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







                 PROTECTING SOCIAL SECURITY FROM WASTE,
                            FRAUD, AND ABUSE

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 18, 2016

                               __________

                            Serial 114-SS04

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                      KEVIN BRADY, Texas, Chairman


SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
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
TOM RICE, South Carolina

                     David Stewart, Staff Director

                   Nick Gwyn, Minority Chief of Staff

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                      SAM JOHNSON, Texas, Chairman

ROBERT J. DOLD, Illinois             XAVIER BECERRA, California
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
MIKE KELLY, Pennsylvania             JIM MCDERMOTT, Washington
JIM RENACCI, Ohio
TOM RICE, South Carolina



















                            C O N T E N T S

                               __________
                                                                   Page

Advisory of May 18, 2016 announcing the hearing..................     2

                                WITNESS

The Honorable Patrick P. O'Carroll Jr., Inspector General, Social 
  Security Administration........................................     6
 
        PROTECTING SOCIAL SECURITY FROM WASTE, FRAUD, AND ABUSE

                              ----------                              


                        WEDNESDAY, MAY 18, 2016

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:01 a.m., in 
Room B-318, Rayburn House Office Building, the Honorable Robert 
Dold presiding.
    [The advisory announcing the hearing follows:]
 
 
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    Mr. DOLD. The hearing will come to order. Good morning and 
welcome to today's hearing on Protecting Social Security from 
Waste, Fraud, and Abuse. Today we will hear from the Social 
Security Inspector General on what he sees are the big 
challenges facing Social Security, and where Social Security 
can do a better job at protecting taxpayer dollars.
    For those of you who may not know, Mr. O'Carroll has served 
as Social Security Inspector General for the past 12 years and 
will be retiring at the end of the month. Under his leadership 
the Office of Inspector General has engaged in a number of 
antifraud initiatives, including the expansion of the 
Cooperative Disability Investigations units. Overseeing 
investigations that have lead to the recovery and savings of 
hundreds of millions of trust fund dollars, the conviction of 
hundreds of crooks, and has protected Social Security employees 
from threats of violence against employees and facilities. Mr. 
O'Carroll we want to thank you for your service to our country 
and congratulations on a well deserve retirement.
    As you know well, hardworking taxpayers fund Social 
Security Administration and they rightly expect that the Social 
Security Administration will do all it can to prevent waste, 
fraud and abuse. So when Americans hear and read in the news 
about stories of hundreds of millions of dollars, of fraud in 
Puerto Rico, and New York, or the agency spending over $300 
million on an IT project that has yet to even work, you can't 
blame them for asking questions. Sometimes Social Security's 
track record does not inspire all that much confidence.
    As members of this subcommittee, it is our job to make sure 
that Social Security is spending their money in a way that 
doesn't violate the taxpayers' trust by paying benefits to 
those trying to cheat the system or wasting funds on projects 
that don't work. As the longest serving inspector general for 
the SSA, Mr. O'Carroll knows all about the challenges the 
agency faces that put tax dollars at risk. For example, and as 
many of you may know, this subcommittee has raised concerns 
over the years about Social Security's long-term strategic 
planning.
    Today we will hear that Social Security still does not have 
a plan that includes specific measurable goals or outlines a 
strategy to make sure Americans get the service they expect and 
deserve from Social Security. And this is after they have spent 
about $1.5 million on contractors to help them.
    Social Security faces some very real challenges that I am 
afraid are only going to get worse over time and the 
representative payee program is one of them. A recent study by 
the Institute of Medicine raised serious questions about Social 
Security's ability to decide if someone needs a representative 
payee. Earlier this year the Social Security Advisory Board 
also raised serious concerns about this program.
    Last fall the Bipartisan Budget Act included the biggest 
changes to Social Security since 1983, and some additional 
tools to help fight fraud. This includes expanding Cooperative 
Disability Investigations units to cover every State and new 
and harsher penalties for those who attempt to defraud Social 
Security. These tools along with others are a step in the right 
direction when it comes to protecting taxpayer dollars.
    Mr. O'Carroll we thank you for being here today, thank you 
again for your service to our country. We look forward to 
hearing your testimony.
    I now would like to recognize Mr. Becerra for his opening 
statement.
    Mr. BECERRA. Mr. Chairman, thank you very much.
    Mr. O'Carroll, congratulations to you on your service to 
our country and to the many people who rely on Social Security.
    Mr. Chairman, Social Security must work continuously to 
prove to all those people in America who paid into it, over the 
years, that their benefits will be there. And that is perhaps 
why over 80 years Social Security has been able to pay in full 
and on time to every American who contributed since its 
inception.
    The other thing that Social Security must do is make sure, 
like any organization, it provides quality service in 
dispensing those benefits because people have paid through 
their taxpayer dollars for that.
    And finally, as the chairman points out, the last thing we 
want to see is that the money that people contribute to Social 
Security into the trust fund is used for the wrong reasons, 
whether because of fraud, or waste or abuse. And so the Social 
Security system and all the people, the good people who work 
for it, including Mr. O'Carroll, have an obligation for the 
people who are paying their salaries and paying for this to 
happen to do it the right way.
    Over the last decade there are some 10 million more 
Americans today who are receiving Social Security benefits than 
there were just back in 2006, 10 million more. And because of 
the baby boomers that is going to continue to increase for 
quite some time. More and more Americans are now finally being 
able to take advantage of the benefits that they paid years and 
years to be able to earn and receive.
    And because Social Security has so many highly skilled 
employees who are there to provide the services, they have been 
able to have an on time, in full track record for 80 years. But 
that line of defense for good customer service and to fight 
fraud is in jeopardy. I would like to put up some slides.
    What we have seen here in this first slide is, it documents 
what we already know. Inadequate funding of Social Security has 
taken a toll. Let's go to the next slide.
    Mr. O'Carroll--who is about to testify in his written 
testimony to us--makes a point, as workloads have increased and 
its own workforce has undergone a retirement wave, the Social 
Security Administration had to encounter a difficult fiscal 
climate and resulting in budgetary constraints.
    Resources for Social Security overall in its services and 
operations for more than 160 million Americans who are paying 
into it, and some 50 to 60 million Americans who are receiving 
their benefits, those resources have fallen. The severe 
underfunding is evident here in these slides as you can see.
    If you were to take a look at the chart on the left, the 
funding that Social Security has received overall has fallen 
over the last 6 years. And if you were to take out the money 
that Congress has given to do fraud detection, to fight the 
fraudsters, the cuts would be severe to the overall operations 
and services that the Social Security Administration provides 
to a growing number of people collecting the benefits, which 
are reflected in the chart to the right. We are providing, as 
Congress, fewer and fewer resources to an agency that is having 
more and more people who are putting--making a demand on its 
services and rightfully so because they paid for them.
    Congress is shortchanging Social Security and Americans who 
paid for that Social Security are watching Social Security move 
towards a system of mediocrity. Congress is baking in 
mediocrity, into the Social Security system, if we don't 
provide the resources to handle a growing number of Americans 
who expect to get their services.
    Now Social Security still does its work at less than 1 
percent cost in administration. Put it another way, you won't 
find a company, an insurance company or any company in America 
that can say it operates at 1 percent administrative cost. And 
if you can, please put them before us because we want to learn 
from them. But Social Security is doing yeoman's work with 
fewer and fewer resources.
    Mr. O'Carroll will testify to some of the activities that 
Social Security must do, but let's remember a few things. If 
Social Security has fewer frontline people working for it 
today, and this chart reflects it, than it had in 2010, to deal 
with an increase in the number of tens of millions of people 
who are receiving benefits, some 10 million more people over 
the last 10 years, it becomes very difficult for those people--
a shrinking number of workers--to provide those services.
    And so Mr. Chairman, it is important--next slide please--as 
you can see backlogs grow. Next slide--wait times for appeals 
for people who paid into the system grow. The next slide. And 
people making calls to Social Security for services must wait 
longer. It is not the way we should operate. We have to make 
sure that Social Security can have the resources it needs to 
provide the services to people who paid into the system.
    Mr. Chairman, with that, I will yield back the balance of 
my time.
    Mr. DOLD. Thank you, Mr. Becerra.
    As is customary any member is welcome to submit a statement 
for the hearing record, but before we move on to our testimony 
today I want to remind our witness to limit your oral 
statements to 5 minutes. Obviously your entire statement will 
be placed into the record for the hearing.
    Without objection, all the written testimony will be made a 
part of the hearing record. So we have one witness today, 
seated at the table is Patrick P. O'Carroll, Jr., Inspector 
General of the Social Security Administration. Mr. O'Carroll, 
you are recognized for your oral testimony.

