    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                         HEARING WITH THE COMMISSIONER
                      OF SOCIAL SECURITY, MARTIN O'MALLEY

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

                                    HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON SOCIAL SECURITY

                                    AND THE

                        SUBCOMMITTEE ON WORK AND WELFARE

                                     OF THE

                          COMMITTEE ON WAYS AND MEANS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 MARCH 21, 2024

                                   __________

                              Serial No. 118-SS06

                                   __________

             Printed for the use of the Committee on Ways and Means

     [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                  __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    56-478                     WASHINGTON : 2024

    -----------------------------------------------------------------------------------
                          COMMITTEE ON WAYS AND MEANS

                        JASON SMITH, Missouri, Chairman
    VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
    ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
    MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
    DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
    DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
    BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
    JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
    DREW FERGUSON, Georgia               LINDA SANCHEZ, California
    RON ESTES, Kansas                    TERRI SEWELL, Alabama
    LLOYD SMUCKER, Pennsylvania          SUZAN DelBENE, Washington
    KEVIN HERN, Oklahoma                 JUDY CHU, California
    CAROL MILLER, West Virginia          GWEN MOORE, Wisconsin
    GREG MURPHY, North Carolina          DAN KILDEE, Michigan
    DAVID KUSTOFF, Tennessee             DON BEYER, Virginia
    BRIAN FITZPATRICK, Pennsylvania      DWIGHT EVANS, Pennsylvania
    GREG STEUBE, Florida                 BRAD SCHNEIDER, Illinois
    CLAUDIA TENNEY, New York             JIMMY PANETTA, California
    MICHELLE FISCHBACH, Minnesota        JIMMY GOMEZ, California
    BLAKE MOORE, Utah
    MICHELLE STEEL, California
    BETH VAN DUYNE, Texas
    RANDY FEENSTRA, Iowa
    NICOLE MALLIOTAKIS, New York
    MIKE CAREY, Ohio

                           Mark Roman, Staff Director
                     Brandon Casey, Minority Chief Counsel
                                     ------

                        SUBCOMMITTEE ON SOCIAL SECURITY

                        DREW FERGUSON, Georgia, Chairman
    MIKE CAREY, Ohio                     JOHN LARSON, Connecticut
    DAVID SCHWEIKERT, Arizona            BILL PASCRELL, New Jersey
    RON ESTES, Kansas                    LINDA SANCHEZ, California
    BLAKE MOORE, Utah                    BRIAN HIGGINS, New York
    RANDY FEENSTRA, Iowa                 DAN KILDEE, Michigan
    GREG STEUBE, Florida
    DAVID KUSTOFF, Tennessee
                                     ------

                        SUBCOMMITTEE ON WORK AND WELFARE

                        DARIN LaHOOD, Illinois, Chairman
    BRAD WENSTRUP, Ohio                  DANNY DAVIS, Illinois
    MIKE CAREY, Ohio                     JUDY CHU, California
    BLAKE MOORE, Utah                    GWEN MOORE, Wisconsin
    MICHELLE STEEL, California           DWIGHT EVANS, Pennsylvania
    LLOYD SMUCKER, Pennsylvania          TERRI SEWELL, Alabama
    ADRIAN SMITH, Nebraska
    CLAUDIA TENNEY, New York

                             C  O  N  T  E  N  T  S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Hon. Drew Ferguson, Nebraska, Chairman...........................     1
    Hon. John Larson, Connecticut, Ranking Member....................     3
    Hon. Darin LaHood, Illinois, Chairman............................     1
    Hon. Danny Davis, Illinois, Ranking Member.......................     4

                                   WITNESSES

    Martin O'Malley, Commissioner of Social Security.................     5

                        MEMBER QUESTIONS FOR THE RECORD

    Member Questions for the Record and Responses from Martin
      O'Malley, Commissioner, Social Security Administration.........    61

                       PUBLIC SUBMISSIONS FOR THE RECORD

    Public Submissions...............................................    75

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                         HEARING WITH THE COMMISSIONER
                      OF SOCIAL SECURITY, MARTIN O'MALLEY

                                  ----------

                            THURSDAY, MARCH 21, 2024

                      House of Representatives,
                       Subcommittee on Social Security,
       joint with the Subcommittee on Work and Welfare,
                                   Committee on Ways and Means,
                                                        Washington, DC.
        The subcommittees met, pursuant to call, at 2:50 p.m. in
    Room 1100, Longworth House Office Building, Hon. Drew Ferguson
    [chairman of the Subcommittee on Social Security] presiding.
        Chairman FERGUSON. Good afternoon, everyone. We will call
    the hearing to order.
        I first would like to thank Commissioner O'Malley for
    joining us today.
        Thank you for being here today.
        This is an important time to talk about the future of the
    Social Security Administration. There are going to be an awful
    lot of topics that come up today, and one of the things in this
    that we are going to focus on is the efficiency and the
    operation of the administration itself.
        We will continue to have discussions throughout this year,
    developing really good frameworks for discussions about
    bipartisan solutions to solvency. But clearly, today's hearing
    will be on the focus of the improvement and the steps that you
    have taken, Mr. O'Malley, for making the customer service
    better, efficiencies better, and making sure that our citizens'
    data is protected.
        But thank you again for being here. I am going to be fairly
    short here with my opening comments, because of the time and
    the vote schedule. But we look forward to a robust and healthy
    discussion.
        Chairman FERGUSON. With that I am going to call on Mr.
    LaHood for his opening comments.
        Chairman LaHOOD. Well, thank you, Chairman Ferguson.
        Welcome, Commissioner O'Malley. I want to thank you for
    being here today and the opportunity to visit with you about
    the Social Security Administration. And I want to thank you for
    your prior service as governor of Maryland, and also for you
    stepping up to take this position, and your leadership. And we
    look forward to a robust and constructive dialogue today.
        I will just say a couple of opening remarks, and Chairman
    Ferguson touched on customer service and your mission there.
    It's critical that we work together to ensure that seniors and
    that millions of Americans with disabilities that depend on
    your agency get the services they need.
        You have a tall task before you, and I have heard from
    numerous constituents from across my district, covering much of
    the central and northwest part of the state, about the Social
    Security Administration's struggle to provide timely,
    responsive services. Since the beginning of last year, my
    office has worked on 150 Social Security constituent cases,
    with about one-fourth of them still open.
        As Chairman of the Work and Welfare Subcommittee, I have a
    particular interest in your plans that would impact the
    Supplement Security Income, or SSI--we talked a little bit
    about this when we had an opportunity to visit last week--and
    the individuals it serves. Our subcommittee is overseeing SSI,
    along with multiple Federal programs that help Americans most
    in need, need to be reviewed and retrofitted.
        One of the main concerns is the high rate of improper
    payments in SSI. In fiscal year 2022, the agency reported 5.3
    billion in improper payments, 4.6 billion of which were
    overpayments. Many of these occur through no fault of those who
    have been improperly paid, and place a heavy burden on
    recipients, who often face a difficult and time-intensive
    process to resolve the issue.
        I appreciate the Social Security Administration's recent
    rulemaking to put in place the Payroll Information Exchange to
    combat improper payments, as requested by myself and Chairman
    Ferguson nearly nine years after Congress authorized it. We
    should use every available tool and technology available to
    make sure we get payments right the first time. However, that
    does not mean that the SSA should sidestep Congress and
    unilaterally use rulemaking to change eligibility rules in the
    name of administrative simplification and reducing improper
    payments.
        In the last two years, SSA has quietly released several
    proposed rules that continue the Biden Administration's
    executive overreach that threatens to cost taxpayers billions.
    By my count, SSA has four proposed rules that would result in
    $40 billion in unpaid-for mandatory spending in the Social
    Security and SSI programs.
        For example, SSA has proposed expanding the definition of a
    ``public assistance household,'' at an estimated 10-year cost
    of nearly $16 billion.
        Another rule proposes to reduce the level of scrutiny given
    to the disability claimant's ability to do past work--has an
    estimated 10-year cost of 20 billion.
        And it has not gone unnoticed how the SSA is overstepping
    Congress's authority to make spending decisions, and I hope we
    can work together to ensure that these rules are not finalized
    in their current form or without offsetting costs as called for
    in the bipartisan Fiscal Responsibility Act signed by President
    Biden last year.
        Finally, our subcommittee is interested in working with you
    on finding ways to support what I call the dignity of work, and
    we have been focused on that in the Work and Welfare
    Subcommittee. All of our government programs need to be
    oriented to provide every opportunity for able-bodied
    individuals, no matter their circumstances, to grow their
    capacity and be connected to meaningful work.
        Chairman LaHOOD. With that, Mr. Commissioner, we look
    forward to a good hearing today. Thank you.
        Chairman FERGUSON. Next we will go to my friend and
    colleague, a ranking member on the Social Security
    Subcommittee, Mr. Larson.
        You are now recognized.
        Mr. LARSON. Thank you, Mr. Chairman. It is good to have
    Commissioner O'Malley before us today.
        And your distinguished service throughout a lifetime is
    exceptional here in Washington, D.C. to have someone of your
    caliber who is managing one of the nation's most important
    agencies. I commend you for your leadership, and I look forward
    to continuing to work together to ensure that the nearly 70
    million Americans who are on Social Security continue to
    receive the benefits they have earned.
        I applaud your quick attention to addressing the impact of
    overpayment collections on seniors and people with disabilities
    in a way that puts the needs of beneficiaries first.
        I also want to applaud President Biden for requesting 15.4
    billion for SSA's administrative budget, a 90 percent increase
    over the 2023 level. We must ensure that the Social Security
    Administration has proper funding to address customer service.
        Since 2010, SSA's funding has dropped by 17 percent, yet
    there are more than 21 percent more beneficiaries than there
    were 14 years ago, and 10,000 Baby Boomers a day, 10,000 a day
    become eligible for Social Security. Thanks to those cuts, the
    agency's staffing is on track to hit a more than 50-year low.
        The answer is clear: If we are going to serve the people in
    the way that they deserve and that they have paid for, SSA
    needs funding and the staffing to adequately do it. Yet during
    last year's appropriations process our colleagues on the other
    side voted to slash the budget by 30 percent. Republicans are
    starving the Social Security Administration, and we wonder why
    there are issues like backlogs, long wait times, and accidental
    overpayments.
        The customer service crisis isn't an accident, and it's not
    mismanagement by a Federal agency. Let there be no mistake:
    Under-funding SSA is an attack on hard-working Americans'
    earned benefits. This is no entitlement. These are earned
    benefits that everybody in this committee is aware of and
    knows. Defunding SSA's ability to properly process payments is
    a de facto attempt to cut benefits.
        We do not need to look hard to see that cutting benefits is
    the goal here. Just yesterday the Republican Study Committee
    proposed more than 1.5 trillion cuts to Social Security, more
    than double what they proposed last year. And this to an agency
    that doesn't add a single penny to the debt or deficit but goes
    to help out every single one of your constituents, whose money
    they receive goes right back into your district.
        Just last week former-President Trump called for cuts to
    Social Security benefits on national television, and House
    Republicans have recently been pushing to pass a closed-door
    fiscal commission that would fast-track unamendable Social
    Security cuts to the floor for an up-or-down vote during a lame
    duck session. Now, there is democracy for you.
        We don't need to slash people's hard-earned benefits; we
    need to act now to protect and enhance them. Earlier this month
    President Biden said he would protect and strengthen Social
    Security during the State of the Union Address. His budget
    request calls for improving benefits for the elderly and people
    with disabilities, and a nine percent increase in the funding
    needed to tackle this customer service crisis.
        We have a bill, Social Security 2100, that would enhance
    benefits across the board, repeal WEP and GPO, and we would
    also cut taxes on more than 23 million Americans and eliminate
    the dangerous 5-month waiting period to receive disability
    payments. It does this by making sure the wealthy pay their
    fair share. It scraps the cap on people who make more than
    $400,000 a year.
        I hold hearings all the time. I ask people in the hearing
    to raise their hand if they are making more than $400,000. To
    this date I have yet to have anyone in any town hall that I
    have been in raise their hand.
        And while my colleagues are busy doubling down and trying
    to find a back-door way to cut Social Security, Democrats are
    standing up, along with the President, to enhance Social
    Security. The last time it was enhanced, Richard Nixon was the
    President of the United States. It is in line with budgets they
    have proposed with Trump's call to cut benefits, and with their
    push for a closed-door fiscal commission.
        Congress must adequately fund SSA. And to do so the
    President has selected an individual who understands, as he
    said in his remarks the other day, the importance of compassion
    in terms of addressing the most important and number-one anti-
    poverty program for the elderly and for our children.
        Chairman FERGUSON. Thank you, Mr. Larson. Next we will call
    on the distinguished gentleman, Mr. Davis from Illinois,
    ranking member of the Work and Welfare Subcommittee.
        Mr. Davis you are recognized.
        Mr. DAVIS. Thank you, Mr. Chairman, and I want to welcome
    Commissioner O'Malley.
        We look forward to working with you, sir, to protect and
    strengthen the Social Security Administration and the benefits
    it provides.
        Every American relies on Social Security for birth-to-death
    protection. For generations, every American has counted on SSA
    to deliver Social Security and supplemental security income
    benefits, or SSI, at critical life moments: when they retire,
    become disabled, fall into poverty, as they age or lose a wage
    earner. I look forward to working with you to keep that promise
    to my constituents in Chicago and across the country.
        I also appreciate that the President's budget continues his
    strong, unwavering support for universal, comprehensive, paid
    family and medical leave, the kind of leave that is guaranteed
    in nearly every other country in the world. So many workers and
    small businesses have told us that paid leave is the key to
    keeping talented, hard-working individuals in the workforce,
    and unlocking our economy's potential. Last Congress, Democrats
    on this committee passed universal paid leave legislation for
    the first time in Congress's history. We look forward to doing
    it again with the President's help, and making it the law of
    the land.
        Importantly, SSA works for every American, and the budget
    would give you the tools to do it well. I am alarmed that the
    House Republican chaos and dysfunction has delayed SSA's budget
    this year, and forced a hiring freeze, compounding staffing
    challenges forced by past budget cuts. Those staffing shortages
    have done unacceptable damage to the amount of time that
    Americans have to wait for SSA's vital help, and Congress needs
    to fix that now.
        Staffing shortages and the loss of skilled staff affect our
    constituents in other ways, too. For example, 1 in every 365
    Black children is born with sickle cell traits, which puts them
    at high risk for life-threatening conditions, and subjects them
    to debilitating pain. Children with sickle cell rely on SSI
    benefits so their families can afford basic necessities and
    take time off work to make sure they get medical care.
        My Democratic colleagues on the Worker and Family Support
    Subcommittee recently flagged an urgent concern for the
    commissioner related to the serious flaws in the current
    criteria for determining whether children with sickle cell
    qualify for SSI. I know the commissioner heard me about what a
    priority this is for fixing it.
        I also know that revising the criteria will take hard work
    from trained staff and providing the necessary resources that
    is Congress's job. I look forward to partnering with you,
    Commissioner, for immediate action, and even more pleased to
    see the energy and commitment that you and President Biden are
    bringing to the vitally important job of protecting Social
    Security, our economy, and the most vulnerable Americans.
        Mr. DAVIS. Thank you, Mr. Chairman, and I yield back.
        Chairman FERGUSON. Thank you, Mr. Davis.
        Mr. O'Malley, you are now recognized for five minutes for
    opening remarks. Thank you again for being here.

