    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                     PROTECTING THE SAFETY NET FROM WASTE,
                                FRAUD, AND ABUSE

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

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                     of the

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

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  June 3, 2015

                                   __________

                                Serial 114-HR04

                                   __________

             Printed for the use of the Committee on Ways and Means

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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                          COMMITTEE ON WAYS AND MEANS

                         PAUL RYAN, Wisconsin, Chairman

    SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan,
    KEVIN BRADY, Texas                     Ranking Member
    DEVIN NUNES, California              CHARLES B. RANGEL, New York
    PATRICK J. TIBERI, Ohio              JIM MCDERMOTT, Washington
    DAVID G. REICHERT, Washington        JOHN LEWIS, Georgia
    CHARLES W. BOUSTANY, JR., Louisiana  RICHARD E. NEAL, Massachusetts
    PETER J. ROSKAM, Illinois            XAVIER BECERRA, California
    TOM PRICE, Georgia                   LLOYD DOGGETT, Texas
    VERN BUCHANAN, Florida               MIKE THOMPSON, California
    ADRIAN SMITH, Nebraska               JOHN B. LARSON, Connecticut
    LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
    ERIK PAULSEN, Minnesota              RON KIND, Wisconsin
    KENNY MARCHANT, Texas                BILL PASCRELL, JR., New Jersey
    DIANE BLACK, Tennessee               JOSEPH CROWLEY, New York
    TOM REED, New York                   DANNY DAVIS, Illinois
    TODD YOUNG, Indiana                  LINDA SANCHEZ, California
    MIKE KELLY, Pennsylvania
    JIM RENACCI, Ohio
    PAT MEEHAN, Pennsylvania
    KRISTI NOEM, South Dakota
    GEORGE HOLDING, North Carolina
    JASON SMITH, Missouri
    ROBERT J. DOLD, Illinois

                           Joyce Myer, Staff Director

             Janice Mays, Minority Chief Counsel and Staff Director

                                     ______

                        SUBCOMMITTEE ON HUMAN RESOURCES

                 CHARLES W. BOUSTANY, JR., Louisiana, Chairman

    TODD YOUNG, Indiana                  LLOYD DOGGETT, Texas
    KRISTI NOEM, South Dakota            JOHN LEWIS, Georgia
    PAT MEEHAN, Pennsylvania             JOSEPH CROWLEY, New York
    GEORGE HOLDING, North Carolina       DANNY DAVIS, Illinois
    JASON SMITH, Missouri
    ROBERT J. DOLD, Illinois

                                C O N T E N T S

                                   __________
                                                                       Page

    Advisory of June 3, 2013 announcing the hearing..................     2

                                   WITNESSES

    PANEL ONE
    The Honorable Xavier Becerra, Member of Congress, Washington,
      D.C............................................................    22
    The Honorable Kevin Brady, Member of Congress, Washington, D.C...    13
    The Honorable Rosa L. DeLauro, Member of Congress, Washington,
      D.C............................................................    34
    The Honorable Sam Johnson, Member of Congress, Washington, D.C...     6
    The Honorable Tom Reed, Member of Congress, Washington, D.C......    27
    The Honorable David G. Reichert, Member of Congress, Washington,
      D.C............................................................    18
    The Honorable James B. Renacci, Member of Congress, Washington,
      D.C............................................................    30
    PANEL TWO
    Dan Bertoni, Director, Education, Workforce, and Income Security
      Issues, Government Accountability Office.......................    52
    Curt Eysink, Executive Director, Louisiana Workforce Commission..    75
    Patrick O'Carroll, Jr., Inspector General, Social Security
      Administration.................................................    42
    Debra Rohlman, Vice President of Government Sales, Equifax
      Workforce Solutions............................................    84
    Rebecca Vallas, Director of Policy for Poverty to Prosperity
      Program, Center for American Progress..........................    95

                           SUBMISSIONS FOR THE RECORD

    Consortium for Citizens with Disabilities, statement.............   140
    Justice in Aging, statement......................................   146
    Northeast Michigan Community Mental Health Authority, letter.....   154
    Stephen A. McFadden, statement...................................   156
    Western Center on Law & Poverty, letter..........................   167
    Work Opportunity Tax Credit Coalition. letter....................   172
    Work Opportunity Tax Credit Coalition, statement.................   175

                            QUESTIONS FOR THE RECORD

    Curt Eysink......................................................   130
    GAO..............................................................   135
    Debra Rohlman....................................................   139

             PROTECTING THE SAFETY NET FROM WASTE, FRAUD, AND ABUSE

                                  ----------

                            WEDNESDAY, JUNE 3, 2015

                 U.S. House of Representatives,
                           Committee on Ways and Means,
                               Subcommittee on Human Resources,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 10:03 a.m., in
    Room 1100, Longworth House Office Building, the Honorable
    Charles Boustany [Chairman of the Subcommittee] presiding.
        [The advisory announcing the hearing follows:]

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        Chairman BOUSTANY. This committee will come to order.
        Welcome to today's hearing on how we can protect key safety
    net programs from waste, fraud, and abuse. Today we will review
    risks involving Unemployment Insurance and Supplemental
    Security Income, which benefits low-income, elderly, and
    disabled individuals.
        Now, UI and SSI are very different programs. But there is
    one thing that they have in common. Each wastes billion of
    dollars in taxpayer funds every year due to their high improper
    payment rates. Specifically with regard to fiscal year 2014,
    SSI improperly paid $5.1 billion, while UI improperly paid $5.6
    billion.
        This is a serious problem. I have a little video I want to
    play here. This is an investigative piece that was done by CNN
    that I believe explains how vulnerable the UI program is to
    abuse. So if we could have the video, please.
        [Video shown.]
        Chairman BOUSTANY. Since fiscal year 2007, SSI and UI
    improper payments have been near 10 percent, wasting nearly
    $100 billion combined in taxpayer funds. I don't see this as a
    partisan matter. OMB has placed both UI and SSI on their annual
    list of programs with the highest error rates since they
    started compiling such a list.
        Even worse, these error rates are not improving. They are
    getting worse. The UI error rate actually rose last year. And a
    2012 GAO report found that cumulative SSI overpayment debt rose
    92 percent in the prior decade, while overpayment recovery
    increased only 40 percent. One cause of higher error rates is
    that both programs place an emphasis on getting checks out of
    the door before verifying that they are going to the right
    person.
        Fortunately, we should be able to make progress there
    without harming those who need this vital help. And they need
    it right away. There is a way to deal with this. And as we
    learn from several of our witnesses, data systems exist that
    agencies can use to better prevent improper payments by
    identifying thieves, prison inmates, fugitives, people with
    significant earnings, people with significant savings, or
    others who simply should not be collecting these benefits.
        We are very fortunate to have a number of our colleagues
    joining us today to discuss specific proposals to protect these
    programs from abuse. So today we welcome all our witnesses and
    look forward to learning more about how we can both reduce
    improper payments and improve services for the Americans who
    truly are in need.
        So I look forward to hearing all the testimony and working
    with members on both sides of the aisle to do just that.
        Chairman BOUSTANY. With that, I am pleased to yield to the
    ranking member, Mr. Doggett, for his statement.
        Mr. DOGGETT. Thank you, Mr. Chair.
        And I thank our colleagues for being here.
        I think that, for the most part, this is an issue on which
    we agree. If there is fraud, if there is wrongful payment, it
    needs to be eliminated so that those individuals these programs
    were designed to serve have their needs met.
        I think whether that fraud comes from billions of dollars
    that pharmaceutical companies improperly collect from Medicaid
    or Medicare or individual receipt of an incorrect monthly
    payment, Congress should do everything reasonable to prevent
    abuse.
        That is one of the reasons that I have been a sponsor of
    Mr. Becerra's Social Security Fraud and Error Prevention Act,
    on which we have been seeking a hearing, and I hope we can
    secure a hearing on that bill in the near future to provide new
    enforcement tools.
        I think it is very important to not conflate identity
    theft, which we just heard about and which I believe not a
    single bill that we are discussing today addresses. It is an
    issue that Representative Johnson and I and Representative
    Brady addressed as it related to the Medicare identity and the
    use of Social Security numbers on Medicare.
        And I think it took us many years to address it. And it
    could not be done without some additional resources being
    allocated to address this problem. And that goes to the heart
    of the identity theft issue. There is a serious identity theft
    issue with the Internal Revenue Service as well.
        If these agencies are not funded to address these new
    technology crimes adequately, they cannot do their job. And
    that is something I believe we will hear about more from
    Representative DeLauro, from some of our other colleagues, the
    need to see that the resources are there to protect the
    taxpayer and prevent fraud.
        There is a difference between identity theft, fraud of some
    parent applying for benefits to which they are not entitled,
    and then that overpayment that occurs from a miscalculation.
    Some of those miscalculations, to some extent, get exaggerated
    by the fact that so little has been done to update SSI over the
    years. The SSI income and earnings limits have not been raised
    since the program was established in 1974.
        And while prompt payment and getting the check out the door
    may be criticized--and we certainly don't want that to happen
    for identity theft--if you are a parent out there with a
    disabled child, you want to not have to wait indefinitely to
    get the resources that this program was designed to provide.
        The SSI asset limit has not been raised since the 1980s.
    These are decades-old standards that mean lower earnings, and
    assets trigger payments for beneficiaries in ways that were not
    conceived originally for the program.
        There are also other specifics that need to be addressed.
    Senators Wyden and Hatch in the Senate and Representative
    Marino and I here in the House have introduced the Ensuring
    Access to Clinical Trials Act as a result of contact from
    families who have children with cystic fibrosis and would like
    to continue the current law that is set to expire soon that
    allows some beneficiaries to exempt a small amount of their
    income when they are participating in medical trials from the
    income determination under SSI.
        On the whole, whether it is Mr. Reichert's PERP bill--we
    don't want to pay prisoners. That clearly is fraud, and we need
    to prevent it. I am surprised it hasn't already become law--to
    some of the other ideas that are advanced, I agree with the
    chairman, we need to be working to do everything we can,
    explore every option to prevent fraud.
        But let's also see some focus in this subcommittee on the
    deficiencies in the program from the standpoint of those who it
    is designed to help. And there is much more work to be done in
    that area as well.
        I yield back, Mr. Chairman. Thank you.
        Chairman BOUSTANY. Thank you, Mr. Doggett.
        Without objection, each member will have the opportunity to
    submit a written statement and have it included in the record.
        And I also want to remind our witnesses we are going to
    adhere to the 5-minute rule for oral statements. But rest
    assured that, without objection, all written testimony will be
    made part of the permanent record.
        We have two panels today. We will start with a very
    distinguished member panel. We have Congressman Sam Johnson,
    Congressman Kevin Brady, Congressman Dave Reichert, Congressman
    Xavier Becerra, Congressman Tom Reed, Congressman Jim Renacci,
    and Congresswoman Rosa DeLauro.
        Welcome. We are really glad to hear your testimony. We know
    you have done a lot of work in this area. And so we look
    forward to going through your testimony.
        Congressman Johnson, you may begin.

      STATEMENT OF THE HONORABLE SAM JOHNSON, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. JOHNSON. Thank you, sir.
        You know, I appreciate you and Mr. Doggett holding this
    hearing today. Thank you.
        As the chairman of the Social Security Subcommittee, I have
    looked at Disability Insurance programs from nearly every angle
    and have seen how vulnerable the program is to waste, fraud,
    and abuse. And make no mistake. Waste, fraud, and abuse in the
    disability program is a problem, a problem for the American
    taxpayer and a problem for deserving beneficiaries.
        Social Security works hand in hand with a number of other
    programs that are run by the Federal Government. Because of
    this, many of the commonsense reforms that I have introduced
    also affect the program under this subcommittee's jurisdiction.
        I have enjoyed working with several of you on legislation
    to improve these programs, and I would like to discuss a number
    of them today. First, I want to discuss the Social Security
    Disability Insurance and Unemployment Benefits Double Dip
    Elimination Act of 2015.
        In a 2012 report, the Government Accountability Office
    found that, under current law, thousands of people have been
    able to receive benefits from both unemployment and disability
    at the same time. Both provide cash to workers, but for
    different reasons. Unemployment Insurance benefits are there
    for those workers who have lost their jobs, but are still able
    to work. However, when a worker is unable to work due to a
    severe medical condition that is expected to last at least a
    year or result in death, Disability Insurance benefits are
    there.
        Now, even though disability benefits are there for those
    who can't work and unemployment benefits are there for those
    who can work, under current law, someone can receive both at
    the same time. That doesn't make sense. That is why I
    introduced commonsense legislation to help preserve Social
    Security disability benefits only for those who cannot work.
        I also recently teamed up with a number of this
    subcommittee, Congressman Kristi Noem--thank you, Kristi--to
    introduce the Control Unlawful Fugitive Felons Act of 2015.
    This legislation is just common sense.
        That is why similar bills passed the Congress in 1996 and
    2004. Our bill would prevent felons fleeing a warrant as well
    as probation and parole violators from collecting Supplemental
    Security Income and Social Security.
        The legislation is simple. If you are fleeing prosecution,
    we aren't going to give you the same benefits as law-abiding
    citizens. Our bill has built-in protections so that only
    serious criminals can be denied benefits. And Social Security
    has the authority to determine whether good cause exists for
    benefits to be restored when the matter is questionable.
        Americans won't stand for criminals getting benefits,
    especially when Social Security will soon lack the money to pay
    full benefits. This bill has the support of the Social Security
    inspector general.
        I would also like to thank the law enforcement community in
    my district for supporting this bill.
        Mr. Chairman, I ask unanimous consent to submit several
    statements of support from the police chiefs as well as the
    country sheriff from back home.
        Chairman BOUSTANY. Without objection.
        [The information follows: The Honorable Sam Johnson]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. JOHNSON. Thank you.
        Finally, I have worked closely with the chairman of this
    subcommittee, Chairman Boustany, on legislation that would help
    deter, punish, and prevent fraud in the Social Security system.
        The Disability Fraud Prevention Act of 2015 would impose
    additional penalties and charges for those who are defrauding
    the retirement, disability, or Supplemental Security Income
    programs. We have seen scandals in West Virginia, New York, and
    Puerto Rico where fraudsters stole millions of dollars.
        The legislation Chairman Boustany and I have produced is
    simple. If you commit fraud against Social Security, we will
    punish you and you will repay the money you took from the
    American taxpayer until it is made whole.
        All told, these bills combined would save almost $10
    billion. Of that money, $6.5 billion would go to Social
    Security trust funds. With the Disability Insurance trust fund
    running out of money in a little over a year, Congress should
    act on these commonsense proposals. The American taxpayers
    expect nothing less.
        I want to thank Chairman Boustany and Congresswoman Noem
    for working with me on these proposals. And I want to thank you
    for inviting me today to discuss with you these important and
    commonsense measures.
        Chairman BOUSTANY. Thank you, Chairman Johnson.
        [The prepared statement of Chairman Johnson follows:]

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        Chairman BOUSTANY. Mr. Brady, you may proceed.