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

    Mr. O'CARROLL. Good morning Chairman Dold, Ranking Member 
Becerra, and members Black, Renacci, Kelly, Smith, Larson and 
Mr. McDermott. I regret that Chairman Johnson could not make it 
today. I am happy to be here.
    Last August a 38-year old teacher's aide received her last 
Social Security disability check after 8 years of collecting 
them for a bad back, a condition that never existed. A 
disability examiner stopped payment based on evidence from our 
Cooperative Disability Investigations unit in Baltimore in one 
of its very first cases. This woman told SSA she couldn't drive 
or take care of herself because of a back disorder and 
depression. She even used a walker at a medical exam. However, 
CDI observed her walking, working, driving, and actively living 
her life with no sign of back pain or mental problems. She soon 
admitted she didn't deserve the benefits. That one case saved 
us all about $100,000, probably much more given her young age. 
The Baltimore CDI unit exists because of this subcommittee, so 
on behalf of the taxpayers I thank all of you.
    During my tenure as Inspector General, you have demanded 
rigorous oversight that has helped make Social Security better 
for all of us. So today as always I am pleased to appear before 
you for what is probably my last time. Thank you for asking me 
to share my observations gleaned from a decade of overseeing 
Social Security's programs and operations.
    Despite the many things that we have accomplished together, 
much work remains. All of us will likely rely on Social 
Security at some point and SSA has a long tradition of serving 
citizens and meeting their needs. But that mission must never 
outweigh the agency's responsibility to be a good steward of 
the $2.5 billion it pays out each and every day.
    I want to share three ways that SSA can achieve this 
balance. First, the agency must prioritize program integrity 
and look for innovative ways to identify improper payments and 
fraud. Thanks to your subcommittee, the Bipartisan Budget Act 
contains a provision increasing the cap on SSA's program 
integrity spending and it allows SSA to use those funds to work 
CDRs, open new CDI units and hire special assistant U.S. 
attorneys. I am pleased that the act authorizes SSA to access 
employer data about disability applicants' wages.
    For years we have seen potential from many other data 
matches, government agencies, and third party sources that will 
reduce payment errors and identify fraud proactively. This has 
been a personal crusade of mine as IG and I hope to continue my 
work on this issue even after I retire.
    Second, SSA must modernize and secure its information 
systems. One of its first efforts to modernize the Disability 
Case Processing System or DCPS has come under serious scrutiny. 
We have already issued two reviews on DCPS to inform the 
subcommittee about its challenges. And we have two ongoing DCPS 
audits that will shed more light on a process that has not been 
very transparent.
    SSA must also do more to remediate the significant 
deficiency and internal controls and information security that 
we have reported over the past 4 years. In an environment where 
high profile data breaches have occurred at other agencies, we 
must ensure the same does not happen at SSA.
    Third, SSA must maintain its antifraud momentum and support 
OIG efforts. In 2014 we arrested over 100 people, many of them 
retired New York City police officers and firefighters, in a 
single disability fraud scheme, totaling $30 million dollars. 
After you held a hearing on that case you asked SSA for a plan 
to address disability fraud. In response, the acting 
commissioner asked us to expand CDI. And now you have given SSA 
a mandate in the Bipartisan Budget Act to further expand CDI to 
all 50 States.
    We have opened 12 new CDI units in less than 2 years, an 
impressive feat of collaboration and cooperation. We have also 
saved taxpayer money as a result with dozens more cases like 
the teacher's aide that I discussed at the beginning.
    Finally, the recent arrests of attorney Eric Conn and Judge 
David Daugherty demonstrate our commitment to pursing third 
party facilitators, people who violate the public trust by 
exploiting their knowledge of the system for personal gain.
    Our efforts to identify and dismantle these schemes will 
save taxpayers many millions of dollars and increase public 
confidence in the integrity of SSA's programs. As I prepare to 
step down, I know OIG will continue to protect Social Security 
from fraud, waste and abuse. Acting Inspector General Gale 
Stone and her outstanding staff will work with you and the 
agency to provide independent oversight of these vital 
programs.
    It has truly been an honor to serve the American public in 
this capacity. Thank you for asking me to be here today and for 
your commitment to improving Social Security. And I will be 
happy to answer any questions.
    [The prepared statement of Mr. O'Carroll follows:]
    
