[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                  THE SOCIAL SECURITY ADMINISTRATION'S 
                  PROVISIONS IN THE AMERICAN RECOVERY 
                      AND REINVESTMENT ACT OF 2009 

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 28, 2009

                               __________

                           Serial No. 111-16

                               __________

         Printed for the use of the Committee on Ways and Means

                               ----------
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52-326 PDF                       WASHINGTON : 2009 

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                      COMMITTEE ON WAYS AND MEANS

                 CHARLES B. RANGEL, New York, Chairman

FORTNEY PETE STARK, CALIFORNIA       DAVE CAMP, MICHIGAN
SANDER M. LEVIN, MICHIGAN            WALLY HERGER, CALIFORNIA
JIM MCDERMOTT, WASHINGTON            SAM JOHNSON, TEXAS
JOHN LEWIS, GEORGIA                  KEVIN BRADY, TEXAS
RICHARD E. NEAL, MASSACHUSETTS       PAUL RYAN, WISCONSIN
JOHN S. TANNER, TENNESSEE            ERIC CANTOR, VIRGINIA
XAVIER BECERRA, CALIFORNIA           JOHN LINDER, GEORGIA
LLOYD DOGGETT, TEXAS                 DEVIN NUNES, CALIFORNIA
EARL POMEROY, NORTH DAKOTA           PATRICK J. TIBERI, OHIO
MIKE THOMPSON, CALIFORNIA            GINNY BROWN-WAITE, FLORIDA
JOHN B. LARSON, CONNECTICUT          GEOFF DAVIS, KENTUCKY
EARL BLUMENAUER, OREGON              DAVID G. REICHERT, WASHINGTON
RON KIND, WISCONSIN                  CHARLES W. BOUSTANY, JR., 
BILL PASCRELL, JR., NEW JERSEY       LOUISIANA
SHELLEY BERKLEY, NEVADA              DEAN HELLER, NEVADA
JOSEPH CROWLEY, NEW YORK             PETER J. ROSKAM, ILLINOIS
CHRIS VAN HOLLEN, MARYLAND
KENDRICK B. MEEK, FLORIDA
ALLYSON Y. SCHWARTZ, PENNSYLVANIA
ARTUR DAVIS, ALABAMA
DANNY K. DAVIS, ILLINOIS
BOB ETHERIDGE, NORTH CAROLINA
LINDA T. SANCHEZ, CALIFORNIA
BRIAN HIGGINS, NEW YORK
JOHN A. YARMUTH, KENTUCKY

             Janice Mays, Chief Counsel and Staff Director

                   Jon Traub, Minority Staff Director

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                  JOHN S. TANNER, Tennessee, Chairman

EARL POMEROY, North Dakota           SAM JOHNSON, Texas, Ranking Member
ALLYSON Y. SCHWARTZ, Pennsylvania    KEVIN BRADY, Texas
XAVIER BECERRA, California           PATRICK J. TIBERI, Ohio
LLOYD DOGGETT, Texas                 GINNY BROWN-WAITE, Florida
RON KIND, Wisconsin                  DAVID G. REICHERT, Washington
JOSEPH CROWLEY, New York
LINDA T. SANCHEZ, California
JOHN A. YARMUTH, Kentucky

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

Advisory of April 21, 2009 announcing the hearing................     2

                               WITNESSES

Mary Glenn-Croft, Deputy Commissioner for Budget, Finance and 
  Management, Social Security Administration.....................     7
Robert Hewell, Acting Deputy Commissioner, Public Buildings 
  Service, United States General Services Administration.........    14
The Honorable Patrick P. O'Carroll, Inspector General, Social 
  Security Administration........................................    22
Valerie Melvin, Director of Information Management and Human 
  Capital Issues, U.S. Government Accountability Office..........    26
Sylvester J. Schieber, Chairman, Social Security Advisory Board..    42

                       SUBMISSIONS FOR THE RECORD

Dale and Linda Walker, Statement.................................    91
Larry S. Stoudemire, Letter......................................    91
The National Association of Disability Examiners, Statement......    91


                  THE SOCIAL SECURITY ADMINISTRATION'S
                  PROVISIONS IN THE AMERICAN RECOVERY
                      AND REINVESTMENT ACT OF 2009

                              ----------                              


                        TUESDAY, APRIL 28, 2009

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:01 p.m., in 
room B-318, Rayburn House Office Building, the Honorable John 
Tanner (Chairman of the Subcommittee) presiding.
    [The advisory of the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
April 21, 2009
SS-2

                 Congressman Tanner Announces Oversight

            Hearing on the Social Security Administration's

                  Provisions in the American Recovery

                      and Reinvestment Act of 2009

      
    Congressman John S. Tanner (D-TN), Chairman, Subcommittee on Social 
Security, announced an oversight hearing on the progress made by the 
Social Security Administration (SSA) in implementing the American 
Recovery and Reinvestment Act of 2009. The hearing will take place on 
Tuesday, April 28, 2009 in room B-318 Rayburn House Office Building, 
beginning at 2:00 p.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 Committee and for 
inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    In February, Congress passed and the President signed the American 
Recovery and Reinvestment Act of 2009 (ARRA, Pub. L. 111-5), landmark 
legislation designed to create jobs, promote economic recovery, assist 
people most impacted by the recession, and make investments in 
infrastructure and technology to increase economic efficiency and 
provide long-term economic benefits.
      
    The Recovery Act made a significant and strategic investment in 
SSA, to ensure that the agency is capable of continuing its vital role 
in helping American families meet their financial needs during 
retirement, in case of disability, or after the death of a wage earner. 
A decade of funding below the President's request had left SSA with a 
decreased ability to meet the requirements of serving an aging society. 
As a result, the agency was also ill-prepared to deal with a 
significant increase in retirement and disability benefit claims caused 
by the current economic downturn. Post-9/11 enhancements to Government 
requirements for systems continuity in case of a disaster combined with 
SSA's increasing use of electronic processes also require modernization 
of its information technology systems, including complete replacement 
of its nearly obsolete National Computer Center (NCC). Moreover, ARRA's 
provision of one-time economic recovery payments to Social Security 
beneficiaries is intended to give some financial help to retired and 
disabled Americans, who are most likely to be impacted by the economic 
crisis.
      
    SSA's national computer processing and data storage facility, the 
NCC, houses 450 million records of Americans' earnings and benefit data 
for almost 56 million beneficiaries. It performs a billion electronic 
transactions annually in the administration of benefits and data-
matching agreements with other Federal, state and local agencies. As 
reliance on electronic processing and technology grows--both within SSA 
and among other Federal, state and local agencies--so does the need to 
ensure the NCC is able to function effectively. The NCC is nearly 
thirty years old. It is nearing the end of its useful physical life, 
its capacity is inadequate to meet anticipated future needs, and 
deterioration of the facility is posing increasing risks to SSA 
operations. Questions have been raised concerning why replacement of 
the NCC became an unforeseen and urgent priority, and whether steps can 
be taken by SSA to avoid such crises in the future. ARRA provided SSA 
with $500 million to begin the process of replacing the existing NCC. 
This amount is expected to cover the cost of building a new facility 
and part of the cost of equipping it.
      
    In addition, SSA's workload in processing new claims for retirement 
and disability benefits began to increase significantly in FY 2009 as a 
result of the economic downturn combined with the aging of the 
population. SSA estimated that processing the increased number of 
claims will cost the agency $900 million more in FY 2009-10 than was 
previously projected. ARRA provided SSA with $500 million as a down-
payment on the cost of processing these recession-driven claims.
      
    Finally, ARRA provided most Social Security, Railroad Retirement 
Board, Veterans Administration, and Supplemental Security Income (SSI) 
beneficiaries with a one-time, additional payment of $250 to help 
stimulate economic recovery. Direct payments to retirees and people 
with disabilities have a beneficial impact on the economy, as 
beneficiaries with modest incomes are more likely to spend the money on 
immediate needs rather than save it. SSA has notified its beneficiaries 
of the upcoming payments and anticipates their distribution several 
weeks ahead of the June statutory deadline.
      
    In announcing the hearing, Chairman John Tanner (D-TN) stated, 
``Congress counts on the Social Security Administration to reliably 
serve America's retirees, people with disabilities and survivors, 
providing needed benefits in a timely manner. In the Recovery Act, 
Congress made a significant investment in SSA's capacity to continue to 
effectively serve our constituents. This hearing will allow the 
Subcommittee to learn how SSA is managing this investment, to ensure 
that waste is avoided and all due effort is made to maintain the high 
level of customer service for which the agency historically has been 
known.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on the progress made by SSA and other 
involved agencies in using ARRA resources to replace the NCC; SSA's use 
of ARRA funding to process recession-driven claims; and the agency's 
plans for distributing the $250 economic recovery payments to over 50 
million recipients.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Committee Hearings''. Select the hearing for which you would like to 
submit, and click on the link entitled, ``Click here to provide a 
submission for the record.'' Once you have followed the online 
instructions, complete all informational forms and click ``submit'' on 
the final page. ATTACH your submission as a Word or WordPerfect 
document, in compliance with the formatting requirements listed below, 
by close of business Tuesday, May 12, 2009. Finally, please note that 
due to the change in House mail policy, the U.S. Capitol Police will 
refuse sealed-package deliveries to all House Office Buildings. For 
questions, or if you encounter technical problems, please call (202) 
225-1721.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item 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. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies 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. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone, and fax numbers of each witness.
      
    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.
      
      Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov.

                                 

    Chairman TANNER [presiding]. If Mr. Brady has arrived, we 
could come to order.
    I thank all of you for being here, particularly our 
witnesses.
    This hearing today is about the implementation of the so-
called stimulus bill, the American Recovery and Reinvestment 
Act, and, basically, there are two or three things that we want 
to talk about here with our witnesses. One, of course, is the 
resources that were made available for the backlog and the 
problems that we have been having with that, and secondly is 
the somewhat urgent need to move on a new facility for the 
Social Security Administration.
    This came to us late in the day, as one might say, about 
the urgency of the problems out at the site, the National 
Computer Center, and, therefore, Congress responded with some 
moneys in the stimulus package to address this issue. And, 
finally, we will talk a little about the stimulus bill and the 
recovery payments and so forth that is contained therein.
    Unfortunately, Mr. Johnson, our Ranking Member on the 
Subcommittee, could not be here today, and so, at this time, I 
would like to ask Mr. Brady for any comments he may have as the 
Ranking Member. And thank you.
    Mr. BRADY. Great, Chairman. Thanks for having us.
    I am pleased to be filling for our Ranking Member, Sam 
Johnson, who is remaining in Texas for part of the day and will 
start by reading his opening statement for today's hearing.
    This Committee, as the chairman said, has long worked on a 
bipartisan basis to ensure Social Security has the resources it 
needs. In the last 2 years, Congress has provided funding at 
levels higher than the President's request, and the Recovery 
Act provides an additional $1 billion to build a new computer 
center and to process increased workloads due to the economic 
downturn.
    Today, we will begin to learn how Social Security is using 
these funds and whether they are doing so in ways that provide 
real results to the American people without squandering 
substantial taxpayer investments.
    First, these results must include restoring service 
delivery and protecting Americans' personal information and in 
the event of a major failure at the 30-year-old National 
Computer Center. Second, delays our constituents face when they 
visit or contact the local Social Security office, call the 800 
number, or wait over 16 months for a decision on their 
disability appeal before administrative law judge must be 
reversed.
    Third, efforts to address program waste, fraud, and abuse, 
including conducting continuing disability reviews, must be 
increased in order to save billions in program dollars and 
build taxpayer confidence. Finally, whether Social Security 
will achieve these results now and in the future depends on 
their ability to effectively and strategically modernize its 
technology infrastructure as it purchases a new National 
Computer Center and builds the capacity of the second data 
center in Durham.
    As said in a recently released bipartisan Social Security 
Advisory Board report, ``There is much that remains to be done 
to establish a truly robust and modern IT infrastructure that 
will truly support service delivery in the 21st century, and 
time may be running short.''
    In closing, as we address Social Security service delivery 
challenges, we cannot just ignore the fiscal challenge Social 
Security faces. President Obama has expressed his commitment to 
advance Social Security reform. We all know the sooner we act 
to protect and strengthen Social Security, the better.
    So I hope this Subcommittee can begin work on a bipartisan 
basis as soon as possible to examine options and find 
solutions.
    Thank you, Chairman.
    Chairman TANNER. Thank you, Mr. Brady.
    The Chair would ask unanimous consent that his statement 
and all others on the Committee be inserted into the record. 
Without objection.
    [The statement of Mr. Johnson follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman TANNER. In addition, I would like to ask unanimous 
consent that all of the statements of the witnesses that are 
going to testify be inserted into the record. Without 
objection. Thank you.
    And now may I call on Ms. Glenn-Croft first for your 
testimony. You are recognized. And, please, if you could 
observe the 5-minute rule, we would appreciate it.

  STATEMENT OF MS. MARY GLENN-CROFT, DEPUTY COMMISSIONER FOR 
 BUDGET, FINANCE AND MANAGEMENT, SOCIAL SECURITY ADMINISTRATION

    Ms. GLENN-CROFT. I will do that.
    Chairman Tanner, Ranking Member Brady, and Members of the 
Subcommittee, good afternoon. I am Mary Glenn-Croft, Social 
Security senior accountable official for the use of Recovery 
Act funds.
    On behalf of Commissioner Astrue, I appreciate the 
opportunity to discuss how these funds will help us process our 
increasing workloads and replace our aging National Computer 
Center. I will also share our plan to oversee our Recovery Act 
responsibilities, including issuing one-time $250 economic 
recovery payments to Social Security and SSI beneficiaries.
    Let me begin by thanking you for the significant investment 
you are making in our agency and for the trust that you have in 
us to get the job done.
    The Recovery Act provides us with $500 million to process 
what we expect to be the highest levels of disability and 
retirement claims we have ever seen. This fiscal year, because 
of the twin forces of the economic downturn and the first baby 
boomers retiring, we expect to receive over 300,000 more 
retirement claims, about a 9-percent increase, and 300,000 more 
disability claims, about a 12-percent increase, over last year. 
Fiscal year 2009 appropriations and Recovery Act funding will 
allow us to process most, if not all, of the additional 
retirement claims, hold 75,000 additional hearings, and process 
an additional 30,000 disability claims.
    We will also hire more than 2,000 people with the Recovery 
Act funding this fiscal year. About 1,500 of these new hires 
will provide direct service to help people file claims, 
adjudicate applications, and answer the public's questions. We 
will hire 35 additional administrative law judges and 550 
support staff in hearing offices, and we will provide funding 
for 300 new employees in the state disability determination 
services.
    In addition, we will authorize overtime and frontline 
components to process critical workloads. We have already 
recruited and hired a highly diverse group of more than 1,400 
new employees. New hires will make a real difference in the 
service we provide to the American public, although it will 
take some time for us to fully train them. Our combined fiscal 
year 2009 annual appropriation and the Recovery Act funding 
will allow us to hire over 7,000 employees by September.
    The Recovery Act authorized us to spend part of the $500 
million on technology investments, including health information 
technology. We will spend about $16 million dollars of Recovery 
Act funding on computers and other equipment our new hires will 
need. We will also invest in video-conferencing equipment and 
increased bandwidth to support the hearings process. We intend 
to spend $24 million to contract with the health care community 
to provide us with electronic health records to improve the 
speed and accuracy of our disability determination process.
    Congress also acknowledged our long-term information 
technology needs by providing $500 million to replace and 
partially equip our national Computer Center. The NCC is the 
technological heart of the agency, housing critical computer 
operations and data essential to provide prompt and accurate 
benefit payments to millions of Americans. Because the NCC is 
30 years old, eventually, it will be unable to support the 
growing demand of our computer systems and electronic services. 
This funding will ensure that a new data center will be 
operational as the NCC nears the end of its functional life.
    We are working collaboratively with the General Services 
Administration to formulate specific requirements for a state-
of-the-art data center and to develop criteria for a building 
site. As of April 1, GSA awarded a contract to a construction 
management firm, and we are currently providing that firm with 
information to define building requirements and land 
specifications.
    We strongly support the accountability and transparency 
standards Congress established for Recovery Act funds. As 
recommended by OMB, our executive internal control Committee 
will oversee Recovery Act performance across the agency. We 
have established oversight workgroups for each of our Recovery 
Act efforts, and in compliance with reporting requirements, we 
were one of the first agencies to put up a recovery Web site 
and submit our weekly reports to OMB. We are also working 
closely with our inspector general's office as it plans 
additional oversight of Recovery Act funding.
    Finally, the Recovery Act provides for one-time $250 
economic recovery payments to Social Security and SSI 
recipients. Although implementing this legislation required 
extensive coordination with other Federal agencies, we are on 
track to issue these payments in May, 3 weeks earlier than the 
statute requires. These payments to more than 50 million people 
will inject over $13 billion into the economy.
    Again, we greatly appreciate the actions of Congress to 
provide assistance to the American people in this time of 
economic hardship, and we thank you for providing us with the 
funding we need to help in these efforts. We will keep the 
Committee apprised of our progress, and we look forward to your 
continued support as we implement the plans I have described 
above.
    I would be happy to answer any of your questions.
    Thank you.
    [The statement of Ms. Glenn-Croft follows:]
     Statement of Mary Glenn-Croft, Deputy Commissioner for Budget,
         Finance and Management, Social Security Administration
    Thank you for the opportunity to describe the important and 
ambitious projects that we at the Social Security Administration are 
undertaking with the funds that you appropriated to us through the 
American Recovery and Reinvestment Act of 2009 (Recovery Act) I want to 
thank you on the agency's behalf for the significant investment you are 
making in us and for the trust that you have in us to get the job done.
    We realize that many of our fellow citizens are suffering because 
of the current economic downturn. Jobs have become scarcer; homes have 
been lost, and too many of our neighbors are facing increased 
difficulty in making ends meet. Undoubtedly, these are challenging 
times. Nevertheless, we believe that we have a unique opportunity to 
serve the millions of Americans who rely upon our programs and to 
continue to provide them with the quality service they deserve.
    As the Senior Accountable Official, I am responsible for overseeing 
how we use the Recovery Act resources. Under the Recovery Act, you 
afforded us $500 million to tackle our retirement and disability 
workloads--$40 million of which we may use for health information 
technology initiatives. You also gave us $90 million to administer 
economic recovery payments and $500 million to construct and partially 
equip a new data center to replace our aging National Computer Center 
(NCC). This substantial investment will help us address the 
dramatically increasing service demands caused by the combination of a 
weakened economy and increased baby boomer retirements.
    Today, I will discuss how these Recovery Act resources will help us 
process our increasing workloads and replace our aging NCC. I will 
share with you the agency's plan to oversee all of our Recovery Act 
responsibilities, including paying $250 to millions of Social Security 
and Supplemental Security Income (SSI) beneficiaries.
PUTTING RECOVERY FUNDS TO WORK--HIRING AND PROCESSING WORKLOADS
    The Recovery Act gives us $500 million to process the increased 
number of disability and retirement claims we are seeing because of the 
economic downturn and the beginning of the baby boomer retirement wave. 
If our projections hold true, we will receive and process more claims 
this year than in any prior year. With the fiscal year (FY) 2009 
appropriation and the Recovery Act funding, we plan to process over 
300,000 more retirement claims, 30,000 more disability claims, and 
nearly 75,000 more hearing requests this fiscal year than we did in FY 
2008.
    We will use a significant portion of this funding to hire and train 
new employees and to provide additional overtime so that we can process 
critical workloads. Of more than 7,000 new hires that we are making 
this fiscal year, the Recovery Act funding will allow us to hire more 
than 2,000 Federal employees and the States to hire additional 
disability examiners. Specifically, in the near term:

          Our field operations will hire 1,500 employees in 
        local field offices, teleservice centers, and processing 
        centers;
          Our hearings offices will hire 550 new employees and 
        35 additional administrative law judges, and
          State disability determination services (DDS) 
        throughout the country will hire 300 additional disability 
        examiners.