      STATEMENT OF THE HONORABLE KEVIN BRADY, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. BRADY. Chairman Boustany, Ranking Member Doggett, all
    the subcommittee members, a good-paying job is the best
    solution to income inequality and ensures the ladder of success
    is open to every American willing to get a skill and work hard.
        A solid education, workforce training programs that
    actually perform in better connecting local workers with local
    jobs, that is the key to good-paying job. And it is even more
    important as millions of Americans continue to look for work in
    the worst economic recovery in half a century.
        So given our half-trillion dollar deficit that will only
    grow and the impact that has on future generations, when it
    comes to safety net programs, our principles should be clear.
    One, no Federal program should pay more than a job. Two, no
    Federal program should trap Americans in poverty. And, three,
    let's fund programs that are proven to work and not a dime to
    those that don't.
        Despite all the Federal programs, we have a lot of
    Americans still living below the poverty line. It is our job to
    not only protect taxpayers, but to redirect them towards the
    programs that actually get people to independence and out of
    poverty.
        Chairman Boustany talked about the stunning $5.6 billion in
    improper payments in Unemployment Insurance in 2014. That is as
    much as we spend for the entire Federal job training program.
    Think about it. We waste as much as we spend on all the
    programs to help get people back to work.
        Like Congressman Johnson and others on the panel today, I
    have two suggestions to help stretch those dollars and redirect
    them. The first one, relatively minor. Stop double dipping of
    unemployment benefits by furloughed Federal workers.
        You may remember that, during the temporary shutdown in
    2013, some Federal employees were furloughed and applied for
    and received unemployment benefits. The Federal employees were
    later provided retroactive pay, but some States considered
    paying their Federal workers twice for not working at all.
        The Furloughed Federal Employee Double Dip Elimination Act
    prevents that in the future. My guess is, while that is not
    looming on the horizon, some day it may. So let's make it clear
    you don't get paid twice for not working.
        But the bigger solution really is about unemployment.
    Another problem plaguing America in our unemployment program is
    illegal substance abuse. We want Americans to earn paychecks
    instead of collecting unemployment checks. Yet, one of the
    worst common reasons, most common reasons, individuals can't
    return to work is due to the fact that they cannot pass a drug
    test.
        In the 2006 report, the Society for Human Resource
    Management said 84 percent of private employers conducted pre-
    employment drug testing. That has only grown mostly because of
    the Federal mandates dealing with security after 9/11.
        So with the majority of employers subjecting job applicants
    to drug testing, the Federal Government should allow States to
    incorporate drug testing into their UI programs if they believe
    it will help connect these individuals to full-time employment.
        The bottom line is that taxpayers shouldn't subsidize drug
    use. If you are on illegal drugs, you are simply not job-ready.
    And, in short, the Federal unemployment program should be a
    drug-free zone.
        To address the problem, Congress has already passed
    legislation that the President signed, the Middle Class Tax
    Relief and Job Creation Act of 2012, supported by many
    lawmakers, Republicans and Democrats, on the Ways and Means
    Committee. It included a carefully crafted compromise that for
    the first time allowed States to screen and test unemployment
    recipients for illegal substances.
        Unfortunately, after years of inexcusable delay and
    roadblocks that ignored the language and intent of the law, the
    Department of Labor has issued proposed guidance on this
    provision. It is simply unworkable for States that are
    interested in drug testing their unemployment recipients and
    getting the help they need in getting them into a job.
        The bottom line is States are ready to implement the law
    that is on the books. The Federal Government must uphold its
    promise. My home State of Texas has already passed legislation
    and has been recognized by the White House for the innovative
    ways to get Texans back to work.
        But, again, the White House needs to apply the law, allow
    States like Texas and others to continue that innovation and
    get people back into work and making good wages rather than
    collecting benefit checks.
        Mr. Chairman, ranking member, and members, I am ready to
    work with the subcommittee as we go forward with these reforms.
    Thanks for having me here today.
        Chairman BOUSTANY. Thank you, Chairman Brady. And thank for
    your work in this area.
        [The prepared statement of Chairman Brady follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman BOUSTANY. Next, we will hear from Chairman
    Reichert.
        You may proceed.

     STATEMENT OF THE HONORABLE DAVE REICHERT, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF WASHINGTON

        Mr. REICHERT. Thank you, Mr. Chairman, and thank you,
    Ranking Member Doggett, for inviting me here today to talk
    about the PERP Act.
        And I just want to take a moment to thank Matt and Ryan of
    your staff for the innovative acronym. That was, I think,
    accomplished on behalf of my past profession as a police
    officer. So PERP Act actually stands for Permanently Ending
    Receipt by Prisoners. So I thought that was pretty innovative
    on their part.
        I introduced this bill last Congress as chairman of the
    subcommittee with the full support of many of you that are
    sitting here today. And I appreciate Chairman Boustany's
    continued support as well as Mr. Renacci's for joining me once
    again in introducing this commonsense piece of legislation.
        The PERP Act is very straightforward. Understanding that
    the existing UI program rules that operate in all States, an
    individual must be able, they must be available, and they must
    be actively seeking work in order to be eligible to collect UI
    benefits, which are paid to those who are unemployed through no
    fault of their own.
        Individuals confined in jails, prisons, and other penal
    institutions are, by definition, not able and not available to
    work and have historically been presumed to be not eligible for
    UI benefits. However, in recent years, thanks to news articles
    that have appeared in multiple States, it has become clear that
    this law is not being properly enforced.
        Headlines included from Illinois State, ``More Than 2
    million in Unemployment Benefits Went to Inmates''; from New
    Jersey, ``Audit Says 20,000 Inmates Were Mistakenly Paid Nearly
    $24 million in State and Federal Benefits''; from Pennsylvania,
    ``Inmates Collect Millions in Unemployment Benefits in
    Philadelphia Jails''; and, again, from South Carolina,
    ``Government Waste: Inmates Collecting Millions in Fraudulent
    Unemployment Checks.''
        These articles and many others make clear that taxpayer
    money is being wasted on these payments by the millions. We
    must make it crystal clear that this is absolutely
    unacceptable. Incarcerated individuals should not be receiving
    unemployment benefits meant for individuals and families fallen
    on hard times and working to get back on their feet.
        States must be making affirmative efforts to end this
    abuse. Law-abiding taxpayers should never have to worry that
    their tax dollars are being spent on improper payments to those
    who have broken the same laws they work so hard to follow.
        The PERP Act resolves this problem by taking the following
    steps: Number one, it bars States from paying unemployment
    insurance checks to local, State, and Federal prisoners,
    strengthening a current implied prohibition because prisoners
    are not able and available for work, as I said; number two, it
    requires State UI agencies to regularly compare UI roles with
    currently available inmate rosters to ensure UI checks are not
    paid to current inmates.
        At a minimum, these States must access and use prisoner
    information that the Social Security Administration has
    collected and used since the late 1990s to prevent the payment
    of Supplemental Security Income, SSI, benefits checks to
    currently incarcerated individuals. This current data match is
    simple, it is quick, and it is efficient and can readily be
    replicated by States to ensure that UI benefit checks are not
    paid to prisoners.
        In 2011, the UI program paid out a total of $10.3 billion
    in improper payments. By ensuring that none of those payments
    continue to go to individuals in jails and prisons, we can take
    a major step towards increasing that total amount. By ending
    the reliance on self-reporting of ineligibility for UI benefits
    and, instead, requiring States to use already existing Federal
    databases of prisoners, we can create a simple, efficient, and
    affordable system.
        Again, I thank my Ways and Means Committee colleagues for
    listening to my testimony today and for the invitation to be
    here to share thoughts on this legislation. I appreciate your
    support.
        And I yield back.
        Chairman BOUSTANY. I thank the chairman for his testimony.
        [The prepared statement of Chairman Reichert follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman BOUSTANY. Next, we will go to Congressman Becerra.
    Thank you. Another member of the Ways and Means Committee.

    STATEMENT OF THE HONORABLE XAVIER BECERRA, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. BECERRA. Mr. Chairman, Ranking Member Doggett, and
    Members of the Committee, thank you for the opportunity to talk
    about fighting errors and fraud in the programs Americans
    depend on.
        I want to begin by noting that the Social Security
    Administration has very effective tools to prevent fraud and
    errors, and these tools have been proven to work. What SSA does
    not have are the resources to fully deploy those tools to fight
    fraud and errors.
        Today, as I talk about my legislation, the Social Security
    Fraud and Errors Prevention Act of 2015, I also want to make
    sure to discuss how budget decisions Congress makes impact the
    SSA's ability, the Administration's ability, to use the
    effective tools it has developed for this purpose of fighting
    fraud and errors.
        Since 2010, the Social Security Administration's local
    offices, the front lines against fraud and error, have lost
    more than 5,000 skilled employees to budget cuts and dozens of
    local offices have closed their doors. And to the point of this
    hearing, as a result of budget cuts, the Social Security
    Administration has fewer fraud investigators on the beat now
    than it had 5 years ago.
        In each of the past 5 years, the Social Security
    Administration received an average of $1 billion less than it
    needed to manage Social Security and Supplemental Security
    Income programs. I said a billion, not a million. The Social
    Security Administration's budget is lower now than it was in
    2010, even though it is providing services to more than 7.5
    million additional Americans today than in 2010.
        In 2 of the last 4 years, this Congress has failed to
    allocate funding provided by the Budget Control Act for Social
    Security and SSI eligibility reviews, which have been
    demonstrated to save as much as $13 for every $1 we invest in
    those reviews to fight fraud. Using the most conservative
    estimates of return on investment, American taxpayers have lost
    between $2 billion and $6 billion because of this failure to
    act.
        Budget cuts are also undermining the customer service that
    American workers pay for with their tax dollars. Americans are
    waiting more than 2 weeks just to schedule an appointment in a
    Social Security office. Callers to Social Security's 800 number
    wait an average of 22 minutes, and that is if they can get
    through at all. More than a third of the callers get a busy
    signal and give up before getting an operator.
        Processing time for applications for those who qualify on
    the basis of a disability are rising. Right now, over a million
    people are awaiting a hearing before an administrative law
    judge. And wait times are now in excess of 450 days.
        Time and again, the Social Security Administration has
    proven that it can fight effectively against fraud and errors
    if Congress just provides the resources. Recently, the Social
    Security Administration discovered sophisticated fraud
    conspiracies in New York and Puerto Rico. Thanks to the
    investigators, hundreds of arrests have been made, benefits
    have been terminated, and improperly paid benefits are being
    recovered.
        The Social Security Administration has developed tools to
    prevent payment errors, ranging from simple prepayment reviews
    to sophisticated computer modeling that identify patterns of
    fraud and error. On average, using these tools saves more than
    $10 for every $1 the Social Security Administration invests in
    them.
        Last year, about 1,300 people were convicted of Social
    Security fraud based on investigations conducted by the Social
    Security Administration's inspector general. The special Social
    Security Administration fraud prosecutors secured nearly $9
    million in restitution for the Social Security trust fund.
        Nearly a year and a half ago, several members introduced a
    Social Security Fraud and Error Prevention Act, H.R. 1419, in
    this Congress. Our bill provides a secure stream of dedicated
    resources to ensure that Social Security can use its most
    effective proven tools to root out fraud and prevent waste and
    errors. It also incorporates the recommendations made by the
    Social Security Administration's inspector general.
        We would make sure that there are pre- and post-payment
    case reviews to make sure that only those who are supposed to
    receive benefits get them. We would ensure that SSA has enough
    resources to recover overpayments and collect the monetary
    penalties that are assessed for fraud.
        We would guarantee the fraud investigation budget of the
    Social Security inspector general. And we would fund special
    prosecutors for Social Security in order to end the budget cuts
    that have let some criminals get away with fraud.
        Our bill would also expand Social Security's ability to
    detect and punish fraud by expanding elite fraud-fighting units
    and increasing penalties against those who conspire to commit
    fraud, including those in a position of trust, such as doctors
    who provide false evidence of disability.
        The Ways and Means Committee has yet to consider our bill
    or any other plan to support the Social Security
    Administration's efforts to reduce fraud and error, but we hope
    that we will have an opportunity soon to hold that type of a
    hearing to move forward with the Social Security
    Administration.
        Working together, we can secure Social Security dollars for
    those who paid them and earned them. And, Mr. Chairman, I think
    we all agree that we can move on this in a way that helps
    secure Social Security and all those services that we provide
    to people because they paid for them and earned them.
        I yield back.
        Chairman BOUSTANY. Thank you, Congressman Becerra. We
    appreciate your testimony.
        [The prepared statement of Congressman Becerra follows:]

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        Chairman BOUSTANY. Next we will go to Congressman Reed,
    another valued member of the Ways and Means Committee.
        You may proceed, sir.

       STATEMENT OF THE HONORABLE TOM REED, A REPRESENTATIVE IN
                     CONGRESS FROM WASHINGTON, D.C.

