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39–387—PDF 2007

S. HRG. 110–222

NOMINATION OF MICHAEL J. ASTRUE

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

ON THE

NOMINATION OF

MICHAEL J. ASTRUE, TO BE COMMISSIONER OF SOCIAL SECURITY

JANUARY 24, 2007

(

Printed for the use of the Committee on Finance

COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

TRENT LOTT, Mississippi

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

CRAIG THOMAS, Wyoming

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)

C O N T E N T S

OPENING STATEMENTS

Page

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee

on Finance ............................................................................................................ 1

Kerry, Hon. John, a U.S. Senator from Massachusetts ........................................ 3

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 4

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 5

ADMINISTRATION NOMINEE

Astrue, Michael J., nominated to be Commissioner, Social Security Administration, Baltimore, MD ........................................................................................ 7

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Astrue, Michael J.:

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 27

Biographical information ................................................................................. 30

Responses to questions from committee members ......................................... 44

Baucus, Hon. Max:

Opening statement ........................................................................................... 1

Bunning, Hon. Jim:

Prepared statement .......................................................................................... 54

Grassley, Hon. Chuck:

Opening statement ........................................................................................... 4

Hatch, Hon. Orrin G.:

Opening statement ........................................................................................... 5

‘‘PIN Money,’’ by Robert C. Pozen, Wall Street Journal, January 9, 2007 .. 55

Kennedy, Hon. Edward:

Prepared statement .......................................................................................... 57

Kerry, Hon. John:

Opening statement ........................................................................................... 3

COMMUNICATIONS

National Association of Disability Examiners ....................................................... 59

Public Program Testing Organization .................................................................... 64

(III)

(1)

NOMINATION OF MICHAEL J. ASTRUE, TO BE

COMMISSIONER OF SOCIAL SECURITY

WEDNESDAY, JANUARY 24, 2007

U.S. SENATE,

COMMITTEE ON FINANCE,

Washington, DC.

The hearing was convened, pursuant to notice, at 10:05 a.m., in

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus

(chairman of the committee) presiding.

Present: Senators Kerry, Salazar, Grassley, Hatch, and Bunning.

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. The committee will come to order.

We meet today to consider the nomination of Michael Astrue to

be the next Commissioner of Social Security. Social Security is important. If Social Security did not exist, about one-half of American

senior citizens would today live in poverty.

Social Security’s long-run finances face a challenge, but they are

not in a crisis. According to the Congressional Budget Office, we

can pay full Social Security benefits until 2046.

After that, payroll taxes will continue to flow in and that will

allow us to pay 79 percent of full benefits. Making sure that Social

Security can pay full benefits is a challenge that we can, and will,

meet.

One thing that will not help us to meet that challenge is the

President’s privatization plan. Under that plan, a portion of Social

Security payroll taxes are diverted into private savings accounts.

That would move up the date that Social Security would no

longer be able to pay full benefits by 11 years, and that plan would

force the Government to borrow about $5 trillion in the next 20

years of its operation.

Finally, that plan would expose some bedrock Social Security

benefits to the risks of the private financial markets. The President’s privatization plan would also cause deep cuts in benefits for

future middle-class retirees. For example, future retirees who earn

the equivalent of $59,000 a year today will have their benefits cut

by 42 percent—simply unacceptable.

So I will ask the nominee what his position is on the President’s

privatization plan. I want to know what he thinks about diverting

Social Security payroll taxes into private accounts, and I want to

know what he thinks about deep benefit cuts for future middleclass retirees.

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We ought to explore options that would fix Social Security’s longrun financial challenge, but to begin with I want to explore proposals that do not cut benefits or raise taxes.

For example, we could reduce the tax gap for Social Security pay- roll taxes. Each year, about $50 billion in Social Security payroll

taxes are not collected. We have to do better.

The problems of running the Social Security Administration are

enough to occupy the Social Security Commissioner, and the Commissioner will have no time for advocating changes to Social Security such as privatization. The last Commissioner did not do that

and our nominee has told us that he would not do that either, and

I respect that.

The Commissioner’s term of office is 6 years. The Commissioner

cannot be removed from office except for ‘‘neglect of duty or malfeasance.’’ The nominee has indicated that he plans to serve his full

6 years.

That means that he could well be in office under a new President

for 4 years, and that would be a President who did not appoint

him, and that could be a President from a different party. We have

not faced this situation ever before.

I plan to ask the nominee how much independence he thinks the

law allows him, what would he do if he disagreed with the President, and how much independence might he actually use?

One problem that Social Security faces right now is that it can

take as much as 4 years for applicants for disability benefits to get

their benefits approved. During that time, these disabled workers

cannot work so they may have no earnings.

Huge backlogs for pending claims are a key cause of these waiting times. Right now, for example, there is a backlog of more than

700,000 hearings. These backlogs have occurred because each year

since 2003, the money requested in the President’s budget has not

been appropriated. This year will likely be no exception. This has

to change. I want to know if this nominee is prepared to fight for

adequate budgets to administer Social Security.

I also want to call attention to a great absurdity in our budget

process. The Social Security Disability programs include something

called ‘‘Continuing Disability Reviews,’’ or CDRs. Many disability

beneficiaries are supposed to be medically reexamined every few

years to see if their medical condition has improved.

If their condition has improved enough so they can then work,

then their benefits end. As a result, these reviews save the government $10 in benefits for every $1 the government spends administering them, and that is based on the Chief Actuary for the SSA.

Fully funding these reviews ought to be a no-brainer. But it is

not that simple. When the money to run Social Security gets cut,

the Social Security Commissioner faces a dilemma: what services

should be cut?

Reasonably enough, the last Commissioner did not cut funding

for handling applications for Social Security benefits or for other

basic services to the public. Instead, she reduced funding for CDRs.

We could solve this problem by exempting these administrative

costs from the caps on appropriations. This has been done before,

so I will want to see if the nominee agrees that Congress ought to

look at this.

3

The former Commissioner, Jo Anne Barnhart, did an excellent

job running Social Security. She accomplished a great deal in her

tenure, and the Nation owes her a debt of gratitude.

Mr. Astrue, you have some big shoes to fill, and the process of

filling those shoes begins with our hearing today.

With your indulgence, Senator Grassley, I would like to now turn

to Senator Kerry, who would like to introduce the witness; they are

from the same State.

OPENING STATEMENT OF HON. JOHN KERRY,

A U.S. SENATOR FROM MASSACHUSETTS

Senator KERRY. I appreciate that, Mr. Chairman. Thank you,

Senator Grassley, for your indulgence to do that.

I apologize, we are in a mark-up over the way on the Iraq resolution in the Foreign Relations Committee, and I need to run back

to that.

But let me just say, Mr. Chairman, what a pleasure it is to welcome a nominee with the qualifications of Michael Astrue. It is

quite remarkable, and we are lucky, I think, to get somebody with

the quality of his life experience to come back to government and

serve yet again after an enormously successful career, both in and

outside government.

He is a resident of Belmont, MA, and we welcome his wife,

Laura, here also. Thank you for being here.

He was educated at Yale University, where he graduated magna

cum laude, with honors in English and philosophy, and then he

sort of went backwards by going to Harvard Law School from

there, and has taken graduate courses subsequently. He clerked for

one of our Superior judges in Massachusetts. He subsequently went

to one of the best law firms in the country, Robes & Gray.

Then he came back to public service here. In 1985, he served as

Deputy Assistant Secretary for Legislation in Human Services, and

subsequently as counselor to the Commissioner of Social Security.

So, he comes with a lot of experience already in this field.

From 1985 to 1992, he served in that capacity at the Department

of Health and Human Services, where he was the General Counsel

and supervised over 500 lawyers in the FDA, HCFA, NIH, and

other sub-agencies, and tried and argued major cases in that capacity.

He then went to yet another of our prestigious law firms, which

I am proud to say my brother is a partner in, and I know they

worked together, and he comes with his strong recommendation.