     STATEMENT OF MARTIN O'MALLEY, COMMISSIONER OF SOCIAL SECURITY

        Mr. O'MALLEY. Mr. Chairman, thank you, and thank you for
    the courtesy of the time we have spent one on one. I hope that
    is the beginning of many more conversations.
        And Mr. Chairmen, Ranking Members, whether we are talking
    about real people in Georgia or Illinois, Chicago, Connecticut,
    or any other part of this country, I think we can all agree,
    whatever party we are from, Social Security touches all of us.
    And so I really want to thank you for having this hearing.
        I say that because it has been nine years since Congress
    has given Social Security a budget hearing. And during those
    nine years it has been a downward decline, in terms of customer
    service at Social Security. So I am looking forward, as the
    hearing goes on, talking about SSI simplification, talking
    about earned benefits, sickle cell, the dignity of work.
        And I finally wanted to, by word of thanks, I want to thank
    you for the staff members of this committee and your own
    offices that you have sent to our headquarters in Baltimore to
    observe and sit in and watch Security Stat, which is our new
    performance management regimen, which has snapped us out of a
    sleepy kind of annual approach to delivering results, and
    instead we are now focused every two weeks on how we can
    deliver better services for the people of our country.
        The truth is today, as I come before you as a freshly-
    minted commissioner, Social Security is now serving more
    customers than ever before with fewer staff than at any time in
    27 years. I was surprised to learn that Social Security now
    operates on less than one percent of its annual benefit
    payments. This operating overhead, that means that over the
    last 9 years, without the attention that you are giving this
    agency, we have seen a decline that amounts to an effective cut
    of about 17 or 20 percent, depending on how you look at it,
    over those last 9 years.
        By way of comparison, other insurance companies, if you
    measure their administrative overhead compared to their
    benefits payments, Allstate operates on 19 percent of its
    annual benefit payments; Liberty Biberty operates on 24 percent
    of its annual benefit payments; and Social Security, at least
    before 2018, operated on 1.2. We are now down to less than one
    percent.
        So what is the result of that? The result of that is,
    today, customers now wait an average of 39 minutes when they
    call the 800-number. That is an average. Sometimes it can be
    north of an hour. The result of those nine years of decline is
    that people with disabilities wait nearly eight months, on
    average, for a decision on their application, and then another
    seven months if they have to appeal.
        And of course, we have all seen the 60 Minutes piece--and
    you have heard it through your phones and in your offices--
    about overpayments, and the additional time it takes us now to
    catch up and address those overpayments.
        So this, briefly, is what we are doing about it, and I look
    forward to unpacking more and going deeper in response to your
    questions.
        We have recruited a new team at the top of Social Security.
        We have launched a cross-cutting performance management
    program called Security Stat, where for one blessed hour every
    two weeks on a rotating basis we lock the whirlwind outside the
    door, and we singularly focus on field operations, with the
    latest evidence on what is happening where in our country, what
    are the average processing times, et cetera.
        After that it is human resources, because Social Security,
    at the beginning and the end of the day, is a large, human
    resources organization serving the people of our country.
        Another one of those meetings is on initial disability
    determinations.
        Another one is on the ALJ hearings and reducing the time it
    takes for those.
        Another one, the only one that is closed-door, is about
    fraud, getting inside the turning radius of fraudsters.
        And then the seventh one is about notices. I am sure your
    constituents call you about notices they get from Social
    Security and they can't make heads and tails of them.
        And then, of course, the eighth one is about overpayments.
        So in conclusion, the American people work their whole
    lives to earn the benefits of Social Security. Nobody gave them
    any discretion about whether or not they paid their FICA taxes
    every two weeks in the payroll. They paid it. It wasn't in
    their discretion. And not only were they paying for the
    benefits they earned, they were paying for the customer service
    necessary to access those benefits.
        To continue to reduce staffing while beneficiaries rise
    will ultimately undermine not only trust in this program, but
    trust in our country itself. President Biden's investment in
    Social Security for the people of this nation is a solid step
    forward to restoring customer service, and I strongly urge that
    you support his budget proposal of 15.4 billion. We want to
    work with Congress to do better by the American people.
        And finally, I want to thank the hard-working men and women
    of Social Security, those that haven't quit yet, for getting up
    every day and going to work, notwithstanding the overwhelming
    workloads and numbers of customers that they have the duty to
    serve.
        Thank you, Mr. Chairman.
        [The statement of Mr. O'Malley follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman FERGUSON. Thank you for your opening remarks. We
    will now begin the question-and-answer session.
        You know, look, we have all recognized how important this
    program is. And, you know, as you look through the years, and
    we talk about, you know, how Social Security has changed or not
    changed, I think it is important to recognize that
    beneficiaries now, because of the formula, are receiving more
    benefits than they ever have. And there has been a steady
    increase because of the way the program is structured.
        I also think it is important to point out--and we--I just
    came from a--before votes, a budget hearing, and OMB Director
    Young was there. And she and I got into an exchange, and I was
    trying to get her to explain, in the President's budget, if you
    look at how--if you look over the 10-year period, the
    President's budget cuts about $17 billion worth of payroll
    taxes from the beneficiaries. And the Treasury Secretary, who
    was over on the Senate side doing her thing, and made the
    comment in an exchange with Senator Cassidy that the President
    really didn't have a plan, he had just guiding principles.
        Well, I believe that we are going to have to come together
    in a bipartisan way to fix, really, some of these long-term
    solvency issues. But in the meantime, there are things that we
    can do to improve customer service, and the efficiency, and the
    better use of taxpayer dollars as it relates to the operation
    of the Social Security Administration.
        And Mr. O'Malley, in our meeting I got a sense that you are
    sincere about doing that. So the first question that I have for
    you, you have got a relatively short runway here. Your term
    expires in 2025. If you could do one thing, if you could do one
    thing that was lasting in the Administration past your tenure,
    what would that be?
        Mr. O'MALLEY. Mr. Chairman, if I could do one thing that
    would last into the future, you know--I pause a little bit here
    because, having served as mayor and served as governor, I have
    seen many of the things that I thought would last for a long
    time dissipate as soon as the next fellow came in.
        I think the most important thing that I can do that will
    have the most lasting impact is to change the culture at Social
    Security so that we realize that all of those huge numbers that
    we deal with are real people. If I can change that--you know,
    it struck me in walking around that building that there are
    very few walls that even have pictures of the human beings that
    we serve. We have kind of gotten away from that in the pressure
    and the trauma, if you will, of all of the rising workloads. If
    I could change one thing, it would be to use modern
    technology--you know, the data, the map, the measures--to
    realize that each of those dots on the map represents a real
    human being.
        Chairman FERGUSON. If you can do that, we will probably all
    chip in for your statue, if you can change the culture of your
    bureaucracy.
        Mr. O'MALLEY. Not a brick, Mr. Chairman, not a brick.
        Chairman FERGUSON. A different type of question here. You
    have seen,or the agency has seen, a decline from about 87
    million calls down to about 81 million calls on an annual
    basis, and wait times have doubled. Part of the problem I think
    we discussed was implementation of the new phone system. Can
    you tell us where that process is, and how you expect that to
    improve?
        Mr. O'MALLEY. Yes, sir. The short context of this is that
    shortly before the pandemic my predecessor decided to launch on
    a new contract for the phone system that would integrate the
    1,210 field offices in each of your districts with the
    headquarters phones and the 1-800 phone number. Then the
    pandemic hit, and everything was all about closing down the
    field offices, standing up an 800-number really quickly, and
    trying to do everything through that 800-number.
        We have struggled with the technology and an 800-number
    that has not lived up to what we expected of it in terms of the
    business intelligence to balance the load, to give usmanagement
    information about who is calling when so that we can have the right
    staffing to cover it. And we are open to all options to improve that as
    quickly as possible.
        I was on the phone----
        Chairman FERGUSON. So----
        Mr. O'MALLEY [continuing]. With the CEO of Verizon, and we
    hope to improve that.
        In the meantime, we do everything we can, and a little bit
    of good news here. While our average wait time has been 39
    minutes for the last several months, over the last few weeks we
    got that down to 31 minutes. Nothing to write home about, but
    it is at least--we are at least getting it headed in a better
    direction, with leading actions that deflect calls on the front
    end and changes that allow us to resolve the call on the first
    time once people get through.
        Chairman FERGUSON. All improvement is good. And, you know,
    the Administration has spent about $300 million on this
    contract so far, implementing the system. I just think it is
    really important and I think, and I hope, that you will be this
    kind of commissioner that understands that, ultimately, you
    have got to get this under control. You have got to get the
    systems going, and hold the providers accountable.
        Mr. O'MALLEY. Yes, sir.
        Chairman FERGUSON. And while simultaneously doing
    everything that you can.
        One final question here, and this has to do with disability
    applications. We have seen a decade-long decline in disability
    applications. And despite that, we have got about a 1.2 million
    caseload that is on backlog. But yet we had seen $100 million
    being spent to bring more in. So you got 1.2 million in
    backlog, there was an effort to, because of equity initiatives,
    to get more in.
        Can you tell us how much in Social Security--the Social
    Security Administration has spent on these initiatives?
        And do you think this is an effective use this has been an
    effective use, this $100 million for equity initiatives, has
    this been a good use of the limited resources of the
    Administration?
        Mr. O'MALLEY. Well, I think that depends on what we learn
    from that effort and what we do moving forward.
        We have seen a great decline in the numbers of people that
    apply for both SSI and also for Social Security disability--not
    as great as a percentage on those, respectively.
        I think what we learned from that advertising campaign--and
    it is hard to disaggregate. I mean, it is hard to determine,
    Mr. Chairman, as we saw increased numbers of application in
    SSI, whether that was directly attributable to the ad campaign,
    or was that directly attributable to the fact that people were
    coming out of the pandemic, and it is a natural sort of follow-
    on effect?
        I believe that the better approach is going to come from
    much more targeted outreach to the populations that we already
    know are most likely able to qualify for SSI. That is going to
    require a level of data sharing between our agency and, you
    know, HHS, and others. And----
        Chairman FERGUSON. Mr. Commissioner, my free advice is to
    get the existing workload under control, get it back on track--
    --
        Mr. O'MALLEY. Yes, sir.