    In total, by September of this year, with our FY 2009 appropriation 
and the Recovery Act funding, we will hire over 7,000 employees. We 
will assign these new employees throughout the agency and across the 
country to provide a much-needed increase in our staffing level.
    Additional employees, of course, require additional space to house 
them. As Commissioner Astrue said during his appearance before this 
Subcommittee last month, we will open 10 new hearing offices in the 
near future.\1\ Earlier this month, he also decided to add 3 more 
offices, bringing the total number of new hearing offices to 13.
---------------------------------------------------------------------------
    \1\ St. Petersburg, FL; Tallahassee, FL; Atlanta South, GA; Topeka, 
KS; Mt. Pleasant, MI; Livonia, MI; Akron, OH; Toledo, OH; Fayetteville, 
NC, and Madison, WI. The three additional offices will be in Auburn, 
WA; Phoenix, AZ, and either Danville or Portage, IN.
---------------------------------------------------------------------------
    New hires will make a real difference in the service we will 
deliver to the public. With this increased staffing, we will be able to 
take more claims, whether in person or by telephone, to adjudicate more 
claims, and to serve callers to our national 800 number.
Recruitment and Training--A Long-Term Investment
    Hiring new employees is critical. Accordingly, as the Recovery Act 
moved through Congress, we instructed personnel offices and managers to 
be ready to hire as soon as we had an appropriation. To achieve a 
diverse and high-performing workforce, we will continue to seek 
employees through announcements on USAJOBS. We also will utilize the 
full range of hiring flexibilities, such as the excepted service 
appointment authorities for Veterans Recruitment Appointments and the 
Federal Career Intern Program. We are also working with the Office of 
Personnel Management (OPM) to obtain the necessary authority to hire 
reemployed annuitants for some of our highly technical positions since 
these individuals already possess the skill sets necessary to do the 
job.
    Realistically, new employees will not have an immediate impact on 
our current or backlogged workloads, as hiring and fully training new 
employees is a lengthy and resource-intensive process. The hiring 
process includes reviewing applications and resumes, conducting 
interviews, conducting background checks, and offering positions. 
Often, new employees must relocate to their duty stations or give their 
employers sufficient notice so that the employer may seek a 
replacement. Once new employees report to work, they will receive 
training that because of the complexity of our programs, generally 
lasts from 13 to 17 weeks. After this initial training, we assign a 
mentor to most new employees to help them learn the intricacies of 
processing our work. This on-the-job training typically lasts a full 
year. By the end of that year, though still not fully proficient in all 
parts of the job, these employees will begin to contribute 
significantly to workload processing. The time spent training and 
mentoring, however, reduces the time our more experienced employees 
have to process their own work, reducing productivity in the short run.
    Whenever we recruit and hire, we remain mindful of our firm 
commitment to a high-performing, diverse workforce. We are making a 
concerted effort to hire persons with disabilities by reaching out to 
Wounded Warrior transitional programs and Ticket to Work beneficiaries 
who are trying to return to the workforce. For example, on May 28, we 
will hold our second annual Hiring Heroes Career Fair at our Baltimore 
headquarters, and we expect over 100 military personnel and veterans 
with disabilities to attend. With Recovery Act funding, we have already 
hired a highly-diverse group of more than 1,400 employees.
Fully Funded and Staffed DDSs Are Essential to Meeting Our Commitments
    When States are hiring DDS employees, they confront some of the 
same obstacles that we face when we hire employees. A number of States 
have introduced an additional challenge to fully staffing their DDSs by 
furloughing DDS employees in an effort to balance their budgets.\2\ 
Such practices are unnecessary since we fully fund the DDSs and 
reimburse the States for the salaries and benefits of all DDS 
employees. This fiscal year over 16,000 DDS employees will process more 
than 2.6 million disability claims. We will pay about $2 billion to the 
States to cover all payroll costs as well as the costs to obtain the 
health records and to perform the medical examinations necessary to 
adjudicate disability claims.
---------------------------------------------------------------------------
    \2\ DDS employees in California, Maryland, Massachusetts, Ohio, and 
Oregon are currently subject to furloughs.
---------------------------------------------------------------------------
    We empathize with the budget struggles that States face in these 
difficult economic times, but States do not save any money when they 
furlough or lay off DDS employees. We estimate that if all States 
furloughed DDS employees for one day, they would lose $7.8 million in 
administrative funding that we pay to them. In addition, such furloughs 
would delay the processing of approximately 15,000 claims and the 
payment of $4.2 million of monthly benefits to their disabled 
residents. Furloughs and restrictions on hiring and overtime only delay 
payments to their disabled citizens who have applied for benefits.
    We appreciate your efforts in communicating with State leaders to 
help them understand the importance of having enough trained, full-time 
DDS employees on hand to process the influx of disability claims--an 
influx that we project will grow by more than 12 percent this fiscal 
year. Without enough fully trained and fully productive DDS employees, 
we risk limiting the processing gains that we can achieve with Recovery 
Act funds.
    We will need Congress's continued support as we work with 
Governors, legislators, and other elected officials to ensure that DDSs 
have the staff needed to adjudicate the increased number of disability 
claims that we expect to arrive at their doors because of the economic 
downturn.
Technology Investment Is Critical To Maintain and Expand Our Service to 
        the American People
    The Recovery Act also authorizes us to spend part of the $500 
million for technology investments including health information 
technology. We will spend about $16 million of Recovery Act funding on 
computers for our new employees, as well as video conferencing 
equipment and increased bandwidth, which will improve our 
telecommunications network. With this funding, we will be able to 
continue to reduce the hearings backlog.
    While all hearing offices now have at least one video conference 
connection, we are increasing the availability of video hearings in 
remote areas in order to reduce travel time for claimants and 
representatives who would otherwise have to drive long distances to 
reach a hearing office. The inability of some claimants and their 
representatives to attend face-to-face hearings can delay the 
disposition of their claims. Video conferencing addresses this 
situation by allowing claimants and their representatives to attend 
hearings remotely.
    Indeed, two weeks ago, Commissioner Astrue officially opened our 
new National Hearing Center (NHC) in Albuquerque, New Mexico. The 
Albuquerque NHC utilizes video conferencing that enables administrative 
law judges to hold remote disability hearings providing relief to those 
hearing offices that are struggling the most. Initially, the 
Albuquerque NHC will hear disability claims pending in Kansas City, 
Missouri and Portland, Oregon--two of the most backlogged offices in 
the country.
    Moreover, we are a leader in the Federal Government in health 
information technology. We intend to spend $24 million of our Recovery 
Act funding to contract with a diverse group of health care providers 
and networks to provide us with electronic health records to improve 
the speed and accuracy of the disability determination process. As 
Commissioner Astrue told this subcommittee last month, we conducted a 
pilot project in Boston that allowed us to receive health records 
electronically in seconds and minutes, rather than the usual weeks and 
months that it takes to gather paper records. To improve the speed and 
quality of our disability determinations, we will use this funding to 
expand the number and kinds of health care records that providers can, 
with the claimant's consent, send to us electronically. This funding 
will also be used to implement any new requirements that may be issued 
under the HITECH Act. Providers will be required to transmit to us 
structured electronic medical data based on standards established for 
use by the Nationwide Health Information Network.
Significant Headway in Workload Processing
    Use of Recovery Act funds for hiring and technology will help us 
process our increasing workloads; however, improvements to processing 
times and claims pending will not happen overnight. Our current 
hearings backlog developed over time, and it will take time and 
sustained funding for us to reduce that workload to acceptable levels. 
In the near term, initial disability receipts will outpace our capacity 
to process them, and the initial disability claims backlog will rise. 
Just as we did with the hearings backlog, we are currently developing a 
multi-year plan to deal with the future increases of pending initial 
disability claims.
    The substantial investment you made to increase our staffing levels 
will allow us to make significant headway in workload processing over 
the next several years. The additional employees we hire and train this 
fiscal year will enable us to increase our capacity to process critical 
workloads in FY 2010.
INCREASING OUR COMPUTER PROCESSING CAPABILITIES
    Of course, these hiring and technological gains are only a part of 
the solution. To move forward in this environment of increasing 
workloads, we must continue to be innovative and find additional 
efficiencies. We must use every tool at our disposal to meet the 
standard of service the public has come to expect from us.
National Computer Center (NCC)--Limitations of the Existing Facility
    Congress acknowledged our long-term information technology needs in 
the Recovery Act by allocating $500 million to replace and partially 
equip our NCC. The NCC houses critical data and computer operations 
essential for promptly and accurately paying benefits to millions of 
Americans. Because it plays such an important role in our data 
processing operations and automation initiatives, I especially 
appreciate this opportunity to describe our prior efforts to maintain 
the NCC and the analysis that led us to realize that a new facility was 
essential.
    The NCC was designed over 30 years ago. Technology has changed 
radically since then, and we must upgrade the building's cooling, 
electrical, and fire suppression systems to accommodate these new 
technologies. As a result, the NCC's infrastructure systems will not be 
capable of accommodating the information technology necessary to handle 
our increasing volumes of work, our new and expanded responsibilities, 
and our new ways of doing business. Our transition to full electronic 
processing of our core workloads and the growth of electronic service 
delivery over the last decade resulted in a dramatic increase in our 
needs for data storage and network capacity. While we have modernized 
our hardware, we are facing finite limitations on our ability to 
distribute electrical power to our servers and mainframes.
    Updated servers and mainframes have significant electrical 
requirements. Until recently, each server required only one power 
supply to operate; now, a server requires two to four power supplies to 
function, which the NCC can accommodate at this time. The current 
electrical panels will not be able to accommodate the more than four 
power supplies that we will need to run servers in the future.
    As the NCC has aged, we have continuously upgraded and repaired 
structural, electrical, and data processing capabilities. Incrementally 
upgrading a facility of this kind is a best industry practice for 
maintaining facilities beyond their life cycle. We must incrementally 
repair these infrastructure systems because we cannot totally replace 
them in the existing NCC. To replace them, we would have to shut down 
the building completely for an extended period of weeks or months.\3\ 
Such a shutdown would result in an unacceptably long interruption of 
service to the public.
---------------------------------------------------------------------------
    \3\ Presently, we have only a single 30-hour window each year to 
perform all maintenance on the NCC.
---------------------------------------------------------------------------
    We also considered the possibility of renovating the existing 
building; however, renovations of this magnitude would require us to 
vacate the building and design and lease a facility to temporarily 
house the data and employees. The expense of doing this would be almost 
as costly as simply building a new, up-to-date data center and would 
create a risk of a major interruption in service.
    Even if we could overcome the obstacles to repair and upgrade the 
NCC and its infrastructure, we would still have a building designed 
around a 1970s' mainframe environment. In the seventies, redundant 
electrical, heating, and cooling systems were not state-of-the-art 
requirements for data centers. In addition, fire suppression systems 
were not designed to cover an entire floor.
    In short, the current facility will not be able to meet the 
industry standards for data centers in the future.
    In February 2008, we received a report from Lockheed Martin, whom 
we had asked to independently analyze the condition of the NCC's 
infrastructure and recommend ways to upgrade it, if necessary. The 
Lockheed Martin consultants identified no chronic structural defects 
and verified that over the years, we have maintained the building well. 
Lockheed Martin also confirmed the NCC's structural limitations and 
recommended we build a new facility.
The New Data Center
    We thank you for your support of funding to construct a new 
facility, which we are calling the National Support Center, and 
appreciate your acknowledging that in an environment of evolving 
cyberthreats, we must continue to protect beneficiary records with 
unmatched vigilance.
    I am pleased to report that the facility that will replace the NCC 
will not only be a state-of-the-art data center, but it will also 
incorporate green building technology. Compared to the existing 
facility, the new center will be substantially more energy efficient.
    We have started working with our colleagues at the General Services 
Administration (GSA) on all aspects of this project. GSA will manage 
the design and construction activities for the project, as only GSA has 
the authority to own or lease Federal facilities for us. However, we 
are working very closely with GSA in designing and constructing the new 
facility. We have a history of working very successfully on 
construction projects with GSA, both at the national and regional 
levels. For this project, GSA assigned some of its most highly 
qualified project managers, as have we, to ensure the work is completed 
on time without cost overruns and in full compliance with our 
requirements. We look forward to this important collaboration, and I 
would like to thank GSA for its vital support of this particular 
project, as well as our other building and space needs.
    We have started the formal planning process with GSA. Initial 
activities include:

        (1)  formulating specific requirements for constructing a 
        state-of-the-art data center;
        (2)  developing the criteria for selecting a site; and
        (3)  developing a detailed construction project plan. GSA will 
        execute these steps, and we will provide input and oversight to 
        ensure the facility's design fully meets our needs and 
        requirements. Additionally, GSA has awarded a contract to a 
        construction management firm. The firm, Jacobs, will work with 
        GSA and us to develop a detailed Program of Requirements, also 
        known as a ``scope of work.'' We are currently providing Jacobs 
        with necessary background information on the objectives of the 
        project that it will use to define building requirements and 
        land specifications.

    In addition to replacing the NCC, we have proactively addressed our 
increased data processing demands and enhanced our disaster recovery 
strategy by bringing up a Secondary Support Center. We have begun to 
install equipment at that site, and we are ahead of schedule for 
bringing up the facility. Within approximately 6 months, we will be 
able to process about half of our production workloads at this 
facility, thus providing necessary backup to the NCC. The Secondary 
Support Center will eventually be able to provide full backup and 
recovery for our data and daily processing needs.
SUPPORTING ACCOUNTABILITY AND TRANSPARENCY FOR RECOVERY ACT RESOURCES
    We strongly support the accountability and transparency standards 
for Recovery Act resources established by Congress. To emphasize the 
importance of these standards, we are holding executives and staff 
accountable for monitoring and achieving the goals of all of the 
Recovery Act initiatives for which we are responsible. Because the 
Recovery Act invests in our core mission work, our existing internal 
controls will help us effectively account for our use of Recovery Act 
funding. However, we will also add any internal controls that we may 
need to assess our implementation of the Recovery Act.
    As recommended by the Office of Management and Budget (OMB), we are 
using existing entities to review, assess, and manage Recovery Act 
risk. We have designated our Executive Internal Control Committee (EIC) 
to serve as our Senior Management Council, overseeing Recovery Act 
performance across the agency, including risk management. The Deputy 
Commissioner of Social Security chairs the EIC, and the Inspector 
General and I serve on the committee. The EIC oversees the results of 
our internal controls that, among other things, test our financial 
reporting processes, systems development, and validation processes. The 
EIC also helps ensure our compliance with administrative, security, and 
management policies.
    As the Senior Accountable Official, I oversee all aspects of 
Recovery Act planning, implementation, reporting, and performance. I 
report progress, total obligations, and disbursements through a weekly 
update report, which we post to our website and submit to recovery.gov. 
As an indication of our readiness and ability to meet our 
responsibilities, we were one of the first agencies to place these 
reports on our website. We will be working with OMB to finalize our 
Recovery Act implementation plans by early May.
    We have formed intra-agency workgroups at both the executive and 
staff levels to manage the implementation of our three key Recovery Act 
responsibilities. These groups meet on an ongoing basis to ensure 
progress, resolve issues, and as needed, take corrective actions.
    Finally, we are working with the Office of the Inspector General 
(OIG) on seven of its audits that are directly related to the Recovery 
Act and four audits related to information technology processing. At 
this time, the Recovery Act audits focus on the adequacy of our 
planning processes. We understand that later OIG will perform 
additional audits on program results.
ISSUING ECONOMIC RECOVERY PAYMENTS--AHEAD OF SCHEDULE
    Among the projects that we are monitoring very closely is, of 
course, the disbursement of economic recovery payments. The Recovery 
Act provides for immediate and direct assistance by issuing one-time 
$250 economic recovery payments to Social Security, Railroad 
Retirement, Veterans, and SSI recipients. We serve as the clearinghouse 
for the Railroad Retirement Board and Veterans Affairs to match the 
lists of eligible beneficiaries on our various systems to avoid 
duplicate payments.
    We have already notified beneficiaries that they need not take any 
action to receive their payments. We are also informing the public 
about the recovery payments through a recorded message on our national 
800 number, a prominent link about these payments on our website 
(www.socialsecurity.gov), and an informational leaflet available at all 
field offices and Wal-Mart stores across the country. We also have 
knowledgeable employees in our field offices across the country ready 
to answer what we anticipate will be millions of questions about these 
payments.
    Our extensive planning with the Department of the Treasury, the 
Railroad Retirement Board, and the Department of Veterans Affairs will 
allow us to issue these payments to the more than 50 million eligible 
individuals during the month of May--3 to 6 weeks before the statutory 
deadline. We will automatically mail the payments to them or deposit 
the payments into their bank accounts.
    The Social Security and SSI Recovery Act payments will inject more 
than $13 billion into the economy, helping beneficiaries put extra 
meals on the table and pay increasingly high utility bills. We 
appreciate the support of Congress in our administration of the 
economic recovery payments.
GOING FORWARD
    Thank you for the opportunity to describe the very real and 
tangible opportunities the Recovery Act provides to us to improve our 
service to the public, as well as assist in the Nation's economic 
recovery. Despite the many challenges we face, Social Security is a 
can-do agency. We have made a commitment to the American public to work 
down our backlogs, and we will continue to do so. The Recovery Act 
provides us with resources to tackle the increase in the work we expect 
this year and to collaborate with GSA to build a new data center that 
will meet our future needs. With the cooperation of colleagues at the 
Department of the Treasury, the Department of Veterans Affairs, and the 
Railroad Retirement Board, we have mapped out a plan to deliver $250 
recovery payments to millions of Americans.
    For more than 70 years, we have served as a cornerstone of American 
economic security. We are proud of this role and see our Recovery Act 
responsibilities as a continuance of our mission. Going forward, we 
will maintain the highest level of oversight over all of our 
responsibilities funded in full or in part by Recovery Act resources. 
We will do our part to implement Recovery Act initiatives efficiently 
and effectively to help the American people as quickly as possible. 
However, the higher workloads the agency is experiencing require 
ongoing attention. We will need your continued support and timely 
action on the President's FY 2010 budget in order to maintain our 
momentum and obtain the full benefit from Recovery Act funding for 
dealing with our workloads. We will keep this Subcommittee apprised of 
our progress and look forward to your continued support as we implement 
the plans I have described today.
    We appreciate the actions of Congress to provide assistance to the 
American people in this time of economic hardship, and we thank you for 
providing us with the resources we need to help in these efforts.

                                 

    Chairman TANNER. Thank you very much, Ms. Glenn-Croft.
    With the permission of the panel, may we go ahead with all 
of the testimony before we go to questions?
    Mr. Hewell, you are recognized, sir.

  STATEMENT OF MR. ROBERT HEWELL, ACTING DEPUTY COMMISSIONER, 
   PUBLIC BUILDINGS SERVICE, UNITED STATES GENERAL SERVICES 
                         ADMINISTRATION

    Mr. HEWELL. Thank you. Excuse me. Thank you, Chairman 
Tanner and Ranking Member Brady and Members of the 
Subcommittee.
    My name is Rob Hewell. I am the Acting Deputy Commissioner 
of the General Services Administration's Public Buildings 
Service. Thank you for the opportunity to be here today to 
discuss GSA's delivery of a new Social Security Administration 
National Support Center.
    As you know, as part of the Recovery Act of 2009, SSA 
received $500 million to replace their existing National 
Computer Center in Woodlawn, Maryland. SSA turned to GSA for 
help in locating, designing, and building a new data center to 
meet their long-term needs. Today, I will highlight our 
approach to this project.
    We are working closing with the SSA in defining their 
requirements for site, building infrastructure, and workspace. 
We are planning for a facility that will increase data, office, 
and warehouse space. It will meet Tier 3 standards established 
by the Uptime Institute, sustainable design goals, and the 
Interagency Security Council Level 4 security requirements.
    To deliver this new data center, we are using our design 
excellence and construction excellence program processes, time 
proven to provide outstanding cost-effective Federal 
facilities. We are also using a multiphased approach to 
concurrently develop criteria for both site acquisition and 
design. Concurrent development streamlines the processes and 
ensures consistency between site elements and design elements.
    In fiscal year 2008, prior to the enactment of the ARRA, we 
received funding from SSA to develop a program of requirements 
for the National Support Center. On April 1, GSA awarded a 
contract to Jacobs Facilities to assist in all aspects of 
developing this project. In addition, Jacobs will conduct an 
energy optimization study to help us achieve our energy goals.
    Selecting a site for the National Support Center is of 
great importance to SSA, GSA, and local communities. We are 
committed to provide our customers with well-located, high 
quality sites. We will use established processes to research, 
evaluate, and select a site that can best serve the interests 
of the Federal Government, the end users, and the community.
    There are many factors associated with selecting and 
acquiring a site, and this kind of facility creates additional 
challenges. For example, the data center demands high-capacity 
utility services, as well as redundant power, communications, 
and other utility infrastructure services. Proximity to SSA 
headquarters in Woodlawn, Maryland, is also required to 
facilitate the transition to a new data center and for employee 
access in the event of a local or national emergency. These are 
all factors both GSA and SSA will use to identify the area of 
consideration.
    We intend to negotiate and award a contract for land 
acquisition in the second quarter of 2010, less than a year 
from now.
    Concurrent with site selection, we will be working with SSA 
and technical experts to develop SSA's program of requirements 
for the data center. Once the site is acquired, we can begin 
developing the site's specific design requirements associated 
with the solicitation for a design-build contract. We 
anticipate contract award for design and construction of the 
National Support Center in the second quarter of fiscal year 
2011 with construction completed scheduled for October 2013. 
SSA will then begin their information technology migration.
    Projects of this size and scope present challenges, such as 
potential contractor protests, environmental impacts identified 
during the process of environmental studies and the changing 
nature of the fast-paced and ever-changing IT world. There are 
a number of steps we intend to take to minimize these risks, 
including establishing a detailed source selection plan for the 
design-build contract, screening possible sites for potential 
environmental impacts early in the process, and designing a 
flexible facility capable of accommodating expansion, mission-
related changes, and advancements in technology.
    As leaders in sustainably designed buildings, we will build 
a facility that incorporates the Guiding Principles for Federal 
Leadership in High Performance and Sustainable Buildings. We 
will use industry experts in data center technology and energy 
experts from the Lawrence Berkeley National Laboratory. And we 
have staffed this project with our most seasoned technical 
experts and project managers.
    GSA is well prepared to meet SSA's data center requirements 
on schedule, within budget, and with careful consideration to 
our responsibilities to the American taxpayers. We have a long 
partnership and an excellent working relationship with SSA, and 
we are eager to work with them and Members of this Subcommittee 
in the successful delivery of the National Support Center as 
part of this nation's economic recovery.
    Chairman Tanner, Ranking Member Brady, and Members of this 
Subcommittee, this concludes my statement. I will be pleased to 
support my colleagues from SSA in answering any questions you 
have.
    [The statement of Mr. Hewell follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman TANNER. Thank you very much, Mr. Hewell. We will 
probably have some questions about your timeline later on.
    Mr. O'Carroll, you are certainly recognized. Thank you, 
sir.