He then spent 10 years in the biotech and technology world,

working at Biogen as vice president and general counsel, and subsequently senior vice president and general counsel.

He then was involved with two companies, one of which he

helped bring out of trouble, turned it around, a failing biotech company, then subsequently engineered a merger for a company where

he was the interim chief executive officer.

So this is a person who knows the private sector, knows the

trials and tribulations of both the public sector and the workplace/

private sector.

As I said in my opening comments, this is an important position,

with baby boomers growing older, with the system obviously chalVerDate 11-MAY-2000 15:27 Jan 03, 2008 Jkt 095484 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 39387.000 SFIN1 PsN: SFIN1
4

lenged in terms of its viability for the long term. Many of us here

believe it does not take a lot of tweaking to actually fix it.

As the Chairman said, we have serious questions about the privatization plan, but we certainly look forward to your testimony

today before the committee. We welcome you here, and we thank

you for your willingness to come back and serve your country. We

appreciate it.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator Kerry, very, very

much. I know you are very proud of a fellow resident from Massachusetts.

Mr. Astrue, I might also say that Senator Kennedy very much

wanted to be here, too, to introduce you. He is very proud of you.

He is now managing the minimum wage bill on the floor. It is

tough. You have to make choices around here. You cannot be in

two places at once. But he very much wanted to be here. He has

a full statement on your behalf which we are going to enter into

the record.

Mr. ASTRUE. Thank you.

The CHAIRMAN. Thank you.

[The prepared statement of Senator Kennedy appears in the appendix.]

The CHAIRMAN. Senator Grassley?

OPENING STATEMENT OF HON. CHUCK GRASSLEY,

A U.S. SENATOR FROM IOWA

Senator GRASSLEY. I wanted to congratulate you, obviously. I

said that privately. I thank you for coming to my office when I

asked for a private meeting with you. It was a worthwhile meeting

to have.

As you know, you are going into a position as Commissioner that

is an extremely important one, and it is one that is responsible for

one of the most successful social programs that the U.S. Government is involved in. You are going to manage and oversee the retirement, survivors’ and disability programs, programs that we all

recognize are very vital to millions of Americans.

I do not think I can outdo what the Chairman has said about the

very important challenges that you face as Commissioner, that

your agency faces. In a sense, we all face them. You face them

every day in administering the program to make sure it runs

smoothly, but these long-term problems are something that Congress has to deal with, the financial solvency of it.

In the near term, you are going to face these increased workloads. If we do not get the budget turned around for this year, if

we go with a continuing resolution, as we have discussed, that is

going to have serious consequences for your agency meeting the

needs of the people it has to serve.

I know the Chairman and his staff are working hard to help the

Agency and our seniors and disabled people fill that gap that would

be there if we end up with just a continuing resolution.

If we do not have them, as you and I discussed, you are going

to have an agency-wide system of furloughs you are going to have

to put in place to make up for some of that money.

5

In the longer term, we have to deal with the financing of it, but

you have to deal with the day-to-day things that are coming with

the biggest generational shift in our history, the 77 million baby

boomers going into retirement. This will adversely affect the Agency’s workforce, its workload, and ultimately financial solvency.

The Agency needs strong leadership to meet these challenges. It

needs someone who is committed to the day-to-day operations of

the Agency and the long-term viability of the program.

It seems to me that, as best said by Senator Kerry, you come

here with those attributes to get the job done. You have had senior

positions in government at the Department of Health and Human

Services, at the White House, and at the Social Security Administration.

You have also held positions of leadership in the private sector,

so you know what the cold, cruel world of the private sector is.

Your previous experience demonstrates a commitment to public

service. I think it demonstrates a vision of leadership. Your experience and vision will serve you well as you undertake this new assignment. Congratulations.

The CHAIRMAN. Thank you very much, Senator.

Mr. Astrue, this is probably a good time for you to introduce your

family.

Mr. ASTRUE. Yes. Thank you, Mr. Chairman. And thank the entire committee for scheduling this hearing, and to Senator Kerry

for his very kind remarks, and for Senator Kennedy’s support

throughout this process. I am really very grateful.

My wife, Laura, behind me, is an elementary school teacher. My

daughter, Caitlin, is a freshman at Washington University.

The CHAIRMAN. Are any of them here?

Mr. ASTRUE. Not my children. Unfortunately, they both decided

that their academic commitments had priority over today’s hearing.

For my son, this actually conflicts with his ROTC class, and he is

taking that very, very seriously, and I think that is what we all

would want.

The CHAIRMAN. All right.

Well, who is behind you?

Mr. ASTRUE. This is my wife, Laura.

The CHAIRMAN. Your wife. Would you please stand so we can recognize you? Congratulations.

[Applause.]

The CHAIRMAN. That is great.

Senator Hatch would like to say a few words first, if you do not

mind, Mr. Astrue.

OPENING STATEMENT OF HON. ORRIN G. HATCH,

A U.S. SENATOR FROM UTAH

Senator HATCH. Mr. Astrue, I’d like to welcome you and your

wife and family. I have known you for quite a while. I want to

make sure that everybody knows how much confidence I place in

you, your abilities, and your honesty, integrity, and decency. I am

personally grateful that you are willing to take on this assignment

as Commissioner of the Social Security Administration, and I want

to publicly thank you for it.

6

I also want to publicly thank Mr. Astrue’s predecessor, Commissioner Jo Anne Barnhart, who has ably served this Agency. And

while Commissioner Barnhart will be missed, I am confident that

President Bush made the correct choice in selecting Mr. Astrue for

this job.

Over the years, my office and I have worked very closely with

Mike in his capacity as a government official and an industry leader, and I am sure that many other Senators in this body have had

a similar experience.

We have also, through these years, been impressed by your management style, your management ability, your forthright manner,

your legislative skills and leadership skills, and above all, your intelligence.

So I know you will bring all those attributes to benefit the Social

Security Administration and, of course, all of our people in this

country who depend so much upon it.

I do not want to take very much time, but let me just say this.

You are taking upon yourself one of the most formidable jobs in the

government today. We all know that this is going to be a disaster

if we do not do some things very effectively to augment and

straighten out Social Security.

There are a number of very good ideas, but it is going to take

great leadership to get not only those here in the Senate, but those

in the whole Congress, to do what is right with regard to Social Security.

Frankly, we are going to have a doubling of people who are collecting Social Security within a reasonable period of time, and by

2042 we are going to be basically in a deficit, and I believe it will

be long before then knowing how everything works around here.

So I just personally want to thank you for being willing to take

this on. You are the type of person, and leader, that this Agency

needs. Commissioner Barnhart really laid great groundwork for

you to work on, and I believe that you will have a lot of support

from this committee, and from the Senate as a whole.

Even though you may be serving another administration—could

be a Democratic administration the next time—I know that you

will do it in a bipartisan, decent, honorable way. I do not know

what greater compliment I can throw your way, other than the

ones I have said here today, although I would like to think of a few

more that I could throw out your way.

I hope you have a very easy time getting through the Senate,

getting confirmed, and getting on this job and really doing what

will be beneficial to virtually every American.

Thank you, Mr. Chairman. I appreciate you letting me speak.

The CHAIRMAN. Thank you, Senator, very, very much for that

good statement.

Mr. Astrue, it is your turn now to give a statement, say what you

want to say, tell us what you want to tell us.

7

STATEMENT OF MICHAEL J. ASTRUE, NOMINATED TO BE COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, BALTIMORE, MD

Mr. ASTRUE. Thank you, Mr. Chairman. I will try to be brief.

I started my career here in the Russell Building in 1978 in an

entry-level job for Senator Richard Schweiker, then went on to

work for the National Council of Senior Citizens after the Senator

announced his retirement.

When I returned to Washington in 1985 to work primarily on Social Security issues, the system was an abstraction for me—an incredibly important one, but an abstraction nonetheless.

That changed radically 2 months later when my father, at the

age of 52, suffered a severe cerebral hemorrhage, which we later

learned was caused by a rare form of brain cancer. I handled all

the paperwork for my father’s SSDI and Medicare claims.

