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


                THE FINANCIAL RISK OF RETURNING TO WORK

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

                                 HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 OF THE

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 16, 2015

                               __________

                          Serial No. 114-SS02

                               __________

         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                   CHARLES B. RANGEL, New York
DEVIN NUNES, California              JIM MCDERMOTT, Washington
PATRICK J. TIBERI, Ohio              JOHN LEWIS, Georgia
DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
CHARLES W. BOUSTANY, JR., Louisiana  XAVIER BECERRA, California
PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
TOM PRICE, Georgia                   MIKE THOMPSON, California
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
LYNN JENKINS, Kansas                 RON KIND, Wisconsin
ERIK PAULSEN, Minnesota              BILL PASCRELL, JR., New Jersey
KENNY MARCHANT, Texas                JOSEPH CROWLEY, New York
DIANE BLACK, Tennessee               DANNY DAVIS, Illinois
TOM REED, New York                   LINDA SANCHEZ, California
TODD YOUNG, Indiana
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 SOCIAL SECURITY

                      SAM JOHNSON, Texas, Chairman

TOM REED, New York                   XAVIER BECERRA, California
ROBERT J. DOLD, Illinois             LLOYD DOGGETT, Texas
TODD YOUNG, Indiana                  JOHN B. LARSON, Connecticut
MIKE KELLY, Pennsylvania             EARL BLUMENAUER, Oregon
JIM RENACCI, Ohio
KEVIN BRADY, Texas

                            C O N T E N T S

                               __________

                                                                   Page

Advisory of June 16, 2015 announcing the hearing.................     2

                               WITNESSES

Daniel Bertoni, Director, Education, Workforce, and Income 
  Security, Government Accountability Office.....................    29
David A. Weaver, Associate Commissioner, Office of Research, 
  Demonstration, and Employment Support, Social Security 
  Administration.................................................     6

                        QUESTIONS FOR THE RECORD

Questions from The Honorable Sam Johnson, Chairman, Subcommittee 
  on Social Security, to Daniel Bertoni, Director, Education, 
  Workforce, and Income Security, Government Accountability 
  Office.........................................................    69

                       SUBMISSIONS FOR THE RECORD

Association of Mature American Citizens (Amac)...................   117
National Disability Rights Network (NDRN)........................   118
National Federation of the Blind.................................   120
RespectAbility...................................................   126

 
                THE FINANCIAL RISK OF RETURNING TO WORK

                              ----------                              


                         TUESDAY, JUNE 16, 2015

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 2:16 p.m., in 
Room B-318, Rayburn House Office Building, Hon. Sam Johnson 
[Chairman of the Subcommittee] presiding.

    [The advisory announcing the hearing follows:]

ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Tuesday, June 9, 2015
No. SS-02

                 Chairman Johnson Announces Hearing on

                the Financial Risk of Returning to Work

    U.S. Congressman Sam Johnson (R-TX), Chairman of the House 
Committee on Ways and Means Social Security Subcommittee, announced 
today that the Subcommittee will hold a hearing on the Social Security 
Administration's (SSA) management of earnings reports from disability 
beneficiaries trying to go back to work. The SSA faces difficulties 
processing earnings reports and adjusting benefits in a timely fashion, 
in part due to the complexity of the work incentives in the Disability 
Insurance program. These difficulties can cause large overpayments for 
disability beneficiaries trying to return to work. The hearing will 
take place on Tuesday, June 16, 2015, in Room B-318 of the Rayburn 
House Office Building, beginning at 2:00 p.m.
      
    In view of the limited time available to hear the witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization may submit a written statement for 
consideration by the Committee and for inclusion in the printed record 
of the hearing.
      

BACKGROUND:

      
    Upon the announcement of this hearing, Chairman Johnson made the 
following comment:
      
    ``There are two problems for the American taxpayer when Social 
Security can't manage earnings reports: First, dollars go out that 
shouldn't; second, individuals who want to work are discouraged from 
doing so. It's time Congress takes a look at what drives overpayments. 
The American people want, need, and deserve nothing less.''
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Tuesday, June 30, 2015. For questions, or 
if you encounter technical problems, please call (202) 225-3625 or 
(202) 225-2610.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any materials submitted for the printed record, 
and any written comments in response to a request for written comments 
must conform to the guidelines listed below. Any submission not in 
compliance with these guidelines will not be printed, but will be 
maintained in the Committee files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be submitted in 
a single document via email, provided in Word format and must not 
exceed a total of 10 pages. Witnesses and submitters are advised that 
the Committee relies on electronic submissions for printing the 
official hearing record.
      
    2. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. The name, 
company, address, telephone, and fax numbers of each witness must be 
included in the body of the email. Please exclude any personal 
identifiable information in the attached submission.
      
    3. Failure to follow the formatting requirements may result in the 
exclusion of a submission. All submissions for the record are final.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 

    Chairman JOHNSON. Thank you all for being here. The hearing 
will come to order.
    I would like to welcome Members of the Subcommittee and our 
witnesses and guests today. Thank you.
    Before I get started, I would like to welcome Mr. Dold, who 
has joined the Subcommittee for the first time, as well as Mr. 
Brady, who has returned to the Subcommittee. We are glad that 
you all could join us.
    Earlier this year, at our first Subcommittee hearing, I 
made a commitment to the disability community to make this 
program work better and to promote opportunity for those who 
want and can return to work. In talking with the disability 
community, what I often hear is that in order to make this 
program work better and take away some of the fear, the 
reluctance, of those trying to return to work, Congress needs 
to do something about overpayments.
    Now, overpayments happen when Social Security pays the 
beneficiary too much, sometimes through no fault of the 
individual. I bet all our offices have had to work with folks 
who experience overpayments, and these stories tend to spread 
like wildfire throughout the community. Why would you try to 
return to work when you hear of others who have done it and yet 
end up owing thousands of dollars to Social Security due to 
overpaid benefits?
    Today, we will hear from the Social Security Administration 
and the Government Accountability Office about how complexity 
of the disability program hurts both beneficiaries and 
taxpayers. According to the GAO's testimony, more than half of 
overpayments in the last 10 years were due to work activity. 
That is a symptom of a broken system.
    The leading cause of overpayments in the Disability 
Insurance program is due to the complex work rules, which are 
difficult and costly to administer, and the end result is bad 
for individuals with disabilities and taxpayers. Just take a 
look at the chart that is on the screen now, which Social 
Security provided us. No wonder beneficiaries can't make heads 
or tails of this system. Maybe you all can understand the 
chart.
    This is what the folks who want to work have to go through 
so they don't face financial risk down the road. Individuals 
are responsible for reporting their wages to Social Security so 
that benefits can be properly adjusted. Unfortunately, the 
system for reporting wages is not user friendly for the worker 
and it is unreliable.
    For those who try to return to work, those beneficiaries 
simply don't have an easy way to report their earnings. They 
must go in person to a field office to talk to someone, talk to 
someone on the phone or mail in proof of earnings. Yet, in the 
Supplemental Security Income program, Social Security actually 
has modern options for wage reporting, including a smartphone 
app.
    Social Security needs to find ways to make reporting 
earnings easier for everyone. And for those people who try to 
do the right thing and report their earnings, they can still 
face overpayments. The program is simply so complicated that it 
can take Social Security several months to make sure a person's 
benefit check is correct.
    Right now, the reality is that Social Security sends the 
wrong message. If you go back to work, you may get hit with a 
major overpayment from Social Security through no fault of your 
own. That is wrong, and we need to put an end to that.
    We need to make sure that the disability program encourages 
people to work and makes it as easy as possible for them to do 
so. We can't have a program that punishes them for doing it. So 
it is time to do better for individuals with disabilities.
    I thank our witnesses for being here today and look forward 
to your testimony.
    I now recognize the Ranking Member, Mr. Becerra, for his 
opening statement.
    Mr. BECERRA. Mr. Chairman, thank you very much for calling 
this hearing. Thank you to our witnesses for their testimony in 
advance.
    How we help the Social Security Administration avoid 
overpayments and support disabled Americans who receive Social 
Security Disability Insurance but yet try to return to work is 
something we want to encourage. In spite of their severe 
disabilities, the fact that they wish to try to go back to work 
is something that we should support.
    Remember that all of these disability insurance recipients 
earned those benefits because they paid into Social Security 
while they had the opportunity to work, most for more than 20 
years. On average, about 22 years of work goes into the 
services that some of these disabled Americans now have put 
into the American public in terms of the workforce over the 
years. And so these are folks who have put in quite a bit of 
time before they became disabled.
    But, at the same time, we have to recognize that these are 
folks who on average are in far more difficult health condition 
than most Americans. One-fifth of men who receive disability 
insurance die within 5 years of starting to receive those 
disability insurance payments. One-sixth of women die within 5 
years after they have begun to receive those disability 
insurance benefits. The vast majority of these disability 
insurance recipients are over the age of 50, over a fourth of 
them are over the age of 60.
    If we remember that you don't qualify for disability 
insurance unless you can't work, not just at the job you used 
to do, but any work, you may have been a rocket scientist 
before you became disabled, but if you can do even the most 
menial of labors, you still will not receive disability 
insurance. You have to be prepared to do any type of work that 
is out there that pays. And so it is very difficult to qualify 
for disability insurance. And even when you do receive it, on 
average you are getting somewhere around $1,100 a month, which 
leaves most people in poverty if they have nothing else to go 
with. Yet, despite all these odds, many Americans would like to 
try to go back to work if at all possible, even with their 
disability.
    The Social Security benefits that folks receive don't 
replace, as I said, a lot of the income they used to have. On 
average, they receive less than half of what they used to make 
when they were working. A fourth of those Americans who are on 
disability insurance benefits try to work.
    Chairman JOHNSON. Is that a quarter?
    Mr. BECERRA. Yeah, about a quarter, Mr. Chairman.
    They try to work. The difficulty is this: Only a small 
fraction of those Americans who are disabled who try to work 
ultimately succeed in sustaining themselves in work.
    As a result of the efforts of many of these Americans to 
try to go back to work, Congress enacted some protections to 
make sure that if you try to go back to work, you land a job, 
on day one you don't lose your benefits, your disability 
benefits. We want you to know that you can try to take that 
risk of returning to work without suffering both the loss of 
your disability insurance benefits immediately and possibly 
then the loss of the job soon thereafter if you can't sustain 
it.
    And so we instituted some protections a while ago to make 
sure we gave Americans who are disabled the incentive to try to 
go back to work. Those work incentives have encouraged a number 
of disabled Americans to try to go back to work and see if they 
can make it happen.
    Part of those protections include things like making sure 
that we offset the fact that it costs more for someone who is 
very disabled to return to work, whether it is because you need 
a wheelchair or an accommodation at the work site. There are 
additional costs that are involved. We don't want the fact that 
there are higher costs to work as a disincentive for any 
employer to hire you or for you to believe you can't sustain it 
because you will have additional costs.
    We also allow beneficiaries to first test their ability to 
sustain work and support themselves before we have them lose 
their eligibility for the Social Security Disability Insurance 
benefits and their health care. That is a big encouragement, 
because if you are going to lose your benefits, you are in 
trouble.
    And so, Mr. Chairman, I think what we are trying to do is 
make sure that we do this the right way for Americans who are 
disabled. Let them test the ability to go to work, keep the 
protections there that give them every incentive to go to work, 
at the same time making sure that we don't in the process of 
trying to streamline that bureaucracy that you showed there 
that causes in some cases overpayments to go to people who 
should not have received that money from causing those who 
really want to get out there and work that opportunity to do 
so.
    So, Mr. Chairman, this is a good time to have this hearing. 
I look forward to the testimony of the witnesses, and I look 
forward to all the discussion. With that, I yield back.
    Chairman JOHNSON. Thank you.
    As is customary, any Member is welcome to submit a 
statement for the hearing record.
    And before we move on to our testimony, I want to remind 
our witnesses to please limit your oral statements to 5 
minutes. However, without objection, all the written testimony 
will be made part of the hearing record.
    We have one witness panel here today, and at the table are 
David A. Weaver, Associate Commissioner, Office of Research, 
Demonstration, and Employment Support, Social Security 
Administration--that is a mouthful--and Daniel Bertoni, 
Director, Education, Workforce, and Income Security, Government 
Accountability Office.
    I welcome both of you and thank you for being here.
    Mr. Weaver, please go ahead, you are recognized.

