    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

                              USE OF TECHNOLOGY TO
                         IMPROVE THE ADMINISTRATION OF
                    SSI'S FINANCIAL ELIGIBILITY REQUIREMENTS

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

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                     of the

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

                          ONE HUNDRED TWELFTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 25, 2012

                                   __________

                              Serial No. 112-HR15

                                   __________

             Printed for the use of the Committee on Ways and Means

                                   ----------
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    78-762 PDF                       WASHINGTON : 2013

    For sale by the Superintendent of Documents, U.S. Government Printing
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                          COMMITTEE ON WAYS AND MEANS

                         DAVE CAMP, Michigan, Chairman

    WALLY HERGER, California             SANDER M. LEVIN, Michigan
    SAM JOHNSON, Texas                   CHARLES B. RANGEL, New York
    KEVIN BRADY, Texas                   FORTNEY PETE STARK, California
    PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
    DEVIN NUNES, California              JOHN LEWIS, Georgia
    PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
    GEOFF DAVIS, Kentucky                XAVIER BECERRA, California
    DAVID G. REICHERT, Washington        LLOYD DOGGETT, Texas
    CHARLES W. BOUSTANY, JR., Louisiana  MIKE THOMPSON, California
    PETER J. ROSKAM, Illinois            JOHN B. LARSON, Connecticut
    JIM GERLACH, Pennsylvania            EARL BLUMENAUER, Oregon
    TOM PRICE, Georgia                   RON KIND, Wisconsin
    VERN BUCHANAN, Florida               BILL PASCRELL, JR., New Jersey
    ADRIAN SMITH, Nebraska               SHELLEY BERKLEY, Nevada
    AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
    LYNN JENKINS, Kansas
    ERIK PAULSEN, Minnesota
    KENNY MARCHANT, Texas
    RICK BERG, North Dakota
    DIANE BLACK, Tennessee
    TOM REED, New York

                       Jennifer Safavian, Staff Director

                      Janice Mays, Minority Chief Counsel

                                     ______

                        SUBCOMMITTEE ON HUMAN RESOURCES

                        GEOFF DAVIS, Kentucky, Chairman

    ERIK PAULSEN, Minnesota              LLOYD DOGGETT, Texas, Ranking
    RICK BERG, North Dakota              JIM MCDERMOTT, Washington
    TOM REED, New York                   JOHN LEWIS, Georgia
    TOM PRICE, Georgia                   JOSEPH CROWLEY, New York
    DIANE BLACK, Tennessee
    CHARLES W. BOUSTANY, JR., Louisiana

    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 July 25, 2012, announcing the hearing................     2

                                   WITNESSES

    Carolyn W. Colvin, Deputy Commissioner, Social Security
      Administration.................................................     7
    Patrick P. O'Carroll, Jr., Inspector General, Social Security
      Administration.................................................    42
    Paul F. Soczynski, Director of Government Services, Accuity
      Solutions......................................................    50
    Marty Ford, Director, Public Policy Office, The Arc of the United
      States.........................................................    57
    Douglas J. Besharov, Professor, School of Public Policy,
      University of Maryland.........................................    66

                           SUBMISSIONS FOR THE RECORD

    Carolyn Colvin, statement........................................    95

                              USE OF TECHNOLOGY TO
                         IMPROVE THE ADMINISTRATION OF
                    SSI'S FINANCIAL ELIGIBILITY REQUIREMENTS

                                  ----------

                            WEDNESDAY, JULY 25, 2012

                 U.S. House of Representatives,
                           Committee on Ways and Means,
                               Subcommittee on Human Resources,
                                                        Washington, DC.

        The Subcommittee met, pursuant to notice, at 3:03 p.m., in
    Room 1100, Longworth House Office Building, Hon. Geoff Davis
    [Chairman of the Subcommittee] presiding.
        [The advisory announcing the hearing follows:]

    ADVISORY

    FROM THE
    COMMITTEE
     ON WAYS
    AND
    MEANS

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                                    CONTACT: (202) 225-1721
    FOR IMMEDIATE RELEASE
    Wednesday, July 25, 2012
    HR-15

                   Chairman Davis Announces a Hearing on the

                Use of Technology to Improve the Administration

                  of SSI's Financial Eligibility Requirements

        Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on
    Human Resources of the Committee on Ways and Means, announced today
    that the Subcommittee will hold a hearing on the use of technology to
    improve the administration of the Supplemental Security Income (SSI)
    program's financial eligibility requirements. The hearing will take
    place on Wednesday, July 25, 2012 in 1100 Longworth House Office
    Building, beginning at 3:00 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:

        The Supplemental Security Income (SSI) program is the Nation's
    largest Federal means-tested cash assistance program and is
    administered by the Social Security Administration (SSA). Unlike the
    Social Security Disability and Retirement programs, which require
    sufficient past employment covered by Social Security payroll taxes for
    eligibility, the SSI program pays benefits to disabled and elderly
    individuals who currently have limited income and assets, regardless of
    prior work history, using general revenue funds.

        In 2012, the SSI program provides monthly cash payments up to $698
    per individual or $1,048 per couple, which typically includes
    eligibility for Medicaid to cover health expenses. In December 2011,
    SSI provided cash assistance to more than 8.1 million children, adults,
    and aged individuals at an annual cost of over $49.5 billion, not
    including Medicaid expenses. According to the SSA actuaries, the SSI
    program is expected to grow by 1 million recipients in the next decade,
    with the largest growth coming among those over the age of 65.

        Since the program was created in 1972, SSI has applied financial
    eligibility requirements to all recipients, primarily in the form of
    monthly income and asset tests designed to ensure that individuals do
    not have significant current income or assets on which they should
    depend before turning to the program for support. For income, an
    individual's actual monthly benefit is determined by taking the Federal
    SSI benefit and subtracting countable wages and other income received
    during a month (generally up to $1,481 per month for an individual with
    income only from wages). If countable income is not reported in a
    timely manner, it can cause an overpayment that is typically recovered
    from an individual's future benefits. Separately, a recipient's assets
    must remain below $2,000 for an individual or $3,000 for a couple to
    maintain eligibility. Like income, certain items are countable, such as
    cash, liquid assets in a bank account, or property that can be sold;
    other assets are not counted, such as the value of a primary residence,
    car, or burial plot.

        The administration of these financial eligibility requirements can
    be difficult and error-prone if done manually and based on recipient-
    reported data. For fiscal year 2011, the SSI program had a 9.1 percent
    error rate, representing $4.6 billion in improper payments. To address
    this longstanding issue, SSA continues to look for ways to use
    technology to reduce error rates. This includes automated processing
    such as its Access to Financial Institutions (AFI) project, which
    attempts to confirm asset data reported by recipients with actual
    financial institution records. Through this and other automation
    efforts, SSA is expected to achieve significant program savings and has
    already reduced the SSI error rate by 17 percent in the last 2 years,
    even as overall benefit outlays have increased.

        In announcing the hearing, Chairman Geoff Davis (R-KY) stated,
    ``The SSI program provides important financial support for low-income
    families with disabled children, disabled adults, and aged individuals.
    Especially in a restricted financial environment, we need to ensure SSA
    is using technology to its fullest to administer these benefits in an
    automated, reliable, and efficient manner. This hearing will review
    what progress SSA has been making on that front, which is essential to
    targeting limited taxpayer resources to those with the most financial
    need.''

    FOCUS OF THE HEARING:

        The hearing will review SSI financial eligibility requirements and
    the use of technology to improve their administration.

    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
    ``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,
    submit all requested information. ATTACH your submission as a Word
    document, in compliance with the formatting requirements listed below,
    by the close of business on Friday, August 3, 2012. 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 or (202) 225-3625.

    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 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 TDD/TTY in advance of the event (four
    business days notice is requested). Questions with regard to special
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    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://www.waysandmeans.house.gov.

                           * * * CHANGE IN TIME * * *

    ADVISORY

    FROM THE
    COMMITTEE
     ON WAYS
    AND
    MEANS

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                                    CONTACT: (202) 225-1721
    FOR IMMEDIATE RELEASE
    Wednesday, July 25, 2012
    HR-15

                       Change in Time for Hearing on the

                Use of Technology to Improve the Administration

                  of SSI's Financial Eligibility Requirements

        Congressman Geoff Davis (R-KY), Chairman of the Subcommittee on
    Human Resources of the Committee on Ways and Means, today announced
    that the Subcommittee hearing on the use of technology to improve the
    administration of the Supplemental Security Income (SSI) program's
    financial eligibility requirements, previously scheduled for 3:00 p.m.
    on Wednesday, July 25, 2012, in 1100 Longworth House Office Building,
    will now be held at 2:00 p.m.

        All other details for the hearing remain the same. (See
    Subcommittee on Human Resources Advisory No. HR-15, dated July 25,
    2012.)