One of the things I learned from the frustrations of that experience is how well-meaning people in agencies, just like me at age

28, often do not understand what actually happens in practice in

complex programs such as Social Security.

Accordingly, the following year, when I began working as Counselor to the Commissioner of Social Security, one of the first things

I did was to visit DDSs in Pennsylvania, Maryland, Delaware, and

Massachusetts to see how the disability determination process actually worked in those States.

The lessons learned from those trips were incredibly useful to me

as we tried to improve the disability programs after many years of

inflamed controversy. I am particularly proud of having led the effort to terminate the Agency’s longstanding ‘‘nonacquiescence’’ policies, an achievement highlighted by Chairman Moynihan when I

was last before you in 1989 during my confirmation hearing for

General Counsel of HHS.

While I intend to duplicate those DDS trips, I expect to focus

first on operations relating to Medicare Part D. Based on Commissioner Barnhart’s public comments, she and I agree that there has

been an unacceptable level of problems to date, and the Agency has

even greater Medicare responsibilities this year.

I cannot tell from the publicly available materials and the briefing materials exactly where the operational issues are and how

many of them are under SSA’s direct control, but I want to assure

you that I will be relentless at getting to the real issues, that I will

focus on action and not blame, and that I will be proactive and candid with this committee if we need legislative clarification or additional support.

This task may be complicated, however, by budget constraints

and the likelihood of furloughs that Commissioner Barnhart has

raised repeatedly in recent months.

I cannot help but be exceptionally concerned about this outcome

at a time when the Agency is already under significant operational

stress. I very much need this committee’s advice and guidance as

to how to manage this situation, and how to avoid repetition of it

in the future.

It will be difficult to advance this committee’s interest in improving the disability determination process and the Agency’s performVerDate 11-MAY-2000 15:27 Jan 03, 2008 Jkt 095484 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 39387.000 SFIN1 PsN: SFIN1
8

ance with regard to its Part D responsibilities if both senior and

line employees are distracted and demoralized by furloughs.

With regard to the Commissioner’s role on retirement policy, my

goal is to be a good steward of the program for both current and

future beneficiaries. For current beneficiaries, this role means setting high standards for management, performance, service, and

committing to meeting those standards. It also means being scrupulous and painstaking and making sure the Agency adheres to the

law and best demonstrated practices of accounting, efficiency, and

compassion.

For future beneficiaries, good stewardship means engaging with

others in the Agency and the executive branch, with members of

this committee and other members of Congress, and with outside

groups and experts to provide unbiased data about all the options

for safeguarding the financial stability of the program.

It is part of our obligation to the American public that we must

strive to continue the best possible support for older Americans,

people with disabilities, and their families in the coming decades.

I look forward to providing technical support for those in the legislative and executive branches engaged in this policy debate.

Let me conclude by noting that Commissioner Barnhart is someone who I like, admire, and respect from our two previous tours of

duty together. I feel blessed to have been asked to follow this

strong and principled leader in a position so vital to our success as

a Nation.

If confirmed, the committee can count on me to do everything I

can to live up to her record and be another good steward for the

Social Security Administration. Thank you. I will be happy to answer any questions you may have.

[The prepared statement of Mr. Astrue appears in the appendix.]

The CHAIRMAN. Thank you, Mr. Astrue, very much.

Senator Grassley has a commitment he has to attend to, and I

would like to turn to him to ask the first questions.

Senator GRASSLEY. I thank you for that courtesy. I am just going

to take my 5 minutes, and if I have other questions that I do not

get to, I would ask you to respond in writing.

We have already talked about a possible shortfall in funding and

we have talked about furlough. I will give you two opportunities to

speak to that, one, how you would handle it, and number two gives

you an opportunity from a platform here to tell everybody in Congress the serious consequences.

Mr. ASTRUE. Right now, my understanding is that the Agency is

looking at up to 10 days of furlough for all employees. No matter

how you try to implement that, it will have a serious negative impact on service.

In terms of exactly how that would be implemented, I would obviously try to get input from senior staff, from the labor unions,

and from others to try to figure out the best way to manage it for

employees and for recipients.

But any way you do it, it is going to be ugly, and the effects will

be long-lasting in terms of morale on the employees and in terms

of backups in workloads. One of the consequences of the decrease

in funding in the last couple of years is that the time for processing

9

on most major actions of the Agency is starting to go back up. You

have very little discretion as a Commissioner of Social Security.

Almost everything that you do is mandated by Congress. So, unlike a regulatory agency that can prioritize enforcement, or a grantmaking agency that can just cut everything 3 percent across the

board, you do not have that same flexibility as Commissioner of Social Security.

Really what has happened is exactly what the Chairman said,

which is that Continuing Disability Reviews, which were about 1.2

million a year and are tremendously important for safeguarding

the trust funds, started dwindling, and they are now down to the

point of zero. We are now down to the point where the hiring

freeze, the lack of overtime, and everything else is seriously affecting the backlogs in cases, and that is a very disturbing trend.

If the Agency shuts down for two-thirds of a million work days

sometime this summer, it is going to be very hard. I know that

every member of this committee whom I talked to is very concerned

about service levels—I am, too. I would be misleading you though

if I said anything other than, I have difficulty maintaining the status quo if we have that kind of funding crisis in the Agency.

Senator GRASSLEY. Thank you. Obviously this is something that

everybody is going to have to be concerned about between now and

February 16 when the continuing resolution runs out.

Your predecessor, Commissioner Barnhart, redesigned the disability determination process. This redesign, according to her

schedule, was to be implemented throughout the country one region at a time.

How do you intend to monitor this implementation—do you intend to continue doing it the way she was—and determine whether

or not it was achieving its intended results?

Mr. ASTRUE. That is a great question, Senator. I do intend to revisit one thing. The initiative is up in Region 1, the New England

region, and I think there are some very good ideas there, some of

which are fairly simple and common-sense and have been on my

wish list for a long time.

I want to ask the question coming in whether we can take the

least controversial and most cost-effective parts of that initiative

and maybe roll them out more rapidly than Commissioner Barnhart had intended.

My sense of it is, there has been a plan, maybe perhaps once a

year, spreading it into other regions. I think some of these good

ideas may need to get to the rest of the country faster.

So, my intention is to ask that question. It may be that Commissioner Barnhart’s original intention was exactly right, and that is

the best way to do it, but I will not know until I go and ask the

question. But I do want to see if there is any way we can take some

of these things that might accelerate reviews and do them a little

faster than what I understand the original plan was.

Senator GRASSLEY. All right.

My last question is a little on the periphery of your main job, but

I want to ask you. The United States—and it is a concern of this

committee as we deal with retirement, tax incentives, and all

that—has such a poor savings rate, and obviously that affects the

quality of life of people in retirement.

10

Are there any ways that you feel Social Security Commissioners—not just you, but Social Security Commissioners—can encourage people to save more beyond Social Security for retirement?

Is it a role for the Commissioner, number one? If so, how would you

handle it?

Mr. ASTRUE. Yes, I do think that is an appropriate role. I think

this is largely through public education. I think there is often a

misunderstanding among people that Social Security is intended to

supply all their retirement income, and it is not.

Senator GRASSLEY. Amen! That is what too many people think.

Mr. ASTRUE. And I am, just on another level, concerned for the

country as a whole that the savings rate has dropped so dramatically in the country. I remember, actually, 25 years ago writing a

speech for a member of Congress where we were, I think, bemoaning that it had gone from 8 percent to 5 percent, and now it is far

below that.

The CHAIRMAN. It is negative.

Mr. ASTRUE. It is negative now. I guess it is my New England

background, but I am just sort of bothered by that, culturally and

personally. So I do not want to do anything heavy-handed or inappropriate, but you do have a bully pulpit as Commissioner of Social

Security.

One of the great things that my former boss, Commissioner

Hardy, started 20 years ago was a pilot where there are annual

statements that go out to individuals.

