**SSA's Organizational Culture and Its Compatibility with the Mission of
Returning People with Disabilities to Work**

David C. Stapleton, Cornell Center for Policy Research[^1]

November 2003

Table of Contents

[Executive Summary ii](#executive-summary)

[I. Introduction 1](#__RefHeading___Toc51998020)

[II. Challenges to the Development of a Pro-work Culture
3](#ii.-challenges-to-the-development-of-a-pro-work-culture)

[III. Lessons from Other Organizations
8](#iii.-lessons-from-other-organizations)

[A. State Welfare Agencies 8](#a.-state-welfare-agencies)

[B. Private Disability Insurers 15](#b.-private-disability-insurers)

[C. The National Aeronautic and Space Administration
17](#c.-the-national-aeronautic-and-space-administration)

[IV. Moving Forward 19](#iv.-moving-forward)

[A. Actions to Date 19](#a.-actions-to-date)

[B. Actions in Progress 21](#b.-actions-in-progress)

[C. Actions for the Future 22](#c.-actions-for-the-future)

[D. Future Policy Change 24](#d.-future-policy-change)

[References 26](#references)

# 

# Executive Summary

With the passage of the Ticket to Work and Work Incentives Improvement
Act of 1999, return to work became a central part of the Social Security
Administration's (SSA's) mission. Up to that point, the Agency's culture
had been one that was adapted to distributing the right check to the
right person at the right time. The nature of the disability programs
bred a culture in which frontline workers were: required to be skeptical
of applicants' claims to eligibility for program benefits; committed to
helping them through benefit payments if they were eligible; not
committed to helping them return to work, regardless of eligibility; and
accepting of the idea, imbedded in the medical eligibility criteria,
that they could not work if they met those criteria. At worst,
beneficiaries and others have characterized the frontline workers as the
"Trust Fund police" -- an extreme and inaccurate characterization, to be
sure, but one that has a ring of truth because of SSA's role as guardian
of the Social Security Trust Funds. To be successful in its pro-work
mission, SSA needs to develop a pro-work culture, but one that is
consistent with its responsibility to taxpayers.

SSA faces many challenges in the development of a pro-work culture.
Perhaps the most difficult challenge is the nature of its income support
programs. It is critical to recognize that the pre-Ticket culture was
driven by the nature of those programs. Those programs, in turn, reflect
a broader social culture in which disability has often been defined,
however incorrectly, as inability to support one's self through work.
Society's message, as embodied in the income support programs, has been
"we'll help you if you do not help yourself, but not if you do." The
challenge is to develop a pro-work culture in the face of income support
programs that create a work disincentive and appear to perpetuate this
anti-work message.

There are other significant challenges to development of a pro-work
culture: other Agency priorities (Trust Fund solvency and improvements
to the disability determination process) that compete for the Agency's
scarce resources; the size and complexity of SSA's bureaucracy; and the
highly political environment in which the Agency operates.

In this paper, I draw lessons for SSA's efforts from three other types
of organizations: state welfare agencies, private disability insurers,
and the National Aeronautics and Space Administration (NASA). The first
two of these have missions that are similar to SSA's current mission in
one key respect: they attempt to help their clients attain financial
security through both income support and work.

Researchers have attributed much of the better-than-expected success of
welfare reform to changes in organizational culture at the state welfare
agencies, thereby demonstrating the power of cultural change. State
agency culture is characterized by "tough love" paternalism toward their
clients. That is, the agencies help their clients, but they also hold
them accountable for helping themselves. The experience of these
agencies also shows that cultural change takes a long time; occurs
through the effective implementation of changes to worker
responsibilities, the provision of tools and processes used to carry
them out, and the rewards workers receive for performance; needs strong
political support both inside and outside the agency; requires
sufficient resources for implementation; can greatly benefit from good
luck, as in the case of state agencies, or be set back by bad luck, as
it likely has been at SSA; and should include the cultivation of
relationships with other agencies and organizations that can help an
agency achieve its mission.

The experience of state welfare agencies also suggests that much more
fundamental change in SSA's income support programs might be needed to
achieve cultural change of the magnitude that many would like to see.
Welfare reform created strong incentives for non-working parents to
become employed, so welfare offices observed a large surge in their
client's motivation to work, and a very large share of their time
quickly became devoted to helping clients enter the labor force or find
better jobs. In contrast, the bulk of SSA's administrative effort for
the disability programs continues to be devoted to sending the right
check to the right person at the right time, through a process that
fosters an anti-work culture. As implementation of the Ticket Act
proceeds, frontline workers are likely to perceive that most
beneficiaries are not responsive to SSA's return-to-work activities,
partly because of severe medical conditions, but also because many work
barriers and disincentives remain. Under these circumstances, we can
hardly expect pro-work cultural change to permeate the Agency or to
reach far beyond its borders.

Although there are many differences between SSA's responsibilities and
those of private disability insurers, the latter appear to offer a
useful model for how an organization can pursue both an income support
mission and a return-to-work mission. Insurer claims management is
fundamentally different from SSA's claims management. Claims management
teams are responsible for both making fair eligibility determinations
and taking steps to help the claimant return to work, and well-developed
performance management systems ensure that the team pursues both of
these objectives well.

The experience of private disability insurers also reinforces two
lessons from state welfare agencies. The first is the need to provide
SSA with adequate resources to fulfill its mission. It appears that
SSA's administrative expenses per dollar of benefits paid are much lower
than those of private insurers. The second is that fundamental changes
to address the anti-work nature of the disability programs might be
necessary before SSA can successfully move to a pro-work culture.
Private disability benefits are time-limited in a substantial way,
although they can be extended, and there is a clear expectation that
most beneficiaries will attempt return to work.

The lessons to be learned from NASA, and the recent crash of the
Challenger, demonstrate the importance of the political environment to
an Agency's culture. The independent review board that investigated the
Challenger accident placed part of the blame on the White House,
Congress and NASA leadership that a) exerted constant pressure to cut
costs while demanding that NASA meet its goals, and b) created a high
level of uncertainty about future plans. SSA faces similar challenges,
and it is not clear how they can be overcome.

SSA has, in fact, taken numerous steps that will help move cultural
change in a pro-work direction, although change is much slower than most
people inside and outside the Agency would like to see. Certainly the
Agency's leadership strongly supports the return-to-work mission, and
has conveyed that message to managers and frontline workers by setting
specific return-to-work goals, conducting extensive training,
collaborating with other agencies and organizations in its
return-to-work efforts, and addressing several long-neglected system
issues related to return to work. The Agency is taking seriously the
need to be responsive to problems encountered by Employment Networks
(ENs) and state vocational rehabilitation (VR) agencies, such as the
recently announced changes to earnings reports required for Ticket
payments, as these providers attempt to learn how to operate under
Ticket to Work. SSA also is moving forward with plans to conduct new
return-to-work demonstrations, and studying how private disability
insurers manage their claims.

The Agency's current strategic plan includes the goal of developing and
implementing a better performance management system, with an array of
performance measures for managers and frontline workers, and a system to
reward superior performance. Inclusion of measures and incentives to
promote the return-to-work mission in that system might substantially
help the Agency to develop a pro-work culture.

SSA will eventually need to integrate some of its outsourced
return-to-work functions into its own operations if it is to make
substantial progress in the development of a pro-work culture. This
might be difficult, in part because the Agency's culture has been
focused on eligibility. Although outsourcing much of this work might
make sense for other reasons, a consequence is that frontline workers
inside the Agency continue to focus primarily on eligibility issues.
Inevitably, this will perpetuate the Agency's existing culture and the
beneficiary distrust that the determination process engenders.

Significant additional resources, visibly targeted at return-to-work
activities, would help move the Agency's culture in the desired
direction. In the current political climate, however, the Agency is
unlikely to obtain such resources unless those resources can be expected
to pay for themselves through benefit reductions, or unless there is
exceptionally strong outside support for other reasons.

Ultimately, substantial policy changes that directly address the
anti-work features of SSA's income support programs \-- and make work
pay \-- will be needed before SSA can develop a culture that is as
supportive of work as many would like it to be.

[]{#__RefHeading___Toc51998020 .anchor}

# I. Introduction

Since its inception, the Social Security Administration's (SSAs) mission
has been to provide economic security *by means of income benefits*,
initially to retired workers and dependents (under Old Age and Survivors
Insurance, OASI). This was extended to workers with disabilities and
dependents in 1956 (under Social Security Disability Insurance, or
SSDI), and to low-income elderly persons and persons with disabilities
in 1974 (under Supplemental Security Income, SSI). Throughout, the
Agency's focus has been to send "the right check to the right person at
the right time" -- a well-known mantra at SSA. Although SSA has had some
experience in encouraging work and self-support for beneficiaries with
disabilities, through the SSDI and SSI work incentive programs and its
cost-reimbursement payments for vocational rehabilitation (VR) services,
return to work had never been perceived as central to the Agency's
mission prior to the 1999 Ticket to Work and Work Incentives Improvement
Act (the "Ticket Act"). The Ticket Act requires the Agency to take an
additional approach to providing economic security for its beneficiaries
with disabilities, by helping them return to work. Thus, return to work
has become a significant component of the Agency's mission.

For an organization to be successful in the pursuit of its mission, it
must develop and foster a culture that is consistent with that mission.
That is, its leaders and managers must cultivate an environment in which
workers routinely make decisions and take actions that support the
organization's mission, rather than pursuing other objectives.

There are two recent, prominent examples of how an organization's
culture can affect its success in achieving its mission -- one a
spectacular and tragic failure, and the other a better than expected
success. The first is the crash of the space shuttle Columbia. The
recently released report of the Columbia Accident Investigation Board
(CAIB) squarely blamed the culture at the National Aeronautics and Space
Administration (NASA), and pointed out that the same cultural problems
were the root cause of the Challenger crash nearly two decades earlier
(CAIB 2003). The Board found that NASA has a "can do" culture that
rewards employees for meeting deadlines and accomplishing challenging
tasks despite insufficient funds. In that environment, it was easy for
employees to become complacent about safety issues and ignore warning
signs that, if heeded, would have prevented these crashes. While NASA's
culture likely contributed to its short term program successes, these
two crashes have had devastating impacts on its longer-term
achievements.