        Chairman FERGUSON [continuing]. Before we go dumping more
    cases into it. And I look forward to your success on that.
        Now I will call on my colleague, Mr. Larson, the ranking
    member, for five minutes of questions.
        You are recognized.
        Mr. LARSON. Thank you, Mr. Chairman.
        And again, thank you, Commissioner O'Malley, for being
    here. And in your testimony the other day before the Senate you
    said people among us really need their neighbors to care about
    them. I think all of us on this body and the panel you were
    addressing would agree that there probably is no more important
    program our country has ever created that expresses our
    compassion for our neighbors quite so much as Social Security.
    I believe that that is true of this committee and all the
    members on both sides that understand truly the impact of this
    unbelievable commission that, as you pointed out in your
    testimony--and I come from an insurance sector place in the
    United States in Hartford, Connecticut, studied at the Yetna
    School, where they singled out Social Security as part of the
    three legs of the economic stool, and the only one that has
    never missed a payment, and I would dare say also has that
    compassion that you talked about.
        Commissioner, can you talk about what you have done so far
    to address the customer service crisis? You did in your opening
    remarks, but I wanted to give you a chance to expand on how you
    would use the 1.3 billion increase that President Biden has
    proposed.
        Mr. O'MALLEY. Yes, sir. We are currently in a general
    hiring freeze in this agency. It is a crude tool. That tool
    itself hurts our operations. And hopefully, with your help, we
    will get out of that soon in order to do a number of targeted
    hires right away.
        I want to thank you for what is in the, you know, the most
    recent action passed by this Congress. That is a little bit of
    help, and we need help. So it is a lot better than a cut, and I
    know cuts were on the table.
        So we do have a plan for immediate targeted hiring in those
    teleservice centers, as well as some processing center
    backlogs, and especially the DDSs.
        But more to the point of your question, the 15.4 that the
    President proposes, this is how we would propose to invest
    those dollars to improve customer service.
        Number one, 269 million into the field staff. Our field
    offices have been open 5 days a week, from 9:00 to 4:00 p.m.
    every day, and that has been true ever since the end of COVID.
    But they are short-staffed, they are understaffed, and they are
    overwhelmed.
        The teleservice centers, we would propose investing $79
    million in hiring more of the agents who can be on the other
    end of that call. Not surprisingly, when somebody has been on
    hold for an hour, they come off that call hot, and we right now
    have an attrition rate of about 24 percent in our teleservice
    centers. We would invest 85 million in adding staff to the
    process centers, the processing centers that I am sure many of
    you get calls about people saying, hey, I was told my claim was
    approved, but it has been months, been weeks, I am still
    waiting. That is what goes on at the processing centers.
        Eighty-nine million for the ALJ hearings. And the biggest
    amount of all is really the 2.8 billion for the state
    disability services. In my prepared remarks that are before
    you, there is a map that may look to you at first glance like
    it is a climate change map, because the only colors on it are
    yellow, orange, and red. There is nothing green, there is
    nothing where we are actually hitting in a timely fashion those
    initial disability determinations. In the State of Montana, 85
    percent of their disability determination folks are trainees.
    It is a tough--it is a tough job. And some of our states have
    seen a 30 percent, you know, reduction in staffing since--
    compared to pre-pandemic times.
        And then finally, 1.7 billion to invest in IT
    modernization. It might be a little known fact, but it has been
    driven home to me that in our IT budget, which is only about a
    third of the size of the VA--not to be jealous--but in our IT
    budget, 90 percent of it is from maintaining old legacy
    systems. Think, if you will, about the City of Jerusalem being
    built up over years, except this is COBOL and green screens.
    Only 10 percent of it goes to modernization.
        Mr. LARSON. And imagine you do that with 40 percent of the
    nation who is on Social Security, knowing that is the only
    benefit that they have is their Social Security. And on
    average, that is 18,000 per male, 14,000 per female. And there
    is 5 million fellow Americans that get below poverty-level
    checks in the wealthiest nation in the world.
        Chairman FERGUSON. Next I recognize Mr. LaHood.
        You are recognized for five minutes.
        Chairman LaHOOD. Thank you, Chairman Ferguson.
        And Commissioner, thanks for your opening statement. And
    you have obviously had a distinguished public service career. I
    think this may be your most challenging position you have had
    yet, and we want you to be successful in this job, and I
    appreciate your opening statement and talking about the need
    for improving customer service and workforce morale. That seems
    essential. And so we want you to be successful there.
        I want to ask you about a couple of things here. As you may
    be aware, last June Congress passed the bipartisan Fiscal
    Responsibility Act, and a key part of the FRA included the
    equivalent of a PAYGO for agency rulemaking. It established a
    new requirement that, if the cost of a proposed rulemaking
    exceeds $1 billion over 10 years, or $100 million in any given
    year, before the rule can be finalized the agency must either
    propose to undertake one or more administrative actions to
    reduce spending, or publish a waiver of such requirement by the
    Director of Office of Management and Budget, OMB.
        Now, I know you have only been on the job for four months
    now, equivalent, but in the past year SSA has published at
    least 3 proposed rules that exceed $1 billion in estimated
    cost.
        Number one, the ``Omitting Food from In-Kind Support and
    Maintenance Calculations'' proposed rule, with a cost of $1.5
    billion; number two, the ``Expand the Definition of Public
    Assistance Household'' proposed rule, with a cost of 15.9
    billion; and three, the ``Intermediate Improvement to the
    Disability Adjudication Process'' proposedrule, with a cost of
    20.3 billion. SSA has indicated it plans to finalize these rules
    sometime in 2024.
        So Commissioner, I guess my question is, does the SSA
    intend to comply with the FRA and the clear requirements there,
    and publish information regarding how the cost of these rules
    will be offset through other administrative regulatory actions?
        Or if not, will OMB be issuing a waiver for such
    requirements?
        If you could, address those three.
        Mr. O'MALLEY. Yes, sir. And as I look through, Mr.
    Chairman, as I was listening and looking through my own list, I
    do believe that I was the commissioner that approved all three
    of those.
        Chairman LaHOOD. All right, even better.
        Mr. O'MALLEY. It wasn't the last year, it was the last 60
    days. And they will be published in due course, and we will, of
    course, abide by the law of the land in terms of finding
    offsets or asking for waivers.
        There is a few others, as well. You know, availability of
    information and records to the public, social security numbers
    and government records. Oh, the Payroll Information Exchange,
    which we hope will go a long way to reducing overpayments,
    especially in SSI, that one is also in motion. And many of
    those will actually save us administratively.
        There is also the manner of appearings--appearance at
    hearings, which I approved three nights ago, and there are the
    payments to entities, what is called----
        Chairman LaHOOD. And Mr. Commissioner, I guess on the three
    that I mentioned, do you, as we sit here today, have a decision
    on whether you are going to seek the offset or whether you are
    going to seek the waiver?
        Mr. O'MALLEY. Well, we are still--we want to hear what
    people have to say after we publish them and get the--all of
    the necessary feedback.
        Chairman LaHOOD. Okay. The Work and Welfare Subcommittee
    that I chair also has jurisdiction over child welfare programs.
    And we have been investigating an issue where state welfare
    agencies act as ``representative payees'' for children in
    foster care who receive SSI or Social Security survivor
    benefits. Approximately 6 percent of children in foster care
    receive SSI or SB benefits.
        In 2018 the Strengthening Protections for Social Security
    Beneficiaries Act called for the establishment of data
    exchanges through SSA and state welfare agencies to increase
    transparency for youth receiving SSI and placed in foster
    homes. My understanding is 5 years later, only 22 states are
    actively sharing data with SSA on their child welfare
    representative payees as part of these exchanges.
        Could you provide insights into SSA's concrete strategy to
    incentivize the remaining states to fully engage in the
    representative payee data exchange?
        And what does Congress need to do to make sure this is
    implemented as it was intended?
        Mr. O'MALLEY. Mr. Chairman, thank you for your question,
    and thank you for your care and concern and compassion for our
    kids who are in foster care and often times age out, and they
    are given a pat on the back on their birthday and their clothes
    in a plastic bag, and said good luck. And all of you know that
    the outcomes for kids that age out of foster care are pretty
    bad, not surprisingly.
        I believe that we have an opportunity here with Social
    Security, and especially as you look at the movement--I think
    there are 17 states that have now required that some amount of
    money be conserved for kids in foster care for when they age
    out, especially if they are, you know, receiving some sort of
    benefits.
        So we are now doing a deep dive on this issue. According to
    a GAO report about 2 years ago, 34 percent of states claimed
    that they conserved some money for the kids once they get to a
    place where they are aging out of foster care. We are going
    back through those records, even as I speak. I would like to
    reserve the opportunity to come back for you--to you for help
    if there is a legislative--if there is a need for amending
    statutes.
        But we are looking at everything we might be able to do
    ourselves through rulemaking power or POMs so that we, in
    essence, say to states, if you are going to be the
    representative payee for the--for this child, you have got to
    assure us that you are going to conserve something so that kid
    can at least make a downpayment on an apartment, instead of
    living under a bridge, especially if we have the opportunity
    because of Social Security benefits to be able to do that.
        It is not a practice, as you know, that has been deemed
    contrary to the law by the states to use that for support and
    maintenance, any more than it would be contrary to law for a
    grandmother or an aunt or uncle in care of a child to be able
    to use those dollars for maintenance and support. However, I
    think it is different when we have a state government entity
    that can and should do better in partnership in our Federal
    framework to do better by these kids, and we are going to be
    issuing some notice of advance plan for rulemaking so we can
    get some feedback.
        There is a lot of good work that has been done on this, and
    I am hopeful that, with our existing powers, we can address
    this gap in our expectations of one another and how we should
    do right by these American kids.
        Chairman LaHOOD. Well, in closing on that, Commissioner, I
    mean, I think it is unacceptable that only 22 states are
    sharing data on this issue right now. And so your statement
    that you want to work with us in Congress on how we make sure
    this is implemented as intended, we want to share suggestions
    and ideas on that, but we got to remedy this situation.
        Mr. O'MALLEY. Yes, sir.
        Chairman LaHOOD. So I have one more question, but I will
    submit that for the record so that others can ask questions.
    Thank you.
        Chairman FERGUSON. Thank you. The gentleman from Illinois,
    Mr. Davis, is now recognized.
        Mr. DAVIS. Thank you, Mr. Chairman. And I would request
    unanimous consent to submit for the record a statement left by
    Mr. Kildee, who was unable to be here with us today.
        Chairman FERGUSON. Without objection.
        [The information follows:]
        [GRAPHIC] [TIFF OMITTED] T6478A.015