I think that the rationale for doing that at the time was to just

make sure that people got their earnings records right. That was,

at least, the OMB’s accepted rationale for the cost benefit of it.

But I think part of her purpose, which has been served, is that

notice has made more husbands and wives sit down and talk about

retirement planning more than almost anything else that probably

has happened in the country.

So you want to look at those ways that you communicate with

the public, the annual statement, the website, all those types of

things to see if you can remind people about what the role of Social

Security is in their overall savings plan and try to encourage savings.

If you can provide them information that is totally neutral in

terms of hard information about what happens, I think those are

all good things. Specifically, exactly what we do, I am not at that

place yet, but in terms of the goal, I think that is an important use

of the bully pulpit for the Commissioner of Social Security.

Senator GRASSLEY. Thank you.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator Grassley.

I have three standard questions I would like to ask you, Mr.

Astrue, before I ask more substantive questions.

First, is there anything that you are aware of in your background

that might present a conflict of interest with the duties of the office

to which you have been nominated?

Mr. ASTRUE. No, Mr. Chairman. I have divested of a number of

stocks, even though I was not required to do so by OGE, and my

intention actually is to put all my holdings into a blind trust just

11

so that there will not be any question about my financial holdings.

I have not had any work or consulting relationships since July.

The CHAIRMAN. So there is no conflict that you can think of?

Mr. ASTRUE. There is no conflict.

The CHAIRMAN. Thank you.

Do you know of any reason, personal or otherwise, that would in

any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated?

Mr. ASTRUE. No, Mr. Chairman.

The CHAIRMAN. Do you agree, without reservation, to respond to

any reasonable summons to appear and testify before any duly constituted committee of Congress, if confirmed?

Mr. ASTRUE. Yes, I do.

The CHAIRMAN. Especially this committee.

Mr. ASTRUE. Especially this committee. [Laughter.]

The CHAIRMAN. Thank you.

We would like to address the long-term solvency of the Social Security trust fund. Clearly, the President has suggested private accounts. That did not really get very far, both here in the Congress

and in the country.

Your thoughts on private accounts, personally? And before you

answer that question, I am obviously interested in your personal

views, but I just advise you that I think that is a non-starter in

any serious discussion to find serious long-term solutions. This,

after all, is a democracy. There are a couple of political parties.

Some things are possible and some things are not possible. I would

just like your thoughts on personal accounts and privatization accounts.

Second, the degree to which, if you do have some inclination to

favor them, you would use your position as Commissioner to advocate for that proposal.

Mr. ASTRUE. When I first talked to the White House about this

position, I think they seemed to be holding their breath when they

indicated to me that this area would not be part of the Commissioner’s responsibility, because they, I think, were concerned that

I might not be interested if that were not part of the job.

But for me, I see the value in what I think is the consensus between the executive branch and the legislative branch in having a

very politically neutral Commissioner that stays out of the highly

partisan issues and is an honest broker and supplier of information

about the very difficult choices that the Congress has to make.

So it is my intention, as I indicated also in the letter that I sent

to you and the Majority Leader, to stay out of that debate, and I

will honor that.

The CHAIRMAN. Now, is that both public and private? That is, it

is one thing to publicly not make statements with respect to any

component, but it is something else to privately talk to friends and

so forth.

Mr. ASTRUE. This is something, to be honest—and I was, I think,

candid when I went through the process. I mean, I have a general

familiarity with this. I remember, we all, on the senior staff of

Commissioner Hardy, got a briefing on this area in 1987 or 1988

because the Dupont plan had come up in the presidential campaign

and it was the first time people were talking about privatization.

12

I remember being struck by the huge difficulties with the transition costs, that we were so rooted in the current pay-as-you-go system, that even with a very well-thought-out plan it was going to

be very difficult to make that transition because of the transition

costs.

Certainly it has been my observation, that is not where all the

opposition has come. An awful lot of the opposition has come from

things that you have to do because of the difficulty of the transition.

But I am not sitting on a secret, magic plan. I have been pretty

busy outside the Social Security area for the last 10 years. So I will

be honest with you, I have not mastered the subject. I see a wide

array of things that might be a way out.

One of the things I said to the White House when we were talking about this is that it is very brave to have a full, cosmic plan,

but I think everybody should be happy if there is significant

progress. And maybe it is not everything that everybody wants, but

the history of programs of this type is that they change incrementally.

It is difficult and it requires political consensus, but there do

tend to be those magic moments when people come together. My

sense is, that is what the President would like to achieve now in

terms of opening up for conversation issues that would not have

been opened last year. I do not know what Secretary Paulson is intending to propose, and that type of thing.

The CHAIRMAN. I am just curious in that regard. Do you see

yourself more of a creature of the executive branch, or legislative,

or independent?

Mr. ASTRUE. Well, I think the way the job has been defined, it

is a unique animal. I have actually thought pretty seriously about

separation of powers because I have actually worked in all three

branches of the Federal Government.

The CHAIRMAN. And the statute is ambiguous, too.

Mr. ASTRUE. I think, ultimately, you are performing an executive

branch function, but there have been restrictions and limitations

and other special provisions put into the statute to respond to some

of the unique considerations of the Agency.

And I do think that one of the things that you have to be careful

about is a very fine line between independence and unaccountability. I have had a great concern, back home in Massachusetts,

when we set up a lot of truly independent agencies with their own

funding sources and no accountability to the legislature, and I

think that is part of why we ended up with the Big Dig and such

a horrible disaster.

So I do take my separation of powers——

The CHAIRMAN. Do not compare yourself with the Big Dig.

[Laughter.]

Mr. ASTRUE. Well, no. But I think, when I say I take separation

of powers seriously, it does not mean my prerogatives. I think it

is very important to try to make sure that you are responding in

an appropriate fashion to the legitimate interests of the judiciary,

the legislature, and the executive branch, and hopefully you work

in a style so that some of the theoretical issues that might be problematic never arise and you try to work in a collegial, open, candid

13

way, and you resolve problems in a way that some of the theoretical issues that might arise under the statute do not arise.

The CHAIRMAN. Yes. I have a good number more questions on

this subject, but my time has expired.

I will turn to Senator Hatch.

Senator HATCH. Mr. Astrue, just a couple of questions here. Beyond the issues you identified in your opening statement, have you

given any thought to any structural changes that you might bring

to the Agency or you might recommend to this committee?

Mr. ASTRUE. I have thought about it. The structure of the Agency

is actually, in most ways, pretty similar to what it was 20 years

ago that I was familiar with. My philosophy on these things is a

little bit influenced by my experience in the Agency the last time

around, where most of the senior people were still complaining

about a reorganization of 10 years before and the continuing effect

on the Agency.

So I tend to be an incrementalist on these things. I think that

would be my tendency, except perhaps in the immediate Office of

the Commissioner, where I probably will organize it a little bit differently for my personal style. In terms of the organization more

broadly, I would probably want to get in and spend at least 6

months familiarizing myself with the people, the structure, and

how things are working, and then maybe consider some incremental changes. But, I think I am a highly unlikely candidate to

do any kind of sweeping reorganization.

Senator HATCH. In a recent opinion piece in the Wall Street Journal, Robert Pozen suggested that a bipartisan compromise could be

reached, given the new make-up of the Congress, and suggested

that we should re-think progressive indexing of Social Security,

and that that might be a possible solution, plus, his ideas on how

you might be able to keep Social Security viable and active up

through, at least, far beyond 2042.

I would like to ask unanimous consent that Mr. Pozen’s article

be placed in the record at this point.

The CHAIRMAN. Without objection.

[The article appears in the appendix on page 55.]

Senator HATCH. I would ask you if you have had a chance to look

over the various reform proposals that we have discussed here in

recent years, and if so, have you come to any conclusion on these

approaches or do any of them appear to have viability with you, or

is this too early?

Mr. ASTRUE. I think my reaction at this point is, that there are

no good solutions, the question is the least bad solution. I am actually grateful that it is not going to be my choice, that it is going

to be your choice. [Laughter.] I honestly do not know what I would

do and what positions I would take if I were sitting in your chair.