        Chairman DAVIS. Good afternoon. Thank you to our witnesses,
    staff members, and visitors for your patience. Unfortunately,
    we don't control the whip's schedule for votes. I appreciate
    your forbearance in the unanticipated delay.
        In today's hearing we are going to review how technology is
    being used to improve the administration of the Supplemental
    Security Income, or SSI, program. As the Nation's largest
    Federal means-tested cash assistance program, SSI is sometimes
    called ``the other welfare.'' Last month SSI provided checks to
    more than 8.1 million disabled and aging individuals. For
    example, that is almost twice as many people as collect welfare
    checks under the TANF program.
        Unlike other Social Security programs which require prior
    work and payroll tax payments, SSI pays monthly checks to
    disabled and elderly individuals with limited income and assets
    regardless of whether they have worked in the past. Since SSI
    was created in 1972, it has had complex eligibility rules
    designed to ensure that recipients do not have significant
    income or assets on which they should depend before turning to
    SSI for support. How these financial eligibility requirements
    are working and how their administration can be improved are
    the subjects of today's hearing.
        It is worth noting that in contrast to other means-tested
    programs like food stamps, SSI has continued to enforce these
    financial eligibility standards in recent years, which has
    helped to keep SSI's growth in check. The administration of
    SSI's financial eligibility requirements can be difficult,
    prone to error, and extremely time-consuming, draining
    administrative resources, especially if done manually and using
    recipient-reported data.
        In 2011, SSI had annual payments totaling almost $50
    billion, not including the cost of Medicaid benefits typically
    provided to SSI recipients. It also had a 9.1 percent error
    rate, representing a staggering $4.6 billion in improper
    payments. As I have described in previous hearings, we can and
    should expect more from government. We should expect it to
    administer benefits using 21st century technology, not from the
    era before the personal computer existed.
        We have made significant progress in the past year and a
    half enacting into law our data standards provision to jump-
    start a process for defining these standards. And I am very
    grateful for the true bipartisanship in which Members of the
    Republican and Democratic Caucus worked together to give the
    tools to repair these broken processes and bring some private-
    sector business practices into government.
        I believe that SSA can and should significantly contribute
    to this process. What is more, I believe SSA will also greatly
    benefit from this effort, and it will improve how they
    administer all their workloads, including SSI. This is all part
    of a larger goal of leveraging technology to prevent improper
    payments of all kinds.
        Today we will hear about how SSA has expanded nationwide
    the Access to Financial Institutions Project, AFI, along with
    other efforts to better use technology. These efforts have
    shown that while difficult, income and asset tests can be
    administered in a timely and cost-effective manner, improving
    program efficiency and reducing cost to taxpayers. That is an
    important lesson not just for SSI, but across all means-tested
    Federal programs.
        For example, other programs, like food stamps, have
    recently waived these same sorts of complex eligibility rules,
    especially asset tests, to speed eligibility determination and
    expand benefit payouts. As a result, today one in seven
    Americans is eligible for food stamps, at a cost of over $70
    billion in 2011. That is triple the level of food stamp
    spending in 2002, when the asset test was consistently applied.
        In a time of failed stimulus, out-of-control spending, and
    a struggling economy, we can't continue on the current fiscal
    path. Efficient enforcement of programs--or efficient
    enforcement of income and asset tests across means-tested
    programs will make it possible for limited taxpayer resources
    to be targeted to those with the greatest financial need. In
    this, we hope the SSI program can actually show the way.
        We look forward to all the testimony today and to working
    to improve how this program serves disabled and elderly
    individuals who depend on it, as well as ensuring all means-
    tested programs efficiently and effectively use tax dollars.
        With that, I would like to yield to my friend from Texas,
    the Ranking Member Mr. Doggett, to make an opening statement.
        Mr. DOGGETT. Thank you very much, Mr. Chairman.
        We have worked together on this Subcommittee to ensure
    safety-net programs effectively collect and use the information
    to determine eligibility. Because Supplemental Security Income
    provides modest benefits to aid individuals with disabilities,
    seniors, disabled children, our most vulnerable neighbors, it
    is critical that the Social Security Administration uses the
    most up-to-date technology to fully administer the benefits in
    the most efficient manner and ensure that only those
    individuals entitled to this important benefit receive it.
        But our goal of improving the integrity of SSI as well as
    other programs is severely threatened by the Republican
    Appropriations Committee, which would cut about a billion
    dollars from the Social Security Administration. This comes
    after cuts in each of the last 2 years for Social Security, and
    this includes moneys that are essential for combating waste,
    fraud, and abuse. I believe that this cut means that there will
    be fewer SSI redeterminations, and there will be less available
    for other program integrity measures.
        Every dollar that is invested in SSI eligibility and
    disability reviews has produced between $6 and $9 in program
    savings. Cutting funding threatens the integrity of these
    programs.
        Ensuring an effective SSI program is important to over 8
    million senior and disabled Americans who receive important
    assistance from the program. These benefits are not overly
    generous, with the maximum SSI payment providing less than $700
    a month for an individual, which reaches less than 75 percent
    of the poverty level. But even at these low levels, this
    assistance is a vital lifeline for those who have little other
    source of income.
        In my home State of Texas, over 600,000 of our neighbors
    are helped by SSI, including about 55,000 in Bexar County and
    17,000 in Travis County. One of these people is a 37-year-old
    woman who has Angelman syndrome, which includes cerebral palsy,
    seizures, and profound cognitive impairments. She lives in a
    group home with other adult women and comes home to stay with
    her mother 3 days a week. Her mother says, in these words:
    ``Without the option of community living, she would be at home.
    I would be unable to care for her and would be unable to work.
    We would be destitute. Her only other option would be a State
    institution, which is unthinkable.''
        As we review current efforts to verify SSI eligibility, we
    should also consider steps to help SSI recipients comply with
    program requirements, especially when they attempt to go to
    work. We could take a major step in that direction by
    increasing the value of work for SSI recipients. The amount of
    wages that an SSI recipient can earn before losing some of
    their benefits has not been increased since this program was
    first started in 1974, at a time when gas was 50 cents a gallon
    and the median household income was about $11,000 a year. There
    is a real need to make a change there. If this earnings
    exclusion had kept pace with inflation over the last four
    decades, it would be well over $300 a month now instead of a
    mere $65 a month. Raising the current threshold would not only
    promote and reward work, but it would also reduce SSI
    overpayments to individuals earning very small amounts from
    employment.
        Another step that we should take is to continue an expiring
    program that helps SSI beneficiaries navigate program rules
    when they attempt to go to work. Since 2000, the Work
    Incentives Planning and Assistance program has served nearly
    half a million SSI and SSDI recipients who are working or
    attempting to work, but the program is now expiring, and
    Congress, as with so many other areas, has failed to act.
        I recently joined Congressman Becerra in introducing
    legislation to extend this program and a related one so that we
    help SSI recipients understand and comply when they move into
    work. This extension would be funded by the Social Security
    Administration's basic administration allocation, so taxpayers
    won't be out another dime to do it. We really need for the
    House to act on it.
        I look forward to hearing our witnesses' views on these and
    other issues and continuing to work with you, Mr. Chairman.
    Thank you.
        Chairman DAVIS. Thank you, Mr. Doggett.
        I would like to remind our witnesses to limit your oral
    testimony to 5 minutes; however, without objection, all the
    written testimony will be included as part of the permanent
    record.
        On our panel this afternoon, we will be hearing from Ms.
    Carolyn Colvin, Deputy Commissioner of the Social Security
    Administration; the Honorable Patrick P. O'Carroll, Jr.,
    Inspector General of the Social Security Administration; Mr.
    Paul Soczynski, Director of Government Services, Accuity
    Solutions; Ms. Marty Ford, Director of Public Policy, The Arc
    of the United States; and Mr. Douglas Besharov, Professor,
    School of Public Policy, the University of Maryland.
        Ms. Colvin, please proceed with your testimony.