The second example comes from the reform of welfare for families with
children -- the transformation of Aid to Families with Dependent
Children (AFDC) to Temporary Assistance for Needy Families (TANF), which
was accompanied by 1) a major expansion of the Earned Income Tax Credit
for working parents with low earnings, and 2) associated reforms to
Medicaid, Food Stamps, housing and many other programs. Even critics of
welfare reform would agree that the positive impacts of the reforms on
employment and earnings of low-income parents, and the reduction in
their families' dependence on welfare payments, have been remarkable --
much greater than almost anyone had anticipated.

Most students of welfare reform point to changes in the organizational
culture at state welfare agencies as a major contributor to the
unexpectedly large impacts. Changes varied by state, and were much
greater in some states than in others. In general, however, the
orientation of case workers and other welfare agency employees changed
from a focus on determining a family's eligibility and the appropriate
amount of income support, to requiring, encouraging and providing
support for the parents' efforts to obtain or retain jobs and increase
their earnings.

SSA's organizational culture has evolved in ways that reflect its
historical mission, and it would be surprising if that culture were
consistent with a new return-to-work mission. Providing income to those
who qualify because they meet complex medical and vocational criteria
and do not work above SGA is fundamentally different than -- some would
say inherently in conflict with \-- encouraging and helping the same
individuals increase their earnings to a self-supporting level. Before
the passage of the Ticket Act, the organizational culture was supported
by organizational structures, processes, managers, staff, equipment and
other resources that had been developed to provide income support. There
is really no question that the pre-Ticket culture needed to change
substantially for the Agency to be successful in the implementation of
its new mission. The important question to address is how SSA can adopt
an appropriate "pro-work" culture -- one that promotes the Agency's new
return-to-work mission, but that also supports its income benefits
mission.

In Section II I discuss the many challenges that SSA faces in changing
its culture to support its return-to-work mission. In Section III we
consider what can be learned from experiences in other organizations.
Most of the section is devoted to state welfare departments and their
responses to welfare reform. Although there are critical differences in
the target populations of welfare reform and the Ticket Act that we
should not lose sight of, welfare reform's main objective for low-income
families is the same as the Ticket Act's main objective for people with
disabilities -- to increase their ability to support themselves through
work, and reduce their dependence on income support. Hence, state
welfare agency efforts to change their own culture in response to the
change in their mission might be instructive for SSA and others
interested in promoting the success of SSA's return-to-work efforts. I
also consider private disability insurers \-- which, like SSA, face the
challenge of both providing income support to people with disabilities
and helping them return to work \-- and briefly return to the example
provided by NASA. Although NASA is in a fundamentally different line of
business than SSA, I believe there are important lessons to be learned
from the way that the space program culture outside of NASA influences
NASA's internal culture. I conclude the paper with a discussion of steps
SSA has taken that are supportive of cultural change, and discuss
changes the Agency and others might consider in the future.

In preparing this paper, I interviewed SSA staff in various offices, as
well as people outside of the Agency who are involved with SSA's
return-to-work efforts. The paper also draws extensively on my 11 years
of experience in conducting policy research on SSA's disability
programs, including numerous opportunities to directly observe the
Agency's pre-Ticket culture and operations at all levels. The paper
specifically draws on findings from an SSA-funded project concerning the
Agency's performance management system (Stapleton and Pugh 2001), and on
our work to design SSA's evaluation of the Ticket to Work (TTW) program
(Stapleton et al. 2003), which includes a process evaluation of
implementation in Phase 1 states (Livermore et al. 2003). I am currently
a co-PI for SSA's TTW evaluation itself.

# II. Challenges to the Development of a Pro-work Culture

It takes a long time to change an organization's culture, and there are
many obstacles to overcoming the inertia of an organization's existing
culture. SSA faces some particularly difficult challenges in this
regard.

***The "anti-work" nature of the disability income support programs***

The most fundamental of these challenges is the nature of the disability
income support programs themselves. They are, in effect, "anti-work"
programs. Conceptually, eligibility for these programs is based on the
medical model -- which states that it is possible to determine from
medical evidence whether a person is able to work at the substantial
gainful activity (SGA) level. Applicants who meet non-medical criteria
for eligibility and who are determined to satisfy complex medical
criteria -- "meet or equal the Listings" \-- are presumed unable to work
at the SGA level unless evidence indicates that they are actually
receiving earnings above the SGA level, or participating in an
equivalent activity (e.g., as a volunteer). Yet there are thousands of
people who work above SGA and have obvious conditions that satisfy the
medical criteria (e.g., anybody who is blind, deaf, or unable to walk,
among others). Those who satisfy the medical criteria, but who can work
above SGA, are faced with a choice: self-support through work, or
reduced earnings supplemented by income benefits. The latter can mean
lower total income, yet might be preferred to the former because of the
time, effort, and other demands of work. The result is that these
programs encourage people not to work.[^2] How is it possible to
establish a pro-work organizational culture in a program whose main
component is fundamentally anti-work?

Because of the anti-work nature of the income support programs, the
relationship between SSA and the applicant or beneficiary can become
adversarial around the issue of the individual's ability to work. The
individual has a vested interest in demonstrating inability to work, and
the Agency has a responsibility on behalf of taxpayers to protect the
integrity of the program. In a very large share of cases, it is
difficult to establish that an applicant satisfies the medical criteria
(e.g., for many applicants with lower back disorders, psychiatric
disorders, or chronic illnesses). In such cases, the applicant, often
with support from his or her medical provider, attorney, or other
advocate, tries to present convincing evidence of inability to work. In
such cases an SSA employee, or a state Disability Determination Service
(DDS) employee acting on SSA's behalf, tries to judge the credibility of
that evidence. The same scenario often arises during continuing
disability reviews.

Such scenarios have bred a high level of distrust toward SSA among
applicants/beneficiaries. Many suspect that SSA efforts to help them
work are not in their own best interest. One interviewee expressed the
problem succinctly: "Work doesn't pay, so SSA has to protect the Trust
Fund from the undeserving -- nail them if they show any sign of work. No
wonder beneficiaries, providers and advocates don't trust SSA. In their
eyes, SSA staff are the Trust Fund police."[^3]

Some SSA/DDS workers also display a high level of distrust with respect
to the abilities and motivations of applicants and beneficiaries. That
attitude seems to be especially prevalent among DDS disability
examiners, who make initial medical determinations, and with particular
regard to SSI applicants. At the same time, however, most SSA/DDS
employees have a firm belief that those who legitimately satisfy the
medical criteria deserve to receive their benefits as quickly as
feasible -- an attitude that is perhaps missed by many applicants and
beneficiaries because of their distrust. Many SSA/DDS employees are also
skeptical, however, that those who meet the medical criteria can work;
after all, these employees have been taught to presume that those who a)
are not working, and b) satisfy the medical criteria, cannot work. They
apply that presumption on a daily basis.

***Competition with higher priorities for scarce Agency resources***

The second most important challenge to development of an appropriate
pro-work culture is the fact that return-to-work efforts are competing
for scarce resources with two higher-priority items that were on the
Agency's agenda before TTW. The first of these is the projected
imbalance of the OASI Trust Fund. For many years SSA's actuaries and the
Trustees have projected that the Trust Funds will be insufficient by a
substantial margin to pay retirement benefits when the baby boom
generation enters retirement (SSA 2003c).

The debate about how to address this issue has been the focus of public
attention, and is likely to be the number one concern of SSA's
leadership for years to come; in fact, it is, and will continue to be,
among the top policy concerns of the Administration and of Congress.
Although this debate does not appear to have an effect on the daily
activities and attitudes of frontline workers, it clearly does command a
large share of the Agency's leadership resources.

The Agency's second highest priority item is improving the disability
determination process. Because of high costs, long processing times, and
concerns about determination accuracy, SSA launched a major effort to
redesign the disability determination process in 1994. That effort has
been much less successful than anticipated, and the problems that led to
the redesign effort have not disappeared. Worse yet, the baby boom
generation has started to enter the age range in which disability onset
and SSDI application are most likely to occur. As a result, a very large
share of the Agency's administrative budget, and much of the
leadership's attention, must be devoted to addressing this issue.

Given the importance of these two priorities and the Agency's limited
resources, when SSA leadership and managers are faced with choices about
how to allocate their time, their employees' time, and other resources,
they have strong incentives to favor these priorities over
return-to-work efforts. An example of the impact of this situation is
the fate of the Employment Service Representative (ESR) position. SSA
developed a plan to post an ESR in each Field Office, who would
specialize in work-related issues, provide information about work
incentive programs to applicants and beneficiaries, process
post-entitlement work-related cases, etc. SSA's internal evaluation of
an ESR pilot test was very positive, but full implementation would
eventually have required the creation of more than a thousand new
positions. The Agency instead implemented a more economical plan that
involves a) fifty-seven Area Work Incentive Coordinators (AWICs), one
for each SSA area office, with two for a few selected areas; and b)
designation of an existing worker in each field office as the office's
Work Incentive Liaison (WIL) to the AWIC. In most offices the latter
will continue to devote a large share of his or her effort to claims
processing.

More generally, Field Office and DDS managers are under enormous
pressure to increase workforce "productivity," measured by the number of
determinations cleared per employee. Clearing cases has become the
driving force in these offices. Unless managers have incentives to do
otherwise, they are likely to use all resources at their disposal to
increase the volume of cases cleared.

***The size and complexity of SSA's bureaucracy***

A third significant challenge is that SSA is an enormous, complex
bureaucracy, designed and developed to further its income support
mission. In FY2002, the Agency distributed OASI and SSDI benefits of
\$442 billion, plus an additional \$46 billion for SSI payments and
administrative costs, for total outlays of almost half a trillion
dollars. This sum constituted 24 percent of all government outlays that
year.[^4] Almost 50 million people, including about 10 million children
and working-age adults with disabilities, received income support
benefits. The Agency operates a network of about 1,500 regional and
local offices, and has about 65,000 employees. In addition, SSA uses
DDSs in all states to process medical determinations; collectively, the
DDSs have another 15,000 employees (SSA 2003b, Chapter II).