Senator HATCH. Well, I guess I am asking, which is the least

bad, in your opinion?

Mr. ASTRUE. Well, certainly if you can avoid cutting benefits, either through a direct benefit cut or changing eligibility, that certainly tends to be where my starting point is. Certainly, I think

that things in the zone that the Chairman referred to in terms of

trying to make the status quo run more efficiently.

14

There may be some ways we can do that and make the trust

funds work better, more efficiently, just simply things like starting

up the CDRs, as well. We are starting to lose billions in the Disability trust fund, in all likelihood.

First of all, I have pledged to stay out of this. The second thing

is, even if I had not, I am not sitting on any very strongly-held set

of views that it has to be this. I am just not a strong partisan on

that.

Senator HATCH. Well, after you get out and get into the Agency

and look it over and look at all the trouble spots——

Mr. ASTRUE. We will talk.

Senator HATCH. We expect to see a little bit of advice up here.

Mr. ASTRUE. All right.

Senator HATCH. Because we have a lot of ideas, but getting everybody to agree and getting that 60-vote margin in the Senate and

convincing the House, those are very important things, but we all

know something has to be done. We all know we cannot continue

down this path.

You have kind of made clear what your role in policymaking is

with regard to Social Security, and I just want to say, with your

experience, I think you will be in a position where you can really

help us up here.

I would hope that you might consider revamping your position a

little bit to realize that you have to play a role, maybe, in helping

to reform the Agency by helping us up here to do so in a bipartisan

way.

If you can do that, you will do a tremendous job for our country

and for all of those who hope there will be Social Security funds

for them someday, and those who are currently on Social Security.

Mr. ASTRUE. Well, certainly if I can identify possible options that

the committee and the Congress might want to consider and try to

supply good data about that, certainly that is something that I

know I ought to be doing, and will be looking for opportunities to

try to do that.

Senator HATCH. We are counting on you, and I know you can do

that. So, thank you.

Mr. ASTRUE. Thank you.

Senator HATCH. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator.

Senator Bunning?

Senator BUNNING. Thank you, Mr. Chairman.

It seems like de ́ja` vu all over. As a member of the Ways and

Means Committee in 1992, I was put on the Social Security Subcommittee and became Ranking Member, and spent 4 years as

Ranking Member.

Then in 1994, I became Chairman of the Social Security Subcommittee. The same problems we are talking about as far as disability, as far as backlog, as far as all the problems that you have

brought forward, were the exact same problems that were going on.

We addressed legislation both in the House, and Senator Moynihan and myself had the same bill and conferenced the same bill,

and we did something for the Social Security Administration and

I do not think they have fully comprehended what we did for them:

we made them an independent agency.

15

Now, of course there are some strings attached to that, and the

Chairman and I have had some words about, how independent are

they? But the fact of the matter is, they are an independent agency. They do submit their budget to the executive branch of the government, and it is still done through CBO and all that.

But you have the power as an independent agency to do your

own thing and do your own thinking, particularly later on through

a bill that I had put in the Senate the first year I was here, or the

House the last year I was there, and then when I came to the Senate, Senator Kennedy and others passed that bill on CDRs and

tried to accelerate the rate by which we did them.

The Agency has sat on its duff, absolutely sat on its duff in trying to accelerate the hearing process on CDRs, and it drives me

crazy, watching it.

One other question I want to ask you, because it has been

brought to my attention by anecdotal information and personal information. We have an immigration problem in this country and

the Social Security Administration is part of that problem; whether

they want to be or not, they are.

Employers send Social Security numbers to the Social Security

Administration and somehow they do not react to the numbers immediately in finding out whether they are active numbers, or

whether they are numbers that have been used, or they are currently held numbers.

I have had the experience of people coming to me and saying,

‘‘Jim, I just received a letter from the Social Security Administration and it is 2 years since I submitted these Social Security numbers to the Social Security Administration, and now they tell me

that this person is using an illegal or already-used Social Security

number.’’

I believe the Social Security Administration can do a much better

job with that problem, and I think they can do it within 2 weeks,

at least, instead of 2 years, in notifying an employer who gets a Social Security number that is in use or has been already used and

is a duplicate number of somebody else’s, and notifying the employer that you might have a problem with illegal immigration

here, and do something about it quickly.

So I am tasking you, as the potential new Commissioner of Social

Security, to do something about that. Your administration, the Social Security Administration, can do something quickly when they

get notification of Social Security numbers and know that there are

duplications or they are already in use, and notify that employer

that they may have a problem.

Two years later is a joke—2 years later, to tell that employer,

you might have a problem here, you might have somebody who is

an illegal immigrant using an invalid Social Security number or

one that is already in service.

I know that you know all the problems involved in Social Security, that in 2017 we are going to run into a sliding scale, and by

2040 or thereabouts, or a little after, that we are going to be paying

75 percent of the benefits if we do not do something dramatic.

I apologize for going 54 seconds past. Chairman Greenspan had

a commission that patched the Social Security system for quite a

while. He patched it because he was at a point where we could get

16

consensus because we were going to go belly-up. Now he has made

the suggestion that it is not going to be very difficult to fix the Social Security system.

All you have to do is expand the 67 age group to 70, in the same

manner that we have done with 65 to 67. I hope the Social Security

system, and I hope the Congress, will take a look at some of these

problems in not a complicated fashion, but a fashion that would

ease your burden. You are going to have enough burdens as it is

without looking at the solvency problem that is coming down the

road in a big hurry.

Mr. ASTRUE. I agree with you, Senator, that one of the advantages of the structure that I think the President and the Congress

agree on is that, to be involved in the solvency discussions, that is

an enormous time-sucker if you do it right, and you really do not

have the opportunity to focus on these host of other administrative

challenges for the Agency.

My mandate is to go after those and to do the very best job that

I can, and that is what I will try to do. And certainly, after confirmation, any information you give me about particular employers

who are having issues in Kentucky, I would love to hear them.

Senator BUNNING. We have them in jail. We have some people

in jail because of the fact. We have construction companies that are

having all kinds of problems. We have horse farms where I know

80 percent of the employees on those horse farms are illegals.

Mr. ASTRUE. I would really welcome the opportunity to take a

look at that and try to figure out what the source of the problem

is.

The CHAIRMAN. Good. Thank you, Senator, very much.

Senator Salazar?

Senator SALAZAR. Thank you very much, Chairman Baucus.

Congratulations to you, Mr. Astrue, on your nomination. I look

forward to working with you.

Three quick points. First, in terms of the approach that the administration took last year on the privatization concept on Social

Security, I understand from your responses to my colleagues’ questions that you will not be involved in those policy initiatives.

But I will tell you that, as you might be asked by the administration on what you do, my own view is that the approach that was

taken by the administration was wrong. It was an approach that

was ‘‘my way or the highway.’’

I think, as Senator Bunning was saying earlier on, that in terms

of dealing with the issues of Social Security, we are going to have

to deal with these issues in a consensus-based approach.

So to the extent that you, as the Social Security administrator,

will be having any input with respective administration officials on

that issue, I hope you can keep in mind that the failed effort of ‘‘my

way or the highway’’ simply did not go very far last year or 2 years

ago, so it is just a comment to you, sir, as you sit before our committee.

Mr. ASTRUE. [Nods.]

Senator SALAZAR. The second question, and this is a question for

you, I think for all of us 100 Senators and each of our States, one

of the major issues that we deal with in our offices as we serve constituents is dealing with Social Security issues, whether it is collecVerDate 11-MAY-2000 15:27 Jan 03, 2008 Jkt 095484 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 39387.000 SFIN1 PsN: SFIN1
17

tion of a Social Security check of an elderly person or somebody

who is disabled.

Can you just generally, and very briefly, describe what your approach would be to the management of dealing with those kinds of

conflicts and providing the service to those recipients of Social Security?