                    STATEMENT OF CAROLYN W. COLVIN,
          DEPUTY COMMISSIONER, SOCIAL SECURITY ADMINISTRATION

        Ms. COLVIN. Chairman Davis, Ranking Member Doggett, and
    Members of the Subcommittee, thank you for inviting me here to
    discuss how we use technology to improve the administration of
    the Supplemental Security Income program, or SSI. I am Social
    Security's Deputy Commissioner and the Administration's
    accountable official for improper payments.
        SSI is the safety net in the Social Security Act that
    guarantees a minimum income to individuals of limited means who
    are aged, blind, or disabled. In addition to a monthly benefit,
    SSI eligibility provides recipients in many States with access
    to Medicaid. We have administered SSI since the early
    seventies, when Congress created the program to replace a
    patchwork of State-run income-maintenance programs.
        SSI turns 40 this year, and while we now use sophisticated
    technology to help us administer the program, the design of the
    program itself has remained largely unchanged. I would like to
    share with you today some of our best practices and the lessons
    we have learned over the last four decades.
        While SSI has never been simple, over the years Congress
    and the courts have added many new rules which in turn have
    made SSI harder to manage. Nearly every change in an SSI
    beneficiary's life, from moving to a new apartment to a spouse
    picking up an extra shift at work, can affect the benefit. Due
    to the structure of the program, some improper payments are
    inevitable; however, we continuously look for ways to improve.
        Our primary key to success is to regularly review our
    beneficiaries' records. These reviews, which we call
    redeterminations, help to detect changes and to ensure that our
    information is current. We save $6 in benefits for every dollar
    we spend, and our redetermination process is highly effective.
    When we complete more redeterminations, our payment accuracy
    rate goes up.
        Another key to our success is our use of data analytics. We
    do not have the resources to review every case, so we use
    predictive models to help prioritize our program integrity
    workload. This modeling focuses our review on the cases with
    the greatest return on investment. In 2010, our predictive
    model for redeterminations helped us save $1.2 billion more
    than what a random selection would have saved.
        We have also learned how important technology is to helping
    us stay afloat amid staffing losses and growing workloads.
    While the SSI program requires the expertise of our trained
    employees, we successfully automated routine tasks, freeing our
    employees to focus on more difficult issues.
        Verifying the resources of SSI beneficiaries is an
    important, but error-prone element of eligibility. Through our
    partnership with Accuity Solutions, we have developed a
    creative approach, the Access to Financial Institutions, or
    AFI, Project. AFI allows us to electronically verify bank
    account balances as well as discover undisclosed accounts. It
    is a significant improvement over the paper-based process it
    replaced and has been successful in helping ensure that we only
    pay the right people the right amount.
        Technology can also make it easier for our beneficiaries to
    comply with program rules. One example is our SSI Telephone
    Wage Reporting System. This system allows individuals to update
    their wage amounts over the phone and correct their SSI
    payments before they are overpaid. This application has an
    additional simplification feature in that our records are
    directly updated with little or no employee intervention. We
    are now developing similar wage-reporting applications for the
    Internet and smartphone users.
        The last best practice that I want to highlight addresses
    the importance of sharing data across government. We have
    learned that data matches are critical to detect when
    beneficiaries have not reported changes to us timely.
    Electronic data matches have improved our program-integrity
    efforts. We have numerous computer matches with Federal, State,
    and local organizations, and we are constantly looking for
    cost-effective ways to obtain new data that will improve our
    payment accuracy.
        Our successes are largely dependent on sustained, adequate
    funding. I urge you to support the President's fiscal year 2013
    budget request for SSA because we have proven that we deliver.
    Through the hard work of our employees and technological
    advancements, we have increased productivity by an average of
    about 4 percent in each of the last 5 years.
        In closing, we continue to look for ways to simplify the
    SSI program. As we consider changes, we are also mindful of the
    need to balance benefit adequacy, benefit equity, and program
    integrity. We look forward to working with the Subcommittee on
    these important issues.
        I am happy to answer any questions. Thank you.
        Chairman DAVIS. Thank you very much, Ms. Colvin.
        [The prepared statement of Ms. Colvin follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman DAVIS. Mr. O'Carroll, you are recognized for 5
    minutes.

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

        Mr. O'CARROLL. Good afternoon, Chairman Davis, Ranking
    Member Doggett, and Members of the Subcommittee. Thank you for
    the invitation to testify today.
        For many years my office has recommended that SSA consider
    all available tools and methods to ensure the right person
    receives the right payment at the right time. As technology
    advances, data matches and electronic records are emerging as
    effective tools to improve payment accuracy in Federal programs
    like SSI.
        Financial and other nonmedical factors can affect SSI
    eligibility, such as earnings and income, resources and assets,
    living arrangements, and presence in the United States.
        SSA's Access to Financial Institutions Project, or AFI, is
    a data-matching initiative we recommended years ago that helps
    the agency prevent commonplace SSI payment errors. AFI allows
    the agency to receive data directly from financial
    institutions, rather than relying on recipients to report
    assets that may reduce or eliminate the benefits. Self-
    reporting, or the lack thereof, is a leading cause of payment
    errors. AFI is now in place in all 50 States, and the agency
    anticipates $900 million in lifetime program savings for each
    year it uses AFI.
        My office has also recommended that SSA expand its use of
    electronic databases to verify real property and assets. Last
    year we estimated that SSA has made improper payments of more
    than $2 billion because SSI recipients did not self-report
    property ownership to SSA. In recent months, SSA used a real
    property database in its stewardship reviews. The agency
    reported the records database was an effective tool, and that
    SSA would use the database in all SSI reviews in fiscal year
    2013.
        SSA is also working to collect transactional-level data
    from foreign ATMs. This data can identify ineligible recipients
    because they were outside of the United States for more than a
    month. We recommended this approach in a 2008 audit, which
    estimated $225 million in overpayments to 40,000 recipients
    outside of the United States. We are working on a review of
    SSA's progress in addressing this issue.
        We have also made other data-matching recommendations to
    SSA to identify marital status, workers' compensation, and
    vehicle ownership. We in OIG use data matches in our work as
    well, but the Computer Matching and Privacy Protection Act
    requires formal computer-matching agreements that can take
    years to complete. This prolonged process can delay or derail
    time-sensitive audit and investigative projects.
        In 2010, the Department of Health and Human Services
    obtained a legislative exemption for data matches designed to
    identify fraud, waste, or abuse. We are pursuing a similar
    exemption, which could serve as a vital tool in our
    organization as we combat fraud in SSA's programs.
        This office also continues to encourage the agency to seek
    funding to support key improper payment-prevention tools. For
    example, SSA has reported that it saves $7 for every dollar
    spent on redeterminations, which are periodic reviews of an SSI
    recipient's eligibility.
        In conclusion, it is critical that the agency makes certain
    that all SSI payments are correct and timely. SSI recipients
    depend on these payments for basic needs. But it is equally
    important to protect the integrity of taxpayer dollars through
    data matches, electronic records, and traditional reviews. I
    applaud Chairman Davis' proposal to expand data-matching across
    the Federal Government. For now my office will continue to work
    with your Subcommittee and SSA to ensure SSI program integrity
    and increase taxpayer savings.
        Thank you again for the invitation to testify, and I will
    be happy to answer any questions.
        Chairman DAVIS. I appreciate that, Mr. O'Carroll.
        [The prepared statement of Mr. O'Carroll follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman DAVIS. I still remember that meeting in January of
    last year that was quite eye-opening on the complexities the
    agency faced with data-matching. You put a little Irish on the
    spin of the whole thing for us. We appreciate that moving
    forward, as Ranking Member Doggett and I began down that path,
    with data standardization. Thank you.
        Mr. Soczynski, you are recognized for 5 minutes.

                    STATEMENT OF PAUL F. SOCZYNSKI,
           DIRECTOR OF GOVERNMENT SERVICES, ACCUITY SOLUTIONS

        Mr. SOCZYNSKI. Thank you.
        Good afternoon. My name is Paul Soczynski. I am the Senior
    Director of Government Services for Accuity, Inc. Chairman
    Davis, and Ranking Member Doggett and Members, we are grateful
    for the opportunity to provide our views on technology and how
    they might be used to improve public benefit programs.
        Since 1911, Accuity has been the official registrar of the
    American Bankers Association U.S. Routing and Transit Codes, a
    role that requires us to assign and maintain ABA routing codes
    to every deposit-taking financial institution in the United
    States. In our role as ABA registrar, Accuity is required to
    maintain up-to-date information on the 117,000 financial
    institution locations across the United States. As such, we
    have earned a unique reputation as the trusted source of
    information about and for the banking industry.
        As you have heard, Accuity currently manages a technology
    solution to facilitate the eligibility process for the SSI
    program. In September 2003, Accuity was awarded a contract to
    develop and implement a pilot proof-of-concept program designed
    to automate the then-existing manual financial asset
    verification eligibility component of the SSI benefit program.
    We designed the asset verification system to include three main
    components: number one, a secure automated gateway between SSA
    field offices and the U.S. financial banking institutions;
    number two, a comprehensive and accurate database of registered
    participating financial institutions; and number three, a Web-
    based and direct-transmission Web service technology platform
    with sophisticated message-routing logic designed to speed the
    process and mechanism and optimize the detection of undisclosed
    financial assets.
        Following several years of the pilot, for all SSA field
    offices in New York, New Jersey, and California, a national
    rollout did occur. It commenced in July of 2010, and all 50
    States are now operational as of June 2011. Leveraging our
    longstanding position in the banking industry and our unique
    trusted relationships in the financial institutions across the
    country, Accuity has successfully recruited and registered to
    participate in the automated solution in 95 percent of the
    financial institution locations nationally.
        Accuity's asset verification system has successfully
    processed millions of automated financial asset-verification
    requests and responses utilizing our comprehensive database of
    financial institutions. Instead of mailing a paper request form
    to a general financial institution address indicated by the SSI
    applicant, the request is now sent and received instantaneously
    through Accuity's asset verification system. By ensuring the
    account balance search for each financial institution is
    inclusive of an institution's entire branch network and not
    just a single location, the canvassing and search of financial
    assets goes beyond local and State borders to include regional
    and national searches regardless of where the applicant process
    takes place or where the applicant resides.
        The system automatically routes alternative multiple
    requests to financial institutions based on geographic logic
    and account detection probability parameters. The search
    algorithm, refined over many years, ensures the additional
    financial institutions that are canvassed for possible
    undetected financial assets. This added step creates stronger
    program integrity by improving the detection of undisclosed
    application assets instead of relying solely on the bank
    account information provided by the applicant.
        Accuity has successfully coordinated and implemented direct
    transmission automation with the largest financial institutions
    in the country. This direct, end-to-end technology reduces the
    need for human intervention in a high-volume environment,
    resulting in optimized efficiency, reduced costs, and high-
    speed response turnaround times, thus accelerating the overall
    determination process for program beneficiaries.
        Accuity has been pleased to partner with SSA in proving the
    value of technology and serving beneficiaries, while preventing
    fraud and abuse. Based on the success of the asset-verification
    technology, Congress passed section 1940 of the Social Security
    Act. This amendment to the Act requires States to implement a
    comparable electronic solution for the aged, blind, and
    disabled Medicaid population. While the legislation included
    the requirement for all States to have this implemented by
    2013, States have been slow to implement the solution. We are
    hopeful after initial implementations in various States, that
    will become a different reality.
        We appreciate the opportunity to inform the Subcommittee
    about how we worked developing and implementing a new
    technology to provide greater efficiency to taxpayer-funded
    programs. I would be pleased to provide additional information
    regarding Accuity's asset verification system, and I look
    forward to answering your questions today. Thank you.
        Chairman DAVIS. Thank you very much, Mr. Soczynski.
        [The prepared statement of Mr. Soczynski follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman DAVIS. Ms. Ford, you are recognized for 5 minutes.