STATEMENT OF DAVID A. WEAVER, ASSOCIATE COMMISSIONER, OFFICE OF 
    RESEARCH, DEMONSTRATION, AND EMPLOYMENT SUPPORT, SOCIAL 
                    SECURITY ADMINISTRATION

    Mr. WEAVER. Chairman Johnson, Ranking Member Becerra, and 
Members of the Subcommittee, thank you for inviting me to 
discuss the complexity of statutory rules for returning to work 
and overpayments due to work in the Disability Insurance or DI 
program. I am David Weaver, Associate Commissioner for 
Research, Demonstration and Employment Support at the Social 
Security Administration.
    Social Security is a social insurance program under which 
workers earn coverage for retirement, survivors, and disability 
benefits by working and paying Social Security taxes. DI 
benefits help replace some of the lost earnings for workers 
who, due to their significant health problems, may no longer be 
able to work and support families. Last year we paid over $140 
billion to nearly 11 million DI workers and their family 
members. In all, 151 million Americans are insured for DI 
protection.
    The statutory benefit eligibility requirements are 
stringent. Disability is the inability to engage in any 
substantial gainful activity due to a physical or mental 
impairment that has lasted or is expected to last 1 year or to 
result in death. In addition, DI benefits are modest. In 2015, 
disabled workers received on average less than $1,200 in 
benefits per month or less than $14,000 per year, just above 
the poverty line.
    Given the strict eligibility criteria, many DI 
beneficiaries may not be able to return to sustained work. 
However, we are committed to helping beneficiaries with 
disabilities who want to attempt to reenter the workforce 
through various work incentives established by the Social 
Security Act. These incentives allow a DI beneficiary to test 
his or her ability to work without immediately losing cash 
benefits or medical coverage.
    For example, the Social Security Act provides for a trial 
work period under which beneficiaries can work for at least 9 
months without losing any cash benefits, regardless of how high 
their earnings might be during those months. Once the trial 
work period has expired, the Social Security Act provides for 
an extended period of eligibility. The Act requires us to pay 
cash benefits for 3 additional months even if the DI 
beneficiary continues to work and earn above a certain level.
    After these 3 months, the Social Security Act requires us 
to pay cash benefits to a DI beneficiary for any month in a 3-
year period if earnings fall below a certain level. The statute 
provides that at or after the 37th month of the extended period 
of eligibility, cash benefits are terminated if a DI 
beneficiary continues to earn above a certain amount, although 
the beneficiary will continue to receive Medicare for several 
more years. For 5 years after termination of cash benefits, a 
beneficiary is generally eligible for the expedited 
reinstatement period to the DI beneficiary rolls if he or she 
is unable to continue working at a certain level.
    Many DI beneficiaries often need medical devices or unique 
services that facilitate their ability to work. Accordingly, 
the Social Security Act requires us to exclude from earnings 
any out-of-pocket costs for items or services that a 
beneficiary needs to work, which are called impairment-related 
work expenses. We are also required to consider whether a DI 
beneficiary is receiving subsidies or other special conditions 
to support his or her work.
    These incentives are depicted in this chart that was 
mentioned earlier. As you can see, the statutory work 
incentives are complex and our beneficiaries, many of whom have 
very serious conditions, often find them difficult to navigate.
    Earnings may or may not lead to the loss of DI benefits 
depending on many interrelated factors, including how much is 
earned, when work is performed, and whether some earnings must 
be discounted because they paid for impairment-related work 
expenses or their earnings are subsidized. The situation 
becomes even more complicated considering that many DI 
beneficiaries are also entitled to Supplemental Security 
Income, which has a different set of statutory work incentives, 
shown on this chart.
    Given this complexity, evaluating a DI beneficiary's work 
is one of our most resource-intensive administrative workloads. 
Even with better data and better tools at our disposal, we 
cannot simply rely on numbers that are reported to us. We must 
follow up with beneficiaries and their employers to evaluate 
work activity. These interviews take time and resources.
    That said, we are excellent stewards of the Social Security 
DI program. We estimate the 5-year average amount of 
overpayments due to work is less than 1 percent of benefit 
payments. However, we continue to strive to improve efforts to 
prevent overpayments. My written testimony describes how we 
inform beneficiaries to promptly report work activity and our 
more recent efforts to improve program integrity.
    In addition, we would support congressional action to renew 
our demonstration authority to test new ways to simplify work 
incentives and encourage more disability beneficiaries to work.
    As policy changes are considered, we stand ready to help 
evaluate changes to our programs and how they would affect our 
DI beneficiaries. SSA and Congress have established a complex 
set of work rules to encourage beneficiaries to work, but this 
is balanced with a shared interest in program integrity and 
stewardship that requires limitations or reductions in benefits 
as people reenter the workforce.
    We would very much like to work with you to simplify these 
rules, but we are also aware that there can be winners and 
losers. We must proceed with caution to avoid unintended 
consequences.
    Thank you for allowing me the opportunity to testify today. 
I would be happy to answer your questions.
    [The prepared statement of Mr. Weaver follows:]
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                                 ------
                                 
    Chairman JOHNSON. Thank you. Thank you for being with us. 
We do need to simplify and change.
    Mr. Bertoni, welcome. Please proceed.

