[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




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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]
    
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    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:]
    
    
    
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    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:]
    
    
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    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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             Work Opportunity Tax Credit Coalition, Letter
             
             
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            Work Opportunity Tax Credit Coalition, Statement






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