    
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    Mr. DOLD. Mr. O'Carroll, thank you for your testimony. I 
want to remind members that again we will have 5 minutes for 
questioning each. I will start that time.
    So, Mr. O'Carroll, again thank you for your service to our 
country in the Social Security Administration. As your time as 
the I.G. is coming to close, I certainly know that protecting 
taxpayer resources is a priority of yours and certainly of 
ours. If we can take a look at, and just have you expand on, 
your top three things that we can be doing or that the Social 
Security Administration should be doing to save taxpayer 
dollars without compromising service to the public.
    Mr. O'CARROLL. Well, a number of issues on that, Mr. 
Chairman. First, and the biggest one I think we are all 
concerned about, is the IT security of Social Security. That is 
something that is a high priority of this committee, and a high 
priority of my organization. We have been watching all the 
other breaches of government agencies on it. We have been 
trying to identify what vulnerabilities there are at SSA, plug 
those holes up, and give advice to SSA. Anyway that is right at 
the top of it.
    The next one we have been talking about, which is what the 
Budget Act recommended, is that we need to be proactive. SSA 
needs to be proactive in its stewardship. And what we are doing 
is expanding the CDI program, which has been something that, I 
guess we generated out of this committee at the very beginning 
of my term. It is extremely effective; it is at the front end; 
it is before fraud is committed. It is a partnership of us, SSA 
and the States. It is very effective, works very well and sends 
a signal that we don't tolerate fraud of SSA's programs.
    Mr. DOLD. In your testimony you also discuss the Disability 
Case Processing System or the DCPS, and some of the concerns 
that you have with regard to this program. Can you talk to us a 
little bit more about what DCPS is supposed to do, the current 
status of the project and how much Social Security has spent 
thus far to date?
    Mr. O'CARROLL. Yes, Mr. Chairman. DCPS is of great concern 
to us and the committee. We have been pretty much hand in glove 
with the committee in the oversight of SSA and the development 
of this system. And if people remember, it's about 6 years in 
process. Within the last year--the SSA has gone off in a 
different direction in the development of it. A portion of the 
$300 million that has been put into this project is being 
saved. And at the same time, a new form of development is being 
used to start this new system on it. And that is where we have 
our concerns.
    Our concern with it is that they're using pretty much a new 
type of development system to develop this processing system. 
And what happens with it is--I have got to say from our 
standpoint as auditors, it gives us concern. It is called 
Agile. And what it does, is that it inserts developers in with 
the users. It is very responsive. It is being used in the 
public sector. However, our major concern with this thing is 
the scope. This will probably be one of the biggest 
governmental Agile projects there is. One of the other parts of 
it is that as it develops, working with the user on it, it 
pretty much is a fluid process. And where we are concerned with 
it is that normally with an audit what you do is, you contract 
with the contractor. They will say they will make a delivery on 
a certain date. If that date isn't met, then you go back to the 
contractor and you readjust your procurement.
    With this type of a thing, there aren't any real specific 
deliverable dates. What we are trying to do now is work with 
SSA, and have our auditors along to try to go along with the 
process on it, and see if there are ways that we can identify, 
sort of milestones along the way for deliverables. Because I am 
pretty sure a year from now if this product doesn't come out, 
the first thing you are going to ask us is, Where did it go 
astray? What we need to do is start coming up with some 
guideposts along the lines of it.
    And what I have got to tell you is, it is not just us that 
are concerned with it. It is as I said the first time for a 
massive government project like this. MacKenzie is a 
contracting company that went out, took a look at this thing, 
and they have said they have some concerns; one on the scope, 
the size of it, and deliverable dates. So they too have 
concerns like we do.
    So I think it is one of those things that needs oversight 
by the committee, bringing SSA in frequently. We would like to 
be along with those meetings on it. Getting updates on it will 
help. And we assure you that we are doing two more status 
reports on it as we speak. We will keep informing along the 
way.
    Mr. DOLD. So as you mentioned, this is the first time the 
Agile method is being used on such a large scale project?
    Mr. O'CARROLL. It is.
    Mr. DOLD. Are you optimistic that this is going to work? 
And you also mentioned in your testimony that you believe it 
will save $300 million? Or what is----
    Mr. O'CARROLL. I didn't say that. The agency has indicated 
that there will be cost savings coming from it. We haven't been 
able to identify that.
    Mr. DOLD. And can you give me just kind of an overall cost 
estimate of what you think this is going to run?
    Mr. O'CARROLL. Well, that is one of our other major 
concerns on it. We don't know, because there are two ways. One 
is the core that is being done. It is being identified in terms 
of what the costs are going to be for the core. But the problem 
that we foresee with it is the personalization. Each of the 
States out there after they get the core, will then personalize 
it as much or as little as that State needs. In each of those 
cases, that is another cost out there that's hard to be able to 
ascertain. We don't know what the core is going to be and what 
each of the States is going to be asking for. So again, that is 
where our concerns are on it. It is hard to get any specifics.
    Mr. DOLD. Okay. Thank you. Mr. Becerra you are recognized.
    Mr. BECERRA. Thank you, Mr. Chairman.
    Again, Mr. O'Carroll, thank you for the work you have been 
doing. And I am going to continue to probe on this issue, 
because I think you need the resources to go out there and do 
the fraud detection act. I remember visiting with you in our 
Los Angeles bureau that you have out there. Your team is 
excellent, they are doing yeoman's work. They wish they had 
more resources and more personnel because they knew that if 
they had the time they probably could ferret out some of the 
folks who are trying to take advantage of that Social Security 
money that other people have paid. So thank you for everything 
your team has done. Please not only applaud them, tell them we 
hear them. We are trying to get more resources to do their 
work.
    I want to call your attention to the slide that I mentioned 
earlier, because it points out on the left side, the left 
chart, how Social Security has received less funding over the 
years, which makes it tough. The one exception of course, that 
we put up there, is in the light blue. That is the money for 
you to do those investigative projects to go after folks. Now 
you just mentioned that last year we gave you the authority to 
expand to 50 States. How many States were you in before when we 
said go to 50 States?
    Mr. O'CARROLL. About that point there, we are right in the 
low 30s, so we are up in the high 30s, into the 40s. Just about 
at 40 now.
    Mr. BECERRA. Good. And I remember when you came to Los 
Angeles I think you were barely at around 20.
    Mr. O'CARROLL. Yes.
    Mr. BECERRA. Twenty States that had an investigative team 