        Mr. DAVIS. Thank you, Mr. Chairman, and thank you,
    Commissioner.
        As you know, committee Democrats have made paid family and
    medical leave for all American workers a top priority. I am
    particularly concerned about the effect our failure to enact
    paid leave has on people of color and lower-paid workers, who
    are far less likely to get paid leave from their employers, and
    often have to quit their jobs if they or someone in their
    family gets sick.
        Would the President's proposal for a universal,
    comprehensive paid leave provide 12 weeks of leave for lower-
    paid workers and allow them to take leave when they need it
    instead of leaving the workforce?
        Mr. O'MALLEY. Yes, sir. As I understand it, the President's
    proposal calls upon us to administer that program, and we
    would--and with the funding that is included in it we would
    certainly endeavor to do it. It is not right that we should be
    one of the most developed economies in the world, and yet one
    of the very few that does not have paid family leave.
        Mr. DAVIS. Thank you very much.
        Many of our constituents rely on grandparents and extended
    family networks. My understanding is that the President's
    proposal, like ours, would allow people to take leave to care
    for their chosen family. Is that correct?
        Mr. O'MALLEY. Yes, sir, it is. It is an acknowledgment of a
    truth that--I mean, we all know that that is the way it works.
    I mean, grandparents, I think, at least in my city of
    Baltimore, deserve a medal for what they do for their families
    at great expense and great hardship often times.
        Mr. DAVIS. Thank you very much. Also, I extend my sincere
    thanks for your attention to key concerns for me.
        First, I want to thank you for responding to the letter my
    colleagues and I sent about sickle cell disease quickly and
    understandingly, how urgent the situation is for the families
    we represent. You indicated that the SSA will consult with
    sickle cell experts in HHS.
        I also encourage you to draw on the medical expertise
    within the Sickle Cell Disease Association, as well. Once your
    staff has reviewed the current criteria and consulted medical
    experts, could we schedule a time for all of us to hear the
    results and talk about next steps?
        Mr. O'MALLEY. Yes, sir. Duly noted. And I absolutely will
    commit to that here and now.
        Mr. DAVIS. Thank you so much.
        And secondly, I am very pleased that you will examine how
    SSA can better protect the benefits of foster youth to ensure
    that representative payees prioritize children's needs, rather
    than state financial security. Both the Supreme Court and the
    SSAB have indicated that the SSA commissioner has the authority
    to determine if states reimbursing themselves for the cost of
    care violates their fiduciary responsibilities as
    representative payees. I am grateful for your leadership and
    commitment to foster youth.
        And finally, I want to thank you and the many members of
    your team for helping resolve issues facing my constituents,
    including Lee Marsaglia, Tom Klouda, Eric Hansen, Joel Najar,
    Elizabeth Tino, and all the caseworkers in the West North
    Avenue Chicago office. They have been incredible, and I want
    you to know that.
        Thank you, Mr. Chairman, and I yield back.
        Chairman FERGUSON. Thank you, Mr. Davis. Next we are
    honored to have the Chairman of the full committee with us, the
    gentleman from Missouri.
        Mr. Smith, you are recognized for your opening statement--
    or excuse me.
        Chairman SMITH. For questions?
        Chairman FERGUSON. Questions, I am sorry.
        Chairman SMITH. Okay, thank you. Thank you, Chairman, for
    having us.
        Commissioner O'Malley, thank you for taking time to be here
    with the best committee in Congress. So----
        Mr. O'MALLEY. Thank you, and thank you for the time you
    gave me in your office about a month ago.
        Chairman SMITH. Of course.
        In 2022 the Social Security Administration rescinded a
    policy that barred recovery of certain overpayments when the
    SSA had failed to act on them for 10 years. In a message to its
    employees, the agency noted that it rescinded this policy
    because it didn't have the authority to bar recovery of those
    debts under the Social Security Act.
        In fiscal year 2022 alone, Social Security made $11 billion
    in overpayments across the Social Security and Supplemental
    Social Security Income programs, 2 billion of which resulted
    from the agency's failure to use available data to avoid such
    mistakes.
        Commissioner O'Malley, if Congress provides you with the
    necessary authority, do I have your assurance that you will
    implement it as quickly as possible so that more people are not
    penalized for the SSA's failure to act in a timely manner?
        Mr. O'MALLEY. Yes, sir. And Mr. Chairman, would you be
    talking about that 10-year statute of limitations or
    administrative finality, whatever the proper parlance is here?
        Chairman SMITH. That is it, yes.
        Mr. O'MALLEY. Yes, sir, I would. In fact, we are examining
    that, even as we speak, as part of the other things that we are
    doing on overpayments.
        Chairman SMITH. Thank you. Thank you very much.
        Over the past year the SSA has published multiple proposed
    rules, and taken administrative action independent of Congress
    that would obligate an estimated $40 billion of new mandatory
    spending. Under what statutory authority do you believe that
    you can make these changes?
        And are there, in your view, any limits to that authority?
        Mr. O'MALLEY. Well, Mr. Chairman, certainly there is there
    is limits within the law, and just a little while ago we were
    talking about some of those things.
        It is interesting. I meet on a regular, every-month basis
    with claimants' representatives, as well as advocates. And
    especially among the claimants' representatives, I mean, they
    are people from all over the country, Democrats, Republicans
    alike. And they have been waiting a long time for a confirmed
    commissioner that would put forward many of these regulations.
        One of them I know that you and I spoke about was PIE, the
    Payroll Information Exchange, which could limit overpayments.
    So that one is now moving. Social Security numbers and
    government records, the--and the rental subsidy policy for SSI
    recipients.
        Now, all of those have a--all of those have a bit of a
    price tag. Some of them come out of the trust fund, and I would
    argue--or submit to you, rather--that those have already been
    paid for by and don't contribute to the debt because they have
    been paid for by the people that have paid into Social
    Security. Others, where SSI is concerned, will have a cost, but
    there will also be some administrative savings.
        Now, having said all of that, we still have to publish
    these. We still have to get, you know, public comment back on
    these. But there has been a lot of thought and a lot of
    deliberation on these. I don't want you to think for a second
    that all of a sudden, you know, we just started rubber-stamping
    a bunch of these and sending them through the door. They have
    been stuck at Social Security in some cases for years, and I
    hope it will make the program better and improve our customer
    service and the purpose of the Act, and I think your
    congressional intent, which is to serve people who are in need
    in better and faster and more timely and accurate ways.
        Chairman SMITH. Thank you, Commissioner.
        Thank you, Chairman.
        Chairman FERGUSON. Thank you. Next we will recognize the
    cheerful and happiest man in Congress, a former fellow mayor,
    and the gentleman from New Jersey, Mr. Pascrell.
        Mr. PASCRELL. Thank you, Mr. Chairman. It is a wonderful
    day in the neighborhood today. [Laughter.]
        Mr. PASCRELL. Good to see another mayor.
        Mr. O'MALLEY. Good to see you, Mayor.
        Mr. PASCRELL. Social Security is like a priceless heirloom
    in a family, but not one fully maintained. There is a backlog.
    In fact, 2024 is going to be worse than 2023, projected, in
    terms of folks that are working to bring service to people. You
    are getting 12,000 beneficiaries every week, new ones.
        So regardless of how you slice it, there are many on both
    sides of the aisle who understand it, have studied it, and
    think we need to do something different.
        The former President of the United States doesn't think we
    should do very much different. His answer is we need more
    cutting in Social Security. He says it. He doesn't hide it. We
    have a clear choice about Social Security right now. You didn't
    say it, I didn't say it. That form of President said it. He
    continues to say it. So the delays of 218, 225 days are not
    going to be reduced very much if we continue the path where we
    are.
        I was the first Member of Congress to ask that this
    Administration remove the failed predecessor in your job. He
    was appointed by the former President.
        Tens of millions of Americans rely on Social Security for
    their lives. Yet between 2018--excuse me, 2019 and 2023, the
    wait time rose 86 percent. Who speaks for thesepeople? Have
    they no spokesperson? Who speaks for people old like myself? If you
    don't, don't think any of us are going to jump up.
        How do we ratchet up SSA's volume of disability case
    reviews for Americans receiving disability insurance and
    Supplemental Security Income?
        Commissioner, yesterday the study committee of our brothers
    and sisters on the other side made up of 80 percent of
    colleagues across the aisle called for increasing the
    retirement age, now tying it to life expectancy. I do not know
    about you, but I do not think Americans should be forced to
    work until they drop dead. Can you give us your thoughts on the
    dangerous proposal?
        Mr. O'MALLEY. Well, Mr. Chairman, the--you know, the
    beautiful thing about this program is that 80 percent of
    Americans support it, regardless of party, and they want their
    government to strengthen it and expand it, not to cut it,
    contract it, or gut its customer service. I think that is a
    phenomenal consensus in a time of polarized politics, that 80
    percent of the American people want us to expand it.
        To those who--for those who would advocate, you know,
    raising the age, I think we have to be mindful of people that
    really do hard work, hard labor their whole lives, and who die
    sooner than those of us that are privileged enough to be able
    to, you know, do work that is not as, you know, taxing on our
    bodies and our physical well-being.
        So I have never supported that myself. Your job is the
    policy-maker, and every day I have to remind myself that my job
    is to improve customer service and leave the policy to you. But
    I also can't deny that once upon a time, before I got promoted,
    I was in elective office and I used to run for office, but I
    never advocated those sorts of policies.
        Mr. PASCRELL. Mr. Chairman, can I ask a question without
    getting an answer? I just want to let it hang out there.
    [Laughter.]
        Mr. PASCRELL. Is that all right with your approval?
        Chairman FERGUSON. Yes, sir.
        Mr. PASCRELL. Thank you.
        Chairman FERGUSON. I hope I am not going to regret this.
    [Laughter.]
        Mr. PASCRELL. No, you won't regret it.
        We all have a fascination with the nation of immigrants.
    What is SSA doing to ensure we do not block access to
    disability assistance for certain non-English speakers?
        The whole issue of immigration in Social Security, and
    where we would be without the immigrants getting into the
    system is one which I think--you need to address clarity.
        Chairman FERGUSON. My dear friend----
        Mr. PASCRELL. Thank you, Mr. Chairman.
        Chairman FERGUSON [continuing]. I let you ask the question.
    I didn't know you were going to preach a sermon.
        Mr. PASCRELL. Thank you.
        Chairman FERGUSON. So with that I will turn to my colleague
    from Ohio. We are going to go to two to one here.
        So, Mr. Carey, you are now recognized.
        Mr. CAREY. Thank you, Chairman.
        Thank you, Commissioner, for being here today. I am going
    to focus my questions on overpayments, so if you wanted to get
    your notes for that.
        Commissioner, I was disturbed to learn that there are
    people who are getting notices demanding tens of thousands of
    dollars for overpayments that went unnoticed by SSA for years.
    On December 13 I sent a letter with my colleague, Emilia Sykes
    from Akron, and five other Ohioans requesting information on
    how SSA processes improper payments, including overpayments.
        I was made aware right before this hearing--in fact, I
    believe the time stamped was 1:55 that I did finally get a
    response from your office. I will have time to read through
    that response later today. But I do have a couple questions for
    you.
        How much time, on average, does it take for SSA to
    determine an overpayment has occurred after a person has
    actually received the funds?
        And is there any limit on how long SSA has to establish the
    debt after the actual overpayment has occurred?
        Mr. O'MALLEY. Let me answer--let me break down. Those are
    two questions.
        Mr. CAREY. Right.
        Mr. O'MALLEY. With regard--let me back up a second.
        Beginning February 5 we began a process of looking for one
    hour every two weeks at what we can do to untangle this Gordian
    knot of the overpayments. That review actually, fortunately for
    my service, began in October, right around the same time as
    that 60 Minutes expose that showed those stories of those
    Americans who, through no fault of their own, had 100 percent
    of their benefits intercepted and caused them a horrible
    financial calamity.
        So there are several things that we have already done, and
    there are more things that we are doing. One of the things we