                  STATEMENT OF MARTY FORD, DIRECTOR,
           PUBLIC POLICY OFFICE, THE ARC OF THE UNITED STATES

        Ms. FORD. Chairman Davis, Ranking Member Doggett, and
    Members of the Subcommittee, thank you for the opportunity to
    testify on the use of technology to improve the administration
    of the SSI financial eligibility requirements.
        As you know, SSI benefits, along with related Medicaid
    benefits, are the means of survival for over 8 million people
    with severe disabilities. SSI benefits help people meet their
    basic needs for food and housing, secure medical care, and pay
    for medications not covered by Medicaid. SSI also plays a
    critical role in helping people with severe disabilities live
    in the community rather than in institutions. We applaud SSA's
    continued work in improving its technology infrastructure to
    improve services to claimants and beneficiaries even during
    these challenging economic times.
        SSA has recognized that the SSI program rules are
    challenging even for administrators of the program. The program
    is many times more difficult for SSI beneficiaries to
    understand and follow. Beneficiaries are under tremendous
    financial stress when they apply for SSI and while they are
    using benefits. SSI pays only about 75 percent of the Federal
    poverty level for an individual. Beneficiaries often experience
    food insecurity, possible homelessness, and personal and family
    crisis due to economic hardship. For some, the disability
    itself adds its own pressures and makes navigating the
    complexity of the SSI program extremely difficult.
        The CCD Social Security Task Force generally supports SSA's
    efforts to use technology to improve the program so long as the
    improvements do not infringe on claimants' rights. We have
    always supported SSA's work in conducting continuing disability
    reviews and redeterminations to ensure continued integrity of
    the SSI and Social Security disability programs.
        We recognize that technology can improve the
    Administration's efforts in these areas; however, many SSI
    applicants and beneficiaries lack electronic access to SSA or
    may not be able to understand or navigate electronic
    communications. For example, a recent study by the Department
    of Commerce found that in 46 percent of households headed by a
    person with a disability, there was no computer at home,
    compared to 20 percent of homes where the head of household had
    no disability. Sadly, our fast-growing electronic world is
    creating new barriers for people unable to cognitively or
    financially keep pace.
        The complexity of the SSI program and the requirements for
    reporting and maintaining compliance with the rules, combined
    with the push for increased use of technology, will place
    increased pressures on those SSI beneficiaries who are unable
    to navigate in an electronic world. For these reasons we
    believe that SSA must exercise caution to ensure that
    beneficiaries are protected. This will require an increased
    commitment on the part of the Administration and the Congress
    to recognize the increasing difficulties for these
    beneficiaries and find solutions for them.
        Improvements to the process will save time for both
    beneficiaries and SSA, improve accuracy and timeliness, and
    hopefully assist beneficiaries who are exploring opportunities
    to work. We have some very specific recommendations.
        Most importantly, SSA requires adequate administrative
    resources to effectively administer the program, including its
    financial eligibility requirements. We urge Congress to provide
    SSA with adequate resources at the level requested by the
    President.
        Additionally, SSA needs to develop a better earnings
    reporting and recording system, including providing an option
    for online wage reporting, for those recipients who can use it,
    that allows the agency to promptly adjust benefit payments to
    help reduce overpayments and remove barriers for people who
    want to work.
        SSA should also consider using its continuing disability
    review enforcement model to help prevent overpayments before
    they happen.
        SSA also needs to enhance the use and operation of its
    toll-free 800 number.
        We support continuation of the WIPA and PABSS programs that
    have already been commented on. That is very important for
    those people who want to work.
        Congress should raise the SSI asset limit and income
    disregards and index them annually for inflation. While the SSI
    program has numerous work incentives built in to encourage
    people to work, the extremely low disregards mean that many SSI
    beneficiaries' earnings trigger an overpayment for even
    relatively modest amounts of work. Nearly half of beneficiaries
    who work earn less than $200 per month. Increasing the
    disregards would help beneficiaries and at the same time reduce
    SSA's administrative workload.
        I will end here and am open to any questions that you have.
    Thank you.
        Chairman DAVIS. Thank you very much, Ms. Ford.
        [The prepared statement of Ms. Ford follows:]

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        Chairman DAVIS. Mr. Besharov, you are recognized for 5
    minutes.