Mr. ASTRUE. Well, there are certainly at least a couple primary

avenues of response. Certainly the front line are the Social Security

offices. They are dealing with the struggle now that there is a hiring freeze in place. People are leaving. It does not fall equally

across offices.

A number of the members of this committee have expressed deep

concern about the impact of service on their constituents because

of that contraction, and I am very worried about it. I think that

is probably the most important thing we can do.

There has also been a branch, historically, within the legislative

office, if I remember correctly, that responds very directly to inquiries from members of Congress about particular types of problems.

My understanding is, historically, they have done a pretty good

job for the cases that have not gone the way that they should, trying to straighten that out. I mean, there is always room for improvement, I am sure. But those are at least the two main ways

of dealing with those issues.

Senator SALAZAR. Given, Mr. Astrue, the reality that I think,

from what I hear, there is very low staff morale now in the Social

Security Administration with your staff and looking at what is happening with the cuts that have taken place, how do you, as the

leader of this organization with, I do not know the exact numbers,

but I am sure it is tens of thousands of employees, try to restore

morale back into your agency?

Mr. ASTRUE. Having been through some extremely difficult corporate experiences, I have a somewhat different view than I think

a lot of people. I think there is a tendency for executives to just

try to be ‘‘rah-rah’’ and avoid the issues. I think that is implicitly

a patronizing position.

What I find people respond to is respecting their intelligence and

their commitment, telling them openly and candidly what the

issues are, what you are trying to do to fix it, and what the prospects for success are.

I think if employees feel that you care, that you are doing everything that you know how to do and they know what that is, that

this is the best you can do for morale in the short run. I think the

pep rallies and the happy talk, people see through that. I think the

most important thing is the candor and the information.

Senator SALAZAR. One other quick question. This is a follow-up

on immigration. Do you have any sense of the number that is being

paid into Social Security by undocumented workers in the United

States today?

Mr. ASTRUE. I do not have that number at the tip of my fingers.

I know it is a substantial number, but I do not know the precise

number off the top of my head.

Senator SALAZAR. Would it surprise you if it was in the tens of

millions of dollars?

18

Mr. ASTRUE. Not at all. As a matter of fact, I believe it is probably substantially higher than that.

Senator SALAZAR. Probably over $100 million?

Mr. ASTRUE. Probably.

Senator SALAZAR. And I will ask you, once you are in a position

to get me some information, about the amount of money that is

flowing in. We currently have a surplus, obviously, this year and

in prospective years in the Social Security trust fund.

There is a very significant amount of that surplus that I think

is coming from undocumented workers paying into the system.

There was some allegation made that there are some payments

coming out on undocumented workers.

I would like to know what the data are, because at least studies

that I have seen have indicated that a great part of the reason that

we do have a surplus is that undocumented workers are putting

money into the system and the money is not coming out.

Mr. ASTRUE. Right. I think, because of the nature of the question, there is always a larger error band around the data than

there is on most of the data that you get from Social Security. But

I think, certainly, we would be delighted to provide you with the

very best numbers and estimates we have for all of that.

Senator SALAZAR. All right. Thank you, Mr. Astrue.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you. Thank you, Senator.

Mr. Astrue, I would like to discuss with you ways, together, also

working with this committee, we can work to reduce those backlogs

by setting up some benchmarks. I am a firm believer in names,

data, dates, and benchmarks.

Mr. ASTRUE. Yes.

The CHAIRMAN. Let us see how we are doing when we get there

and see what adjustments we have to make to do better. Clearly,

some of that depends upon resources.

Mr. ASTRUE. Right.

The CHAIRMAN. Clearly, we do not know what the President’s

budget is for the Social Security Administration. Maybe you do

know, but I do not know.

Mr. ASTRUE. Actually, I do not know yet.

The CHAIRMAN. All right.

But certainly if you are confirmed, you will be in a position to

influence the budget for the next fiscal year. So could you just give

me your thoughts on how we, together, can set up some timetables

here? I am trying to draw down that backlog, which can be as

much as 4 years for disability claims.

Mr. ASTRUE. I am sympathetic to the request.

The CHAIRMAN. I might say, too, I was just astounded, in talking

to my office in Montana to the main person who handles all this,

just how long the backlogs are. In a country like the United States

of America, that is an outrage.

Mr. ASTRUE. Yes.

The CHAIRMAN. We are supposed to be the leader here. These are

people who need benefits because they are disabled.

Mr. ASTRUE. Yes.

The CHAIRMAN. I understand it is probably more complicated

than it appears on the surface, but certainly we can do an awful

19

lot better than we are. We are being irresponsible, frankly—you,

the Social Security Administration, and this committee—if it does

not try to figure out a way to reduce those.

Mr. ASTRUE. It was one of my main interests in going out to the

Agency in the first place, and it is a main interest in coming back

again. It can be a very difficult experience for someone to go

through. As I indicated in my remarks, I have been through it in

a very unpleasant situation.

There are, I think, a number of things that one can do. I think

that Commissioner Barnhart has tried to do some very thoughtful

things to try to move it along. Those are somewhat on the margins.

Ultimately, a lot of this is brute force in terms of people, unless

there is some radical change in the system.

So I have had some dialogue with committee staff on this issue.

I think once I have had a little time to get on top of things and

I know what the amount of money is that we are looking at for this

year, then I will be perfectly happy to sit down and try to work out

an understanding on benchmarks.

I think my guess is that the budget people can even develop

some pretty good models for you, that with this many people, this

much cost, you ought to be able to reduce by such and such an

amount.

I think that if we can develop a tool like that, that might be very

helpful in making more members of Congress understand what I

think all of you understand, that this is vitally important and that

we need to get it done, and that it should have the support of the

Congress.

The CHAIRMAN. All right.

You have some experience with the Agency, so what are the two

or three major drivers here? Resources is one.

Mr. ASTRUE. Yes.

The CHAIRMAN. Senator Salazar referred to morale. You referred

to just forcing it. What are the main components, maybe two, or

three, or four?

Mr. ASTRUE. Well, one of the things that I am very interested in

seeing is what the data actually say in Commissioner Barnhart’s

initiative—what the impact has been of eliminating the reconsideration step at the DDS level.

My historic view has been, most recipients who are denied at

that level go on through the process anyway. It takes a fair amount

of time. It just never seemed to me that it was worth the time,

money, effort, and delay to do it.

This has actually been changed. I have not seen any data on the

initiative yet, but that is pretty high on my priority.

The CHAIRMAN. So cutting out one level of review would be second.

In addition to resources, what else?

Mr. ASTRUE. Well, I think that it is not only the resources at the

DDS level. I mean, I am very conscious—and I may be going back

to the wrong label—the Office of Hearings and Appeals, that the

backlogs there, too, have become very substantial. There, maintaining the appropriate level of administrative law judges has been a

real issue.

20

So the problem is even worse, I think, than was outlined, in that

you have a big problem with the DDSs and the delays there, but

you are also facing increasing and, in my view, unacceptable levels

of delay at the Office of Hearings and Appeals as well.

I need to understand. I am still not entirely clear, with the new

initiatives, some of the changes of the Office of Hearings and Appeals and what the real implications of those are.

Historically, I have had some other ideas that I thought might

move things along more at the Office of Hearings and Appeals, but

I think I have to get back in and wallow in the data a little bit

and talk to the people before I have a firm plan.

The CHAIRMAN. If this committee gave you a reasonable date,

could you come back to this committee with some recommendations

as to what it would take to get those numbers reduced by a certain

amount?

Mr. ASTRUE. I think if we could have it triggered by when the

final decision is made on the funding, I would hope within 60 days

or so after that that we ought to be able to sit down.

The CHAIRMAN. So what would be a reasonable date for you?

Mr. ASTRUE. Can you tell me what date we will know about the

funding? It is so tied together. I do not mean to be facetious, but

it is so tied together that it is an abstract exercise until you really

know.

The CHAIRMAN. I think we will have a continuing resolution, at

least for 2007, not too far down the road. That expires at the end

of September. Then we have another cycle. We should have that by

the middle of February, the continuing resolution.