          STATEMENT OF MR. PATRICK P. O'CARROLL, JR.,
       INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION

    Mr. O'CARROLL. Good afternoon, Mr. Chairman, Mr. Brady, and 
Members of the Subcommittee.
    I am pleased to be here today to discuss the initial work 
of the Social Security Administration's Office of the Inspector 
General under the American Recovery and Reinvestment Act, and I 
thank you for inviting me.
    As you know, my office was provided with $2 million in 
funding for the oversight of programs, projects, and activities 
funded by the Act.
    The Act stresses the need for transparency in our oversight 
efforts, and we take this responsibility very seriously. As you 
can from our chart over there, our Internet home page already 
displays a prominent link to Recovery Act reporting as well as 
a means of reporting Recovery Act fraud.
    Under the Act, all inspector generals are charged with 
receiving and investigating whistleblower claims from employees 
of private firms and state and local Governments receiving 
recovery funds. My office has taken on a central role in this 
regard, coordinating the efforts of the entire inspector 
general community to ensure consistency in the application of 
the Act's whistleblower provisions across the Federal 
Government.
    The OIG's primary responsibility under the Act, however, 
remains the oversight of SSA's expenditure of the 
$1,090,000,000 provided to the agency for three specific 
purposes: $500 million for the replacement of the National 
Computer Center, $90 million to be used to issue about $13 
billion in one-time economic recovery payments of $250 each to 
beneficiaries, and $500 million for the processing of 
disability and retirement workloads.
    Our efforts in this oversight role are already well 
underway. In particular, the replacement of SSA's National 
Computer Center is a critical matter for the American people. 
The NCC is the repository for the applications and data that 
support all of SSA's functions, but it is at the very end of 
its lifespan. As early as 1997, we issued an audit with some 29 
recommendations for the protection of the NCC, and, in 2004, we 
provided information on alternate facility options in the event 
of a catastrophic event at the NCC. SSA considered our comments 
in planning their second data center.
    We are now conducting a review of the plan, status, and 
data processing capacity of the second data center as well as a 
review of SSA's plans to address its data processing needs 5 to 
20 years into the future. These reviews stem in part from a 
recent OIG report that concluded that the agency needed to 
focus its efforts on detailed plans to acquire, construct, and 
operate a new data center; to estimate costs for the use or 
disposal of the NCC; and for IT requirements for the next 5, 
10, and 20 years. Further, we urged SSA to identify the 
underlying factors that allowed the current NCC crisis to occur 
and implement controls to prevent it from reoccurring.
    To round out our initial work in this area, we are in the 
process of acquiring a vendor to evaluate SSA's process for 
selecting the replacement strategy for the NCC and to 
independently evaluate SSA's efforts toward implementing that 
strategy.
    The $90 provided to SSA for issuing one-time recovery 
payments is also the subject of OIG oversight with two 
evaluations already underway. One will assess the agency's 
controls and procedures for administering the one-time 
payments, and another will evaluate the processes put in place 
by SSA to identify and report costs incurred in the 
administration of these payments.
    The agency also received $500 million toward the processing 
of retirement and disability workloads. In a series of 
evaluations, we will examine SSA's hiring, training, and 
placement of employees with the Recovery Act funds. Of the $500 
million provided for processing disability and retirement 
workloads, $40 million was earmarked for health information 
technology.
    One of our planned evaluations will examine the use of $24 
million which SSA plans to direct toward contract-based 
demonstration projects and pilot tests focused on electronic 
medical record retrieval. These efforts are only the first of 
many by SSA OIG to comply not only with the letter of the 
Recovery Act, but with its spirit of transparency, oversight, 
and accountability.
    I thank you again for the invitation to speak with you 
today, and I will be happy to answer any questions.
    [The statement of Mr. O'Carroll follows:]
             Statement of The Honorable Patrick O'Carroll,
           Inspector General, Social Security Administration
    Good afternoon, Mr. Chairman, Ranking Member Johnson, and Members 
of the Subcommittee. It's a pleasure to be here today to present our 
initial efforts under the American Recovery and Reinvestment Act of 
2009 (ARRA), as well as our future plans geared toward transparency and 
accountability. Thank you for the invitation to testify.
    The ARRA provided the Social Security Administration (SSA) with 
$1.09 billion, to be used as follows:

          $500 million for necessary expenses for the 
        replacement of the National Computer Center (NCC) and 
        associated information technology costs. This funding is 
        available until expended.
          $90 million to be used to issue approximately $13 
        billion in one-time Social Security and Supplemental Security 
        Income payments of $250 each.
          $500 million for the processing of disability and 
        retirement workloads, including information technology 
        acquisition and research in support of such activities.

    The ARRA also provided the Office of the Inspector General (OIG) 
with $2 million for salaries and expenses necessary for the oversight 
and audit of programs, projects, and activities funded by the ARRA. 
This funding is available through September 30, 2012.
    While the majority of substantive SSA-related activities mandated 
by the ARRA are to be carried out by SSA itself, the OIG is bound by 
two types of requirements: those which the ARRA imposes on all 
Inspectors General, and those related to this OIG's specific SSA-
related oversight activities.
    To briefly address the former, the ARRA requires all Inspectors 
General to review, as appropriate, any concerns raised by the public 
about specific investments using Recovery Act funds. Any findings of 
such reviews, if not related to an ongoing criminal proceeding, must be 
relayed immediately to the head of the Agency; in this case, the 
Commissioner of Social Security. Additionally, the ultimate findings of 
such reviews, along with any audits conducted by any Inspector General 
of the use of Recovery Act funds, must be posted on the individual 
Inspector General's website and hyperlinked to Recovery.gov.
    To accomplish this, Inspectors General are authorized by the ARRA 
(in addition to their existing authorities) to examine any records of 
any contractor, subcontractor, grantee, or subgrantee, and to interview 
any officer or employee of any contractor, grantee, subgrantee, or 
agency, if the matter pertains to Recovery Act funds.
    Finally, the ARRA also places significant responsibilities on all 
Inspectors General, who will now play a central role in expanded 
whistleblower protections. Employees of private employers or State or 
local Governments that receive Recovery funds may not be retaliated 
against for making allegations concerning such funds to certain 
sources, including Inspectors General. Inspectors General have 180 days 
to investigate and make appropriate reports, and the whistleblower has, 
with certain exceptions, access to the investigative file during that 
time.
    The SSA OIG has taken on a key role in the Inspector General 
community in this regard, responding to a call from the Chair of the 
Council of Inspectors General for Integrity and Efficiency (CIGIE). In 
light of the increased responsibilities of the Inspector General 
community with respect to whistleblower allegations, it was felt that 
the community would be best served, and the ARRA best observed, by 
creating consistency and reliability across the community. As such, the 
SSA OIG has taken on the task of developing this cross-cutting issue on 
behalf of the community, beginning with a survey and study of 
approaches, interpretations, and best practices.
    The CIGIE has also formed a working group to support the Recovery 
Accountability and Transparency Board in its statutory function, and my 
office is a participant and proponent of that group.
    The Office of Management and Budget has issued implementing 
guidance on the ARRA, and the SSA OIG is compliant with that guidance--
we are fully prepared to receive and investigate all ARRA-related 
whistleblower claims. The SSA OIG's website is not only compliant with 
ARRA requirements, but goes a step beyond--our internet home page, 
www.socialsecurity.gov/oig, already displays a prominent link to our 
Recovery Act reporting, as well as a means of reporting Recovery Act 
fraud.
    The SSA OIG's specific responsibilities, however, rest in its 
oversight of the Agency's use of Recovery Act funds for the purposes 
enumerated in the Act: the replacement of the NCC, the processing of 
retirement and disability workloads, and the issuance of one-time 
stimulus payments. My office has already completed work in these areas, 
has additional audits underway, and has still more audits planned.
Replacement of the NCC
    The NCC is the repository for the applications and data that 
support all of SSA's functions, as well as other Government functions 
that rely on SSA data. It was constructed in 1979 and, with current 
trends, it is estimated that the NCC will reach its maximum data 
capacity within three to five years. In addition, the NCC's 
infrastructure, including heating, ventilation, and air conditioning, 
as well as its electrical components, are at the end of their useful 
lives. Failure of any large component of the uninterruptible power 
supply (UPS) cannot be repaired, and the UPS manufacturer will 
discontinue maintenance of the outdated model at the end of 2015.
    As early as 1997, only two years into the OIG's existence, we 
issued an audit entitled Review of Physical Security at the Social 
Security Administration's National Computer Center. In that audit, we 
made some 29 recommendations for the protection of the NCC, most of 
which SSA agreed with. In 2004, the OIG issued a memorandum, SSA's 
Alternate Facility Options for the NCC, in which we provided 
information on alternate facility options in the event of a 
catastrophic event--such as a terrorist attack--at the NCC. SSA 
considered our comments in its planning of the Second Data Center, also 
referred to as the Second Support Center.
    In 2008, Lockheed Martin completed an NCC Feasibility Study of the 
facility that identified infrastructure and data processing capacity 
issues that pose a significant risk to SSA's continuity of operations. 
That study recommended that SSA undertake 17 projects to sustain 
existing information technology operations through Calendar Year 2014.
    Under the ARRA, we recently issued a report entitled Quick Response 
Evaluation: The Social Security Administration's Ability to Address 
Future Processing Requirements. In this limited distribution report, we 
sought to assess SSA's efforts to address future processing needs and 
infrastructure issues at the NCC. Specifically, we assessed SSA's 
actions in addressing the significant issues identified in the Lockheed 
Martin study. We noted the importance of ensuring the continued 
operation of the NCC. SSA estimates that it would cost the taxpayers 
$25 million for each day that the NCC was not operational. Moreover, 
during such outages, the Agency would be unable to process tens of 
thousands of retirement, survivors, and disability claims, as well as 
Social Security number verifications. This type of service interruption 
would likely hamper people's ability to obtain employment, driver's 
licenses, even loans and mortgages.
    We found that SSA had already taken or planned some corrective 
action on 13 of the 17 recommended projects. (Lockheed Martin had 
recommended that 3 of the 17 be deferred due to changes in the NCC's 
functional role.) Lockheed Martin concluded that there were four 
options for resolving the Agency's long-term data processing needs: a 
new, on-campus data center; a new, off-campus data center; lease of an 
existing off-campus data center; or renovation of the existing NCC.
    SSA is progressing on both immediate and long-term solutions. 
However, until the significant issues identified by Lockheed Martin are 
fully addressed, and a long-term data center solution is implemented, 
the Agency's operations remain vulnerable.
    In our report, we concluded that, going forward, the Agency needs 
to focus its efforts on detailed plans:

        1.  to acquire, construct, and operate a new Data Center;
        2.  to estimate costs for the use and/or disposal of the NCC 
        should a new primary Data Center be built; and
        3.  for IT requirements for the next 5, 10, and 20 years.

    Further, we urged SSA to identify the underlying factors that 
allowed the current NCC crisis to occur, and implement the necessary 
controls to prevent it from reoccurring.
    In another ARRA project focused on the NCC, we are in the process 
of acquiring a vendor with the necessary highly technical skill sets to 
evaluate SSA's process for selecting the replacement strategy for the 
NCC, and to independently evaluate SSA's efforts toward implementing 
that strategy. While a contract award of this type would normally take 
almost 180 days from the date that funding was made available, SSA's 
Office of Acquisition and Grants has expedited the process on our 
behalf. We anticipate that the contract will be awarded mid-June--
approximately 90 days from the date that OMB apportioned the funds to 
us.
    On February 19, the OIG began an ongoing study, Congressional 
Response Report: The Social Security Administration's Information 
Technology Strategic Planning. In that report, we will review SSA's 
plan to address its data processing requirements 5 to 20 years into the 
future, and examine what actions SSA has taken to meet those 
requirements.
    Another ongoing audit, The Social Security Administration's Second 
Data Center, is reviewing the plan, status, and data processing 
capacity of SSA's Second Data Center. SSA's Information Technology 
Operations Assurance (ITOA) initiative is designed to mitigate the 
risks of having a single point of failure associated with having a 
single, national computing facility. The ITOA project seeks to 
alleviate these risks by establishing a second, fully functional, co-
processing data center.
    This Second Data Center will be designed to process a portion of 
SSA's workloads, and this new center and SSA's main data center will 
back up each other, so that in the event of a catastrophe, operations 
can continue. SSA estimates that the Second Data Center will be fully 
functional in 2013; we will recommend that they accelerate that process 
to bring the Second Data Center fully online by 2010. I recently toured 
both the NCC and the Second Data Center, and while I was struck by the 
condition of the NCC, I was impressed in equal measure by the state-of-
the-art facility at the new location, and the foresight evident in its 
planning and execution. This contrast between the NCC and the Second 
Data Center only highlights the importance of accelerating the 
completion of the new Center.
    As SSA continues to plan and implement changes to ensure its 
continued data processing operations, the OIG will undertake additional 
audits and reviews to assess and evaluate the Agency's progress.
One-Time Economic Recovery Payments
    We've undertaken two evaluations associated with the distribution 
of approximately $13 billion to Social Security and Supplemental 
Security Income (SSI) beneficiaries in the form of $250 individual 
payments. The ARRA provides SSA with $90 million to ensure these 
payments can be made efficiently and accurately.
    Our first evaluation, Quick Response Evaluation: Economic Recovery 
Payments for Social Security and SSI Beneficiaries, is assessing the 
Agency's controls and procedures for administering the ARRA-mandated 
payments. Under the ARRA, individuals who receive Social Security or 
SSI benefits, as well as either Railroad Retirement Board or Veterans' 
Affairs benefits, will receive only one $250 payment. Our review will 
determine whether SSA has adequate controls in place for the accurate 
distribution of ARRA funds.
    Our second review, Quick Response Evaluation: Administrative 
Expenses Incurred to Provide Economic Recovery Payments, will evaluate 
the processes put in place by SSA to identify and report costs incurred 
in the administration of the one-time ARRA payments.
Retirement and Disability Workload Processing
    The ARRA also provided SSA with $500 million to process retirement 
and disability workloads, of which $40 million may be set aside for 
Health Information Technology development. The OIG is already at work 
overseeing the use of these ARRA funds.
    A series of reports already underway will evaluate hiring 
practices. One of these reports, Quick Response Evaluation: ODAR Hiring 
Under the Recovery Act, began earlier this month, and will examine 
SSA's Office of Disability Adjudication and Review staffing plans 
associated with ARRA funds. Similar reports have also been initiated to 
examine hiring strategies for State Disability Determination Services, 
and for SSA's Office of Operations, which includes all SSA field 
offices.
    Another planned evaluation, Quick Response Evaluation: Funding for 
Health Information Technology, will evaluate SSA's plans for the $40 
million earmarked for this purpose. In March of this year, SSA informed 
us that it will invest the $40 million as follows:

          $16 million in direct support of IT needs to reduce 
        the backlogs, including video conference equipment for hearings 
        and workstations; and
          $24 million specifically for Health Information 
        Technology, including contracts for ``proof of concept'' 
        demonstration projects and pilot tests focused on electronic 
        medical record retrieval.

    Our audit will focus on the planned use of the $24 million 
designated specifically for Health Information Technology, whereas the 
$16 million will be reviewed as part of a separate audit that is 
already underway.
    These completed, ongoing, and planned efforts are only the first of 
many by the SSA OIG to comply not only with the letter of the ARRA, but 
with its spirit of transparency, oversight, and accountability. We will 
continue to report to the Subcommittee, post the results of our work on 
our own website and on Recovery.gov, and ensure that the funding 
provided both to SSA and to the OIG is spent well and wisely.
    I thank you again for the invitation to speak with you today, and 
I'd be happy to answer any questions.

                                 

    Chairman TANNER. Thank you very much.
    Ms. Melvin, you have the floor.

  STATEMENT OF MS. VALERIE C. MELVIN, DIRECTOR OF INFORMATION 
 MANAGEMENT AND HUMAN CAPITAL ISSUES, UNITED STATES GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Ms. MELVIN. Thank you, Chairman Tanner, Ranking Member 
Brady, and Members of the Subcommittee.
    I am pleased to be here today to comment on SSA's use of 
resources provided by the American Recovery and Reinvestment 
Act to replace its National Computer Center. While GAO has not 
reviewed the agency's plans for this initiative, by all 
indications, it represents a significant undertaking, and its 
success will depend on how effectively it is carried out from 
inception through completion.
    As our work has noted, investments in information 
technology can improve organizational performance, but, if not 
well planned and managed, they can become costly and 
unproductive, yielding disappointing results. Our research into 
IT management best practices and our reviews of agency 
performance have identified essential management disciplines 
that agencies can use to help ensure that investments achieve 
their potential benefits. For all IT investments, including 
SSA's new data center initiative, it is important to follow 
effective practices in key management areas. At your request, I 
will summarize several of these areas.
    First, effective strategic planning helps an agency set 
priorities and decide how best to coordinate activities to 
achieve its goals. In this regard, an agency should describe 
its goals, the strategies it will use to achieve them, and 
performance measures that allow it to determine how well it is 
doing.
    For example, when a strategic plan identifies 
interdependencies among project activities, the agency is 
better able to understand and manage them so that projects and 
their results are effectively integrated. Given the new data 
center is to form the backbone of SSA's automated operations, 
it is important that the agency identify goals and resources 
and dependencies in the context of its strategic vision.
    Further, an agency's enterprise architecture is important 
to help avoid developing operations and systems that are 
ineffective in supporting mission goals. It is a blueprint for 
organizational change describing how an organization operates 
now, how it intends to operate in the future, and how it plans 
to transition from present to future. Thus, it should be 
closely aligned with the IT strategic plan. An enterprise 
architecture can help ensure that those planning and 
implementing SSA's data center take full account of the 
business and technology environment in which the center and its 
systems are to operate.
    Also, an agency should follow a portfolio-based approach in 
which investments are selected, controlled, and monitored from 
an agency-wide perspective. Such an approach helps ensure that 
resources are allocated effectively. Thus, robust investment 
management processes can help agencies like SSA meet the 
accountability requirements of the Recovery Act and align with 
its goal.
    Projects funded under the Act are to avoid unnecessary 
delays and cost overruns and achieve specific program outcomes. 
Investment management is aimed at precisely such goals. As one 
important aspect, accurate cost estimates provide a sound basis 
for establishing a baseline so that agencies can effectively 
formulate budgets and measure program performance.
    Finally, information security is essential to any 
organization that depends on information systems and networks 
to carry out its mission. This is especially true for 
Government agencies like SSA where maintaining the public's 
trust is essential. As such, security should be considered 
throughout the planning, development, and implementation of the 
data center.
    A vital part of information security management is 
contingency and continuity of operations planning. Data centers 
are vulnerable to a variety of service disruptions, including 
accidental file deletions, network failures, and disasters. 
Accordingly, defining plans that govern how information will be 
processed, retrieved, and protected in the event of minor 
interruptions or a full-blown disaster is essential.
    Thus, overall, these capabilities will be important in 
helping SSA ensure that it accomplishes its objectives 
consistent with Recovery Act requirements. With a solid grasp 
of its current IT environment, a clear vision of what 
capabilities a new data center is to provide, and an informed 
and sound approach to getting there, SSA will be better 
positioned for success.
    Mr. Chairman, this completes my prepared statement. I would 
be pleased to respond to any questions that you or other 
Members of the Subcommittee may have.
    [The statement of Ms. Melvin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman TANNER. Thank you very much.
    Mr. Schieber, thank you for being here today. You are 
recognized, sir.

