```

[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]

              SOCIAL SECURITY SERVICE DELIVERY CHALLENGES

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

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

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 11, 2006

                               __________

                           Serial No. 109-64

                               __________

         Printed for the use of the Committee on Ways and Means

                    U.S. GOVERNMENT PRINTING OFFICE

30-446                     WASHINGTON : 2006
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                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman

E. CLAY SHAW, JR., Florida           CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut        FORTNEY PETE STARK, California
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM MCCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM MCDERMOTT, Washington
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. MCNULTY, New York
PHIL ENGLISH, Pennsylvania           WILLIAM J. JEFFERSON, Louisiana
J.D. HAYWORTH, Arizona               JOHN S. TANNER, Tennessee
JERRY WELLER, Illinois               XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri           LLOYD DOGGETT, Texas
RON LEWIS, Kentucky                  EARL POMEROY, North Dakota
MARK FOLEY, Florida                  STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas                   MIKE THOMPSON, California
THOMAS M. REYNOLDS, New York         JOHN B. LARSON, Connecticut
PAUL RYAN, Wisconsin                 RAHM EMANUEL, Illinois
ERIC CANTOR, Virginia
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California

                    Allison H. Giles, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON SOCIAL SECURITY

                    JIM MCCRERY, Louisiana, Chairman

E. CLAY SHAW JR., Florida            SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas                   EARL POMEROY, North Dakota
J.D. HAYWORTH, Arizona               XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri           STEPHANIE TUBBS JONES, Ohio
RON LEWIS, Kentucky                  RICHARD E. NEAL, Massachusetts
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.

                           C O N T E N T S

                               __________

                                                                   Page
Advisory of May 4, 2006 announcing the hearing...................     2

                                WITNESS

The Honorable Jo Anne B. Barnhart, Commissioner, Social Security 
  Administration.................................................     5

                       SUBMISSIONS FOR THE RECORD

American Federation of Government Employees, Social Security 
  General Committee, and National Council of Social Security 
  Administration Field Operations Locals, Witold Skwierczynski, 
  statement......................................................    28
Consortium for Citizens with Disabilities Social Security Task 
  Force, statement...............................................    37
Michael Steinberg and Associates, Michael A. Steinberg, Tampa, 
  FL, statement..................................................    42
National Association of Disability Examiners, Shari Bratt, 
  Lincoln, NE, statement.........................................    43
National Council of Social Security Management Associations Inc., 
  Richard E. Warsinskey, statement...............................    48
National Council on Disability, statement........................    52
Social Security Advisory Board, Hal Daub, statement..............    58
Social Security Disability Coalition, Rochester, NY, statement...    61

 
              SOCIAL SECURITY SERVICE DELIVERY CHALLENGES

                              ----------                              

                         THURSDAY, MAY 11, 2006

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:01 a.m., in 
room B-318, Rayburn House Office Building, Hon. Jim McCrery 
(Chairman of the Subcommittee) presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
May 04, 2006
No. SS-15

                      McCrery Announces Hearing on

              Social Security Service Delivery Challenges

    Congressman Jim McCrery, (R-LA), Chairman, Subcommittee on Social 
Security of the Committee on Ways and Means, today announced that the 
Subcommittee will hold a hearing on service delivery challenges facing 
the Social Security Administration (SSA). The hearing will take place 
on Thursday, May 11, 2006, in room B-318 Rayburn House Office Building, 
beginning at 10:00 a.m.
      
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Subcommittee and 
for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    The SSA's work affects the lives of most Americans. Based on the 
President's budget request, in fiscal year (FY) 2007, the SSA will 
provide more than 54 million people with monthly cash benefits totaling 
approximately $614 billion. In addition to paying benefits, the 
agency's employees will process more than 6.7 million claims for 
benefits, make decisions on more than 575,000 hearings and process 
nearly 245,000 Medicare Part D low income subsidy applications. They 
will also process 265 million earnings reports for crediting to 
workers' earnings records, issue 18 million new and replacement Social 
Security cards, and handle 59 million transactions through their 800-
number. The SSA will also serve 42 million visitors to field offices, 
issue 142 million Social Security Statements, and conduct 1.6 million 
continuing disability reviews and more than one million non-disability 
Supplemental Security Income (SSI) redeterminations.
      
    In addition to processing their core workloads, the SSA has an 
impressive record of recent accomplishments towards improving service 
to the public. For example, the agency improved its productivity by 
nearly 13 percent since 2001 and completed the initial rollout of its 
electronic disability folder system. The agency also sent 19 million 
applications to individuals potentially eligible for extra help with 
prescription drug costs, implemented a free service for employers to 
verify Social Security numbers (SSNs) of employees, and issued more 
than 73,000 immediate payments to displaced evacuees in the aftermath 
of the Gulf Coast hurricanes.
      
    Despite these accomplishments, the agency faces a number of service 
delivery challenges, including the following: increased workloads 
resulting from the leading edge of the baby boom that will reach early 
retirement age in 2008, workloads associated with taking income subsidy 
applications under the Medicare Modernization Act (P.L. 108-173), and 
processing additional documentation for those applying for SSNs and 
cards as required under the Intelligence Reform and Terrorism 
Prevention Act (P.L. 108-458).
      
    Also, due to current budget constraints, the agency has not made 
progress in reducing its pending initial disability determination and 
hearing workloads, and has limited the processing of workloads aimed at 
ensuring program integrity and facilitating return to work. Finally, 
according to an SSA study, 22 percent of agency employees became 
eligible for retirement in 2005, and 56 percent of employees will be 
eligible to retire in 2014.
      
    For FY 2007, the President's budget requests $9.6 billion for the 
administrative expenses of the SSA, which equals less than 2 percent of 
total estimated outlays. The request would be an increase of 4.2 
percent from last year. According to the SSA, the President's budget 
provides adequate resources for the agency to make progress in 
addressing objectives under Commissioner Barnhart's four strategic 
goals--Service, Stewardship, Solvency, and Staff. These objectives 
include reducing overall disability processing time through process and 
automation improvements, strengthening opportunities for the public to 
conduct business with the SSA electronically, reducing erroneous 
payments and collecting related debt, while continuing productivity 
improvements.
      
    In announcing the hearing, Chairman McCrery stated, ``Despite 
growing workloads and a number of service delivery challenges, 
including assisting the victims of the Gulf Coast hurricanes, the 
employees of the Social Security Administration press on, doing 
everything they can to effectively serve our Nation's seniors, 
individuals with disabilities, and their families. The costs of 
providing these services are paid for by the hard-earned wages of 
American workers, and these workers expect and deserve responsive 
service. This hearing will highlight the degree to which that service 
is achieved, and at what cost.''
      

FOCUS OF THE HEARING:

      
    The Subcommittee will examine the current service delivery 
challenges facing the SSA and how the President's budget request will 
help address those challenges.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``109th Congress'' from the menu entitled, ``Hearing Archives'' (http:/
/waysandmeans.house.gov/Hearings.asp?congress=17). Select the hearing 
for which you would like to submit, and click on the link entitled, 
``Click here to provide a submission for the record.'' Once you have 
followed the online instructions, completing all informational forms 
and clicking ``submit'' on the final page, an email will be sent to the 
address which you supply confirming your interest in providing a 
submission for the record. You MUST REPLY to the email and ATTACH your 
submission as a Word or WordPerfect document, in compliance with the 
formatting requirements listed below, by close of business Thursday, 
May 25, 2006. Finally, please note that due to the change in House mail 
policy, the U.S. Capitol Police will refuse sealed-package deliveries 
to all House Office Buildings. For questions, or if you encounter 
technical problems, please call (202) 225-1721.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
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    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone and fax numbers of each witness.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://waysandmeans.house.gov.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.

                                 

    Chairman MCCRERY. Good morning, everyone. Today, we welcome 
once again to our Subcommittee the Commissioner of Social 
Security Jo Anne Barnhart, to review the service delivery 
challenges facing the Social Security Administration (SSA). 
Some of these challenges, as we know, are predictable, such as 
the increased workloads resulting from the aging of our 
generation, the baby boomers, which I am not in, who will begin 
retiring in 2008. In fact, the expected retirements by the 
agency's own baby boomer employees, which will pose another 
problem.
    Some new challenges, such as Medicare Part D increases the 
workload the Agency is responsible for administering. Some 
challenges are not expected, such as last year's Gulf Coast 
hurricanes, where caring and compassionate Agency employees 
provided needed help, including issuing nearly 74,000 immediate 
benefit payments to those who could not return to their homes.
    No matter what the challenge, as we will hear today, the 
hard-working employees of the SSA have done their best to 
respond.
    Fortunately, the President's commitment to the Agency is 
clear, as reflected in his budget request. For Fiscal Year (FY) 
2007, the President requested $9.6 billion for the Agency to 
deliver its essential services. This reflects an increase of 
3.1 percent from last year, among the highest increase for all 
Federal agencies, excluding the Departments of Defense and 
Homeland Security.
    One reason for this increase is the agency's impressive 
strides in productivity. Earlier this year the President's 
Office of Management and Budget (OMB) cited the SSA as a well-
managed Agency that uses technological and program design 
changes to improve productivity annually.
    In the past few years the Commissioner has fulfilled a 
promise not to accept the status quo. Among her leadership 
achievements, the transition from a paper to an electronic 
disability folder has been accelerated, and an improved 
disability determination process is now moving to 
implementation. For employers, the Agency now provides an 
important free service to verify the name and Social Security 
numbers (SSNs) of employees and new hires.
