeals (OHA) of the Social Security Administration (SSA)
for more than 19 years as an Attorney-Advisor. I am also the President
of National Treasury Employees Union (NTEU) Chapter 224 that represents
Attorney-Advisors and other staff members in approximately 110 Hearing
Offices and OHA Regional Offices across the United States. I wish to
thank the Subcommittee for inviting me to testify regarding the
challenges and opportunities facing Social Security disability programs
today.
The crisis in disability adjudication at the hearing level of the
mid-1990's has returned. Case backlogs and average processing time have
increased at an alarming rate severely diminishing the quality of
service provided to the American public. The current situation is even
more disturbing because the anticipated workload will significantly
increase with the aging of the ``baby boomers''. SSA must immediately
address the current backlog problem and devise a system that will
adequately serve the needs of the future.
NTEU makes the following recommendations for action necessary to
ensure that the Office of Hearings and Appeals delivers the quality of
service demanded by the American people currently and in the future:
L 1. All qualified OHA Attorney Advisers should be converted
to Senior Attorney decision makers and given the authority to
issue fully favorable on-the-record decisions. These Senior
Attorney decision makers would review all cases coming into the
hearing office.
L 2. SSA should establish a workgroup to examine the
implementation of additional attorney decision makers in the
OHA hearing offices to work in conjunction with the ALJs in
processing the ever-growing workload that faces SSA.
L 3. SSA should establish a workgroup to examine the issue of
introducing an Agency representation into the adjudication
process.
Since the mid-1990's SSA's disability program has been in crisis.
In the mid-1990s the disability backlog rose to over 550,000 cases and
processing time climbed to nearly 400 days at the hearing office level.
In 1995 SSA introduced the Senior Attorney Program that was
instrumental in reducing the disability backlog to approximately
311,000 cases by September 1999 and reducing processing time to
approximately 270 days at the end of fiscal year 2000. Since the
termination of the Senior Attorney Program the disability case backlog
has risen to approximately 460,000 and SSA projects by the end of FY
2002 the backlog will rise to 546,000 cases.
Additionally, since the mid-1990s SSA has been concerned that its
disability program would be unable to meet the needs of the future,
particularly in view of the inevitable increase in disability
applications caused by the aging of the ``baby boomers''. That concern
was, and remains, well-founded, because it is clear that both the
system prior to 1995 and the current system are unable to meet the
needs of today's workloads to say nothing of the projected workloads of
the future. In order to address this problem the Social Security
Administration established the Disability Process Redesign Program
(DPR) in 1995. Despite the expenditure of millions of dollars, test
after test revealed failure in initiative after initiative. SSA
recently announced the demise of the Disability Claims Manager and
Prototype programs. They join the Adjudication Officer and Redesigned
Disability Systems Programs as failed major initiatives. Additionally,
DPR failed to produce an acceptable quality assurance program.
The failure of DPR did not discourage SSA from resurrecting many of
its basic concepts under the guise of the Hearings Process Improvement
Plan (HPI). One lesson learned from DPR was that testing often
disclosed problems. SSA took no chance that testing would reveal
problems with the HPI concept and implemented the program without
testing. Everyone concedes that like DPR, HPI has failed.
While both programs have failed, the failure of DPR had little
direct effect on claimants. The failure of HPI has severely damaged the
quality of service delivered to the public. During the time DPR was
failing, the disability backlog at OHA fell from approximately 570,000
cases in 1995 to approximately 311,000 cases in September 1999, but
since the inception of HPI, the backlog at the hearings level has risen
to more than 460,000 cases. This change of circumstances can be
attributed to the fact that during the unsuccessful DPR effort, OHA's
Senior Attorneys were issuing over 220,000 fully favorable decisions,
while the elimination of the Senior Attorney Program and the decisions
it produced was one of the ``improvements'' of HPI.
Under HPI, the Senior Attorney Program was replaced by a triage
system in which Attorney Advisers would screen profiled cases (the same
profiles used by the Senior Attorney Program) and recommend cases to
ALJs that could be paid on the record. This still requires a
significant commitment of ALJ resources. However, this process has
resulted in a considerable decline in on-the-record decisions emanating
from this profiled workload leading to fewer overall dispositions. The
rate of ALJ dispositions has not increased, in fact it has declined,
leading to a substantial decrease in total dispositions. Workload
growth is not the problem. In spite of the small increase in receipts
(5.7%), the case backlog has increased by nearly 40%. At the hearings
office level we have returned to the crisis situation of 1995, but the
expected flood of `baby boomers' is seven years closer. The service
delivery problems have both long-term and short-term ramifications, and
the time to address them is rapidly shrinking.