Any organization of this size will find change enormously difficult.
Several specific aspects of SSA's structure are worth noting. The first
is that SSA has 10 major offices each headed by a Deputy Commissioner
who reports directly to the Commissioner. In the organizational
management literature, this is often referred to as a "silo" structure.
All of the DC offices have some responsibility for every SSA program. Of
relevance to SSA's return-to-work efforts, the Office of Employment
Support Programs (OESP), which is in the Office of the Deputy
Commissioner for Disability and Income Security Programs, has lead
responsibility for return-to-work efforts, but many other offices have
very significant roles. The Office of the Deputy Commissioner for
Operations, which manages SSA's regional and local offices, has
responsibility for implementing many of the activities associated with
return-to-work efforts; the Office of the Deputy Commissioner for
Systems is responsible for implementing necessary changes to the
management information, telecommunications, and other systems; the
Office of the Deputy Commissioner for Human Resources is responsible for
recruiting, training, workforce assessment, and other human resource
activities; and the Office of the Deputy Commissioner for Finance,
Assessment and Management has responsibility for developing, assessing
and managing budgets. Other offices also have return-to-work roles.

In a silo structure, each office must cooperate to achieve the
objectives of a single program. As the managers and staff in each office
are directly responsible to the leadership of their office, and not the
program's leadership, conflicts in priorities must be expected.
Obtaining and maintaining cooperation requires extensive time and effort
across offices on the part of leadership and management. Some leaders
and managers can have entrenched interests that thwart cooperation.

Like any such organization, SSA also has extensive and complex systems
and processes in place to support its past mission, and changing those
systems and processes would require extensive time and effort even with
full cooperation and abundant resources. Thus, for instance, development
of the desktop software and management information systems needed to
implement TTW has been a significant challenge, in part because these
systems must interface with a complex system that was designed to
support multiple other objectives.

Such complex organizations often have groups of internal stakeholders
that operate outside the management structure, and SSA is no exception.
Several labor unions -- most notably the American Federation of
Government Employees and the Association of Administrative Law Judges
**--** have their own objectives, and can exert influence over Agency
activities in a variety of ways. Each DDS reports to its State's
governor and has a significant stake in any program changes. Cooperation
among all of these stakeholders is needed to effectively implement
changes to the Agency's mission.

***SSA's political environment***

A fourth challenge to development of a pro-work culture is that SSA
operates within a highly political environment. Implementation of a new
program requires steady leadership and dogged pursuit of a long-term
goal, but SSA's leadership is subject to the winds of political change.
The Agency's Commissioner is appointed by the President for a six-year
term. Although both the Agency's independence from other federal
agencies and the Commissioner's six-year term are intended to provide
the Agency with leadership that is somewhat insulated from short-term,
partisan politics, that insulation is far from complete. The last change
in leadership coincided with the 2000 election. SSA went through a
lengthy period without a new Commissioner,[^5] and an even longer period
without new Deputy Commissioners, during a period when much work needed
to be done to implement Ticket Act provisions on schedule. This was one
cause of the delay in TTW's implementation. Although the Agency's new
leadership has shown a strong commitment to return to work (see the last
section), it is no surprise that the change resulted in some loss of
continuity with respect to Ticket Act implementation efforts.

The influence of politics extends beyond SSA's leadership. Members of
Congress have an interest in helping their constituents in their
dealings with SSA. Their requests to the Agency on behalf of specific
individuals can be a significant distraction to managers and frontline
workers. Members of Congress and state governors also have an interest
in the policies that impact state and local government. Thus, for
instance, Agency rules and regulations that affect state VR agencies or
other state agencies are likely to command representatives' and
governors' interest. The courts play a very significant role in
protecting the rights of people with disabilities, and Agency actions
are always under court scrutiny. Litigation can be extremely costly, so
the Agency expends considerable effort to avoid it. Advocacy
organizations also have a strong interest in Agency policy and
operations, and they wield substantial influence with the Congress, the
Administration and the voting public. Thus, there are many external
stakeholders whose opinions SSA leadership must consider when making
implementation decisions about any policy.

One aspect of the political climate that transcends the change in
administrations is a strong push to control growth in government
spending. Congress mandated that SSA implement the Ticket Act, but did
not appropriate additional administrative funds specifically for that
purpose. The Agency was already struggling with large disability
determination backlogs before the Ticket Act was passed, so moving a
share of fixed resources into implementation of the Ticket Act
necessarily came at the expense of efforts to address that problem. One
way leaders can change an organization's culture is to visibly commit
major resources to that effort; i.e., "put your money where your mouth
is." In the current political climate, it is very hard for SSA managers
to ask their political leadership for more resources, because it is even
harder for that leadership to ask the Office of Management and Budget
and, ultimately, the President and Congress for more resources.

The Agency's many internal and external stakeholders make it very
difficult to implement change \-- even if there is broad support for the
direction of change, as in the case of the Ticket Act \-- because of
their diverse and sometimes conflicting objectives. This was evident in
the development of the TTW regulations, a process that attracted much
public comment and substantially contributed to implementation delays.

# III. Lessons from Other Organizations

## A. State Welfare Agencies

***A brief history of family welfare policy***

AFDC was initially authorized by the Social Security Act of 1935 to
provide income support to families in which the father was unavailable
to provide support due to death, disappearance, or disability.[^6] At a
time when it was rare for mothers to work outside the home, there was no
expectation that mothers should work to support their families. AFDC was
administered by states, with the federal government paying a substantial
share of the benefits.

Caseloads grew extensively over the years, in part because of
eligibility expansions, but also due to growth in the proportion of
mothers who were unmarried. From 1960 to 1977, the program quadrupled,
from about 800 thousand families to over 3.5 million.[^7] The value of
benefits also increased, in large part because AFDC became the gateway
for families to obtain access to in-kind benefits, especially Medicaid
and Food Stamps. Most state welfare offices developed integrated
application and administrative processes, and federal law made AFDC
families automatically ("categorically") eligible for both Food Stamps
and Medicaid.

The fiscal consequences of AFDC caseload growth, along with broader
concerns about the number of children being born and raised in poverty,
and the development of a poverty culture, led to substantial reform
efforts. In the 1970s and 1980s, these primarily took four forms: 1)
some tightening of eligibility and more careful screening for
eligibility; 2) efforts to establish paternity and obtain child support;
3) substantial investments in education and training; and 4) reductions
in the work disincentives inherent to the benefits structure. The latter
two deserve further discussion because they are broadly analogous to
current efforts to increase the earnings of people with disabilities,
and to reduce their reliance on income support.

By the 1970s it was becoming more "normal" for mothers to help support
their families through work. It was recognized, however, that many
mothers in welfare families, as well as fathers who were not providing
support, had very low levels of education and skills -- i.e., "human
capital." Hence, investment in their human capital appeared a promising
approach to helping them lift their families out of poverty and into
economic independence. It was also recognized that AFDC and related
programs created a disincentive to work. As a family's earnings grew,
benefits would fall -- sometimes by almost as much, or even more, than
the increase in earnings. Economists cited this "implicit tax" as a main
reason for low employment rates among unmarried mothers. Reforms to
address disincentives included reducing the rate at which earnings
increases were offset by AFDC benefit reductions, de-linking other
benefits (especially Medicaid) from AFDC eligibility, and providing
support for childcare that might be necessary when there was no parent
at home because of work.

Despite these reforms, caseloads continued to grow, reaching 5.0 million
in 1994.

***Recent welfare reforms***

Backed by strong public support, some states began experimenting with
more radical welfare reforms in the early 1990s, under federal waivers.
Among other things, these included the new principle that parents had a
responsibility to support their families through work, or to at least
try. Some states started to actively divert low-income families from
entering the welfare rolls, and/or launched efforts to move parents into
employment as quickly as feasible. In 1993 Congress passed legislation
to greatly increase the Earned Income Tax Credit for parents, to "make
work pay;" i.e., to make work a better option than welfare for low-skill
mothers and fathers. In 1996, a Republican Congress and Democratic
Administration enacted the Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA), which replaced AFDC with TANF.

TANF embodied the concept that mothers, as well as fathers, were
responsible for supporting their families through work, and the
objective of the program was to help them do that. This change reflects
a broader social change -- over the many years since the passage of the
1935 Act, employment has become the norm for married mothers, rather
than the exception. Reflecting this philosophy, PRWORA placed a
five-year time limit on TANF payments to families, allowing states to
exempt a small share of recipients for reasons such as disability. It
also changed federal funding from the cost-share system of AFDC to the
TANF block grants, under which states receive a fixed amount of funding
regardless of the size of benefits paid out to recipients. The
legislation also imposed work requirements and allowed states to
sanction families that did not comply. Within these (and other)
parameters, states were given much greater latitude than before with
respect to implementation, and the block grants created a strong
incentive for the states to find ways to increase employment and reduce
caseloads.

The decline in TANF caseloads and contemporaneous increase in employment
of unmarried mothers have been called "stunning" by one leading welfare
researcher (Blank 2002), and are clearly much greater than almost anyone
expected (see, for instance, Besharov 2003; Hotz and Scholz forthcoming;
and Moffitt 2002). By 2001, the TANF caseload was down to 2.1 million --
a drop of 59 percent from the 1994 peak. The employment rate of
unmarried mothers increased from 68 percent in 1994 to 78 percent in
2001 -- greatly exceeding the small growth in the employment rate for
married mothers during the same period (from 69 percent to 71 percent)
(Blank 2002).

Researchers who have studied the causes of these trends broadly agree
that the welfare reforms, the 1993 Earned Income Tax Credit (EITC)
expansion for low-income working families, and seven years of strong
economic growth between 1993 and 2000 each contributed substantially to
the increases in employment for unmarried mothers and the declines in
TANF caseloads \-- although there is disagreement about the relative
importance of these three factors (Blank 2002, Moffitt 2002, Besharov
2003, and Hotz and Scholz forthcoming).

Considerable research has been conducted on how states implemented their
welfare reforms. One widely accepted conclusion is that the changes in
state welfare delivery systems were extensive, and help account for the
unexpectedly large impacts of welfare reform. A critical aspect of these
changes is a marked change in state agency culture: from one in which
the primary objective of managers and workers was to see that only those
who qualified for benefits received the right payment on a timely basis,
to one in which the primary objective was requiring and helping parents
to support themselves through earnings.