   STATEMENT OF MR. SYLVESTER J. SCHIEBER, CHAIRMAN, SOCIAL 
                    SECURITY ADVISORY BOARD

    Mr. SCHIEBER. Thank you, Chairman Tanner, Mr. Brady, 
Members of the Subcommittee. I am pleased to have this 
opportunity to appear before you on behalf of the Social 
Security Advisory Board.
    Over its history, the agency has been a diligent steward of 
the public's trust, overseeing the programs that so many 
individuals and families depend on. Because of chronic 
underfunding and the ever-increasing growth in new claims 
applications, SSA's ability to fulfill its mission has been 
under constant pressure in recent years.
    Today, the economic downturn is creating a dramatic spike 
in workloads, and just down the road, the baby boomers will be 
in their peak disability-prone years just ahead of their 
retirement applications. The infusion of resources provided by 
the Recovery Act should allow SSA to meet current backlogs and 
to manage increased workloads going forward. It should help in 
addressing the data system and processing issues under 
consideration today.
    Recent workload pressures have been compounded because the 
agency has not widely undertaken business process reviews and 
reengineering common in other business and Government settings, 
has relied too long, in our opinion, on outmoded technology 
that has reached its processing capacity. The agency has 
recently begun to move to address these problems, but the 
bounds of what these new process and planning tools can do are 
narrow without a robust and flexible IT foundation.
    In the intermediate term, Social Security's data processing 
operations are at serious risk because of inadequate backup 
capabilities if some sort of breakdown should beset the 
National Computing Center at Baltimore headquarters. This 
problem is being addressed with the construction of a second 
data center in North Carolina. Backup capability between the 
two sites is scheduled to be fully operational in 2013, and the 
agency executives are working to accelerate that schedule 
because of the problems with the National Computer Center.
    In the meantime, the agency's disaster recovery plans are 
of grave concern. Today, we are talking about the critical need 
to replace SSA's National Computer Center. Its capacity is 
inadequate to meet future processing needs and assure the 
security of data. We have been told that in just three more 
years, by 2012, the NCC will not be able to meet Social 
Security's workloads. We have also been told that, in the best-
case scenario, it will take 4 or 5 years to plan, develop, and 
build a new data center and another 2 to 3 years to complete 
its setup and integration. In short, the new NCC will not be 
fully operational until 2016, possibly 4 years too late. 
Frankly, this is a bit like a slow-motion wreck playing out in 
front of our eyes that might be entertaining if it were not 
such an important matter.
    Through the services it provides, the Social Security 
Administration touches the lives of nearly 60 million 
beneficiaries every month and gathers earning data on some 145 
million workers necessary to run the program. The backlogs that 
have pestered the disability insurance program in recent years 
are going to look like a cakewalk compared to the issues that 
you will be getting constituent calls about if the SSA computer 
systems break down.
    I do not think the timelines we have heard on building and 
bringing a new computer center online are acceptable. In my 
prepared remarks, I tell how the Pentagon went from first 
concept to occupation in 18 months at the beginning of World 
War II. The building was completed in 18 months from the time 
it was initially conceived. It was done on an extraordinary 
schedule because of the importance of our responding to a 
daunting challenge that we were facing.
    I am convinced that the American public believes that where 
there is a will, there is a way to get things done in a timely 
fashion, even by our modern-day Government. If we were able to 
take a building as complex and large as the Pentagon from 
nothing to occupancy in 18 months, we should be able to build 
and furnish a new Social Security computer center in something 
less than 5 to 8 years when the current one will be inadequate 
for the task in half that time. The urgency of our response in 
this case has to match the urgency of the task before us.
    Rather than guess as to how this situation arose, it is 
more productive to consider how to ensure that the problem does 
not happen again. The Board has come to question the governance 
of the agency's IT investments. The current process is 
decentralized, and IT oversight is split among a number of 
senior executives. Originally intended to ensure transparency 
and foster shared responsibility, the result has diluted 
ownership and management of the overall IT process. We believe 
that there needs to be a realignment of responsibility and 
accountability and a new governance structure established.
    Finally, I would offer that without a map the road ahead is 
not always clear. In recent years, SSA's strategic plans have 
often reflected narrow, short-term goals that address immediate 
issues. They are tactical plans. They are not strategic plans. 
Perhaps a longer planning horizon that was broader in scope 
would have identified earlier the need to replace the NCC. We 
continue to urge Social Security to focus on longer range 
service delivery needs and develop the infrastructure that will 
carry them well into the 21st century.
    Mr. Chairman, I hope these comments are helpful, and I will 
be happy to answer any questions you might have.
    [The statement of Mr. Schieber follows:]
             Statement of Sylvester J. Schieber, Chairman,
                     Social Security Advisory Board
    Chairman Tanner, Mr. Johnson, Members of the Subcommittee. I am 
pleased to have this opportunity to appear on behalf of the Social 
Security Advisory Board to present the Board's view on the progress 
made by the Social Security Administration in implementing the American 
Recovery and Reinvestment Act of 2009 (ARRA). The investment that the 
Congress has made in the Social Security Administration will ensure 
that the agency is able to fulfill its vital role in helping American 
families when they need it most.
    Through the services it provides, the Social Security 
Administration (SSA) touches the lives of nearly 60 million 
beneficiaries, 145 million workers and nearly every American. One out 
of every six individuals receives monthly cash benefits from Social 
Security or Supplemental Security Income (SSI), the major programs that 
SSA administers. This fact alone should be an indicator of the 
importance of continuous, smooth operations of this agency.
    The role of Social Security in our society is not only pervasive; 
it is an extremely important economic lifeline for millions of 
vulnerable citizens. The beneficiaries and recipients of Social 
Security's monthly check include aged individuals and persons with 
disabilities, their spouses, other dependents, and survivors. In fiscal 
year 2008, 41.2 million people were receiving retirement and survivor 
benefits and another 15.1 million were receiving disability benefits. 
SSA processed nearly 4.1 million retirement and survivor claims, 2.3 
million initial disability claims, and 559,000 disability hearings 
during that same fiscal year. The agency provided services to the 
public in general by processing over 19 million requests for new or 
replacement Social Security cards, posting 273 million earnings items 
to individual earnings records, answering 63 million calls to its 800-
number and handling over 42 million visitors to local field offices.
    Over the past 74 years, the agency has been a diligent steward of 
the public's trust, overseeing the benefit programs that so many 
individuals and families depend on. In recent years, however, SSA's 
ability to fulfill its mission has been severely strained. Chronic 
underfunding despite growing workloads exacerbated the situation. The 
expansion of electronic disability case processing coupled with the 
need to request and store millions of images of electronic medical 
records has sorely tested the agency's processing and storage capacity. 
Moreover, they have continued, far too long in our opinion, to operate 
with outmoded information technology and database structures that could 
not support new and more efficient business rules and processes.
    Last April I had the opportunity to testify before the Committee on 
Ways and Means. The issue under discussion was whether SSA had the 
resources to substantially reduce the growing disability claims 
backlog. At that time over 756,000 people were waiting nearly 500 days 
for disability decisions from administrative law judges. The increased 
productivity in the hearings offices this year has aided the growing 
momentum in reducing the backlog. These backlogs were-and still are-
alarming in their own right, but become even more so when they are 
juxtaposed with the anticipated rise in claims over the next 10 years. 
SSA's workload will increase dramatically. Retirement claims will jump 
by over 40 percent and disability claims will rise by nearly 10 
percent. The 2008 OASDI Trustees Report estimated that by 2015 there 
will be 50 million retirees, widows and widowers, and dependents 
receiving benefits and they will be expecting efficient and modern 
service from the Social Security Administration.
    But the anticipated growth in claims does not stop there. The baby 
boomers are entering their disability prone years and the number of 
initial disability claims is projected to rise steadily from the 2.5 
million claims received in 2008. A year ago SSA's actuaries estimated 
in Fiscal Year 2009 SSA could expect to receive over 2.6 million new 
disability claims.
    The economic downturn that became apparent at the end of last year 
is having a significant impact on SSA's workloads in the current year 
and is expected to continue to affect workloads over the next couple of 
years. DDSs have already received over 11 percent more claims this year 
than at this same point in time last year. Over 664,000 new initial 
claims are pending in the DDS. This is over 100,000 more than they had 
at the start of the fiscal year in October 2008. It is highly likely 
that SSA will receive approximately 2.9 million disability claims this 
year: 300,000 more than anticipated. About 75 percent of those who are 
denied benefits at the DDS level eventually find their way to the 
hearings level and this will lead to another 50,000 claims in the 
hearings backlog. All of this puts immense stress on the agency's 
ability to provide timely, accurate, and efficient service.
SSA's Approach to Managing the Increased Workload
    SSA has experienced extraordinary spikes in its workload before and 
has always stepped up to meet the challenge. These prior surges in 
workload were, for the most part, fairly well defined and eventually 
leveled off. But this time it is different. Now there are burgeoning 
workloads that are not likely to decline for several years. Significant 
numbers of experienced staff are leaving through retirement and the 
agency's ability to replace them has been uncertain. The additional 
funding provided by an increased FY 2009 appropriation and the American 
Recovery and Reinvestment Act has allowed SSA to hire a significant 
number of new staff to fill the critical vacancies in the field 
offices, DDSs, and hearings offices. While this new staff will not 
bring relief in the short run, they are essential for the agency's 
future.
Business Process Modeling and Performance Management
    Throughout the Board's existence, we have spent the vast majority 
of our time studying the disability program and how well it serves the 
public. In our 1999 report on how SSA can improve service to the 
public, we noted that more sophisticated performance management tools 
were needed. This is an agency that collects a wealth of data on case 
characteristics, decisional outcomes, timeliness, productivity, 
quality, and cost. The data are tallied and put into charts and called 
``management information.''
    We have commented in the past that the Office of Disability 
Adjudication and Review's (ODAR) Case Processing Management System 
(CPMS) technology makes it possible to create and retrieve information 
and yet historically there has been little innovative analysis 
occurring. The only way to understand and improve performance is by 
identifying and targeting the root cause of bottlenecks and vulnerable 
processes and then implementing measures that track outcomes.
    The Board was recently briefed on several new initiatives underway 
in ODAR and it appears to us that there is a growing emphasis on data 
analysis and process management. They have developed an electronic 
business process model that simulates how work currently is processed, 
and for the first time, will be able to systematically identify steps 
in the process that create bottlenecks or do not add value to the 
process. While this initiative is very new and still in the validation 
stage, it does hold promise for improving workload management 
throughout the hearings process.
    We have been assured by senior management that the modeling 
capabilities being developed to help identify problems in the hearings 
process will be able to isolate variance in performance from office-to-
office and determine the root cause for that variance. If this approach 
proves effective, through process modeling, ODAR will be able to plan 
proactively for changes in receipts and how to redistribute workload, 
anticipate the need for changes in staffing mix, and determine what 
legitimately can be mitigated by improved management practices. The 
current use is focused on assuring the success of the agency's plan to 
reduce the backlog and going forward it will give them the capability 
to manage proactively, not just reactively. It is a new direction for 
ODAR and we are encouraged by this initiative.
    Overall workload management can be dramatically improved through 
sophisticated forecasting and modeling tools. SSAB continues to urge 
the agency to use its research capacity more broadly and tap those 
resources in order to take a more systematic long range look at growth 
in workload, where it is happening and the underlying causes, and then 
develop simulation models that demonstrate the effects of different 
variables on all parts of the adjudication process. ODAR is in the 
early stages of analyzing the characteristics of the hearings 
population and this will better inform the agency leadership about 
managing cases at that level; but we believe that there is much that 
SSA can learn about the characteristics of potential filers at the 
initial claim level as well.
Current State of Data Center Operations
    SSA's main computer operations center, the National Computer Center 
or NCC, is a thirty year old facility located on SSA's main campus in 
Baltimore. While originally designed to house the agency's large 
mainframe processing units and associated peripheral equipment, the NCC 
has been retooled and modernized over the years in an attempt to keep 
pace with SSA's ever-growing computer needs. But growing workloads, 
expanding telecommunications, storage requirements for huge volumes of 
electronic images, the electronic disability folder process, and ever 
tighter security measures have pushed the NCC's capacity to the limit. 
We were recently told that the storage capacity at the NCC has been 
expanded from 12 terabytes in 2000 to 483 terabytes in 2009 and the 
agency is estimating that storage requirements could increase by four 
times that amount in the next five years.
    Coupled with these processing capacity issues, we learned in late 
2008 that the NCC also has significant structural problems. Electrical 
supplies into the building are rapidly becoming inadequate; the backup 
power supplies are so old that it is virtually impossible to get 
replacement parts; and the fire suppression system needs upgrading. In 
addition, the General Services Administration (GSA) has advised the 
agency that in order to keep the NCC functioning, SSA would have to 
significantly increase the number of times it shuts down the data 
center on an annual basis to do routine maintenance, potentially 
curtailing the agency's ongoing operations to a considerable degree. To 
identify options for shoring up the NCC operation the agency consulted 
with external experts and learned that by the end of 2012 the NCC would 
no longer be viable and replacing it could not wait until the second 
data center was fully up and running.
    We have been told by agency executives that, in the best case 
scenario, a new NCC will take 4 to 5 years to plan, develop, and build; 
another 2 to 3 years would be needed to complete all systems set-up and 
integration activities. The agency has estimated that the replacement 
facility would be fully operational by January 2016; however, given the 
typically long lead time to build and outfit such a governmental 
facility, there is some risk that it could take longer to complete. In 
fact, we recently learned that the process for acquiring the land may 
not be complete until March 2010. The $500 million the agency received 
in the economic stimulus package for the NCC is a sizeable and 
necessary investment and speaks to the urgency of this project. Making 
this project a reality is the shared responsibility of SSA and the 
General Services Administration. In our view, pursuing this building 
project in a ``business as usual'' process is unacceptable and I would 
guess that much of the American public would find the timelines I have 
outlined here laughable if they were not so appalling. Due diligence is 
essential, but areas where red tape can be cut or timeframes shortened 
should be pursued.
    You might wonder why I would suggest that many in the American 
public would find taking five years or more to build a new computer 
center and another two to three years to get the operating equipment in 
place as laughable. I do not believe that most people would consider 
the five-to-eight-year time frame involved would reflect the urgency 
this project deserves given the national dependence on this agency. I 
do not believe that most people would accept that we could not do this 
on a more timely basis if we were truly committed to the task.
    By way of contrast, I would like to offer a little lesson from 
history. Early in World War II, the Government was pressed for office 
space for the growing military effort associated with our joining the 
war. On Thursday July 17, 1941, Brigadier General Brehon B. Somervell 
summoned two of his subordinates and told them that by the following 
Monday morning he wanted basic plans and an architectural perspective 
for an air-conditioned office building to house 40,000 workers in four 
million square feet of space, not more than four stories high and with 
no elevators. After what Lt. Col. Hugh Casey called a busy weekend, he 
and his staff completed the basic layout of a five-sided building by 
the following Monday. The building's basic concept was approved that 
Monday by General Somervell and by the Secretary of War the next day 
who then informed President Roosevelt of his plans. At the same time 
President Roosevelt was being briefed, General Somervell was presenting 
the plan to Congress. Congress and the President moved quickly to 
approve the supplemental appropriation bill to fund the project. 
Construction commenced on Sept. 11, 1941. One section was completed by 
the end of April 1942 and the first tenants moved in. The basic shell 
and roof were finished in one year, and the building was completed by 
Jan. 15, 1943.\1\ Since then, we have known that building just across 
the Potomac River as the Pentagon which today still is the central 
administration facility for the U.S. Defense Department.
---------------------------------------------------------------------------
    \1\ Summary derived from http://pentagon.afis.osd.mil/history.html 
as read at 3:10 p.m., 23 April 2009.
---------------------------------------------------------------------------
    I believe that the American public believes that where there is a 
will, there is a way to get things done in a timely fashion even by our 
Government. If we were able to take a building as complex and large as 
the Pentagon from nothing to complete in 18 months while we were in the 
middle of one of the most daunting military conflicts in world history, 
then assuming we cannot do something better than five to eight years in 
building a new Social Security computer center is, well, laughable.
Second Data Center and Plans for Disaster Recovery
    In researching our recent report on SSA's information technology 
infrastructure, we learned that the agency began planning a second data 
center more than five years ago as part of a new strategy for 
comprehensive data backup and recovery. In response to September 11, 
2001, the Department of Homeland Security issued a directive in 2003 
requiring all Federal agencies to develop plans that identify, 
prioritize and protect critical infrastructure. At that time, SSA had 
not updated its disaster recovery plans in over ten years and, 
therefore, had not taken into account the impact of the electronic 
disability processing system or the disability electronic folder. 
Agency executive recognized that their contingency plans were not 
nearly sufficient. In the event of a disaster, plans called for the use 
of private backup and recovery facilities at an offsite commercial hot 
site. However, the arrangements only allow for the recovery of 25 to 30 
percent of the agency's production capability and recovery would take 
seven to nine days. In addition, SSA would have to queue up with other 
businesses or governmental agencies for access to the facility. This 
is, in fact, the disaster recovery plan still in effect today; the plan 
that will remain in effect until the two data center strategy is fully 
operational.
    The vision for a second data center is that it would function in 
tandem with the primary NCC as ``a fully functional, co-processing 
facility.'' The plans call for about 50 percent of the work currently 
processed in the NCC to be transferred to the second center. 
Functionally, the two facilities would ``mirror'' each other and 
provide backup capability. In the event of a disaster, the second 
center would have the capacity to process virtually all of SSA's 
priority workloads almost immediately. The new site would also have 
sufficient space available so that additional equipment and staff could 
be brought in to handle 100 percent of the agency's computing needs in 
the event the NCC was non-operational. SSA took occupancy of the new 
facility in Durham, North Carolina in January 2009. Over the next 12 
months, the agency will be installing the data processing and storage 
infrastructure. Backup capability between the NCC and the second center 
is scheduled to be operational by the end of the second year with full 
functionality in place by 2013. However, in discussions with the 
agency's executives, we have learned that they are trying to accelerate 
the schedule because of the problems with the NCC.
Continued Risk
    Where does all this leave the agency in terms of operational 
capacity and its ability to backup data and recover operations as the 
transition between data centers takes place? Sometime within the next 
two years the second data center should have sufficient capacity to 
process some workloads on an ongoing basis as well as provide 
additional backup and recovery for other critical workloads. This will 
certainly improve the situation for a period of time. However, by late 
2012 when the NCC is at the end of its projected life-cycle, the second 
data center will most likely need to serve as the agency's primary 
computing center with disaster recovery once again reliant on 
commercial hot sites. To date, we are unaware of any efforts the agency 
has taken to actively pursue alternative recovery scenarios such as 
contracting for the use of other governmental or commercial hot sites 
in the event the NCC becomes non-operational.
    The National Research Council referred to the data stored by SSA as 
the ``crown jewels.'' The current two data center strategy affords some 
assurance that the data are secure and recoverable. The agency recently 
appointed a highly talented Future Systems Technical Advisory Panel to 
advise them on emerging technologies and infrastructure needs. We 
suggest that this panel be enlisted to perform a quick analysis of the 
situation and provide recommendations to the Commissioner within 30 
days.
    In the interim, over the next seven years until the new NCC and the 
second data center are fully operational, there is a risk that at some 
point benefit checks could be significantly delayed or not delivered 
and important data could be lost. Given the economic role that Social 
Security plays in the lives of a large segment of the American 
population, I find this situation deeply disturbing.
How did SSA get in this situation?
    As I mentioned previously, the Board has just finished a two-year 
study that focused on how SSA's public service can be improved through 
technology. During that time we met with several agency executives on a 
host of issues, including systems development, strategic planning, 
infrastructure needs, and resource allocation. Discussions relative to 
the NCC revolved around its limited capacity to meet future workload 
demands and how the second data center in Durham would fulfill the need 
to expand processing and backup capacity. In fact, the Board first 
learned of the critical nature of the NCC's physical plant from the 
Commissioner in the fall of 2008 and I believe he informed the Board 
virtually immediately upon becoming aware of the problems himself.
    I can only hazard a guess as to why this issue has only come before 
our viewfinder in the last several months and I doubt that my guessing 
about root causes would add much of value. Instead, I believe that it 
will be more productive to ensure that this potential for great risk to 
SSA's infrastructure does not happen again. The Board strongly urges 
SSA to undertake a self-assessment that would identify the underlying 
factors that allowed the current NCC situation to occur. While this 
particular story is about the development and maintenance of systems 
operations at Social Security, the root of the problems associated with 
it are about the role of senior career managers in the agency, their 
sense of fiduciary responsibility in their roles and how they handle 
these roles when the agency leadership is not open to the messages 
being delivered.
    SSA needs to develop a governance structure of shared ownership and 
accountability that is committed to diligently identifying and managing 
all risk factors and strengthening its strategic and tactical planning 
processes.
Governance of the Information Technology (IT) Investments
    Given the recent developments with regard to the National Computer 
Center, there is clearly reason to question the governance of the 
agency's IT investments. With different planning and oversight of the 
IT process, perhaps the critical situation the agency finds itself in 
could have been avoided. As the Board looked at the IT planning and 
management process at SSA, there is evidence that the current process 
could be more effective.
    Governance of IT investments at the agency is a decentralized 
process. While the Chief Information Officer (CIO) and the Deputy 
Commissioner for Systems (DCS) are the principle players, IT oversight 
is split among a number of senior executives. The CIO has 
responsibility for such functions as IT capital planning and investment 
management, overall enterprise architecture, strategic planning for IT, 
and e-Government initiatives. The DCS has responsibility for systems 
acquisition, development, and integration. All of these disparate 
functions are supposed to be brought together and managed under the 
auspices of the Information Technology Advisory Board (ITAB). The ITAB 
has the overall responsibility for shaping the agency's IT strategy and 
for approving and allocating resources for the hundreds of projects 
that are proposed each year. While originally designed as a way to 
ensure transparency and foster shared responsibility for IT investment, 
the result has been more of a dilution of ownership and management of 
the agency's overall IT process.
    During our research, we talked with a number of organizations, both 
public and private, and found some major differences in the way IT 
governance is handled. For most of these organizations, the 
responsibility for governance is a centralized process with ultimate 
accountability invested with the CIO. The CIO is responsible for 
comprehensive planning, development, and implementation of new IT 
projects as well as for the ongoing maintenance of current systems. It 
is the CIO's responsibility to ensure IT investments are aligned with 
the organization's strategic plan and that they are properly evaluated 
to measure their success or failure. I believe that this is the type of 
oversight that the Congress intended when it passed the 1996 Clinger-
Cohen Act. This Act requires agencies to designate a CIO to help 
control risk, better manage technology spending, and achieve real, 
measurable improvements in agency performance through the use of 
technology.
    The Board has recommended that the agency restructure its 
governance process and that it centralize overall responsibility for 
all IT processes. I believe that the current structure has left the 
agency open to the type of risk we are talking about here. While some 
may argue that capital planning and the management of the overall 
enterprise architecture are separate and distinct functions from the 
more tactical responsibilities for systems acquisition, development and 
implementation, this bifurcated process, for whatever reason, simply 
has not worked at SSA. The agency's ability to deliver public service 
will increasingly depend on technology and governance of the IT process 
must have strong leadership who is empowered to make critical decisions 
and is held accountable for those decisions.
    Further, the more theoretical process of assessing emerging 
technologies and new IT-related strategies has for too long been 
divorced from the practical development of processing systems. The 
result has been that an agency once considered a pioneer in systems 
automation is now struggling to provide service with an outdated 
technology infrastructure. The recently appointed Future Systems 
Technical Advisory Panel will be instrumental in helping the agency 
create a system for the future. However, I believe it will take strong 
leadership to ensure that the agency breaks out of its insular view of 
technology and embraces what it can bring to the delivery of quality 
public service.
Strategic Planning
    SSA's original endeavors in strategic planning described a 
comprehensive and ambitious vision for the future of the agency. While 
high-level in nature, these early plans described in broad terms the 
necessary steps that would be needed to carry out that vision. In 
recent years SSA's strategic plans have been primarily narrowly focused 
shorter range tactical plans designed to address a more immediate 
issue. While it is only conjecture, it is possible that the failure of 
SSA to anticipate and adequately plan for a replacement national 
computer center when the current building came to the end of its 
lifecycle is partly the result of inadequate enterprise-wide long-range 
planning. The more immediate need to support the agency's computing 
capacity with a second data center may have overshadowed the need to 
develop a longer-range plan for replacing and transitioning out of the 
current NCC facility.
    The Board believes SSA needs to return to longer-range planning 
that envisions how the agency will deliver service and what the 
supporting infrastructure must be to make this plan a reality. We urge 
SSA to begin the planning process for the next decade and develop a 
``to be'' 2020 vision. The process must include a broad scan of 
environmental factors that will arise within the next decade, a 
thorough assessment of future technologies, a comprehensive review of 
all major business processes, and in-depth analyses of service delivery 
channels and opportunities for change or improvement. Short-term 
planning and implementation strategies are not sufficient for the type 
of technological changes SSA will need to make if it is to meet future 
challenges.
    The Advisory for this hearing rightly noted that Congress has made 
a significant investment in SSA's capacity to continue to effectively 
serve the American public. We firmly believe that your confidence has 
not been misplaced and that this investment will yield significant 
dividends. In our role as an Advisory Board that serves the President, 
the Congress, and the Social Security Administration, we are committed 
to ensuring SSA's ability to fulfill its mission. FORCED BREAK 
TO KEEP BODONI DASH FROM TOP OF PAGE deg.
    Mr. Chairman, I hope these comments are helpful to the 
Subcommittee. I would be happy to provide any additional assistance you 
may want, and I would be happy to answer any questions you may have.