to go out there and detect fraud. So now you are up to 40 and 
with this money you will probably get to go to the 50 States, 
which is what we need to do. We don't want to stop Social 
Security recipients from getting their money simply because we 
don't have enough fraud detection in that State to prevent 
that.
    Would you be able to expand to 50 States if we cut--that 
light blue chart, the column there that gives you that extra 
money-- would you be able to go to 50 States?
    Mr. O'CARROLL. No. Well, two things on it. One is that we 
are very dependent on SSA for the funding of the CDI units as 
we expand. My cost of a CDI unit is the lead investigator. SSA 
picks up all the other costs. As you are saying, those costs 
are balancing out with other things and the costs decline. It 
will decline on that----
    Mr. BECERRA. Could you expand to 50 States if you didn't 
get those extra resources?
    Mr. O'CARROLL. Probably not. Again, it is at SSA's behest 
that we are going to do it.
    Mr. BECERRA. Yes. In other words, to do your good work, to 
hire the quality people, you need the resources?
    Mr. O'CARROLL. Uh-huh.
    Mr. BECERRA. And so, what makes it difficult for the Social 
Security Administration is if Congress continues to shortchange 
Social Security's ability to do its work, whether in fraud 
detection or in basic service. Let me go to the next chart that 
I showed previously.
    There you go. Now there is a hidden backlog that is growing 
and growing. And while you have extra money to do the fraud 
detection, there are a whole bunch of services out there where 
we are not providing the adequate funding to get the job done. 
And it could be something as simple as making sure someone's 
bank account change is adequately addressed so we don't have 
any potential fraud in the future. Or someone gets correct 
information about their Medicare account. Or someone repays an 
overpayment that they got from Social Security that should not 
stay with them. Or perhaps they were underpaid and now Social 
Security has to give them a little bit back. All of those 
things are being delayed because the Social Security 
Administration has lost about 10 percent of its workforce and 
it has gained about 10 million new people to service in about 
the last 10 years.
    Let's go to the next chart: Appeals. You are familiar with 
this because so much of the fraud occurs with people who apply 
for Social Security benefits and don't deserve it. Yet you have 
a whole bunch of folks who do deserve, who are waiting now, in 
the hundreds of days, to have their appeal for benefits heard, 
to get them. And this is what happens when--in late 2006, 2007, 
2008, 2009 we started to provide more resources to bring down 
that backlog. But 2010 the cuts started, 2011 cuts, 2012, 2013, 
2014, 2015. Finally 2016 we gave a little bit more. You can see 
what happens when you don't provide the resources.
    And so, Mr. O'Carroll, I think all of us want to make sure 
that you can do your work because you have to be the front 
line. If someone gets through that door for the wrong reasons, 
it is going to take us a while to find them and capture them 
and get them off the rolls. But if you could do your work well, 
and that is why you got that extra money now to go to 50 
States, then we have one level of protection. But we need to 
make sure that all the good people of Social Security have the 
resources they need to make sure the services are properly 
performed. If we could go to the next chart.
    No one wants to wait three times as long to have their 
phone call answered, even if they are not trying to do any kind 
of fraud. They are just trying to get their services. But if 
there aren't personnel doing that because they had to help your 
fraud detection unit get the information they need, then all of 
a sudden people are waiting on the phone a long time. And so 
this is a matter of making sure our priorities are straight. 
People paid for their Social Security benefits, they earned 
them. We should make sure they have the services that go with 
them. Thank you.
    Mr. DOLD. Thank you, Mr. Becerra.
    Mr. O'CARROLL. May I add one comment on that, Mr. Chairman? 
A couple of things: one is that, Mr. Becerra, we talked about 
in the past that line on the first chart, the increase in the 
light blue there, that isn't to my advantage on that type of 
thing. That represents different tasks that have been placed on 
SSA, CDRs specifically, that are very expensive. They go up. I 
have to say as you are taking a look at the size of SSA going 
down, I can put a chart up of the OIG and it will mirror that 
exactly. I have 10 percent less people than when I started. And 
amongst other things, different demands are being made on SSA 
for antifraud activities and stewardship, which we applaud. We 
think it is well worth it and the return to the taxpayer is 
good. But, by the same token too, we need more resources. SSA 
needs resources too. That is the balance that each of us as 
managers make.
    And in my case what I am doing is that by expanding CDI, it 
is getting me into the States. It is helping us with antifraud. 
It is not costing the taxpayers.
    Mr. BECERRA. Thank you.
    Mr. DOLD. Mr. Smith, you are recognized.
    Mr. SMITH of Nebraska. Thank you, I would refrain from 
suggesting that all things are solved when more money is spent. 
I would hope that we could focus on technology and innovation, 
but that is not my question here today.
    In September 2015, you had an evaluation of SSA's listing 
of impairments. You had indicated that the SSA is making 
progress on updating its listings, but hasn't updated some of 
the listings in decades. When were the mental impairments 
listings last updated?
    Mr. O'CARROLL. Mr. Smith, the last time of our work on this 
thing was in 1985. And we have noticed that SSA has the 
intention of updating it. We were told, one day, possibly April 
or May of this year, an update is coming out. It has not come 
out as of yet. So we are talking about pretty much 20 years of 
old data.
    Mr. SMITH of Nebraska. Right. Now the SSA recently released 
a proposed regulation that would deny second amendment rights 
incidentally to certain individuals with disabilities who 
receive Social Security benefits. Which listings will they be 
using to make this determination?
    Mr. O'CARROLL. They will be using those same 1985 
disability listings, specifically the one for mental 
disability, which is 12.0.
    Mr. SMITH of Nebraska. Okay. So the Social Security 
Administration repeatedly failed to meet even the self imposed 
and recommended deadlines to update the listings. And some 
listings have not been updated since the 1980s as you 
indicated. Certainly this is unacceptable. And now the Social 
Security Administration will be using these outdated listings 
to make judgments about some people's second amendment rights. 
Is that accurate?
    Mr. O'CARROLL. That is correct. That is the direction 
things are going in, yes.
    Mr. SMITH of Nebraska. So the Social Security 
Administration has recently proposed using the need for 
representative payee as a determining factor for whether an 
individual should be denied his or her second amendment rights. 
Mr. O'Carroll, your office has identified concerns with the 
Social Security Administration's capability determination 
process used to assess whether an individual needs a 
representative payee. Can you describe the way the capability 
determination process works, and discuss some of the issues 
that you have found?
    Mr. O'CARROLL. Yes, Mr. Smith. A couple of those on it--and 
I might add that we don't have much work done on this thing.--
What's been coming up in this program is fairly new so we are 
still trying to work our way through it. But of major concern 