***The specifics of changes in state welfare offices***

Much work has been done to document what happened at state welfare
offices in the 1990s (see, for instance, Fossett, Gais and Thompson
2002; Martinson and Holcomb 2002; and Lurie 2001). It is difficult to
distinguish change in organizational culture, *per se*, from the many
specific changes in processes, program rules, and organizational
structure that occurred. To some degree they are inextricable -- one
cannot occur without the other. Changes are not the same in every state,
and no complete survey has been done, so it is only possible to report
what appear to be general findings from multiple studies.

Changes begin at the "front door" -- at the very beginning of the
benefit application process. Instead of just accepting applications and
determining eligibility, as in the past, the intake worker's job is to
send the message that employment is expected, and, if possible, help the
applicant obtain work right away, thereby diverting the family from
TANF. Methods used to accomplish this objective include: making sure the
applicant understands TANF work requirements, time limits, and other
features; requiring an immediate job search and/or attendance at job
search classes; provision of information about employment support and
other supports available from the welfare agency, other state agencies
and local organizations (including child care, transportation, Medicaid,
Food Stamps, and the EITC); and one-time payments in exchange for an
agreement not to reapply for a specified period (Lurie 2001). For
diversion to work well, it was necessary for intake workers to guide
their own actions by asking themselves "How can I help this person work
and stay off the rolls?" rather than "Is this person eligible, and for
how much?" This change in workers' thought process represented a
fundamental cultural change in the organization.

States also made substantial changes for families that were already
"inside the front door" (i.e., receiving benefits), with the primary
objective of helping the family exit TANF through earnings or some other
source of support. They now require participants to sign Personal
Responsibility Agreements concerning parental responsibilities --
especially working to support their children. Caseworkers had to become
more paternalistic in their approach to a family -- an approach that
might be characterized as "tough love." That is, they help parents, but
also hold parents strictly accountable for helping themselves.
Caseworkers can, and often do require such things as participation job
search training, job search, and even unpaid work experience.
Participation in longer-term education and training activities has been
markedly curtailed. Caseworkers can also require parents to attend
classes on parenting, money management, life skills, family planning,
and health. They can require parents to enter substance abuse counseling
and treatment and to refrain from substance abuse. They can also require
medical checkups, immunizations, and school attendance for children, and
can impose sanctions for non-compliance, especially with work
requirements.

The caseworker position changed from one of "eligibility clerk" to "case
manager" (Martinson and Holcomb 2002). Caseworkers became responsible
for assessing employability, identifying barriers to work, monitoring
participation, and coordinating work-related services. Caseworkers also
became responsible for providing families with accurate information
about work incentives, the EITC, and continued eligibility for Food
Stamps and Medicaid after they exited TANF (Fosset et al. 2002). Many
states created two specialty positions, with one responsible for the
caseworker's traditional clerical functions and the other responsible
for the new case management functions (Martinson and Holcomb 2002).

Change also occurred at the "back door" as welfare recipients exited the
rolls. Initially, many welfare leavers lost Medicaid and Food Stamp
benefits, even though they remained eligible, and they did not take
advantage of child care and other assistance available to them. State
welfare agencies have now substantially fixed the problems that
triggered automatic benefit loss, and some have engaged in aggressive
efforts to help leavers take advantage of other services (e.g., via call
centers and extended case management). However, back door changes often
lose in the competition for resources with front door and inside the
door reforms (Lurie 2001).

States accomplished these changes in varying degrees and at varying
speeds. Typically, but not uniformly, agency leaders backed the rhetoric
of welfare reform with changes in systems and provision of the resources
needed to support the new responsibilities of frontline staff.
Computerized information systems were revamped to reduce the time spent
on clerical matters and increase the accuracy of information collected.
Intake workers received extensive training to learn both the new rules
and how to be productive case managers. Some states increased the use of
home visits so the intake worker could better assess the family's needs
and work capacity. The application process itself was changed so that
TANF was no longer the gateway to Food Stamps and Medicaid; simplified,
clearer processes made it easier for intake workers to determine
eligibility for these programs independently of TANF eligibility
(Fossett et al. 2002). Welfare offices extended hours and expanded phone
services to provide greater convenience to the applicants and to reduce
backlogs. Obviously such steps required additional resources, but states
were able to purchase enhanced services with money from the block grants
and benefit savings. State agencies faced considerable challenges in
implementing performance accountability, and the complexity of the new
set of services they provide has hindered the development of performance
management systems.

Services to support those with significant challenges (disabilities,
substance abuse and other dysfunctional behaviors, lack of English
language skills) and to discourage out-of-wedlock childbearing need to
come from outside the welfare office, from DOL, state VR agencies,
schools, colleges, mental health agencies, substance abuse treatment
agencies, developmental disability agencies, and charitable community
organizations. Increased recognition of service needs by frontline
workers and expanded sources of support have been an important element
of reform in most states.

One other important aspect of changes at state welfare offices deserves
attention: agency cultivation of relationships with other agencies and
community organizations. Martinson and Holcomb (2002,) write that the
"most striking institutional change is the development and expansion of
organizational linkages to fulfill new policy objectives and work
program requirements." State welfare agencies recognized early on that
they were not equipped to provide all the services that recipients
needed, and turned to other state agencies (e.g., workforce development
agencies) and community organizations for help. A few contracted with
for-profit firms to manage their programs or provide case management
services. Some efforts were made to integrate and coordinate rules and
program administration. Many state welfare agencies gave case managers
the authority to refer recipients to other programs. Some co-located
their offices with those of other state agencies. Agency leaders,
managers and frontline staff all needed to develop a more outward, open
mentality towards other agencies and organizations, in one way or
another. They needed to become more familiar with the services these
entities could provide to low-income families, and how families could
access those services; many needed to interact with those entities on a
daily basis. They also needed to foster mutual trust between the welfare
agency and other entities -- a difficult challenge because of prior
disinterest or, in some cases, conflicting objectives.

Three key factors have been identified in the extensive institutional
change that occurred during welfare reform. The first is the
availability of funding to support the change, made available by
declining caseloads and block grants. The second is the high level of
discretion that states had in spending the block grant funds, and the
fortuitously large size of those funds relative to need. The third is
ardent political support for state agencies to change their approach and
deliver a broader, more complex set of support services (Martinson and
Holcomb 2002).

***Lessons for cultural change at SSA***

Although the family welfare reforms represented by the EITC and TANF are
much more ambitious than the reforms embodied in the Ticket Act, the
experiences of state welfare agencies in changing their cultures contain
numerous lessons for SSA's effort to change its culture.

The first is that *cultural change within an organization can make a
powerful contribution to success in achieving a new mission*. Although
nobody will ever be able to measure the exact size of the contribution
of cultural change toward welfare reform impacts family earnings growth
and declines in dependence, most observers agree that it was
substantial. Hence, pursuit of cultural change at SSA can be well worth
the effort.

The second lesson is that *cultural change takes a long time,*
especially when complex changes to program features and processes are
required. We should expect SSA to need years, not months, to get the job
done. Those of us outside the Agency need to exercise patience, but also
look for signs of progress.

The third lesson is that *cultural change occurs through the effective
implementation of changes to worker responsibilities, the provision of
tools and processes used to carry them out, and the rewards workers
receive for performance.* Cultural change is not accomplished by
flicking a switch or simply announcing to workers that the
organization's mission has changed. Cultural change in state welfare
agencies was brought about by the myriad of changes that these agencies
made at the operational level, summarized above.

The fourth lesson is that *strong political support for change, both
inside and outside SSA, is critical.* Although there were differences of
opinion about welfare reform, the reforms that were passed had
widespread bipartisan support. The Ticket Act and its objectives also
have widespread bipartisan support. Nonetheless, to be a constructive
force in helping SSA achieve its new mission, the Administration, the
Congress, beneficiaries, and their advocates must continuously and
consistently reinforce the message that they want SSA to put a high
priority on return to work. Inside the Agency, SSA's leaders must
clearly transmit that message to both managers and frontline workers, by
what they do, as well as what they say.

The fifth lesson is that *strong political support for change must be
backed by the resources needed to implement change.* The leaders of
state welfare agencies were fortunate to have the resources they needed,
because of the block grants combined with early success in reducing
caseloads. The effectiveness with which they used the resources varied,
but success was achieved in varying degrees. Resources are needed to
train SSA's frontline workers so that they know how to perform their new
responsibilities; they understand that a high-priority part of their job
is to encourage and facilitate return-to-work efforts; and they convey
accurate information about return-to-work programs and policies to
beneficiaries. Resources are also needed to develop and implement new
processes; develop and provide the new tools needed to carry out those
processes; develop new ways of monitoring and rewarding performance;
reach out to other agencies and organizations that can help
beneficiaries return to work; and reach out to the beneficiaries
themselves.

A sixth lesson, related to the previous one, is that *good luck helps.*
For the state welfare agencies, good luck came in the form of the EITC,
and the exceptionally strong economy. As indicated earlier, researchers
have established that these two factors contributed substantially to a
decline in caseloads. That meant that the agencies could use their block
grants to invest in program change and provide the supports that some
families needed to enter employment and exit TANF, instead of paying
benefits. From the perspective of frontline workers, it also meant the
reward of success.

Unfortunately, SSA's implementation of the Ticket Act has encountered
exceedingly bad luck. The economic downturn is probably having an
adverse impact on the earnings success of beneficiaries who use their
Tickets, which is discouraging for beneficiaries, costly to providers,
and disappointing to all inside and outside SSA who have invested
heavily in promoting and implementing the program. The recession is also
having an adverse impact on state programs that might otherwise be
making a greater contribution to improving outcomes. The most prominent
example of the latter are the state Medicaid agencies, many of which
started to implement Buy-in programs only to later delay them, increase
their premiums, or otherwise limit implementation. The events of
September 11, 2001 had an immediate adverse impact on the rollout, and
the eventual consequences of both that event and the recession for the
federal budget make the availability of additional administrative
resources in the future even less likely. Some ENs are no doubt also
having financial difficulty because of reduced business or funding from
other sources, making it harder for them to weather likely short-term
losses for the Ticket. The recession has likely increased SSA's
application workload substantially, as it has in past recessions.
Another piece of bad luck is the fact that the baby boom generation has
started to reach the age range in which disability onset, and SSDI
application, are most likely to occur \-- further increasing demands on
SSA resources. It is not possible to willfully change SSA's luck, but it
is important to keep the likely substantial impact of bad luck in mind
as we assess the Agency's progress.