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

    Mr. BERTONI. Chairman Johnson, Ranking Member Becerra, and 
Members of the Subcommittee, good afternoon. I am pleased to 
discuss the Social Security Administration's efforts to address 
Disability Insurance program work activity and resulting 
overpayments.
    Last year, SSA paid about 11 million beneficiaries and 
their families over $140 billion in benefits and identified 
$1.3 billion in overpayments. To ensure that beneficiaries 
remain eligible for benefits, SSA requires prompt reporting of 
their work activity, including starting a job or a change in 
wages. If the beneficiary does not report as required or SSA 
doesn't properly process such information, the agency may pay 
benefits in excess of what is due, resulting in an overpayment.
    Avoiding overpayments is important as they pose a burden to 
those who must repay excess benefits and waste taxpayer dollars 
when they can't be recovered. It may also create a disincentive 
to beneficiaries who might otherwise wish to work.
    My statement is based on our ongoing work for this 
Subcommittee and discusses what is known about work-related 
overpayments and factors affecting the processing of 
beneficiary work reports.
    In summary, over the last decade, $11 billion in 
overpayments were paid to beneficiaries with work earnings that 
exceeded program limits, with about 96,000 beneficiaries 
annually incurring an average overpayment of about $12,000.
    Moreover, over the last several years, SSA attributes a 
significant portion of overpayments to its not taking timely 
and appropriate action to adjust payments when notified of a 
beneficiary's work activity.
    We identified several factors that affect timely handling 
of work reports and increases the risk of overpayments, even 
when beneficiaries try to follow program rules and report work 
and earnings as required.
    First, we identified process weaknesses that could result 
in staff not issuing a critical receipt that proves a 
beneficiary's work activity was reported per program rules. 
Such receipts are also critical to promptly processing work 
reports and adjusting beneficiary payments to minimize the 
chance of overpayments.
    And, second, while SSA requires staff to timely record and 
investigate reported work activity, it lacks procedures 
detailing the steps they must take in screening reports to 
determine whether further investigation is warranted and for 
ensuring they are processed and closed out with appropriate 
action. In fact, at several locations, we didn't identify any 
agency processes to assess the accuracy or quality of screening 
decisions or to provide feedback to staff on how to improve 
work report processing. And, absent better controls, there is a 
risk that a report could be improperly closed and the 
beneficiary overpaid.
    SSA also lacks automated reporting options similar to those 
in its Supplemental Security Income program. For example, SSI 
recipients can report work and wages through an automated 
telephone reporting system and a smartphone application, which 
allow for more prompt action and processing of such reports.
    Although deemed effective for the SSI program, the agency 
has cited complex DI program rules and an unclear return on 
investment as a reason for not pursuing these tools for both 
programs. However, this conclusion was based on only a limited 
evaluation of the cost and benefits of using these reporting 
options for DI program beneficiaries. In the meantime, SSA's 
current manual process remains vulnerable to error and can 
result in long wait times for those who try to report work 
activity.
    Finally, we have long reported that the DI program has 
complex and sometimes confusing work incentive rules for both 
beneficiaries and agency staff to understand. During our 
current field work we found that staff had varying 
interpretations of program rules for when beneficiaries should 
report work and earnings and that the direction they provided 
beneficiaries could lead to overpayments.
    And despite the importance of informing beneficiaries of 
their reporting responsibilities, we found that SSA provides 
only infrequent reminders via its forms and communications with 
beneficiaries, and those that it does provide contain limited 
information. Once again, this is in contrast to the SSI 
program, where the agency employs various electronic and Web-
based reminders for recipients to report work and earnings.
    As you are aware, our work is still ongoing, and we will 
continue to build on the findings discussed today. As such, we 
will continue to work closely with SSA and this Subcommittee in 
developing recommendations to address the policies and 
procedures that pose a risk to both beneficiaries and taxpayers 
alike.
    Mr. Chairman, this concludes my statement. I am happy to 
answer any questions you may have. Thank you.
    [The prepared statement of Mr. Bertoni follows:]
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                                 ------
    Chairman JOHNSON. Thank you. I appreciate your testimony. I 
wonder how you keep track of every office that those reports go 
into. How do you?
    Mr. BERTONI. It is all up here.
    Chairman JOHNSON. I think that is part of the problem.
    As is customary for each round of questions, I will limit 
my time and ask my colleagues to also limit their questioning 
time to 5 minutes.
    Dr. Weaver, on the screen is a chart provided by Social 
Security on all the rules a disability beneficiary needs to 
deal with if they are working or looking to get back to work. I 
don't know how beneficiaries can make sense of all that. Can 
you?
    Mr. WEAVER. It is definitely complicated. I think when you 
talk about our disabled population you are talking about 
individuals who suffered something terrible, a health 
impairment. They often have financial conditions. So we know 
that the population is dealing with a lot of issues, and a 
process like this to them often is viewed as complicated. So we 
do agree that the rules that have been built over time--the 
intention is to make it safe to return to work, but there is an 
issue of whether the complexity has become too much.
    One of the things we do to try to help our beneficiaries is 
not to just give notices or reminders to them about the work 
rules, but we support a large number of partners. About 400,000 
of our beneficiaries are either working with a State VR agency 
or an employment network under the Ticket to Work program. 
Another 40,000 are working with community-based work incentive 
planning assistance organizations or protection and advocacy 
organizations.
    So it is complicated. In some cases the best way to deal 
with that is for the beneficiary to get help from one of our 
partners.
    Chairman JOHNSON. How can a Social Security office 
determine whether the guy deserves benefits continually or not? 
And you can't count on the guy telling you: Hey, I am okay now, 
I am working. They are not doing that.
    With all these rules, how in the world is someone supposed 
to know if they ought to be getting disability still or if 
Social Security has even made a mistake and the individual is 
racking up overpayments that they may have to pay back?
    Let's assume that a person does everything right, they tell 
Social Security they are making money, they are following all 
the rules. If that is the case and they receive an overpayment, 
is that person still responsible for the overpayment or to tell 
them about it?
    Mr. WEAVER. It is possible the person is still responsible 
for the overpayment. The waiver requirements are in the Act and 
we have built policy and regulations around them, but, 
generally, it depends as a rule if the person is without fault 
and if they have the resources to pay us back. But it is 
possible somebody reported timely----
    Chairman JOHNSON. Well, do you go after it?
    Mr. WEAVER. We do try to collect the over----
    Chairman JOHNSON. Repayments?
    Mr. WEAVER. Yes.
    Chairman JOHNSON. We try. When you say try, what do you 
mean?
    Mr. WEAVER. Well, we have to work with the beneficiary to 
determine whether they can pay the money back. So we look at 
whether their income is sufficient to cover their day-to-day 
living expenses.
    Chairman JOHNSON. But if they are making any income at all, 
do they still deserve the disability payment?
    Mr. WEAVER. I think in many cases they deserve it. I think 
the issue is that we are required to collect overpayments. We 
do take account of the beneficiary's circumstances, and if they 
have limited income or resources we can sometimes waive the 
overpayment.
    Chairman JOHNSON. Do you have any idea how much in 
overpayment you have recovered in a year?
    Mr. WEAVER. I may have to get back to you.
    Chairman JOHNSON. If you look at that chart, I am not sure 
it is working the way that Congress intended for it to work.
    Social Security has offices all over the country managing 
the program, and we hear a lot about how Social Security needs 
more money to administer the program. Now, your testimony 
states that work CDRs are one of your most resource-intensive 
administrative workloads due to the complexity of the work 
incentive program.
    Do you think it would reduce administrative costs to 
simplify work incentives or even centralize the work instead of 
spreading it all over the country?
    Mr. WEAVER. I think it is possible that changes in the law 
to simplify the programs could reduce the administrative 
burden. You would have to look at that carefully in terms of 
how it affected the beneficiaries. But I do think there are 
certainly possible policies that would reduce complexity and 
lower the administrative----
    Chairman JOHNSON. How many workers do you have working on 
CDRs?
    Mr. WEAVER. We do about 250,000 CDRs per year. I would have 
to get you the figure on how many workers support that 
workload.
    [The first submission of Mr. Weaver follows:]

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                                 ------

    In response to your question about how much do we collect 
in overpayments: In the last fiscal year we recovered $900 
million in overpayments in the DI program.
    Chairman JOHNSON. Do you know what the total overpayment 
was?
    Mr. WEAVER. Are you referring to work-related overpayments? 
I will have to get you that figure.
    [The second submission of Mr. Weaver follows:]