             STATEMENT OF DOUGLAS J. BESHAROV, PROFESSOR,
            SCHOOL OF PUBLIC POLICY, UNIVERSITY OF MARYLAND

        Mr. BESHAROV. Chairman Davis, Ranking Member Doggett, other
    Members of the Committee, it is a pleasure to be back.
        It was a great pleasure listening to the other speakers
    because it is rare that we have this kind of agreement about
    the need to move forward, and I was really impressed when I
    read about the bipartisan work of this Committee on the data-
    matching and the modernization of means-testing programs.
        I think I am here a little bit from another world, but let
    me tell you why I think it is all connected and why I think it
    is so important. In the other means-tested programs that I
    watch, whether it is food stamps, WIC, TANF, and so forth, the
    process of eligibility determination has become so expensive,
    and so much of that cost is on the States, that the States
    look--that the Federal Government helps the States to do
    everything they can to do less eligibility checking. So, for
    example, we have 1-year certifications of income in food
    stamps. So, for example, we don't have asset tests in food
    stamps anymore. Maybe a little bit of it is ideological, but
    the main reason is because it is too expensive to do those
    things in the modern world, the modern world where data
    processing and data searching are the low-cost answer.
        My question is why should both liberals and conservatives
    want better eligibility determinations? And I want to spend a
    few minutes on that because I think that is the crux of this
    discussion.
        It is not that everyone gets more payments under disability
    or everyone gets more payments under food stamps. It is a very
    haphazard process, and there is great unfairness. The technical
    term is horizontal inequity. That is to say, if I am lucky
    enough to be with a caseworker who says, ``Oh, let us forget
    about this income,'' or if I am lucky enough to be with a
    caseworker who says, ``Well, you deserve it even though you
    don't formally fall into the rules.'' That is just unfair. And
    the thing about automated systems is it becomes less possible
    for there to be that kind of unfairness. I think that is very
    important.
        The second thing--and I am struck by this--is the
    possibility to do serious reform of the system as a whole and
    especially its disincentives to work. I was struck by the
    comments of my colleagues and also Mr. Doggett about the
    earnings limitations, the set-asides. Let me mention a few
    things about that and talk for the 2 minutes I have left about
    the U.K.
        These programs are all interconnected. About 36 percent of
    SSI households also receive food stamps. If SSI goes down $1,
    food stamps go up, I think, 33 cents, if I remember my math on
    this. If SSI goes up, food stamps go down. And this has to be
    done by hand. I was going to say across Committee
    jurisdictions, but it is really across agencies at the State
    and local level. We are in the 21st century. We shouldn't have
    to do it that way.
        The U.K. has a process of making real-time eligibility
    determinations. And it is striking only when you think about
    U.S. Government actions, because, of course, when you use a
    credit card to buy something, it is real time. And so the idea
    that we can't match what is happening in the U.K. is striking.
        What the U.K. has been able to do (because it had a process
    of systematizing eligibility across programs), is to deal with
    the work disincentives embedded in these programs, whether it
    is the income set-aside, whether it is an earnings disregard,
    and whether it is the effect of food stamps.
        As you probably know, depending on the family, and
    depending on the income, marginal tax rates in this country for
    means-tested programs can be over 100 percent, which is you
    earn 1 more dollar, and you owe the government more than $1. In
    the U.K., they have been able--and it started under the Labor
    government, not just the Conservative/Liberal Democrat
    coalition--to reduce the maximum marginal tax rate to 65
    percent. Many of us wish it was not that high. But I think this
    is the promise of modern technology.
        I hope that this Committee will be able to pursue this
    topic this year and in the years to come. Thank you very much.
        Chairman DAVIS. Thank you, Mr. Besharov.
        [The prepared statement of Mr. Besharov follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman DAVIS. The trend in some means-tested programs
    like food stamps has been to waive complex eligibility rules,
    especially asset tests, in order to speed eligibility
    determination and expand benefit receipt. In the manufacturing
    world that I grew up in, in business, we call that expediting,
    where you step aside from established processes and rules, and
    in the long run you can actually create more cost. And thus,
    the more you process, the higher your cost per item until it
    completely flips the cost structure upside down on what we call
    customer service or the equivalent of a banking transaction.
        States, especially when spending Federal, not State,
    dollars, seem less interested in making the administrative
    effort needed to effectively verify income and asset levels,
    thus suggesting they need a stake in this game as well. But as
    a result, today one in seven Americans is eligible for food
    stamps at a cost of over $70 billion in 2011, three times what
    it was in 2002 when the asset test was more consistently
    applied.
        Listening to all of your testimony today, it appears
    technology solutions exist to overcome these administrative
    barriers, or islands of excellence in various parts of
    government and out in the State, but not connected in an
    integrated manner yet. For asset verification under AFI, banks
    are responding in an average of 7 days, with more than a
    quarter reporting back in 24 hours, which is a big step
    forward. Meanwhile, the United Kingdom is moving to a system
    with real-time wage data.
        Mr. Soczynski or Mr. Besharov, are any of the issues and
    solutions we have talked about today unique to the SSI program
    versus other programs? Go ahead, Mr. Soczynski.
        Mr. SOCZYNSKI. No, actually they are not. And I think that
    is the applicability of the Medicaid solution in similar
    environments. The connection between the government agency and
    the financial institutions to share that account balance
    information is applicable and transferable to other such
    programs.
        Chairman DAVIS. Mr. Besharov.
        Mr. BESHAROV. I think that is right. I agree. The one thing
    I would add to that is something that you mentioned, Mr. Davis,
    and that is the fact that States share in the cost of
    eligibility and administration, but not in the cost of the
    actual program. That is a formula to encourage cutting back on
    eligibility determination. Not only does the State save money
    that way, but easier eligibility brings more money into the
    State.
        One thing I would like to also mention, since these rules
    are different across programs, TANF to food stamps to
    disability, and other programs as well, (housing), you
    incentivize States to game the system. Many people wonder why
    the TANF program hasn't grown in this time of economic
    difficulty. There are many reasons; who is affected,
    unemployment rates, and so forth. But I think one very big
    reason is States pay all of TANF costs. They pay none of food
    stamps cost. And so why should we be surprised if the food
    stamp caseload has gone up and the TANF caseload has not? And
    the same for the disability caseload. So these incentives that
    are built into the system create distortions that we should all
    be uncomfortable with.
        Chairman DAVIS. Ms. Colvin and/or Mr. O'Carroll, in your
    interactions with other agencies, do you see the same types of
    issues? In fact, have any other agencies approached you, or
    have you shared your experience with others in terms of trying
    to streamline the integration of processes?
        Ms. COLVIN. I have found that there is a very strong
    interest among other agencies. Let me speak first to the State
    level, though, because I came out of the State. I administered
    all of the means-tested programs at the State level.
        The States are very interested in innovation and
    creativity. They are interested in automation. For them it has
    been a big resource issue. Unlike at the Federal level, where
    you have one agency administering the program, many of these
    programs are administered at the local level in addition to the
    State.
        But at the Federal level, we have a Benefits Processing
    Work Group. We have presented AFI to them. They are very
    interested. I think the standardization of data that you are
    proposing will be helpful.
        But we have been working with most of the benefit-paying
    agencies like VA and CMS and the Office of Child Support
    Enforcement. And there is a very strong interest, and we are
    continuing to work with them in that regard.
        Chairman DAVIS. Mr. O'Carroll.
        Mr. O'CARROLL. Mr. Chairman, I agree that working with the
    other departments and other agencies on this is very important,
    and woven into this are the matching agreements between all the
    agencies.
        We can't compare data with other agencies that are doing
    the same type of work that we are doing, trying to identify
    income and wages and other information. We can't do that
    without a matching agreement. It takes years, and usually by
    the time we get the agreement, the issue is over. So anything
    you can do to help us in terms of getting access to data
    without computer-matching agreements between Federal agencies
    to identify improper payments will be very helpful.
        Chairman DAVIS. Thank you very much.
        Mr. Doggett, you are recognized for 5 minutes.
        Mr. DOGGETT. Thank you, Mr. Chairman, and thanks to all of
    our witnesses.
        Commissioner, let me ask you, I referenced in my opening
    statement this proposal that has been approved in an
    Appropriations Subcommittee to cut the billion dollars from
    what the President proposed for the Social Security
    Administration. What is the impact of that on your efforts to
    reduce waste, fraud and abuse, and on all of your program
    integrity activities?
        Ms. COLVIN. Let me just summarize what the impact is going
    to be for us. There is going to be a severe impact within the
    agency. I don't have the specifics under the proposal, but it
    should be recognized that we had significant cuts in 2011 and
    2012. As you know, we have had to close offices and reduce
    office hours. We have had a hiring freeze on. We have lost
    about 7,000 employees over the 2 years, and we are making other
    draconian cuts. We would have similar experiences under this
    bill.
        There is also going to be a significant reduction in our
    program integrity dollars. We have indicated that we already
    see a return of $9 for every $1 with our continuing disability
    reviews, and $6 saved for every $1 spent with our
    redeterminations. The bill significantly reduces the amount of
    funding that would be available for that work, reducing it from
    $756 million in fiscal year 2012 to $272 million in 2013. So
    that is going to be a significant reduction in our ability to
    do program integrity work.
        But more importantly, the service to the public is going to
    take longer. It is not going to be the quality that we have
    been able to provide in the past. I don't have at this time
    specifics relative to this proposal, but you can conclude that
    the impacts will be very similar, if not even worse.
        Mr. DOGGETT. We had the Social Security Commissioner
    himself at the Social Security Subcommittee the other day