at the moment is the way SSA develops. I have got to say there 
are two issues on it, besides the second amendment issue. We 
have a lot of concern over the rep payee program in general. We 
have done a lot of work on it. It's one of those things, a 
subjective decision on the part of the claims rep from SSA as 
to whether or not it appears a person can handle their own 
personal issues and whether they need assistance. And 
oftentimes that is going to be just whether or not they can pay 
bills, whether they are able to feed themselves, and issues 
along those lines.
    So there is not a scientific decision on it. It is one of 
pretty much personal opinion. And oftentimes what has been 
happening is that there are more and more people that are 
needing it and especially as we are noticing with the expansion 
of the aged into the beneficiary force. There it is going to be 
more and more needed.
    So anyway, our biggest concern is that the level of 
decision on it is more in terms of just being able to take care 
of yourself, not whether or not you can have the right to carry 
a gun.
    Mr. SMITH of Nebraska. Okay. I appreciate that and I know 
that a lot of effort is being made to do the right thing. I 
would hope, and I want to support those types of efforts. But I 
also am very careful, especially as it relates to 
constitutional rights.
    Rewinding just a bit from your comments about the fraud 
that was determined. What followed the determination of that 
fraud that occurred?
    Mr. O'CARROLL. Which fraud that occurred? I am sorry, Mr. 
Smith.
    Mr. SMITH of Nebraska. I think the teacher's aide that you 
mentioned.
    Mr. O'CARROLL. Oh. What happened with those is that--and 
again I guess the beauty of the cooperative disability 
investigations unit is that in those units we have disability 
examiners in place with us--when they have a suspicion that 
somebody is not actually as disabled as they claim they are, 
they turn it over to the unit. So what happened before with the 
lady is that it was brought to our attention, and we 
investigated it. In this case here it was presented for 
prosecution.
    Mr. SMITH of Nebraska. So then prosecution took place with 
a conviction?
    Mr. O'CARROLL. It is still in process. In fact, this one is 
a fairly recent one so I am not even too sure where it is in 
the process. But we did present it to a U.S. attorney.
    Mr. SMITH of Nebraska. With a conviction, what might 
happen?
    Mr. O'CARROLL. With a conviction on it we would probably be 
taking a look at a significant fine and up to 10 years in 
prison.
    Mr. SMITH of Nebraska. Thank you.
    Mr. DOLD. Thank you, Mr. Smith. The gentleman from 
Connecticut, Mr. Larson, you are recognized.
    Mr. LARSON. Thank you very much, Mr. Chairman, and thank 
you for conducting this hearing. Mr. O'Carroll, thank you for 
your incredible service to your country and the responsible job 
that you are doing; making sure that we are focusing on fraud, 
abuse and waste and weeding that out. It is essential, 
especially to a program.
    As Mr. Becerra pointed out, it is the most efficient and 
effective government program, but it cannot be sustainable if 
all the pieces aren't working. And actually what we have here 
is an insurance issue. Social Security is an insurance problem. 
And there is fraud in insurance. Fraud needs to be weeded out, 
and we need inspectors to do that, just like the private sector 
provides.
    They say, insurance program. Why? Because this is funded 
through something we call FICA, the Federal insurance 
contribution program. Whose contribution? Yours: the people of 
this country. And yet the last time we have done anything with 
this program was in 1983. Can I see a show of hands in the 
audience of anyone's whose insurance premiums have gone up 
since 1983? Of course they have, all across the board. But we 
have not addressed that issue at all in Congress. We have shied 
away from it.
    While in private, everybody knows that when you pay into a 
system, especially a system that sees all the baby boomers 
coming through, we have got to make adjustments. I maintain and 
I hope we have a hearing on this because I think there is an 
easy pragmatic solution; a bill that we have out there that 
increases the benefits of Social Security by 2 percent. It says 
that no one can retire into poverty. It makes the new level 125 
percent of poverty, going to CPIE. It is something the AARP has 
long advocated. You would have adequate funding. The expenses 
that the elderly incur would actually be based on their cost a/
k/a medical devices, doctor visits, pharmaceuticals, heating 
and cooling their homes.
    And also, how about giving the elderly a tax cut that will 
only go right back into the economy? Because again, the last 
time we touched this program significantly was in 1983 so that 
you are taxed on your Social Security. If you are single and 
make more than $25,000 and if you are a married couple and make 
more than $32,000, that is a disgrace. And people are out there 
working because they have to, or some even if they don't have 
to because they desire to be out there and work.
    We enact a proposal in which 11 million seniors will get a 
tax cut immediately. The big question then is, how do you pay 
for this? Well, we have two ways to pay for this. We say we 
should scrap the cap, but following the change that this 
committee made in the tax law, we should start at $400,000. 
$400,000 means that that would impact four-tenths of 1 percent 
of the American people. They will receive more in benefits, but 
they would pay more.
    As you all know, Bill Gates, for example, stops paying into 
the Social Security fund at noon on January 1st. And so there 
is a certain fairness to it all. But the most important thing 
that we can do is increase this fund by 1 percent. It hasn't 
been touched. If your insurance company told you, look, your 
insurance rates are only going to go up by 1 percent this year, 
everyone would go through a sigh of relief. We have not taken 
that stance, a very pragmatic, and simple, and straightforward 
way that doesn't increase the national debt. It doesn't create 
a burden on anyone.
    But you might say, well even 1 percent--of course, as you 
know congressman, when the employer pays half, and the employee 
pays half, and we have self funded people--still can be a large 
expense. Okay, let's phase that in over 25 years. That means 
the increase to preserve the program will be .05 percent; .05 
percent, in order to preserve the most efficiently run 
government program. As Mr. Becerra pointed out, any insurance 
company would die to have a loss ratio in this area of 
efficiency, less than 1 percent. And this proposal, I am 
saying, is the only one that is actuarially sound as we are 
required by law to make sure that we produce a program that is 
75 years solvent. This will take us into the next century.
    .05 percent for someone making $50,000 a year is 50 cents a 
week; fifty cents a week to save Social Security, to make sure 
that it's adequately funded so that we end this discussion once 
and for all in the committee, and that millennials will know 
that yes, this program's going to be there for them, for 50 
cents a week if you are making $50,000. That to me is a 
pragmatic solution.
    Thank you for your service. I hope the committee and I hope 
my colleagues, who I know are interested in solving this 
problem, on the other side, will grant us a hearing on what I 
think is a very pragmatic, straightforward solution to Social 
Security.
    Mr. DOLD. Thank you, Mr. Larson. And I think there was 
something about a Starbucks cup there that you forgot to 
mention?
    Mr. LARSON. Well, I did. It is just if you want to know--
thank you for bringing that up. Usually I have gone all across 