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    Chairman JOHNSON. Mr. Bertoni, shouldn't this process be 
simplified and improved? And, in doing so, wouldn't it help 
beneficiaries and also help Social Security save on 
administrative costs?
    Mr. BERTONI. I would say, first, last year work-related 
overpayments were about $1.3 billion. So that is where they 
were last year.
    As far as saving administrative costs, I would defer to the 
agency. They have probably looked into this. But there is no 
doubt that processing and following up on thousands of work 
reports annually is a huge workload and a very costly workload.
    Administrative simplification and simplifying the program 
could in fact result in some cost savings. But it all comes 
down to, the devil is in the implementation details. What you 
choose to simplify, how you get there is going to drive where 
your savings end up.
    There are some changes that could, in fact, result in the 
administrative savings, but at the end of day could result in 
more benefit outlays. But if you have a less complex program, 
less error-prone program, a program that is less vulnerable to 
fraud and abuse, that is a tradeoff.
    So it really comes down to how you design it, what you 
choose to simplify, and what your goal is.
    Chairman JOHNSON. Have you thought about it? I am sure you 
have. Can you help us simplify the program?
    Mr. BERTONI. There are aspects of the program that clearly 
don't make sense. There are options out there to do that. I 
think that the best source for you to go to would be the folks 
that administer this program. I think you need to work closely 
with SSA. They know this program front and back. We certainly 
can evaluate these options and give you criteria by which to 
evaluate them, but I have no specific model that I would 
pursue.
    Chairman JOHNSON. Thank you, sir.
    Mr. Becerra, you are recognized.
    Mr. BECERRA. Thank you, Mr. Chairman.
    Thank you for your testimony. I think what your testimony 
highlights to me is that this is one tough job to try to 
administer in terms of making sure it is being used for the 
right reasons, but at the same time making sure it is 
available, because these folks who have qualified for the 
disability, they have no obligation to try to go out there and 
work. For the one-fourth of all these disability recipients who 
try to work, what they are saying to us is, ``Hey, I am so 
disabled I qualify to receive the benefits,'' but they are 
still saying, ``But let me see if I can go out there and 
work.'' I think what we want to say to them is, ``Go for it. We 
want you to succeed.''
    The difficulty is the balance between providing them with 
the protections, because the last thing we want to do is say, 
``Go out there and try to find a job,'' and they land a job, 
and they succeed at it for 25 days, but we have cut off their 
benefits because now they are working, and on day 26 they no 
longer have a job, now they have nothing.
    I think we would give them a disincentive to try to find 
work if we told them, ``You found work, that is it, we are 
going to cut you off.'' Of course, that means that we have to 
run the risk that somebody finds work, and works and works and 
works, and now is doing fairly well, but hasn't informed SSA, 
the Social Security Administration, that they are now working 
well and they may not need the disability benefits at the level 
they have. That is the tough part.
    We want to go after those folks who start to game the 
system. At the same time, we want to give every American who is 
disabled the incentive to believe, ``I can still get out there 
and do work.''
    Having said that, Mr. Weaver and Mr. Bertoni, please, if 
you have anything you would like to shed on this. Are there any 
of these protections that we have provided that you think we 
can undo as part of simplification? For example, we tell a 
Social Security disability recipient, ``Go out and find work. 
If you find work for several months, we are still going to pay 
you your benefits even though we know you are working. We are 
still going to pay you the benefits until longer term, when we 
see that you are going to be able to sustain yourself.'' Should 
we get rid of that incentive?
    Mr. WEAVER. Well, let me offer a few comments without 
advocating a particular policy.
    If you just took the work incentives away, it would harm 
our beneficiaries. So the issue is, what do you put in place or 
what do you keep?
    I think one of the things that confuses our beneficiaries 
is the number of periods we have in the law. When we tell our 
beneficiaries, well, there is a period where you can have 9 
trial work months in a 60-month period and it has no effect on 
your benefits, and then you get in the extended period of 
eligibility and you go above another amount, it does cease your 
benefits but we may be able to restart them, and then there are 
other periods, I think that----
    Mr. BECERRA. You have already confused me.
    Mr. WEAVER. Yes, it is hard to state that in words, and for 
people who are struggling with a lot of issues, as our 
population is, it is confusing. So I think the issue is, can 
you find some alternative that is protective of beneficiaries 
but is simpler? Again, not to endorse any proposal, but there 
are proposals out there to look at benefit offset formulas.
    We had an idea for a demonstration proposal a few years 
ago, and it is not a current one, but under that proposal you 
would have very simple rules, that if the person earns above 
substantial gainful activity, which is about $1,090 a month, 
they wouldn't get paid a benefit; if they earn below that they 
do get paid a benefit. We don't terminate them, they don't have 
to go through all these periods.
    So rule-based things may help; but, again, I'm not 
advocating any.
    Mr. BECERRA. So, where we can, try to streamline it so it 
is clear for the person who is trying to work. I know you have 
a project, it is called the Work Incentive Simplification 
Pilot, where you are going to try to see if you can figure out 
a way to simplify things. But you are calling it a pilot 
project, you are not just implementing it full blown right 
away. Is that because you want to test it, to see if it works?
    Mr. WEAVER. Right. It is not an official pilot at this 
point. It was in the 2012 President's budget, but it is not in 
the current one. So we don't want to put everything in what we 
call the Work Incentive Simplification Pilot. We are interested 
in working with Congress on finding if there are particular 
incentives we could test. You are right. You would want to test 
it before you put it in the program to see if it improved 
things, such as lowering the administrative burden, or whether 
it encouraged people to return to work.
    Mr. BECERRA. Mr. Chairman, I think it would be helpful the 
next time we have a hearing on this to have someone who could 
speak from the beneficiary, that disabled American's 
perspective, so that we could get a sense from them what they 
think works, doesn't work, where are the complications, the 
complexities for them to navigate the process.
    Most of these folks would tell you they are trying to do 
the right thing. Part of the problem is the delays that they 
incur in getting a hearing to get this settled. I know that the 
wait time is over a year now to have an administrative law 
judge hear their case. I don't think any American wants to 
deprive an American who worked and is now disabled the chance 
to receive the proper benefits that they have paid into.
    You mentioned, I think--was it Mr. Weaver or Mr. Bertoni? I 
think you mentioned there are 250,000----
    Mr. WEAVER. Work CDRs.
    Mr. BECERRA. Work CDRs. And CDRs, again, are?
    Mr. WEAVER. Continuing disability reviews.
    Mr. BECERRA. So these are the cases that you are looking at 