    have done is we have ended, as of March 25, the process of
    intercepting 100 percent of benefits if the person doesn't, you
    know, respond to the notice.
        Second, we are going to shift the burden away from asking
    the claimant to prove they weren't at fault. That should be on
    the agency.
        Third, we are going to allow repayment plans instead of
    just within the next 36 months. Instead, 60 months to alleviate
    the burden.
        And finally, we are going to make it easier for overpaid
    beneficiaries to request a waiver of repayment.
        The answer to the first part of your question, how long
    does it take us to discover it, is the product of two things.
    It depends on what the nature of the overpayment was, and it
    also depends partly on the staffing that we have available.
        I have talked about the----
        Mr. CAREY. Real quick----
        Mr. O'MALLEY [continuing]. Staffing being----
        Mr. CAREY. Commissioner, real quick.
        Mr. O'MALLEY. Yes, sir.
        Mr. CAREY [continuing]. Because my time is going to run
    out. So just in the case--except in the cases of fraud and
    other fault on the part of a beneficiary, do you think it is
    reasonable to surprise folks with recovering notices for old
    debts because it took the SSA too long to identify them?
        Mr. O'MALLEY. No sir, I don't. But the length of time that
    it takes us to discover it is a product of staffing being at
    27-year lows.
        In other words, I don't believe--we don't believe, from the
    studying we have done for the last four months, that there is
    more errors--in other words, more overpayments. But we can
    clearly see that the average amount of those payments has gone
    up because it takes us longer to discover them.
        Mr. CAREY. And on average, how many people are receiving
    these overpayments?
        I know we had a discrepancy in the last time I asked that
    question, so I figured you came prepared to give a correct----
        Mr. O'MALLEY. Yes.
        Mr. CAREY [continuing]. Answer on that.
        Mr. O'MALLEY. Yes, sir. We are better now. There are, to
    the best of our knowledge, information, and belief, there are--
    over the fiscal years 2019 to fiscal year 2023--I will just
    give you 2019 and 2023.
        Mr. CAREY. Okay.
        Mr. O'MALLEY. So total unique individuals in title 2 was
    990,821. In fiscal year 2023 it was 986,912.
        In terms of SSI overpayment individuals--and keep in mind,
    this is, like, every month they have to prove how much they
    have earned, and that sort of thing, or send in their pay
    stubs--in fiscal year 2019 it was 1,375,000. In fiscal year
    2023 it was one 1,310,000.
        But as I said, what we saw was that, because of staffing
    being at a 27-year low, it takes us longer to catch up with
    those overpayments when we discover them.
        Mr. CAREY. Thank--Commissioner, my time has expired.
        And Mr. Chairman, I yield back.
        Chairman FERGUSON. Thank you, Mr. Carey. The gentleman from
    Arizona is now recognized.
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        Mr. Commissioner, Governor I actually think you have one of
    the most interesting jobs. I have always been fascinated with
    the math. So let's bang through some of these real quick so we
    have a couple of moments for actual--some conversation.
        Would you consider--there is a program called Ticket to
    Work.
        Mr. O'MALLEY. Yes, sir.
        Mr. SCHWEIKERT. It was always meant to be somewhat
    optimistic. And is there a chance of moving whoever leads that
    into sort of your management cabinet so it gets more focus,
    more attention, and maybe more use?
        Mr. O'MALLEY. Yes, sir, perhaps. I am on a steep learning
    curve. And one of the things that I have learned, though, is
    that when it comes to Ticket to Work, it is a well-intended
    program, but it is a program that we have not promoted.
        Mr. SCHWEIKERT. It is almost exactly the point, is how do
    we make it meet its mission? Because it is something that had
    both left and right support, so----
        Mr. O'MALLEY. Yes, it is two things. It is not only
    promoting the program, it is not only educating our front-line
    staff about it. There is probably some changes necessary so the
    ENs, the Employment Networks, are able to submit on behalf of
    third parties--I mean as a third party, those payment
    verifications.
        But it also, as I understand it so far--I could be wrong--
    sometimes in big bureaucracies people tell you one thing, and
    when you ask five more whys, you find out another.
        Mr. SCHWEIKERT. Why does that sound so familiar?
        But look, you have our interest. So----
        Mr. O'MALLEY. It requires, I think, some more staffing as--
    in addition to just, you know, printing up more fliers and
    pushing out more notice.
        Mr. SCHWEIKERT. As time goes on, if one of your senior
    staff would ever be willing to communicate with us, we would
    like to sort of understand it better.
        Mr. O'MALLEY. Yes, I would like to get back to you in short
    order on that.
        Mr. SCHWEIKERT. Second, several months ago I think we had
    one of the Social Security actuaries with us, and there was a
    comment made that is burned in my head, and that was when we
    get to expiration of the trust fund in, what is it, 8 or 9
    fiscal years, that the commissioner may have authority to say,
    okay, high-income earners, you get a 40 percent cut, low-income
    earners, you only get a 5 percent cut.
        Have you ever had response from your legal staff on an
    opinion whether you have that authority?
        Mr. O'MALLEY. I haven't, I have not had that opinion from
    them. I had one U.S. Senator tell me that in the Social
    Security commissioner's office drawer there is a whole bunch of
    magic wands. I can assure you I looked in that drawer. There
    were no magic wands.
        Mr. SCHWEIKERT. But at some point I want to make sure, if
    you have that authority, then we need to work with you. If you
    don't have the authority, we have to try to not obfuscate our
    own responsibilities.
        Mr. O'MALLEY. I will inquire more deeply.
        Mr. SCHWEIKERT. Okay.
        Mr. O'MALLEY. Can I talk a little bit? I don't want to take
    your time.
        Mr. SCHWEIKERT. Well, I want to hit on----
        Mr. O'MALLEY. Okay.
        Mr. SCHWEIKERT [continuing]. One other. If you ever have a
    conversation with the IRS commissioner----
        Mr. O'MALLEY. Yes, frequently.
        Mr. SCHWEIKERT [continuing]. They did an experiment last
    year, a small one, and it was kept fairly quiet. But it was
    using a chat AI for answering the phones, providing service.
    Early data on that, it was remarkably accepted and functional.
    They are expanding it this year.
        There may be a learning curve there, because if part of
    your backup is the inbound phone calls, the ability to adopt
    technology--because, let's be honest, hiring people in--when
    you see our labor force structure, is hard and difficult. So
    please consider that as a backbone.
        One of the other things I would like to make--because
    originally I was going to say some very snarky things; I bit my
    tongue because this is too important--I would love a moment
    where, you know, one of my friends here from, I believe it is
    Connecticut, cares deeply about Social Security. I am fixated
    on the math. Obviously, it is your--could we ever bring in your
    actuaries, my PhD economists from the Joint Economic Committee?
    Because we had a couple of--our smartest team spent months, it
    took months because of how hard it is to get responses and
    actuarial data from your actuaries, from our own folks on our
    side because population data, retirement data, labor force
    participation, there is all sorts of things that go on here.
        But my fear is we don't tell the truth about the math. We
    use 2034 as our date, and I have actually done multiple floor
    speeches on this. We actually have the actual total shortfall
    by--if you tax--raise the cap $400,000 and up, just remove it,
    you still have a $417 billion shortfall in the 1 year. So
    remember, the first year of shortfall is $616 billion short.
    And raising the cap takes care of 358, and then you lose
    another 59 in general fund revenues. So you have an over $400
    billion shortfall. Getting rid of the cap completely, you still
    have another well over $300 billion shortfall.
        Why the morality of this I am so concerned about is it is a
    great political issue. It will be, as your own actuary said, we
    double senior poverty the day the trust fund is emptied.
        Mr. O'MALLEY. Yes, sir.
        Mr. SCHWEIKERT. And the solutions we give here are only
    covering about a third of the shortfall. We are going to have
    to have some very uncomfortable conversations, both the left
    and the right, to make this math work.
        With that, I yield back.
        Chairman FERGUSON. Thank you.
        Mr. LARSON. I think a vote would be good.
        Chairman FERGUSON. Thank you, Mr. Chairman----
        Mr. SCHWEIKERT. Maybe a vote on math that is actually real.
        Mr. LARSON. And on people associated with the math.
        Chairman FERGUSON. We will--let's--gentlemen, both--if you
    all want to have that discussion in the back room, go ahead. We
    are going to continue on, and the gentlelady from California,
    Ms. Chu, is now recognized.
        Ms. CHU. Commissioner O'Malley, thank you for being here.
        One of my top priorities on this committee is improving
    outcomes for children and youth in the foster care system, as
    we know that without appropriate documentation, including
    Social Security cards, foster youth transitioning out of care
    can't travel, secure employment, obtain housing, or continue
    their education. I have heard from foster youth about this, and
    I have also heard from the LA County Department of Children and
    Family Services.
        So in January of last year, I sent a letter to the
    Administration detailing these challenges faced when the foster
    youth are trying to secure Social Security cards. These
    challenges stemmed from differences in the Social Security
    Administration's regional enforcement of the agency's document
    requirement policies. For example, regional SSA offices appear
    to be using inconsistent application approval procedures,
    including for what they consider acceptable documents for
    Social Security card requests for children and foster youth.
        I do appreciate that the Administration responded to this
    letter to let me know that they had contacted LA County and
    local Social Security field offices about the concern, but I
    understand that challenges remain. So can you talk about what
    SSA is doing to ensure that foster youth can smoothly and
    reliably secure their Social Security cards?
        Are there ways that Congress can help you improve this
    process?
        Mr. O'MALLEY. Congresswoman, thank you for your question,
    thank you for your letter, and also thank you for your concern
    in fighting for kids in foster care. As a former mayor of
    Baltimore and a former governor, I have spent a fair amount of
    effort and time trying to do better by kids as they age out of
    foster care. And sadly, I saw a lot of the similarities to
    reentry programs in another context, although in this context
    it is kids who are reentering and, we hope, a life of
    independence outside of foster care.
        There is a couple of things we need to do much better as an
    agency. There are many things we need to do much better, I
    should say. And we are discovering some of those.
        Training really took a hit during COVID, and we haven't
    recovered from it since. So we do find disparate, different
    applications of our rules, depending on what region you are in,
    and even from one field office to another. So we have to
    improve on our training.
        Secondly we have been slow--in our aversion to risk and our
    duty to safeguard the program, we have been slow to embrace
    some technologies that Americans take for granted everywhere,
    like electronic signatures or state records that are e-
    certified. There are many things we need to do to ease the
    traditional requirements of paper documents in order to make
    sure that people--in this case, foster kids--have what they
    need from the agency so that they can be successful in moving
    forward.
        The most important thing you could do, the most important
    thing you could do for the agency is to pass the President's
    budget. It would be a solid step in the right direction.
        And to the gentleman who was talking about the Social
    Security Trust Fund and the longer term, we need to get back to
    operating on 1.2 percent of our annual benefit outlays. That
    was the way it was in 2018, 2017, 2016, and going back. But now
    we are down to less than one percent. And for those of you that
    are concerned about what this does to the trust fund and the
    2034 depletion event, bringing Social Security funding back up
    to the traditional 1.2 percent would only advance that
    depletion event by 30 days.
        Ms. CHU. Well, I hope that you will monitor the situation,
    that we can stay in touch on this issue in terms of
    improvements made, because these are the most vulnerable kids
    who really need that help.
        And I did want to ask about the 2024-2025 President's
    budget request, because I am very disturbed by these 38 minutes
    that you are on hold for the 800 system and the 8 months that
    disability applicants are waiting on average. And we know that
    it made a big difference when we gave funds to the IRS to
    improve their services. And what would be the major thing that
    you think would improve if the President's budget was approved?
        Mr. O'MALLEY. The major thing would be our ability to hire
    agents and train the agents so that they can answer those
    calls. We are suffering from a 24 percent attrition rate in our
    teleservice centers. We have some work to do ourselves. The
    contractor on our phone system needs to deliver what has been