    Social Security affects the lives of nearly all Americans. 
Wage earners and their families, beneficiaries, and employers 
all have a stake in the success of the SSA, and their hard-
earned wages directly support the costs of running this 
essential Agency.
    Today, we will learn how the SSA will meet the challenge to 
give all Americans the service we expect and deserve. Mr. 
Levin.
    Mr. LEVIN. Thank you very much, Commissioner Barnhart. Over 
the past year the American people have reminded us how

deeply they value Social Security's guaranteed benefits for 
retirees, disabled workers and families. I am pleased to be 
here to discuss the challenges Social Security faces in 
delivering all these kinds of benefits quickly and accurately.
    To briefly state the obvious, there is a direct connection 
between resources and the SSA's ability to do its work. 
Unfortunately, Congress and the President both have 
consistently short-changed SSA's administrative budget in 
recent years. This year, for example, the President's budget 
request is not enough. Inadequate funding means not enough 
workers to do the work, and that means longer waiting times for 
disabled workers to get benefits.
    In recent years, as we know, Social Security has also had 
to take on substantial new work. For example, the start of 
enrollment for the new Medicare drug insurance program confused 
and sometimes overwhelmed seniors, who deluged SSA with phone 
calls, forcing the Agency to use much of their overtime budget 
to answer the phones.
    May 15, 2006 is the deadline for regular enrollment in the 
drug program and also the lock-in date for those who have not 
enrolled. As seniors who are locked into plans begin to enter 
coverage that was not perhaps fully explained, it is likely 
that SSA may again meet the increased costs.
    I look forward to hearing from you, Commissioner, about the 
impact of past and future budget decisions and the 
administration's ability to deal with the challenges we face. 
Because Social Security's effectiveness is so critical, I hope 
also that we can continue to explore these issues, and in the 
future we may also be able to discuss them with Social Security 
employees and customers who deal with these challenges on a 
daily basis. Thank you.
    Chairman MCCRERY. Thank you, Mr. Levin. Ms. Barnhart, you 
can proceed with your oral testimony. Your written testimony 
will be included in the record in its entirety.

   STATEMENT OF JO ANNE B. BARNHART, COMMISSIONER OF SOCIAL 
                            SECURITY

    Ms. BARNHART. In the interest of time, I am going to hit 
the highlights, Mr. Chairman. I really want to thank you and 
the Subcommittee for inviting me here to discuss the service 
delivery challenges facing the SSA. I always look forward to 
appearing before this Subcommittee.
    Much has changed in the world and at SSA since my term 
began more than 4 years ago, but the core mission of the Agency 
remains the same, and that is giving the American people the 
high-quality service that they expect and deserve.
    In recent years, although at SSA we have enjoyed strong 
support from this Subcommittee, as was pointed out in Mr. 
Levin's opening comments, the Congress has appropriated less 
for SSA than called for in the President's budget requests. As 
Commissioner of Social Security, I believe my primary 
responsibility is to ensure that benefits are paid as timely as 
possible, and this means that workloads such as processing 
retirement and disability claims have priority over other 
workloads, including stewardship activities such as continuing 
disability reviews and Continuing Disability Reviews (CDR)

and Supplemental Security Income (SSI) nonmedical 
redeterminations.
    At SSA our responsibilities are great, and I believe our 
mission is critical. In FY 2007 our employees will process over 
6.7 million claims for benefits, almost 245,000 Medicare Part D 
low-income subsidy applications; will make decisions on over 
575,000 hearings; issue 18 million new and replacement Social 
Security cards; process 265 million earnings items for workers' 
earnings records; handle approximately 59 million transactions 
through our 800 number; serve 42 million visitors to our field 
offices; process millions of actions to keep beneficiary 
records current and accurate; and conduct 1.6 million CDRs and 
over 1 million nondisability SSI redeterminations. Mr. 
Chairman, we will do all this for less than 2 percent of the 
total Social Security annual budget.
    As I have said often, and as you noted in your opening 
statement, I did not accept this position to manage the status 
quo. Nowhere was the need for change more apparent than in the 
disability program, and therefore, from the outset of my 
tenure, I made disability claimants a priority, especially the 
successful development and implementation of the electronic 
disability process, (eDib).
    I am really proud that the medical information that we have 
captured electronically since we began eDib in 2004 in the 
State of Mississippi already is the world's largest repository 
of electronic medical records, with over 34 million records, 
and that is growing as we sit here this morning.
    The implementation of electronic disability is important 
for improving service and efficiency, but also was important 
because it was a necessary prerequisite to the successful 
implementation of process changes that I believe will 
significantly improve the disability determination process. To 
that end, as this Committee well knows, we developed the 
regulations after a long and comprehensive outreach process to 
all groups involved in every step of the disability 
determination process. In response to the Notice of Proposed 
Rule Making (NPRM), we received close to 900 comments, it was 
actually 883, and those comments offered insight on the process 
from every perspective and vantage point throughout the system.
    In drafting the final rule, we were aware that, although 
there was broad agreement on the fact that we needed change in 
the disability program, numerous groups including this 
Committee perceived our proposed rules as favoring 
administrative efficiency over fairness, and that view was, as 
I say, underscore here in the hearing that I appeared at last 
fall. I want to assure you that was not our intent, and I 
believe the final rule contains a significant number of changes 
which we think underscores our commitment to serve the public 
who depend on us.
    At SSA we are committed to technology and innovation, but 
we also believe that our devoted employees are the heart of our 
success. Our most critical asset in continuing to maintain a 
high level of services is the excellence of our work force, and 
we currently have almost 65,000 full-time and part-time 
permanent employees. We expect just over 40 percent of our work 
force is going to be retiring by 2014.
    Over the past 5 fiscal years alone, we have hired 
approximately 18,350 permanent employees, and we focused on 
equal opportunities for all, including minorities and women. 
Currently, almost 37 percent of our claims representatives have 
been in the position for less than 3 years, and at the other 
end of the scale, 555 employees are reaching 40 years of 
service this year, and we expect 745 employees to reach that 
40-year milestone next year.
    In the interest of time, I am not going to go into detail 
about new responsibilities and workloads that the Chairman 
referenced under the Medicare Modernization Act (P.L. 108-173). 
I know this Subcommittee has been following our activity very 
closely. I would like to say that I am proud of our Agency's 
performance in meeting the responsibilities that we have for 
the new prescription drug program and specifically the low-
income subsidy. I assure you also that we are on target to meet 
our responsibilities for changes in the part B premium 
structure for high-income beneficiaries.
    Also, among the challenges facing us is one arising from 
new verification requirements. These changes are in response to 
requirements in the Intelligence Reform and Terrorism 
Prevention Act (P.L. 108-458)and they have led to increased 
traffic in field offices because some individuals have made 
second or multiple trips in order to present the documents they 
need to do business with us to receive a Social Security card.
    Finally, as you know well, Congress is in the process of 
considering changes in immigration policies that could require 
additional verification processes or make other changes to the 
way that we do business. I would hope that consideration of 
such proposals takes into account the time and the resources 
that Social Security would need to ensure that workers would 
not have to wait lengthy periods after being hired because of 
delays in the verification process.
    In closing, Mr. Chairman, I want to thank you, Mr. Levin, 
and the other Members of the Subcommittee for your unflagging 
support for this Agency in order to meet the challenges that I 
have described and continue to provide the kind of service I 
know your constituents expect and deserve.
    At this time I will be happy to try and answer any 
questions that you or other Members may have.
    [The prepared statement of Ms. Barnhart follows:]
 Statement of The Honorable Jo Anne B. Barnhart, Commissioner, Social 
                        Security Administration
    Mr. Chairman and members of the Subcommittee, I am pleased to be 
here today to discuss the Social Security Administration's service 
delivery challenges. I appreciate the Subcommittee's interest in and 
support of SSA in the past, and I look forward to continuing to work 
with you. I want to thank you for holding this hearing and giving me 
the opportunity to tell you of our accomplishments, our plans for the 
future, and our budgetary needs.
    The President's FY 2007 administrative budget request for $9.496 
billion for SSA would provide the resources to allow SSA to maintain 
service and fulfill new responsibilities, some of which I will outline 
today. In recent years, although we at SSA have enjoyed strong support 
from this subcommittee, the Congress has appropriated less for SSA than 
called for in the President's budget requests. Consequently, I have 
been faced this year, as last year, with the dilemma of determining 
where among our workloads I should cut back resources from the 
originally planned levels. As Commissioner of Social Security, I 
believe my primary responsibility is to ensure that benefits are paid 
as timely as possible.
    This means that workloads such as processing retirement and 
disability claims have priority over other workloads including 
stewardship activities such as continuing disability reviews and SSI 
non-medical re-determinations.
    Mr. Chairman, we at SSA have been tasked with new and non-
traditional workloads through new legislation which I will discuss 
later in my testimony. Managing these new workloads, such as our duties 
under the Intelligence Reform and Terrorism Prevention Act and the 
Medicare Modernization Act, in a way that does not erode our ability to 
carry out our core mission, is a challenge, especially in a world of 
tighter resource constraints.