The seventh lesson is that *cultural change should include the
cultivation of relationships with other agencies and organizations that
can help SSA achieve its new mission.* State welfare agencies recognized
the need to engage other entities in their efforts, and many did so
effectively. SSA has a very similar need, and its efforts are likely to
be most successful if it works collaboratively with the many agencies
and organizations that provide a wide variety of services to people with
disabilities. This includes, most obviously, offices in the Departments
of Labor, Education, Health and Human Services, but also might include
Housing and Urban Development, Transportation, and others. The state
counterparts of these federal agencies are also included in the list.
Perhaps more importantly, SSA needs to develop constructive, mutually
trusting relationships with the wide array of organizations that serve
people with disabilities: employment service providers, employer
organizations, private disability insurers, and others.

The final lesson from state welfare agencies is that, *to achieve
cultural change matching the scope and depth of that in the state
welfare agencies, we would need a larger and more comprehensive
transformation in how we provide economic security to people with
disabilities.* The radical nature of changes in family welfare policy
essentially forced state welfare agencies and their frontline workers to
modify their culture to one that supported their clients' efforts to
work. A different course of action would have resulted in substantial
harm to their clients, and there is little doubt that failure to adapt
quickly did harm many clients.

The policy changes embodied in the Ticket Act are much less radical. In
fact, they are reminiscent of the family welfare reforms of the 1970s
and 1980s that provided training and employment services, and lessened
the disincentives to work faced by welfare parents. These changes,
however, did not make work pay for many and did not embody the
responsibility to support one's family through work. What is most
impressive about the cultural change in state welfare agencies is that
it permeated all agency activities, and reached outside the agencies as
well. The same result cannot be expected at SSA, because substantial
disincentives to work remain, and those who meet medical eligibility
criteria are not held accountable for making a good faith effort to work
and leave the benefit rolls.

The bulk of SSA's administrative effort for the disability programs
continues to be devoted to sending the right check to the right person
at the right time; as discussed in the previous section, that process
fosters an anti-work culture. As implementation of the Ticket Act
proceeds, frontline workers are likely to see that most beneficiaries
are not responsive to SSA's return-to-work activities. This is partly
because of severe medical conditions, but also because many work
barriers and disincentives remain. Many of the workers' daily activities
will embody the presumption that people who are not working and who
satisfy SSA's medical eligibility criteria cannot work. Under these
circumstances, we can hardly expect pro-work cultural change to permeate
the Agency or to reach far beyond its borders. It will be difficult for
SSA to engage other entities such as state VR agencies and ENs in its
return-to-work efforts if those entities perceive 1) disinterest on the
part of most beneficiaries, and 2) continuation of disability
determination activities that make beneficiaries and their advocates
distrust the Agency's intent.

## B. Private Disability Insurers

Private disability insurers appear to be the obvious place to look for
lessons about organizational culture that can be applied to SSA, given
the challenge SSA faces in providing income support that discourages
work while simultaneously promoting return to work. There is no
substantial literature on the culture at private disability insurers,
and a full study is well beyond the scope of this paper. However, I have
learned about private disability insurers through a few interviews
conducted for this paper and through formal and informal contacts with
private disability insurer executives and industry experts over the
years. For example, we conducted an extensive site visit to
UNUM/Provident, the nation's largest disability insurer, for an earlier
SSA project.[^8] The information obtained is enough to suggest that a
fuller investigation is warranted. I understand, in fact, that SSA is
currently devoting some effort to such an investigation.

Private disability insurers are primarily driven by the profit motive.
They succeed by selling their product to major employers and
self-employed professionals at a price that is competitive, and at costs
that are presumably lower than price but sufficient to effectively
deliver the product that their customers want. To be successful they
need to 1) treat their employer and insured clients fairly, and with a
high level of service; 2) promptly provide income support to claimants
who truly cannot work by the criteria specified in their policies; 3)
not provide income support to claimants whose claims fail the policy
criteria; and 4) help and encourage claimants to return to work as
quickly as feasible.

***Claims management by private disability insurers***

Several features of claims management operations at private disability
insurance companies are strikingly different than those at SSA:

-   They use an intensive team approach that involves medical and
    vocational rehabilitation professionals to manage each case;

-   The total resources used in the processing of an individual case
    appear to be an order of magnitude higher. These include more time
    and expertise, as well as better systems.

-   They do not follow an equivalent of the Program Operations Manual
    System (POMS) \-- a voluminous SSA document containing detailed
    interpretations of laws, regulations, and rulings, as well as
    procedural instructions on deciding cases \-- but instead rely more
    heavily on the professional expertise of their staff.

-   Teams specialize by impairment.

-   The team's responsibility includes helping the individual return to
    work if feasible.

-   Performance management processes are in place to ensure that the
    claims management teams perform well in all four areas indicated
    above, including return to work. These include performance measures
    in all areas; intensive audits of performance on individual claims;
    senior mentors assigned to each claim team, to assure that the team
    performs well in all areas on every case; and strong incentives to
    perform well.

Typically, when a new disability claim enters the private disability
insurer's process, the vocational rehabilitation expert on the team
assigned to the claim will quickly review the case. He or she will also
potentially work with both the claimant and the claimant's employer to
develop a rehabilitation plan, explore accommodations, and possibly
develop a transitional return-to-work plan -- while other members of the
team review medical evidence and determine benefit eligibility.

When the insurer awards long-term benefits to the claimant, initially it
is typically for a two or three year period and is on the basis of being
unable to return to their former occupation. In most instances benefits
can be extended, but the claimant must meet a tougher standard to do so.
Hence, the claimant has a strong financial incentive to return to work.
The message from the insurer to the claimant is: "You've got a few years
to get yourself back on your feet, and we'll help you do that. If you
have a really rough time, we might continue your benefits for longer,
but there is no guarantee." That message is built in to the culture of
the claims teams. Thus, like the state welfare agencies, the claims
teams take a paternalistic approach. The insurer's approach forcefully
stresses that return to work is in the claimant's interest, offers to
help the claimant achieve that objective, and provides security by
leaving open the possibility of longer-term benefits if return to work
is not successful.

In contrast, SSA's claim processing can be reasonably characterized as
one that: focuses on accurate, low-cost determination of eligibility,
with some consideration for customer service but no concern for return
to work; has insufficient resources to perform its limited task well,
and is widely regarded as inequitable; is mired in rules, regulations,
procedures, and inadequate, outdated systems; has a sequential process,
with a different individual responsible for each step (i.e., no team is
assigned to the claim or is ultimately responsible for its management);
and uses a performance management system that focuses only on
productivity and accuracy.[^9] The message to claimants is: "prove that
you cannot work \-- if you can work, we will not help you; if you cannot
work, take your benefits and keep them as long as you want."

The contrast between the resources devoted to SSA and private insurer
claims processing deserves further discussion. In an earlier study, we
estimated that SSA spent about \$1,300 to process the average disability
claim in FY1999, including both the initial determination and appeals
processes.[^10] Based on information provided by one private insurer, it
appeared that the latter spent about 75 percent more to manage each
claim, although we were not able to verify that this comparison was
"apples-to-apples," in part because of the different nature of the
processes. What was more impressive was the difference in cost relative
to the value of the decision being made. Based on estimates provided by
SSA's actuaries, SSA's cost amounted to 0.9 percent of mean benefits
awarded, included both income and medical (Medicare or Medicaid)
benefits. We did not have information on the value of mean benefits for
the private insurer, but they are clearly much lower, because a) only a
small share of claimants receive benefits for more than three years; b)
when benefits are for a longer period, they are often offset dollar for
dollar by DI benefits; and c) there are no medical benefits. Private
insurers operate in a very competitive environment, where economic
efficiency is key to survival. The insurers apparently have determined
that it is efficient, from a cost/benefit perspective, to invest much
more in claims management relative to benefit values than SSA has. The
implication is that SSA spends too little, by a substantial margin.

To be sure, private disability insurers have some other significant
advantages relative to SSA in performing their mission. Their claimants
have at least some incentive to return to work as benefits are
potentially limited in duration; the insurers are much smaller, less
complex organizations; they are not in the political spotlight and their
customer, the employer, is a well-defined, single entity rather than an
array of interest groups with often conflicting objectives; they have
connections to their claimants' employers and can use those connections
to help claimants return to work; their typical claimant is more
educated and skilled than SSA's typical claimant, and almost all have
experienced disability onset relatively recently; and development of
their eligibility criteria, operational procedures, and management is
not subject to intense public scrutiny.

The connection of private disability insurers to employers is worth
further discussion, as two aspects of that connection give them
advantages that SSA does not enjoy. First, they can become involved with
an individual's case immediately upon recognition of disability onset,
even while the individual is still at work. In contrast, for SSDI there
is a five-month waiting period for benefits, during which the applicant
cannot work above SGA. Second, the insurer can negotiate terms of the
insurance contract with each individual employer. More employer
cooperation with return to work is rewarded by lower premiums.

***Lessons from private disability insurers***

Because of fundamental differences between SSA's environment and that of
disability insurers, it is doubtful that SSA could ever fully follow the
private insurer model. There are, however, features of the private
insurer model that demonstrate the possibility of having a pro-work
culture while continuing to serve an income support mission \-- even if
the latter has anti-work features. Most notably, *return to work is
imbedded in claims management*, and is not a separate function that
comes into play only after the claim is in payment. In that respect, it
is quite similar to the new state welfare agency model, where helping
families attain employment starts at the front door, continues if they
come in the door, and follows them out the back door. In both cases,
frontline workers have specialized functions (e.g., return to work,
medical determinations, or others), but they work together, with each
client, from day one.

The second most notable feature of private disability insurer operations
that appears to be transferable is their approach to *performance
management*. This is characterized, to varying degrees, by: clarity in
mission and an operational statement of that mission, organization-wide
attention to the full range of that mission, performance measures that
reflect the full range of objectives and that are actively used to
improve performance, incentives to innovate, team approaches that take
advantage of specialized expertise, and active mentoring by experienced,
qualified staff. Such features can all help an organization accomplish
its mission. Our assessment of performance management at SSA found that
these aspects were missing or deficient in many respects (Stapleton and
Pugh 2001). Improvements in performance management in these areas would
make it much easier for SSA to adapt to its changed mission.