Mr. ASTRUE. All right. Assuming the continuing resolution comes

in February, in middle February, and assuming I am in place so

I can actually talk to people and wallow in the data, I would hope

that I would be able to do it within about 60 days or so.

The CHAIRMAN. All right. Maybe 2 months afterwards.

Mr. ASTRUE. Yes.

The CHAIRMAN. That would be very helpful. I would like you to

be pretty bold and aggressive here, that is, with ideas and what it

would take to reduce the backlogs by, say, 50 percent, by what

date, that kind of a thing, in the various categories.

Mr. ASTRUE. Right. I think that it is important to view this, also,

too, not as a one-shot deal.

The CHAIRMAN. Exactly.

Mr. ASTRUE. This is a long-term struggle.

The CHAIRMAN. Absolutely.

Mr. ASTRUE. It ought to be an iterative process throughout the

6 years.

The CHAIRMAN. Absolutely.

Mr. ASTRUE. I am perfectly delighted to do that because I cannot

do this without the help of this committee.

The CHAIRMAN. All right. Thank you.

Senator Bunning?

Senator BUNNING. This sounds like a hearing I had in 1994 and

1996, exactly. I mean, the same hearing, only the backlogs are

longer. It was only a year and a half at that time. We had the same

complaint about administrative law judges, that there were not

21

enough. Or we were going to eliminate the middle hearing, or the

second hearing before the DDSs.

If my memory serves me right, we tried with dollars to fix that

problem. The problem is an internal problem. It is within the Agency itself, so it is fixable inside the Agency.

What the Chairman has asked you to do is critical because we

will know what the 2008 budget looks like for SSA, and we will

know what you will have for the remainder of 2007 sometime in

the middle of February, so you will have a fix on dollars. You are

not going to be able to change them much.

But you are going to have to plan if you want to reduce these

backlogs past the 4-year level, which, in my mind, in the United

States of America, is outrageous. People die before they get their

hearings. Absolutely die, the disability people. That does not sound

like something we should have in the United States of America.

So your position is one that I think is the fourth or fifth hearing

that I have been involved with with a new supposed head of the

Agency or Commissioner of the Social Security system, and we all

have talked about the same issues over and over and over, and we

just keep adding to the backlogs in every category.

So it is something that is internal, and the bureaucracy does not

seem to be able to handle it. We have tried legislatively to do it,

and we are going to need a lot more cooperation out of the agency

if we are going to handle what you suggest as a benchmark to do

this. I am tired of it.

I am sick and tired of the Social Security Administration appearing before Congress and saying, well, we have this problem, we

have this problem, we have this problem. Well, fix it. And do not

tell me it is only the dollars that you need to fix it. I am not kidding.

I am going to, unfortunately or fortunately, be on the Social Security Subcommittee of this Finance Committee and I am going to

be active in trying to get some things done again. This is the first

time I will get a chance to do that on the Senate side. I tried, legislatively, twice on the House side. We succeeded both times and we

still have the same problems.

So, we have to do more than just legislatively try to fix it. We

need, internally, to fix it. I am not trying to put a hat on you or

trying to push you. You are someone who is capable of running

businesses.

What you have at the Social Security Administration is a very

large agency, one of the largest—not the largest, but one of the

largest—in the Federal Government. Whether it is your morale,

whether it is your employees, whether it is the inability of action,

we need your help to help guide us into a better situation. I hope

that you are the right person for the job, because it is a big job.

Mr. ASTRUE. I am certainly going to give it my best shot. I have

stopped everything else I am doing. We are moving back down

here. It is not worth doing in a mediocre fashion.

Senator BUNNING. No, it is not, because it has been done. I am

not blaming the Commissioners, but it has not gotten done. So,

someone is responsible.

Thank you.

22

The CHAIRMAN. Thank you. Thanks for chiming in here. I appreciate that very much.

I talked to you earlier, Mr. Astrue, about benchmarks referring

to initial disability claims. That is one category. In addition, there

is a backlog of hearings before administrative law judges. Then,

third, the number of Continuing Disability Reviews, CDRs, that

category as well.

So in about mid-April, April 15, tax day——

Mr. ASTRUE. I will get an extension and work on it. [Laughter.]

The CHAIRMAN. Well, we do not know if they will give you an extension. [Laughter.] But it is roughly that date, so let us sit down.

We owe it to the country.

Mr. ASTRUE. I welcome the question from staff. I think, in addition to having a specific plan that brings out value as time passes,

I do actually think that it may be possible to do some very useful

things in terms of modeling so that there is a tool that not only

I have, but you have to look and consider options, choices, and

measure performance.

The CHAIRMAN. It is a great opportunity, frankly, all the way

around.

Mr. ASTRUE. Right.

The CHAIRMAN. I guess, frankly, it might even be a morale booster.

Mr. ASTRUE. Yes. Absolutely. It is a very proud agency. The history of the agency, particularly in the 1950s and 1960s, was that

was where the best and brightest who wanted to be public administrators went. It was boot camp, then they went to other agencies.

That pattern does not occur now, but there is a hold-over there.

It is a very proud agency. And they are not happy when things are

not working well. They know that a lot of these things are not

working well. So I think you are absolutely right, that improving

performance is another element of improving morale.

The CHAIRMAN. Yes. I think everybody wants to do a good job.

They can see a way to get from here to there.

Mr. ASTRUE. Yes.

The CHAIRMAN. I am sure most of the people in the agency would

like to get that backlog reduced.

Mr. ASTRUE. Absolutely.

The CHAIRMAN. And figure out ways how to do that.

Mr. ASTRUE. I have never met anyone close to it that did not

want to do it.

The CHAIRMAN. Yes. It is just not right, the way it works today.

A couple of other questions. Basically, the relationship between

the administration and one of the unions representing agency employees, I am told, has not been good during the last few years.

If confirmed, would you move to establish a dialogue with each

of the unions representing SSA employees for the purpose of sharing information, sharing concerns and ideas about administering

the Agency? Because that gets to morale, too.

Mr. ASTRUE. Right. This is one of the issues where I do have a

track record. During my time at HHS, I had 700 employees and

had what I think they would tell you is a very good relationship

with the union. We had an open door.

23

It was very civil. We did not always agree, and when we did not

agree on things it was civil. In fact, the union representative is now

on the management side and is the senior career person in the office. So, I think we had an air of good feeling.

However, I am familiar enough with Social Security to know that

the bad feeling between management and the union has not been

just the last few years, Mr. Chairman, it has been pretty chronic

over a long period of time.

Certainly you would try to break that. I think, not just in government but in our culture broadly, it seems harder to maintain civil

dialogues. If you are going to get things done, an exchange of information so everyone has the best information possible, is how you

make the best decisions, so certainly you have to try.

I have some trepidation about it because I know that the history

is not good, and it would be hard for me to believe that Commissioner Barnhart did not try her best as well, and I understand that

that did not succeed with Commissioner Barnhart.

But sometimes there is an advantage to a new face just simply

because someone is a new face. I would be happy to meet with the

senior union representatives in the beginning. I intend to do a lot

of the same sort of things with the advocates who are battling the

Agency on lots of things. I want to get to know them again. I want

to understand where they are coming from.

In general, I want people to feel that they can approach the

Agency and express their concerns. I think, as long as there is that

civility, I think they will find that they have relatively good access.

When the civility breaks down, everybody is a human being and it

is very hard to keep talking.

The CHAIRMAN. That is true. But so much of this is attitude, and

you are the leader.

Mr. ASTRUE. Right.

The CHAIRMAN. If you have the right attitude——

Mr. ASTRUE. I will go first, Mr. Chairman.

The CHAIRMAN. Yes. And also, if somebody is giving you a hard

time, somebody may appear to be irresponsible and so forth, you

just have to deal with it. You do not dish it back. It just does not

work.

Mr. ASTRUE. Right. I think I am a little bit thicker skinned than

I used to be. I think there is some advantage to time passing.