    In FY 2007, we will process over 6.7 million claims for benefits; 
process almost 245,000 Medicare Part D low income subsidy applications; 
make decisions on over 575,000 hearings; issue 18 million new and 
replacement Social Security cards; process 265 million earnings items 
for workers' earnings records; handle approximately 59 million 
transactions through SSA's 800-number; serve 42 million visitors to our 
field offices; process millions of actions to keep beneficiary and 
recipient records current and accurate; and conduct 1.6 million 
continuing disability reviews (CDR) and over 1 million non-disability 
Supplemental Security Income (SSI) re-determinations.
    First, I will discuss where we are in terms of delivering our 
traditional services.
Service
    As I have said many times, I did not accept the position of 
Commissioner of Social Security to manage the status quo, and as you 
know, I have made improving service to our disability claimants a 
priority.
    We have taken significant steps toward that end--especially the 
successful development and implementation of the electronic disability 
process, or eDib.
    As you know, Disability Determination Services (DDS) are the state 
agencies that make initial determinations for Social Security and SSI 
disability claims. Already, the electronic claims folder is being used 
in all 50 DDSs, and 92 percent of DDS staff adjudicate cases in an 
electronic environment. I am proud that the medical information we 
capture electronically is already the world's largest repository of 
electronic medical records, with over 36.5 million records.
    I want to assure you that we are monitoring the implementation of 
eDib carefully. We have developed a certification process, called the 
Independence Day Assessment (IDA) certification, to determine when each 
State is ready to use eDib exclusively as the official Agency record. 
We assess the electronic business process and evaluate the system 
performance. IDA is an important quality assurance initiative that 
accurately measures eDib rollout progress while allowing for the unique 
characteristics of each State's disability determination 
infrastructure, population, and demographics. The electronic claims 
folder is the official Agency record for new disability claims in 37 
States and the remainder will be IDA certified by the end of calendar 
2006.
    Let me share with you a real-life story that makes obvious the 
necessity of eDib. In the aftermath of Hurricane Katrina--while issuing 
more than 73,000 immediate benefits payments for displaced persons and 
setting up response units at the Houston Astrodome and other evacuation 
centers--SSA provided further relief. Of the 5,000 cases in the New 
Orleans Disability Determination Services, 1,500 had already been 
stored electronically through eDib. These records were immediately 
transferred to other offices to be processed. Ultimately, we gained 
access to the building, packed the remaining 3500 folders in 400 boxes 
and carted those down six flights of stairs by flashlight. But thanks 
to eDib, there was no delay in processing those 1,500 cases.
    The implementation of eDib is important in and of itself to 
improving service and efficiency, but it is also a vital precursor to 
the successful implementation of process changes that I believe will 
significantly improve the disability determination process. On March 
31, 2006, we published in the Federal Register final rules to implement 
our plan for Disability Service Improvement, which will improve our 
ability to make the right decisions as early in the process as 
possible.
    The rules were developed after a long and comprehensive outreach to 
all groups involved at every step of the disability determination 
process. We listened to interested parties and groups in both the 
government and private sector, and to the claimants and beneficiaries 
who rely on us to provide the best possible service. I personally 
participated in more than 100 meetings with almost 60 groups, and we 
received hundreds of informal comments and suggestions. Throughout this 
dialogue, the professionalism and serious manner in which concerned 
groups and individual citizens provided their thoughts and ideas 
constantly impressed upon me the need to improve the process.
    It was only after laying this firm foundation that we drafted the 
notice of proposed rulemaking (NPRM) that was published last summer on 
July 27, 2005. In response to the NPRM, we received close to 900 
comments. They offered insight on the process from every perspective 
and vantage point.
    In drafting the final rule we were aware that, although there was 
broad agreement on the need for change, numerous groups perceived our 
proposed rule as favoring administrative efficiency over fairness. That 
view was underscored by this subcommittee. Let me assure you that was 
not our intent. The final rule contains a significant number of changes 
which we think underscores our commitment to serve the public who 
depend on us.
    We will begin implementation on August 1, 2006, in the Boston 
region, one of our smallest regions, consisting of the states of Maine, 
New Hampshire, Massachusetts, Vermont, Connecticut, and Rhode Island. 
We will carefully monitor the implementation process in the Boston 
region and quickly address any problems that may arise. We will wait at 
least a year before implementing these regulations in a second region 
so we can be sure that our improved disability determination process is 
functioning in the manner that we expect, and to be certain that we 
have resolved any unanticipated issues that arise during the first 
phase of implementation. Once we are satisfied with our progress, we 
will then move to roll out the process one region at a time.
    In our disability program, as with all our core services, the 
Agency continually strives to find cost-effective means for providing 
excellent service. For example, we have developed a system to control 
and process reports of return to work by disability beneficiaries. The 
system is called e-Work.
    This is important because, if earnings are not processed timely, 
beneficiaries trying to return to work may ultimately face large 
overpayments. And, avoiding overpayments is a key element of good 
stewardship.
    The e-Work system allows for improved coordination between Field 
Offices, enabling earnings information to be recorded at the point-of-
contact, thereby reducing the occurrence of overpayments. Work CDRs are 
used to develop and evaluate the worth of the beneficiary's earnings to 
determine if disability benefits should continue or cease. The e-Work 
system replaced a manual, labor-intensive process, allowing SSA 
employees to process work CDR more efficiently, timely and accurately. 
The system also provides a mechanism to collect reports of earnings for 
SSI recipients and issue receipts of such reports to both DI work CDR 
beneficiaries and SSI recipients. The application provides improved 
management information and tighter controls on the work CDR process.
    At SSA, we are committed to providing service to all Americans in a 
way that meets their needs. Thus, in addition to our traditional field 
office and telephone service, we have developed a suite of Internet and 
automated telephone applications that are safe, accurate and efficient. 
Last year, more than 23 million inquiries were answered through our 
Internet Frequently Asked Questions (FAQs), rather than by our 
employees. FAQs are easy to use and ensure consistent and accurate 
information is provided to those who need it.
     Electronic transactions initiated by the public, such as 
applications for benefits and reports of status changes, grew from 
about 600,000 in FY 2004 to over 1. 5 million in FY 2005, an increase 
of approximately 175 percent. Internet service is less costly than our 
traditional service methods, and we are also finding that, as Americans 
become accustomed to electronic services in banking and other areas of 
their lives, a growing number prefer on-line access to SSA services. 
Finally, I assure you that SSA complies with all applicable privacy and 
security protections ensuring the availability, integrity and 
reliability of personal information subject to the electronic business 
processes I describe today.
Stewardship
    Our commitment to quality service extends to all of SSA's programs. 
I've discussed today some of the steps we are taking to improve the 
disability process so that eligible claimants receive the benefits they 
are entitled to. But true public service also requires sound 
stewardship of public resources. The people of America, who fund the 
Social Security program through their FICA tax contributions and the 
SSI program through part of their income tax payments, expect and 
deserve well managed programs. And we take very seriously this 
responsibility to ensure that those entitled to benefits--but only 
those that are entitled--receive them.
    But good stewardship involves more than money. It also means making 
sure that earnings reported and recorded by employers are as accurate 
and precise as possible, credited to the correct worker, and that those 
with criminal intent are prevented from using Social Security numbers 
(SSNs) and cards to advance their illicit operations.
    Accurate earnings information is vitally important to our 
administration of the Social Security program because a worker's 
earnings record is the basis for determining eligibility for and 
computing retirement, survivors, and disability benefits. If a worker's 
earnings are not properly recorded, he or she may not qualify for 
Social Security benefits or the benefit amount payable may be wrong.
    SSA has assigned over 436 million SSNs since 1936. Earnings posted 
to an individual's SSN are used to determine eligibility for and the 
amount of Social Security benefits to which that worker and his or her 
family may be entitled. Ultimately, the SSN is used to track earnings 
and the payment of those benefits.
    Over the years, we have worked to offer employers alternative 
methods to verify SSNs. One of those methods is the Employee 
Verification Service (EVS). EVS is a free, convenient way for employers 
to verify employee SSNs. It provides employers with several options 
depending on the number of SSNs to be verified. For up to five SSNs, 
employers can call SSA's toll-free number for employers (1-800-772-
6270) weekdays from 7:00 a.m. to 7:00 p.m.
    Eastern Standard Time. Employers may also use this number to get 
answers to any questions they may have about EVS or to request 
assistance. In FY 2005, SSA responded to nearly 1.5 million calls.
    Employers also have the option to submit a paper listing to the 
local Social Security office to verify up to 50 names and SSNs. In 
addition, employers may use a simple registration process to verify 
requests of more than 50 names and SSNs or for any number of requests 
submitted on magnetic media. Currently, almost 17,000 employers are 
registered for this verification service.
    To further increase the ease and convenience of verifying employee 
SSNs, we developed the Social Security Number Verification Service 
(SSNVS), which is an internet option that permits employers to quickly 
verify the accuracy of employees' names and SSNs by matching the 
employee-provided information with SSA's records. This service was 
expanded to all employers in June 2005.
    I announced the nationwide rollout at the SSA--sponsored National 
Payroll Reporting Forum in Baltimore, Maryland, and we have publicized 
SSNVS in various ways. An article on SSNVS appeared in the SSA/IRS 
Reporter that is sent to over 6.5 million employers. It was also 
featured in the SSA wage reporting email newsletter, W2News. We have 
also highlighted SSNVS in our many speaking engagements before the 
employer community. There is a special section on SSA's website for 
employers that highlights and explains the use of SSNVS.
    Through SSNVS, we processed over 25.7 million verifications for 
over 12,000 employers in 2005, and 8.9 million verifications from 
16,000 employers in the first four months of 2006.