        Mr. REED. Well, thank you, Mr. Chairman and Ranking Member
    Doggett and all the Members of the Subcommittee.
        As a former member of this subcommittee, it is an honor to
    appear before you today to discuss important reform measures
    within the Supplemental Security Income program. Too often,
    Federal policies directed at supporting individuals and
    families in poverty do not require results, leaving too many
    Americans in need with too few opportunities to break the cycle
    of poverty.
        What we do know is that education, even a high school
    diploma, is a key to higher earnings and a likelihood to be
    employed, which can help break the cycle of poverty that many
    youth in America are faced with. That is why I introduced H.R.
    2511, the School Attendance Improves Lives, or SAIL, Act.
        The SAIL Act will require youth, ages 16 and 17, receiving
    Supplemental Security Income, SSI, to attend school with
    appropriate, but limited, exceptions when the health of the
    child does not permit school attendance.
        I care about our Nation's youth, and I want them to reach
    adulthood with the skills they need to succeed. It is
    imperative to encourage and incentivize young people to stay in
    school and build a future full of opportunity, self-
    sufficiency, and economic success. This encouragement must
    begin with the parents of children receiving SSI.
        Parents must provide the best opportunities for their
    children to succeed. Letting children on SSI drop out of school
    is not fair to them, and it leaves them far less equipped to
    succeed as adults. It is for this reason that high school
    dropouts have the highest rate of unemployment today.
        My bill improves accountability within the SSI program to
    ensure children do not find themselves in this position.
    Roughly 66 percent of youth on SSI are still in the program at
    age 19, which drastically increases the likelihood that they
    will remain on SSI well into their adulthood.
        One reason children on SSI continue to receive benefits for
    extensive lengths of time is that the program does not offer
    incentives for personal success. This measure is one way to
    ensure those receiving SSI continue toward the path of self-
    sufficiency.
        We can and must do better for those in this program. Thirty
    percent of children ages 17 and 18 on SSI are not attending
    school. By requiring children to remain in school as they
    receive SSI, these individuals will increase their likelihood
    of graduation, obtaining employment, and breaking that cycle of
    poverty that we all agree must be broken. Attending school
    enables these children to achieve their true potential.
        When poverty affects more than 46 million Americans, it is
    imperative that we work together to address this issue by
    giving those in need all the tools to empower themselves.
    Emphasizing education by including accountability measures
    within SSI is an important step, in my opinion, toward
    achieving this goal, and I offer it to the subcommittee for
    consideration and, hopefully, action soon here in the 114th
    congressional session.
        With that, I yield back, Mr. Chairman.
        [The prepared statement of Congressman Reed follows:]

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        Chairman BOUSTANY. I thank the gentleman.
        Next we will go to Congressman Renacci, another member of
    the Ways and Means Committee.
        You may proceed sir.

     STATEMENT OF THE HONORABLE JAMES RENACCI, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF OHIO

        Mr. RENACCI. Mr. Chairman, Ranking Member Doggett, members
    of the Human Resources Committee, thank you for the opportunity
    to be here today to discuss member initiatives to restore
    program integrity in UI and SSI.
        In 2010, the good people of northeast Ohio elected me to
    represent them in Washington, and I thank them for the
    opportunity to help change business as usual.
        Since taking office, I have sought to work with both
    Republicans and Democrats alike to help advance the pro-growth
    policies we need to get America's economy moving again and to
    provide faith in the idea of the American Dream: If you work
    hard, you can be successful.
        This is why I firmly believe that we must place progress
    over politics and work together to end the job-crushing
    politics that have consumed Washington and choked progress
    toward economic recovery.
        I am honored to serve on the Ways and Means Committee with
    many colleagues in this room today. We continue to work to
    implement smart policies aimed at stabilizing our entitlement
    programs and simplifying our Federal tax system, among other
    things.
        The focus of this hearing is finding ways to reduce waste,
    fraud, and abuse in the UI and SSI systems. And I applaud my
    colleagues who are testifying with me on their efforts to
    improve program integrity.
        Over the last several years, we have been discouraged by
    some of the worst job reports we have seen in recent times.
    Though the unemployment rate has ticked down, it is largely due
    to our shrinking labor force. The lesson learned is clear: We
    must turn to pro-growth solutions that will help northeast
    Ohioans and Americans across the country get back to work.
        That is why I introduced the Flexibility to Promote
    Reemployment Act with my friend John Carney from Delaware, a
    co-founder of a bipartisan working group that he and I had
    founded 4 years ago.
        This bipartisan bill would encourage job creation by
    providing States with more flexibility to help unemployed
    individuals collect paychecks instead of benefit checks.
        Under the Middle Class Tax Relief and Job Creation Act of
    2012, the Department of Labor was granted waiver authority
    within the Unemployment Insurance program. The waivers allowed
    unprecedented flexibility in the use of State UI funds,
    enabling States to operate demonstration projects designed to
    assist the unemployed in their efforts to reenter the
    workforce.
        To date, Texas is the only State that has applied for a
    waiver, and its application was swiftly denied. Many States
    have described the rigorous application process created by the
    Department of Labor as onerous and time-consuming, including my
    State, Ohio. So, today, no State is participating.
        At a time when too many continue to struggle with
    unemployment, we should be doing everything we can to help
    incite growth and investment in our local communities. It is
    time for the Department of Labor to go back to the drawing
    board and reassess its application requirements.
        The Flexibility to Promote Reemployment Act would require
    the Department of Labor to do just that, benefiting both
    employers and employees. It would implement a series of reforms
    to the current waiver in an attempt to make it more appealing
    to States, increasing States' flexibility to help unemployed
    individuals find employment.
        Among the reforms in the Flexibility to Promote
    Reemployment Act, this bill would clarify application
    requirements and demonstration activities, allow for greater
    transparency in the demonstration determination process, and
    require an evaluation from the Department of Labor with
    cooperation by the States. Additionally, this legislation
    further extends the deadline for waiver applications to 2019.
        It is critical that we reduce the unnecessary Washington
    red tape that stands in the way of job growth in Ohio's 16th
    District and throughout the country. A good place to start is
    by working with States to make unemployment programs more
    effective to both job seekers and job creators.
        Encouraging job creation is not a partisan issue. Democrats
    and Republicans alike agree we must advance policies that will
    fuel the economic recovery we so desperately need.
        I fully expect that my colleagues on both sides of the
    aisle will support the Flexibility to Promote Reemployment Act,
    and I look forward to seeing this bipartisan, commonsense
    legislation swiftly moved through the legislative process.
        Again, thank you for holding this hearing. I look forward
    to working with all of my colleagues to advance many of the
    initiatives discussed today.
        Chairman BOUSTANY. I thank my colleague for his testimony.
        [The prepared statement of Congressman Renacci follows:]

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        Chairman BOUSTANY. Next, we will go to Congresswoman
    DeLauro.
        You may proceed.

     STATEMENT OF THE HONORABLE ROSA DELAURO, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CONNECTICUT

        Ms. DELAURO. Thank you very much, Mr. Chairman. It is a
    pleasure to join with you and Ranking Member Doggett and the
    distinguished members of the Ways and Means Committee, all of
    whom are colleagues on this panel as well this morning.
        I thank you for inviting me to testify about two of the
    most important programs in our social safety net, Supplemental
    Security Income and Unemployment Insurance.
        We must not lose sight of the people these programs are
    there to help. Millions of American families rely on them every
    day to make ends meet, and they make a real difference.
        SSI supports low-income seniors and people living with
    disabilities, including families who need extra help to raise a
    disabled child. For a great many people, SSI is a critical
    piece that helps them to live their lives day to day.
        UI helps workers who lose their job through no fault of
    their own to continue putting food on the table, paying their
    bills, and raising their families. And despite an improving
    economy, millions of Americans still need that support to get
    through a tough period in their lives.
        Both programs help the economy as recipients spend their
    benefits on the necessities of life. I hope and I know we can
    agree that these benefits should always be there for struggling
    families who need them. Eliminating fraud and abuse is a
    critical part of keeping these programs strong for the vast
    majority of recipients whose need is all too genuine.
        Clearly, those who break the law should be prosecuted, and
    we all agree to that. However, as the ranking member on the
    Labor, HHS, Education Appropriations Subcommittee, I must
    highlight the damage years of budget cuts have done, including
    to the very programs that are designed to root out fraud and
    abuse.
        At the Department of Labor, the Labor, HHS, Education bill
    funds activities known as, quote, ``reemployment eligibility
    assessment and reemployment services,'' or REARES. These
    programs help beneficiaries to access reemployment services,
    but they also identify and remove individuals who are not
    eligible for UI. In this way, every dollar invested in REARES
    saves the UI system an estimated $3 to $4 in benefits.
        In the 2010 budget resolution, we provided a $50 million
    cap adjustment for these anti-fraud activities. It is estimated
    by OMB to have saved more than $200 million in State UI funds.
    Unfortunately, American taxpayers no longer recoup all of those
    savings because the Budget Control Act eliminated the cap
    adjustment.
        So my first suggestion to this committee is to convince our
    colleagues on the Budget Committee to reinstate the cap
    adjustment and then to double it. If we do that, we can save
    taxpayers $400 million each year, $4 billion over the next
    decade.
        And the Social Security Administration, which oversees SSI,
    the Labor, HHS, Education bill, funds two program integrity
    initiatives: continuing disability reviews, known as CDRs, and
    SSI redeterminations. For every $1 invested, SSI
    redeterminations save about $4. CDRs save around $15.
        In the 2015 budget, the President asked for more than $1.7
    billion for these cost-cutting initiatives. Because of the
    years of underfunding of SSA's operating budget, the
    subcommittee had to cut the request by $211 million, another
    casualty of budget austerity. As a result, taxpayers are
    missing out on a potential savings of more than $2 billion.
        My second suggestion to the committee is to increase the
    allocation for Labor, HHS appropriations bill so we can fully
    fund the President's request. Some of my colleagues may think
    the solution is to take more funds from SSA's operating budget.
    That would be a mistake. SSA's operating budget has already
    been cut by more than $1.2 billion in real terms since 2010.
    SSA has lost 11,000 staff between 2010-2013, has closed at
    least 64 field offices in the last 5 years.
        You need to talk to seniors in your district to think about
    what these closures mean. People are forced to spend seven
    times as long on the phone to reach an SSA agent. Five times as
    many callers are faced with a busy signal. The average wait for
    a disability hearing decision is now more than 15 months.
        We cannot expect SSA to do more with less. It can only do
    less with less. I agree that fraud and abuse needs to be
    stamped out, but we need to not slash the SSA's operating
    budget to do it.
        I would leave you with this: The allocation--I know it is
    not in the purview of the Ways and Means Committee--is $3.7
    billion lower than it was for 2015. That means less for the
    Department of Labor, less for SSA.
        I believe it is the wrong direction. And what we can do is
    we can prevent errors and, at the same time, root out fraud and
    abuse, but without hurting hard-working Americans and the
    services that they have earned.
        So I ask you to keep those programs in mind as you move
    forward. The programs are too important to be allowed to
    wither. We need to root out that fraud and abuse. We do not
    need to do it in a way that undermines these programs for
    millions of families who support them.
        Thank you for the opportunity to be here this morning.
        Chairman BOUSTANY. We thank you for your testimony.
        [The prepared statement of Congresswoman DeLauro follows:]

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        Chairman BOUSTANY. I want to at this point thank all the
    members for the great work you have done in this area and for
    your testimony and appearing before the committee today.
        At this point we will refrain from questions. We know we
    can talk to you on the House floor or whenever to further
    discuss these items. So at this point we thank you.
        And we will call up our second panel.
        Ms. DELAURO. Thank you.
        Chairman BOUSTANY. We are very pleased to welcome our next
    panel. This is a very distinguished panel who I believe will
    lend tremendous expertise to the discussion of this topic and
    potential pathways forward.
        First, we will be hearing from Patrick P. O'Carroll, Jr.,
    Inspector General, Social Security Administration.
        Welcome.
        Next, Dan Bertoni, Director, Education, Workforce, and
    Income Security issues, from the Government Accountability
    Office.
        Thirdly, Mr. Curt Eysink, from my home State of Louisiana,
    where he serves as Executive Director of the Louisiana
    Workforce Commission. He will bring a State perspective to
    this.
        Fourth, we have Debra Rohlman, Vice President of Government
    Sales, Equifax Workforce Solutions, considerable private sector
    expertise.
        Last, but certainly not least, Rebecca Vallas, Director of
    Policy, Poverty to Prosperity Program, Center for American
    Progress.
        We welcome all of you. This will be a good, lively debate
    and discussion. We appreciate the expertise that you all bring
    to this.
        So, with that, we will start with you, Mr. O'Carroll.
        I would ask each of you to try to adhere to the 5-minute
    rule for your oral testimony. As I said earlier, your written
    testimony will be made a part of the record in total.
        So, Mr. O'Carroll, you may proceed.