                                 

    Chairman TANNER. Thank you very much, Mr. Schieber.
    And I want to thank all of you all for your time and for 
your expertise, for your devotion to duty, and for being here 
today with respect to this. Actually, a critical part of 
America's dependence on its social safety net as represented 
here today, and we wanted to take time to look and see where we 
are with respect to the recovery funds that have been made 
available to accomplish a purpose that we all foresee.
    I guess, Ms. Glenn-Croft, Mr. Hewell, is there a way, 
without, of course, sacrificing quality or any sort of 
capability, to speed this process up some because if you have a 
glitch and we have a life expectancy out there at the computer 
center of 2013. If we do not have something to take its place, 
as Mr. Schieber said, we have a monumental problem here.
    Ms. GLENN-CROFT. Well, I certainly appreciate that 
question, and I certainly expected you to ask that question, 
Chairman.
    Let me provide a little bit of background here. In addition 
to being responsible for Recovery Act funds for Social 
Security, I am also the deputy commissioner for budget, 
finance, and management. So facilities are part of my 
responsibility.
    I have been in this role now a little over a year, and, 
obviously, I have looked at this very question that you raised, 
and this is a little bit of context here. The NCC is headed 
toward its 30th birthday. We have taken good care of that 
building. We have maintained it at high levels of high 
standards, but, as you know, the infrastructure in that 
building is getting old.
    I would like to say, though, that we are very confident 
that we are going to be able to keep that building operational 
until the point in time that we finish the new data center and 
we actually transition from the NCC to the new data center, and 
I certainly can provide either verbal comments on or 
information for the record as to how we believe that we can do 
that. But we are very confident that we can keep that building 
going well past the 2012 date that you have heard, okay.
    What I would also like to tell you, as part of this good 
news story--and I know the commissioner mentioned this when he 
was here at the hearing last month--is that we have moved into 
the Durham site, and we are moving rapidly with that Durham 
site, and part of the situation that we are very happy to tell 
you about is that probably by late calendar year or early 2010, 
we will have enough equipment, hardware, and software in the 
Durham site that should the NCC have a catastrophic event 
occur, which, obviously, we hope will not happen, but should 
that occur, we will be able to use that site to bring up our 
critical production workloads, okay. That is a new situation 
that I am not sure that the committee is aware of.
    The reason I go through these two points about being able 
to keep the NCC operational and the enhanced capacity that we 
will have in Durham is that that does take off some of the 
pressure and the timeframes that you were talking about in 
terms of getting the new data site up and operational.
    Obviously, we will work with GSA. We will do everything 
that we can to get the new data center up and operating as 
quickly as possible. We are going to do that to keep us moving 
forward on time and within costs, but this is a very difficult 
build. There is a lot of logistics. This is not like building 
an office building. This is a huge project. We have to do it 
right. We have to do it to avoid protests and disputes.
    There is a lot of environmental factors and issues and 
studies that have to occur, and working with GSA, we will do 
everything we can to get that building done as rapidly as 
possible, but, again, while this is happening, we believe we 
can keep the NCC going, and we will have much more capability 
and backup potential in Durham as that build occurs.
    Chairman TANNER. Thank you.
    Mr. Hewell, do you have anything to add to that with 
respect to--that addressed partially my question. My question 
is: Is there any way to accelerate this schedule without 
sacrificing competency or capability of the installation?
    Mr. HEWELL. Yes, Mr. Chairman. We think there may be.
    We have compared our schedule to what we are told are 
normal private-industry schedules for similar facilities, and 
it is pretty much right in line with that. What some private-
sector companies have done to get data centers done more 
quickly is double or even double and a half the timing of work 
schedules and things like that, by going to what is called--
this was a new term to me--a 6/20 week. Excuse me. We will 
certainly be looking at that.
    We also think right now that probably the most promising 
area that we could achieve some savings in is the period 
between site purchase and award of the design-build contract by 
doing as much of the development of the requirements for the 
facility at the same time that we are acquiring the site. If 
that goes well, we may be able to cut as much as 6 months off 
of the year in between those two.
    So we are looking at ways to make the schedule shorter.
    Chairman TANNER. Well, I do not know why that could not 
happen. I get a little nervous when I realize the steps to the 
House side of the Capitol took longer to replace than it did to 
build a new football stadium out in Maryland. So you get a 
little nervous about these timeframes if you are looking at 
them.
    Mr. O'Carroll, we appreciate what you do because, as 
stewards of the money, we are trying to get money into the 
economy quickly, but, in doing so, we do not want to sacrifice 
anything with respect to transparency, oversight, auditing, and 
so on. Do you have any comments about speeding up and what your 
office might encounter were that to be done?
    Mr. O'CARROLL. Yes, Mr. Chairman. One of the things that we 
are looking at now is hiring a vendor that is technically 
competent and knows the state of the art in terms of being able 
to evaluate the plans, be able to take a look at the location, 
the timelines, et cetera, on it, to make sure that, you know, 
all the i's are dotted and t's are crossed in relation to this.
    And another one that--you know, although you did not ask, 
but just to say one of our concerns on this thing is that we 
were very encouraged by the 2010 with the secondary site being 
able to take on some of the redundancy of a lot of the 
operations that are going on, but, again, our biggest concern 
is up until 2010 where we are still using an offsite vendor in 
a different state and competing with other entities, you know, 
recoup in, you know, a catastrophic instance, you know, at the 
NCC.
    So we are watching very carefully that, and we are going 
to, you know, be encouraging everyone to go as fast as they 
can, but being as cautious along the way.
    Chairman TANNER. We want to avoid haste makes waste if we 
can, and I know you all do as well.
    Did either of you have a comment? Mr. Schieber.
    Mr. SCHIEBER. Redundancy is redundancy. What we are facing 
if we have a catastrophe may be still a precarious situation. 
We first discovered or were told about the problems with the 
National Computer Center in November. The commissioner came and 
met with us, and that was the first time it was brought to our 
attention.
    We immediately became concerned and started asking 
questions about bringing the North Carolina facility online and 
were given timelines and capacity loads that it would be able 
to carry. I believe right now the recovery provisions 
supposedly will allow them to recover their critical production 
workloads in a period of a week, so they would be back up on 
what they call their critical production work. But that is only 
about 30 percent of their operating capacity. If they did that, 
at that juncture, they would have no Internet, they would have 
no intranet, they would have probably no phone system.
    So I think we need to make sure when we say that we are 
going to cover certain things, we understand what that means, 
and it is not that they are not working hard at trying to get 
this. In some regards, my sense is that, for senior management, 
this has been as much a surprise to them as it has been to us.
    So I think there is an urgency here that we all need to 
keep our eyes on, and we need to make sure exactly what bases 
we are covering when we say we can cover certain bases.
    Ms. MELVIN. I would add, speaking from the standpoint of 
not having reviewed exactly what they are doing, but 
recognizing the urgency of what they are doing, I think it is 
also important to advocate for caution from the standpoint of 
them proceeding in a disciplined approach so it is kind of 
moving quickly, but, at the same, making sure that they have 
plans that really identify what it is that they need to put in 
place, that they have a strategy identified for doing that, and 
that they have a means of measuring their progress and their 
performance along the way.
    Again, it goes back to a point I made in my oral statement 
earlier about the--just many times money is invested in 
projects, but if you do not have a disciplined approach to 
managing that, you can still waste that, even in the sight of 
urgency and even recognizing the importance of what you are 
trying to do.
    Chairman TANNER. Mr. Brady.
    Mr. BRADY. Well, thank you, Chairman. I share your 
concerns. I would take Ms. Glenn-Croft up on her offer to 
outline for the committee some of the things that can be done 
to extend the life of the current computer center, and I do 
urge you, Mr. Hewell, and others to find ways to accelerate 
this. So rarely do things stay on budget and on time, but we 
could have a major gap for capacity in Social Security, and 
that is a concern to both parties on this Committee.
    Two questions really--well, Ms. Glenn-Croft, obviously, 
Social Security is receiving $1 billion in stimulus, some to 
pay for the computer center, others to deal with the new 
workload and to improve service delivery. What real benefits 
will our taxpayers see as far as, you know, will they wait less 
long to get their disability reviews and appeals heard? Will 
they spend less time waiting in the Social Security office or 
getting a busy signal when they call SSA for services? When 
will we see--when is a fair timetable to see improvements in 
service delivery as a result of the extra money?
    Ms. GLENN-CROFT. As you know, we are expecting 300,000 
additional retirement claims this year and 300,000 additional 
initial disability claims this year as well as 50,000 
additional hearings. We are very pleased and thankful for the 
Recovery Act funding that we received, and upon receipt of that 
money, we immediately--immediately--very aggressively started 
hiring. We expect with Recovery Act funding to hire over 2,000 
people. As of today, coming in to this hearing, we have already 
in 1 month hired 1,400.
    Before we received the Recovery Act funding, we had already 
started going out and doing recruitment efforts, broad-based 
recruitment efforts, so that we would be ready to go if we did 
get the funding. And, again, we are thankful for that. So we 
are bringing in quite a number of new people into our front-
line components, our field offices, our teleservice centers, 
our hearing offices.
    When you bring new folks in, you do not see immediate 
productivity from new staff. Our programs, as you know, are 
very complex. Training lasts anywhere from 10 to 15 weeks, and 
when they come out, then we put them under a mentoring program.
    Mr. BRADY. Sure. That is exactly right. You cannot change 
things overnight, and those additional resources will help. But 
that was my question. Where is the fair timetable where we will 
see improvement?
    Ms. GLENN-CROFT. Well, I was just going to get to that. 
That was just a little bit of context. We expect that we will 
really see productivity from our new hires starting in fiscal 
year 2010.
    Mr. BRADY. What kind of measurements can you produce for 
the Committee as we go forward so we can measure those wait 
times, the quality of service?
    Ms. GLENN-CROFT. We have a number of performance measures 
that we have included in our Recovery Act plans that we have 
submitted in draft to the Office of Management and Budget, and 
we have included performance measures, such as the number of 
retirement claims we will process, the number of initial 
disability claims processed, hearings processed. We will also 
obviously have processing time data. So we will be able to 
provide you with performance measures along those lines.
    Mr. BRADY. Okay. Great.
    If I may, I think every Member of this Subcommittee is on 
here because we want to see Social Security preserved for every 
generation, and Social Security is not immune to the economic 
downturn. We have some charts, I think, that in the March 
update, CBO now projects Social Security surpluses will be very 
low over the next 4 years, as low as $3 billion in 2010, which 
is very nearly breakeven. There you can see the dramatic change 
just in a year as a result of the recession. That is almost 
breakeven next year there. It disappears by 2017.
    CBO has lowered its Social Security surplus projections 
pretty dramatically over the past year, and what that chart 
does not show is the disability program is already experiencing 
cash flow deficits. CBO projects that the insurance trust fund 
balance will reach zero in 2019, and, under current law, 
program revenues will be unable to pay the full benefit 
schedule.
    For years, the Social Security board of trustees has warned 
of the financing challenges we face in Social Security. I think 
there is a general belief the sooner we act to protect and 
strengthen Social Security, the better. A 2009 annual Trustees' 
Report is expected as soon as next week, and I am hopeful 
Chairman Tanner will schedule a hearing of the Subcommittee to 
closely examine the report.
    So my question to you, Mr. Schieber--and then to Ms. Glenn-
Croft is knowing the bipartisan advisory group has done so much 
on this issue, is it better that we act sooner rather than 
later on this issue?
    And then to Ms. Glenn-Croft, are you sharing your expertise 
with the administration about what these challenges are and how 
we move forward on that?
    Mr. Schieber.
    Mr. SCHIEBER. The Board over the years of my tenure on it 
has issued three separate reports. We like the title we put on 
the first one so much, we have used the title on all three 
reports saying that action sooner rather than later is 
preferable. We probably should have issued a repeat of that 
report under my tenure as chairman, but, once you have said 
something three times, saying it a fourth sometimes does not 
seem maybe so valuable. Maybe it is. My wife oftentimes tells 
me twice is enough to hear me say something.
    So we also have issued a couple of other reports. One we 
titled ``The Unfolding of a Predictable Surprise'' about the 
general state of our retirement system. This was before the 
recent collapse in the financial markets. And in the last 
couple of months, we have issued a report on the value of 
encouraging people to work longer. These all have ramifications 
for the financing of Social Security.
    At this juncture, I guess I would say that it is extremely 
important. This program is a vital foundation of retirement 
security for the overwhelming majority of Americans. Even 
people at middle-income levels rely to some substantial extent 
on Social Security, and having this program defined not only in 
a way that they understand what the benefits are going to be is 
extremely important to them, but there is another side as well. 
We have to have a program that our children and their children 
can afford.
    I have done some work recently that suggests if we continue 
to allow health costs to increase the way they have over my 
working career and we let Social Security costs go up the way 
the Social Security actuaries project they will under current 
law if we try to deliver current law benefits and people try to 
save on their own that, for the middle-income worker and down, 
any additional disposable income that they may earn because of 
increased productivity is going to be eaten up by what they are 
paying for their own health insurance, for Medicare and 
Medicaid to provide to the elderly, and for retirement 
benefits.
    Now do we want this to be the end of growing prosperity 
from generation to generation in America? And I am not talking 
about something in 2042 or 2050. I am talking about my son and 
his wife who are 30 years old, trying to start a family, trying 
to buy a house. They may have reached the pinnacle of their 
standard of living if we let this play out.
    It is time we look at these programs on a serious basis, 
including how we are going to control health costs, and start a 
conversation with the American people about how we are going to 
address these issues. It is of critical importance, and it is 
of critical importance to at least three-fourths of the 
American population. The people who are well-off, I assume, 
will continue to do fairly well, but many of the rest are going 
to struggle if we do not address these problems, and we ought 
to do it now.
    Mr. BRADY. I thank you.
    And I am over my time, so the chairman can decide if Ms. 
Glenn-Croft gets to answer or not, but I do think--we all may 
have different ideas on how we strengthen it, that is fair, but 
I think every Member on this Subcommittee thinks sooner rather 
than later would be helpful, as difficult as it can get.
    Mr. SCHIEBER. If you want the board to begin exploration 
here, you know, a request of some sort would be helpful. Our 
Members--we are political appointees also, and we are reluctant 
to weigh very much further into these issues on our own without 
some sense that maybe somebody has something that we could help 
with. We have spoken out. I would be willing--my tenure as 
Chair is going to be relatively short here. I would be willing 
to try and get the board started in a discussion if it would be 
helpful to the committee and to moving this discussion along.
    Mr. BRADY. Thank you, Chairman.
    Chairman TANNER. Thank you, Mr. Brady.
    Thank you, Mr. Schieber. We will be back in touch with you 
on that point.
    Ms. Schwartz, you are recognized.
    Ms. SCHWARTZ. Thank you, Mr. Chairman, and I appreciate 
some of your comments, and, of course, as you well know, the 
broader issue of health care and health care reform is one that 
is very much on the agenda of this President, and should we be 
successful in voting the budget this afternoon and in the 
Senate this week, we will certainly have it on the agenda.
    So, more broadly speaking, it is not unrelated because, of 
course, if we do a better job of containing costs in both the 
public and the private sector that will help and help Americans 
be healthier, maybe you would have fewer claims for disability. 
Wouldn't that be a good thing? The goal is to have Americans be 
healthier.
    But what I wanted to ask was a bit about the health care, 
particularly the disability, and one of the aspects of the 
extra money that was provided to Social Security Administration 
was for health information technology, and there have been some 
comments about the difficulties of information technology, but 
I understand that using some demonstration projects that have 
been quite successful--the idea was--as we are again more 
broadly in the health care sector, certainly under Medicare--
different jurisdiction, Ways and Means, but nonetheless 
jurisdiction.
    We have invested quite a bit in health information 
technology as a way to improve quality and monitor what we are 
doing, but I understand that these demonstration programs have 
been very successful having--I will just be clear. I understand 
it to be able to have your staff be able to review claims and 
get medical records online. And that one of those difficulties 
in time delays in processing the claims is the many calls back 
and forth for medical records that can be quite dispersed. And 
getting all that information, getting it accurately, getting it 
in a timely way is dramatically changed, I understand, to the 
point of seconds rather than days, that that information can be 
available to the reviewer.
    So my question really is severalfold. One is: Can you tell 
me--I think I am directing this maybe most appropriately toward 
Ms. Glenn-Croft. I think you would be the one to answer it. Ms. 
Melvin, if you have some add-on, you can as well. But what I 
want to know is how far does that $40 million that we have 
provided from recovery funds to be able to move the electronic 
medical records and the ability to get this information in a 
timely fashion--given what you just said about how long it 
takes to train personnel, 8 to 10 months, which is somewhat 
staggering, you said it is--that is what you said. You started 
training them, but until they are fully operational, it is 8 to 
10 months. That may be a different question someone else wants 
to ask about whether we could speed that up.
    But they are training in the use of the information 
technology, medical records. How quickly can we see a 
shortening of the number of days? That is one of the major 
complaints we certainly hear from people who have applied, 
think they are eligible, you think they are eligible, but you 
do not have all the documentation, and it literally takes 
months and months and months for them to be approved, and these 
are people who are in critical situations sometimes certainly. 
So these are not people who have months and months necessarily 
to wait.
    So can you speak to how quickly, how broadly this is going 
to impact the literally tens of thousands, hundreds of 
thousands claimants that we hear from all the time and how much 
this will help move that forward?
    Ms. GLENN-CROFT. Health information technology really is a 
thing of beauty for this agency. We have been a leader in this 
area. As you know, we have done several pilots, one in Boston 
and one now in Virginia, and just to add some context, we 
process new--request medical evidence or health records about 
15 million times a year from about 900,000 sources, so making 
movement forward with HIT is absolutely critical to us in terms 
of adjudicating cases on a much more timely basis because now 
it takes us, oftentimes, weeks to get records when we get them 
in hard copies through them mail, okay.
    What we are going to do with money received under the 
Recovery Act is we are going to use $24 million of the Recovery 
Act money. The commissioner has just identified a new executive 
to lead this effort, is getting high visibility in the agency. 
In the July timeframe, we are going to go out and solicit for 
interest. We will be picking on--we will be contracting with a 
limited number of medical sources as a proof of concept, pilot-
type scenario, so that we can get it more experience in 
requesting medical evidence from them electronically and then 
having them send it back to us electronically. Every hospital 
and every doctor's office has its own type of automation----
    Ms. SCHWARTZ. Right.
    Ms. GLENN-CROFT [continuing]. How they keep their records, 
the format of their records, how they code their records, and 
we need to get experience, broader experience, on how we can 
share that information electronically, watch the format the 
medical evidence and information should be in, how coding 
should work, and we are going to experience.
    Again, we will solicit for offers in the July timeframe. We 
believe we will start to let the contracts probably in the 
December timeframe.
    Ms. SCHWARTZ. Two questions on that--of course, you are 
well aware that in the ultimate Recovery and Reinvestment Act, 
we did put in quite a bit of dollars for HHS, and one of the--
--
    Ms. GLENN-CROFT. Yes.
    Ms. SCHWARTZ [continuing]. The responsibilities for HHS 
going forward is to establish Federal guidelines for 
interoperable secure medical records that should help in the 
sense of what kind of formatting you will see----
    Ms. GLENN-CROFT. That is correct. And we need that.
    Ms. SCHWARTZ [continuing]. Different hospitals and doctors, 
but how--so what are you going to do with the rest of the 
money? That is $40 million. You are putting out $24 million.
    Ms. GLENN-CROFT. We could spend up to $40 million. We have 
chosen at this point in time to spend $24 million. The 
remainder of that $40 million--we are spending $16 million of 
it, the balance of that $40 million, to buy supplies--not 
supplies, but equipment, computers, those types of----
    Ms. SCHWARTZ. So you can receive the information.
    Ms. GLENN-CROFT. Yes. And that equipment will be used, 
obviously, to review the electronic medical records. We will 
also use some of that money just to provide systems support on 
the Social Security end so that we can work with the hospitals 
to modify their systems so that we can talk to each other.
    Ms. SCHWARTZ. Do you have any idea yet how many claims that 
will affect and how many people it will affect?
    Ms. GLENN-CROFT. No, I do not. At this point in time, I 
cannot give you that scope. I certainly can go back and check 
that out and provide it for the record if we have it. But, no, 
I do not know that.
    Ms. SCHWARTZ. I think it would be helpful, particularly--
Mr. O'Carroll might want to know what your plans are, what you 
expect to be able to accomplish, how many people you expect 
to--the timeframe----
    Ms. GLENN-CROFT. Again, this is----
    Ms. SCHWARTZ [continuing]. What your goals are so that at 
least you can measure your own success against them.
    Ms. GLENN-CROFT. Yes. And we will be doing that, but, 
again, this is a proof of concept. It is so that we can learn 
what we need to do, what needs to be changed. There will be a 
lot of lessons learned that will come out of this, but, 
obviously, we will have measures to measure our success as we 
go forward.
    Ms. SCHWARTZ. Again, I think all of us would say, you know, 
move in a way that actually does not have you moving too fast 
and you are doing the wrong thing, to learn from the initial 
experiences, but we also have a sense that this is something 
that done right, done well, do not take too long if it actually 
could, in fact, change literally the lives of so many of the 
people who are applicants.
    Ms. GLENN-CROFT. We are moving aggressively on this, and I 
have to tell you, from the standpoint of an employee who 
receives evidence via this method, it is very exciting when you 
can process a claim in a matter of hours versus a matter of 
months.
    Ms. SCHWARTZ. I think we would all appreciate it quite 
personally as well as, of course, the people we represent.
    Thank you, Mr. Chairman. I yield back.
    Chairman TANNER. In keeping with who was here when the 
gavel went down, we have Mr. Becerra and then Ms. Brown-Waite.
    Mr. Becerra, you are recognized.
    Mr. BECERRA. Thank you, Mr. Chairman.
    And thank you all for your testimony today.
    I would like to begin by asking both the Social Security 
Administration and the GSA if they have a high level of 
confidence that they will adhere to their current timeline for 
completing the replacement of the National Computing Center 
project.
    Actually, Ms. Glenn-Croft, why don't you go first in terms 
of whether SSA has a high degree of confidence that--my 
understanding is by 2014, you expect to complete the building 
and, within another 18 months, equip and migrate data and 
processing from the existing building.
    Ms. GLENN-CROFT. I have a very high degree of confidence 
that we will do this. There is a strong partnership with GSA. 
SSA has put their strongest technicians on this project. We 
have an executive that is----
    Mr. BECERRA. That is good. Good.
    Ms. GLENN-CROFT. And I believe that GSA would say the same.
    Mr. BECERRA. Okay.
    Mr. HEWELL. Yes? Okay.
    And you are prepared to notify this Committee and any other 
oversight bodies if you fall behind in that process?
    Ms. GLENN-CROFT. Yes, we will. As a matter of fact, we will 
be providing monthly reports to this Committee on our progress 
with all aspects of the Recovery Act funding.
    Mr. BECERRA. Can I ask, Ms. Glenn-Croft, why was it that 
SSA waited so long to tell us of the urgent need to replace the 
existing NCC building in the first place?
    Ms. GLENN-CROFT. Well, what happened----
    Mr. BECERRA. And just a brief answer. I do not want to get 
in too much detail.
    Ms. GLENN-CROFT. All right. Well, basically, what happened 
is, in the 2005-2006 timeframe--and, again, this is based upon 
my going back and looking at the situation when I came into 
this role--the way we did business at Social Security 
dramatically changed. We became basically an electronic 
business process agency. We moved from paper to electronics. 
Our disability process is totally electronic now, and, as a 
result of that, our need for servers to store electronic data 
dramatically changed, and----
    Mr. BECERRA. Okay. So you became aware of the fact that now 
with this new electronic world you actually would need to have 
a better facility and----
    Ms. GLENN-CROFT. Well, what really pushed it over the edge, 
sir, was the fact that with the need for servers in this ever-
changing technological world, servers now come with two plugs 
versus one plug because of the need for redundancy. Previously, 
for the years past, they came with one plug. You get a server, 
you plug it into the wall. Now, when you get a server, you have 
to plug it with two plugs.
    And what happened is--I know this seems simplistic, but 
what we realized is we were running out of electrical 
distribution capacity. Basically, we are adding 25 servers a 
month, and we realized that with that increased server capacity 
that by 2012, 2013, we were going to run out of ability to plug 
servers in, and when that happened, we realized that we needed 
to go to look at what our options were for the NCC, and that is 
when we went out and we got a neutral vendor, Lockheed Martin, 
to come in----
    Mr. BECERRA. Let me ask----
    Ms. GLENN-CROFT [continuing]. And do a study.
    Mr. BECERRA. Let me ask a couple other questions. And I 
appreciate your response there. And I know the chairman has 
asked if there is any chance to accelerate the completion 
because of the concern that if there are any delays, it could 
jeopardize a lot of that data and what we do with the data, if, 
indeed, you slip on the deadline. So I hope that you are able 
to give some response, if you believe and GSA believes that 
there is any chance to accelerate the completion.
    I also hope that you will give us some additional 
information on what you are doing to work with the Office of 
Management and Budget to try to get the additional moneys. I 
understand you need about another quarter of a million dollars 
to complete the project, and what you are doing to try to make 
sure you get the money both in the President's budget and, 
obviously, finally from the Congress to make sure you do not 
fall behind. Because the last thing we need is to find that you 
fall behind because of money concerns, and we or White House or 
the OMB are responsible for delaying SSA. I think too many of 
us have seen what happens when SSA does not get the money it 
needs, and ultimately our constituents, our beneficiaries are 
the ones that pay the price. So I hope you will keep us abreast 
of that.
    Can I also finally ask--I am concerned--and, Mr. O'Carroll, 
maybe I should ask this of you. Why would we allow an agency to 
cannibalize its resources that are meant for IT at a time when 
we have just heard that we are shifting over so much toward a 
world of IT to try to deal with the millions--I should say 
billions--of bits of information that are needed to transact 
all the affairs of people who paid into a system to now be able 
to get their disability benefits or their retirement benefits?
    Doesn't it seem disconcerting that--and I know part of the 
problem is Congress and OMB, that we have not given them money? 
But how can we enable SSA to ask for the money it needs to gear 
itself up to deal with this technology and information 
requirements?
    Mr. O'CARROLL. Well, let me go backward first, I guess it 
would be, on the reason things have happened the way they have 
in terms of, you know, the robbing Peter to pay Paul with the 
agency on it. I have to say--and it is partially our issue as 
the inspector general on it, is that we were more interested in 
terms of continuity of operations and making sure that the new 
processes that were being put in place for the disability 
programs and different things like that.
    We were spending most of our time looking at that and not 
really looking at the building and looking at, you know, the 
structures that were, you know, falling into disrepair, and I 
have to tell you this. You know, I even go to my employees that 
walk down the hall every day past, you know, wires sticking out 
of walls and stuff and say, ``Why didn't somebody tell us that 
this place is falling apart?''
    So, on that regard, you have my assurance that we are 
looking very hard on at least the hardware side of things and 
the building of it, and one of the answers before that you were 
asking on is monitoring SSA. We are going to start--we are 
taking a look at their plans for the future. We are looking at 
how their funding is being done.
    We are going to come out with a report in June on sort of 
an overview of what will be going forward on it, to make sure 
that the funds are coming from the right places, it is not 
taking it from the other programs. And then we are also going 
to be planning on doing quarterly reports just to update what 
is near the Committee and any of the other oversight entities, 
in terms of where the SSA is going with it and whether they are 
staying on their time with their one--so I guess the best I can 
assure you is it is kind of, you know, as the agency has said, 
is we are all kind of, you know, looking very hard at this 
thing and making sure that the right resources will be, you 
know, put to use.
    Mr. BECERRA. Thank you.
    Thank you, Mr. Chairman.
    Chairman TANNER. Thank you.
    Mr. Yarmuth, you are recognized for----
    Mr. YARMUTH. Thank you, Mr. Chairman.
    I just want to get some clarification on some of the 
funding that is going to be spent from the Recovery Act out of 
the $500 million for processing of claims. Ms Schwartz talked 
about the $40 million for IT. Is the other $460 million 
dedicated primarily to salaries of the employees, or could you 
break that down for us, how you intend to use that?
    Ms. GLENN-CROFT. Yes, I can. The remaining portion of that 
$500 million will be primarily spent for salaries and benefits 
for employees that we are hiring, the new employees that we are 
hiring, for the remainder of this year and over next year, and 
it will also allow us to provide significant amounts of 
overtime to our frontline components so that they can process 
critical workloads, better handle the 800 number calls that are 