Two other lessons reinforce lessons from state welfare agencies. First,
*adequate resources are needed* for SSA to perform its new mission
successfully. Second, *fundamental changes to address the anti-work
nature of the disability programs might be necessary before SSA can
successfully move to a pro-work culture* \-- changes to introduce the
expectation that beneficiaries will attempt return to work, and to
create incentives for them to do so.

## C. The National Aeronautic and Space Administration

***The importance of consistent, adequate support from outside an
agency***

The report of the Columbia Accident Investigation Board was made public
as I was completing research for this report. Its focus on NASA's
culture caught my attention, although at first blush the different
objectives of NASA and SSA seemed to make the findings irrelevant to my
own work. Reading further, I noticed the dramatic illustration it
provided of the importance of an organization's culture. It became
evident that SSA and NASA have one thing in common -- they both operate
in a political environment that is sometimes highly charged. The report
points a finger at this environment as a major reason that NASA's
culture developed the way that it did, and failed to adequately heed
warning signs of impending disaster.

> "Throughout the \[last\] decade, the Shuttle Program has had to
> function within an increasingly constrained budget. Both the Shuttle
> budget and workforce have been re­duced by over 40 percent during the
> past decade. The White House, Congress, and NASA leadership exerted
> constant pressure to reduce or at least freeze operating costs. As a
> result, there was little margin in the budget to deal with unexpected
> technical problems or make Shuttle improvements." (CAIB 2003, p. 118)

Thus, just as availability of sufficient resources made it possible for
state welfare agencies to succeed in changing their cultures in a
desirable direction, lack of sufficient resources pushed NASA's culture
in an undesirable direction.

It is difficult to assess the extent to which oft repeated complaints
from SSA administrators and others about tightening of administrative
budgets and staffing over the last two decades have jeopardized the
management of the disability programs, as advances in technology
presumably have led to substantial increases in productivity. It is
clear from chronic workload backlogs and long processing times, however,
that given current administrative processes, resources have been \-- and
continue to be \-- insufficient by a wide margin.[^11] Given that
condition, the failure of Congress and the Administration to appropriate
new administrative funds for the initial implementation of the Ticket
Act is astonishing. Highly visible, bipartisan support for the Ticket
Act was not backed by the resources needed to implement it. This fact
and lessons from both state welfare agencies and NASA about the
resources needed to develop an appropriate culture, make it hard to be
optimistic about early success in changing SSA's culture to one that is
pro-work.

***The costs of an uncertain external environment***

The CAIB report also provides an example of how the uncertainty of the
political environment can adversely affect an Agency's mission.

> "In the 1990s, the planned date for replacing the Shuttle shifted from
> 2006 to 2012 and then to 2015 or later. Given the uncertainty
> regarding the Shuttle's service life, there has been policy and
> budgetary ambivalence on investing in the vehicle. Only in the past
> year has NASA begun to provide the resources needed to sustain
> extended Shuttle operations. Previously, safety and support upgrades
> were delayed or deferred, and Shuttle infrastructure was allowed to
> deteriorate." (CAIB 2003, p. 118)

There are at least two examples of similar phenomena in the
implementation of the Ticket Act. The first is delays in Ticket Act
implementation brought on by the lengthy absence of political appointees
for SSA leadership, and the uncertainty over what those appointees would
eventually want to do. The second is the problems that SSA staff, the
Ticket Program Manager, State VR Agencies, and ENs experienced as they
first pushed to put everything in place for a quick rollout. They were
rewarded by delays in the rollout due to public comments on proposed
regulations, and in some instances had to fix systems that were
initially built poorly because they were built in haste. For instance,
some SSA staff have pointed out that the need to quickly develop a
Ticket data system led them to base it on an existing system, which
ultimately resulted in significant limitations to the new system. Had
they known in advance how much time they actually had before the rollout
began, they likely would have started from scratch and developed a
better system (see Livermore et al. 2003). There are probably many other
such examples. It is important for all parties to remember that the
often unpredictable political environment imposes significant costs on
the Agency and the organizations it works with.

#  IV. Moving Forward

Thus far, I have painted a fairly bleak picture of the prospects for
successful change toward a pro-work culture at SSA. Against that
backdrop, it is encouraging to see some signs that the Agency is moving
in the right direction, albeit slowly. I begin this section with a
description of some actions the Agency has taken that will contribute to
cultural change. I follow that with a description of other such efforts
in-progress then discuss a few other steps that appear to merit
consideration. I have to conclude, however, that the comprehensive
cultural change that many would like to see will not occur until more
fundamental changes are made to the disability programs themselves.

## A. Actions to Date

***SSA's leaders actively support Agency return-to-work initiative***

One of the early steps the Agency took was to change discussion of its
mission to include a substantially more prominent role for return to
work. For instance, in SSA's most recent strategic plan (SSA 2003a)[^12]
the first of four strategic goals is "To deliver high-quality,
citizen-centered service." The second of three objectives for this goal
is to "Increase employment of people with disabilities." Of the seven
key outcomes listed for the goal, four relate specifically to the
Agency's return-to-work efforts:

-   "Increase by 50 percent from 2001 levels the number of people with
    disabilities who achieve employment;

-   Establish with the DOL \[Department of Labor\] a nationwide network
    of employment support staff in One-Stop Centers to serve Social
    Security beneficiaries with disabilities;

-   Test the impact of early intervention and youth transition; and

-   Eliminate backlogs for post-entitlement work"[^13]

Return to work also appeared prominently in past high-level documents on
the Agency's mission[^14], but discussions of specific objectives have
become more focused on the specifics of implementation -- items that are
likely to drive managerial decisions and the actions of frontline
workers in a positive way. The Commissioner's statement in support of
the President's budget request for SSA prominently mentions funding for
Ticket-to-Work implementation for every budget year from FY2000 to
FY2003. Somewhat surprisingly, there is no mention of the program or
other return-to-work efforts in the Commissioner's FY2004 statement, but
the statement features a large increase in support to reduce disability
determination backlogs, including the post-entitlement backlog.[^15]

SSA has also taken substantial steps to train Field Office and other
staff, and one Field Office worker we've interviewed indicated that the
magnitude of the training effort -- including 40 Interactive Video
Training programs on work incentives -- made it clear that the central
office was giving a high priority to return to work. He stated that in
20 years with SSA, he had never before seen as much training and
emphasis on work incentive issues. Thus, the message that return to work
is an important priority for SSA is at least becoming evident to
frontline workers.

***SSA is addressing long-dormant process issues related to return to
work***

Early on in our TTW evaluation efforts, one manager at SSA told us that
the implementation of TTW has served as a catalyst to address
return-to-work issues that have "lain dormant within SSA for decades."
For instance, prior to TTW, SSA did not have a good system to document
work activity for SSDI beneficiaries and determine when earnings were
sufficient to stop benefits. This often resulted in overpayments and
eventual large requests for re-payments -- a potentially devastating
request for a beneficiary who has just successfully returned to work.
SSA regional and field office staff developed a computer program called
Modernized Return to Work (MRTW) for the purpose of tracking work
activity and earnings, and the Agency has now implemented this software
nationwide. Similarly, SSA's Disability Control File (DCF), released in
November 2002, helps SSA keep track of work activity for both SSDI and
SSI beneficiaries, and makes that activity more transparent to all.

***SSA is engaging other agencies and organizations that can help in its
new mission***

SSA has also adopted a more outward, constructive orientation toward
entities that can play a positive role in helping SSA accomplish its new
mission. Most obviously, these include the Program Manager (MAXIMUS),
the Benefit Planning Assistance and Outreach (BPAO) grantees and the
Protection and Advocacy for Beneficiaries of Social Security (PABSS)
grantees.

SSA has also engaged the leadership of other federal agencies that play
significant rolls in supporting people with disabilities, most visibly
DOL and the Center for Medicare and Medicaid Services (CMS). DOL is
establishing a Disability Program Navigator position in state One-Stop
employment centers, to provide information to SSDI and SSI beneficiaries
who use those centers. SSA also worked with DOL to establish the "Ticket
to Hire" database, an effort aimed at facilitating employer hiring of
beneficiaries who have assigned their Tickets. CMS is implementing the
Medicaid and Medicare provisions of the Ticket Act, collaborating with
SSA as needed. Among other things, the two agencies are pursuing
development of demonstrations that would provide early access to health
insurance for DI beneficiaries and address the health care needs of
beneficiaries with affective disorders. SSA is also working with DOL and
the Department of Education to conduct seven Youth Transition
Demonstration Projects aimed at improving employment outcomes for SSI
youth as they transition to adulthood.

In addition, SSA has conducted extensive outreach efforts to state VR
agencies and providers, most visibly through activities arranged by the
Program Manager. SSA has also tried to be responsive to issues these
organizations have raised, although this is often difficult for SSA to
do. An example is Vocational Rehabilitation Providers' Handbook
Transmittal No. 17, which described SSA's regulations for paying state
VR agencies under TTW. It also clarified issues concerning Ticket
assignments by beneficiaries who were former state VR agency clients, or
who later became VR clients.

## B. Actions in Progress

Many other current activities are likely to eventually contribute to a
more pro-work culture at SSA.

***SSA continues to address system issues***

Although progress has been made in developing tools for Agency staff to
use in conducting return-to-work activities, much remains to be done.
The lack of automation and coordination of functions between the SSI and
SSDI programs makes the processing of earnings information difficult and
time consuming for CRs. Incomplete systems integration has been
identified as a significant issue. Under an initiative referred to as
eWork, SSA is integrating the DCF with both the MRTW and software used
for processing CDRs (PC-CDR), and plans to implement the new system
later this year.

***SSA is pursuing outreach to beneficiaries on return-to-work issues***

SSA has not substantially marketed TTW directly to beneficiaries in the
past. There is, however, an effort underway to do that, including a plan
to procure substantial professional services for this purpose. Such
efforts have the potential to change the relationship that SSA has with
its beneficiaries in a positive way.