    talking about the impact this would have on disability
    determinations; for example, where we have big backlogs and
    delays already that the Social Security Administration had been
    working to try to reduce, that now, without adequate resources,
    there will not be the quality of service.
        You actually have already, as you mentioned, had to close
    some offices. And we can foresee more of that type of thing if
    you don't have the money to deliver the service. And this is
    coming from some of the same type of people that are always
    talking about waste, fraud and abuse, and yet the resources
    needed to ensure we don't have waste, fraud and abuse are being
    denied to the Administration, which I think is a very
    significant shortcoming.
        Thank you for your testimony.
        Ms. Ford, I would like to ask you about another program
    that I mentioned in my opening statement, and that is the Work
    Incentives Planning and Assistance program that is about to
    expire. Would you review the type of assistance it provides and
    comment on if it is not renewed, what the effect will be on
    those who rely on it.
        Ms. FORD. Yes, thank you.
        The grants from the WIPA, or Work Incentives Planning and
    Assistance, go to local nonprofit and other agencies to support
    outreach, education, and benefits-planning services for people
    who are using SSI or the disability benefits under Title II
    about work incentives and supports for finding, maintaining,
    and advancing in employment. So this is all aimed at assisting
    people in getting work, staying at work, or even increasing
    their work effort or advancing in their employment.
        Beneficiaries are informed about what will happen with
    their employment and what kind of medical coverage they can
    get. It addresses the concerns that beneficiaries have, their
    fears about whether they will lose the protections that they
    have in terms of medical coverage. It is basics benefits
    counseling: what will happen if you work; what will happen if
    you attempt work, are not able to continue, and have to come
    back into the program; or if you are able to be successful and
    continue on into the work world. It was designed to provide
    that one-on-one assistance to people who want to try to leave
    the rolls.
        Mr. DOGGETT. Those are individuals that may not always be
    the first choice of an employer to take a job, and individuals
    that may be taking their first job or have had difficulty
    getting a job who really need that assistance. It is good for
    the employer and the individual employee.
        Ms. FORD. Correct, yes.
        Mr. DOGGETT. Thank you very much.
        Ms. FORD. I agree.
        Chairman DAVIS. I thank the gentleman.
        The chair now recognizes Mr. Paulsen form Minnesota for 5
    minutes.
        Mr. PAULSEN. Thank you, Mr. Chairman.
        Let me ask Mr. O'Carroll a question, because in your
    testimony you mentioned that SSA should conduct certain
    redeterminations and limited issue reviews when it discovers
    changes in circumstances that might affect an SSI recipient's
    eligibility or benefit amount.
        Are there any other ways that SSA can help determine if an
    SSI beneficiary has additional income or resources besides the
    beneficiary just simply telling SSA this information and then
    SSA trusting that self-reported information?
        Mr. O'CARROLL. Mr. Paulsen, a very good point. Since it is
    self-reported, a lot of times SSA isn't finding out about it,
    and needs to use other forms of data matches and indicators.
        Some of the things that we have been looking at or we
    recommend that SSA be doing is, one, taking a look at its own
    records; taking a look at the master earnings file, comparing
    that against recipients to see if they are showing any income
    and taking a look at the earnings suspense file to see if there
    are any earnings that are being reported there.
        But then the other major thing SSA could be doing is
    dealing with the IRS, getting 1099 information from IRS, which
    would show that people are getting access to pensions, other
    forms of wages, gambling income, that type of information. So
    that is very important. And then also matching data with the
    States.
        So it keeps coming back to all the government agencies need
    to be talking to each other and comparing this type of
    information.
        Mr. PAULSEN. Good.
        And then the Unemployment Insurance program is also a
    program that is under this Subcommittee's jurisdiction. It has
    a 12 percent error rate, with more than $13 billion in improper
    payments that went out last year. So in that program the
    largest source of error involves individuals going back to work
    without then reporting that they are going back to work, and
    then continuing to actually receive benefits. That is a
    situation that is a little bit similar to the SSI overpayment
    discussion.
        Mr. Soczynski, is there any potential in your system to
    help identify wages?
        Mr. SOCZYNSKI. Not specifically in our system. The
    information that is provided by the banking industry is account
    balance information. However, Accuity and one of our partners,
    Early Warning, is involved in a research project with the
    Department of Labor at this point attempting to find easier
    ways to find out if someone has gone back to work while still
    claiming unemployment benefits faster than is reported through
    the current data-generation system now.
        That pilot should be kicking off shortly. It will involve
    three States participating in that: Maryland, Illinois, and
    Missouri. And we expect that by the end of the year, we will
    have some information on whether or not--not necessarily
    through our AFI program, but through an identification of other
    databases--if we can identify people back to work sooner than
    they are going in to claim that they are no longer needing
    unemployment benefits.
        Mr. PAULSEN. Mr. Besharov, maybe you can answer. Are there
    other programs that you see that need timely and accurate wage
    information? Do you have any other thoughts? How should they
    get it in the future?
        Mr. BESHAROV. Well, I think, first of all, it would help to
    have one fundamental reform, which is what Chairman Davis said,
    which is have the States have some skin in the payment process,
    not just the administration process. That would focus some
    attention and deal, I think, with some of the issues about
    encouraging modern information technology. We need the States
    to want the system to work better. And it is not just audits
    that will do it. They have to feel that it costs them money to
    have inaccurate systems.
        It is the case across many of these means-tested programs--
    food stamps come to mind. You mentioned UI. WIC is another
    program. About 53 percent of all newborns receive WIC benefits.
    And this is supposed to be a program for just those who are
    nutritionally needy. At some point it would be good to have
    better evidence and better information about student loans,
    student grants. It goes across the board where you see we have
    given up the process of enforcing the rules, and we are now
    having to catch up for almost 40 years of inaction. We started
    thinking people would just tell us when their income changed.
        And I just want to mention this before closing. People
    don't believe this, but there was a President who said, we
    don't need any of this recordkeeping. People should just tell
    us what they need, and we will send them a check. The
    President's name was Richard Nixon. It was the last time we
    talked about a benefit that had no double-checking of actual
    wage information, and it is time for us to double-check as best
    we can across all means-tested programs.
        Mr. PAULSEN. Thank you, Mr. Chairman. I yield back.
        Chairman DAVIS. I thank the gentleman.
        The chair now recognizes the distinguished chair of the
    Republican Policy Committee, the gentleman from Georgia, Mr.
    Price.
        Mr. PRICE. Thank you, Mr. Chairman. I appreciate that.
        This is an interesting panel. I don't envy any of you who
    have the responsibility for administering this. I think 40
    years is probably the accurate timeframe for when we put in
    place a program that is extremely, extremely difficult to make
    work on a day-to-day basis.
        Ms. Colvin, you referred to that in your opening comments,
    and I want to commend you for that.
        Our hearing is entitled ``The Use of Technology to Improve
    the Administration of SSI's Financial Eligibility
    Requirements.'' I think if you break that down, what that means
    is that we all want to make certain that those who should be
    receiving benefits are receiving benefits for which they are
    eligible, and those who shouldn't don't. That is the unanimity
    that I think you talked about.
        So if I step back from this and would ask you, challenge
    you to step back, if the slate is clean, what are the one or
    two things that you think are imperative to making a system
    work that allows us to utilize the technology of today to
    assist in the administration of SSI's financial eligibility
    requirements? If you wipe the slate clean--
        Ms. Colvin, any thoughts about that, if you were not
    encumbered by the current system?
        Ms. COLVIN. Well, I think that having standard definitions
    of what is income and are resources would be important. The
    complexity of being able to each month look at someone's
    circumstances, whether or not they have had income that month
    or if their resources have changed, is very, very complex. We
    have to look at whether or not they received benefits from
    someone else who may have contributed to their care. So it is
    the whole complexity of the program.
        We have in the past presented ideas to simplify the
    program, but I think the automation that we are using which
    allows us to be able to do this without having to do it
    manually, where we can do data exchanges--we have 1,500 data
    exchanges with local and State government, we have many with
    our Federal agencies so we can compete--that has helped us.
        But it is the complexity of the program. If we could find
    some way to simplify so we do not have to look at these changes
    every single month. Many times we are looking at it
    retroactively. For instance, if we give the correct check to
    someone for SSI, we give it to them at the beginning of the
    month, but they may get income during the month, and then that
    makes them overpaid. So it is the complexity of the program. We
    need to find a way to simplify it.
        I would be very happy to provide some ideas for the record,
    but I am not certain I can come up with any off the top of my
    head right here.
        Mr. PRICE. Mr. O'Carroll, one or two silver bullets?
        Mr. O'CARROLL. Well, the first one, as my esteemed
    colleague just brought up, is reducing the complexity of it.
    With the alerts and these matches where we are either using
    third-party databases or other government information, it still
    requires that the claim rep at SSA, when they get that
    information, develop it, talk to the person, and find out what
    the truth is. And that is a whole other step that is needed. So
    no matter what we are doing in terms of data-matching, it still
    comes down to human intervention in that interview. And that is
    part of the issue of complexity.
        Mr. PRICE. Mr. Soczynski, one silver bullet.
        Mr. SOCZYNSKI. One silver bullet. Well, thinking that I had
    the opportunity to listen to a few ahead of me, but clean
    slate, back to the future? You know, we have silos. We have so
    many disparate databases in so many places that trying to pull
    all that together into a big interface, you know, that is the
    future. That is the Star Wars of the technology is to really