    In addition, employers may participate in the Basic Pilot program, 
an ongoing voluntary program in which SSA supports the Department of 
Homeland Security (DHS) in assisting employers confirming employment 
eligibility for newly hired employees. Participating employers register 
with DHS to use the DHS' automated system to verify an employee's SSN 
and work authorization status. The information the employer submits to 
DHS is sent to SSA to verify that the Social Security number, name, and 
date of birth submitted match information in SSA records. SSA will also 
confirm US citizenship, thereby confirming work authorization; DHS 
confirms current work authorization for non-citizens. DHS will notify 
the employer of the employee's current work authorization status. In 
December 2004 the Basic Pilot was expanded. Currently the Basic Pilot 
is being used by 6,509 out of a total of approximately 6.6 million 
employers nationwide.
    In 2005, through the EVS, SSNVS, and Basic Pilot programs, we 
estimate we provided a total of 67 million employer verifications, up 
from 62 million in 2004.
    Employers report wages to SSA on Forms W-2 (Wage and Tax 
Statement). SSA processes the Form W-2 data for tax purposes for the 
Internal Revenue Service (IRS). Self-employed individuals report 
information on self-employment income to IRS on Schedule SE. IRS then 
sends this self-employment information to SSA. SSA uses the SSN to 
record employees' earnings.
    Last year, SSA processed over 235 million W-2s from 6.6 million 
employers that are sent to the SSA either on electronic media or on 
paper. Over 150 million wage earners work in jobs covered by Social 
Security, which means that many workers were employed in more than one 
job during a year. While some employers continue to send us their 
reports on paper, we encourage electronic filing. We work with the 
employer community to educate them on the advantages of this method and 
expect its use to expand as technology improves. In fact, in FY 2005, 
66 percent of W-2s were filed electronically, up from less than 10 
percent in 1999. We believe the increase in electronic filing will 
reduce errors over time.
    As you know, SSA mails Social Security Statements to workers over 
age 25 each year (approximately 144 million in 2005). The Statement is 
a concise, easy-to-read personal record of the earnings on which the 
worker has paid Social Security taxes during his or her working years 
and a summary of the estimated benefits the individual and his/her 
family may receive as a result of those earnings.
    We encourage workers to review the Statement to ensure that the 
information in SSA's records is correct and to contact SSA to make any 
corrections necessary.
    When a person files for benefits, an SSA employee reviews the 
earnings record with the worker and assists the worker to establish any 
earnings that are not shown or are not correctly posted. However, since 
it may be difficult for the worker to accurately recall past earnings 
or to obtain evidence of them, we strive to maintain accurate records 
at the time the wages are reported.
    Apart from enumeration initiatives, we also fulfill our fiscal 
stewardship responsibility by conducting Continuing Disability Reviews 
(CDRs), which ensure that those who receive disability benefits 
continue to meet our definition of disability. CDRs are a cost-
effective program integrity workload, saving $10 in program benefits 
for every $1 spent in administering them. As I noted earlier, we are 
doing fewer CDRs than called for in the President's budget request for 
FY 2006 because we have given priority to our claims processing 
workloads including applications for disability benefits. An increase 
in the number of CDRs conducted in FY 2007 will result in greater 
program savings, but let me stress that we need our full request for 
administrative resources for CDRs, whether provided in our 
appropriation within the discretionary spending cap, or provided as an 
adjustment to the cap.
Staffing
    At SSA, we are committed to technology and innovation, but we also 
believe that our devoted employees are the heart of its success. Our 
most critical asset in continuing to maintain a high level of service 
is the excellence of our workforce, and we currently have almost 65,000 
full time and part time permanent employees.
    We expect that just over 40 percent of our workforce will be 
retiring by 2014. Our workloads are also expected to grow dramatically 
as the baby boom generation approaches their peak disability and 
retirement years. Consequently, the greatest human capital challenge 
facing us is to develop strategies that ensure we will be able to 
maintain a high performing workforce that is prepared to deliver 
quality service.
    To meet this challenge, we developed our first Human Capital Plan 
(HCP) in 2004 as a tool to chart the Agency's course, and we issued an 
updated Plan in 2005. It outlines our plans to successfully recruit, 
hire, develop, and retain a diverse workforce to carry out the mission 
of the Agency. SSA was well positioned to implement our HCP because we 
had started in the 1990s to analyze and plan for the impact of future 
retirements. This early Retirement Wave analysis resulted in our 
original Future Workforce Transition Plan, which now serves as a 
tracking mechanism for the HCP.
    Because of our earliest Retirement Wave analysis addressing 
potential future losses, we have successfully used several key 
strategies to control the impact of possible retirements. We 
implemented an aggressive, agency wide recruitment strategy, we 
strategically use early-out in order to ``flatten'' the retirement 
wave, and we renewed our national leadership development programs.
    Our HCP aligns with and supports the Agency Strategic Plan goal of 
strategically managing and aligning staff to support SSA's mission by 
demonstrating how we will invest in and use human capital. It focuses 
on the areas of Strategic Alignment, Workforce Planning, Workforce 
Development and Knowledge Management, Performance Culture, Leadership, 
and Accountability Measures.
    It includes steps directly related to employee recruitment, 
development and retention. Our human capital goals also focus on 
developing a performance culture linked to Agency mission and goals, 
and enabling us to identify and develop our future leaders. This plan 
sets our course for continuing to achieve measurable human capital 
results, which will not only continue to improve SSA's service to the 
American public, but also provide accountability for all of our human 
capital activities. We update our analysis and assess our progress 
annually.
    Approximately 23% of our employees are currently eligible for 
regular retirement. In five years (2010), 40% will have become eligible 
and that figure will continue to grow.
    Overall, we estimate the wave will peak between FY 2008 and FY 
2010, when the greatest number of employees will retire from our 
workforce. Typically, we've found that our employees retire 3.7 years 
after they are first eligible.
    Our recruitment strategies continue to succeed. During FY 2005, we 
hired 4,610 new employees. In this massive recruitment effort, we hired 
2,200 new front line employees in support of the Medicare legislation.
    We have experienced a steady improvement in retaining new hires. 
Between 1998 and 2004, the two year retention rate for new hires has 
increased from 84% for 1998 to 88% for those hired in 2004. Our one-
year retention rate for all employees for FY 2005 was 93.4%, as 
compared to 91.6% in the Federal government overall.
    Through our efforts, we have turned the retirement wave into an 
opportunity. Over the past five fiscal years, we have hired 
approximately 18,350 permanent employees, and we have focused on equal 
opportunities for all, including minorities and women. Currently, 
almost 37 percent of our claims representatives have been in position 
for less than 3 years. At the other end of the scale 555 employees are 
reaching 40 years of service this year and we expect 745 to reach that 
milestone in 2007.
    We attribute our success to several factors:

      Support from the highest levels of the agency;
      Strong linkage to the agency strategic plan;
      Development of a long-term service vision;
      A specific Human Capital Plan;
      Analysis and study of potential future losses;
      and National and regional leadership development 
programs.

    Through these strategic Human Capital approaches, we are confident 
that we will continue to maintain a high performing workforce that is 
prepared to deliver quality service to the public we serve.
    At the beginning of my testimony, I said that I am concerned that 
new and non-traditional workloads may affect our ability to perform our 
core responsibilities. I will discuss those now.
New Enumeration Procedures
    As I touched on earlier, we have taken a number of steps to further 
strengthen the processes associated with issuing SSNs. You will recall 
that SSA formed a high-level response team to develop recommendations 
on enumeration policy and procedure in the aftermath of the terrorist 
attacks of September 11, 2001. Implementation of many of the team's 
recommendations has strengthened our capability of preventing those 
with criminal intent from obtaining and using SSNs and SSN cards. Some 
of these initiatives include:

      Beginning June 1, 2002, we began verifying birth records 
with the issuing agency for all United States born SSN applicants age 
one or older. Under former rules, we only verified birth records for 
applicants age 18 and older. As of December 17, 2005, we are verifying 
all birth records.
      Beginning in July 2002, we began verifying the 
immigration status of all non-citizen applicants for SSNs with DHS 
before assigning SSNs.

    In addition, we have new responsibilities under the Intelligence 
Reform and Terrorism Prevention Act of 2004 which became effective in 
mid-December 2005. As a result, the processes we employ to issue Social 
Security numbers and cards have changed. For instance, we now require 
applicants to submit documents that include a name, identifying 
information, and a photograph. For U.S. citizens, we must see a 
driver's license, a state-issued picture ID, or a passport if one is 
available. If these documents are not available and the applicant 
cannot obtain one within 10 days, we will accept other documents, such 
as an employee identification card, a school ID, a health insurance 
card, or an adoption decree. For non-citizens, we must see current U.S. 
immigration documents. This may require an applicant to return to the 
field office if they come to an office without one.
Medicare Prescription Drug Program
    As you know, the Medicare Modernization Act, or MMA, enacted in 
December 2003, established the new Medicare prescription drug benefit. 
The new Medicare prescription drug coverage was designed to help 
beneficiaries meet their needs for prescription drugs. Under the new 
coverage, all people with Medicare have the opportunity to voluntarily 
enroll in prescription drug plans. MMA also provided an extra level of 
assistance for people with Medicare who have limited incomes and 
resources in helping to pay for the monthly premiums and cost-sharing 
required by the new Medicare prescription drug coverage. This 
assistance is the low income subsidy, or extra help, as it is 
frequently called.