the country and actually I raise this up every time. Bob, thank 
you so much.
    This is usually a big hit, because I say to every single 
elderly group where I am from, what do you think this costs? 
They all know. They go, $4.50. I go, That is right or 9 weeks 
of Social Security payments; 9 weeks of Social Security 
payments if you are making $50,000 a week.
    And that is what it amounts down to. When people say there 
is a pragmatic way where both tax cuts can be achieved, no one 
ends up retiring into poverty, especially women who have worked 
and paid their quarters and who get the short end of the 
stick--I was going to use other language, but--with Donald 
Trump maybe I could use this language. But I will rephrase it--
--
    Mr. DOLD. The next cup of coffee is on you.
    Gentleman from Ohio, Mr. Renacci you are recognized.
    Mr. RENACCI. Thank you, Chairman Dold. And I want to also 
thank Chairman Johnson for calling this hearing to allow Mr. 
O'Carroll to have the opportunity really to discuss the 
challenges, the future challenges facing the Social Security 
Administration.
    I want to thank you, Mr. O'Carroll, for your testimony and 
for agreeing to testify in front of the committee today. 
Additionally, I want to thank you for your many years of public 
service and your last 10 years of service as Inspector General 
for the Social Security Administration. It is really 
appreciated.
    I have heard from numerous constituents in northeast Ohio 
who have been impacted by fraud or attempted fraud with Social 
Security, specifically Social Security numbers. Social Security 
numbers play a vital role in daily life of every American. 
Attempts to defraud and steal the identities of Americans, 
especially senior citizens is a concern that I now share with--
I know I share with many of my colleagues.
    I also had my identity stolen. My Social Security number 
was stolen. A tax return was filed. So I do have some history 
with it as well. That is why I am concerned when the government 
puts the personal information of millions of Americans at risk 
by sending out so many documents. I have been committed to 
protecting Americans from identity theft; stopping the use of 
Social Security numbers when it just isn't necessary. In fact 
last year, we were able to pass into law the Johnson-Doggett 
legislation ending the use of Social Security numbers on 
Medicare cards. So it is definitely my concern when I learn 
Social Security includes--many of the Social Security letters 
and filings include--Social Security numbers on so many 
documents. So I kind of want to, while you are here, ask you 
some questions about that.
    So what is Social Security's plan to stop mailing out 
Social Security numbers? Is there some plan? Something that is 
being looked at or potentially that could be done?
    Mr. O'CARROLL. Yes. And like you, I applaud the fact that 
one of our first, or one of my first under my watch, issues was 
identity theft and the misuse of the SSN and the publication of 
the SSN. We pretty much, first through this committee, brought 
it to the attention to the military, and then we brought it to 
the attention of HHS and then Medicare. And now internally we 
have been taking a look at SSA. We audited all the forms that 
are going out. We identified which forms are using the SSN 
still, brought them to the attention of SSA, and made the 
recommendation that it be taken off. And SSA has responded that 
the number they use is so core in their business process that 
it is difficult to do.
    So what we are asking the agency to do is to come up with 
timelines in terms of which ones they can take off and to start 
being able to tell us and the committee when they are going to 
stop using them on documents. But it is probably going to take 
a while.
    Mr. RENACCI. Thank you. I also know that when tax returns 
are filed, when a W-3 is filed--we now have it so that people 
get their W-2 at the end of January. And hopefully next year 
most companies are going to actually under law, have to file 
with the Social Security Administration their W-2 information. 
But I know there is a delay even there, in getting it to the 
IRS. What are some of the things that Social Security 
Administration will do to try to move those documents a little 
quicker if possible to the IRS to match up this information?
    Mr. O'CARROLL. I will tell you Congressman, we haven't 
worked on that one yet. So I really can't make a comment on it. 
But what I can do is we will take a look at it and get back to 
you.
    Mr. RENACCI. I would appreciate that. These are the issues 
that I know affect identity theft. And again, I want to thank 
you for what you have done. I appreciate your work and 
dedication to our country and your service. I yield back.
    Mr. O'CARROLL. Thank you very much.
    Mr. DOLD. Thank you, Mr. Renacci. The gentleman from 
Washington, Dr. McDermott, you are recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. Mr. O'Carroll, 
first I have a question about death reporting. Are all States 
required to report to you deaths that occur within the State?
    Mr. O'CARROLL. Yes, they--by me, meaning SSA, they do 
report to SSA. However, the way they report is different in 
terms of some using the electronic death reporting method, 
which is extremely accurate and quick. The ones still using the 
paper ones--which I think is now probably about 10 States are 
still doing paper--those are usually not as accurate. There are 
a lot of issues with them.
    Mr. MCDERMOTT. Issues being that you send out checks to 
people who have passed away. You are continuing to send checks?
    Mr. O'CARROLL. Correct. Our biggest concern of that one is 
the timely notification of SSA of a death and the accuracy of 
it. You also don't want to be reported as dead when you are 
alive.
    Mr. MCDERMOTT. You require States to report electronically 
to you, can you?
    Mr. O'CARROLL. No, it is not mandatory. So what has 
happened is that there is a lot of encouragement for it. HHS is 
the primary agency and they have been pushing the States to do 
it. But there are a few States--in many cases it is going to be 
on the electronic systems in the State and bringing that State 
up to a standard so that they can transmit electronically. But 
we are making the recommendation based on our finding that the 
accuracy level is so much better when it is electronic than 
when it is manual. We really encourage it.
    Mr. MCDERMOTT. From health research, it is a lot better. 
And HHS is getting the data directly electronically. They can 
do a lot more research in terms of what is happening in the 
country medically.
    Mr. O'CARROLL. Absolutely.
    Mr. MCDERMOTT. And so I was wondering how many States you 
are saying. You are saying there are about 10 States that still 
are not?
    Mr. O'CARROLL. Yes.
    Mr. MCDERMOTT. I would ask if you would send us a list who 
they are that are dragging their feet on this, so that we have 
an idea where these are coming from.
    Mr. O'CARROLL. Yeah. An example of that would be New York 
State that is not doing it electronically yet. New York City, 
the biggest contributor in the State, is. So it is spotty and 
we can give you a list of those.
    Mr. MCDERMOTT. Okay. Thank you.
    The other thing, thing about waste, fraud and abuse--my 
understanding is that in 2015 your office received about 
150,000 complaints and that you opened 8,400 investigations and 
only 2,200 resulted in indictment, a conviction or information 
in lieu of indictment and that the civil monetary penalties 
amounted to 343. Now if I--I take this because they are the 
figures we got from----
    Mr. O'CARROLL. Semiannual.
    Mr. MCDERMOTT [continuing]. In your office. Tell me why you 