We are in the midst of an emerging disaster precipitated by the
demise of the Senior Attorney decision maker and fueled by HPI. The
situation continues to deteriorate. Any hope of significant improvement
without bold and decisive action is unreasonable. OHA has traditionally
maintained a roster of 1000-1100 ALJs. Hiring substantial numbers of
additional ALJs to meet future needs is fiscally irresponsible. SSA
recently hired approximately 130 new Administrative Law Judges
(returning to the norm) but readily admits that this addition will not
solve today's problems.
The loss of efficiency caused by HPI, the elimination of the Senior
Attorney Program, the precipitous decline in the number of on-the-
record decisions, the staggering increase in ``unpulled'' cases, the
expected increase in disability receipts, and the imposition of a new
and increased Medicare workload spell disaster. The Social Security
Administration must act quickly to deal with the current disability
backlog. It must also realistically assess its future workloads and
devise processes sufficient to meet the decision-making needs of the
future.
SSA Must Re-introduce of the Senior Attorney Program
The fundamental problem at OHA is that the number of decision
makers is insufficient to meet the workload. There is widespread
agreement that it is unreasonable to expect an Administrative Law Judge
to produce more than 500 dispositions in a year if an acceptable level
of quality is to be maintained. If ALJs are the only decision-makers,
and unless the Agency is prepared to accept a much greater number of
ALJs than currently are employed, the simple arithmetic mandates an
ever increasing backlog and skyrocketing processing times. The solution
is more decision makers.
In 1995 the Social Security Administration faced a disability
caseload backlog and processing time crisis very similar to that
existing today. In order to reduce the backlog and decrease processing
time, SSA instituted the Short Term Disability Program. The primary
element of that program, designed to reduce both the backlog and
processing time, was the Senior Attorney Program.
That program began in 1995 and continued until the advent of the
HPI Program. The authority to make and issue fully favorable decisions
on the evidence of record was delegated to the Agency's experienced
Attorney Advisors. The Senior Attorney decisions combined with ALJ
decisions resulted in a substantially higher level of total
dispositions than would have occurred if ALJs had been the sole
decision-makers. In addition to performing the ``Senior Attorney
work'', the Senior Attorneys also continued to draft ALJ decisions.
This arrangement utilized the knowledge, skills, and abilities of these
attorneys to issue fully favorable decisions to those claimants whose
case did not require a hearing, and to continue to draft the more
difficult ALJ decisions. This afforded, on an individual hearing office
basis, the flexibility to direct decision making and decision writing
resources as necessary to achieve maximum productivity.
Senior Attorneys issued approximately 220,000 decisions during the
course of the Program. The average processing time for Senior Attorney
decisions was approximately 105 days. During its pendency the OHA
backlog fell from over 550,000 to as low as 311,000 at the end of FY
1999. The correlation is obvious. During the same time period there was
also an increase in ALJ productivity demonstrating that dual decision
makers was a viable concept. It is readily apparent that processing a
large number of cases in such an expeditious manner materially reduced
the average processing time for all disability cases at the hearings
level in OHA.
While the Senior Attorney Program resulted in a substantial
increase in on-the-record decisions, there was not a corresponding
increase in the OHA payment rate. In fact the overall payment rate at
OHA declined during the course of the Senior Attorney Program. The
absence of a significant increase in ALJ on-the-record decisions as the
number of Senior Attorney on-the-record decisions declined (because of
the downsizing and eventual elimination of the Program) is difficult to
explain, particularly in view of the recent significant increase in the
ALJ payment rate.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
As the Senior Attorney Program was marginalized, OHA dispositions
declined.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Finally, the size of the backlog reflects the success and demise of
the Senior Attorney Program.
In July 1998 the Senior Attorney Program was significantly
downsized with approximately one-half of the senior attorneys returned
to the GS-12 attorney adviser position. The remaining Senior Attorneys
spent 100 percent of their time doing ``Senior Attorney work''. This
lack of flexibility doomed this arrangement to a very short lifetime.
In fact it lasted only four months before the remaining Senior
Attorneys were also assigned ALJ decisions drafting duties.