***SSA is implementing a system to provide some return-to-work services
directly to beneficiaries***

As indicated earlier, SSA elected not to implement the ESR position
nationwide because of financial considerations. The Agency is, however,
moving forward with establishment of the AWIC positions and the
development of WILs in the Field Offices.

***SSA is studying the operations of private disability insurers***

As indicated earlier, SSA leaders are quite interested in learning from
private disability insurers, and are engaged in an effort to do that.

***SSA is attentive to provider concerns***

SSA continues to be attentive to the concerns raised by ENs and state VR
agencies. For example, SSA has just instituted the Certification Payment
Request Process \-- a simplification to the Ticket payment system
designed to make provider documentation of earnings less onerous and
speed up the payment process. SSA has also launched the EN
Capitalization Project, to be conducted by the Program Manager, for the
purpose of helping ENs find ways to finance the provision of Ticket
services before successful employment outcomes lead to substantial
Ticket revenues.

***SSA is pursuing other employment initiatives from the Ticket Act***

The Agency is actively pursuing plans to conduct numerous
demonstrations, all of which will promote return to work: the Sliding
Scale Benefit Offset (i.e., \$1 for \$2) Demonstration, the Early
Intervention Experiment, a mental health demonstration, and the Youth
Transition Demonstrations.

To be sure, for the most part the activities described above have been
implemented at a pace that is far slower than many advocates and others
would like. From my perspective, however, that slowness has been due to
the many significant challenges the Agency faces in moving forward,
rather than a lack of commitment on the part of Agency leaders.

## C. Actions for the Future

Looking ahead, there are a number of actions the Agency could take that
would promote cultural change to help SSA shed its image as "Trust Fund
police," which is at least a partially fair description of its past
culture; and to assume a new role of "benevolent paternalism," with a
strong emphasis on return to work.

***SSA's efforts to implement a more advanced performance management
could have a substantial impact on disability program culture***

In earlier work, we developed options for the Agency to consider that
would improve its outdated performance management system (Stapleton and
Pugh 2001). Among the options were opportunities for development of
performance measures that would reflect the full scope of the Agency's
mission, and use of those measures to actively reward performance and
manage the organization. In that context, development, implementation
and active use of measures based on return-to-work activities would
substantially help SSA move toward a pro-work culture. It would not only
affect the daily decisions of workers, but also help SSA recruit and
retain capable workers. In this regard, it is encouraging to see that
SSA's most recent strategic plan includes implementation of a new
performance management system as a key outcome under the strategic goal:
"to strategically manage and align staff to support SSA's mission," with
specific goals of developing systems that recognize and reward superior
performance at all levels, by 2005 (SSA 2003a, p. 36).

***Development of a strong pro-work culture is likely to require
integration of some return-to-work functions into SSA office***

Rapid, full implementation of the Ticket virtually required that SSA
contract much of the implementation work to another organization, the
Program Manager. Such an organization can focus its resources absolutely
on the task at hand, quickly develop the concentration of expertise
needed to operate the program, and avoid many of the bureaucratic issues
that make it difficult for an organization like SSA to move quickly.
Similarly, SSA's use of the BPAO grantees to quickly provide
beneficiaries with better return-to-work information was probably
essential to a successful launch, in part because of beneficiary
distrust. The result, however, is that frontline workers are rarely
involved in the provision of return-to-work services. Integration of
more return-to-work functions into Field Offices could help change the
culture of the field offices. Right now, the return-to-work Field Office
functions are so limited that SSA cannot justify including a work
specialist in each office. Transfer of additional functions would
presumably mean transfer of additional resources to perform those
functions, and would make return-to-work activities a more integral part
of what Field Offices do.

Several interviewees have expressed serious doubts about the ability of
SSA to implement some of the activities that are currently outsourced to
the Ticket Program Manager and the BPAOs. One reason for doubt is the
enormous pressure that disability determination backlogs place on
managers to focus new resources on the determination process. Another is
beneficiary distrust of the Agency. The latter is a chicken and egg
problem; distrust is likely to continue as long as Field Office staff
and other SSA/DDS employees focus almost exclusively on disability
determinations.

The current separation of return-to-work functions from disability
determination functions serves to perpetuate SSA's pre-Ticket culture.
In the long-term, it will be necessary for SSA to integrate these
functions into its daily work, following the models of the private
disability insurers and the state welfare agencies, if the Agency is to
develop a pro-work culture. This does not mean that the Agency should
enter the business of providing employment services directly to
beneficiaries. It does mean, however, that Field Office staff should
actively engage beneficiaries in discussions about return to work and,
to the extent feasible and appropriate, steer them in that direction in
a supportive manner.

***Specific training of SSA staff on disability awareness might be
warranted***

SSA's training efforts on return-to-work issues are substantial, and
obviously have made an impression on managers and frontline staff. One
observer of the training, however, suggested adding training in
"disability awareness;" that is, to help frontline workers better
understand the perspective of the beneficiary, so that the workers can
serve them better.

***SSA needs to continue attending to provider issues***

SSA's current efforts to address payment issues and help ENs identify
and pursue capitalization opportunities could be of substantial benefit
to providers. The Ticket payment process remains complex, however, in
part because of different earnings report requirements for the SSI and
SSDI programs. Additional effort to address payment issues seems
warranted. Within the bounds of the current payment structure, there
might be other ways to substantially simplify the process. More
generally, SSA needs to continue to be responsive to provider concerns
about the financial viability of the program from the provider
perspective. It will be difficult to do so in a way that also makes the
program financially viable from SSA's perspective, but at least
conceptually there seem reasonable prospects for developing a system
that both pays for itself through benefit reductions and is financially
attractive to providers. SSA needs to continue to treat the providers as
valued partners in their return-to-work efforts, even as it continues to
hold them accountable.

***Additional resources ear-marked to return-to-work efforts would be
extremely valuable***

Although it is encouraging to see SSA and OMB requesting additional
funds to address post-entitlement backlogs and other workloads, it seems
that a reasonable case can be made for even more monetary support,
targeted at return to work. Areas identified by interviewees as needing
additional resources include post-entitlement workloads (beyond the
current request); systems development; and outreach and marketing to
beneficiaries, employers, and others. One interviewee suggested
declaration of a partial amnesty for beneficiaries who have received
overpayments because of delays in processing post-entitlement work. This
would serve as both a good will gesture from SSA toward beneficiaries
who want to work, and a way to clean up backlogs that are problematic
for SSA's return-to-work efforts.[^16] It is not possible to judge the
value of these suggestions without more information and careful
analysis. However, it seems clear that a) more resources are needed, and
b) a significant, visible boost to SSA's return-to-work objectives would
help the Agency move toward a pro-work culture, and help beneficiaries
and others understand that the Agency is making a good faith effort to
support beneficiary return to work. Unfortunately, in the current
financial and political climate, it would be very hard for the Agency to
ask for such support unless it can also convincingly demonstrate that
the support will pay for itself through benefit deductions. For
instance, it might be possible to make a case for the proposition that a
carefully structured amnesty and clean-up of post-entitlement backlogs
would pay for itself in the long-term through reduced overpayments and
increased return to work.

## D. Future Policy Change

Although SSA is taking steps to move toward a pro-work culture, and can
potentially take others, such steps cannot lead to the development of a
culture that is as pro-work as many would like to see. As suggested by
the experience of welfare reform, and the differences between the SSA
disability programs and private disability insurance, more substantial
changes in income support policy for people with disabilities will
almost certainly be necessary before there can be a radical change in
the Agency's culture. Such changes would need to substantially address
the anti-work nature of current income support policy.

The changes would need to include improvements that would make work pay
for many more beneficiaries. Welfare reform made work pay for parents by
a) offering "carrots" \-- the increase in the EITC, improved access to
health insurance, child care services, and other supports for low-income
working families \-- and b) applying "sticks" (time limits and work
requirements). Designing the carrots and sticks for people with
disabilities is an enormous challenge, in part because there are many
people with disabilities for whom we would not want to apply a stick of
any sort,, and in part because heavy reliance on carrots is very
expensive.[^17] Were policy changes for people with disabilities to
occur of the same magnitude as those that occurred for low-income
families, the Agency would be in a position to -- indeed, would be
almost forced to -- develop a strong pro-work culture and improve the
return-to-work services it offers to people with disabilities. Until
that happens, the best efforts the Agency can possibly make to change
its culture will likely fall far short of what many outside of the
Agency would like it to achieve.

# References

Autor, David and Mark Duggan. 2003. "The Rise in Disability Recipiency
and the Decline in Unemployment." *Quarterly Journal of Economics*.

Besharov, Douglas J. 2003. "The Past and Future of Welfare Reform," *The
Public Interest,* Winter, 4-21.

Blank, Rebecca M. 1997 *It Takes a Nation: A New Agenda for Fighting
Poverty.* Princeton, NJ: Princeton University Press.

Blank, Rebecca M. 2002. "Evaluating Welfare Reform in the United
States." *Journal of Economic Literature*. 40 (4): 1105-1166.

Burkhauser, Richard V. and David C. Wittenburg. "How Current Disability
Transfer Policies Discourage Work: Analysis from the 1990 SIPP,"
*Journal of Vocational Rehabilitation*, 7(½) (August 1996): 9-27.

Burkhauser, Richard V. and David C. Stapleton. 2003. "A Review of the
Evidence and It Implications for Policy Change**,"** in *The Decline in
Employment of People with Disabilities: A Policy Puzzle,* D.C. Stapleton
and R.V. Burkhauser, eds., Kalamazoo, Michigan: W.E. Upjohn Institute
for Employment Research. [http://www.upjohninstitute.
org/publications/newsletter/S_B_703.pdf](). Accessed 9/24/2003.

Burkhauser, Richard V. and David C. Stapleton. Forthcoming. "The Decline
in the Employment Rate for People with Disabilities: Bad Data, Bad
Health, or Bad Policy?" *Journal of Vocational Rehabilitation*.

Burkhauser, Richard V. and David C. Stapleton. Forthcoming. "Employing
Those Not Expected to Work: The Stunning Changes in the Employment of
Single Mothers with Children and People with Disabilities in the United
States in the 1990s." In [Disability Policy Under Review]{.underline},
Bernd Marin, Christopher Prinz and Monika Queisser (eds.), OECD.
[http://
www.ilr.cornell.edu/extension/ped/download.html?pub_id=1187](http://www.ilr.cornell.edu/extension/ped/download.html?pub_id=1187).
Accessed 9/24/2003.