    SSA was given the responsibility by Congress to take extra help 
applications and to make extra help eligibility determinations for 
individuals who were not automatically eligible. Additionally, SSA was 
charged by Congress with the collection of premiums for the 
prescription drug program itself, in cases where beneficiaries tell the 
prescription drug plans when they enroll that they want their premiums 
withheld from monthly Social Security benefits. This withholding of 
premiums is similar to the function SSA already performs for 
beneficiaries in the withholding of other Medicare premiums.
    We were given these responsibilities because of our network of 
nearly 1,300 offices with 35,000 employees across the country, and 
because of our existing role in administering some parts of the 
Medicare program as well as our proven experience in serving the 
public. Over the past 70 years, our agency has gained a reputation for 
helping citizens in the communities where they live, and Congress 
realized that our presence on the ground would be vital in the launch 
of the Medicare extra--help program.
    As of April 30, we had received applications from more than 4.9 
million beneficiaries, of which almost 850,000 were unnecessary, 
because either the applicants were automatically eligible or because 
they had filed more than one application. We have made over 3.9 million 
determinations on the eligibility for extra help, and have now found 
more than 1.7 million of these individuals eligible. We have also 
notified the individuals who filed unnecessary applications of their 
current eligibility.
    We will face new Medicare challenges at the beginning of FY 2007. 
Section 811 of the MMA reduces the federal subsidy of Medicare Part B 
premiums for those with higher incomes. Currently, Part B enrollees pay 
about 25 percent of their Part B cost (the ``standard'' premium). The 
remainder is financed by transfers from general revenues into the part 
B Trust Fund.
    Starting in January 2007, the federal Part B premium subsidy will 
be reduced so that higher income beneficiaries pay higher Part B 
premiums. There will be four levels of increases to these premiums. 
This subsidy reduction will be phased in over three years. MMA requires 
that we use IRS data to determine who is affected and the amount of the 
additional premium they will have to pay.
    In 2007, the threshold amount above which a higher premium must be 
paid is $80,000 for those who file a single income tax return and 
$160,000 for married couples who file a joint return. Threshold levels 
will be indexed annually.
    MMA requires use of modified adjusted gross income. This is 
adjusted gross income plus tax-exempt interest income and other income. 
We will do the first annual data exchange with IRS in October 2006 for 
premiums paid effective 2007. Weekly exchanges for the newly entitled 
will start prior to January 2007. Ongoing premium amount determinations 
will be made annually, prior to the start of each calendar year, and 
will be effective the entire year. It will also be made on an ongoing 
basis as people enroll in Medicare Part B.
    The IRS data we will receive is 2 to 3 years old. Because of the 
time lag, the law permits Medicare beneficiaries to provide more recent 
tax return data to determine the premium when they have a life-changing 
event that significantly reduces their income or to provide corrected 
or amended tax returns.
    SSA published proposed regulations concerning these rules on 
Friday, March 3 and the public comment period closed on May 2. We will 
be evaluating the comments in the coming weeks to determine what 
changes, if any, made by needed to the proposed regulations. We expect 
to publish the final rule later this year.
    Those regulations and the statute define those life changing events 
as well as the procedures beneficiaries may use to provide corrected or 
amended returns when determining premiums. Beneficiaries may appeal 
SSA's calculation of the premium.
    Affected Medicare beneficiaries will receive a notice from Social 
Security later this year. And I need not tell you, Mr. Chairman, that 
we can expect to see an up tick in calls and visits when those notices 
go out.
    In fact, I should note that all of the challenges I've talked 
about--especially our new Medicare responsibilities and changes in 
verification requirements--have combined to create substantial 
increases in the number of field office visits and 800 number calls, 
especially in January.
    The volume of visits and calls has receded from the January peak 
although they are still higher than historical levels. And I want to 
take this opportunity to recognize the efforts of SSA employees to 
handle the increased workloads we experienced during the fall and 
winter.
Funding and Productivity
    Our achievements over the last year are proof that resources 
provided to SSA are used efficiently and effectively to administer 
America's social security programs. In FY 2005, SSA made benefit 
payments monthly to over 52 million people for an annual total of over 
$552 billion. And we did all of this, and much more, with 
administrative expenditures of less than 2 percent of the SSA budget.
    In FY 2005, SSA productivity increased by 2.7 percent over the 
previous year, part of an impressive cumulative increase of 12.6 
percent since 2001. I am proud to note that we increased productivity 
annually for fiscal years 2003, 2004, and 2005.In addition, from FY 
2001 to FY 2005, SSA improved performance in several key service areas. 
For example, SSA has reduced processing time for both initial 
disability claims (from 106 days to 93 days) and appeals of hearing 
decisions (from 447 days to 242 days). SSA has also processed more 
work. In FY 2005, SSA processed over 450,000 more initial disability 
claims, approximately 140,000 additional SSA and Medicare hearings, and 
over 670,000 more retirement and survivors claims than in FY 2001.
    Coupled with productivity increases, funding is the fuel that 
drives our ability to meet the needs of the people who rely on our 
services.SSA's service delivery budget provides a context for making 
funding decisions and determining the effect a given level of funding 
would have on the Agency's ability to provide service over a broad 
range of workloads.
Conclusion
    I am very proud of the exceptional dedication of the men and women 
of Social Security and the State Disability Determination Services. Our 
employees share a deep commitment to finding better ways to be even 
more responsive to those who depend on our service and sound fiscal 
stewardship. I am fortunate to work with such dedicated and 
compassionate public servants. And I want to thank you, Mr. Chairman 
and members of the Subcommittee, for your support for the Agency. In 
order to meet the challenges I have described and continue to provide 
the kind of service your constituents expect and deserve, we will need 
your continued support.
    I will be glad to answer any questions you may have.

                                 

    Chairman MCCRERY. Thank you, Commissioner Barnhart. Let's 
follow up on the thing you mentioned last about the Social 
Security Number Verification Service (SSNVS). According to 
information that I have, in 2006 your Agency is on track to 
increase the SSNVS activity by about 38 to 40 percent. In your 
statement just now you indicated while you are doing that, 
there may be some delays in getting that verification to the 
employers.
    Ms. BARNHART. I appreciate the opportunity to clarify. With 
SSNVS there is no delay, as the Chairman points out. We 
absolutely are on target to increase the usage of that SSNVS, 
which is a real-time system. Employers who choose to 
participate get a pin and password; type in a name, address, 
birth date, and SSN; and we will send back immediately whether 
that information matches or doesn't match.
    The issue in terms of delays relates specifically to the 
Basic Pilot, which, as you know, is a system that we 
participate in that is operated by the U.S. Department of 
Homeland Security (DHS), and one of the immigration proposals 
that is being considered is to make the Basic Pilot mandatory. 
Right now it is a voluntary program, and I think about roughly 
6,000 employers participate. If it is made mandatory, that 
number goes up dramatically.
    The reason that it creates delay is that when the system 
checks to see if your name and SSN are in the system to verify 
your citizenship status and birth date, if there is an issue 
and it doesn't match, what we call fall-out work, which means 
the ones that don't match come to the Social Security office, 
and we have to do follow-up activities to resolve the fact it 
doesn't match, to find out whether it really doesn't match, or 
is a mistake, or someone got married. It is that kind of work 
that could cause a delay if we don't have adequate resources, 
because obviously we are operating at full capacity and then 
some.
    We are already on target to increase productivity this year 
by about 2\1/2\ percent, so if we add new responsibilities, and 
we don't have commensurate resources, then it means there could 
be delays in terms of doing that follow-up work, which would 
affect someone's ability to start a new job, for example.
    Chairman MCCRERY. Could there be or is there some sort of 
automatic checklist that the employee could receive 
immediately. In other words, have you been recently divorced or 
married; common reasons why the match might not work so it 
would help you, they can check off those things and send it 
right back to you and verify that?
    Ms. BARNHART. Certainly, we could do those kind of things, 
but the information comes in from the potential employers. They 
are the ones that go to DHS. We could do that once it gets to 
us, obviously, which requires contact with the individual. The 
ideal thing would be if that kind of thing could happen at 
contact with the employer, but then it is up to the employer to 
actually make that happen.
    We would look at all kinds of things like that to cut down 
on the fall-out work, believe me, and that is a good 
suggestion.
    Chairman MCCRERY. Are you conducting outreach activities to 
the employer community to know about this service?
    Ms. BARNHART. Absolutely. We have sponsored conferences 
with payroll communities to let employers know. We have 
positions in which employers support liaison officers who are 
all over the country and go out and seek out contacts with 
local businesses and employers or to inform them of it.
    We also have a number of publications. We put things on the 
Internet. We have a whole section on our Website that speaks 
specifically to the services that we provide to employers and 
highlights the SSNVS.
    Yes, sir, we are doing everything we possibly can to reach 
out to the employer community.
    Chairman MCCRERY. Let's talk about the President's budget 
for just a moment with respect to additional funding, emergency 
funding. I am thinking particularly of hurricanes and the 
additional expenses that the SSA incurred as a result of the 
hurricanes.
    The President in his budget requested some additional 
funding, supplemental appropriations for inspector generals, 
but not for, I think, the $38 million that the Senate has 
included in their bill, general increases in your expenses 
related to hurricane follow-up.
    What is the status of that? Has the administration made any 
comment on the Senate's $38 million? What is your position on 
that?
    Ms. BARNHART. Certainly, as I am sure you can appreciate 
being from Louisiana, more than probably anyone in this room. 