Unfortunately, the number of Senior Attorneys was not increased which
led to a significant decline in the Program's productivity. This
decrease in productivity led to the rise in unpulled cases and the
beginning of the increase in the backlog and average processing time.
The Senior Attorney Program benefited more than just those
claimants who received their disability payments far earlier than would
otherwise have been the case. Because Senior Attorneys adjudicated the
fully favorable on the record cases, staff and ALJ time was not spent
needlessly on cases that could be paid without a hearing. They could
more timely attend to the other cases, thereby reducing processing time
for those cases as well. Another benefit, less appreciated at the time,
was that cases paid by a Senior Attorney were not pulled (prepared for
hearing). Had the Senior Attorney Program had not been downsized and
then eliminated, I believe that there would currently be 90,000 fewer
cases waiting to be pulled.
The processing of Senior Attorney cases involved a very limited
amount of hearing office staff time. This resulted in the expenditure
of far fewer work years devoted to processing Senior Attorney cases
than would have been the case had ALJ adjudication been required. This
resulted in a significant reduction of administrative costs for those
cases that did not require ALJ adjudication. The former Chief
Administrative Law Judge stated that OHA may receive as many as 100,000
cases a year that with minimum development could be paid without a
hearing before an Administrative Law Judge. The savings in
administrative costs arising from the reinstitution of the Senior
Attorney Program would be substantial.
During the pendency of the Senior Attorney Program, the payment
rate at the hearings level significantly declined. Since its demise,
the payment rate has returned to near record levels. The Senior
Attorney Program was at least in part responsible for this decrease in
the payment rate, a key factor in determining program costs.
One of the criticisms of the Senior Attorney Program involved
decisional accuracy. Of course that is also one of the chief complaints
regarding ALJ decisions. The Appeals Council review of Senior Attorney
and ALJ on-the-record decisions found no difference in quality. I am
convinced that the formulation and implementation of an effective
quality assurance program at the hearing level should be of the highest
priority. Quite simply, the time for such a program has come.
Of course the success of the Senior Attorney Program ultimately
rests on the competence of the highly trained legal professionals who
can serve as adjudicators. These individuals are experienced OHA
Attorney Advisors who have many years experience dealing with the
intricacies of the legal-medical aspects of the Social Security
disability program. They are attorneys well versed in the law, and they
are experienced disability practitioners with a wealth of adjudicatory
experience in the Social Security disability system.
The immediate conversion of OHA Attorney Advisers to Senior
Attorney decision makers as described above will result in an immediate
and substantial improvement in OHA service to the public with minimal
disruption of current OHA structure and operations and at minimal
additional cost. Based upon the Agency's experience with the original
Senior Attorney Program, and with the full cooperation of hearing
office management (lacking during the original Senior Attorney
Program), this measure could produce as many as 75,000-100,000
decisions a year without diminishing ALJ productivity. Based upon
previous experience, the average processing time for these cases would
be approximately 100 days. Additionally, the minimal staff and complete
lack of ALJ time spent on these cases frees the staff and ALJs to spend
more time on processing those cases requiring a hearing.
The original Senior Attorney Program was a resounding success. It
materially improved the quality of service provided to the public,
especially for those individuals who were disabled and entitled to
receive their disability decision and benefits on a timely basis. In
addition, it resulted in administrative and program cost savings.
Senior Attorney decision makers have proven by their performance that
pre-ALJ decision making in the OHA hearing office significantly
improves the quality of service provided to the public.
SSA has long been concerned that the disability adjudication system
will be unable to meet the expected increase of applicants for
disability benefits caused by the aging of the ``baby boomers''. Based
upon the performance of the disability system, that concern is
justified. However, the basic problem that affects adjudication at OHA
today, the lack of a sufficient number of decision makers, will remain
unless OHA either greatly expands its ALJ Corps and support staff,
creates a magistrate position, develops additional decision-making
positions with the authority to grant and deny disability benefits,
and/or fundamentally alters the adjudication process.
However, the number of dispositions is not the only chronic problem
faced by the adjudication system at the hearings level in OHA. The
maintenance of quality assurance has been a long-standing problem at
OHA. Managerial oversight of the quality of ALJ decisions unavoidably
impacts on the decisional independence guaranteed by the Administrative
Procedures Act. As a consequence, very few effective quality assurance
activities have occurred at the hearings level.