in the event that there may be something going on in them.
    Mr. WEAVER. That is correct. And those are complicated 
workloads. If we don't get a timely report from the 
beneficiary, we do enforcement actions where we receive data 
from the IRS that is posted to our earnings file.
    Mr. BECERRA. That is a red flag that has gone up saying to 
you, we have to look at this person's file to make sure that 
they are receiving the benefits they deserve.
    Mr. WEAVER. That is right. And at that point you have to 
employ this whole chart, but retrospectively, because it is 
after the fact.
    Mr. BECERRA. Yeah. So not only do you have the complexity 
of the chart, but if I did my math correctly, if you have 
250,000 of these cases, it sounds like a lot, but when you have 
64 million people who are receiving benefits under Social 
Security, that translates into, if my math is correct, less 
than one-half of 1 percent. So more than 99 percent of 
Americans who are receiving their benefits under Social 
Security aren't part of this, but we still want to make sure 
that we are only giving benefits to those who have earned them.
    So, I think, Mr. Chairman, this is where we have to go. I 
think we all agree on a bipartisan basis. We have to figure 
this out, whether it is because of the delays because of the 
bureaucracy that we are not getting to these overpayments 
quickly enough or it is because someone happens to be trying to 
game the system, we want to go after those folks, because at 
the end of the day what we want is a program that actually does 
encourage people to work if they can. I mean, I want to give 
any American who is disabled, who says, ``I can still work, let 
me show you,'' the opportunity to do so.
    So, I appreciate your testimony.
    Mr. Chairman, I think this is one of those areas where we 
are probably going to have to delve into it quite a bit, 
because it sounds to me like you have to shepherd these things 
a lot. You are never going to come up with some real simplistic 
formula to determine someone who can and cannot work or is or 
is not receiving benefits they deserve. It is going to take a 
lot of investigative work, and that is where I think if we do 
more to provide the resources so you get through those CDRs 
quickly, we will be able to process this in the right way for 
Americans who have paid into Social Security.
    With that, Mr. Chairman, I will yield back.
    Chairman JOHNSON. Are you ready to fill out your form for a 
job?
    Mr. BECERRA. I hope, for a while, I still don't have to 
worry about that, Mr. Chairman.
    Chairman JOHNSON. Mr. Young, you are recognized.
    Mr. YOUNG. Thank you, Mr. Chairman, for holding this 
hearing. And I thank both of our witnesses for mastering the 
details of this chart and others so that we can be better 
informed and craft better public policies.
    I am very confident that together, in a bipartisan way, or 
nonpartisan way, we can make meaningful improvements to how 
these programs are administered, and we want to be a partner in 
that, in working with you and others, and the beneficiary 
community as well.
    In the end, this comes down to capability depravation, the 
depravation of capabilities that results from, in some 
instances, a flawed work reporting process, which leads to 
overpayments, which can exacerbate the return to work. And we 
want people to go back to work because most people want to work 
if able to do so. And so this is about empowerment.
    I am confident we can do this. I used to be a management 
consultant, and we would go into organizations, we would 
flowchart stuff out, we would look for opportunities to 
automate and reduce some of these different boxes where they 
existed.
    And very frequently there were, we called them COTS, 
commercial off-the-shelf technologies that had worked in one 
environment for one purpose and one enterprise and could be 
modified to also work in another enterprise, a similarly 
situated one that perhaps provide some more services. I see a 
similar opportunity here, it is not something I have conceived 
of, but others have discussed this, and that is looking to the 
means-tested SSI, Supplemental Security Income program. They 
have a mobile app and an automated phone system, unlike the 
disability program.
    And so I guess my first question would be, why can't we 
make this automated set of tools available to and adapted to 
the needs of SSDI and recipients?
    Mr. WEAVER. Sure. Thank you for the question.
    We are highly motivated to have technology that solves 
these problems. When we looked at the SSI program, we did have 
more to work with in terms of policy complexity and structure. 
So, in the SSI program, there isn't a trial work period or an 
extended period of eligibility. Earnings have an effect on cash 
payments through a formula, that is, if you earn above a 
certain amount, $65 a month, each $2 of earnings reduces a 
dollar of the SSI amount. So it lent itself to a more direct 
technology where somebody could input their wages and we could 
seamlessly put that through our systems to compute a payment.
    On the DI side, I think some of the things we struggled 
with are that it depends on where you are in the structure 
about how earnings effect your benefits. But I take your point 
about the improvements in technology, but I think some of it 
was driven by the complexity of the DI program in particular.
    Mr. YOUNG. So is it your belief that perhaps, at least for 
a subset of the disability recipient population, adaptation of 
existing technologies may be one of the options we pursue?
    Mr. WEAVER. I would have to reflect on that. It may be for 
a subpopulation that system would work, but I would have to 
give it a little more thought.
    Mr. YOUNG. Okay.
    Mr. BERTONI. Mr. Young, I think I could touch on that a 
little bit.
    We think that the agency should be looking at those 
alternative technologies. And perhaps they are looking at it a 
bit differently than we are. I understand that there are 
complexities associated with the DI program, there is a 
different level and multiple levels of additional layers that 
you have to dig down into to determine whether there is a work 
CDR to be ordered.
    But these apps, as well as the telephone reporting system, 
do a couple things. The first thing they do is to give 
beneficiaries a couple more avenues to report wages and 
earnings, and, hopefully, in a timely way, to prevent an 
overpayment; if not that, to reduce the overpayment. So there 
is a use there. So there is some value there.
    The second thing they do is they address this longstanding 
problem of no receipt. If you have a receipt in this program 
and you get an overpayment, the receipt proves that you 
reported work activity. And if you have a receipt, that is how 
you can get the waiver.
    Mr. YOUNG. So, bottom line, is you think this is worthy of 
pursuing, you think it could conceivably work. And so I will 
just put a period there because I sense that is a fair summary. 
Can you nod affirmatively?
    Mr. BERTONI. Vet it fully before they kick it to the curb, 
yes.
    Mr. YOUNG. Okay. And then, finally, perhaps you could just 
answer this very directly. It is my understanding when Social 
Security shifted toward an automated system there were a number 
of work years that were saved. Could you quantify those work 
years to maybe give us a sense of the potential with respect to 
DI and our ability to save years administratively?
    Mr. BERTONI. That I can't, I would have to defer to the 
agency on that.
    Mr. YOUNG. The agency. Is that something you could answer, 
Mr. Weaver?
    Mr. WEAVER. The work year savings from SSI telephone wage 
reporting? Let us try to get you an answer for that. The issue 
is how much in work year savings we have because of the SSI 
telephone technology.
    [The third submission of Mr. Weaver follows:]