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

        Mr. O'CARROLL. Good morning, Chairman Boustany, Ranking
    Member Doggett, and Members of the Subcommittee. Thank you for
    the invitation to testify.
        Last September, police in Richmond, Virginia, issued an
    arrest warrant for a man who had committed serious crimes. The
    suspect was wanted for, amongst other crimes, carjacking, using
    a firearm to commit a felony, and malicious wounding. Within
    weeks, a U.S. Marshal's fugitive task force, along with OIG
    special agents, located and arrested the man in Virginia.
        Because this fugitive received SSI payments, the task force
    found him with an assist of our Fugitive Enforcement Program.
    Through information sharing and collaboration with law
    enforcement agencies across the country, this program has
    helped bring thousands of fugitives to justice.
        In the past, SSA would have suspended this fugitive's SSI
    payments based on the felony arrest warrant from Richmond. But
    since he was wanted for carjacking rather than for fleeing
    justice, SSA could not take action to stop his payments until
    he was behind bars.
        For many years, we have worked with local law enforcement
    to locate fugitive felons and help SSA cut off their payments.
    However, since 2009, two court decisions have dramatically
    limited SSA's ability to stop these payments. I discuss these
    decisions further in my written testimony, but they essentially
    stopped SSA from suspending payments unless someone is wanted
    specifically for flight or escape.
        As I said, the effect has been dramatic. In 2009, SSA
    suspended benefits for more than 58,000 individuals. In 2014,
    after the court decisions, SSA suspended benefits for 830
    individuals. The court decisions did not affect our ability to
    share locator information with law enforcement. And we continue
    to help those agencies in their efforts to apprehend fugitives.
        Your subcommittee, with support from the Subcommittee on
    Social Security, recently introduced the Control Unlawful
    Fugitive Felons Act. This law would again discontinue payments
    to individuals who are the subject of an outstanding felony
    arrest warrant.
        The Social Security Act also prohibits payments to
    prisoners, and we have a long history of overseeing and
    improving the agency's efforts in this area. Some of our
    earliest audit work recommended that SSA improve collection of
    prisoner information and pursue agreements to obtain this
    information.
        Because of our work, SSA now has agreements to obtain
    prisoner data from 50 States, the Federal Bureau of Prisons,
    and thousands of local corrections facilities. SSA matches this
    inmate data against its payment records every month to make
    sure that prisoners don't receive a check. SSA estimates that
    it suspends benefits to about 60,000 prisoners each year,
    saving about $500 million per year. This success story is a
    good example of the potential that data matches for ensuring
    that SSA payment accuracy.
        For many years, my office has recommended these matches to
    SSA. For example, we work with Homeland Security to match
    Customs travel data to SSA records, an estimated $150 million
    in overpayments to SSI recipients based on their absence from
    the United States for more than 30 days.
        And as your subcommittee knows, we recently reviewed SSA's
    process for removing self-employment earnings from SSI
    recipient records and notifying the IRS of this discrepancy. We
    recommended that SSA work with the IRS to identify earned
    income tax credit fraud.
        Unfortunately, we in SSA are limited in our ability to
    secure data matches under the Computer Matching and Privacy
    Protection Act. We have proposed an exemption from the CMPPA
    only for data matches intended to identify fraud and waste. One
    current House proposal, the Inspector General Empowerment Act,
    includes this exemption.
        In conclusion, SSI payment accuracy is a high priority for
    my office. The program is a critical safety net for the most
    vulnerable citizens in our society. We must also not forget
    that we are accountable to the taxpayers who fund this program
    to ensure that only those who are eligible can receive these
    payments.
        I appreciate your interest in improving the integrity of
    the SSI program. We look forward to collaborating with your
    subcommittee on the best ways to do this effectively. Thank you
    again for the invitation to testify, and I will be happy to
    answer any questions.
        Chairman BOUSTANY. Thank you very much, Mr. O'Carroll.
        [The prepared statement of Mr. O'Carroll follows:]

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        Chairman BOUSTANY. Mr. Bertoni, you may proceed.

     STATEMENT OF DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE,
      AND INCOME SECURITY ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. BERTONI. Thank you, Mr. Chairman, Ranking Member
    Doggett, Members of the Subcommittee. Good morning.
        I am pleased to discuss our work in the Supplemental
    Security Income program and issues affecting program integrity
    which, left unchecked, increase the potential for waste, fraud,
    and abuse.
        Last year, SSA paid almost $56 billion to over 8 million
    SSI recipients. Given the size of the program, even small
    errors in benefit payments can result in substantial loss to
    taxpayers.
        My statement is based on a body of work conducted over
    several years and describes SSA's challenges with ensuring SSI
    program integrity.
        In summary, the agency faces real challenges in preventing
    and detecting overpayment. To ensure that only eligible
    individuals receive benefits, follow-up reviews after benefits
    are granted provide an important check on growth and are key to
    program integrity.
        Federal law requires that SSA conduct periodic continuing
    disability reviews, or CDRs, to determine whether recipients
    have medically improved and to cease benefits as appropriate.
    However, last year SSA reported a backlog of 1.3 million
    reviews.
        Moreover, we found that adult reviews declined by 70
    percent. Those for children with mental impairments fell by 80
    percent. We also noted that 435,000 child cases with mental
    impairments were overdue a CDR, oftentimes for many years,
    including thousands originally deemed likely to medically
    improve within 12 to 18 months.
        We recommended that SSA address this backlog and calculated
    the agency would save $3 billion over 5 years as a result.
    Since the report was issued, the agency has increased the
    number of child CDRs conducted annually and plans to eliminate
    the backlog. However, it is unclear whether it will continue to
    use any new funding increases to review children most likely to
    medically improve.
        Beyond untimely reviews, overpayments can also occur when
    recipient bank account and wage information is incomplete or
    outdated. The unreported value of bank accounts and wages
    represent nearly 40 percent of all SSI overpayments.
        While the agency has developed tools to better capture
    banking and wage information, there are limitations. For
    example, the agency now has electronic access to recipient
    banking data. It can query this information when determining
    benefit eligibility. However, this data is not entirely
    complete, and staff rely on recipients to self-report such
    accounts and the amounts of funds in them.
        SSA also uses telephone wage reporting to capture recipient
    wage information to adjust benefits to prevent improper
    payments. However, the accuracy of this information is also
    limited due to recipient self-reporting and SSA's inability to
    process wage information for those with multiple employers.
        Beyond prevention, the agency has also had difficulties
    with overpayment recovery and management of its waiver process.
    Generally, recipients must repay overpaid benefits, but can
    request a waiver under certain circumstances. SSA approves
    about 76 percent of all waiver requests. And documentation and
    management oversight is limited.
        Specifically, we found that staff can approve waiver
    requests of $2,000 or less without any supervisory approval. We
    recommended that SSA review this policy and amend it to improve
    program integrity. The agency agreed with our recommendation,
    but has not taken action, despite a 2015 internal study that
    showed 50 percent of such waiver decisions were incorrect.
        To improve oversight, we also recommended that SSA study
    waiver activity to identify patterns specific to its regions,
    field offices, and even individual staff. Unfortunately, the
    agency declined to conduct such analyses and will continue to
    be limited in its efforts to recover overpaid taxpayer dollars.
        Finally, I would be remiss in not stating that SSI program
    complexity has been a longstanding challenge, contributing to
    high administrative costs and risk of overpayments. Beyond
    documenting income and resources, staff must also apply a
    complex set of rules to assess recipients' living arrangements
    and other financial support received.
        In prior work, we have cited program complexity as a major
    driver of payment errors, program abuse, and excessive
    administrative costs. In light of this longstanding issue, we
    have begun work for this subcommittee, examining potential
    options and barriers to streamline policies for calculating
    recipient benefits.
        As we proceed, we will continue to work closely with you in
    your efforts to enhance the design and integrity of the SSI
    program.
        Mr. Chairman, this concludes my remarks. I am happy to
    answer any questions that you may have. Thank you.
        Chairman BOUSTANY. Thank you, Mr. Bertoni.
        [The prepared statement of Mr. Bertoni follows:]

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        Chairman BOUSTANY. Mr. Eysink, you may proceed.

        STATEMENT OF CURT EYSINK, EXECUTIVE DIRECTOR, LOUISIANA
                          WORKFORCE COMMISSION

        Mr. EYSINK. Thank you, Chairman Boustany, Ranking Member
    Doggett, and Members of the Committee for this opportunity to
    share with you some of the progress Louisiana has made in
    reducing fraud, waste, and abuse in the Unemployment Insurance
    system and, also, to suggest an approach which may improve the
    performance of the system while lowering its costs across the
    country.
        That focus should be on reemployment activities. During the
    Great Recession, it became apparent that claimants who got help
    from the State and local staff in all of our offices got a good
    result faster than those who relied only on our self-service
    tools to look for work entirely on their own.
        Now in Louisiana they must appear almost every 2 weeks
    during the first 10 weeks of their claims for coaching, labor
    market information, job search assistance, assessments or other
    services identified in their customized reemployment plans.
    They must conduct certain fundamental job search actions in our
    system so that we can continue to validate their eligibility.
        And it is working. About 75 percent of otherwise eligible
    claimants initially fail to meet the requirements and their
    benefits are suspended. Only about one-third of those with
    suspensions returned to the system to comply and resume their
    benefits. That means about half of all claimants who receive an
    initial payment are quickly disqualified. Crosschecks against
    our wage records and new hires databases shows that only a
    small percentage of those who are disqualified, in the single
    digits, do not return to work.
        Last year an analysis by Louisiana State University
    economists showed that, since we launched this program, our
    trust fund has grown in the tens of millions of dollars, more
    than they could account for by the strengthening of our
    economy. Louisiana's unemployment rate is 1.2 percentage points
    higher than the national average, but the average duration of
    benefits is more than a week less.
        Congress deserves a lot of credit for this approach. You
    launched and funded the Reemployment and Eligibility Assessment
    Program to help States and their claimants recover from the
    Great Recession. Our brand is blended with that program. It is
    more intense and it more tightly integrates unemployment
    insurance with workforce development and job placement. It is
    proving to work well in better economic times, also. We are not
    the only State experimenting with variations of this theme, but
    more States should join us.
        Another very important benefit of having people show up in
    person and prove they are who they claim they are is that it
    blocks them from being able to use others' identities for
    fraud. This is as true for identity theft rings as it is for an
    individual who borrows the identity of a friend or a relative
    who is incarcerated. And if they are already working, they
    can't show up to try to maintain eligibility for benefits.
        This summer we will launch the second phase in the
    modernization of our Unemployment Insurance system. It will
    greatly increase automation, reduce costs, and improve
    integrity by, among other things, building in 40 different
    crossmatches with State, Federal, and private databases. These
    crossmatches will verify each claimant's identify in realtime
    and force claimants to address discrepancies before they can
    complete their claim.
        Mr. EYSINK. Those discrepancies, for example, could be a
    Social Security number that doesn't match their name or birth
    number associated with it or it could be that the claimant
    identify matches a prison inmate.
        I want to give you an example of a crossmatch that is
    really working today, as proposed to us by Texas and jointly
    developed by our two States. Many claimants work in one State
    and live in the other across the border. Those claimants still
    have to register for work in the State in which they leave.
        Well, we weekly swap information on those claimants and
    those who don't register are disqualified. So far, since that
    program began 3 years ago, we have together avoided $36.7
    million, an estimate, of improper payments in our two States.
    The total programming and implementation cost was just $43,000.
        We are also instituting the same kinds of integrity on the
    employer side. We have a portal which they have to use to file
    their wage records. When they file, we validate the identity of
    the employer, but also the identities of their staff members
    who engage in that system, so that nobody can commit fraud from
    that side or file false reports. It has improved our error rate
    dramatically and lowered our costs.
        Finally, I want to talk about--I leave you with one
    thought. I do not believe that States have to choose between
    good customer service and paying claims timely, on one hand,
    and UI integrity, on the other. It does take time and money to
    rebuild a broken system, but it is possible to improve service
    and integrity at the same time. And the investment is returned
    many times over. In 2008, our system ranked very poorly, 52nd
    or 53rd against other States, for many indicators, other states
    Guam, Puerto Rico and D.C.
        Today we are doing much, much better. Our improper payment
    rate has been cut to about the OMB threshold and continues to
    improve. We have reduced the duration of claims, and we are a
    national leader, I believe, in identifying misclassified
    workers.
        The cost burden of our Unemployment Insurance system as a
    percentage of payroll is the second lowest amongst the States.
    We could not have made these improvements without the
    persistence and support of the Department of Labor and the
    great ideas and lessons learned from many other States. Such
    collaboration, along with the State's ability to develop
    solutions that best fit their own circumstances, are keys to
    the continued improvement of the entire system.
        I am happy to answer any questions. And thank you for your
    time today.
        Chairman BOUSTANY. Thank you for sharing the Louisiana
    experience with us and for the leadership you have provided in
    that regard. So thank you. I appreciate you being here today.
        [The prepared statement of Mr. Eysink follows:]

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        Chairman BOUSTANY. Ms. Rohlman, you may proceed.

    STATEMENT OF DEBRA ROHLMAN, VICE PRESIDENT OF GOVERNMENT SALES,
                      EQUIFAX WORKFORCE SOLUTIONS

        Ms. ROHLMAN. Good morning, Chairman Boustany, Ranking
    Member Doggett, and distinguished Members of the Subcommittee.
    My name is Debra Rohlman, and I serve as Vice President of
    Government Sales Solutions and Client Relations for Equifax
    Workforce Solutions, a subsidiary of Atlanta-based Equifax,
    Inc., which is based in Congressman Lewis' district.
        I appreciate the opportunity to appear before you today and
    provide information related to the employment and income
    verification services that Equifax Workforce Solutions provides
    State and Federal agencies to assist in their administration of
    public assistance programs.
        Separate from our traditional credit-reporting business,
    our automated employment and income verification service is
    provided through our proprietary database known as The Work
    Number. This database, which is governed by all applicable
    Federal and State regulations, is comprised of the current
    payroll data of thousands of employers with the salary
    information of their workforces.
        Equifax is then able to deliver a streamline, secure, and
    timely transfer of information between employers and verifiers
    that ultimately benefits the consumer by accelerating the
    decision process on their loan or government benefit while
    freeing the employer from the disruption of verification
    requests.
        In 2014, we provided over 18 million verifications to
    government entities, including agencies in all 50 States and
    Washington, D.C. We help these agencies by providing data for
    applicants of various programs, such as SNAP, TANF, CHIP,
    Medicaid, UI, SSI, as well as for child support enforcement and
    states and local housing authorities.
        My written testimony provides a more detailed overview of
    how we work with these and other Federal agencies. We commend
    the bipartisan efforts to address the issues around
    implementation of Treasury's Do Not Pay portal, originally
    intended to reduce improper payments, yet hindered by statutory
    privacy concerns.
        I would now like to address the potential changes that
    should be considered to improve the efficacy of the UI and SSI
    programs.
        In SSI, one area where change is needed is the frequency in
    which benefit charges against employers, unemployment accounts
    are issued. Our data indicates improper payments are more
    easily identified and addressed when State UI agencies provide
    benefit-charged statements with a weekly breakdown of data
    versus some agencies' practices of quarterly or even annual
    data. We would welcome the committee's support in requiring all
    States to provide weekly UI benefit charge detail.
        The second area where opportunity exists is the format of
    wage audit and earnings verification forms. The majority of UI
    agencies require wage data be provided in a weekly, Sunday
    through Saturday, format. In practice, this is not a common
    payroll frequency and often results in complex recalculations
    by employers, incorrect data provided or simply noncompliance.
        If UI agencies would accept wage information in an
    employer's customary format at the initial earnings wage audit
    and pursue a detailed breakdown only on actual or suspected
    fraud cases, compliance would improve. We would encourage the
    committee to require State UI agencies' consideration of more
    traditional payroll systems, verification databases, and
    technologies.
        In regard to the current SSI verifications process, there
    are two areas that can be improved. First, SSI verifications
    are currently performed on a manual per-applicant basis that is
    both labor- and time-intensive.
        We would welcome the committee's support in expanding the
    SSA's use of commercial databases to allow batch verifications
    of applicants. This batch process would ensure that every SSI
    applicant is checked on a monthly basis for any changes to
    their employment or income and, therefore, preventing potential
    improper benefit payments.
        Second, due to statutory limitations, SSI is only permitted
    to verify income for eligibility at initial application and for
    annual redetermination because an applicant's job status can
    change a number of times throughout a year.
        Congress should consider passing legislation that would
    allow the SSA to verify income with a third-party database on a
    monthly basis in a batch format instead of annually on a per-
    applicant basis.
        In closing, Equifax encourages the committee to review the
    program improvement recommendations I highlighted today and in
    my written testimony. We stand committed to helping State and
    Federal agencies make eligibility determinations, reduce
    improper payments, improve service, and increase overall
    program integrity.
        Thank you for the opportunity to testify, and I welcome
    your questions.
        Chairman BOUSTANY. We thank you, Ms. Rohlman.
        [The prepared statement of Ms. Rohlman follows:]

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        Chairman BOUSTANY. Next we will go to Ms. Vallas.
        You may proceed.