Many agencies spent additional unanticipated funds as a result 
of Hurricane Katrina, and I have to say that I am very proud of 
the job that Social Security did, and I appreciate your kind 
comments because our people clearly went above and beyond the 
call of duty as individuals because many of them were affected 
themselves in terms of losing everything they own and still 
going to the closest offices to provide service to other 
people. It was really a remarkable occurrence.
    However, the supplemental appropriation request that the 
administration submitted did not include additional funds for 
Social Security. We originally estimated our costs somewhere 
around $73 million, Some we took care of under last year's 
budget. It covered things like the 15 offices that were 
damaged. Ten of those--I think it's eight that are almost 
completely demolished. We've set up 10 temporary work sites to 
deal with those.
    We had relocation expenses for employees. We had 58 SSA 
employees who volunteered with U.S. Federal Emergency 
Management Agency (FEMA). It was a host of things that occurred 
as a result of Hurricane Katrina, but, no, there was no funding 
request included for Social Security in the administration's 
supplemental.
    Chairman MCCRERY. Again, thank you for so competently 
responding to that disaster. I wish that I could say the same 
for every Federal Agency that was involved. I know other panel 
Members have questions, so I will stop now. I may come back and 
ask you a few more inquiries. Mr. Levin.
    Mr. LEVIN. Thank you, Mr. Chairman. I share your expression 
of admiration for the effort of the administration and your 
wish that that were achieved elsewhere.
    Let me ask you some questions about levels of support that 
come from both the budget of the administration and from here. 
I know that you are in somewhat of a sensitive position. Years 
ago I was in an Agency, and there was always the dilemma of how 
do we talk about the President's budget--some of us who were 
appointees of the President. There is a problem there, and I 
respect that.
    I do think it is important to get as clear an understanding 
as possible of where the Agency is and also whether you really 
have the resources that are necessary to carry out these 
responsibilities. You mentioned these new responsibilities. As 
we go through this, I think we are struck by the additional 
jobs that you all have. You mentioned the level of support of 
cost and how efficient SSA is, but I think we have to be 
careful that we don't put so much pressure on you that that 
level of efficiency is undermined.
    Let's talk a bit about the budget request as much as you 
can say, because I think it may also have some impact on what 
the appropriators do. There is mention here the Congress had 
appropriated less for SSA than called for in the President's 
budget request. At the same time, as I understand it, the 
President's budget request for 2007 was considerably less than 
you requested, right?
    Ms. BARNHART. I appreciate your comments. Thank you very 
much for understanding the situation, this so-called budgetary 
dilemma, as you describe it.
    One of the reasons that I created this service delivery 
budget plan is precisely because of that dilemma. I thought it 
was really important for a program this significant that is 
such a part of the fabric of American society for Congress, the 
administration, the President, and the Office of Management and 
Budget (OMB) to understand, what it took to get to where we 
want it to be, and that is why I did a 5-year budget, which I 
have upgraded every year. Had I gotten everything that I asked 
for or laid out in that original service delivery budget plan, 
had I received the funding levels that I show to be necessary 
to achieve the goals of getting rid of all backlogs by 2008, we 
would, in fact, have accomplished all those things. We would 
not have backlogs anywhere. We would be in a very good position 
not just because of the money, but also because of the 
productivity increase that the Agency has managed. As the 
Chairman mentioned in his opening comments, it is almost 13 
percent. That is one way to look at it.
    Another way to look at it is in the last several years 
Congress gave us $720 million less than the President 
requested, which equates to about 9,000 work-years. If we had 
gotten those 9,000 work-years, we would have no backlogs in the 
hearing offices. There would be 400,000 pending hearings. That 
amount pending is considered pipeline work just so that there 
is work going on in the process. We would still have backlogs 
in our postentitlement work, maintaining accurate records and 
so forth, posting, changing address, those types of things. 
Does that give you the picture you were looking for, Mr. Levin, 
to discuss it in those terms?
    Mr. LEVIN. More or less. Mr. Chairman, we have a vote. How 
many votes do we have? I think I will stop here and let my 
colleagues, because we may be there for a while. We have so 
much to do, I am not sure we want to delay your departure. 
Maybe what we will do is I will submit further questions, and 
you can communicate with us.
    Ms. BARNHART. Be happy to, or happy to meet with your 
staff.
    Mr. LEVIN. Maybe we want to come back. It is not clear how 
long we will be gone. I will finish.
    Mr. POMEROY. Thank you, Mr. Chairman.
    Madam Commissioner, I also wanted to say that I think you 
are doing an extraordinary job. I don't know of an Agency that 
is as strongly led as Social Security under your leadership. I 
think very highly of the job you are doing, and I share your 
view, the staff commitment is incredible. In North Dakota 
offices, okay, who is the new-timer here; how long; 18 years. 
It is just amazing to me.
    It is clear to me that this is really a mission that these 
people feel about providing this service. In that context I had 
a visit with a couple of employees at a Medicare sign-up event 
in North Dakota. They were concerned about the diminished 
service levels that had occurred in the office. It was Minot, 
North Dakota, but I don't single out Minot, and the replacement 
ratio is something like four workers leaving before you can 
hire one to fill has significantly reduced their staffing by 
like 40 percent, and they just cannot provide the kind of 
service that they used to provide.
    For people who are so deeply committed to doing the best 
they can, watching their performance be diminished is 
difficult. I think there is a shared responsibility in terms of 
underfunding. I don't think the administration has given you 
the resources you require, and I think Congress further 
whacking back the administration has really been remiss in 
taking that action. We are diminishing the service levels in 
the Social Security office in our districts when we don't fund 
the President's request on Social Security. That is the least 
we should do, not some kind of arbitrary mark, you start paring 
from there.
    Over the years you and I have talked about this 
administrative law judge (ALJ) issue and the insufficient 
number of ALJs on the disability system. How many do we have?
    Ms. BARNHART. Where we are on that, Mr. Pomeroy, is we have 
1,100 ALJs on duty. We are in the process of hiring 42 this 
year. I originally planned to hire 100 this year, but because 
of the fact we received $294 million less than the President 
requested, we are hiring 42 ALJs. Our strength is coming back 
up. In terms of ALJs, and I would be happy to provide for the 
record----
    Mr. POMEROY. Have they opened the list, refreshened the 
pool of potential ALJ applicants?
    Ms. BARNHART. I am pleased to report that the Office of 
Personnel Management did publish an Notice of Proposed Rule 
Making (NPRM) in December. They tell us the regulation will be 
final in about 3 months, at which point they will have the test 
available. Then they will administer the exam, and I think, 
probably, by the end of this year we should have a new register 
for ALJs. Obviously, I know you have been very interested and 
very supportive in this whole effort, and that is going to be 
very important, since we have been using a list over 10 years 
old. I am sure there are many well-qualified people who have 
lots of experience in that 10-year period that didn't make the 
grade the first time.
    Mr. POMEROY. Thank you. In the interest of time I will 
forego further questions.
    Chairman MCCRERY. Thank you, Mr. Pomeroy.
    Mrs. Tubbs Jones.
    Ms. TUBBS JONES. Thank you, Mr. Chairman.
    Madam Commissioner, it is always good to see you. I wanted 
to let you know that in February I had the opportunity to speak 
at the Beachwood office of the SSA with regard to Black History 
Month, and I had a wonderful time. One of the most amazing 
things for me is this office is 99.44 percent or near 100 
percent women. The other exciting thing about the office was 
the fact that----
    Chairman MCCRERY. Maybe that is why it works so well.
    Ms. TUBBS JONES. Yes.
    Mr. BECERRA. That is on the record now.
    Ms. TUBBS JONES. I have been trying to tell you all that 
all along. It has been difficult to get it through.
    The other thing that was so amazing was the length of 
service. The women in that office had 20, 25 years of service, 
and I was really pleased to see that as well.
    Let me quickly just say that we appreciate the work you 
have done to bring more ALJs in to handle the work. You can't 
scream because you are part of the administration, we are all 
going to scream for you. You deserve to have the money. You 
must be doing such a great job that they are giving you all 
these other responsibilities, and we are going to scream and 
holler about them. The basic needs of workers in the United 
States of America, on disability, on Social Security, come to 
your office, and you ought to have the people to do the work. 
That is why we are against the pay cuts.
    Thank you very much. I yield my time. I mean tax cuts, not 
pay cuts. Tax cuts.
    Ms. BARNHART. I will share the comments about the Beachwood 
office with them. It will mean a lot. Thank you very much.
    Chairman MCCRERY. Mr. Becerra.
    Mr. BECERRA. Commissioner, good to see you again. First, I 
hope that you will help us lay the case that you need more 
money. There is just no way that anyone can expect to continue 
to achieve what you have done so tremendously well with the 
amount of money you are getting. At some point you are going to 
be overburdened to the point of collapse, and we should not 
expect that you nor the troops under you at the administration 
should be expected to continue to perform at this level and 
not, at some point, just expire from overwork.
    I hope that we will get message out within the Congress to 
the appropriators and to the White House and OMB; you need to 
have more money. You are doing great work, and you need to do 
it with the right amount of resources because no one should 
expect you to burn both ends of the candle.
    Two issues, and it relates to the fact that your folks are 
overworked. We keep hearing in Los Angeles--right now 
California branch offices, I have been told, have been 
operating without full access to the computers; computer 
software used in entering information is slow and cumbersome, 
we are being told; databases used in all California offices 
have been down since this past Tuesday, or, I am sorry, last 
Tuesday of last week. We are being told that currently, there 
are folks in these offices averaging 50 new cases per week, per 
week. The backlog on medical determinations is up, where 
before, apparently, they were able--in these offices in Los 
Angeles, able to complete the processing of some of these 
medical determinations within a 90-day period.