NTEU believes that it is time for the Social Security
Administration to seriously consider fundamentally altering the nature
of ALJ hearings by introducing an Agency representative, the Social
Security Counsel, who will be responsible for presenting the Agency's
case to the Administrative Law Judge. The Counsel would be responsible
for developing the record and presenting it at the hearing. This would
relieve the ALJ of the primary responsibility for developing the
record.
It is the responsibility of the Counsel to present the adjudicator
with a balanced and complete record upon which a fair and just decision
can be based. It is not the Social Security Counsel's responsibility to
obtain a denial in as many cases as possible. The Counsel is also
responsible for facilitating the adjudicatory process to ensure that
those entitled to benefits receive them as soon as practicable. The
Counsel, in concert with the claimant's representative, will resolve
issues and propose settlement agreements that would be presented to the
adjudicator for approval.
The role of the adjudicator would be reduced to oversight of the
pre-hearing process, conducting hearings, and preparation of written
decisions based on evidence presented at hearing. The Administrative
Law Judge would be relieved of the responsibility of representing the
agency and the represented claimant, and would act as a trier of fact.
The change to a system that allows ALJs to decide cases based on the
merits of the arguments presented by both sides, the facts of the case,
the credibility of the claimant and the rules, regulations and law
could greatly increase ALJ satisfaction with the process. The ALJ will
still be supported in the decision writing and effectuation process. If
case preparation by the Counsel's staff replaces much of the case
preparation currently performed by the ALJ's staff, the net impact on
administrative cost could be quite small.
NTEU is not alone in advocating the consideration of a process in
which an Agency representative plays a vital role. Both the Lewin
Group, Inc. and the Social Security Advisory Board have advanced
similar recommendations.
In its report dated January 2001, Charting the Future of the Social
Security's Disability Programs: The Need for Fundamental Change, the
Social Security Advisory Board also noted that Administrative Law
Judges have been required to balance three roles. They are obligated to
protect the interests of both the claimant and the government, and to
serve as an objective adjudicator. The Board further noted that
approximately 80 percent of disability insurance claimants are now
represented by an attorney. The Board also noted that because of the
massive increase in the disability appellate workload, SSA has
periodically made efforts to increase ALJ productivity which many in
OHA believe has impacted adversely on the quality of decision-making.
To correct a variety of current problems, the Social Security Advisory
Board recommended that the agency be represented at hearings. The Board
stated that having a representative present at the hearing to defend
the Agency's position would help clarify the issues and introduce
greater consistency and accountability into the adjudicatory system.
The Board also indicated that consideration be given to allowing the
Agency to file an appeal of ALJ decisions.
The extent of the quality assurance problems in the current system
is underlined in the report of The Lewin Group, Inc, which stated that
the adjudication process at OHA is almost unique. The Lewin Group
reported, ``We have not encountered good examples of non-adversarial
processes.'' The Lewin Group suggested that one way to improve the non-
adversial system is to make it more adversarial. It suggested that the
mechanism for such a change would be to introduce a representative from
the Social Security Administration into the adjudication process. This
would relieve the Administrative Law Judge of the responsibility of
representing the agency, and if the claimant were represented by
outside counsel, the responsibility for representing the claimant. The
Lewin Group stated that the political issues could be greatly mitigated
by appropriate definition of the representative's job and appropriate
training of the representatives. They stated that the representative's
job is not to obtain a denial in as many cases as possible, and in
fact, the representative could be given the authority to allow cases
that meet the medical eligibility criteria, perhaps subject to the
approval of the ALJ.
The Lewin Group also felt that administrative savings are generated
by elimination of a separate quality assurance process that would not
be required in an adversarial system, because of the normal appellate
process. They concluded that if the system also reduced the allowance
rate, as they expected, program savings would be generated.
In conclusion, NTEU makes the following recommendations of action
necessary to ensure that the Office of Hearings and Appeals delivers
the quality of service demanded by the American people currently and in
the future:
1. All qualified OHA Attorney Advisers should be converted
to Senior Attorney decision makers and given the authority to
issue fully favorable on-the-record decisions. These Senior
Attorney decision makers would review all cases coming into the
hearing office.
2. SSA should establish a workgroup to examine the
implementation of additional attorney decision makers in the
OHA hearing offices to work in conjunction with the ALJs in
processing the ever-growing workload that faces SSA.
3. SSA should establish a workgroup to examine the issue of
introducing an Agency representation into the adjudication
process.