    STATEMENT OF REBECCA VALLAS, DIRECTOR OF POLICY OF THE POVERTY
          TO PROSPERITY PROGRAM, CENTER FOR AMERICAN PROGRESS

        Ms. VALLAS. Thank you, Chairman Boustany, Ranking Member
    Doggett, and Members of the Subcommittee for the invitation to
    appear today. My name is Rebecca Vallas, and I am the Director
    of Policy for the Poverty to Prosperity Program at the Center
    for American Progress.
        Without our Nation's safety net, America's poverty rate
    would be twice as high as it is today and more than 40 million
    more Americans would be poor. In addition to mitigating poverty
    and hardship in the short term, our safety net is also an
    investment that pays long-term dividends.
        For example, children, helped by programs such as the EITC
    and the Supplemental Nutrition Assistance Program have improved
    health, are more likely to graduate high school and attend
    college, and have increased employment and earnings as adults.
        A strong safety net is of the utmost importance to us all,
    given that fully half of Americans will experience at least 1
    year of poverty or near poverty at some point during our
    working years, a figure that rises to a whopping 80 percent if
    you include unemployment and needing to turn to the safety net.
        Unemployment Insurance, Social Security Disability
    Insurance, and Supplemental Security Income are some of our
    Nation's most effective antipoverty tools. While the benefits
    that these programs provide are modest, they are nothing short
    of a lifeline.
        UI replaces less than half of wages for the typical worker,
    but it protected 5 million hard-hit Americans from poverty in
    2009, at the height of the Great Recession, and it prevented
    1.4 million foreclosures between 2008 and 2012.
        Disability Insurance benefits are so modest that 1.6
    million beneficiaries live in poverty. But without DI, more
    than 4 million disabled worker beneficiaries would be poor.
        SSI benefits are even more modest, on average, just $541
    per month, half the Federal poverty line for an individual. But
    for many beneficiaries, these benefits are the difference
    between having a roof over their heads and being out on the
    streets. SSI is also particularly vital for families caring for
    children with the most significant disabilities and severe
    health conditions.
        As we seek to ensure a strong safety net, ensuring program
    integrity must be a top priority. Thankfully, these programs
    have rigorous safeguards to root out improper payments and have
    payment accuracy rates of over 90 percent.
        It is important to keep in mind that the vast majority of
    improper payments are not due to fraud, which comprises just a
    tiny fraction of overpaid benefits in these programs. We must
    work together to ensure that payment error rates remain as low
    as possible, and providing DOL and SSA with adequate
    administrative funding is of critical importance to achieving
    that goal.
        Unfortunately, appropriators have long deprived these
    agencies of the resources they need to perform critical program
    integrity activities that pay for themselves many, many times
    over in the long run.
        The Social Security Fraud and Error Prevention Act
    introduced by Mr. Becerra and Ranking Member Doggett would
    ensure that SSA has the administrative resources it needs as
    well as taking other important steps, such as heightening the
    penalties for defrauding Social Security, keeping evidence from
    fraud-committing doctors out of the disability determination
    process with limited good-cause exceptions, putting CDI units
    in all 50 States and more. These are crucial steps with
    bipartisan support, and I would urge Congress to swiftly pass
    these important legislation.
        Importantly, we must take a hard look at proposals that aim
    to enhance program integrity to ensure that they will not lead
    to unintended consequences. For example, the SAIL Act, which we
    heard about earlier, raises significant concerns along these
    lines.
        Education is, without question, the key to success, and
    ensuring that all young people have access to a high-quality
    education must be a foremost national priority.
        However, as currently constructed, this bill would penalize
    our Nation's most vulnerable youth for experiencing legitimate
    and understandable interruptions in their schooling. H.R. 918,
    the DI/UI Double Dip Elimination Act also raises serious
    concerns along these lines.
        Policymakers and elected officials on both sides of the
    aisle have long shared the goal of helping people with
    disabilities to work. However, this bill would undermine this
    bipartisan objective by punishing beneficiaries who do attempt
    to return to work.
        Finally and fundamentally, in addition to keeping fraud and
    abuse as rare as possible, achieving the goal of program
    integrity also requires that we address egregious backlogs so
    that Americans with severe health conditions need not die by
    the thousands waiting for the benefits that they need, as is
    currently happening across the United States, that State UI
    phone systems work properly so that unemployed workers can
    timely access jobless benefits while seeking to get back on
    their feet, and that beneficiaries do not get hit with large
    overpayments, despite doing everything right, due to massive
    delays in processing work reports. Adequate administrative
    resources are critical to keeping these basic promises to the
    American people.
        In addition, I discuss in detail in my written testimony
    several commonsense steps that would strengthen vital programs
    while also reducing improper payments, such as simplifying
    Social Security's work rules, improving its earning reporting
    and recording systems, using computer algorithms to prevent
    overpayments before they happen instead of just to detect them
    after the fact, and, finally, reforming SSI's outdated asset
    limits, which have not budged in nearly 3 decades, as well as
    the program's income counting rules, which also have not
    changed since the program was established.
        I look forward to working with the members of this
    subcommittee to ensure program integrity in our safety net.
    Thank you. And I am happy to take any questions that you may
    have.
        Chairman BOUSTANY. We thank you for your testimony.
        [The prepared statement of Ms. Vallas follows:]