Columbia Accident Investigation Board. 2003. *Report Volume I*,
Washington, DC: CAIB. [http:// www.caib.us/news/report/default.html]().
Accessed 9/4/2003.

Department of Health and Human Services. 2002. *2002 Indicators of
Welfare Dependence*,
<http://aspe.hhs.gov/hsp/indicators02/appa-tanf.htm#AFDC>. Accessed
5/20/2003.

Livermore, Gina A., Mark Nowak, David C. Stapleton and John Kregel.
2003. *Evaluation Design for the Ticket to Work Program: Preliminary
Process Evaluation.* Falls Church, VA: The Lewin Group.
[http://www.lewin.com/Lewin_Publications/Human_Services/
TTWProcess+Eval.htm](http://www.lewin.com/Lewin_Publications/Human_Services/ TTWProcess+Eval.htm).
Accessed 9/24/2003.

Lurie, Irene. 2001."Changing Welfare Offices," Welfare Reform and Beyond
Brief #9, The Brookings Institution, October.
[http://www.brookings.org/es/research/projects/wrb/
publications/pb/pb09.htm.](http://www.brookings.org/es/research/projects/wrb/ publications/pb/pb09.htm.)
Accessed 9/8/2003.

Fossett, James, Thomas Gais and Frank Thompson. 2002. "New Systems of
Social Programs? First Impressions from Field Research on Local
Implementation of Health Care, Food Stamps, and TANF," *Focus*, 22(3),
44-50, Newsletter of the Institute for Research on Poverty.
[http://www.ssc.wisc.edu/irp/focus/focus.htm.](http://www.ssc.wisc.edu/irp/focus/focus.htm )
Accessed 9/9/2003.

General Accounting Office. 2003. *Major Management Challenges and
Program Risks: Social Security Administration.* Washington, DC: GAO.
GAO-03-117. Available at <http://www.gao.gov/>. Accessed 10/7/2003.

Hotz, V. Joseph and J. Karl Scholz. Forthcoming. "The Earned Income Tax
Credit." in *Mean-Tested Transfer Programs in the U.S.*, Robert
Moffitt., Ed., The University of Chicago Press and NBER.

Martinson, Karin and Pamela Holcomb. 2002. "Reforming Welfare:
Institutional Change and Challenge," Occasional Paper Number 60,
Assessing the New Federalism, The Urban Institute.

Mashaw, Jerry L. and Virginia P. Reno, eds. 1996. *Balancing Security
and Opportunity: The Challenge of Disability Income Policy---Summary &
Overview*. Washington, DC: National Academy of Social Insurance.

Moffitt, Robert A. 1992. "Incentive Effects of the U.S. Welfare System:
A Review," *Journal of Economic Literature.* 30(1) 1-61.

Moffitt, Robert A. 2002. "From Welfare to Work, What the Evidence
Shows." Policy Brief No. 13, Welfare Reforms and Beyond, The Brookings
Institute.

Office of Management and Budget. 2003. *The Budget of the United States
Government, FY2004, Historical Tables.*
<http://www.whitehouse.gov/omb/budget/fy2004/pdf/hist.pdf>. Accessed
9/5/2003.

Stapleton, David C. and Burkhauser, Richard V., eds. 2003. *The Decline
in Employment of People with Disabilities: A Policy Puzzle.* Kalamazoo,
Michigan: W.E. Upjohn Institute for Employment Research.

Stapleton, David C. and Michael D. Pugh. 2001. *Evaluation of SSA's
Quality Assurance Processes and Development of Options That Will Support
the Long-Term Management of the Disability Program, Final Report.* Falls
Church, VA: The Lewin Group. [http://
www.lewin.com/Lewin_Publications/Human_Services/Publication-13.htm]().
Accessed 9/24/ 2003.

Stapleton, David C., Gina A. Livermore, Mark Nowak, Ellen Bouchery and
John Kregel. 2002. *Evaluation Design for the Ticket to Work Program:
Preliminary Design Report.* Falls Church, VA: The Lewin Group.
[http://www.lewin.com/Lewin_Publications/Human Services/
TTWEvalDesign.htm](http://www.lewin.com/Lewin_Publications/Human Services/ TTWEvalDesign.htm).
Accessed 9/24/2003.

Social Security Advisory Board. 2001. *Charting the Future of Social
Security's Disability Programs: The Need for Fundamental Change.*
Washington, DC. [http://www.ssab.gov/
reports.html](http://www.ssab.gov/ reports.html). Accessed 9/22/2003.

Social Security Advisory Board. 2002. *Annual Report, Fiscal Year 2002.*
Washington, DC. [http:
//www.ssab.gov/reports.html](http://www.ssab.gov/reports.html). Accessed
9/22/2003.

Social Security Administration. 1999. *1999 Government Performance and
Results Act Report.* [http:// www.ssa.gov/finance/99gpra.pdf]().
Accessed 9/6/2003.

Social Security Administration. 2003a. *2003 -- 2008 Strategic Plan.*
[http://www.ssa.gov/
strategicplan.html](http://www.ssa.gov/strategicplan.html). Accessed
9/13/2003.

Social Security Administration. 2003b. *FY2004 Annual Performance Plan*.
[http://www.ssa.gov/ performance/2004. Accessed
9/5/2003](http://www.ssa.gov/performance/2004. Accessed 9/5/2003).

Social Security Administration. 2003c. *The 2003 OASDI Trustees Report.*
[http://www.ssa.gov/ OACT/TR/
TR03/index.html](http://www.ssa.gov/ OACT/TR/ TR03/index.html). Accessed
9/13/2003.

[^1]: This paper greatly benefited from early discussions with Stephen
    Bell and Sheila Zedlewski, and from comments on an earlier version
    by Thomas Golden, Gina Livermore, Bryon MacDonald, Marie Strahan,
    and Lawrence Thompson. I would also like to thank, without naming,
    the many individuals inside and outside SSA that I interviewed for
    this project. Work on this paper was prepared for the Social
    Security Administration's Ticket to Work and Work Incentives
    Advisory Panel, through a contract to the Urban Institute. The views
    expressed are those of the author, and do not represent positions of
    the Advisory Panel, the Urban Institute, or Cornell University.
    Comments are welcome, and may be submitted to dcs28@cornell.edu.

[^2]: Burkhauser and Wittenburg (1996) detail the nature of the income
    trade-offs faced by people with disabilities. These programs' links
    to public health insurance exacerbate these trade-offs. While the
    latter were partially addressed by provisions of the Ticket Act,
    they have not been eliminated. Some observers have argued that the
    work disincentives associated with the disability programs are low,
    because mean replacement rates (benefits relative to pre-disability
    earnings) are low (see, for instance, the National Academy of Social
    Insurance's Disability Policy Panel; Mashaw and Reno, eds., 1996),
    but this neglects three important facts: replacement rates for
    individuals with low wages can be quite high; pre-disability
    earnings is an unrealistically high measure of potential
    post-disability earnings for many individuals; and many individuals
    with higher earnings also have private disability insurance wrapped
    around SSDI, usually with a replacement rate of 60 percent. See also
    Autor and Duggan (2003) for a recent analysis of how unintended
    increases in the replacement rate for low-wage workers have affected
    SSDI participation.

[^3]: As those familiar with the financing of SSI and DI know, federal
    SSI payments are not funded from a Trust Fund, but rather from
    general federal revenue, so "Trust Fund police" is a misnomer when
    applied to both programs, as was clearly the intent of the speaker.

[^4]: Government outlays include both "on-budget" and "off-budget"
    items, and OASI and SSDI benefits are off-budget. Source: Office of
    Management and Budget (2003).

[^5]: Commissioner Barnhart took office in November 2001, 11 months
    after Commissioner Apfel's term ended.

[^6]: More detailed descriptions of family welfare policy prior to
    PRWORA appear in Moffitt (1992) and Blank (1997).

[^7]: Caseload numbers are from Department of Health and Human Services
    (2002), Appendix A.

[^8]: See Appendix F.1 of Stapleton and Pugh (2001) for detailed
    findings from a site visit we conducted to UNUM/Provident, on behalf
    of SSA.

[^9]: See Stapleton and Pugh (2001), Appendices D and E for an extensive
    description of SSA's disability determination process.

[^10]: [See Stapleton and Pugh (2001), Appendix G, Section 4.]{.mark}

[^11]: According to the Social Security Advisory Board (2002, p. 6),
    "disability policy has come to resemble a mosaic, pieced together in
    response to court decisions and other external pressures, rather
    than the result of a well thought-out plan of how the programs
    should be operating. Compounding the problem, the disability
    administrative structure, now nearly a half-century-old, has been
    unable to keep pace with the increasing demands that have been
    imposed upon it. Policy and administrative capacity are dramatically
    out of alignment in the sense that new and binding rules of
    adjudication frequently cannot be implemented in a reasonable manner
    with the resources that are available." See also Social Security
    Advisory Board (2001), Stapleton and Pugh (2001), and General
    Accounting Office (2003) for further discussion of the challenges
    SSA faces in improving disability determinations and addressing the
    caseload backlog.

[^12]:

[^13]: The last of these goals is not explicitly focused on
    return-to-work and has a broader purpose. The Agency clearly has
    recognized, however, that backlogs in processing post-entitlement
    work, and resulting overpayments, are an impediment to greater
    success in its return-to-work efforts.

[^14]: For example, SSA (1999) prominently features a discussion of
    SSA's efforts to support the legislation that eventually became the
    Ticket Act.

[^15]: All of these statements appear at <http://www.ssa.gov/budget>.
    Accessed 9/14/2003.

[^16]: It is my understanding that SSA already in effect offers a
    partial amnesty for those beneficiaries who have assigned their
    Tickets, but are later discovered to be ineligible for benefits and
    the Ticket because of past work. In such cases, the beneficiary is
    allowed to continue use of his or her Ticket, and payments are made
    to the provider per the usual payment schedule.

[^17]: See Burkhauser and Stapleton (2003 and forthcoming) for further
    discussion of the need for such policy changes.