    find a way to reduce the multiple places the information is
    filed State by State, agency by agency, and try to get it all
    connected, because the data is all there. It is a way of just
    having it available for the right person to use at the right
    time.
        Mr. PRICE. Ms. Ford, do you agree?
        Ms. FORD. In addition to what Commissioner Colvin had said,
    I would say updating the income and asset levels to reasonable
    amounts, at least to the level they would have been were they
    indexed to inflation since the beginning. We are spending----
        Mr. PRICE. I don't know if that is a clean slate item, but
    I appreciate that perspective. I am running out of time, but I
    want to get Mr. Besharov up, if I may.
        Ms. FORD. My main point is we are spending an enormous
    amount of administrative resources to chase nickels and dimes.
        Mr. PRICE. Sure. Absolutely.
        Mr. Besharov.
        Mr. BESHAROV. I lead a program on comparing what we do to
    other countries. The social democracies of Europe and Asia are
    a little bit complexifying the program to simplify it. So they
    have a category called ``temporary disability.'' And the thing
    about temporary disability, it is easier to get people on, but
    it is easier to get them off.
        The other thing they have is they have partial disability.
    And so it is easier for them to help someone find a job because
    they don't have these earnings penalties. Some people are just
    partially disabled. We need room for that in the system in a
    way so that the rehabilitative side of the program, which we
    haven't talked about, has some way to play out.
        So that would be my blank slate.
        Mr. PRICE. Thank you, Mr. Chairman.
        Chairman DAVIS. I think the gentleman.
        And the chair now recognizes the distinguished gentleman
    from Georgia, Mr. Lewis, for 5 minutes.
        Mr. LEWIS. Thank you very much, Mr. Chairman. Again, thank
    you for holding this hearing. I want to thank all of the
    witnesses for being here.
        Director Ford, what can Congress do to help SSA and the
    disability community to give support to disabled recipients so
    that they can return to work when they are able to do so? I
    guess this is in keeping with the line of questions that my
    good friend from Georgia Dr. Price raised.
        Ms. FORD. Well, I think that making it easier to go back to
    work, increasing those income and asset limits so that you are
    not hitting against those complexities in the program every
    time you earn just a little bit of money. Those complexities
    frighten people. Hitting overpayments every time you earn even
    a little bit of money is very difficult.
        And being creative, we need to look at making it easier for
    people to work. The SSI program does have work incentives in
    it. It needs to make it simpler, though, so that people are not
    frightened when something happens.
        We do already have a way, through the section 1619 program,
    for people to maintain their eligibility for Medicaid so that
    they don't lose that support system. And very often people who
    have very severe disabilities need to maintain their long-term
    services coverage (or their long-term care coverage) through
    the Medicaid program. That is very, very important. We are
    talking about people with very severe disabilities here. So
    that is very important.
        Simplification of work incentives is critical, because
    otherwise it becomes too complex. We are talking about a
    program that is already very, very complex. And for people who
    are eligible for both Title II and Title XVI, the complexities
    become almost too great to surmount. The rules are very
    different.
        Mr. LEWIS. Thank you.
        Commissioner, the SSI program rules are very complicated.
    You probably know that better than anyone. They are very
    complicated. Apart from new technology are there ways to
    simplify the rules to make the SSI program less burdensome to
    administer and easier for a recipient to understand? How can
    you make it simple?
        Ms. COLVIN. I don't have an immediate response to that
    because it is so complex. We would be very happy to work with
    you on ideas that might be worth exploring. But each time a
    change is made, probably for a good reason, it makes the
    program even more complex. So if you just were to roll out all
    of the changes that have been added on to the program over the
    last 40 years, each one of those makes it more and more
    complex. When you have to look at someone's income and
    resources every single month, and regardless of how small that
    change is, it impacts or may impact their benefit, it becomes
    very difficult.
        Mr. LEWIS. You don't have a way in this new age of
    technology to just push a button?
        Ms. COLVIN. No, we don't have that. We do, as I said, have
    a lot of data exchanges, so we are able to get information
    about wages from IRS or the Administration for Children and
    Families, new hire directory, and some of the other pensions
    that they receive, et cetera. But, for instance, if someone's
    living situation changes, they have to report that. There is no
    button that we can push. And once they report it, we then have
    to verify it. So it is a very complex process.
        Even with the reports that we get, for instance, like AFI,
    which is considered a third-party report, we have to verify
    that. We can't just accept that. So it is a very complex
    program.
        Mr. LEWIS. Anyone else have any suggestion, or
    recommendation, or some magic, I guess you call it a silver
    bullet?
        Yes, Director Ford.
        Ms. FORD. I would mention that in my testimony we did
    comment on Social Security's proposal for a work incentive
    simplification project (WISP) which is aimed at Title II, but
    might be able to help those people who are concurrent
    beneficiaries of Title XVI and Title II who want to try to
    work. WISP is one initiative that we would support moving
    forward on.
        Mr. BESHAROV. If I could, just to give a plug again for
    what this Committee has been doing. I sat in on a planning
    session at the Labor Department, and somebody asked the
    question, why was it so difficult and so expensive to do
    research on workforce development programs? And the head
    researcher from the Labor Department said, ``Because for each
    contract, the contractor has to spend $1 million collecting the
    data from the States.'' And someone said, ``Well, doesn't data
    come to you, the Department of Labor?'' ``No,'' says the
    Department of Labor, ``and when it comes, we can't use it
    because it is all in different kinds of pieces.''
        So it sounds so unromantic, but I think the work that this
    Committee is doing on data simplification, data similarities,
    and codification is the first essential step to much more data-
    sharing electronically. It is very important. It seems so
    mundane, but it is tremendously important.
        Mr. LEWIS. Thank you.
        Thank you, Mr. Chairman.
        Chairman DAVIS. I thank the gentleman.
        Ultimately, if we are going to address the deficit and
    spending issues, it is going to be by fixing the engine and not
    external or symptomatic changes. We are hopeful. These
    technologies exist today all around us. It is a question of
    removing the statutory barriers, which the Inspector General
    and I have talked about in the past and others. But I
    appreciate the conversation so far.
        With that, we recognize Mr. Berg from North Dakota for 5
    minutes.
        Mr. BERG. Thank you, Mr. Chairman. I thank the panelists. I
    appreciate the passion that is coming out and what we are doing
    here, which really does seem mundane and boring, but can have
    pretty dramatic effects.
        As you know, the pressure to reduce error rates is
    critical. And the return, the payback is pretty dramatic.
    Obviously, the challenge is if we can prevent an overpayment
    from happening, that is a lot easier than trying to recoup
    money after that money has gone out, for people trying to
    understand why that error was made and for people trying to
    correct that whole process.
        So I guess just really on the big picture, Mr. O'Carroll, I
    would like you to tell us what the most common SSI issues are
    that result in overpayment, and are they preventable?
        Mr. O'CARROLL. Mr. Berg, as I was saying in earlier
    testimony, the biggest issue is the self-reporting of SSI
    recipients. When you are talking about your assets, what is
    your income, what your property is, all those are the biggest
    issues. SSI is a means-tested program, and you have to trust
    the person is giving you the right information. I think what we
    are talking about today is finding ways to verify that
    information the person has given and if any of the
    circumstances have changed.
        Mr. BERG. So how would you prevent that? I am assuming that
    when it relates to property, that is probably a big issue that
    could have a wide variation of opinions on what the value is or
    if there is value. What jumps out and says, this is where it is
    really hard to determine?
        Mr. O'CARROLL. Well, the biggest part of determining
    eligibility is the redeterminations that we have been talking
    about. When those indicators come up, that is the point when
    you have to bring in the recipient and speak to them and find
    out whether or not they have the resources. And unfortunately,
    one of the big issues with the resources of SSA is that we need
    a balance there between stewardship and service. And what we
    are saying is we need to have more resources put toward
    stewardship. So when you get those indicators, you are bringing
    the people in, you are checking to see if their circumstances
    have changed.
        And I think that is one of the issues that we would like
    this Committee to help with is for SSA to be given an integrity
    fund or a fund that is earmarked just for stewardship work
    where, when resources are limited, that there will always be
    the resources there to do the redeterminations, the continuing
    disability reviews, the cooperative disability investigations
    that we do, that is probably the best prevention, Mr. Berg.
        Mr. BERG. Thank you.
        I yield back, Mr. Chairman.
        Chairman DAVIS. I thank the gentleman.
        The chair now recognizes Mr. Reed from New York for 5
    minutes.
        Mr. REED. Thank you, Mr. Chairman.
        And thank you to the witnesses for your testimony today.
        Ms. Colvin, I wanted to follow up on some prior testimony
    from the change in priorities that we have received from the
    Commissioner in prior hearings that I see in this area at SSA.
    And there was some direct testimony from the Commissioner about
    the fact that he was processing incoming eligibility cases over
    the post-entitlement checking and making sure that overpayments
    are getting looked at and corrected. Has that been the case in
    your experience in the agency; has that priority shift
    occurred?
        Ms. COLVIN. I don't think there is a priority shift. We try
    to balance both of the workloads, both our program integrity
    and our direct service. If you have someone who walks into an
    office, you have to serve them. Or if someone calls you on the
    telephone, you have to serve them. And then that work is not
    finished. You have to take action as a result of that call or
    that visit. So certainly that moves to the front of the pile,
    but I think clearly we have tried to balance that.
        Now, we do all of the redeterminations and the CDRs for
    which we are funded, and we are certainly doing other kinds of
    things like our Centenarian Project and other kinds of projects
    that we try to use to identify any overpayments or anyone who
    is getting a benefit who should not. So I would say it is a
    continuous effort to balance the workload.