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        Chairman BOUSTANY. And we thank all of you for your very
    profound testimony.
        Now we will move to a series of questions. And I will start
    by stepping back for a moment.
        I showed a video at the very beginning. I know that Mr.
    O'Carroll and Mr. Bertoni have been looking at this problem for
    quite some time.
        Mr. Eysink, from a State perspective, Ms. Rohlman from
    Equifax's perspective on this, are those concerns valid? Is
    this a serious problem?
        Obviously, the CNN investigative piece depicted what
    appears to be a very serious problem. We have heard numbers. Is
    it your view that this is a serious problem, a growing problem?
        Mr. EYSINK. It is a serious problem, and it is, I think,
    where we have to be more vigilant in the future than we have
    been today. I think that is the next frontier in fraud
    prevention, is these rings that get very sophisticated about
    the data that they get through hacking or whatever means and
    then use it to defraud our systems.
        But I think, at least I hope, that our approach of
    requiring claimants to show up in person will allow us to stop
    any claims like that very quickly. I think validating
    identities and so forth with all of our crossmatches up front
    will prevent many of them from getting the claim through the
    first screen.
        And the other, I think, requirement in every State that
    would prevent a lot of this, too, is the work registration
    requirement. It is unlikely that somebody who has a system to
    defraud Unemployment Insurance directly is also going to be
    able to meet the work registration requirement which, in most
    cases, is an entirely different system, and that needs to be
    enforced very widely.
        Chairman BOUSTANY. I think in your oral testimony you
    mentioned some costs associated with the reforms Louisiana had
    implemented.
        Is this--I mean, the general cost of what you're proposing,
    is it unduly expensive for the States to implement?
        Mr. EYSINK. It is very expensive and difficult for States
    that have not yet moved off of their old mainframe systems to
    implement these crossmatches and all these other interfaces. I
    think the States--and I think it is in the teens now that have
    launched these new systems. We are in process.
        It gets much easier when it is a Web-based system dealing
    with a Web-based system. But there is a cost associated with
    that that will have to be borne. The benefits are great to the
    trust funds, but the cost is borne on the administrative side.
        Chairman BOUSTANY. Could you give us an order of magnitude
    on cost.
        Mr. EYSINK. For us, we are going to spend close to $10
    million to modernize our system. Other States could spend
    considerably more than that, depending on the route they have
    taken or the method that they are taking, working with other
    States or not or going alone. Several States have tried and
    failed. So they are having to duplicate those costs again. It
    can easily get into the tens of millions per State.
        Chairman BOUSTANY. Ms. Rohlman, do you want to comment?
    Same questions, basically.
        Ms. ROHLMAN. Sure. So I would agree definitely that this is
    a serious problem. We know that the improper payment rate
    remains over 11 percent. Much of what has been said about the
    modernization of systems is necessary.
        The Department of Labor has certainly been trying to
    address this issue and others, again, with the database, as I
    mentioned in my testimony about Do Not Pay, how that database
    was trying to reduce improper payments as well. Definitely
    something that needs improvement.
        Chairman BOUSTANY. What is a reasonable amount of time to
    get these new systems in place?
        Mr. EYSINK. It can take--for us, it is going to take,
    probably by the time we are done, a little over 3 years to make
    that whole transition.
        I would say there are some relatively unsophisticated
    things States can do to protect against some kinds of fraud,
    for instance, scan for sequential Social Security numbers. It
    sounds obvious, but some of these rings just crank them out
    like that. The other thing is multiple claims from seemingly
    unrelated people going to the same addresses.
        Chairman BOUSTANY. And implementing the personal appearance
    requirement, was that an expensive endeavor or was it difficult
    to implement?
        Mr. EYSINK. It was difficult to implement because it
    required a change in practices and culture in our one-stops
    around the State. They didn't schedule. It was all walk-in
    traffic.
        But now we have to schedule those visits when they have low
    walk-in traffic so that people don't get stacked up and wait.
    They have to do some activities in a classroom style. But these
    are just logistics issues.
        There is some expense in that it requires staff and many
    officers who they really could not afford to have at the time.
    There are some facilities expenses. Not all of them are really
    equipped for that volume of people. But these are logistics
    issues that can and should be solved.
        Chairman BOUSTANY. Mr. O'Carroll and Mr. Bertoni, the two
    of you have been looking at these problems systematically. I
    know, Mr. O'Carroll, we spoke in the office not long ago about
    some of this.
        And, I mean, there are specific bills that have been
    proposed. You heard some of the testimony from members. There
    are other bills out there. I think you heard what my home State
    of Louisiana is doing.
        Could you comment further on these kinds of steps to get
    program integrity in place.
        Mr. O'CARROLL. Yes, Chairman. One of the things that I
    mentioned in my testimony is the legislation on allowing IGs to
    be exempt from the Computer Matching Act.
        And the reasoning behind it is pretty much as we were
    talking before with identity theft, that, in government
    databases, we know and have a lot of identifying information
    about individuals that the agencies can share with each other,
    which would identify who the person is and make sure that the
    right person is getting the right benefits.
        So, in that regard, that would be--one of the bills is the
    IG Empowerment Act. But of the bills that are being proposed by
    this committee here, all of them--the Fraud Act, the CUFF Act--
    each of those are going after the facilitators, the organized
    groups that are going out there trying to defraud us.
        I think that is a major step in the right direction and
    then making sure that the people that are fleeing from us
    aren't going out there doing more crimes while we are still
    giving them checks.
        Chairman BOUSTANY. Thank you.
        Mr. Bertoni.
        Mr. BERTONI. I think, in general, we need to move into a
    21st-century verification system. So many times we hear about
    recipients self-reporting without third-party verification
    across numerous programs across government. I have been
    reporting on it for 20 years.
        So we need to move into the realm of data cross-matching.
    We need to create interfaces, whether it be State to Federal,
    Federal to Federal, Federal to State, you know, whatever needs
    to happen. We need to triangulate data so we have corroboration
    of what people are attesting to.
        As an example on the UI side, we talk about face-to-face
    interaction. I can go on the Internet and go to a Web site in
    Hong Kong and get the highest grade driver's license that will
    pass TSA screening and TSA--you know, whatever their
    verification devices, have that in my pocket, walk into an
    Unemployment Insurance agency, present that. They look at the
    picture. It matches the license. And we are good to go.
        What you need to do is verify that license with a third
    party. So with an interface with a DMV, a driver's license
    entity, if you ran that and that picture comes back in an
    online mode and, if the technologies are there, you could see
    that there was a disconnect between that person's face on the
    license and the one that the DMV has. So a classic example of
    data crossmatching that could work.
        Chairman BOUSTANY. Seemingly simple solutions, yet we are
    still fighting with this identity theft issue. I certainly
    appreciate the input and the insights you provided.
        I am now pleased yield to my ranking member, Mr. Doggett,
    for questions.
        Mr. DOGGETT. Thank you, Mr. Chairman.
        And thanks to each of our witnesses for their testimony.
        You know, I am as outraged as anyone by the notion that
    someone who's incarcerated is getting public benefits when
    public benefits are under such siege here and in many State
    capitals and there is so much need out there.
        But I think it is apparent from the testimony that we don't
    get law enforcement in this area any less expensively than we
    get it for any other kind of crime. Whether it is identity
    theft, whether it is getting, as you were saying, Mr. Bertoni,
    triangulation data, the States cannot be expected to do this
    for free and neither can the Federal Government.
        And so, while I am in favor of and probably will have an
    opportunity to vote for a number of the measures discussed this
    morning, really, they don't begin to scratch the surface of
    this issue the way providing the resources to the law
    enforcement agencies involved here, as, particularly, Ms.
    DeLauro and Mr. Becerra pointed out in their testimony here,
    unless we do that. So if there really is a desire to prevent
    fraud, to prevent overpayment, we would provide the funding
    necessary for these agencies do their job.
        As much as is the case with the Internal Revenue Service,
    it is always difficult to defend additional appropriations for
    an agency that generally is so disliked across the American
    public, but we are losing billions of dollars a year because we
    are not providing the money for the IRS to deal with tax fraud.
    And the same thing applies here.
        I appreciate the testimony of all of our witnesses. I am
    going to address my questions to Ms. Vallas.
        First, just draw attention, if you would, to the difference
    here between identity theft, overpayment, and fraud. And how on
    the overpayment side does this occur? And what can we do to
    prevent the miscalculation that may occur there quite
    innocently, but that has an impact?
        Ms. VALLAS. Thank you for the question, Congressman.
        I would reiterate, as you have and as others have this
    morning, the importance of keeping in mind the difference
    between an overpayment, which can be an accident or a
    miscalculation, and fraud, which really does require the intent
    to defraud a system or a program. And the vast majority of
    overpayments in the programs we are discussing this morning are
    not due to fraud. They are due to administrative error,
    miscalculations and so forth.
        And I will give you one example which ties in very much
    with administrative resources or the lack thereof, which you
    mentioned in your question.
        One significant consequence of years of appropriators
    depriving the Social Security Administration of the resources
    it needs in order to keep up with its workload is that there is
    now a significant and massive delay in processing beneficiary's
    earnings reports.
        The most recent statistic that I have heard from the agency
    is that the delay in processing a beneficiary's work report,
    how much they earned, is now 270 days, or 9 months. That is how
    long it sits on someone's desk waiting to be processed.
        So a DI or SSI beneficiary can do absolutely everything
    right, faithfully report his or her earnings, and, yet, still
    get hit with a massive overpayment that is not his or her fault
    and that really is just a mistake months later.
        Another leading cause of needless overpayment is the
    outdated asset limits and income limits that you mentioned,
    Congressman, in the SSI program. They have barely budged from
    where they were set in the 1970s.
        And so beneficiaries are effectively prohibited from having
    even modest, just precautionary, savings just in case there's a
    leaky roof or their water heater breaks. They cannot even have
    more than $2,000 in the bank. So, as a result, what we are
    seeing is overpayments that would never have occurred under the
    original intent of the SSI program. And the same is true with
    the income rules as well.
        Mr. DOGGETT. And who are these SSI beneficiaries? We don't
    have any here today. But what kind of people are we talking
    about?
        Ms. VALLAS. Well, it is really worth mentioning and
    reiterating how strict the disability standard is. So, in
    addition to the 2 million very-low-income seniors who receive
    SSI benefits, we are also talking about individuals with the
    most significant disabilities, the most severe illnesses, many
    of them actually terminally ill, people with significant
    cerebral palsy, Alzheimer's, severe mental illness and so
    forth.
        And these are individuals so have largely nothing else to
    turn to, nothing else to rely on. And so SSI benefits really
    are for them. It is the difference between having a roof over
    their head, being out on the street. It can enable people to
    afford needed copays on life-sustaining medications. I can't
    reiterate the importance of the SSI program to its
    beneficiaries.
        Mr. DOGGETT. Thank you very much.
        Mr. YOUNG. [Presiding.] I will yield myself 5 minutes. The
    chairman had to step out. I thank all of the panelists for your
    testimony today. Very informative, each of you.
        I think all of us agree our safety net programs have to
    reflect our values. And those values, I think collectively as a
    country, are about regarding every single American as an asset
    to be realized and not a liability to be written off.
        That is really the function of these safety net programs.
    And to the extent to which we can further improve the integrity
    of these programs, the better we realize that overall
    objective.
        In a previous life, I worked as a management consultant.
    And, specifically, I did most of my work in the state and local
    government space. So I have some appreciation for the value
    that the private sector can add with respect to project
    management, program integrity, innovation, technology,
    implementation, and business process redesign.
        So I was very much struck by Ms. Rohlman's testimony and
    the good work, Equifax, your company, is doing to improve
    program integrity especially through the automated income and
    employment verification services that you offer through your
    proprietary database, The Work Number.
        Your solutions facilitate a delivery of a streamlined,
    secure, and timely transfer of information between employers,
    on the one hand, and verifiers to help ensure that we have an
    accelerated decision-making process of an individual's
    government benefit eligibility.
        This means cutting through bureaucratic red tape, reducing
    program abuse. There is less back-and-forth under your process,
    less waste of paperwork and human resources, and we can spend
    more time helping people who really need a hand up instead of
    trying to verify employment and income.
        I would like Ms. Rohlman kindly to elaborate on
    specifically how your automated verification services can
    improve the process to assist individuals who are at need at
    the State and Federal level.
        Ms. ROHLMAN. Certainly, and thanks for your question.
        We actually work with the State of Indiana today on all of
    your other benefit programs. We are integrated with your
    systems today.
        And to give an example of how that works, someone comes
    into an office, a case worker pulls up their data, and if we
    have employment and income information on them, it goes
    straight into your system at that point in time.
        You can see if, in fact, we have employment and income
    available. You can see if there have been changes if they were
    in a month before and X wages were reported and now Y wages are
    reported. It helps to make decisions that are necessary to
    allow those benefits to be applied.
        For UI purposes, we are not working with the State today,
    but one of the actions that was underway in the past was both--
    I mentioned Do Not Pay and that process. We have also met with
    the Department of Labor--we do that on an ongoing basis--and
    spoke with them about modernizing systems, their efforts
    towards data analytics in the future, and definitely working
    with Web-based verification systems.
        They are very familiar with our database and believe that
    it can provide tremendous value in this space, once again, to
    just make sure that we are not only relying on self-reporting
    and trust, but that the data is there and use of databases and
    commercial databases both from private, public, State, Federal
    back and forth can work.
        Mr. YOUNG. Thank you.
        We are here to improve program integrity. And so I would be
    remiss if I didn't ask you in my remaining minutes which I
    yielded to myself what sort of barriers Equifax encounters in
    various States.
        I can recall, as a management consultant, there would be
    different risk factors in every implementation, every project,
    some of them legislative, others regulatory, some human
    resource.
        How can we help improve program integrity, working with
    companies and other entities like yours?
        Ms. ROHLMAN. Great question, because we see this a lot.
        Modernization of systems is something that is underway in
    many States. It does take a while. Definitely the legislative
    statutory requirements around data sharing are necessary.
        I know that we work with SSA today and, again, they are not
    allowed to use batch. Our system for batch verifications is on
    a per-applicant basis, and it is all because of a statutory
    requirement that they are not allowed to do that.
        Again, DOL expects that same issue. Do Not Pay ran into
    that. We did work with Treasury in the past. And, again, it is
    a statutory requirement that we believe can be changed pretty
    simply.
        Mr. YOUNG. Thank you. Very helpful.
        I now yield to Mrs. Noem.
        Mrs. NOEM. Thank you, Mr. Chairman.
        Inspector General, could you tell me why we are not allowed
    to use batch. I guess I wanted to follow up on that question a
    little bit to see if you could give us a little bit of insight
    as to why that is not able to be utilized or maybe some
    historical perspective.
        Mr. O'CARROLL. Yes, Congresswoman. That kind of falls under
    the Computer Matching Act. The purpose of that act when it was
    initially passed was that it was for the privacy of the
    citizen. And they were feeling that, if government was using
    all this information that they had, that it would be used
    unfairly towards the citizenry.
        But what we are saying is that we would like the exemptions
    for that to be done on antifraud initiatives, not for blanket
    information on citizens, but just to be able to compare that
    information. And most of it is against the batches.
        So, as an example, we can do one-on-one queries of other
    agency databases, but when we get into doing it in batch form,
    all we can use it for is audits. We can't use it for antifraud
    initiatives. We can't use it for that.
        Mrs. NOEM. Okay.
        Mr. O'CARROLL. So that is why we are asking for the
    exemption for not only the IG, but also for the agency to be
    able to use it for antifraud and abuse.
        Mrs. NOEM. Okay. Thank you. I appreciate that insight.
        I take it very seriously that our job here today is to try
    to discuss the programs that we have out there, the dollars
    that are being spent, and make sure that we do restore
    integrity where there is opportunity to do that.
        The Congressional Budget Office reports that fugitive
    felons will receive up to $5 billion in Social Security and SSI
    benefits in the next decade unless we enact reforms such as the
    CUFF Act, which the Inspector General has referenced earlier,