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                                 ------
    Mr. YOUNG. Thank you both.
    Chairman JOHNSON. Mr. Doggett, you are recognized.
    Mr. DOGGETT. Thank you very much.
    Mr. Bertoni, I am a big fan of the GAO. I think that you 
all have been very helpful in our getting accountability from 
all parts of the bureaucracy. I have requested a number of 
reports and I have never gotten one before that is entitled 
``Preliminary Observations.'' I guess this is an unusual 
situation, not unprecedented, that you come forward and give us 
your observations before your work is complete.
    Mr. BERTONI. Correct.
    Mr. DOGGETT. Normally, when I have worked with GAO, there 
has been a preliminary report, the agency is given a month to 
respond and comment, and then it comes to us. When there is a 
reference here on page 2 to the fact that Social Security has 
not responded yet, when did they get this report?
    Mr. BERTONI. They got the report 2 days probably before the 
Hill got the report.
    Mr. DOGGETT. Two days before today?
    Mr. BERTONI. Just to explain that, we had almost no time to 
do this hearing. It was very tight.
    Mr. DOGGETT. I understand it was a rush. It is important 
for us to get your observations, but I understand you are 
identifying some of these problems, but you are not to a point 
of being able to recommend to us what we should do about them.
    Mr. BERTONI. Correct. They are preliminary. These are 
findings that we have been able to fact check----
    Mr. DOGGETT. They could change to some extent in the 
future.
    Mr. BERTONI. Yes.
    Mr. DOGGETT. And we look forward to hearing from you as you 
finalize it. And certainly with reference, Commissioner, to the 
Social Security Administration, I think our concern--my concern 
at least--is that we address the problems that GAO has found, 
but do it in a way that the cure is not worse than the problem 
we are trying to solve.
    We, of course, unfortunately, don't have any disability 
recipients here today or any of the advocates for those groups, 
but it is pretty clear that people that have qualified and gone 
through the very difficult process of becoming Social Security 
disability recipients are people that have serious problems. 
And yet they go back and they try to work. And then if we 
impede those work incentive programs, we will have done great 
damage to them, as well as to the overall goal of trying to 
ensure that everyone who can work does work.
    Mr. WEAVER. Sir, I do agree with that. The work incentives 
do provide protection for beneficiaries. They have serious 
health problems, and one in five are in poverty. So, again, I 
think the issue is, are there policies that are protective and 
possible improvements? But I take your point that the work 
incentives do serve individuals now and it benefits them, so 
you have to think carefully about what the alternative would 
be.
    Mr. DOGGETT. And we could get ourselves in a situation if 
any changes are not done very carefully where somebody who is 
severely disabled who qualified to receive benefits and with 
the best of motives goes out and tries to work anyway could end 
up with nothing, where they can't work and they lose their 
Social Security disability benefits and they are left 
penniless. Isn't that a danger?
    Mr. WEAVER. That could be a danger. And I think in my 
earlier remarks what I wanted to offer was that in addition to 
demonstrations which take longer, we are ready to help this 
Subcommittee look at options with data we have. Things do not 
turn around fast in demonstrations, but we do want to help 
provide information that will allow you to evaluate policy 
changes and make sure the most vulnerable members of our 
society are not harmed.
    Mr. DOGGETT. And while I don't believe that there is any 
part of our government that could not be searching for greater 
efficiencies to be sure every tax dollar is well spent, isn't 
it true over the last 3 or 4 years Social Security has received 
on average $1 billion less a year than it needed to do its work 
and has lost almost 5,000 employees around the country to 
address the charge given to see that Social Security is 
available to those with disabilities and our seniors and our 
survivors?
    Mr. WEAVER. Yes. I will note that, you are right, the 
figure of 5,000 losses is the most recent one. At one point we 
had losses of 11,000 employees. Better budgets have allowed us 
to fix that to some extent, but if we enter another period 
where we have to lose a lot of employees you lose institutional 
knowledge. It is hard to recover from those things.
    Mr. DOGGETT. Well, I want to thank both of you for your 
testimony. I think it is really important we try to make the 
changes necessary to address the problems that have been 
identified, but do it in a way that if in doubt we protect the 
rights of some of our most severely disabled neighbors to 
continue to be able to have an incentive for work and to have 
the dignity of some protection and that overall we give meaning 
to the Social Security Act.
    And I hope we can get a markup in here eventually of Mr. 
Becerra's bill on Social Security fraud so that we can address 
those issues by adequately funding the agency. We know that for 
every dollar we invest there, the taxpayers would gain 
significantly.
    Thank you very much.
    Thank you, Mr. Chairman.
    Chairman JOHNSON. Thank you.
    Mr. Kelly, you are recognized.
    Mr. KELLY. Thank you, Mr. Chairman.
    And to both our witnesses, thank you for being here.
    I just want to make sure that I understand, because you hit 
some figures early on, Dr. Weaver, about the amount of payments 
that we are talking about. Would you tell me again the number 
of recipients and the dollar amount?
    Mr. WEAVER. So, I think one question earlier was what are 
the overpayments, and I think Mr. Bertoni mentioned that from 
some of the numbers they have, they are about $1.3 billion per 
year.
    Mr. KELLY. There are $1.3 billion in overpayments. But the 
total amount that we pay, what are the total benefits that are 
paid out, do you know? Just ballpark it for me within about a 
billion or so.
    Mr. WEAVER. I think about $700 billion----
    Mr. KELLY. About $700 billion.
    Mr. WEAVER [continuing]. If you are counting the old age 
and survivors benefits.
    Mr. KELLY. No, I am counting it all, because it is a large, 
large number.
    Mr. WEAVER. Right.
    Mr. KELLY. The budget for your agency----
    Mr. WEAVER. The budget is $700 billion or $800 billion.
    Mr. KELLY. Your budget is $700 billion or $800 billion?
    Mr. WEAVER. Right. Those are just ballpark.
    Mr. KELLY. I don't want to be disrespectful, but there is a 
hell of a difference between $700 billion and $800 billion, 
especially when it is taxpayer funded.
    Mr. WEAVER. Sure.
    Mr. KELLY. So it is not chump change.
    Tell me about the size of your agency, the number of 
people.
    Mr. WEAVER. We have approximately 60,000 to 65,000 
employees.
    Mr. KELLY. Sixty-five thousand employees. And your 
approximate budget for the year to run it?
    Mr. WEAVER. I think it is approximately $11 billion.
    Mr. KELLY. So 65,000 people, $11 billion, okay. And all 
those funds that we are distributing, where do they come from?
    Mr. WEAVER. They come from payroll taxes.
    Mr. KELLY. Payroll taxes. So people who are working, right?
    Mr. WEAVER. Correct.
    Mr. KELLY. Okay. I know we are talking today about 
overpayments and everything else, but where I am from there are 
quite a few people on Social Security, and I get that, I get 
that. Honestly, we are working with GAO to try to streamline 
this to get to the point where we are being the most effective 
and efficient agency we can be and that we are truly serving 
the needs of those that are disabled and really need that help. 
I get that, I really get that.
    I just don't know, when I hear the numbers that you are 
talking about, these are incredible numbers. So how many people 
receive totally--totally--how many people get some type of a 
benefit each month, how many Americans?
    Mr. WEAVER. I think counting all of our Social Security 
programs and the SSI program it is approximately 64 million.
    Mr. KELLY. Sixty-four?
    Mr. WEAVER. Million.
    Mr. KELLY. Million. And our total population is about 300 
million. Boy, that is a heavy load. So I guess it comes down 
to, so you want to get more effective, you want to get more 
efficient. Believe me, I am not out to get you, I am out to 
make sure we are working as effectively and efficiently as we 
can. But when you talk about those numbers it is almost 
incomprehensible to me that this program is on a path that we 
can actually look at and think, ``You know what? I think things 
are going to be all right if we just streamline it a little 
bit.''
    Mr. WEAVER. So, I think, to your comment, and this came up 
earlier, that the work incentive rules apply to just the DI 
population or the SSI population. Most of our disability 
beneficiaries, because of their health, a large majority have 
absolutely no earnings, and that is true of the SSI program. So 
I agree this is a subset of the issue and it is not the global 
issues facing the programs.
    Mr. KELLY. Yeah, it is huge.
    Mr. Bertoni, GAO, I mean, you are always working to make it 
more effective and more efficient. How often are you able to 
get together to talk about how we could make it better? Are you 
able to share the data? Are you able to go back and forth?
    Mr. BERTONI. Yes, in a typical engagement we are back and 
forth with SSA talking about the issues, the problems, their 
proposed solutions. This whole issue with the app and with the 
telephone wage reporting, we have had multiple meetings with 
them. I have eight-page documents where we have Q&A'd them and 
have really tried to get behind their logic, their thinking, as 
to why they don't want to move forward with this.
    So, yes, we do. And periodically we need to talk about sort 
of high-risk issues, their efforts to modernize their programs. 
We meet a few times a year. And from an oversight standpoint, 
that is my job. And it is a big agency, there is a lot going on 
there, but I think they are productive meetings.
    Mr. KELLY. Yes. I just think that the American people, and 
I mean this sincerely, have no idea of the size and scope of 
these problems. And as we move forward, the dollars it is going 
to take to continue on the path we are on, it is totally 
unsustainable in my way of thinking, but I am only coming from 
the private sector, so I have never had the ability to borrow 
money at whatever amount I needed.
    I think Mr. Becerra is right, we need to work with you 
somehow, all of us getting together to make sure that we can 
have a program that is truly sustainable and we don't penalize 
people. I have people back home that when it comes to reporting 
it is so difficult for them. And they want to go back to work 
and they are not sure if they go back to work if it is worse 
for them by going back to work than staying on SSI disability. 
So we have to make sure we make it easier for them.
    I really appreciate you being here.
    Mr. BERTONI. If you have the mechanisms in place where they 
can report and know that they are not going to get a letter in 
the mail saying they owe $20,000.
    Mr. KELLY. See, that is the problem.
    Mr. BERTONI. That is key to someone's willingness to step 
out and go to work.
    Mr. KELLY. Yes, I have a gal that has been in a wheelchair 
because a drunk driver hit her, she just got tagged with a 
$74,000 overpayment. There is no way in heck. She tutors people 
on the side to make a few extra dollars. They said: Well, you 
are making too much money, now you are going to have to pay 
back $74,000. What she gets now isn't enough to cover her 
living expense.
    So, I mean, really, this is hard, and this is really hard 
for people who get hit with this, not the maybes out there and 
the anecdotal things that we know, but I am talking about real 
American people facing real problems. You get that bill from 
the government that says you owe us $74,000 because we overpaid 
you, that is one hell of a note to get in the mail and that 
scares the living daylights out of these folks.
    Chairman JOHNSON. The gentleman's time has expired.
    Mr. Renacci, you are recognized.
    Mr. RENACCI. Thank you, Mr. Chairman. I want to thank the 
gentlemen for being here.
    According to the Social Security Administration, 27 percent 
of overpayment dollars were the result of cases where the SSA 
received a notice of work activity but failed to take 
appropriate or timely action to adjust the payment.
    Now, I will tell you that that percentage is down. So I 
know you are working to move that number down. But 27 percent 
is still a big number. I know it was as high as 53 percent. So, 
again, I commend you for the work you have done to bring the 
number down.
    I am just trying to get an understanding of how that 
happens. So, Dr. Weaver, can you tell me how long does it take 
for Social Security to identify an overpayment when a 
beneficiary reports his or her earnings? And how big is that 
overpayment on average?
    Mr. WEAVER. We will respond to you with the specific 
numbers.
    [The fourth submission of Mr. Weaver follows:]