    My understanding is that you all are beginning to 
investigate the quality of some of the casework being done in 
Los Angeles. I think a lot of the folks are going to say that 
we have had to sacrifice quality because we have such a massive 
caseload that is growing on us. We can't handle it if we don't 
have the resources. This is not to knock the Agency, this is to 
say that I think this is just a symptom of not having the 
resources you need to do the work with the good people that you 
do have.
    The other thing I wanted to raise in the short time I have 
is that we are also hearing some concern from parents of 
disabled children that the disabled adult-child program--there 
is not enough information out there for families that face this 
problem with children who became disabled before they turn 22 
and, therefore, qualify for the disabled adult-child program, 
and that this program is out there and available to families 
that would qualify. I can submit some questions to you, but 
maybe we can have some correspondence on that particular issue. 
I know I have to yield back.
    Ms. BARNHART. On that second point, let me say, certainly, 
that is not an issue that I was aware of, that parents are 
expressing those concerns. I really would like to have any 
information you can provide because, obviously, we try to do 
outreach to make sure everyone who is entitled and eligible for 
assistance gets it.
    If I could comment for just a moment on the California 
situation and the system situation; I am pleased to be able to 
tell you the system is back up and running full speed today. 
The problem did not start last Tuesday. I will try to make this 
quick. We were upgrading capacity because of the electronic 
disability workload. California is one of our first large 
States to move to an entirely electronic environment. We have 
done upgrades in other locations, and they have gone without 
incident.
    On Tuesday or Wednesday--my understanding is Wednesday or 
Thursday of last week the system started experiencing slowdown, 
which we expected, which is why we were going to upgrade the 
capacity. Friday was a planned down day to do that, to shut the 
system down, increase the capacity of the server, and then be 
back up by Monday.
    Unfortunately, because of the overconfidence of our 
contractor who had actually done a superb job up to that point, 
took the old server down, and we did not have it as a back-up, 
system. We had done fine with the upgrade 31 times. I wish the 
32nd time hadn't been in California a week before I came before 
this Subcommittee.
    Anyway, I have been monitoring the situation personally 
very closely, and as a result we got the new system up. The old 
server has been rebuilt and is available as a back up in the 
event that we need it, even though now we'll be able to process 
faster with the new system. We monitor these things very 
closely because the whole point is to be able to provide better 
service, not worse service.
    Anyway, as a result of the down time, if you include 
Friday, which was a planned down time, we had lost about 5,500 
cases that did not get worked. That is how many would have been 
worked in terms of claims closed or opened, those kinds of 
actions. We are making accommodations for our flexible 
disability unit in San Francisco to help. We will get caught 
up, you have my assurance.
    I do want to say the workers were not sitting idle, because 
there are many things they can do even when the system is down, 
and in every single location we have what is called an 
alternative business process, which means if we are down, we 
still have an alternative process whereby work can still be 
done. DDS staff can call to request medical evidence, pull up 
the e-view screen and make notations on the case. There are 
things that they can do even if they can't open or close the 
case. I want you to know that we were absolutely on top of it. 
It was very unfortunate, and we are going to make sure that we 
have the old server available parallel system as we continue to 
do future upgrades throughout the Nation.
    Mr. BECERRA. Thank you.
    Chairman MCCRERY. Thank you, Madam Commissioner. We will 
submit some additional questions in writing, and we appreciate 
very much your coming before us today and the job that you are 
doing.
    Thank you, panel members.
    Ms. BARNHART. If I can say, finally, I really do appreciate 
the opportunity to come before this Committee. Your interest 
and knowledge of and support for these programs, I think, is 
unparalleled, and it is really remarkable and wonderful for the 
people of the Agency who work so hard. They are working their 
hearts out every single day. They care a lot, and I care about 
them, and I know you do too.
    Ms. TUBBS JONES. Mr. Chairman.
    Just think how lucky you are, Madam Commissioner. This is 
the last day before the weekend, and there are lots of votes. 
You get to get out of here.
    Chairman MCCRERY. The hearing is adjourned.
    [Whereupon, at 10:37 a.m., the Subcommittee was adjourned.]
    [Questions submitted by Chairman McCrery to the Honorable 
Jo Anne B. Barnhart and her responses follow:]

    Question: The funding that was enacted for your Agency in Fiscal 
Year (FY) 2006 was about $300 million below the President's budget 
request. Please provide more details about how you make decisions in 
terms of what workloads will or will not be processed, and how your 
Agency's ability to serve the public has been affected. If the 
President's budget for the SSA for FY 2007 is not enacted, would you 
tell us how service delivery will be further affected?
    Answer: As Commissioner of Social Security, I believe my primary 
responsibility is to ensure that benefits are paid as timely as 
possible. This means that workloads such as processing retirement and 
disability claims have priority over other workloads, including 
stewardship activities such as continuing disability reviews (CDRs) and 
Supplemental Security Income (SSI) non-medical redeterminations. In 
addition, understanding the priority that the President and Congress 
place on the implementation of the Medicare prescription drug program, 
I made a commitment to direct as much of our funding as was needed to 
achieve successful implementation.
    All of this means that this year we will not be able to process as 
many CDRs and SSI redeterminations as was planned in the fiscal year 
(FY) 2006 budget request. This was a difficult decision, because these 
stewardship activities produce significant program savings compared to 
their administrative cost.
    The FY 2007 President's budget request for Social Security includes 
$9.496 billion for our Limitation on Administrative Expenses. If 
Congress were to reduce this amount, we would not be able to meet all 
of the performance commitments laid out in the President's budget. As 
in prior years, I would need to balance our workloads in making 
resource allocations.

    Question: The President's budget proposes funding outside 
recommended caps on discretionary budget authority for several 
government-wide program integrity activities. This would include $201 
million for FY 2007 for the SSA's continuing disability reviews. In the 
past, Representative E. Clay Shaw introduced legislation that would 
fund continuing disability reviews outside discretionary caps. Are you 
and the Office of Management and Budget discussing this proposal with 
the Budget Committee? If so, what has been the reaction?
    Answer: Of the total $9.496 billion proposed for Social Security's 
administrative expenses in FY 2007, the President's budget proposed to 
provide $201 million outside of the discretionary spending caps 
specifically designated for CDRs. The Administration recognizes that 
CDRs result in far greater savings for the Social Security trust funds 
than they cost. In FY 1996 through FY 2002, Congress provided funding 
for CDRs in this manner, enabling us to successfully eliminate a 
significant CDR backlog and contribute to deficit reduction.
    For FY 2007, neither the Senate nor the House-passed budget 
resolutions include the proposed cap adjustment for SSA.

    Question: In your testimony, you mentioned that because of your 
resource constraints for the past few years, your Agency has had to cut 
back on the number of continuing disability reviews (CDRs) it will 
conduct. These reviews are important, as they ensure only those who 
continue to be disabled stay on the rolls and also generate trust fund 
savings--$10 for every $1 invested. How large is the existing CDR 
backlog? If the Agency receives the President's budget request, but 
without the $201 million funded outside recommended discretionary caps, 
what progress will you be able to make in eliminating this backlog?
    Answer: As I said in my testimony on May 11, 2006, as well as in 
response to your first question, I believe that, as Commissioner of 
Social Security, my primary responsibility is to ensure that benefits 
are paid as timely as possible. This means that workloads such as 
processing retirement and disability claims have priority over other 
workloads, including stewardship activities such as CDRs and SSI non-
medical redeterminations. In addition, this year I have committed to 
direct as much of our funding as is needed to achieve successful 
implementation of the Medicare prescription drug program. As a result, 
we estimate that the existing backlog at the end of FY 2006 will be 
approximately 800,000 CDRs. This backlog includes a mixture of Social 
Security and SSI cases.
    If the budget request is reduced by the $201 million that the 
President has requested for CDR processing outside of the discretionary 
spending cap, it would dramatically reduce the number of CDRs we could 
process in FY 2007.

    Question: At the end of December 2005, the period for comments on 
the proposed rule to revise the Ticket to Work program closed. When do 
you expect to issue the final rule? Once the final rule is issued, when 
would you expect to implement it?
    Answer: We expect to publish the final Ticket regulation in the 
fall of 2006 and plan to implement the program shortly thereafter.

    Question: I was pleased to see in your testimony that you have 
taken steps to address a longstanding problem--the lack of timely 
posting of earnings reported by the Social Security beneficiaries. 
Clearly the benefits of your e-Work system and twofold: 1) to reduce 
overpayments and 2) to add a measure of certainty for those who wish to 
work that their wages will not result in an overpayment. Could you 
provide us with details on how the e-Work system is replacing the old 
labor-intensive system? Does the SSA plan to expand e-Work to cover 
Supplemental Security Income (SSI) recipients as well as dually-
entitled persons? If so, what is the timeline for that expansion? In 
addition, how many cases is the SSA waiting to process where a 
beneficiary has reported earnings, or where the SSA data-matching 
operations identify a beneficiary who may have earnings? How long does 
it take between the time of such a report or identification until the 
SSA is able to process the earnings and, if necessary, adjust the 
benefit payment? Is the average amount of overpayment due to disability 
beneficiaries' earnings declining as a result of the availability of 
the e-Work tool?
    Could you provide us with details on how the e-Work system is 
replacing the old labor-intensive systems?