    and which I am cosponsoring with Congressman Johnson.
        Inspector General, could you tell us a little bit about the
    history of this provision and then--I know you talked about
    that in your opening statement--also, the court cases and the
    impact that they have had on actions that have been taken.
        But I wanted to give you another opportunity to go a little
    bit deeper into that to see how we can put this kind of--why
    this legislation would be necessary to make sure that we could
    take the action to not continue payments whether they are not
    justified to felons.
        Mr. O'CARROLL. Congresswoman, that bill--well, in 1996, the
    bill was passed that fleeing felons wouldn't be able to receive
    benefits. That was for the SSI program. And then, in 2005, it
    was applied to all of SSA's programs. So it would be, also, the
    other programs of SSA. And then, in 2009, what happened was
    there were several court decisions.
        The court decisions were basically saying that the
    terminology of the bill was ``fleeing felons,'' and the belief
    was that, if a person was not fleeing, that they would not be
    liable to having their benefits cut off. And so that one, which
    is called the Martinez settlement, went into effect.
        And then, at that point there, just to give you a little
    bit of idea of the sizing it, we were talking about 50,000
    people were ineligible up until Martinez. And then, at that
    point, we are at about 800--well, we had identified about
    50,000 people that were ineligible. And now, with all the
    different constraints that are put on it in relation to
    fleeing, we are down to about 800.
        Mrs. NOEM. Do you have any idea of the dollar amount change
    that that encompassed?
        Mr. O'CARROLL. Yeah. We were talking--let me think. I have
    that somewhere right here in front of me.
        Congresswoman, let me get back to you on that. I should
    have it right here.
        Mrs. NOEM. Sure. That is okay. You can certainly get that
    to me in the future.
        Mr. O'CARROLL. I do have it in front of me right now.
        We were talking improper payments of about--$321 million
    was our original audit, and it has gone down to about $14
    million.
        Mrs. NOEM. Okay. Thank you very much.
        Mr. O'Carroll, do you support the CUFF Act, which would
    amend the Social Security Act to prohibit Titles II and XVI
    from being paid to felons?
        Mr. O'CARROLL. Yes. We not only support it, but we have
    helped on some of the technical work on developing it.
        Mrs. NOEM. Okay. Thank you. I appreciate that.
        And I appreciate the committee bringing this to the hearing
    today and other bills that will help prevent abuse and improper
    payments going forward.
        I yield back.
        Chairman BOUSTANY. [Presiding.] I thank the gentlelady.
        Next we will go to Mr. Lewis.
        Mr. LEWIS. Thank you, Mr. Chairman, for holding this
    hearing this morning.
        I want to thank all of the witnesses for being here.
        Ms. Rohlman, thank you for coming all the way from Atlanta
    to be here and to testify.
        Ms. Vallas, as we work to prevent overpayment, you have
    cautioned us about avoiding unintended consequences, that they
    end up hurting qualified disability or UI claimants.
        Can you review for us proposals that might end up being
    benefit cuts for very needy Americans as opposed to reduction
    in fraud and abuse.
        Ms. VALLAS. Thank you for the question, Congressman.
        I did mention that in my written testimony and in my
    opening statement because I think it is important that we take
    great care as we work together in a bipartisan fashion to root
    out fraud and abuse that we not unwittingly move forward
    legislation that would carry with it unintended consequences
    that could weaken these vital programs and really serve as
    benefit cuts for the neediest Americans.
        I mentioned the SAIL Act, which I have great concerns could
    result in interruption of SSI for children with significant
    disabilities who face very legitimate and understandable
    interruptions in their schooling. So, for example, many SSI
    beneficiaries are too sick for full-time school. Many are
    actually terminally ill. Back in 2013, 7 percent of the SSI
    child caseload was terminated due to the death of the child.
        Other reasons for interruptions in school can include
    homelessness and poverty, which can lead to movement,
    geographic mobility, a high risk of needing to enroll in
    different schools. Students with disabilities are also
    substantially more likely to be bullied than their peers, which
    can lead to gaps in school enrollment.
        And, finally, students with disabilities are
    disproportionately likely to be suspended or expelled from
    school, which then the SAIL Act could result in a
    destabilization of the family's income at the very time when
    they are also dealing with school discipline.
        You mentioned the Double Dip Elimination Act, which
    pertains to Unemployment Insurance and Disability Insurance,
    and I have significant concerns about that piece of legislation
    as well.
        First, Social Security's disability programs contain strong
    work supports and incentives for those who may be able to
    return to work. And so people who receive Social Security
    disability benefits are permitted and, in fact, encouraged to
    work. As a result, they can experience job loss. It can end up
    resulting in Unemployment Insurance eligibility.
        And what we really don't want to do here is to take a step
    backwards and to create work disincentives for disabled worker
    beneficiaries who, I think, on a bipartisan basis, we all want
    to work together to encourage and support in returning to work
    if they are able.
        There are other reasons I have detailed in my written
    testimony of why I am concerned about that bill as well.
        And, finally, I would mention the CUFF Act, which came up
    previously. And while the Social Security Act appropriately
    prohibits individuals who are fleeing to avoid law enforcement
    from receiving Social Security or SSI benefits, it is important
    to keep in mind that the previous SSA policy of terminating
    benefits anytime they had a match with a database that revealed
    an outstanding warrant had significant problems in its
    approach.
        First, SSA frequently suspended or denied benefits in cases
    where warrants were so old that the law enforcement entity had
    no intention of pursuing them anymore, decades-old warrants.
        Second of all, there were frequent cases of mistaken
    identity because of unreliability of criminal records
    databases.
        So, for example, Rosa Martinez, a 52-year-old disabled
    woman, in 2008 was notified that she would lose her disability
    benefits because of a 1980 arrest warrant for a drug offense in
    Miami, Florida. Now, it came to light that Ms. Martinez had
    never been arrested in her life, had never used illegal drugs,
    and had never even been to Miami.
        These are the kinds of people whose lives would be
    negatively impacted by returning to the overbroad policy that
    SSA rightfully reversed subsequent to the court decisions that
    the IG mentioned.
        Mr. LEWIS. Thank you very much for your response.
        Mr. Chairman, I yield back.
        Chairman BOUSTANY. I thank the gentleman.
        Mr. Meehan, you are recognized.
        Mr. MEEHAN. I thank the chairman.
        And I thank all of the panelists for their attention to
    this issue.
        I mean, obviously, the safety nets are there for a purpose.
    And so our objective is not to just indiscriminately go across
    the ground, so to speak, and try to disrupt where it is
    appropriate.
        But you have each given very telling testimony about just,
    really, frankly, remarkable inefficiencies in the way we share
    data and otherwise allow people to utilize the system in a way.
    I hesitate to use the word ``manipulate'' because we do know
    there are some people that may be caught in unemployment,
    employment.
        But there is also a lot of people that take advantage of
    the system, the earned income tax credit being filed at one
    point in time and then later filing for unemployment benefits.
    So we have examples in which there are two separate documents
    filed to the same agencies that are by their very nature
    competing with each other.
        Ms. Rohlman, you are in the private sector, and a lot of
    what I am hearing here is the inefficiency or inability for
    databases to talk to each other. What should we be doing
    better?
        Because in the private sector I am amazed at how quickly
    information changes. All I have to do is do a search on
    something and now I have companies coming to me trying to sell
    me products because I have looked at something. And people are
    making evaluations while I am using a credit card. They are
    looking at databases.
        What's missing in our system that we are so incapable?
        Ms. ROHLMAN. So I would say again that the ability to use
    commercial databases and to share data between those--there is
    no question the value of data matching and data sharing. Again,
    the privacy laws in some cases that have been referred to are
    already prohibiting that sharing between the databases.
        Mr. MEEHAN. What about the privacy laws? What is there that
    needs to be fixed in that that could allow us to catch
    appropriate protection for people's privacy, but identify those
    who are acting fraudulently?
        Ms. ROHLMAN. I can share what I am aware of. We did hear
    this, again, from the Department of Labor, we heard this from
    Treasury, Department of Labor as it relates specifically to UI,
    Treasury as it related to the Do Not Pay, and SSA as it refers
    to our agreement with SSA that we are in every day.
        There is a statutory provision that does not allow them to
    share with the commercial database specifically for the batch
    matching with SSA. I know that there is something in their 2016
    budget which will help to revise that. So certainly looking at
    that would be the first thing I would do.
        The DOL and Do Not Pay--I mention Do Not Pay only because,
    again, their first efforts were around UI integrity. We did
    engage with Do Not Pay, Treasury, the Federal Reserve Bank, St.
    Louis and Kansas City. We had initial matching going back and
    forth.
        We were in production with two States, Utah and Arizona. It
    had to be stopped because they were not allowed to share
    between the State and the Federal Government. The law governing
    Do Not Pay, for example, only allowed them to share with
    Federal agencies. So it did not allow them to work with the
    state agencies and share the data that we----
        Mr. MEEHAN. Notwithstanding that many of these programs are
    Federal programs that are operated through the States. So the
    State's acting as an agent for the Federal Government in many
    of these or at least working as a supplementary source. So they
    are complementing each other. But many are working
    simultaneously already.
        Ms. ROHLMAN. Correct. So the UI program, again, as it was
    written in the Do Not Pay--and we did hear the same thing from
    Department of Labor--there is a provision that--again, I am
    outside my area of expertise because of the law in this case,
    but they continued to say repeatedly it was a statutory
    provision not allowing them to share data between the States
    and the Federal agency and it was related to the Privacy Act.
        Mr. MEEHAN. Well, this issue alone--Mr. O'Carroll, Mr.
    Bertoni, others, do you have any comments that would supplement
    that or any observations in this area?
        Mr. BERTONI. I would say there is no blanket answer. I
    would think you would have to look at each individual desire to
    match databases with the circumstances and the laws associated
    with it.
        A good example is the Death Master File. Right now Social
    Security Administration, per law, in the Social Security Act,
    there is a little line in there that says, if it is data that
    is reported from the States, it comes from state vital
    statistics agencies, SSA is prohibited from sharing that
    information with everyone but seven or eight Federal benefit-
    paying agencies.
        So if you are not a Federal benefit-paying agency, you
    can't get that state information. DEA for drug enforcement
    purposes, Department of Homeland Security for other purposes,
    can't get the full death data. They have to get an abbreviated
    file.
        So, again, on an individual fact basis, you are going to
    run into these quirks in the law that prevent full interface.
        Mr. O'CARROLL. Congressman, one of the things you were
    talking about was the earned income tax credits as an example.
        Just to give you an example of where computer matching
    would help, you have the Department of Treasury that sends out
    the check for the earned income tax credit, which is the same
    one that is sending out the benefit checks for Social Security
    on it, and they don't match the two. And when----
        Mr. MEEHAN. So within their own database they should be
    running that check as a first kind of screen against----
        Mr. O'CARROLL. But, again, since it is two benefit
    programs, they are not allowed to match on that one. It gets
    very complicated.
        Another one is that Department of Labor can be giving
    government unemployment benefits to a person and then SSA at
    the same time will be giving them disability payments on it
    where the two agencies aren't matching again.
        Mr. MEEHAN. Well, it appears there are certainly a lot of
    windows.
        I appreciate your testimony in this area and your
    observations built out of your experience. It is very important
    for us to be able to find the ways to alleviate this.
        Thank you
        Chairman BOUSTANY. I thank the gentleman.
        Mr. Davis, you are recognized.
        Mr. DAVIS. Thank you very much. Mr. Chairman, let me thank
    you and the ranking member for calling this hearing.
        You know, I grew up during an era when people put a great
    deal of emphasis on the notion that an ounce of prevention was
    worth much more than a pound of cure and that, if you could
    prevent things from happening, then, of course, you would
    experience the benefit of that.
        Mr. O'Carroll and Mr. Bertoni, both of you have been
    engaged in this effort to ferret out what we call waste, fraud,
    and abuse for quite some time.
        In your experiences, what have you found the most? Has it
    been waste? Has it been fraud? Has it been abuse that you could
    just categorize?
        Mr. O'CARROLL. Congressman Davis, I will take a first crack
    at that.
        Yes. We have improper payments, and a big portion of
    improper payments can be accidental, can be because of laws,
    rules, whatever, that makes that money go out before it is
    validated. And then, you know, it is very difficult to bring
    back.
        Our biggest concern and one of the things that we have been
    trying to do is to assess what part is fraud and what part is
    just straight improper payment, accidental, intentional, or
    whatever. It is very difficult.
        And Chairman Johnson on the Subcommittee for Social
    Security has asked us to try to size the amount of fraud in
    SSA, and we have taken attempts for it. It is very difficult.
    We are in the process of doing it now. We would be one of the
    first government agencies to do it because it is so difficult
    to show.
        I guess the one thing I try to remind everybody is,
    although fraud is a very small percentage of the improper
    payments, when you are dealing with billions of dollars in
    terms of payments, it is still a very high number and it
    outrages the public.
        Mr. BERTONI. In terms of fraud, historically, in trying to
    define it, I think even SSA defines it very narrowly. It is
    only after it has been pursued and conviction has been
    obtained. That is fraud.
        But the funnel starts very large. There is the allegation.
    There is some sifting through the information. Cases go out.
    Others stay. The funnel keeps narrowing down to what is
    suspected fraud. It is picked up by a justice. It is
    prosecuted. That is fraud.
        But that larger funnel is sort of the waste and the abuse
    where things start. I believe there is a lot more of the waste
    and a lot more abuse. If the agency is supposed to be doing
    something and if they don't and it results in an overpayment
    situation or wasted Federal dollars, that is waste.
        If a recipient who is supposed to be reporting their work
    activities, their wages, a change in their wages, their
    resources, they know the program rules, they don't and they do
    that consistently or egregiously multiple times, now we are
    getting down to abuse.
        So, in my view, I think this funnel includes all of it,
    fraud, waste, and abuse. And I do believe the waste and abuse
    factor is larger than a lot of folks want to admit.
        Mr. DAVIS. Mr. Eysink, I am going to ask you. What has been
    the most effective in the State of Louisiana in your
    experiences?
        Mr. EYSINK. I think having people show up is what has been
    most effective for us. But I think that there are a couple of
    other things, too. And I agree entirely with the description of
    what is fraud, waste and abuse.
        There are two sources of improper payments. One is clearly
    as a result of errors and, therefore, is wasteful. And that is
    when employers who pay all of the UI taxes don't report timely
    or comprehensively to requests for information so that we can
    accurately adjudicate those claims. We have to do a better job
    of training our adjudicators, but employers hold the biggest
    key to solving that issue, and that is wasteful.
        Abuse. It is the law that, when somebody who is receiving
    benefits goes back to work, once they start earning, they are
    not eligible anymore. But, in their mind, they translate that
    often into the fact that they hadn't received their first
    paycheck yet. So they still try to claim for the first week or
    two that they worked before they got their first check.
        No question about whether that is fraud or abuse. Did they
    really know, had they been through that before, you know, and
    so forth. And then there is obviously fraud where people just
    out and out set out to get money that they are not due and they
    know that.
        In the abuse case, employers hold the key to that, too, and
    that is reporting to state and national directors of new hires
    as soon as they hire somebody and give us the start date
    through those databases so we can crossmatch. But those are
    bigger leakages of money out of the system than fraud.
        Mr. DAVIS. Thank you very much, Mr. Chairman. My time has
    expired. So I yield back.
        Chairman BOUSTANY. I thank the gentleman.
        I go next to Mr. Smith. You are recognized.
        Mr. SMITH. Thank you, Mr. Chairman.
        Thank you all for being here today for your testimony.
        I want to focus my remarks on the Unemployment Insurance
    because this program provides cash benefits for people in the
    State of Missouri through the payroll taxes.
        In the fiscal year 2014, the improper payment rate was 11.6
    percent. It included $5.6 billion. To me, that is completely
    unacceptable and very awful.
        I think about it from the perspective that, if I went to
    McDonald's and ordered an extra value meal, I would have over a
    10 percent chance of having an incorrect order. Or if I went to
    my local bank and wanted to deposit my funds or to withdraw
    some funds, what if the bank was wrong more than 10 percent of
    the time in the amount that they gave me or the amount that
    they took out of my account? That would be completely
    unacceptable.
        What do you think Members of Congress would think whenever
    they received their check every month that it was 10 percent
    less than what they were expecting? Or what about any, any,
    individual working from day to day on their paycheck got 10
    percent less?
        The American people don't accept this and it is just not
    absolutely right. It is unacceptable. When you look at more