only offered--opened 8,400 cases out of 150,000? Is that simply 
resources, or is it that you looked at them and said, this case 
isn't worth opening. There is only $50 here, or there is only 
$1,000. Do you have some cut off? Does it have to be $1 million 
worth before we open an investigation, or $50,000, or $10,000? 
How do you make that screening to open 8,400 cases?
    Mr. O'CARROLL. Boy, I am glad you asked that question. We 
are probably the largest hotline in government for fraud 
allegations being made. Yes, we get 150,000 plus allegations a 
year. Two things: a number of things kind of go into what we 
call the waterfall. How it comes down from the initial 
information and it eventually becomes a case. Hopefully an 
arrest is made.
    A couple of things go into it, one is the accuracy of the 
information that we are getting. Oftentimes we are getting 
calls on the hotline where a person will call up and say, my 
next door neighbor is in the backyard doing manual labor and I 
know they are on disability. We really can't do anything with 
that, you know, unless we have specific information on who the 
person is, what their Social Security numbers is, and other 
type of information. So the first step is validating the 
information coming in.
    Next step on it is that we have to start figuring out 
whether we have representation in that location where it is. 
Some States we have one agent for the entire State. That is 
where we start getting into the resources.
    Mr. MCDERMOTT. So your hotline records the name of the next 
door neighbor.
    Mr. O'CARROLL. Uh-huh.
    Mr. MCDERMOTT. But then they ask, do you know his Social 
Security number? They say, no. That one never would be opened.
    Mr. O'CARROLL. Agreed. If they don't know that information 
or--also what is happening oftentimes is, believe it or not, we 
still say the hotline; we talk about telephone calls being 
made. But to be truthful, Congressman, the biggest issue now is 
often times electronic. So we are getting a lot of stuff over 
the web. And when that is coming in one way information, we 
don't have the chance to go back to get secondary information 
from them.
    So if that initial response that we get doesn't have enough 
information in it we can't, we oftentimes can't do anything. 
But if it is really significant----
    Mr. MCDERMOTT. In our offices, we have a legislative 
correspondent. We send back emails to people. You never send an 
email back and say, could you give us more information or can 
you give us information in this category, so we can actually 
know who it is we are looking at next door?
    Mr. O'CARROLL. Well, where we run into difference from you 
is that when they contact your office they want to be re-
contacted. When people contact us, most of the time they want 
anonymity. That is where our problems are. They don't want us 
to know who they are, for fear that--yeah, so the neighbor sees 
the car out in front of the house and figures their neighbor 
informed on them. So those are all the issues.
    I can talk for a long time on this one.
    Mr. DOLD. The gentleman from Pennsylvania, Mr. Kelly, you 
are recognized.
    Mr. KELLY. Thank you, Chairman. Mr. O'Carroll, good to see 
you again and thank you so much for dedicating your life. I am 
sure there are/were things you could have done that may have 
been more pleasant, more profitable, but thanks for doing what 
you have done.
    I admit, there is a misconception out there in the general 
public that we have these cushy jobs. When I get back home, I 
tell people, yeah, we only work a half day; it is either the 
first 12 hours or the second 12 hours. So I know everybody in 
your agency does the same thing.
    You know, when we met the other day someone said, the 
percentage of fraud is 1 percent. Is that a realistic figure?
    Mr. O'CARROLL. No.
    Mr. KELLY. No, okay. So we agree it is not realistic. And I 
would just say from being in the private sector, in addition to 
putting in 6.2 percent of my pay, I also matched everybody that 
I worked with every day, to have some type of mutual success. 
So from an employer standpoint, it was signing checks, and it 
was 12.4 percent.
    Just so we understand, Social Security is made up by people 
who work. 6.2 percent of the associate's paycheck matched by 
6.2 percent of the business owner's. That is 12.4 percent out 
of every paycheck up to $118,500. So I think on Mr. Gates is 
probably, Mr. Larson, probably about 7:30 in the morning. So I 
don't think it would be noon.
    But when it comes to fraud and we have talked about this, 
in the private sector fraud is totally unacceptable because it 
puts you out of business. Realistically we are nowhere near 1 
percent fraud on this, are we?
    Mr. O'CARROLL. Well, that is as we talked about last week. 
What we would like is a baseline in order to be able to see if, 
you know, different efforts that are being done by us and SSA 
are being effective. It would be I guess useful to be able to 
establish a number on it. But I think it is also about going on 
record that no other benefit program yet has established its 
fraud rate. So it would be unlike business where businesses 
have an understanding of what a rate is. I look often times at 
what the fraud rate is in the insurance industry and wonder 
whether it would be the same in a benefit program. But I do--
our concern is that we know it is more than 1 percent, but 
don't have a specific number.
    Mr. KELLY. But without a baseline we don't know. We know 
the huge difference between a private entity running a 
business, and the government running a business. When a private 
entity is not able to control fraud, it goes out of business. 
In a government entity, all we do is throw more money at it. 
Somehow hardworking American taxpayers are going to have to 
find a way to cough up more money, or we are going to have to 
find a way to extract more money from them.
    But when it comes to fraud, the programs themselves--look 
at just credit card fraud. You look around the country and this 
is almost getting back to an old thing. When they caught John 
Dillinger, they asked him, so why do you rob banks? He said, 
because that is where the money is. I would think the same 
thing with these programs. They are so easy to break into. It 
is so easy to go ahead and do this. While there are some 
penalties--only if you are caught and run through the process 
and are actually convicted--we are making it so easy for people 
to do it. It is really, you can't stop it because it is so easy 
to do. That is my perception.
    I have been in a private, family owned business my whole 
life. We would not be here, 63 years later, if we were able to 
not worry about where money was being stolen from; just go 
collect more. So the model changes very dramatically. I have--
Mr. Larson, we are on the same page, from its very inception 
and conception, Social Security was designed in a particular 
sense in a particular way. It has morphed into something far 
different.
    And I think when you look at the population of 
beneficiaries--I know we want to take care of people, 
especially the most vulnerable and those the most at risk--but 
I think we have developed into a program that just can't say 
no. And then wonder why we are not able to do it. A tremendous 
burden is put on the private sector to continue to fund this 
program, which is at great risk right now. If we don't get this 
fixed, the insolvency problem will take care of itself. We will 
be insolvent. We do have the ability to extract more money from 
taxpayers. We do have the ability to throw money at problems. I 
am not sure we have the political will to do what is right.
    So again, I don't want to take up all our time. In fact, we 
are done. I sincerely appreciate what you have done. You and I 