The CHAIRMAN. Well, it is more than thick skin. Again, it is attitude. If you go in, my gosh, this is a great opportunity and we are

going to solve this thing, and we are going to work together, if people perceive that attitude, that goes a long, long way.

Mr. ASTRUE. Well, it has certainly been my feeling, and I think

I expressed this to staff, that if I get bad news on the continuing

resolution and actually have to do furloughs, I think the impact

from the unions on how you do that, how you actually manage

that, I cannot imagine that you would actually want to go forward

on something like that without hearing out everything that they

wanted to say.

So, certainly in addition to an initial ‘‘get to know you’’ meeting,

I certainly, as a contingency, had been thinking it was at least fairly likely that we would have to have that discussion, too.

24

The CHAIRMAN. One other question. Under current projections

from the Congressional Budget Office, Social Security will have

enough funds to pay full benefits, as I mentioned earlier, through

2046, then benefits will be at 79 percent because the surplus will

be gone. Clearly, we need to fix this problem. But it is a problem,

not a crisis. 2046 is not tomorrow.

Over the past year, some of the communications from the agency

have had, I think, an excessive ‘‘gloom and doom’’ tone to them.

Even though the facts were accurate, still the tone is doom and

gloom.

If you are confirmed, will you make an effort to avoid using emotional terms like that? Because we are here to get the facts and

here to solve problems.

Mr. ASTRUE. Right. I am not sure I have seen the specific language but, again, I have not looked comprehensively at these

things.

I would be happy to take a look at any language that has given

you concern. I think in general, consistent with the role of the

Commissioner as it has been defined by the executive branch and

the legislative branch, I think the sense of staying above the fray

is important. I will certainly try to express the thoughts about the

system so it is fair and it is accurate. But I do not have any desire

to spread panic or anything like that.

I, as I have said before, would tend to want, when discussing

those things, to try to put them into context and urge people to

think hard about their own private savings and retirement plans,

and make sure that they understand the role of Social Security in

their own personal future.

The CHAIRMAN. It is just amazing, Social Security. It is one of

the few programs enacted by the Federal Government that has

really worked well.

Mr. ASTRUE. Yes.

The CHAIRMAN. And it has given such confidence to so many. It

is not perfect, but has given such confidence to so, so many people.

Mr. ASTRUE. Right.

The CHAIRMAN. As I mentioned in my opening remarks—you

know the figure, too—without Social Security, half of our seniors

would be in poverty today.

Mr. ASTRUE. No. It is a remarkable program. It is part of the fabric of the country. It is why you do not do other things and why

you come to try to help it. I have friends who think it is very

strange that this is what I want to do with my life.

The CHAIRMAN. I was going to ask you why you wanted to do it.

[Laughter.]

Mr. ASTRUE. Yes, I know. But I have said to people, there is an

enormous amount that goes on in the rulemaking and other decisions that never gets in the papers, never gets any attention. The

people who work on it never get any credit.

But if you do it right, you make it a little bit better, the scale

of the system is such that you can go home at night and say, I just

made life this much better for 50 million people, and that is a great

feeling.

The CHAIRMAN. That is right.

25

I know Senator Bunning has a question, but very briefly, Senator. If you see people doing a great job, let us know.

Mr. ASTRUE. All right.

The CHAIRMAN. We will put something in the Congressional

Record or something. I think it is important to recognize people

who do a really good job.

Mr. ASTRUE. I agree with that.

The CHAIRMAN. So if you see opportunities——

Mr. ASTRUE. I will do that. Thank you.

The CHAIRMAN. Senator?

Senator BUNNING. To get back to the gloom and doom——

The CHAIRMAN. Oh, no, do not! [Laughter.]

Senator BUNNING. But it is not the Social Security Administration that projects the gloom and doom, it is the advocacy of Social

Security people. People who advocate for senior citizens seem to

want to frighten them to solicit dollars to advance their lobbying

efforts more than anything that I can see. I am not going to name

the agencies or the representative groups that try to do that.

I think if you look at Social Security factually and when we

would start having to use the interest on the bonds, as the Chairman has said, in 2046, I am afraid the Chairman and I will not

have to worry about that time.

Mr. ASTRUE. Me neither.

The CHAIRMAN. You will, sir. You will be here.

Senator BUNNING. You mean, that is because I am so mean that

I will live to an old age? [Laughter.]

The CHAIRMAN. You just have that spirit. You have that spirit.

Senator BUNNING. No. But the fact is, I think, generally speaking, the Social Security Administration does not spread doom and

gloom, but the people who are soliciting for funds to advocate for

the preservation of Social Security and making sure it is here for

everybody long-term are the people who have more tendency to do

that.

I sincerely believe I have never seen the Social Security Administration projecting gloom and doom. Only, I read their annual report

that comes out from the trustees, and it has been more positive

than negative in the last couple of years that I have read it. I think

that is a big positive for the administration, especially for those

who know what is really going on with the Social Security trust

funds.

Mr. ASTRUE. I certainly agree. I think that you have to realize

that an awful lot of people are listening to what you say and do,

and you have to try to hit the right balanced tone. I mean, one of

the things that I find distressing is the percentage of young people

who believe there will not be anything for them, which I do not believe is true.

Now, you do not sugar-coat it. Is there some likelihood that it

will not be quite as generous a system as for their parents? Well,

yes, but it will be there in a substantial way. I think if more and

more young people believe that, it starts undermining support for

the system.

Senator BUNNING. My nine children are very happy to pay for

their parents’ retirement right now. I do not know if their children

will be as happy to pay for their parents’ retirement as they go on.

26

It gets a little more testy as you get to the middle of this century

that we are in. I think we have ample time to solve the problem,

but we have to get with it.

Mr. ASTRUE. Yes. I think to keep the consensus that has been remarkable for support of this program, I think everybody has to feel

that they have a stake in it. Sometimes that has not happened. I

think that would be important to try to address.

Senator BUNNING. Thank you very much.

The CHAIRMAN. Thank you, Senator.

I have no further questions. I just want to thank you very much,

Mr. Astrue, for appearing and for agreeing to take the job.

Mr. ASTRUE. Thank you very much. I am looking forward to it.

The CHAIRMAN. You are to be soundly commended for taking all

this on.

Mr. ASTRUE. Thank you.

The CHAIRMAN. It is a huge responsibility, obviously, and, as I

mentioned, a huge opportunity.

Mr. ASTRUE. Yes.

The CHAIRMAN. We want to work with you, this committee.

Mr. ASTRUE. And I have been really pleased by the interaction

so far with both the Majority and Minority staff. Between the two

of them, again, I think civility and candor are how we solve our

problems. It does not happen every place in the Congress, but it

does seem that here on this committee there is a commitment to

that, and I think it is going to make it easier for me.

The CHAIRMAN. Yes. Feel free to test it out just by calling us up.

Mr. ASTRUE. I will.

The CHAIRMAN. All right. Thank you very, very much. Good luck.

Mr. ASTRUE. Thank you.

The CHAIRMAN. Thank you.

Before I adjourn the hearing, I would like to say that there will

probably be other questions. In addition to oral questions, members

might have written questions. If you could have responses to those

by the close of business tomorrow——

Mr. ASTRUE. Yes, I will.

The CHAIRMAN. I do not know how many you are going to have,

but at least by then, so we can then move to, as you know, mark

up and get you confirmed.

Now, before that, however, we have to have an organizing meeting. We have to organize the committee. That is just a technicality,

and we will get that taken care of. My hope is that we can notice

the mark-up Friday for next week, maybe around Wednesday. That

is the thought.

Mr. ASTRUE. Certainly, we will get on it as fast as possible. I

have Deputy Commissioner Wilson here, who I know has been

working with staff.

The CHAIRMAN. All right.

Mr. ASTRUE. We will turn that around as quickly as possible.

The CHAIRMAN. All right. Thank you.

Again, good luck.

Mr. ASTRUE. Thank you.

The CHAIRMAN. The hearing is adjourned.

[Whereupon, at 11:30 a.m., the hearing was concluded.]

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