    promised.
        But the most important thing in that President's budget is
    the ability to hire more teleservice centers. And we are
    getting--and we are anxious to do that. These folks are like
    the Tuskegee Airmen, you know, they are character without any
    recognition for them to hang in there answering call after call
    of really angry, impatient people, and then deal patiently with
    them.
        I visited all nine regions of the country in my first month
    on this job, and I would listen for 40 minutes or an hour on
    the other, you know, on whatever you call it, the copilot
    headset next to these teleservice centers. Man, they are my
    heroes, and we need to do better by them. They are overwhelmed,
    stressed out, and--but still, every day they are trying to make
    it work. Hiring more teleservice centers people is $79 million
    of that President's budget--of the President's proposed budget.
        Ms. CHU. Thank you, I yield back.
        Chairman FERGUSON. Thank you. The gentleman from the great
    State of Utah, Mr. Moore, you are now recognized.
        Mr. MOORE of Utah. Thank you, Chairman. Thank you to all
    the chairmen and to all the ranking members that we have here
    today for holding this hearing. We appreciate it.
        This is, you know, not the attention-getting stuff that you
    will see on the evening news tonight about this work when we
    talk actuaries, we talk Social Security. This is what matters
    to virtually every American. This is what matters, and we have
    to get this right.
        I represent the 1st district of Utah, and it is one of the
    larger processing centers for the IRS, and I have, you know, in
    this committee have gotten to get even closer to that work, and
    heard from them, had a chance to talk to the commissioner from
    the IRS, as well. And I think there is a strong correlation,
    just like my colleague from Arizona mentioned, about the need
    to modernize. And so I wanted to talk a little bit about that.
        But first, I appreciate your comments on the foster care
    adoption, and seeing these kids time out. These aren't just two
    to three percentage points that go into homelessness or drug
    addiction. This is--these kids turn 18, 19, this is massive
    percentages. And so I appreciate the chairman for the Work and
    Welfare Subcommittee for focusing on that.
        I have something for the record, Chairman, a letter from
    Mr. David Camp, CEO of the National Organization of Social
    Security Claimants' Representatives to this committee that
    details the efficiencies that we have already seen simply by
    allowing for digital sharing of information between
    representatives and claimants.
        Chairman FERGUSON. So ordered.
        [The information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. MOORE of Utah. Thank you.
        Despite spending more than a decade and $300 million
    through its Occupational Requirements Survey to procure updated
    jobs data from the Bureau of Labor Statistics, the SSA is still
    using a Dictionary of Occupational Titles from 1977. That was
    last partially updated over 30 years ago to make disability
    determinations.
        At a hearing in October we heard how the use of the
    Dictionary of Occupational Titles, DOT, disadvantages some who
    are truly disabled and advantages others who may be able to
    work because it includes outdated job listings like a
    phonograph cartridge assembler but, unlike the ORS, it doesn't
    include jobs like a web developer, right? We have modernized
    since the 1970s, right?
        And can you help me understand why this updated data hasn't
    been used, and why the SSA still relies on the outdated DOT,
    which contains job listings that haven't existed in our economy
    for decades?
        Or if you can enlighten us with improvements in this area,
    I would be totally interested.
        Mr. O'MALLEY. Yes, sir. As you might imagine, given our
    budget straits and the lowest staffing we have had in 27 years,
    to look at spending more money on a program that has already
    spent a lot of money and no result, I had to, in good
    conscience, put the brakes on that for right now.
        And I am taking a second look at it, doing a deeper dive.
    It is my understanding that this contract is extremely labor
    intensive, and it is also my understanding that any change to
    the DOT will create different winners and losers, as any policy
    choice will in a program.
        So Congressman, I haven't entirely figured it out myself,
    but it is a great source of embarrassment for this agency to
    be, you know, asked why it is that we still have seal killers
    and nut sorters and phonograph cartridge makers as occupations
    when they haven't been here for a long time. We should, at the
    very least, start removing those obsolete jobs from the list,
    and I think perhaps there is something we can learn from other
    advanced and developed nations as to how they stay in touch
    with a rapidly changing economy.
        And the OIS is certainly another alternative.
        Mr. MOORE of Utah. I think there is some really productive
    literature out there. It is my understanding this is mostly
    paid for, and I think there is a--to have the will, we can find
    the way on this.
        I experienced it in my own family. I have a young boy who
    is eight years old. He is going to have a different path in
    life. I know he is going to be a contributing member. He is
    going to find a job that works for him, right? And he is going
    to have challenges up until that point, but he is going to find
    a lane. And I want to make sure we are doing what we can to
    strip out arbitrary, you know, useless data and modernized with
    this.
        AEI has a great book, American Renewal, that has a whole
    chapter on what can be used and what can be done to this to
    enhance what we can get out of our population and our
    communities right now, because there is a whole group of people
    that want to work, that want to contribute. And I am confident
    we can do much better in this.
        I won't have time to be able to dig into the top ten legacy
    systems, but consider our office an office that will dig into
    this as much as possible. It works for--it is important for my
    district for the IRS to be able to modernize their
    technologies.
        And, you know, as we have mentioned earlier, the same could
    go, and we can use these--we improve people's work experience
    by investing in these technologies to make their job
    satisfaction go up. You get better productivity out of them,
    and we will see better hiring come from this type of stuff. So
    I encourage you to push as much as possible on this.
        Mr. O'MALLEY. Congressman, thank you. I totally agree with
    you, and I would really like to work with you.
        Mr. MOORE of Utah. Thank you.
        Chairman FERGUSON. The gentlelady from California, Mrs.
    Steel, is recognized.
        Mrs. STEEL. Thank you, Mr. Chairman.
        And thank you for coming, Commissioner. This is just my
    statement. And you know what? I have been hearing just so much
    from you, low staffing, and then, you know, you need more
    staffing. But actually, Social Security Administration is
    spending $1.7 billion for information technology services to
    maintain and modernizing IT infrastructure, as well as digital
    and automated services. So if you can add that, I don't think
    you should ask more staffing and you have the way too low
    staffing. Having said that, I am not asking you about that
    answer. But you know what? You really have to go back and
    study.
        Social Security improper payments, many of which occur by
    no fault of those who have been improperly paid, place a heavy
    burden on the recipients who often face the difficult and time
    intensive process to resolve the issue with the Social Security
    Administration. So overpayment also cost taxpayers billions and
    take valuable resources away from the Social Security
    Administration that could be used for other purposes.
        So nine years ago that--actually, Congress authorized that
    payroll information exchange you just briefly mentioned, and
    Chairman Smith was asking, and then you answered that it is
    moving. So I just need really quick--I have just one more
    question.
        So it has been launched, when, and what is the result, and
    how this PIE is going, and which direction?
        Mr. O'MALLEY. Yes, the Payroll Information Exchange, the
    regs for that will be published this April. But depending upon
    the comments back, we hope to be able to implement it in July.
        We have had to move money out of that IT budget because 90
    percent of that IT budget goes to tape together old legacy
    systems: COBOL, green screen. But with a new CIO from
    California, we are moving around dollars in order to implement
    PIE. And we have already done a lot of the pre-testing work on
    it in anticipation of these regulations. And so, fingers
    crossed, I would look forward to that being in use by the end
    of this summer.
        Mrs. STEEL. Well, you know what? You are bringing CIO from
    California. When we do exactly opposite of what California
    government does, we are very successful. I love California, I
    love the weather, and I want to save California. That is the
    reason that I am staying there.
        Another leading cause of overpayment in the SSI program is
    undisclosed financial accounts. To address this, SSA
    implemented the Access to Financial Institutions program in
    2011. AFI helps the SSA verify bank account balances when
    processing SSI applicants.
        Currently, SSA examines any bank accounts where the
    reported balance is over $400, but initiated a study to explore
    reducing this threshold to 0. This study was put on hold during
    COVID. In 2022, SSA Office of Inspector General recommended
    that SSA agree to revisit this study in 2023.
        Have you revisited this study, and do you have the result
    to share with the committee?
        Will the SSA be reducing the AFI threshold to zero and use
    it for every SSI applicant to further reduce burdensome,
    improper payment to SSI recipients?
        Mr. O'MALLEY. Congresswoman, I am on a steep learning
    curve, and I am learning something new every day. One of the
    things I have learned about SSI is that, while it is only about
    4 percent of our benefits, it is about 38 percent of our
    administrative costs. I am not specifically aware of any
    results of that study to change that COVID-era rule, but I
    would ask your permission to look into that and get you a
    proper answer promptly.
        Mrs. STEEL. I would love to get that. Thank you very much
    for----
        Mr. O'MALLEY. Thank you.
        Mrs. STEEL [continuing]. Coming to the hearing today.
        I yield back.
        Chairman FERGUSON. Thank you. The gentlelady from
    California, Ms. Sanchez, you are now recognized.
        Ms. SANCHEZ. Thank you, Mr. Chairman.
        And I want to welcome you, Commissioner O'Malley. Thank you
    so much for your time today.
        Mr. O'MALLEY. Thank you.
        Ms. SANCHEZ. Social security is really vital to our
    nation's economy, and I have been a member that has
    consistently supported increased funding for Social Security,
    which is more than I can say for some of my colleagues on this
    dais.
        In fact, just yesterday, the Republican Study Committee
    released their budget proposal, which included even more
    aggressive cuts to Social Security, suggesting a $1.5 trillion
    reduction over the next decade. And as you stated,
    Commissioner, years of underfunding have already eroded SSA's
    customer service and other basic operations. After accounting
    for inflation, SSA's funding for basic operations has fallen by
    approximately 17 percent and, as a result, SSA has lost roughly
    10,500 full-time workers over the past decade.
        In my district there is an SSA Office of Hearing
    Operations, and some of my constituents that are employed there
    recently shared some stories about the difficulties of
    understaffing, and they outlined an agency-wide issue. And
    while I appreciate your encouragement of the hard-working folks
    who are serving their country as SSA employees, I think we can
    all agree that these employees deserve to be paid a decent wage
    and to be fully staffed.
        Commissioner O'Malley, what can Congress do to help ensure
    that SSA can restore not only strong customer service, but
    adequate staffing for field and hearing operations offices?
        Mr. O'MALLEY. Congresswoman, thank you for your question.
    Thank you for your concern for Social Security.
        Your numbers are spot on. We are dealing--we are serving
    more beneficiaries than ever. During COVID we saw a slight dip
    in disability applications. But now, for the last three years,
    disability applications are going back up, as well. And as you
    know, if a person is denied, they go to the next level of
    hearing and in the hearing offices.
        There are some bright spots in all of this. I think it was
    Arnold Toynbee that said that man progresses--and he meant men
    and women--progress in response to adversity. And certainly,
    COVID was a lot of adversity for the office of--what we call
    the Office of Administrative Hearings. We have shifted to doing
    hearings by teleconference and also video, something that was a
    necessity during COVID. But now that we have come out of COVID,
    we find that most of the claimants, 70 percent of whom are
    represented, prefer the teleconference and prefer the video.
        Having said all of that, there is nothing more important
    that you could do for those employees than to restore a level
    of adequate funding that this agency was able to spend for
    every year prior to 2018. We operated on 1.2 percent of our
    overhead more efficiently and more effectively than any other
    insurance corporation on the planet. And yet we have now been
    cut.
        Ms. SANCHEZ. Yes.
        Mr. O'MALLEY. I mean, and I don't pretend--Mr. Chairman, I
    don't think it was intentional by Congress. But in nine years