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    I think your general point, what happens if sometimes a 
beneficiary doesn't report timely or if we don't act on it 
timely and it reaches the enforcement action stage, it is a 
much tougher case and the overpayments can be substantial in 
those situations.
    Mr. RENACCI. So do you have any idea how long that time is?
    Mr. WEAVER. Well, for example, when we do an enforcement 
action and we do a work continuing disability review I think 
the average processing time may be 250 days.
    Mr. RENACCI. Wow. So, again, you would agree that the 
longer it gets down the road----
    Mr. WEAVER. I agree. And let me mention one of the things 
where we think we have some success in moving the dollar 
amounts is we have employed statistical models that when we get 
alerts from the IRS posted to our earnings files, these 
statistical models predict which cases are likely to be large 
overpayments and will get out of hand if we don't act on them 
immediately.
    Our Inspector General looked at sort of that business 
process and some of the things we have done in the last few 
years, and found it did have a big effect on lowering the 
average overpayment in the sample they were looking at from 
about $18,000 to $8,000.
    So one of the things that definitely matters is getting to 
the enforcement action closer to when the earnings actually 
happen. The longer the delays, you are going to get larger 
overpayments. It is very difficult to reconstruct the history 
of what happened. It's a lot of aggravation for our 
beneficiaries, and we often have to contact employers to get 
information to administer these rules.
    Mr. RENACCI. Mr. Bertoni, how does this happen, in your 
eyes, and why can't Social Security move a little quicker?
    Mr. BERTONI. I think the source of some of this is the wage 
data the agency uses. When they get the alert, when they get 
the information, that alert is based on IRS data that can be up 
to 2 years old. So that person could have been working 2 years 
ago, and they are just finding out about it.
    Now, it goes into sort of the hopper to be worked, and we 
reported a couple years ago cases can sit there 12, 15 months 
before they are worked because of the backlog. Then they go 
through a process of being worked.
    Two hundred and seven days is a goal; we had a range of up 
to 900 and something days. So that is a long, extended period 
where the clock is ticking, that person has been receiving 
benefits they shouldn't have been receiving, and ultimately 
that is a pretty large overpayment to recover.
    Any time the wage data is important, usually on alternative 
databases like the National Directory of New Hires, the 
alternative means of reporting wages and wage information of 
work, the agency needs to move forward and explore them more 
fervently.
    Mr. RENACCI. Yes, because you have just indicated it could 
take up to 2 years to get adequate or accurate information. So 
what are some of the things that can be done? What are some of 
the ways we can help you fix that?
    I mean, everybody always talks about more money and 
personnel. Believe me, I came from the private sector, as Mr. 
Kelly did, you have to work with the budget you have. And in 
many cases, that means you have to do things more efficiently. 
So what are some of the things you can do?
    Mr. BERTONI. Their enforcement operation is, like, 80 
percent of all CDRs. That is consolidated across the, I 
believe, eight processing centers. They tend to use the older 
IRS wage data. If the information comes in from an individual, 
they can use other tools, they can use the wage reporting 
tools, they can use the National Directory of New Hire data, 
which is quarterly data.
    We have recommended and, I believe, the agency has 
acknowledged the value of going to the NDNH, the National 
Directory of New Hires, that has quarterly data. I think if you 
go to more timely data sources, it stops the clock from 
running, and in a matter of time you are going to have smaller 
overpayments.
    Mr. RENACCI. Thank you. I do think we need to be able to 
work together in a bipartisan fashion to make this work better, 
because 27 percent overpayment, again, the American people are 
looking at this and saying we have to make things work. And the 
dollars have got to be there for those that really need it. So 
I appreciate your work in getting the number down, but we have 
to get it down much lower.
    So, Mr. Chairman, I yield back.
    Chairman JOHNSON. Thank you.
    Mr. Brady, you are recognized.
    Mr. BRADY. Mr. Chairman, thanks for having me back to the 
Subcommittee.
    A couple thoughts. One, this is frustrating. And not this 
Administration, by the way, it has just been frustrating to not 
be able to reward people for getting back to work, and through 
the years as we have held hearings the frustration continues to 
grow.
    We have some pretty good incentives in place, a 9-month 
trial work program with full benefits, a 3-year safety net on 
your income, up to nearly 8 years for the healthcare side of 
it, which is really important when you are disabled. It seems 
to me we have some pretty adequate benefits in place to help 
people transition today. We hear about the overpayments and the 
improper payments.
    Mr. Bertoni, I was curious, one of the points you made was 
that I am self-reporting, which I am not sure is the way we 
ought to be going, by the way, in this whole system. I am not 
sure the honor system in a complicated process is the heart of 
it, which it is in this case. So why wouldn't someone get a 
receipt if someone is self-reporting? Why is that even a 
question?
    Mr. BERTONI. It really depends on what mode you use. If you 
call into the telephone wage reporting system or you use the 
app, there is no human involvement there. You are going to get 
an automatic receipt. To me, that is a good thing.
    Mr. BRADY. And what percentage use that?
    Mr. BERTONI. I don't know, but it is a pretty significant 
number over the last couple of years.
    Mr. BRADY. Can you get close?
    Mr. BERTONI. I think they had 40,000 in September, 
multiplied by 12, something like that. So it is a good amount. 
I believe it is growing. So you have that mode.
    Now, if I walk into an office or I fax or mail my work 
report into an office, the report is received, the receiving 
staff person has 5 days to get that entered into the system, it 
is a manual process, and then they mail your receipt. People 
are busy, and we have a manual process. There are other 
workloads. Things get put aside. That is where it can break 
down, where the receipt may at times not be mailed out to the 
person.
    Mr. BRADY. So that is really sort of a lose-lose both for 
SSA in tracking these, but also it leaves some vulnerable.
    Mr. BERTONI. They have a 5-day goal, but there is really no 
way to track it with any effectiveness. So it pretty much is a 
metric in holding people accountable. It is a paper tiger.
    Mr. BRADY. Why are we self-reporting? It just seems to me 
someone trying to get back to work, whether they are self-
employed or most likely working for someone, who is reporting, 
even more often than quarterly, why couldn't a beneficiary who 
is trying to get back to work voluntarily provide the approval 
to send monthly income reports or make them available to the 
Social Security Administration? Couldn't we create a crosswalk 
for both the beneficiary, Treasury, and SSA in these areas?
    Mr. WEAVER. I guess I will mention two things in this area. 
There are a couple of proposals in the President's budget. One 
is for quarterly reporting of earnings. SSA processes about 220 
million W-2s, and those are annual figures. So one proposal is 
if we could get earnings reported quarterly, there are a lot of 
issues that might improve things on, but that would get us the 
information more quickly.
    We do have another proposal in the President's budget. 
There are commercial databases of payroll providers that work 
with employers, they have the earnings. One of our proposals is 
to get the authority to have data agreements with those where 
we can get access to the commercial databases, so it is more 
real-time data that the employer has provided to this payroll 
service provider. So that is another possibility.
    Mr. BRADY. What do you need to go forward? Both of those 
seem reasonable approaches, so why not move forward with those?
    Mr. WEAVER. I think both of those would require new 
authority for us to enter into.
    Mr. BRADY. Is that the only thing holding you back, 
authority from Congress to put those in place or try them?
    Mr. WEAVER. I think that is correct.
    Mr. BRADY. We are seeing vigorous head nodding behind you, 
so I assume the answer is not yes, but heck yes.
    Mr. WEAVER. That is correct.
    Mr. BRADY. So it seems to me that is an area where both our 
Member and Ranking Member would probably have a lot of interest 
in. We certainly would. We want to help people get back to 
work, clearly. Self-reporting just seems to me a big weakness 
in this process. It seems to me there could be a solution that 
helps people do exactly that.
    Especially in the workplace, technology is allowing people 
to work who have never been able to work before. Not as many of 
our jobs are ditch-digging. They are knowledge-based. We have a 
more adaptive workplace than we have ever had, frankly, in 
America. So it seems like it is just a ripe environment to sort 
of make a huge change in helping people who want to get back to 
work get back to work.
    Mr. BERTONI. And I agree about the third-party 
verification. I think the self-reporting aspect is just 
complementary to what they should be and are doing in other 
areas. The enforcement operation does a number of data cross-
matches to try to find unreported wages. And even the persons 
that are reported through those self-reporting mechanisms would 
conceivably be swept up in that third-party data match.
    So these are, I think, complementary, where individuals who 
want to report and want to report timely have a venue, and the 
organization also has third-party data sets that they can tap 
into to get the folks who want reporting on their own.
    Mr. BRADY. What do you think that would do to lower the 
overpayments? What is the impact, do you think, in real life?
    Mr. BERTONI. I don't know what the numeric value is, but I 
think having more avenues for self-reporting as well as third-
party verification in a timely way, it works. It works across 
the board in other programs. It works at SSA when they do it 
right. Again, it comes down to implementation and how 
frequently you are doing it.
    Chairman JOHNSON. The gentleman's time has expired.
    Mr. BRADY. Mr. Chairman, thank you very much for holding 
this hearing.
    Chairman JOHNSON. You are welcome.
    Mr. Reed, you are recognized.
    Mr. REED. Thank you, Mr. Chairman, and thank you to the 
witnesses. I am very interested in the testimony today and 
working together on this important issue in regards to the 
disability trust fund and the emphasis on work and having 