coming in, and handle visitors to the field offices. So that is 
basically how the remainder of that money, really the bulk of 
that money, is being spent.
    Mr. YARMUTH. Okay. So that is for essentially 2,000 new 
employees over the 2-year period, however much it is----
    Ms. GLENN-CROFT. Basically, the remaining 6 months of this 
fiscal year and then all of next fiscal year.
    Mr. YARMUTH. So 2 months plus overtime? That is----
    Ms. GLENN-CROFT. Yes, that is correct.
    Mr. YARMUTH. That is all I wanted to ask, Mr. Chairman. I 
yield back. Thank you.
    Chairman TANNER. Thank you, Mr. Yarmuth.
    Ms. Brown-Waite.
    Ms. BROWN-WAITE. Thank you. Thank you very much, Mr. 
Chairman.
    Commissioner Glenn-Croft, in your testimony, you stated 
that there are going to be about 10 additional field hearing 
offices, and I know when Commissioner Astrue was in Florida, he 
stated that there were going to be two additional ones in 
Florida. Other than in the near future, as in your testimony, 
do you have an estimate of when you anticipate that these 
offices will be up and running, even the two in Florida, and 
what are the obstacles if there is going to be a delay? What 
obstacles do we need to overcome?
    Ms. GLENN-CROFT. Well, the two new--there are 13 new 
hearing offices that are planned. I believe the commissioner 
mentioned that when he was here a month ago, and I think he may 
have mentioned it to you when he was recently with you on a 
Florida visit.
    Ms. BROWN-WAITE. He did.
    Ms. GLENN-CROFT. And the two new hearing offices in 
Florida, I believe, are going to be in Tallahassee and St. 
Petersburg. I believe? Is that correct?
    Ms. BROWN-WAITE. I believe that is accurate.
    Ms. GLENN-CROFT. Those are the two locations. We have 
facilities staff that are working very hard, working with GSA, 
the counterparts of GSA, in Region 4, and we are very 
comfortable that those sites will be up sometime--and I can 
give you exact dates, but I know it is sometime during fiscal 
year 2010 that those sites will be up. We are working with GSA 
to expedite getting those sites and building those sites out.
    We have a great need for those sites in those 13 locations 
across the country, so we are doing everything that we can to 
eliminate any roadblocks and make sure that they are up and 
operational and staffed as quickly as feasible. Usually, it is 
a, you know, 18-month process, roughly. I am looking at my GSA 
colleague for him to shake his head on that. You know, 18 
months or so is usually the time for the entire process, but I 
can give you more specific dates for the record.
    Ms. BROWN-WAITE. If you could back to the chairman----
    Ms. GLENN-CROFT. I will be glad to do that.
    Ms. BROWN-WAITE [continuing]. With the dates, not just for 
Florida, for all of the----
    Ms. GLENN-CROFT. I certainly can do that for you----
    Ms. BROWN-WAITE [continuing]. Anticipated offices.
    Ms. GLENN-CROFT [continuing]. For all 13.
    Ms. BROWN-WAITE. I apologize. I thought you said 10.
    Ms. GLENN-CROFT. The commissioner did say 10 originally, 
and he has recently added three additional. So now the number 
is 13.
    Ms. BROWN-WAITE. Oh, okay. Okay.
    Now the other question that I have--and I asked staff this 
a moment ago--I got a call from a constituent this past weekend 
who never hesitates to call me at home because my number is 
listed, and she was upset that she got a mailing from Social 
Security telling her that she was going to receive a $250 check 
as a result of the recovery plan, and she said, ``I do not need 
that money.'' Now my first instinct was, ``Send it to me'' or 
``Donate it to a wonderful charity'' in my district.''
    She asked me two questions. One was, ``How much did that 
mailing cost?'' And, second of all, ``Did the agency really 
believe it was necessary with all of the information that was 
out there? `` If she did want to send that check back, her 
comment was, ``I do not want it just to go to the General 
Treasury where it is going to be blanked away.'' She wanted it 
to go directly into Social Security. If that check is sent back 
to Social Security, does it go directly into Social Security?
    Ms. GLENN-CROFT. All right. You asked two questions, and 
let me take them one at a time.
    Ms. BROWN-WAITE. Okay.
    Ms. GLENN-CROFT. In terms of sending the $250 check back, I 
just heard this week that that was a question that had arisen. 
I am sure--and multiple times that we had gotten that question, 
and we are in the process of trying to figure out policy-wise 
what we will do if someone walks into a field office and wants 
to return that check.
    Since this is an administrative payment, if they return the 
$250, it will not go back into the trust fund. So, if that is 
the question of your constituent, will it go back into the 
trust fund, no, it will not. I assume it will go back into 
general revenue, but, again, that is my belief at this point in 
time.
    Ms. BROWN-WAITE. That was what I told her I believed, but I 
just wanted to check because----
    Ms. GLENN-CROFT. That is correct. That is correct.
    Ms. BROWN-WAITE [continuing]. She said, ``If that is the 
case, I am not sending it back.''
    Ms. GLENN-CROFT. But she can----
    Ms. BROWN-WAITE. But----
    Ms. GLENN-CROFT. She can certainly come in, and, obviously, 
by the time checks are received in the month of May, we will 
have procedures for that. It is not a new concept. We have had 
individuals walk in and return Social Security checks in the 
past, regular monthly benefit checks, so we do have a current 
process in place, but we need to make sure that it is 
applicable for these $250 checks. But, again, they will not go 
to the trust fund.
    Ms. BROWN-WAITE. Okay. And when you have that policy in 
place, if you would----
    Ms. GLENN-CROFT. We can share that.
    Ms. BROWN-WAITE. That would be wonderful. And how much did 
it cost to send this notice out?
    Ms. GLENN-CROFT. We sent out about 52 million notices. The 
notices will all be out by the end of this week. I am giving 
you rough numbers here, but it probably cost between $20 
million and $24 million in total to print and to mail those. I 
am going to say it was under 50 cents a notice.
    But the reason we do notices like this is because, if we do 
not, our field offices and 800 number will be besieged with 
calls and inquiries about these checks. So our history has 
shown that it is a more effective and actually a more economic 
approach to send out a notice when checks of this nature are 
issued.
    Ms. BROWN-WAITE. And this had been done in the past?
    Ms. GLENN-CROFT. We have done similar notices. We did 
similar notices when Part D first started. I have been with the 
agency now 30 years, started out on the frontline. We have been 
doing these kind of notices for special type of situations like 
this for years, and they are very effective. We have proven 
that this is a more economic and business-wise process to use.
    Ms. BROWN-WAITE. Mr. Chairman, would you indulge one other 
question?
    While you are putting together the new building and buying 
additional computers, software, hardware, will those computers 
work in concert with the Medicare computers at CMS because once 
Part--when the Medicare Advantage plans started saying, ``Okay. 
We will pay your Part B or we will reimburse you for your Part 
B,'' as you all know, it was a nightmare for your agency as 
well as for CMS because the computers did not talk to each 
other. Are we going to overcome this?
    Ms. GLENN-CROFT. Well, it was really a matter of exchanging 
data and the format of data and the completeness of data as we 
were trying to exchange data that CMS was sending us for this 
Part D activity. So, yes, we are going to continue to work with 
CMS so that we can share data more easily than our experience 
with Part D was, okay. Our computers talk together. It was just 
the format of the data that CMS was trying to share with us 
that, I understand, was the issue.
    Ms. BROWN-WAITE. So are you saying CMS was the problem 
because quite honestly----
    Ms. GLENN-CROFT. I never like to say any other agency is 
the problem, but we had difficulty meshing their data with 
ours, and so it was a data exchange issue, but we worked it 
through. It was not an easy problem, and I would suggest that 
maybe I could provide more clarity for that for the record for 
you.
    Ms. BROWN-WAITE. Well, you are very kind in your 
description. It was a nightmare because----
    Ms. GLENN-CROFT. Yes, it was. It was a difficult situation. 
Yes, it was, but we had difficulty with the CMS data.
    Ms. BROWN-WAITE. Okay. Thank you.
    Mr. Chairman, I yield back.
    Chairman TANNER. Thank you.
    Mr. Kind, you are recognized.
    Mr. KIND. Great. Thank you, Mr. Chairman.
    I want to thank all our witnesses for your testimony today. 
It is always very helpful and very illuminating.
    But, Ms. Glenn-Croft, let me get back to the previous line 
of questioning about the mailing of the notices. You said about 
$20 million to $24 million to notify roughly 53 million 
recipients or so. Is that right?
    Ms. GLENN-CROFT. Yes. And I might be a little high on that 
dollar amount, but it is, I would say, at least $20 million.
    Mr. KIND. Has the department gone through any other options 
of how best to notify people who have inquires? Because it is a 
little bit of a pet peeve of mine because last year, when we 
had the stimulus and rebate checks sent out, IRS sent out not 
one but two notices at a cost of almost $100 million, basically 
telling people that you do not have to file anything, you do 
not have to take any affirmative action, in fact, you do not 
have to do a thing, and you are still going to get those rebate 
checks, which is the same situation here with the Social 
Security or SSI recipients, is they do not have to take any 
affirmation action and they are still going to get economic 
recovery payments that will be going out.
    I would think that setting up some type of automated voice 
mail for people to punch 4 if you have a question about the 
economic recovery payments that will be going out and just have 
a standard response. And, if there is any further inquiries, 
you can direct them to the Web site where I am sure there is a 
more detailed explanation, they could get in touch with our 
congressional offices, and we would be happy to field some of 
these questions as well.
    You are shaking your head, so, apparently, you have thought 
through all this and----
    Ms. GLENN-CROFT. Yes. And you know what? We have basically 
done everything that you suggested. So we are thinking alike 
here.
    In addition to sending out the informational notices, 
Congressman, we have Frequently Asked Questions on our Web site 
in a very prominent location. If someone would go into SSA.gov, 
you would find prominently Q's and A's that the public could 
look at if they had questions.
    We have put a scripted message on the 800 number. So, if 
you call our 800 number, you can get all the information you 
could potentially need from listening to that script.
    We have created a pamphlet which we are putting in our 
field offices. When people visit the field offices, they can 
pick up the pamphlet. And not only is the pamphlet in field 
offices, it is in Wal-Mart stores all across the country.
    And in addition, we have specially trained our employees on 
the frontlines to answer any questions that they might get.
    So we are trying to use every means of communication so 
that the public will get answers, should they have questions 
on----
    Mr. KIND. And you still fear that without the official 
notice being mailed out, you would be overwhelmed, the system 
would be overwhelmed----
    Ms. GLENN-CROFT. Yes, we would, and we have also----
    Mr. KIND [continuing]. With inquiries and----
    Ms. GLENN-CROFT. Yes. And we found that it will cut down 
dramatically on field office visits, 800 number visits, and the 
one thing I have to say with great pride about Social Security, 
when Social Security sends a letter to the members of the 
public, they open it up and they read it. We are a trusted 
agency, and they read our notices----
    Mr. KIND. That is funny how that works.
    Ms. GLENN-CROFT [continuing]. And so it is a very effective 
approach for us.
    Mr. KIND. Mr. O'Carroll, let me ask you has the inspector 
general's office looked at this at all as far as how we can 
streamline or find some savings on notification issues like 
this as it relates to the Social Security Administration.
    Mr. O'CARROLL. Congressman, no, we have not. But what we 
are looking at is, in terms of the money that SSA was given for 
issuing these checks, that that money is being used correctly, 
and probably what a lot of people do not realize is there is a 
lot of behind-the-scenes work going into it in terms of the 
Railroad Retirement Board and the Veterans Administration are 
both sending out the same checks at the same time. And what we 
are making sure of is that SSA is working with the other 
agencies so only one check goes out. So that is most of our 
background work on it.
    Mr. KIND. Okay. All right.
    Well, Ms. Glenn-Croft, we have a June statutory deadline as 
far as the payments. Are we going to be able to meet that, or 
how is that looking?
    Ms. GLENN-CROFT. We definitely are. Actually, all checks 
will be issued in the month of May. The first checks should 
start to arrive around May 4. We have phased them out 
throughout the money. Last checks should probably be received 
no later than May 26, and we will finish processing these 
checks at least 3 weeks ahead of the statutory deadline.
    Mr. KIND. Are there any fraud or crime issues that we 
should be sensitive about with the mailing of these payments?
    Ms. GLENN-CROFT. At this point in time, I am not aware of 
any, but, obviously, should these issues arise, we will work 
with our colleagues in the IG to address them.
    Mr. KIND. Yeah, because I know last year--I think when the 
rebate checks were sent out, a lot of the Social Security 
recipients who normally do not file taxes found that someone 
else was doing it for them in order to qualify for the rebate 
checks, and that became a bit of a problem. So, hopefully, we 
have some overseers keeping an eye on any possible fraud that 
might occur. Great.
    Ms. GLENN-CROFT. And, again, we are working closely with 
our colleagues and the IG.
    Mr. O'CARROLL. Congressman, if I could just add to that, 
one, of course, you know, as we could see from the Web site, we 
have our antenna up. We are trying to ask anybody to report 
fraud, if there is anything along those lines. Hopefully, we 
will find out about it. The other thing that we are a little 
bit concerned with is that representative payees, when those 
checks are going out to them, how they are going to account for 
the $250 getting to the person that they represent, so----
    Mr. KIND. Sure.
    Mr. O'CARROLL [continuing]. We are kind of making sure that 
that will not be a vehicle for fraud. The other one that was a 
concern, too, is deceased payees in terms of that, by the time 
the checks come out, if the person dies and then the check is 
delivered to him, what is the process for reclaiming that 
money.
    Mr. KIND. So you are already looking into this, as far as--
--
    Mr. O'CARROLL. Yeah, we are looking into those, too.
    Mr. KIND [continuing]. Safeguards that can be implemented?
    Mr. O'CARROLL. Yes, sir.
    Mr. KIND. Yeah, because I think we found last year, Mr. 
Chairman, if I am not correct, that there were over $60 million 
of farm payments that went out to already deceased farmers 
under the USDA program. So that could be a major issue, 
especially when we are talking about Social Security recipients 
out there.
    Great. Well, thank you. That is all the questions I had. 
Thank you, again, for being here.
    Thank you, Mr. Chairman.
    Chairman TANNER. Thank you, Mr. Kind.
    Mr. Tiberi.
    Mr. TIBERI. Thank you, Mr. Chairman.
    Ms. Glenn-Croft----
    Ms. GLENN-CROFT. Yes.
    Mr. TIBERI [continuing]. In your written testimony, you 
mentioned various obstacles that you all have when facing--
well, that you face when you are hiring employees. You also 
mentioned a number of states have made it even more difficult 
by furloughing DDS employees. Ohio is one of those seven states 
furloughing those federally paid employees, 550 in the Columbus 
office that I represent, which has one of the worst backlogs in 
terms of processing times in the country. We all know there are 
extensive backlogs throughout our nation.
    I have three questions if you could answer the three. Can 
you please discuss the effects that the furloughs are going to 
have on the backlogs? If states are not drawing down that 
Federal money for those employees while they are on furlough, 
what is happening to that Federal money? And, finally, can you 
discuss what you all at Social Security are doing to work with 
states and local offices to resolve the furlough issue? In 
Ohio, they have been notified that they are going to be 
furloughed in July.
    Ms. GLENN-CROFT. Yes, I certainly can address those issues, 
and, obviously, that is of grave concern to us. It is my 
understanding that in Ohio--and I may have this wrong--I think 
that they are proposing 10 furlough days over----
    Mr. TIBERI. Correct.
    Ms. GLENN-CROFT [continuing]. A 2-year period.
    Mr. TIBERI. Oh, I did not know it was the 2 years.
    Ms. GLENN-CROFT. That is my understanding at this point in 
time, although the circumstances for each of the states 
continues to change.
    Mr. TIBERI. Well, those furloughs will begin in July.
    Ms. GLENN-CROFT. Yes, I think that is correct.
    Right now, there are seven states that have hiring freezes 
and five that have furlough plans, and, obviously, the 
commissioner has aggressively taken steps to work with the 
Governors of these states to try to get the Governors and the 
state Governments to exempt DDS employees from these furloughs.
    Furloughing or freezing hires really does not make any 
sense, we believe, from the state's perspective. We understand 
that oftentimes the state does make these decisions because 
they want to be equitable, to treat all state employees the 
same.
    Mr. TIBERI. But it does not save them any money.
    Ms. GLENN-CROFT. But it does not save them any money. If 
anything, they lose money by doing this. They do not get 
administrative funding, which we provide, for every day that 
they have furloughs or, you know, freezes, whatever the case 
may be. Fifteen thousand cases a day nationwide do not get 
processed and are not paid that would be allowances. Millions 
of dollars that would be paid in benefits are delayed. So this 
is really a lose-lose----
    Mr. TIBERI. What happens to the money that they are not 
drawing down? It just sits in the account?
    Ms. GLENN-CROFT. Well, it comes back, you know, into SSA's 
budget.
    Mr. TIBERI. It gets sent to Texas probably.
    Ms. GLENN-CROFT. No. No, it does not get sent to Texas.
    But we are working very hard with each of the involved 
states to try to get that exemption. Really this is a lose-
lose. The state employees lose. Your constituents in your state 
lose. Benefits are delayed. And we are paying the bills and we 
have the money and we want to keep the state employees working 
because it is just going to increase the backlog of cases that 
are out there.
    Mr. TIBERI. Can you touch on Ohio at all in terms of are 
you making any progress with the state to rescind the order?
    Ms. GLENN-CROFT. I know that we have had contacts with the 
governor. I know that we have had contacts, obviously, with the 
parent agent and the head of the DDS. I do not have any last-
minute details on that. No, I do not.
    Mr. TIBERI. Can we follow up with your office on that?
    Ms. GLENN-CROFT. I certainly can follow up on that and get 
back to you. Obviously, we would ask your help in any way that 
you could to----
    Mr. TIBERI. You bet.
    Ms. GLENN-CROFT [continuing]. Help us move that issue 
along. It is really a lose-lose situation for everybody 
involved.
    Mr. TIBERI. Well, particularly, when we are so far behind 
the national average anyway--and this has to put us, I would 
think, further behind.
    Ms. GLENN-CROFT. Absolutely. Your area is so far behind, 
especially in the hearing area, that this is just going to make 
everything worse.
    Mr. TIBERI. Mr. O'Carroll, I understand that you issued a 
report in March about the concerning effects of furloughing DDS 
employees. In your report somewhere, you mentioned the impact 
these actions will have on disability claims and the economy in 
these states. Can you expand on that?
    Mr. O'CARROLL. Yes, Congressman. One of the things we have 
been trying to do is get what we call quick response 
evaluations out, and as we saw the furloughs were coming up, we 
knew the backlogs that SSA was facing, we decided to try to 
size the issue, and what we found at the time in March was that 
five states were looking at furloughs. Since then, events have 
overtaken us. In a sense, New Jersey, I think, and Ohio now 
are. So it is seven.
    The biggest one that we looked at the hardest was 
California, and we were finding that by having the furloughs--
and I think they were doing 2 furlough days per month--so what 
we were sizing that with is that it would be about a 10 percent 
reduction in terms of people getting on to disability benefits, 
and then when we size that, we are taking a look at about 
$648,000 a month in disability benefits are not being paid 
because of the furloughs.
    So, again, if you are taking a look at Ohio on it, you 
could probably, you know, be using sort of that 10 percent 
number that we were doing or that we used on this one. You 
could see it is probably going to be in--I would say, about 
$100,000 a month.
    Mr. TIBERI. Is that available, that report?
    Mr. O'CARROLL. Yeah. I can get you that information on it, 
and I will get you the working papers where we calculated it 
for California, and I am pretty sure you can substitute Ohio 
numbers for that, but what my staff was saying--when we were 
just kind of talking about the different states and the impacts 
on it, we were talking, I think, about $100,000 to $120,000 a 
month would be the effect on Ohio.
    Ms. GLENN-CROFT. Actually, I think I have a little bit of a 
different figure. I think it is about $345,000 a month in 
administrative money that is not--a month would be lost with 
furloughs.
    Mr. TIBERI. Wow. Thank you.
    Thank you, Mr. Chairman, for your indulgence.
    Chairman TANNER. Mr. Pomeroy, you are recognized.
    Mr. POMEROY. Thank you, Mr. Chairman.
    I apologize for being in and out of this meeting. It seemed 
like I had about 14 things scheduled during this time. But I 
very much wanted to attend the hearing. I appreciate you 
convening it.
    For a start, I wanted to thank you, Mr. Chairman, for 
making sure the funds that we have been talking about in the 
stimulus package got into the stimulus package in the first 
place. I think the matter of year-in and year-out tied 
appropriations spikes relative to SSA infrastructure, critical, 
though it is, for the operation of the Social Security program, 
this funding increase to address the growing computer crisis as 
well as the crisis in backlog was absolutely central and it 
would not have happened without at the table. I was able to 
watch some of that and really admire your leadership as a 
brand-spanking-new chairman when those discussions were coming 
together.
    Chairman TANNER. The gentleman is recognized for 5 more 
minutes!
    [Laughter.]
    Mr. POMEROY. That is good.
    It has been my pleasure to know and work with Mr. Schieber 
for some time, and I have come to respect significantly his 
expertise on many retirement income security matters.
    My questions would relate, first of all, to the interaction 
between the advisory Committee for Social Security and the 
administration of the program itself. My reference point is the 
IRS advisory Committee, which I am not sure if you are familiar 
with. They have a fairly, I think, robust level of interaction 
and have been extremely helpful to the oversight Committee in 
terms of watching IRS governance. Would you--is your 
relationship with SSA similar to the IRS and their advisory 
Committee, or is it dialog less well developed?
    Mr. SCHIEBER. Well, I certainly do not know the inner 
workings of the IRS relationship.
    Mr. POMEROY. Yes, understood.
    Mr. SCHIEBER. In our case, we meet on a regular basis with 
the commissioner and with many other senior managers from 
Social Security as we look into various aspects of these 
issues. We hope we are helping. I am sure that from time to 
time when we issue reports, they wish we had been focusing on 
the moon program or something else. But we have had very 
cordial relations with most of the people that we have 
interacted with, and we have tried to be as supportive and 
directive as we can, understanding that we are an advisory 
board and, you know, we are not a management oversight 
Committee in any way, shape, or form.
    Mr. POMEROY. I think the role of an advisory Committee can 
be incredibly helpful. We, obviously, have the tremendous 
resources and expertise within SSA, but a third-party look, 
bringing expertise to that look, is helpful. We tend to be 
quite generalist in our backgrounds, even though I have been on 
this Subcommittee for several years.
    Mr. SCHIEBER. And have a much broader set of issues to deal 
with than our narrowly focused group.
    Mr. POMEROY. And especially when it comes to operation as 
opposed to philosophical design of the program.
    Mr. SCHIEBER. Right, right, right.
    Mr. POMEROY. In other words, how is it working? What do we 
need? So, in that regard still, I mean, I think your testimony 
today is as close to a witness setting his hair on fire in 
front of us as you are going to find, and you better not do 
that. You cannot afford----
    Mr. SCHIEBER. No, I do not have that much to--it would not 
be a big fire.
    [Laughter.]
    Mr. POMEROY. But there is urgency on this computer issue.
    Mr. SCHIEBER. I believe there is.
    Mr. POMEROY. For the last several years, I have been 
obsessing on ALJs. I believe that failure to address it in a 
timely way----
    Mr. SCHIEBER. I agree.
    Mr. POMEROY [continuing]. Led to a horrible diminishment 
of----
    Mr. SCHIEBER. I saw your hair close to being on fire when 
they----
    Mr. POMEROY. Yes. I so miss Stephanie Tubbs-Jones because, 
by golly, no one has set their hair on fire better than her. 
But I believe that she would be highly energized by what you 
told us today. I am as well.
    I think we need to get this across not just the panel, 
which I am sure shares your concerns, but we need to somehow--
if there is some role that this Committee can play in cranking 
up the urgency, and you offered at the end of your testimony to 
have a more vigorous level of interaction, advisory Committee 
and SSA management. You know, I applaud the director of SSA, 
the administrator, for essentially being the first to really 
call this to our attention.
    Mr. SCHIEBER. Absolutely.
    Mr. POMEROY. It was in much worse shape than I had any 
idea, again having long been a Member of this Subcommittee.
    Mr. SCHIEBER. We were totally shocked when he brought it to 
our attention last November.
    Mr. POMEROY. So it is a shared concern. This is not you----
    Mr. SCHIEBER. Correct.
    Mr. POMEROY [continuing]. Telling him everything is 
horrible and they are saying everything is great. It is a 
shared concern. But maybe we can pool resources to really 
identify this as the highest priority and getting it up and 
running. I applaud the----
    Mr. SCHIEBER. One----
    Mr. POMEROY. Yeah. Go ahead, Syl.
    Mr. SCHIEBER. One of the things that--you go back and you 
look at the original act that created Social Security as an 
independent agency back in 1994. It required that the 
commissioner put together an annual budget that reflected the 
resources that would be needed for the commissioner and the 
agency to do the work that they have unfolding on their plate.
    That budget is regularly prepared, and it is submitted to 
OMB, and there are discussions between OMB and the commissioner 
on that budget, and it enlightens the process of developing the 
President's budget that is ultimately submitted to the 
Congress, but, by the time that budget gets to Capitol Hill, it 
is a singular number embedded in the President's budget.
    Now my guess is that singular number in all those pages of 
documents is not very informative. We have not had great detail 
on all of the matters that are actually embedded in the 
commissioner's budget from year to year and my guess is you 
have not either. If we want to begin to understand the 
resources they really need, then somewhere there needs to be a 
viewing of that budget on the part of some of the other players 
involved.
    Mr. POMEROY. That is absolutely correct.
    Ms. Glenn-Croft, could you speak to that?
    Ms. GLENN-CROFT. I would be glad to. I would have to say 
under this commissioner that this commissioner is a very 
collaborative commissioner. He is a very transparent 
commissioner, and I would say since he came in the spring of 
2007 that we have spent more time working with Hill staff, 
communicating with Hill staff on our budget needs than I 
believe has ever historically been done.
    Mr. POMEROY. I think that is good, but I remember, you 
know, like on an oversight Subcommittee, I would have the 
advisory Committee budget and some text of what they had 
recommended. You know, I have never seen any of that from the 
advisory Committee. I am not suggesting that is anybody's 
fault. I just think more information from the advisory 
Committee analysis----
    Ms. GLENN-CROFT. I----
    Mr. SCHIEBER. We----
    Mr. POMEROY [continuing]. And comment and review of the 
budget would be helpful.
    Mr. SCHIEBER. We have not had the kind of detail that would 
allow us to prepare that sort of document. This is not in any 
way, shape, or form an implication that the current 
commissioner is not forthcoming. He has been remarkably 
forthcoming and, I think, is doing a tremendous job. Anything I 
said here today should not be considered----
    Mr. POMEROY. I understood it that way. I think he is doing 
a good job, too.
    I see in a PowerPoint--and I know my time is up, so I need 
to hurry--prepared by SSA for a staff briefing in October of 
2008 talking about 3 to 5 years out of electrical capacity on 
the data center floor. I mean, we are talking about the thing 
literally maxing out.
    Now I know that you have shifted functions into new 
facilities to some extent, rewired some other things, but I am 
telling you this sounds a little bit piecemeal for the Social 
Security system of the United States of America. I mean, it 
really does seem as though we are up against it in terms of an 
appalling deficiency in terms of state-of-the-art 
infrastructure to administer a program so critically important 
to the financial security of so many millions of Americans.
    Ms. GLENN-CROFT. And we take that responsibility very 
seriously, but, really, if I could have just a minute, I really 
would like to leave this hearing with making clear just really 
where we stand with this situation.
    It is true that we probably are going to run out of 
electrical capacity to be able to plug in those servers, let's 
say, sometime in 2012 or 2013. And we could extend and put in 
more electrical capacity in the NCC, but we are not going to 
need to do that. We have Durham that is coming up. Durham will 
be able to take on additional work by that point in time.
    So the issue of the electrical capacity, because of Durham 
coming up, is really becoming less and less of an issue all the 
time. Again, I want to reiterate we believe that we can keep 
the NCC going an indefinite period of time through preventative 
maintenance, regular maintenance. We believe that we can keep 
it up until the computer center is built.
    Mr. POMEROY. Well, I appreciate that, but, I mean, I looked 
at some pictures of some of the wiring coming into that 
building, and I know that that--I have not toured the facility, 
so, I mean, you cannot draw too much from that. But I believe 
the will of Congress is reflected in the $500 million dedicated 
to this project, put into the stimulus by the chairman with the 
support of the membership.
    I do not think making do, getting by, Scotch tape, and 
bailing wire is the way we need to treat the electronic 
infrastructure for the Social Security program of this country, 
and I think that Congress has made a decisive commitment of 
resources to get on with it. I mean, I would look for a robust 
level of interaction, advisory Committee, Social Security 
Administration, and this Committee in terms of making sure we 
keep this on task as the highest priority.
    I hope, Mr. Chairman, we will be meeting regularly on this. 
I have something more than ALJs to obsess about now.
    [Laughter.]
    Ms. GLENN-CROFT. Okay.
    Mr. POMEROY. Thank you very much.
    Ms. GLENN-CROFT. We will do that.
    Chairman TANNER. Thank you, Mr. Pomeroy.
    I want to again thank all the witnesses for this and to 
tell you that we may well have another hearing sooner rather 
than later to see how we are coming along because of all the 
concerns that all of the Members have expressed with regard to 
this situation.
    Let me ask one other question, if I could, Mr. Hewell. As 
the Administration tries to acquire space for more hearings to 
address the backlog, we are running into some problems from GSA 
being able to acquire some of this space in a timely fashion, 
sometimes as much as 2 years. Could you look into that for us? 
I mean, I know most of us rent from GSA back in our districts, 
and I might say if their rent is like mine, it is not a matter 
of you not having the resources to----
    [Laughter.]
    Chairman TANNER. No, I am kidding. But, seriously, it is 
taking an extraordinarily long period of time to acquire some 
of this space, so we are told.
    Mr. HEWELL. We will get you----
    Chairman TANNER. Up to 2 years.
    Mr. HEWELL [continuing]. Information on that.
    Chairman TANNER. Yes.
    Mr. HEWELL. I do not have it with me, and I would not want 
to get the facts wrong
    Chairman TANNER. Well, if you could respond to facilitate 
this, because that is exactly what the recovery bill was 
intended to do, is try to address some of these problems that 
are real. When people are dying before they can get a hearing 
because of the backlog, sometimes over a year, that is a pretty 
sad commentary on our ability to function as an efficient 
Government.
    So, anyway, thank all of you. We may be back in touch, and 
if there are any questions we may submit, we may ask that you 
entertain those in a timely fashion.
    If not, the meeting is adjourned. Thank you.
    [Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]
    [Questions for the Record follow:]