        Mr. REED. So when the Commissioner came and testified to us
    in previous hearings that there was a conscious decision on his
    part to switch the priority to incoming eligibility claims at
    the expense of post-entitlement work, the Commissioner's
    testimony was inaccurate?
        Ms. COLVIN. Now, I can't speak to that because I am not
    aware of that testimony, so I am certainly not going to
    contradict what he would say. But I am responsible for the
    program integrity initiative in the agency, and I have not seen
    that getting shifted. We have been pushing that as we always
    have.
        Mr. REED. So from your experience at the agency, that
    priority shift has not occurred?
        Ms. COLVIN. I would say since I have been there, there is
    still a focus on program integrity work.
        Mr. REED. Wait. But that didn't answer the question. Was
    there a shift--there is always a focus on everything you do?
        Ms. COLVIN. I can't speak to whether or not there has been
    a shift. I don't know what timeframe that testimony was given.
    I would be very happy to provide you an answer for the record.
    But I am not aware that there has been a shift of not doing
    program integrity work and instead doing----
        Mr. REED. Incoming eligibility determination.
        Ms. COLVIN. Right, right.
        Mr. REED. That is fair.
        And then I was going to ask, one of the issues I see here
    is that the qualification for the benefits changes, as we point
    out, as you pointed out, are midmonth many a times, and as the
    individual is eligible for the benefits, things change. Has
    there been any exploration of technology? I know there is some
    testimony, Mr. Besharov, from you, in the U.K. there is
    realtime reporting wage technology that is out there that the
    U.K. is relying on. Is there anything in the agency's point of
    view, Ms. Colvin, warranting to get to that realtime data?
        Ms. COLVIN. Thank you for that question. Yes, we have the
    SSI telephone wage reporting where an individual can call in
    and report any change in their wages during the month. Right
    now it is a telephone call. We are moving that application to
    both mobile phone services as well as Internet services. We
    want to make it as easy for people to be able to report changes
    as possible. We think that will go a long way.
        Mr. REED. Now, that is self-reporting from the individual.
    I understand in the U.K.--and I will move over here to Mr.
    Besharov--the U.K. realtime data, that is different?
        Mr. BESHAROV. That comes from the employer. And so as soon
    as there is a change, the employer sends the information to Her
    Majesty's Revenue and Customs.
        Mr. REED. My understanding, I mean, I had four small
    businesses before I came to Congress, and I was doing my weekly
    deposits, I was doing my payroll, and right there you have it
    all listed. You have your Social Security number. Is there a
    roadblock between the IRS and that reporting data, that instant
    wage, weekly deposits that are occurring, not getting over to
    SSA to simply check what is happening during that midstream?
        Ms. COLVIN. Right now the wage reporting from the IRS is
    yearly. We have had proposals in to do it quarterly, but there
    has been concern about the impact on small businesses.
        Mr. REED. Now, what impact on small businesses? They are
    already reporting the data from a majority of the cases.
        Ms. COLVIN. Well, they would have to report it more
    frequently to the IRS to be able to report it to us. We get a
    yearly report. It is usually about 18 months, I think, by the
    time we get it, so the information is old when we get it. And
    we do, in fact, then go back and make changes as a result of
    that, but you have already incurred overpayments.
        We are entering into a contract with--and I don't remember
    the name of it now--that would allow us to have a contract with
    large----
        Mr. REED. Ms. Colvin, if I could reclaim my time. Because
    that is not my understanding of the process of how it works.
    And when I sign those payroll statements, and when I deposit
    it, is that an accurate statement that the wage reporting
    information is only prepared at the end of the year for the
    IRS?
        Ms. COLVIN. I said we only get it at the end of the year.
        Mr. REED. You only get it. But if you got it earlier--well,
    my understanding is the IRS does get that information earlier.
    It gets it on a weekly basis with the deposits. So if you got
    that information earlier, would that help you with this issue?
        Ms. COLVIN. Absolutely.
        Mr. REED. And would you advocate for that?
        Ms. COLVIN. I would advocate for getting it sooner,
    absolutely. And as I was mentioning, we are entering into an
    agreement with an organization called The Work Number, which is
    a large payroll provider for employers that will, in fact, make
    information available to us more immediately. These are your
    large employers like Walmart and some of the other kinds of
    businesses.
        So we are just beginning to look at that. We think that
    will also help us to get the wage data sooner than we currently
    are able to get it. But anything that would allow us to get
    that information sooner would, in fact, allow us to reduce the
    overpayments.
        Mr. REED. And you would be supportive of that?
        Ms. COLVIN. Yes.
        Mr. REED. Okay. Thank you.
        Chairman DAVIS. The gentleman's time has expired.
        And the chair now recognizes Mrs. Black from Tennessee for
    5 minutes.
        Mrs. BLACK. Thank you, Mr. Chairman.
        And I want to thank the panel for being here today. It has
    been very instructive. And I want to follow through on what my
    colleague was just talking about.
        Mr. Besharov, I want to go to you and talk a little bit. If
    you can ferret out a little bit more, in looking at best
    practices--and I think that is something we always should be
    doing is looking at how somebody else is doing, and do they
    have a better widget or a better way of doing it than what we
    do--can you ferret out a little bit more for me on what the
    U.K. is doing that we would like to model? What would be a good
    thing?
        Mr. BESHAROV. Thank you.
        I think first and foremost they have identified that people
    who are labeled as disabled have different levels of
    disability, and with social help many of them can work. And I
    think that is an important social idea.
        I had lunch this afternoon with the senior assistant to
    Iain Duncan Smith, who I think you had here a few weeks ago at
    a hearing. They have just conducted the next phase of their
    review. Seventy percent of the disability recipients in the
    U.K. were found to be either not disabled or only partially
    disabled. And the idea is not to throw them off, but to help
    them.
        So I think one thing we can learn from this is that our
    system, which was created a long time ago--part of our
    disability system we inherited as we tried to create something
    from the States--if we looked at this and compared it to what
    other countries are doing, I think we would decide, number one,
    that there are things called temporary disabilities, and the
    advantage of a temporary disability is that people don't have
    to wait a year or more to get on benefits because we are not
    worried that it is a permanent decision. The decision can be
    reviewed a year or 6 months later. It is much easier to review
    a decision when an initial decision was only temporary. It is
    easier to turn that decision around.
        Second, there are different levels of disability, and it is
    not just a question of allowing people to work, but giving them
    a little bit of a nudge. We think your disability is such and
    such; we think you can earn a certain amount. And if we look at
    other countries, what we see is the incentives that they create
    on top of those rules can often be very powerful.
        A person who goes to work in the Netherlands from a partial
    disability, designated having a partial disability, is able to
    earn more than the amount the disability payment would have
    been. Now, we say, well, that is just going to cost us money,
    but it turns out that that moves so many more people into work,
    that the government ends up saving money.
        We should be able to ask these questions, and the only way
    you could ask them and answer them is to have modern data
    systems and have a system that understands that it is not just
    asking people if they want to work. We have to encourage them a
    little, and we have to give them the financial incentives if
    they take a job that we will respect the fact that they took a
    job.
        Mrs. BLACK. So looking at the analysis and the data from
    the U.K., can we then assume from that that they have less
    people who stay consistently on their SSI? Do they have people
    moving in and out of the program and, therefore, a total number
    that is less than what we have here in the United States? Is
    that an assumption we can jump to or not?
        Mr. BESHAROV. I don't know enough about the program, but I
    wouldn't jump to that conclusion. If we look at other countries
    like the Netherlands, which had a much larger problem, we know
    that when these rules are imposed, the total number of disabled
    goes down. But in this country it really would depend on what
    the error rates are and whether the incentives would help
    people who are only partly disabled.
        I know this is only anecdote, and there are experts around
    the table, but I come from the welfare world, and I can tell
    you what I am told. If someone spends 6 months, a year, or 2
    years getting on a disability program, and then the first thing
    that happens is they get a letter saying, well, why don't you
    go look for a job--am I right about that? And so what I am told
    is there is a certain, wait a minute, now, I am not going to
    mess up what I waited so long to get.
        So I think part of the problem is the structure of the
    program which creates such a high hurdle to get in that it is
    difficult to get out.
        Mrs. BLACK. I know my time is going to run out here. The
    other question that I would have--and each of the panel
    members, this would be something for you as well. I know you
    are not going to have time to answer it. You may be able to do
    that followup in writing for me--but in just breaking down
    silos, which silos would you need to break down to have a
    system that you feel would be working together, where you would
    have the right hand knowing what the left hand is doing?
        I think that my colleague had already rooted that out in,
    Ms. Colvin, you getting information more quickly. So there is a
    silo there that needs to be broken down so that it can--and you
    all have been doing a good job, and in reading this notebook I
    want to commend you on that, but we still have a ways to go.
        So thank you so much, Mr. Chairman, and I yield back the
    remainder of my time.
        Chairman DAVIS. I thank the gentlewoman. I want to thank
    all of you on the panel for your thoughtful perspectives on
    these issues. We appreciate you investing the time to come in
    and talk about the experience in SSI that can be transferable
    to other means-tested programs.
        If any Members have additional questions, they will get
    them to you directly. We would ask that you submit them. They
    will send them to you in writing. If you would submit your
    answers also to us for the record so they can be inserted for
    all to see, we would appreciate that.
        Chairman DAVIS. Thank you again for being here, and this
    hearing is adjourned.
        [Whereupon, at 4:21 p.m., the Subcommittee was adjourned.]
        [Submissions for the Record follow:]

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