assistance available for individuals who have the capacity and 
desire to return to work.
    So let me challenge the Administration, the Social Security 
Administration, a little bit. What is your understanding of the 
stated purpose of the disability trust fund?
    Mr. WEAVER. The stated purpose of the trust fund is so we 
can make scheduled payments that are outlined under law to 
individuals on our programs.
    Mr. REED. See, that is part of the issue I have with SSA, 
because what I am hearing from folks in the community and back 
in the district, across the country, is a potential cultural 
issue with the SSA office when it comes to the disability trust 
fund. Because I noticed in your response you didn't say 
anything about work. I didn't see anything in the material 
talking about part of the disability trust fund being making 
sure the Administration is promoting and encouraging work.
    And that, to me, is an issue, and I think we can do better 
on that front, because we have a whole body of law, in my 
opinion, the Americans With Disabilities Act, and we have come 
so far with the disability community. I was a mayor. I promoted 
the vital link, which is to link our entire community in my 
city to access to make accessible to people with disability 
Main Street, grocery stores or pharmacies. And one of the 
things I am seeing in the disability trust fund arena is a 
conflict with that half of--it is not half--but that purpose of 
the Federal law where the disability trust fund seems to say: 
We are just going to give you money, and that is it. And that 
is what I just heard from your response to my question.
    So the question I have for you on top of that is, what is 
the standard operating procedure for the Social Security 
Administration to discuss with applicants the work incentive 
program? When do you do that?
    Mr. WEAVER. We do a number of things. When they are awarded 
benefits we provide information on how we can support them 
while they are working.
    Mr. REED. Is this the Red Book? This thing?
    Mr. WEAVER. That is one of the publications we have.
    Mr. REED. So do you sit down and go through this with the 
beneficiary?
    Mr. WEAVER. No.
    Mr. REED. No. And if I could, it says here, ``We try to 
keep the Red Book clear and brief. We follow plain language 
guidelines,'' et cetera. Right? That is the stated purpose of 
this book? I just randomly picked some pages as I was preparing 
for the hearing today.
    I will go to one of my favorite here. ``What is the EPE? 
The EPE begins the month after the trial work period, TWP, 
ends. If you are not working that month, the first 36 months of 
the EPE is the reentitlement period.''
    I have 11 older brothers and sisters, and I sit around the 
Thanksgiving table, and this is plain language according to the 
Social Security Administration? This is not the language we use 
around the Thanksgiving table.
    Can you tell how that is developed, how this language is 
developed?
    Mr. WEAVER. I think the language is complicated because the 
structure is complicated. We really do try to make our 
publications in plain language, and the Red Book is actually 
pretty well received in the VR community.
    Mr. REED. How about for beneficiaries?
    Mr. WEAVER. Well, I wanted to mention that our best way of 
supporting beneficiaries is through our employment support 
programs. So we tell beneficiaries that we will provide free 
services. They can get free services through a State VR or 
employment networks in our Ticket to Work program.
    Mr. REED. So actually a State VR to beneficiaries? Do you 
think a beneficiary knows what a VR is?
    Mr. WEAVER. No, I don't. But what we do is we provide 
information on the employment support programs, and there is a 
special call center we run, and we provide notices and other 
information to beneficiaries.
    Mr. REED. So what I hear there, Dr. Weaver, in that 
response is, that is really not our job. That is someone else's 
job. That is the VR's job to do. What I am hearing from you in 
your testimony today is that the best resource that we have 
available to a beneficiary who wants to return to work is not 
from the Administration, but from some third-party outside 
group. Do you think that is the best practice we could do at 
the Federal Government level?
    Mr. WEAVER. Respectfully, I do think it is part of a good 
practice. I think the VRs and the employment networks and the 
work incentive planning and assistant organizations can work 
really closely with these beneficiaries to explain the rules, 
make sure they report their earnings. And not only that, but 
help them get back to work. So individuals who are 
beneficiaries who are in VR or working with the employment 
network actually do have pretty good outcomes under our 
program. They can help explain the rules.
    So it is not all on the third party, but I think those 
individuals are good partners and they serve our beneficiaries.
    Mr. REED. And I appreciate the work the VRs do. Don't get 
me wrong here. I think they do yeoman's work in regards to this 
issue and I applaud them. But one of the concerns I have is the 
cultural effect that beneficiaries have walking into the 
Administration office.
    And if the Administration's office goal, as you stated in 
your original response to the question, is to provide the 
benefit to individuals, how do we change that culture of the 
Social Security Administration to say, we are going to be a 
partner with you, not only to get you the benefit, which we all 
agree we want to do, but we want to encourage you, if you have 
a willingness and a desire to get back to work, not only are we 
going to put you with the VR community, we, the Social Security 
Administration, are going to take the responsibility and be a 
true partner with you in regards to this issue.
    Is that something you think the Social Security 
Administration can accomplish?
    Mr. WEAVER. I think we can be a key part to that. And I 
failed to mention that within Social Security we do have 
individuals who are area work-incentive coordinators, and 
within the field we have work-incentive liaisons. But we do 
message that we value work, and if a beneficiary is interested 
in work, we want to both communicate that at our offices, but 
also to make them aware of partners who can help.
    Mr. REED. I appreciate that. And maybe we can do a little 
better on the Red Book and that language as we go forward.
    Truly, I meant my words in a constructive way, to work with 
you, because I think there is a lot of bipartisan agreement and 
people in the community that want to come together on this 
issue like myself. And I look forward to working with you. I am 
going to continue to challenge you. And that is not meant in a 
negative way. That is meant to be in a positive way.
    With that, I yield back.
    Chairman JOHNSON. Thank you, Mr. Reed.
    Mr. Becerra, you are recognized for 5 minutes.
    Mr. BECERRA. Mr. Brady brought up something I think goes to 
the heart of where we are going to really have to work with 
you, and that is, if we would let people voluntarily, what was 
it, the voluntary ID where you self----
    Mr. BERTONI. Self-report.
    Mr. BECERRA. Self-report, you self-report what you are 
doing. That definitely will streamline things.
    But, Mr. Bertoni, wouldn't you agree that the more we allow 
people to self-report, which will help us do things faster, we 
also take the chance that there is going to be someone who is 
in that group that self-reports who wants to game the system, 
because now I am just self-reporting, you are not checking on 
me, now I might get away with it. So it is a balance, right?
    Mr. BERTONI. Self-reporting in this regard would be the 
telephone reporting system. And the app is someone calling up 
and saying, ``I am working,'' okay. That is a red flag that you 
need to take a look at my benefits. So they are actually, in a 
way, they are flagging work.
    Now, might they, because it is self-reported, report some 
incorrect information about earnings in that? Yes. It is not 
verified, so you can have that issue. But I doubt the report of 
work is incorrect.
    So, at least, we have a report of work that is worthy of a 
receipt. So down the road, should something happen, your SSA 
doesn't work in a timely manner, a $10,000 overpayment pops up, 
the person gets levied an overpayment, at least they have the 
receipt to prove that they did what they were supposed to do. 
That is one of the two elements they need to get a waiver.
    So, again, this might not be the do-all, be-all, end-all, 
but it does serve some purpose.
    Mr. BECERRA. Yes. One last question to you. So I think 
that, because of what you said, if it helps us get more 
accurate reporting and gets people to do the work, that is 
good, but if there is someone who tries to game the system, 
that is where, Mr. Chairman, I think we have to descend on that 
person, make that person an example.
    So we want to encourage folks to want to self-report, but 
the moment you think you can game the system, we want the 
system to just descend on you in such ways that you are going 
to pay a big price, so someone says: Whoa, I was going to self-
report, and I better do it right because I don't want to be the 
next guy who pays the price for thinking I can game the system.
    Mr. BERTONI. If you are gaming the system, you are not 
reporting.
    Mr. BECERRA. But they are reporting inaccurately?
    Mr. BERTONI. Yes. I guess they can report wages 
inaccurately, yes, okay. But the enforcement operation through 
the various runs ultimately should catch up to you if they are 
doing it correctly and timely and we don't have a CDR backlog 
and all that stuff. So it is sort of a double-barrel effect. 
You can catch the folks who want to do the right thing, catch 
the folks who are gaming the system through the back end data 
matching. So I think, again, these are complementary. No one 
thing is going to solve this problem.
    Mr. BECERRA. Thank you, both of you, for your testimony.
    Thank you, Mr. Chairman, for the extra time.
    Chairman JOHNSON. Thank you.
    I want to thank the witnesses for your testimony. We are 
committed to finding ways to make the program work better and 
promote opportunity for individuals who want to return to work. 
Today's hearing looked at one of the problems, only one, but 
there is more that can be done. That is why Chairman Ryan and 
Chairman Hatch and I will be launching a website to gather 
ideas from all Americans on ways to improve and strengthen the 
disability program. And I encourage all of you to share your 
ideas with us.
    With that, I think the hearing has been beneficial to all 
of us, and I thank you for being here and look forward to 
working with you and all my colleagues, including the Ranking 
Member.
    Mr. BECERRA. Mr. Chairman, thank you.
    Chairman JOHNSON. And thank you again for being here and 
trying to help our guys return to work.
    With that, the Subcommittee stands adjourned. Thank you.
    [Whereupon, at 3:31 p.m., the Subcommittee was adjourned.]
    [Questions for the Record follow:]
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