    we haven't even had a budget or appropriations hearing.
        And the good news is--I think it is good news--is that
    because the customer service is funded out of the same dollars
    people have already paid for benefits, this doesn't add to the
    Federal debt.
        Ms. SANCHEZ. Yes.
        Mr. O'MALLEY. It is there. You can't tell people, oh, we
    have got your benefits, and eventually, by 2034, we are going
    to create another long-term fix, but in the meantime we are
    going to allow your customer service to be cut.
        Ms. SANCHEZ. Yes.
        Mr. O'MALLEY. I truly believe that, if you are able to
    support the President's budget for restoring staffing and
    eventually getting us back up to our traditional 1.2 percent,
    you are not only going to restore trust in this agency's
    customer service, you are going to restore a lot of trust in
    the ability of the Republic to serve its people.
        Ms. SANCHEZ. Yes, I have a question about the President's
    budget, but I hope my colleagues will heed your warning and
    join me in calling for an increased Social Security budget for
    fiscal year 2025 and beyond.
        I appreciate your commitment to trying to get Social
    Security back on track. And I know that you and President Biden
    are aiming to address the devastating staffing shortages which
    affect not only those who rely on Social Security, but the
    workers who help provide those benefits.
        I want to say that President Biden's budget proposal
    includes 12 weeks of universal, comprehensive, paid family and
    medical leave, like the proposal that we passed out of this
    committee in Build Back Better in 2021. At that time, every
    single Ways and Means Republican voted against a paid leave
    plan for workers. But paid leave is really vital to working
    Americans. And as a mother myself, I know how difficult it can
    be to balance parenting and a demanding job.
        I just want to ask, Commissioner O'Malley--and I will take
    your response in writing, it doesn't have to be verbal right
    now--but do you consider universal paid leave a critical
    feature of that plan?
        And again, I will take your answer in writing after. Thank
    you.
        Ms. SANCHEZ. And I yield back.
        Chairman FERGUSON. I thank the gentlelady.
        The gentleman from Iowa, Mr. Feenstra, you are now
    recognized.
        Mr. FEENSTRA. Thank you, Mr. Chair.
        Thank you Mr. O'Malley, for being here today. I greatly
    appreciate it. I see you were a mayor of Baltimore, a lot of
    moving parts when you do that. I was a city administrator, so--
    --
        Mr. O'MALLEY. What city?
        Mr. FEENSTRA. A small community in Iowa, Hull. So----
        Mr. O'MALLEY. Where is that?
        Mr. FEENSTRA. In the northwest corner. But----
        Mr. O'MALLEY. I have probably been there.
        Mr. FEENSTRA. Yes, you probably have. It is--and those jobs
    is where the rubber hits the road, and that is what I want to
    talk about today.
        You are a trustee, and so you are in charge of providing
    Congress with an accurate financial picture of the health of
    our Social Security Trust Fund. We all know that in 8 to 10
    years, you know, there is going to be a catastrophic cliff that
    is going to happen in that Social Security recipients, if we
    don't do anything, could see an up to a 30 percent reduction in
    their Social Security. And that is coming, I think, from your
    office.
        How can we tell and advise government and people that, hey,
    this is real. I mean, this isn't something that is made up. I
    mean, I worry about this immensely. And I think you and
    Congress have to do our part to change this dynamic. And I just
    want your thoughts on that.
        Mr. O'MALLEY. Yes, sir, thank you. And I think there is
    probably nothing that gets quite as many eyeballs on
    publications on the Internet as the screaming headlines that
    say your Social Security is about to go away in a few years,
    especially given the fact that 50 percent--for 50 percent of
    seniors, that is the difference between poverty and----
        Mr. FEENSTRA. That is right.
        Mr. O'MALLEY [continuing]. And living in dignity.
        The good news is, you know, the governance to choose. And I
    believe that we have the ability to extend solvency for the
    foreseeable future, just like Tip O'Neill and Ronald Reagan and
    Howard Baker did back in 1982. People remember that
    nostalgically, as if Tip O'Neill and Ronald Reagan had a beer
    and decided to fix it. But it was only up on the deadline.
        I don't think we should wait until the deadline. I have had
    a lot of great conversations with people of both sides of the
    aisle, including Senator Cassidy on the other side of the Hill,
    and Mike Rounds. And the truth is, it is only when enough
    Democrats and Republicans come together for these tough
    things----
        Mr. FEENSTRA. And I agree with that. And I know it is
    Congress's idea, or Congress has to do this. But I also need
    you, as Social Security trustees, to advocate for, hey--you
    know, and create proposals.
        Also, I think the CBO needs a 10-year outlook. I created a
    bill that would do this. It is an easy--an understandable graph
    to accurately forecast where this is going to be. If we each
    year do not do anything, it gets even more and more
    cataclysmic. And I think we are missing the point on that.
        You know, you think about Social Security makes up one-
    fifth of our Federal spending in this--in our budget, one-
    fifth. That is very significant. And it is an unfunded
    liability that we got to tackle.
        Anyway, I want to get to something else. Child welfare
    agencies often enroll eligible children, and then they collect
    and use child's SSI or survivor's benefits to defray the cost
    of that child foster care. And yet, many of our children and
    their parents that have these children in foster care have no
    idea that they are getting an SSA benefit.
        There is a letter that you sent out that says, ``I am
    committed to taking action first, and quickly as possible, as I
    plan to solicit public input on how Federal and state
    governments can ensure a more reasonable conservation of the
    SSA funds for these vulnerable children.'' So are you looking
    at changing rules here or making rules?
        I mean, this is, again, very serious stuff that no one
    knows how much is being taken, and these children don't even
    realize that payment is being made on their behalf.
        Mr. O'MALLEY. Correct. As a governor and as a mayor, I am
    certainly sensitized to the bad outcomes of kids aging out, as
    they say, aging out of foster care, being given their clothes
    in a plastic bag on their birthday, and told good luck.
        There are a number of states that already have created new
    rules. In fact, in 17 states they have had bills in the last
    year or two that would require the conservation of some of
    those dollars.
        Mr. FEENSTRA. Right, so do you think we should create a
    rule? Are you creating a rule? And do you think the Federal
    Government should create law? What is your thought?
        Mr. O'MALLEY. If I can create a rule, I will.
        Mr. FEENSTRA. Okay.
        Mr. O'MALLEY. And I look to do that very quickly.
        Mr. FEENSTRA. Okay.
        Mr. O'MALLEY. If I can't, and I need your authority based
    on what our counsel tells us, I will come back to you. Because
    for eight percent--it is not all of the kids in foster care----
        Mr. FEENSTRA. That is right.
        Mr. O'MALLEY [continuing]. But for the eight percent that
    receive benefits----
        Mr. FEENSTRA. Perfect.
        Mr. O'MALLEY [continuing]. We can do better.
        Mr. FEENSTRA. Yes, thank you. That is what--I appreciate
    that. And I humbly ask that you have got to--again, go back to
    my first question, is that we have got to get down to the
    bottom and making sure that CBO and everybody knows how Social
    Security is going to dramatically change in 8 to 10 years if we
    do nothing.
        Thank you, and I yield back.
        Mr. O'MALLEY. Thank you.
        Chairman FERGUSON. The gentleman from Florida, Mr. Steube,
    you are now recognized.
        Mr. STEUBE. Thank you, Mr. Chairman.
        This past fall the Social Security Subcommittee held
    multiple hearings regarding the failure of the Social Security
    Administration to administer payments to beneficiaries.
    Commissioner, I would like to follow up on the last time the
    former acting commissioner--and I probably won't pronounce this
    right--Kijakazi?
        Mr. O'MALLEY. Kijakazi.
        Mr. STEUBE. I will let you say that--spoke before us, which
    was on October 18, 2023.
        I would also ask unanimous consent to submit her testimony
    for the record from that hearing.
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        Commissioner, as you may know, the acting administrator
    provided incomplete, unverified, and misleading data to this
    committee related to overpayments at that hearing. We were
    especially concerned that SSA failed to disclose this mistake
    for weeks after it was first identified, and only disclosed it
    to the committee after being forced to do so pursuant to a FOIA
    request. This is unacceptable, and it makes me wonder what else
    is going on at the agency, considering the continuous mistakes
    and the lack of transparency. Are you aware of that
    interaction?
        Mr. O'MALLEY. Yes sir, I am.
        Mr. STEUBE. Is that--is she still with the agency?
        Mr. O'MALLEY. Yes, she is. She is serving in a senior
    adviser position, and she is performing many of the duties of--
    we don't have an acting deputy, so she is performing many of
    those duties.
        Mr. STEUBE. So has there been any investigation by you as
    to why she lied to this body, and misrepresented the numbers?
    Is there going to be an investigation as to why it was
    misrepresented to us what the numbers were?
        Mr. O'MALLEY. Congressman, I don't blame you at all for
    being skeptical for--and asking tough questions. But I can tell
    you from my 90 days of trying to untangle and get to the bottom
    accurately of the overpayment causes, the numbers of people
    separate from the numbers of debts--because some people have
    more than one debt--sometimes people have a debt and then they
    have a second overpayment from another time----
        Mr. STEUBE. Well, somebody had to have either provided her
    with those numbers that she then misled Congress of, or she
    knew what the real numbers were and misled the committee
    because she didn't want to represent the totality of the
    failures of the Administration. So one of those two things
    happened. And if I was the administrator--why do you say no?
        Mr. O'MALLEY. I can----
        Mr. STEUBE. It--okay, all right, let's go back. Do you
    agree that she misrepresented the amount to this committee?
        Mr. O'MALLEY. Yes, but I don't believe it was intentional.
        Mr. STEUBE. Okay.
        Mr. O'MALLEY. I can assure you----
        Mr. STEUBE. So if it wasn't intentional, was it somebody
    that provided her the wrong information?
        Mr. O'MALLEY. Well, and I am sure when they gave it to her
    they didn't think it was wrong, either.
        Congressman, I can assure you, in 90 days of looking at
    this, nobody 5 months ago really had a grasp of what the cause
    and the effects and the results of the overpayments were. We
    have a much better grasp of that now, and I would be glad to
    provide that to you. And we have much more accurate numbers
    now.
        Mr. STEUBE. Okay. Well, in my exchange with her she
    basically said that they are accountable--and I have already
    entered the transcript for the record--they are accountable
    because they hold themselves accountable, which doesn't make
    any sense.
        So can you give me a different or more coherent answer
    about how there will be accountability for mistakes at the
    Social Security Administration, when the mistakes are being
    made by the people who work there and it is affecting
    taxpayers?
        Mr. O'MALLEY. Yes, sir. You know, we--the agency--and I am
    new to the agency, you know, I didn't come up in the culture of
    the agency, but they have a mantra that their mission is to get
    the right amount to the right person at the right time. And by
    and large, we do so.
        Yes, we were--I was surprised to find, when we actually
    looked at the actual number of overpayments and the trend over
    time, there is not more overpayments than there have been over
    the last five years. But because of the decline in staffing to
    27-year lows, and it taking us longer to catch up with those
    overpayments, the amount of the overpayments is higher now than
    it was pre-COVID times.
        So when we make a mistake, though, this--it might only look
    on paper like it is one half of a percent or two percent, but
    that is a lot of Americans. And we need to do better----
        Mr. STEUBE. So my question was, are you doing anything to
    ensure that this isn't happening again?
        Like, is there going to be----
        Mr. O'MALLEY. Yes, sir.
        Mr. STEUBE [continuing]. Consequences for people who work
    in your agencies who make mistakes?
        Mr. O'MALLEY. Yes. Well, certainly. And if they do it
    intentionally, pretty dire consequences.
        A number of the committee staff have come to our Security
    Stat. And Congressman, I would invite you to come and see how
    we are improving the accuracy of our data and the sharing of
    that data every day. And----
        Mr. STEUBE. All right, I want to shift because I have only
    got 30 seconds left.
        Mr. O'MALLEY. Okay.
        Mr. STEUBE. On page five of her testimony--this is the last
    time she was before this committee--she stated, and I quote,
    ``We intend to publish a proposed rule changing our overpayment
    recovery waiver rules to streamline processes and reduce burden
    so eligible individuals can more easily seek debt relief. Our
    goal is to ensure that overpayment recovery does not unduly