have had conversations, on about a year from now, where you 
will be. I wish I was going to be there with you. I am not 
going to be. Still I want to sit down and talk with you, 
because I think that the real fixes are here. The question is, 
do we have the stomach to actually do what is necessary to keep 
this program into effect?
    There are too many people that I represent that absolutely 
rely on Social Security being solvent for the retirement age. 
The golden years are not turning into golden years for them. 
They are turning into more worry. So I appreciate everything 
you have done.
    Mr. Chairman, thank you for holding this [hearing.] Mr. 
Larson, is the cup half full or half empty?
    Mr. LARSON. It better be half full.
    Mr. KELLY. You and I are going to work together on this 
Social Security thing. I appreciate it. Thank you.
    Thanks, Mr. Chairman. I yield back.
    Mr. DOLD. The gentleman yields back. The gentleman from 
South Carolina, Mr. Rice, is recognized.
    Mr. RICE. Mr. Chairman, the Inspector General was kind 
enough to come and meet with me in my office about a lot of 
these issues last week so I am going to yield.
    Mr. DOLD. The gentleman yields back. The gentlelady from 
Tennessee, Mrs. Black, you are recognized.
    Mrs. BLACK. I thank the gentleman for yielding.
    Thank you so much, Mr. Chairman, for allowing me to sit in, 
although I am not a member of this subcommittee I have been in 
the past. I just really appreciate your service as has already 
been said.
    Mr. O'Carroll, I know as has been said by my colleagues 
from Pennsylvania, there are probably other areas that you 
could have made a whole lot more money in, perhaps you would 
even have as much hair as on this picture in our notebook, but 
we really, really do appreciate you coming before us and 
helping us to make sure that our taxpayer dollars are used in 
the best way that we can. I know the constituents in my 
district really appreciate it when I can tell them that we are 
overseeing the money they give to the Federal Government.
    And so I go to this question in response: a recent GAO 
report on Social Security Administration stated that IT 
modernization is a significant priority for the agency. In 
fact, the President's budget actually requested $300 million in 
mandatory funding to modernize the SSA's IT system.
    Given that SSA has already spent well over $300 million on 
the disability case processing system, and is still not yet 
operational, how confident are you that the proposed $300 
million will cover the entire modernization project as the 
budget claims?
    Mr. O'CARROLL. Well, Congresswoman, we have great concerns. 
That is probably one of the reasons why I am here and why we 
have been coming before the committee on this issue. We have 
been saying all along that, you know, the modernization of IT 
of SSA is extremely important. It is extremely expensive and 
extremely difficult. It is going to require a lot of oversight.
    And part of that oversight is taking a look at this one 
project that we have many concerns about. I have got to say, 
you know, monthly meetings with, the oversight committees to, 
you know, update them on what is going on with it; this is a 
step in the right direction. The biggest thing, you know, for 
me and where I am sitting right now is that, as with any 
administration on it, we are at the end of this administration. 
You know, no one knows how to predict what is going to be 
happening in the future, but a lot of the different plans and 
processes and everything else at SSA could be, you know, set 
back, with administration changes.
    So it is going to be, I guess, incumbent on this committee 
to keep the IT modernization of SSA in the forefront. And what 
we will do as the IG is continue to make recommendations of 
what they need to do and have meetings during any of the 
transitions that are coming. We will explain what our concerns 
are and what goals should be for the agency. We do have 
significant concerns.
    Mrs. BLACK. And if you were to give a suggestion to this 
oversight committee, what one suggestion would you give that 
you would say to us; this is what we want you to be looking at 
and holding them accountable?
    Mr. O'CARROLL. Well, I have got to applaud the committee in 
terms of, you know, Chairman Johnson, Ranking Member Becerra. 
This committee has been very focused on IT. Of course, what we 
have seen, and I mentioned in my testimony, is the concern that 
the keys to the castle of all information for American citizens 
is at SSA. A breach of SSA would be catastrophic in terms of 
the reputation of this organization.
    So for that reason, the modernization of SSA, bringing in 
all the new forms of IT security is very important. My thought 
on it is that--which is happening is--I would say monthly 
meetings with SSA; to look at, one, the projects that they have 
ongoing, and two, the future. Explain what is needed on it so 
that this committee can go forward in terms of doing--
predicting where SSA's needs are going to be, because IT is the 
future.
    The other one for me that I have woven throughout my 
testimony and everything else, one of the other big issues is 
going to be data matching, which again, goes back to IT. Many 
of the things that, as Congressman Kelly was talking about. If 
we have data matches out there, we don't necessarily need 
investigators or need to know numbers of what the fraud number 
is or anything else. If we can start using the information out 
there to make sure that the right people are getting the money, 
making sure that the people are alive when they are getting 
their checks, that type of information, a lot of that can be 
done without actual people on the ground. It can be done with 
data matching. And that is going to be a robust good IT system 
at SSA.
    Mrs. BLACK. Thank you, and I yield back.
    Mr. DOLD. The gentlelady yields back.
    Mr. O'Carroll, thank you so much for coming before us 
today. I think you can hear from just the questions that we 
need the Inspector General to make sure that we are 
safeguarding Social Security. Frankly, this is a program so 
many of constituents across the country rely upon, and we need 
it to be solvent. We need to make sure that this is around and 
stronger tomorrow than it is today. Your office plays a key 
role in that.
    So as we look at, obviously, IT and cybersecurity and the 
like, the concern is the hundreds of millions of dollars that 
we spent. We want to make sure that, yes, we are getting that 
protection and we want to make sure that those dollars are put 
to good use.
    So I do share my colleague's concern with regard to making 
sure that we are doing the proper investments, to make sure 
Social Security is around in the long haul. But you also have, 
obviously, an obligation on your end to make sure that those 
dollars are being spent wisely and are looked after.
    Medicare; we had Medicare actually before the committee, 
the oversight committee. They actually put their fraud rate at 
12 percent. We think it might be higher than that. That works 
out to be about $60 billion annually; a little over $1 billion 
a week. So obviously, when people see those types of things, 
they get concerned because we can be using those dollars 
elsewhere.
    So again, just going back to thank you for the service that 
you have done, the work that you are doing. We know that you 
want to prevent waste, fraud, and abuse as well. And I want to 
again thank you for a long and illustrious career. We certainly 
thank you for your service to our country. With that, this 
committee stands adjourned.
    [Whereupon, at 11:05 a.m., the subcommittee was adjourned.]

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