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    [Submissions for the Record follow:]

Statement in Support of HR322
May 4, 2009
    There are over 30,000 grandparents like us in Arkansas who are 
raising grandchildren. We have been forced to return to work in order 
to provide for our new families.
    HR322 will help us tremendously. Currently, I am working as an 
adjunct for two Arkansas universities but because of the earnings 
limits on Social Security I can only teach 8 classes a year. My wife is 
disabled, so she is unable to work.
    If the earnings limitation is eliminated I can teach more classes 
and adequately provide for my family.
    I am presently in a doctoral program and hope to complete it in 
2011. At that time I should be in a position for a fulltime faculty 
position. Also, I will be 66 and the earnings limit will not apply.
    In the meantime, I need for HR322 to pass this year so I can teach 
more classes until I finish my doctorate.
    My thanks to Congressman Gene Green (TX) for his sponsorship of 
this tremendously important bill.
    I encourage you to pass this bill as soon as possible. It has long 
reaching benefits for grandparents raising grandchildren.
    The passage of HR322 also increases tax payments to the Treasury 
and additional payments to the Social Security system.
    This is a win-win piece of legislation.

    Dale and Linda Walker
                                 

To the Ways and Means Chairperson:

    This is in response to Social Security Disability Appeals. I have 
applied to disability since Feb. 2007 and have been awaiting for a 
hearing with ALS Judge for a review. Due to the long waiting process it 
has caused applicants to lose all health benefits and become homeless 
due to such waiting periods. I propose to SSA that when people apply 
for disability that they be granted approval upon request to receive 
disability payments and Medicare benefits at time of applying. If 
applicants aren't eligible or approved for these benefits then SSA can 
take these benefits back at age 62 or 65 when they receive social 
security. By this process, we cut health care costs, homelessness, and 
relieve the burden that currently hampers social security 
administration to be more effective in there day to day operations of 
serving the people. I myself have been out of work due to medical 
illness and continue to wait on appeal process causes me to suffer 
daily due to no insurance and having to go into foreclosure on my home. 
So please I insist that this committee work more efficient to resolve 
these social security cases.