    burden those in underserved, vulnerable, or marginalized
    communities.''
        And I asked her specifically about communities of color,
    which is what she was referring to. Commissioner, do you
    believe that your agency should consider race as a factor in
    determining benefits?
        Mr. O'MALLEY. No, I do not, although I do believe we should
    always be mindful of the disparate impact of our policies, and
    also of our congressional mandate to make sure that this
    program--that people have equal access to this program,
    regardless of race, creed----
        Mr. STEUBE. So you can assure----
        Mr. O'MALLEY [continuing]. Color, or where they live.
        Mr. STEUBE [continuing]. This committee today that
    someone's race, religion, gender will not be a factor in the
    overpayment recovery rule that the former acting commissioner
    referenced in her testimony?
        Mr. O'MALLEY. Yes, I can assure you of that. And at the
    same time, we will be very mindful of--not to put up any
    barriers for anybody to be able to access overpayments--I mean,
    rather, the remedy of overpayments not of their making.
        Mr. STEUBE. My time has expired, I yield back.
        Chairman FERGUSON. Okay, thank you. We are going to go get
    one more person here.
        Commissioner O'Malley, as you will find out very quickly
    here, schedule is a mere suggestion of the possibility of what
    might could happen if everything goes well. We have a vote
    series that has been called.
        Mr. Smith, I am going to call on you. Then we will recess
    until immediately following the last vote series. Mr. Smith,
    you are recognized.
        Mr. SMITH of Nebraska. Thank you, Mr. Chairman.
        And thank you, Commissioner, for sharing your time here
    today. I appreciate hearing you reflect on the changes that
    have been made that hopefully are heading customer service in a
    better direction within the Social Security Administration.
        I am very concerned that, you know, not enough progress has
    been made before now accepting the responsibility of this
    proposal to administer paid family leave. You know, I think we
    saw problems at IRS when they took on the new responsibilities
    of becoming a payment distribution agency during COVID, making
    their customer service problems even worse than they were
    prior. And I just have significant concerns.
        You know, there is staffing shortages everywhere, you know,
    and there are various complications with teleworking and so
    forth. I think you have made some changes to that, as well. But
    I just have serious reservations that Social Security can or
    should accept the paid family leave administration. And should
    the administration--Social Security Administration not focus on
    properly implementing and administering the existing programs
    before proposing to undertake such a massive new program as
    paid family leave?
        Mr. O'MALLEY. Well, certainly, Congressman, we need to get
    back to the 1.2 percent overhead that we traditionally have
    been able to use to provide the customer service we need to.
        Having said that, we could also administer paid family
    leave, provided, as the President has provided in his budget,
    there is the staffing that goes with this.
        But you are right. If we go down to----
        Mr. SMITH of Nebraska. Staffing from where?
        Mr. O'MALLEY. What, the funding for it?
        Mr. SMITH of Nebraska. Well, the funding might be there,
    but that does not actually fulfill the staffing needs that
    exist.
        Mr. O'MALLEY. Well, we would have to hire up staff in order
    to do it.
        Mr. SMITH of Nebraska. And where do you believe those
    employees would be found?
        Mr. O'MALLEY. Oh, there is--there are people who want to
    work at our agency who we can't hire because of a hiring freeze
    and a lack of money.
        There are people--I think we need to change our strategy as
    an agency. I think we target too much on college graduates and
    not enough on high school and community college graduates. And
    with proper training, that could really be an investment that
    holds for a long time.
        You know, we used to have a program at SSA called--what was
    it? Something about students. Stay in School, Kids. And I met
    people in Kansas City and town halls, employee town halls
    across the country. They have now been with the agency 40
    years, but they said, ``I was a Stay in School, Kid when they
    hired me 40 years ago out of high school,'' so we could hire
    them if there is the money for it.
        Mr. SMITH of Nebraska. So it is your assessment, though,
    that you have a surplus of applicants?
        Mr. O'MALLEY. Yes----
        Mr. SMITH of Nebraska. Now?
        Mr. O'MALLEY. Yes, sir. I believe we have no shortage of
    applicants. We had a big hiring spike thanks to, you know, the
    anomaly that you all approved in the budget last year. And we
    are--with direct hiring authority, we were able to hire up
    pretty quickly.
        Sadly, though, in the flood of highest beneficiaries and
    customers ever and our training taking a knock, we saw a lot of
    them quit in their first year because of how overworked and
    overwhelmed they were.
        Mr. SMITH of Nebraska. Just for verification, is it still
    the case that walking in without an appointment is less of a
    wait than calling in over the phone?
        Mr. O'MALLEY. It depends on which phone. In our field
    offices, the calls get answered in three to five minutes, on
    average. On the 1-800 number, the week ending March 8 we had
    gotten it down to 31 minutes, but it has averaged 39, 49, and
    some individual calls--you will hear horror stories from your
    constituents, I am sure, that people are waiting an hour.
        I heard one story of a person----
        Mr. SMITH of Nebraska. But shouldn't the 800 number be even
    more efficient than----
        Mr. O'MALLEY. You would think. This is our thirty-fifth
    anniversary of the 1-800 number. And back in the day, when
    Social Security advanced new customer service technologies,
    they were all very, very proud of it, and it was more
    effective. But given problems during COVID, and procuring a new
    system, and the failure of that system to work properly, it has
    made the 800 number a real challenge.
        And I had a call with the CEO of Verizon, who assured me
    just a couple of days ago that he would get back to me before
    the end of the week about how they can resolve what is
    essentially failing business intelligence at the center of that
    system that leads to a lot of dumped calls every day, or what
    some in the industry--their industry, not mine or yours--would
    call polite hang-ups. I don't think any hang up is polite when
    somebody has been on hold for an hour.
        Mr. SMITH of Nebraska. I know it can be very frustrating.
        In the interest of time, I will yield back.
        Chairman FERGUSON. Thank you. We will stand in recess until
    immediately following this vote series.
        [Recess.]
        Chairman FERGUSON. Welcome back. We are in session. The
    gentlelady from Wisconsin is recognized for five minutes.
        Ms. Moore, the floor is yours.
        Ms. MOORE of Wisconsin. Thank you so much, Mr. Chairman,
    and thank you for your indulgence.
        And I want to thank you, Mr. Commissioner. Nice to see you
    in this role, putting people over politics.
        I was very interested in some of the line of questioning I
    heard from my other colleagues here. I think it is really
    appropriate for them to be concerned about the error rates,
    especially when it creates a situation where people have
    liabilities. And of course, like, they are burdened with paying
    it back. And I appreciate that you have limited the amount that
    you would recoup at one time.
        And of course, the customer service wait times. When I
    heard 20 minutes, I was about to say that person must have had
    an inside track or something to only wait 20 minutes. It must
    have been a prince, or king, or somebody, because that is not
    my experience.
        But I guess I want you to sort of draw the nexus between
    the lowest rate of employees in the last 20 years and the
    efforts to cut Social Security, and how that is a nexus, or
    contributes to the error rate. Is there a nexus between low
    customer service and not being able to improve capacity?
        Mr. O'MALLEY. Yes, Congresswoman. The nexus, I would say--I
    mean, overall, Social Security is a customer-facing agency that
    is all about customer service. Even the people that are working
    in IT, it is to the end--the purpose of serving the beneficiary
    customer, the people that paid in, worked hard their whole
    lives. And as part of that, until 2018 anyway, part of what
    they paid for was a high level of customer service so they
    weren't on hold for an hour, they didn't die waiting for a
    disability determination to be made.
        That has been eroded because, I mean--and as I said at the
    outset, I am really grateful to the chairman and this committee
    for even holding a hearing on Social Security's budget, because
    we haven't had a budget hearing here in nine long years. I
    mean, I know it is Ways and Means, and I understand the
    nuances, but the fact remains that by not having a budget and
    not focusing on this, essentially we have seen nine years of
    decline so that we are now operating on less than one percent.
    In fact, it is 0.94, that is----
        Ms. MOORE of Wisconsin. You can't get blood out of a
    turnip, can't expect you to perform.
        So I am going to ask you some more questions. Thank you.
    You have an Enterprise Scheduling System, the ESS, and also My
    Social Security Portal web-based services. I am the co-chair of
    the congressional Foster Youth Caucus, bipartisan. And you
    know, one of the things that we have learned from foster youth
    is that sometimes they have a hard time accessing services to
    which they may be entitled. So is this Enterprise Scheduling
    System available to them, as minors, or only to their
    caretakers or payees?
        Mr. O'MALLEY. That is a great question, and I do not know
    the answer.
        Ms. MOORE of Wisconsin. Okay.
        Mr. O'MALLEY. But I can check it out and get back to you,
    Congresswoman.
        Ms. MOORE of Wisconsin. Yes, I think that that is really a
    barrier that they sort of, you know, identify.
        So there are a lot of complaints, I think, about women not
    getting back into the workforce, or disabled people, would-be
    disabled people not being in the workforce. But I just want to
    comment that the United States is the only country in the OECD
    that doesn't have unpaid leave for maternity leave. And, of
    course, the U.S. and South Korea are the only countries that
    don't have some sort of paid leave for illness. And I am
    wondering if the President has thought about that in terms of
    his budget.
        And, you know, and we have people taking care of their sick
    and elderly folks, and we pay a half-trillion dollars a year
    for uncompensated care. What does the President's budget do----
        Mr. O'MALLEY. Yes, ma'am. It is my understanding that the
    President has proposed paid family leave, and also with
    staffing and--funding for staffing included that the Social
    Security Administration would administer. We can do that,
    especially since there is staffing and dollars for the staffing
    to do it. And I would think it is high time, for all of the
    reasons you pointed out.
        Ms. MOORE of Wisconsin. And I have one last question.
        Mr. O'MALLEY. Yes, ma'am.
        Ms. MOORE of Wisconsin. I have some born-again Christians
    who are on SSI, and they feel guilty because they can't get
    married, they don't think. They don't want to shack up and live
    together. And they say that, as SSI recipients, they can't get
    married. Is that a bias that has some basis in your belief
    about fraud, or--this is a group of people who feel persecuted.
        Mr. O'MALLEY. Yes, ma'am. As I understand it so far--and I
    am learning every day--this very, very complex program to
    administer has an inherent sort of marriage bias in it because
    it--there is--they have to calculate--if two people are in the
    same household, it can reduce the amount that they qualify for,
    because the assumption is that they are both, you know, sharing
    some expenses in that household. It has the effect that you
    just outlined of discouraging people from being married.
        Ms. MOORE of Wisconsin. Well, maybe we can revisit it when
    I have more time, Mr. Chairman.
        Chairman FERGUSON. I just wasn't sure where you were going
    to go with the shacking up comment. I am just glad you didn't
    ask----
        [Laughter.]
        Ms. MOORE of Wisconsin. Well, you know----
        Chairman FERGUSON [continuing]. The advice of a----
        Ms. MOORE of Wisconsin. All I can say is that I have relied
    on Republicans to find me a husband in the past, and they have
    not done so. [Laughter.]
        Ms. MOORE of Wisconsin. And so you just have to do what you
    have to do.
        Chairman FERGUSON. My goodness, I better not respond to
    that.
        Ms. MOORE of Wisconsin. I yield back.
        Chairman FERGUSON. Thank you, my friend.
        You know, I would like to thank you, Commissioner, for
    being here again. Thank you for hanging around while we had
    that vote series.
        This was a very informative hearing, we appreciate the
    candor of your answers. I get a sense of sincerity that you are
    trying to do the right thing here. You are new on the job. We
    want to be partners in helping our constituents get the
    services that they need, and do it in an efficient way. We look
    forward to future conversations.
        I would also like to say that members have two weeks to
    submit written questions to be answered in writing. Those
    questions and your answers will be made part of the formal
    hearing.
        With that, the subcommittee is adjourned.
        [Whereupon, at 5:29 p.m., the subcommittees were
    adjourned.]

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