    than $200 billion of Federal money being inappropriately or
    fraudulently spent, that is a problem.
        The Department of Labor has set a goal of reducing their
    annual and proper payment rate from 11.6 percent to 11.3 for
    2015.
        Ms. Rohlman, do you think that is good enough?
        Ms. ROHLMAN. I would say that Department of Labor is
    working diligently to combat fraud. I think there are a couple
    of small things that could be done I mention in my testimony
    that could have a dramatic impact.
        First of all, again, I mention about the reporting system,
    again, the weekly breakdown of data. If, in fact, States were
    encouraged by the Department of Labor to provide weekly
    reporting, it would help. Today there are only 14 States who
    provide weekly breakdown of data. It may be on a quarterly
    basis, but it at least comes back weekly. So it does help the
    employers.
        Another thing that could be done from a small process
    perspective is relaxation of the rules about the format for
    wage audits and those verification forms. Today it is a
    requirement in most States to have a Sunday to Saturday
    reporting back to the UI agency. And, in fact, that is very
    outdated logic, actually.
        Our data shows that there are between 20 and 30 percent of
    employers who report weekly, but it may not necessarily be
    Sunday, Saturday. It may be Monday, Sunday or it may be et
    cetera. And the traditional formats for employers are
    semimonthly and they are biweekly. We find that about two-
    thirds of employers are reporting that way.
        So if there was just a tweak, which was allowed to use the
    data that is available and then only process those or send to
    investigation those where there is a dramatic difference in the
    data matching that is seen in UI reporting, it would make much
    more efficient use of the process and of investigator
    resources. And we strongly believe it would reduce improper
    payments.
        Mr. SMITH. So you think just relaxing the rules, what you
    said, basically, modifying it, which is in the power of the
    Department of Labor, would probably reduce improper payments by
    how much?
        Ms. ROHLMAN. I don't have an exact number, sir. But if
    Department of Labor allowed that direction to the States and
    let them slow that down and say, ``You can relax these rules,''
    we definitely believe that compliance would go up.
        It would allow more time to provide the benefits to those
    who deserve them, but then also to focus on those where there
    may, in fact, be a discrepancy.
        Mr. SMITH. Mr. Eysink, would you respond to that.
        Mr. EYSINK. Yes, Congressman. First, I want to point out
    that all improper payments are not fraud and that improper
    payments can occur when everybody is acting in good faith, and
    often they do.
        For instance, there could be a decision made in
    adjudication to award Unemployment Insurance claims and later
    on during the process, after the claimant has started to
    receive benefits, those awards are overturned for--as I say, in
    cases where there is just a difference of opinion on how the
    facts should be applied to that case.
        Also, many of these improper payments are recovered. We
    and, I think, nearly all States, if not all States now, recover
    or seize overpayments from tax refunds, both State and Federal,
    and we recover millions of dollars that way every year.
        Mr. SMITH. Let me ask you a quick question, then. The $5.6
    billion that is used as improper payments in 2014, would that
    mean that there was actually, in fact, more improper payments
    above $5.6 billion and they factored in the money that they did
    recover or is the recovered amount included in the $5.6
    billion?
        Mr. EYSINK. The recovered amounts are not included in the
    numbers reported for States and what their improper payments
    are. So I doubt that they are included in that $5.6 million,
    but I can't tell you for sure.
        Mr. SMITH. Thank you, Mr. Chair.
        Chairman BOUSTANY. I thank the gentleman.
        Next we go to Mr. Crowley. You are recognized for 5
    minutes.
        Mr. CROWLEY. Thank you, Mr. Chairman.
        I thank the panelists for your testimony today. And I also
    want to thank the previous panel made up of Members of the
    House. I appreciate the interest and engagement on these
    issues.
        The hearing announcement is described as--and I quote--
    ``Protecting the Safety Net from Waste, Fraud, and Abuse.'' And
    I appreciate very much, Mr. Chairman, the titling of the
    hearing today.
        I think these are all noble goals. I don't think any of us,
    whether Democrat or Republican, wants to see waste, fraud, and
    abuse taking place in crucial social programs like Supplemental
    Security Income or Unemployment Insurance.
        Frankly, I would like to see more hearings begin with
    protecting the safety net. Maybe we can start by protecting it
    from budget cuts and sequestration to start.
        But back to waste, fraud, and abuse, as I said, this is
    something that we all, if we don't agree on, we all certainly
    should agree on. But how we approach this problem makes an
    important difference. For example, look at Social Security. The
    Social Security inspector general's office of investigations
    supports the front line investigators fighting Social Security
    fraud. But in 3 of the past 5 years, the majority has cut the
    inspector general's budget. That means we lost experienced
    investigators and now have fewer people helping to fight fraud
    than we did 5 years ago.
        In other cases, programs haven't been updated as needed,
    which would reduce the rate of overpayments. So in some ways,
    we are limiting our ability to fight fraud and abuse. Beyond
    that, I want to make sure we all understand what we are talking
    about when we say fraud and abuse. Not every overpayment is
    fraud. And not every unusual circumstance is abuse. These are
    important programs that can make the difference between
    supporting a family and falling further behind in poverty.
    These benefits are needed and not enjoyed. They are
    appreciated, not savored. Somehow, over the years, there has
    become this legend of people who would rather receive
    unemployment benefits than work, that somehow they are content
    to live happily off these government funds without facing any
    hardship. These kinds of myths do a disservice to the hard-
    working Americans who lost their jobs through no fault of their
    own and rely on these funds to make ends meet. Ms. Vallas, let
    me ask you to clarify, what is the average unemployment benefit
    per month?
        Ms. VALLAS. Thank you for the question, Congressman. The
    average weekly unemployment benefit at the end of 2014 was
    $317, which comes to $1,268 per month.
        Mr. CROWLEY. And what is the Federal poverty level for a
    family of three?
        Ms. VALLAS. For a family of three, the Federal poverty
    level in 2014, so we can compare apples to apples, was $1,649
    per month.
        Mr. CROWLEY. So, in other words, the unemployment benefits
    don't even keep a family above the poverty level, is that
    correct?
        Ms. VALLAS. That is exactly right. That is the case for
    many families unfortunately.
        Mr. CROWLEY. So all these mythical people who are abusing
    the program, who are gaming the system and committing fraud,
    which is an actual crime with actual penalties, they are still
    not even meeting the basic poverty level, is that correct?
        Ms. VALLAS. That is correct, Congressman.
        Mr. CROWLEY. What about disability insurance? How much of a
    windfall is that? How much per month?
        Ms. VALLAS. The average, well, I should say, first, for the
    typical worker, a DI benefit replaces less than half of their
    previous earnings. So for most folks, it really is a
    significant drop in their standard of living. The average DI
    benefit in this year, 2015, is $1,165 per month, which is just
    over the Federal poverty level for an individual.
        Mr. CROWLEY. Can you tell us more about the people who
    receive disability benefits? How many live in poverty even with
    the benefits provided by the Federal Government?
        Ms. VALLAS. Even with the benefits, because they are so
    modest, fully 1.6 million DI beneficiaries live in poverty,
    that is 1 in 5 DI beneficiaries.
        Mr. CROWLEY. And these are people with severe, life-
    changing disabilities or illnesses, is that correct?
        Ms. VALLAS. That is correct.
        Mr. CROWLEY. Thank you. I know some have tried to dismiss
    these conditions as just anxiety and backaches. And that simply
    isn't the case. Yes, fraud and abuse happens. Our Founding
    Fathers recognized the propensity in human nature. And we
    should make sure we are giving our agencies the tools they need
    and have asked for to fight real incidents of fraud and abuse
    and I would also add waste. I just want to make sure that we
    all understand this. Because as we focus on reducing real fraud
    and abuse, let's make sure we are not putting additional
    hurdles in the way of benefiting the people who need these
    benefits to help them survive.
        Going back to my initial statement about protecting the
    safety net, that is also critical, protecting the safety net,
    while at the same time addressing and going after those who
    would abuse it, going after those who would commit fraud. They
    need to be fully prosecuted to the full extent of the law. But
    not losing sight of the millions of individuals and their
    families who rely upon this to eke by, not to get rich off the
    Government, but to simply make ends meet if they can possibly
    do that. They certainly can't do that in Woodside, Queens on
    this level of payment. So with that, Mr. Chairman, I will yield
    back.
        Chairman BOUSTANY. I thank the gentlemen. Mr. Dold, you are
    recognized for 5 minutes.
        Mr. DOLD. Thank you, Mr. Chairman. And I certainly want to
    thank all of our witnesses for coming and for your testimony
    today. And really the topic that we are talking about, I am
    going to agree with Mr. Crowley, in talking about protecting
    the safety net, that is a goal that we all share. And, frankly,
    when we look at the abuse, when we look at the fraud that
    happens out there, the people that it hurts the most are the
    folks that need the safety net the most. And ultimately, I
    think what we want is we want confidence, we want confidence in
    the system, that it is going to work, that the Government is
    actually out there working. And when we have the, what we are
    looking at is billions of dollars in terms of just payments,
    improper payments paid out, Mr. Smith was talking about, it is
    about 10 percent, 9.2 percent for SSI and 11.6 percent for UI.
    He is talking about a McDonalds on this thing. I would talk
    about it as if you are driving a car and you know, 1 in 10
    doesn't work or is recalled, we are going to have a big
    problem. And so I recognize that some of these overpayments or
    mispayments can be rectified. My hope is, is that we do, that
    we root out this waste, fraud, and abuse. What I am really
    looking for from each and every one of you, from your subject
    matter expertise, is what can we do? We want to come up with
    solutions to these problems so that this number gets as close
    to zero as possible, so that we can end waste, fraud, and
    abuse.
        And, certainly, Ms. Rohlman, your idea about trying to make
    sure that the government is accepting the private sector data
    in a way that it is easy for them to do it makes all the sense
    in the world. Many of you who were here to listen to the first
    panel that had a number of pieces of legislation. Ms. Vallas,
    you talked a little bit about some concerns that you had. But I
    would be interested from all of you, in terms of the five
    different pieces of legislation, from permanently ending
    receipt by prisoners or the PERP Act, The Furloughed Federal
    Employee Double Dip Elimination Act, the School Attendance
    Improves Lives Act, the Flexibility to Promote Reemployment
    Act, and the Control Unlawful Fugitive Felons. Of these, you
    know, which of these pieces of legislation has merit in your
    eyes that we should be really trying to focus and move forward?
    Because, today, if we come and you talk and we don't have an
    action item going forward about how to really solve these
    problems in a bipartisan way, then it was really more of a
    waste of time. And that is not what we are looking to do. We
    need to solve some problems.
        Mr. O'Carroll, we can start with you? Are there some merit
    in some of the pieces of legislation that you look at? Can you
    pick your top two or three that you think may be worthy of
    moving forward?
        Mr. O'CARROLL. Yes, Congressman. As was mentioned before,
    is that we are in favor of, you know the CUFF Act, we assisted
    on that. One of the things that I wanted to correct, too, was
    when I was asked by Congresswoman Noem on the dollars of it,
    was that at the time of 2009, when they kicked in with
    Martinez, there was about $500 million in savings on it. And
    since that act, it has been reduced by about two-thirds of
    that. I just wanted to correct what I had said before and my
    numbers on that. Anyway, in terms of the other acts, the Fraud
    Act is one that we are particularly interested in because it is
    going after the facilitators, it is going after those people
    that make a business out of stealing money from the Government
    and facilitating other people to do it, and making sure that,
    you know, one, when they are caught, they are going to be
    sentenced correctly, and, two, that the money is going to be
    brought back to the Government. So of all the acts, that and
    the CUFF Act would be the two I am most familiar with.
        Mr. DOLD. Okay. Mr. Bertoni.
        Mr. BERTONI. I would defer. I don't think we have done
    enough analysis to endorse or really weigh in on much. I would
    say that what the Congress can do is do what you are doing. I
    think your oversight role, to hold agencies accountable for
    doing what they said they were going to do. Certainly the
    appropriations process, you can direct funds to areas of
    greatest vulnerability. We have looked at the CDR process. We
    have given the agency some direction as to how they can mine
    that data and to work certain subpopulations of the data that
    would give them a significant return on the investment.
        You have already done that with age-18 redeterminations and
    low-weight babies. The return on investment, the cessation rate
    there is 52 percent and 60 percent, respectively. We have put
    some other subpopulations on the table. A speech and language
    delay for children, 38 percent return on investment for CDRs.
    Mood disorders, 39 percent investment.
        So there are ways that you can through the appropriations
    process target funds to specific areas where the agency can be
    more effective in their reviews. And by removing some of these
    cases, the program can become less costly. You can also remove
    a lot of these children from the roles that could benefit from
    being in a different track, not labeled as being Special Ed,
    just mainstream them and getting them the supports they need to
    be successful. So I think there is opportunities in your role
    to direct the agency to areas where they can be most effective.
        Mr. DOLD. Thank you. Mr. Eysink.
        Mr. EYSINK. Thank you. As with any good idea, I wish I had
    had it before the person really had it. I think both the name,
    to call it the PERP Act, I think that is great. In Louisiana,
    we prevent people from getting hunting and fishing licenses if
    they have defrauded our UI system. So anything that gets to
    people to what they want to do, that is going to, you know,
    what their passion is, if we put a barrier and the barrier is
    paying what they owe before they can go do what they want to
    do, I think that would be helpful. I think continuing to push
    forward with the development of the Unemployment Insurance
    Integrity Center of Excellence, which is being stood up now, I
    think that is very important, particularly as we get to the new
    frontier of fraud schemes that are much more sophisticated, and
    requiring collaboration amongst the States, all of the States,
    the Federal Government, and all of its agencies that are
    relevant to these particular programs.
        And then another big thing I think, you know, we have
    spoken and there was some very good questions about the
    difficulty in interfacing with different databases. There are
    databases that all of the States should be able to easily
    interface with. It doesn't make sense to me that all 50 States
    need to go develop their own contract, if it is a commercial
    database, or their own particular little interface, if it is a
    Federal database that we all should be connecting with. So I
    would advocate for the Department of Labor to get information
    from States on what those databases should be and to develop a
    single interface with that entity so that we are all connecting
    the same way. And maybe that could be made available through
    existing means that now, maybe through the National Association
    of State Workforce Agencies which operate some of those tools
    on behalf of all States and the Federal Government. There might
    be easier ways to actually connect these databases together.
        Mr. DOLD. Mr. Chairman, I know I am out of time but I just
    don't want to let----
        Chairman BOUSTANY. Yes, briefly.
        Ms. ROHLMAN. Briefly, I would start with the Reemployment
    Act. I think that that begins to build the integrity from one
    end to the other of the process. And then continuing with the
    UI New York Center of Excellence and, again, helping that to
    define the processes and those databases that would help all
    the States, again, from one central location makes complete
    sense.
        Mr. DOLD. Ms. Vallas.
        Ms. VALLAS. Thank you, Congressman. I would begin with Mr.
    Becerra and Mr. Doggett's Social Security Fraud and Error
    Prevention Act. CAP fully supports this bill which
    appropriately heightens the penalties for fraud, puts special
    fraud-fighting units in all 50 States, and targets bad apples
    without ensnaring law abiding applicants and beneficiaries.
    Importantly, it also provides SSA with the critical
    administrative funding that it needs to do important program
    integrity work such as CDRs and processing work reports which,
    I mentioned, are now currently suffering significant delays,
    which I think really is crucial to the bipartisan goal of
    rooting out fraud and abuse to the extent possible.
        Mr. DOLD. I appreciate it. I thank you all for your
    testimony and appreciate it and look forward to working with
    you all. Thank you, Mr. Chairman.
        Chairman BOUSTANY. Well we thank you. This concludes all
    questioning. I want to thank the members and our witnesses for
    being here today. This was outstanding testimony, very helpful
    to us as we try to grapple with these difficult problems. So
    thank you for being here. Members may have additional questions
    that they will submit to you. And, if so, I would ask that you
    try to get answers back within 2 weeks so we can complete the
    record. With that, the subcommittee stands adjourned.
        [Whereupon, at 12:14 p.m., the subcommittee was adjourned.]
        [Questions for the record follow:]

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        [Submissions for the record follow:]

              Consortium for Citizens with Disabilities, Statement

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                          Justice in Aging, Statement

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          Northeast Michigan Community Mental Health Authority, Letter

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                    Western Center on Law & Poverty, Letter

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                 Work Opportunity Tax Credit Coalition, Letter

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                Work Opportunity Tax Credit Coalition, Statement

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