Thank You,

Larry S. Stoudemire
                                 

    Chairman Tanner, Congressman Johnson, Members of the Subcommittee 
on Social Security: This hearing was called for the purpose of 
reviewing the progress made by the Social Security Administration (SSA) 
and other involved agencies in appropriately using the resources 
allocated by the American Recovery and Reinvestment Act of 2009 (ARRA). 
The National Association of Disability Examiners (NADE) appreciates 
this opportunity to submit comments on this important subject and we 
commend the Subcommittee for its continuing oversight of this important 
issue.
Who We Are
    NADE is a professional association whose purpose is to promote the 
art and science of disability evaluation. The majority of our members 
work in the State Disability Determination Service (DDS) agencies 
adjudicating claims for Social Security and/or Supplemental Security 
Income (SSI) disability benefits. As such, our members constitute the 
``front lines'' of disability evaluation. However, our membership also 
includes SSA Central and Regional Office personnel, attorneys, 
physicians, non attorney claimant representatives, and claimant 
advocates. It is the diversity of our membership, combined with our 
extensive program knowledge and ``hands on'' experience, which enables 
NADE to offer a perspective on disability issues that, we believe, is 
both unique and reflective of a programmatic realism.
    NADE members--throughout the DDSs, SSA Regional Offices, SSA 
Central Office, ODAR offices and throughout the private sector, are 
deeply concerned about the integrity and efficiency of the Social 
Security and the SSI disability programs. Simply stated, we believe 
those who are entitled to disability benefits under the law should 
receive them; those who are not, should not. Decisions on disability 
claims should be reached in a timely, efficient and equitable manner. 
The continuing backlogs in disability claims are an embarrassment to 
all of us within the disability program as is the length of time 
claimants wait for a decision. Our embarrassment, however, is nothing 
compared to the nightmare experienced by those waiting for a decision. 
A large portion of the monies allocated in ARRA was to aid SSA's 
efforts to significantly reduce the backlogs of disability claims and 
improve the timeliness of its decisions on these claims.
The Issue
    The American Recovery and Reinvestment Act of 2009 provided nearly 
$1.1 billion to the Social Security Administration. Included in this 
amount were $500 million for a new National Computer Center and an 
additional $500 million for new staff and supporting infrastructure to 
help the Agency deal with a backlog of claims while also assisting the 
Agency in the processing of an expected increase in the number of 
claims for disability and retirement benefits.
    NADE members are very appreciative of this renewed support Congress 
has provided to SSA, especially after nearly two decades of less than 
adequate financial support that left the Agency ill prepared to handle 
the growing number of claims. The recognition by Congress of the 
critical need for adequate resources at SSA, and the willingness 
demonstrated by Congress to accept a leadership responsibility on this 
matter, has resulted in vital funding urgently needed for SSA. We 
greatly appreciate the support for funding at a level above the 
President's proposed FY 2009 budget and for the $1.092 billion in 
funding included for SSA in the American Recovery and Reinvestment Act 
of 2009. We hope you will also support the President's FY 2010 Budget 
Request of $11.6 billion for SSA's administrative expenses.
    Having provided these funds, it is only to be expected that 
Congress would exercise its oversight authority to insure that these 
funds are spent appropriately and that the problem of backlogged claims 
and lengthy waiting times is resolved. NADE has confidence in the 
current leadership at SSA to apply these monies as directed by the 
legislation and also by a decision making process that is fully aware 
of the problems and the need for requisite resources to address these 
issues. We will not address the spending issue as that is a 
responsibility for which other witnesses appearing before this 
subcommittee have greater knowledge. However, while it is too early to 
determine if the new funding will aid in the resolution of the issues 
for which the funds were appropriated, NADE members are confident that 
these monies will have their desired impact.
    SSA is facing an unprecedented backlog of more than 1.3 million 
claims for Social Security and Supplemental Security Income disability 
benefits. This backlog of claims is particularly problematic at the 
hearings stage, where the backlogs have more than doubled since 2000--
from about 310,000 claims to more than 765,000--and the average waiting 
time per claim has soared to over 500 days. At the DDS level, the 
average processing time for an initial claim has risen from less than 
40 days two decades ago to nearly 100 days in the past year. Not 
coincidentally, this increase in processing times and backlogs have 
occurred simultaneously with congressional budgets that included less 
funding for SSA than what numerous Commissioners of Social Security and 
other witnesses, including this Association, have testified was 
absolutely necessary for the Agency.
    Presidents requesting less money than SSA indicated it needed and 
Congresses appropriating even less money than the President requested 
for SSA must share in the responsibility for the current crisis with 
Agency managers who sought to downsize SSA to utilize precious 
financial resources in other areas rather than filling vacant 
positions. Now the situation is reversed and the President and Congress 
recognize that SSA must have the requisite staff and supporting 
infrastructure to process the growing number of claims. However, just 
as the current crisis did not occur overnight, it will not be resolved 
overnight.
Addressing the Issues
    SSA has immediately taken action to begin the hiring of new staff 
at its Field Offices, in its hearing offices and in its supporting 
offices. Concurrently, the state DDS have been given funding for new 
hires. All total, SSA projects it will hire 7000 new employees in this 
fiscal year. This level of hiring will tax the Agency's resources to 
adequately train these new personnel but, once trained and allowed to 
become proficient in their jobs, these new personnel are expected to 
make a positive impact on the Agency's ability to process the growing 
number of disability and retirement claims that is expected to continue 
flooding the Agency.
    Hiring these new personnel is a critical first step. The ability to 
recruit the best and brightest, to hire, and then train these 
personnel, is a process that will take some time. In addition, new 
employees are not expected to have an immediate impact on current or 
backlogged claims as they must be allowed sufficient time to become 
proficient in the performance of their work duties and 
responsibilities. In addition, current staff must be allocated to 
provide the requisite training and mentoring of new staff. This reduces 
the amount of time experienced personnel will have to process their own 
work, thereby reducing their productivity in the short term. However, 
we firmly believe positive benefits are to be gained from the funding 
provided by ARRA and will be fully realized in a matter of 2-3 years.
    SSA and the DDSs will have to invest heavily in staff retention in 
future years. Both are facing a massive retirement wave and, prior to 
the onset of the current economic downturn, both were reporting heavy 
staff turnover (15 percent in the DDSs) due to low salaries and 
increasing job stress.
Why Is It Important to Provide Increased Funding for SSA?
    NADE believes SSA's ability to provide timely customer service is 
critical. No other agency in Government has the potential to impact so 
many people and the vast majority of Americans will judge the 
Government's ability to serve their needs based on how effective and 
how efficient SSA is able to meet their needs. SSA is America's 
``Window'' to its Government. It can ill afford to fail in its mission 
and must be provided with the resources necessary for the Agency to 
achieve its mission in a timely manner. The growing complexity of the 
Social Security and SSI Disability Programs, coupled with the need to 
produce a huge volume of work, justifies even more the need for 
adequate resources in order to provide the service that the American 
public has come to expect and deserves from SSA.
    In FY 2008, Congress appropriated more money for SSA's 
administrative budget than the President had requested, marking the 
first time in 15 years Congress had acted so favorably. At the time 
Congress took this action, a former Chairman of this Social Security 
Subcommittee offered the observation that constant under-funding of the 
disability program by the Congress over the past two decades had 
contributed heavily to the current crisis. We do not dispute such 
wisdom! We do believe, however, that the congressional action of FY 
2008 and the additional funding provided for SSA in the ARRA of 2009 
are the first steps in a long road back to management stability for 
SSA. It now falls to SSA, and its components, to utilize these funds 
for actions that will produce the desired outcome.
State Furloughs of DDS Personnel
    The best intentions of Congress in appropriating increased funding 
for SSA to deal with its backlogs of claims and to process the growing 
number of new claims is being undermined in many states by Governors 
who, faced with their own budget crises, have implemented furloughs for 
their state employees and hiring freezes for all state agencies. NADE, 
and other witnesses appearing before this Subcommittee, have previously 
pointed out that many of these states have adopted these actions 
unilaterally, failing to provide an exemption for DDS employees, who 
are 100 percent federally funded and who have no impact on any state's 
budget problems.
    These actions fly in the face of the positive actions taken by this 
Congress to appropriate funds to resolve the crises of backlogged 
claims at SSA and lengthy waiting times for applicants. In spite of 
numerous requests from the Commissioner of Social Security, from 
Members of Congress and from the media, the Governors have not backed 
off of their decisions, either because they don't want to treat one set 
of state employees differently from any other or because they simply 
refuse to acknowledge the absurdity of their actions. These actions not 
only punish DDS employees (since furloughing DDS employees does not 
save any state any money, there can be no other reason to furlough 
these employees other than to punish them for being state employees) 
but remove a key investment in America's economic recovery. More 
importantly, such actions by these Governors to furlough DDS employees 
and to reduce and/or eliminate the DDSs ability to hire new staff will 
only enhance the growth of the backlogs of disability claims, add to 
the processing time of current claims and remove from the workforce the 
opportunity for many citizens to obtain much needed jobs. How 
Governors, when their actions otherwise have no positive benefit to 
resolving their state budget crises, can maintain such insensitivity to 
the needs of their own citizens, is beyond reason.
    Recent data has shown applications for initial disability claims 
have, not surprisingly, increased by 10 percent since the beginning of 
this fiscal year. Each week, the number of initial claim filings has 
increased from the week before and the number of new claims in calendar 
year 2009 is up 13.7 percent. The actions to furlough DDS employees and 
to reduce or eliminate the DDS' ability to hire new staff have the 
effect of reducing the size of the workforce processing these claims or 
reducing the hours available for the workforce to process these claims, 
thereby reversing the action taken by Congress to address the crisis in 
backlogs and lengthy processing times. If these state actions are not 
abated, then the disabled citizens seeking benefits will almost 
certainly face the prospect of even longer processing times and 
extended appeal times.
    The current level of furloughs of DDS personnel is estimated to 
cost the States $7.8 million in administrative funding paid to them by 
SSA. How can losing money save money? The current level of furloughs of 
DDS personnel is also estimated to delay the processing of 15,000 
claims and the payment of $4.2 million in benefits each month! How can 
Governors continue to justify their actions?
    We call upon Congress to intercede on behalf of all state employees 
who are 100 percent federally funded. We recognize difficult times 
require difficult decisions but difficult times do not require 
foolhardy decisions.
Program Integrity Issues
    Limited resources in recent years have forced SSA to reduce the 
number of Continuing Disability Reviews (CDRs) performed. Of concern to 
NADE is the past history similar actions have had as the agency fell 
behind in these critical reviews. When a backlog of CDRs occurred 
previously it took several years of dedicated funding and a tremendous 
effort by SSA and DDS staff before SSA was, again, current with CDR 
reviews. With the decrease in the number of CDR reviews done in the 
past few years, there is now a real danger the Agency will, once again, 
find itself in the position of having backlogs of overdue CDRs. Thus, 
it is possible the Agency will work itself out of one backlog into 
another.
    While there are increased administrative costs (including the 
purchase of medical evidence, claimant transportation costs and 
increased utilization of contract medical consultants) with the 
performance of CDRs, there is a potential for significant savings in 
program costs with the elimination of benefits paid to beneficiaries 
who are found to be no longer eligible for disability benefits due to 
no longer meeting the SSA Disability program requirements. A recent 
estimate by GAO revealed that, for every $1 in administrative cost 
spent on conducting CDRs, nearly $15 of program funds was saved. This 
data was significantly higher than the historical ratio of 10-1 
savings. Regardless of which statistic has current validity, there are 
significant savings to be realized if SSA can remain current on CDRs. 
It is essential to program integrity that CDR reviews be conducted in a 
timely manner to ensure that only those who continue to be eligible are 
receiving disability benefits.
    Anti-fraud efforts such as the Cooperative Disability Investigative 
(CDI) units which effectively utilize the strengths and talents of 
SSA's Office of Inspector General (OIG), local law enforcement, and 
disability examiners, offer a visible and effective front-line defense 
for program integrity and serve as a visible and effective deterrent to 
fraud. SSA's Inspector General attributed the success of the CDI units 
to investigate fraud allegations to the efforts of ``. . . those most 
qualified to detect fraud--DDS adjudicators.'' NADE supports the 
continued expansion of the CDI units to combat fraud and abuse in the 
disability program.
5 Month Cash Benefit Waiting Period and 24 Month Medicare Waiting 
        Period
    It is important to note that persons found disabled under Title II 
of the Social Security Disability Act must complete a full five month 
waiting period before they can receive cash benefits. So, a disability 
allowance decision, even when it is processed quickly, will not resolve 
the issue of having to wait five full calendar months before the 
claimant receives any cash benefits. NADE believes this five month 
waiting period is a gross inequity to American citizens with 
disabilities.
    Likewise, we are deeply concerned about the hardship the 24 month 
Medicare waiting period creates for these disabled individuals, and 
their families, at one of the most vulnerable periods of their lives. 
Social Security disability beneficiaries have serious health problems 
and limited access to health insurance. Many cannot afford private 
health insurance due to the high cost secondary to their pre-existing 
health conditions. Since earlier medical intervention could help many 
disabled individuals return to work, NADE supports the elimination of 
the Five Month Waiting Period for Cash Benefits and the 24 Month 
Waiting Period for Medicare eligibility.
Summary
    The operational challenges facing SSA are substantial and are 
expected to become even more acute in the coming years as our society 
ages, as baby boomers continue to prove the actuaries correct regarding 
their forecasts of the baby boomers most disability prone years, as the 
economy continues to offer periodic setbacks, etc. Decades of 
inadequate resources for SSA, combined with increased workloads and 
less than desirable results from multiple redesign efforts, have not 
only caused backlogs in the number of disability claims pending at the 
initial and hearing levels, but has allowed existing backlogs to 
increase. Processing time, expected to decline with the introduction of 
new technology has, instead, increased due to insufficient resources in 
personnel.
    Recent increases in funding for SSA's administrative budget and 
additional funding provided through the American Recovery and 
Reinvestment Act of 2009 can be expected, in the years ahead, to 
produce significant reductions in, or elimination of, SSA's backlogged 
claims and lead to improvements in processing times at all levels. 
However, this new funding cannot, and will not, overnight, make up for 
mistakes of the past. The need to hire, train and deploy new staff will 
take several years before any realistic expectation that they will 
contribute significantly toward efforts to reduce the backlogs of 
claims.
    No amount of planning by SSA or Congress can reverse the negative 
impact on production and processing times caused by state hiring 
freezes and furloughs of state employees which also affect DDS 
personnel. Congress must support the Commissioner's efforts to force 
the states to exempt DDS employees, who are 100 percent federally 
funded, from such actions.
    The crisis of backlogged disability claims, while a significant 
problem, cannot be used as a reason to abandon program integrity 
initiatives. It remains critically important that the public's 
confidence in the disability program not only be restored but 
maintained.
    A lot of effort has been made to improve the speed at which 
disability claims are processed and to eliminate/reduce the backlogs of 
claims. NADE agrees improvements are needed and we support recent 
initiatives, such as the Compassionate Allowance (CAL) initiative and 
the Quick Disability Determination (QDD) initiative. However, the 5 
month waiting period for cash benefits and the 24 month waiting period 
for Medicare eligibility negate the positive impact of faster 
processing times and reduced backlogs. These waiting periods should be 
eliminated.
    No other agency has a greater impact on the quality of life in this 
nation and the American public will judge the ability of their 
Government to meet their needs almost solely by the quality of service 
provided by SSA. Social Security can and must do better in fulfilling 
its promise to America and NADE stands ready, willing, and able to 
assist in fulfilling that promise. People with disabilities, already 
burdened by the challenges of their illness/injury, are often in 
desperate need of benefits to replace lost income. They deserve, and 
should receive, timely and accurate decisions through a fair and 
understandable process. Our challenge, and one which must be met, then 
is to ensure the disability determination and appeals process meets 
those criteria.
    We commend the Subcommittee for exercising its oversight authority 
and we look forward to working with the Subcommittee to achieve the 
goals we have outlined in this statement.
Exhibit I--Furlough Status of State DDSs


         Status of Furlough/Hiring Freeze by DDS--as of 4/28/09
------------------------------------------------------------------------
                                        Hiring Freeze
       DDS          Furlough Status        Status            Remarks
------------------------------------------------------------------------
Alabama           No furlough         DDS exempt from
                                       state hiring
                                       freeze
------------------------------------------------------------------------
Alaska            No furlough         Hiring freeze
                                       but DDS exempt
------------------------------------------------------------------------
Arizona           Furlough but DDS    Hiring freeze
                   exempt              but DDS exempt
------------------------------------------------------------------------
Arkansas          No furlough         No hiring freeze
------------------------------------------------------------------------
California        Furlough in place   DDS exempt from   All DDS
                                       state hiring      employees
                                       freeze            furloughed 2
                                                         days per month--
                                                         started in
                                                         February 2009.
                                                         Employees will
                                                         earn one ``self-
                                                         directed''
                                                         furlough leave
                                                         day per month,
                                                         which allows
                                                         employees
                                                         personal
                                                         discretion when
                                                         to use their
                                                         furlough leave.
                                                         Also per the
                                                         agreement,
                                                         employees must
                                                         use the earned
                                                         leave furlough
                                                         leave by July
                                                         1, 2012.
                                                         Employees will
                                                         also have their
                                                         pay reduced by
                                                         4.62 percent
                                                         per month
                                                         through June
                                                         2010.
------------------------------------------------------------------------
Colorado          Considering         Hiring freeze     Possible
                   furloughs, DDS      but DDS exempt    furlough of DDS
                   not likely exempt                     employees up to
                                                         2 days per
                                                         month (next
                                                         state FY)
------------------------------------------------------------------------
Connecticut       Administrator took  Hiring freeze
                   one voluntary       but DDS exempt
                   furlough day. The
                   governor extended
                   the request for
                   voluntary
                   furloughs to all
                   state employees
                   through June 1
------------------------------------------------------------------------
Delaware          No furlough         Hiring freeze     The Delaware
                                       but DDS exempt    governor has
                                                         proposed an 8
                                                         percent across
                                                         the board pay
                                                         cut and an
                                                         increase in the
                                                         employee share
                                                         of health
                                                         insurance
                                                         premiums,
                                                         effective July
                                                         1st. The net
                                                         effect is
                                                         approximately a
                                                         10 percent
                                                         decrease in
                                                         employee take
                                                         home pay. The
                                                         Governor has
                                                         stated that he
                                                         is proposing
                                                         this to avoid
                                                         furloughs.
------------------------------------------------------------------------
District of       No furlough         No hiring freeze
 Columbia
------------------------------------------------------------------------
Florida           No furlough         No hiring freeze
------------------------------------------------------------------------
Georgia           Furlough but DDS    Hiring freeze
                   exempt              but DDS exempt
------------------------------------------------------------------------
Hawaii            Considering         Hiring freeze
                   furloughs but DDS   but DDS exempt
                   likely exempt
------------------------------------------------------------------------
Idaho             Furloughs but DDS   Hiring freeze
                   exempt              but DDS exempt
------------------------------------------------------------------------
Illinois          No furlough         No hiring freeze
------------------------------------------------------------------------
Indiana           No furlough         Hiring freeze     Several
                                       for DDS           positions
                                                         ``deactivated,'
                                                         ' including 30
                                                         disability
                                                         examiners.
                                                         These positions
                                                         are temporarily
                                                         eliminated and
                                                         would require
                                                         ``reactivation'
                                                         ' to be filled
                                                         again.
------------------------------------------------------------------------
Iowa              No furlough         Hiring freeze
                                       but DDS exempt
------------------------------------------------------------------------
Kansas            No furlough         Hiring freeze     ``Soft'' freeze--
                                                         hiring is
                                                         restricted but
                                                         occurs as
                                                         warranted. DDS
                                                         hired 75
                                                         percent of
                                                         positions.
------------------------------------------------------------------------
Kentucky          No furlough         Hiring freeze
                                       but DDS exempt
------------------------------------------------------------------------
Louisiana         No furlough         Hiring freeze     DDS hiring
                                                         freeze but
                                                         given a limited
                                                         number of
                                                         hires.
------------------------------------------------------------------------
Maine             No furlough         Hiring freeze
                                       but DDS exempt.
------------------------------------------------------------------------
Maryland          Furloughs in place  Hiring freeze     Furlough between
                                       but DDS exempt    2 and 3 days
                                                         depending on
                                                         salary.
------------------------------------------------------------------------
Massachusetts     Furloughs in place  Considering a     Furloughing 3
                                       hiring freeze     days for DDS
                                       and DDS not       managers. Most
                                       likely exempt     are going to
                                                         work the days
                                                         and be
                                                         compensated
                                                         after
                                                         retirement.
                                                         They can also
                                                         work without
                                                         pay. Hiring cap
                                                         RO successful
                                                         in getting the
                                                         cap lifted for
                                                         DDS disability
                                                         examiner
                                                         positions.
------------------------------------------------------------------------
Michigan          No furlough         No hiring freeze  Furlough may be
                                                         possible in
                                                         2010.
------------------------------------------------------------------------
Minnesota         No furlough         No hiring freeze
------------------------------------------------------------------------
Mississippi       No furlough         No hiring freeze
------------------------------------------------------------------------
Missouri          No furlough         No hiring freeze
------------------------------------------------------------------------
Montana           No furlough         No hiring freeze
------------------------------------------------------------------------
Nebraska          No furlough         No hiring freeze
------------------------------------------------------------------------
Nevada            Considering         Hiring freeze
                   furloughs but DDS   but DDS exempt
                   likely exempt
------------------------------------------------------------------------
New Hampshire     No furlough         Hiring freeze     Staffing CAP in
                                       but DDS exempt    DDS
------------------------------------------------------------------------
New Jersey        DDS employees       No hiring freeze
                   exempt from
                   furlough
------------------------------------------------------------------------
New Mexico        No furlough         Hiring freeze
------------------------------------------------------------------------
New York          Considering         Hiring freeze
                   layoffs that        but DDS exempt
                   would include DDS
                   employees
------------------------------------------------------------------------
North Carolina    Furloughs just      Hiring freeze     DDS hiring is
                   ordered by the                        considered on
                   Governor.                             case-by-case
                   Questionable as                       situation (some
                   to whether DDS is                     DDS hires have
                   exempt.                               been approved)
------------------------------------------------------------------------
North Dakota      No furlough         No hiring freeze
------------------------------------------------------------------------
Ohio              Furlough to take    Hiring freeze     State announced
                   effect on July      but DDS exempt    furloughs to be
                   2009.                                 effective 7/09.
                                                         All DDS
                                                         employees
                                                         expected to be
                                                         furloughed 10
                                                         days over 2
                                                         state FYs.------------------------------------------------------------------------
Oklahoma          No furlough         No hiring freeze
------------------------------------------------------------------------
Oregon            Furlough in place   Hiring freeze     Furlough for
                                       but DDS exempt    management
                                                         staff from 2 to
                                                         4 days
                                                         depending on
                                                         salary range.
                                                         Furloughs
                                                         expected for
                                                         represented
                                                         staff but the
                                                         number of days
                                                         has not been
                                                         finalized.
                                                         Governor is
                                                         proposing 26
                                                         furlough days.
------------------------------------------------------------------------
Pennsylvania      No furloughs        Hiring freeze     All out of state
                                       but DDS exempt    travel
                                                         restricted.
------------------------------------------------------------------------
Puerto Rico       Layoffs planned     Hiring freeze
                   but DDS likely      but DDS exempt
                   exempt.
------------------------------------------------------------------------
Rhode Island      No furlough         DDS exempt from
                                       state-wide
                                       hiring freeze
------------------------------------------------------------------------
South Carolina    Considering         Considering
                   furloughs but DDS   hiring freeze
                   likely exempt       but DDS likely
                                       exempt
------------------------------------------------------------------------
South Dakota      No furlough         Hiring freeze     DDS hiring is
                                                         considered on
                                                         case-by-case
                                                         situation (some
                                                         DDS hires have
                                                         been approved)
------------------------------------------------------------------------
Tennessee         No furlough         Hiring freeze
                                       but DDS exempt
------------------------------------------------------------------------
Texas             No furlough         No hiring freeze
------------------------------------------------------------------------
Utah              No furlough         Hiring freeze
                                       but DDS exempt
------------------------------------------------------------------------
Vermont           Considering         No hiring freeze  Staffing CAP in
                   furloughs, DDS                        DDS
                   not likely exempt
------------------------------------------------------------------------
Virginia          No furlough         DDS exempt from
                                       state-wide
                                       hiring freeze
------------------------------------------------------------------------
Washington        No furlough         Hiring freeze
                                       but DDS exempt
------------------------------------------------------------------------
West Virginia     No furlough         Temporary         Hiring
                                       restriction on    restriction
                                       hiring through    maybe extended
                                       6/30/09.          through 9/30/
                                                         09. Also, all
                                                         personnel
                                                         actions
                                                         (including
                                                         promotions) in
                                                         the State are
                                                         not being acted
                                                         upon until
                                                         further
                                                         guidance is
                                                         received by the
                                                         governor.
------------------------------------------------------------------------
Wisconsin         No furlough         Hiring freeze
                                       for DDS
------------------------------------------------------------------------
Wyoming           No furlough         DDS likely
                                       exempt from
                                       state-wide
                                       hiring freeze
------------------------------------------------------------------------

                                  
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