[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
HEARING WITH THE COMMISSIONER
OF SOCIAL SECURITY, MARTIN O'MALLEY
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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
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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
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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
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HEARING WITH THE COMMISSIONER
OF SOCIAL SECURITY, MARTIN O'MALLEY
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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:]
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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.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
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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