    Answer: e-Work is a web-based computer program designed to assist 
in the development and adjudication of Social Security disability 
(Title II) work CDRs. Prior to e-Work there were various stand alone 
programs that were housed on the shared drive of the local offices. 
Employees entered data into these programs to document wage reports 
that were provided by the public.
    e-Work replaced these processes and now provides us with a fully 
automated method of handling and monitoring return-to-work actions. 
Because it is a structured, policy-driven automation tool, it has 
helped to improve the accuracy of work determinations by providing 
consistent developmental direction rather than relying solely on the 
experience of the adjudicator. Notices to the public, including 
receipts of work reports, are fully automated and are complete and 
consistent. Because it allows employees in all of our offices the 
ability to view and process work reports, it also has enabled us to be 
more responsive to the questions that might be received on specific 
cases, regardless of where the person resides and which component is 
contacted.

    Question: Does the SSA plan to expand e-Work to cvover Supplemental 
Secuity Income (SSI) recipients as well as dually-entitled persons?
    Answer: SSA is working to improve collection of earnings 
information within the SSI Program. One improvement under development 
is the new Supplemental Security Income Monthly Wage Verification 
(SSIMWV) system. SSIMWV will streamline the inputs of monthly wage 
information associated with the SSI Program, including the recording of 
the data's source, posting of wages to multiple SSI records when 
required, and the generation of follow-up notices.

    Question: If so, what is the timeline for that expansion?
    Answer: SSIMWV was made available in 10 percent of field offices 
nationwide in April 2005. An enhanced version will be made available to 
these offices in July 2006. Nationwide rollout of SSIMWV is contingent 
on how the enhanced version functions in the test sites.

    Question: In addition, how many cases is the SSA waiting to process 
where a beneficiary has reported earnings, or where the SSA data-
matching operations identify a beneficiary who may have earnings?
    Answer: As of May 14, 2006, there were 192,577 work reviews pending 
nationwide. Information pertaining to data matching operations to 
identify beneficiaries with earnings is not yet available via 
management information (MI) systems currently established within e-
Work. The MI system in e-Work was developed and made available December 
2005, and because of its infant stage, the software only provides basic 
data information regarding work reviews. The e-Work MI system does not 
interface with wage data matching systems at this time, but this 
function is on the list of processes we wish to add in future 
enhancements of the program.

    Question: How long does it take between the time of such a report 
or identification until SSA is able to process the earnings and, if 
necessary, adjust the benefit payment? Is the average amount of 
overpayment due to disability beneficiaries' earnings declining as a 
result of the availability of the e-Work tool?
    Answer: A mechanism to gauge the full case processing timeframe, 
from the point wages have been submitted to the time when the work CDR 
has been completed, has not yet been developed. Further, we do not have 
the data available to substantiate the effect of e-Work on either 
preventing or identifying overpayments.

    Question: You mentioned that your Agency has had an admirable track 
record in annual productivity gains, while processing increased 
workloads. Could you describe to us the changes your Agency has made to 
its business processes to achieve a cumulative productivity increase of 
12.6 percent since fiscal year 2001?
    Answer: Our productivity improvement has been achieved through 
technology and process improvements and through the hard work of our 
dedicated and committed staff. While we have ongoing process changes 
that should yield future productivity savings, such as the new 
Electronic Disability process and the Disability Service Improvement 
(DSI) initiative, much of our productivity improvement to date can be 
associated with a multitude of automation efforts impacting most, if 
not all, of our workloads.
    For example, signature proxy, launched in June 2004, has improved 
benefit application services to claimants who file online, by phone, or 
in person. This process removes the requirement for a ``wet'' signature 
on benefit applications and continues the Agency's progress toward a 
totally electronic environment. By the end of FY 2005, this innovation 
resulted in more than 2.4 million electronic records that would 
otherwise have been created as paper, saving costs related to both 
processing time and storage.
    Through changes like this, we have been able to consistently become 
more efficient from year to year.

    Question: You mentioned that your Agency has hired approximately 
18,350 new permanent employees over the last 5 years. I have also seen 
that you expect fully 40 percent of your 65,000 Member work force to be 
eligible to retire by 2014. That still leaves a net loss in total 
employment. Could you discuss your strategy to meet the expected 
increase in demand for your Agency's services as the baby boom ages? As 
a result of the tremendous growth in the popularity of your Agency's 
online services, do you expect that some of this demand will be met 
electronically?
    Answer: Although approximately 42 percent (or 27,000) of our 
current work force is projected to retire by 2014, we believe that the 
success of our balanced recruitment and hiring methods has created 
solid internal mechanisms for current and future work force 
replacements.
    The men and women of Social Security will continue to provide 
dedicated service to the public and will continue to look for ways to 
improve productivity. These efforts are enhanced by our ability to 
leverage technology and automation advancements. For example, we have 
improved the disability process by moving to an electronic disability 
claims file through Accelerated Electronic Disability (eDib); and, we 
have more than tripled the number of transactions that we process 
electronically over the Internet.
    And, as the public--especially the baby boomers that are nearing 
retirement--become accustomed to conducting business online, we are 
finding that increasing numbers of individuals prefer to do business 
via the Internet. Thus, I would expect that method of providing service 
to continue to be used with increasing frequency.

    Question: Last month's report by the Inspector General raises 
concerns about the amount of benefits your Agency is paying to people 
who are not eligible for them. How do you plan to address the concerns 
raised by the report, and what are your goals for reducing overpayments 
in the next fiscal year? Also, how do you plan to accomplish these goas 
so that you do not discourage disability beneficiaries from attempting 
to return to work?
    Answer: We believe that by reducing overpayments, and the fear of 
being overpaid, we will be encouraging, rather than discouraging, work 
activity. We are focused on encouraging work activity, as well as the 
prompt reporting of this work activity; faster identification of those 
who may not report work activity; controlling the workload to make sure 
it is not delayed; and expediting (through automation and improved 
policies and procedures) the processing of those workloads. These 
actions, in addition to public education, will reduce overpayments 
without imposing an increased burden on our beneficiaries or 
discouraging their work efforts.

    Question: In your testimony, I note that from fiscal year 2004 to 
2005, your Agency has experienced an impressive increase of about 175 
percent in the number of transactions conducted online. Do you plan to 
add more improvements to your Agency's website, so that the American 
people can access more services from the SSA 24/7?
    Answer: Increased usage of our electronic applications has 
continued steadily through FY 2006. As of April 2006, the volume of 
successful electronic transactions of 1,317,200 represents 138-percent 
growth over the FY 2004 baseline. By the end of the fiscal year, our 
goal is to achieve 300-percent growth over the FY 2004 baseline or 2.2 
million electronic transactions. The volume of electronically initiated 
transactions currently represents about 7 percent of our total incoming 
work.
    We strive to provide the public with ``always on'' service via our 
website. Our website is available 24 hours a day, 7 days a week, and 
our online applications are accessible 20 hours per day on weekdays and 
15 to 18 hours per day on weekends. We are planning to make 
improvements to the website during the next few years, with specific 
improvements for next year subject to approval in July 2006.

    Question: We have heard complaints from some people about how long 
the disability determination process is taking at the Department of 
Veterans Affairs. So much so that some veterans are looking to the Ways 
and Means Committee to allow their tax records to be amended 
retroactively for the three past open tax years in current law. I 
believe the better course of action would be to have these cases 
settled faster than that. Do you have lessons learned that you think 
should be shared with the VA? How long has it taken the SSA to plan and 
implement the changes you have made so far, and when do you think the 
disability process will be fully computerized nationwide?
    Answer: Because SSA's disability determination process differs from 
the process used by the Department of Veterans Affairs (VA), it is 
difficult to translate our experience in developing the DSI regulation 
into ``lessons learned'' that would be both appropriate and useful to 
the VA. As we begin to implement our new regulation later this summer, 
we will, of course, gain more insight into how best to improve the 
disability determination process.
    With regard to your question about how long it has taken us to plan 
and implement the changes we have made so far, I first presented the 
basic concepts underlying the new disability determination process to 
Congress in September 2003. Over the last 2 years, we met with hundreds 
of interested parties and individuals during the development of the new 
regulation. The final regulation on DSI was published in March of this 
year.
    Concerning our plans to make DSI available nationwide, we will roll 
out the process in a measured and careful manner. Gradual 
implementation will allow us to monitor the effects that our changes 
are having on the entire disability determination process, and lessons 
learned during the early stages of implementation will allow us to 
proceed in an increasingly efficient and effective manner in the later 
stages of implementation. Efforts are underway to be ready to implement 
DSI in the Boston region in August. We anticipate that nationwide 
implementation of DSI will take 5 years.
    I want to stress that we could not make these changes without eDib, 
which replaces our old paper-based disability claims process and 
enables us to handle all new claims in an expedited manner. The 
electronic claims folder is being used in all 50 State Disability 
Determination Services (DDS), and over 90 percent of DDS staff 
currently adjudicate cases in an electronic environment. We are 
reaching the final stages of the national rollout of eDib that began in 
2004, and by the end of this year I expect each of the DDSs and the 
Office of Disability Adjudication and Review (formerly our Office of 
Hearing and Appeals) to be using electronic folders for new disability 
claims on a regular basis throughout the country.

    Question: The SSA is piloting a program in New York and New Jersey 
that uses an electronic asset verification system to help confirm that 
individuals who apply for SSI benefits are eligible. Under the pilot 
program, has the SSA detected cases that might have been overpaid 
without the verification system? How much in savings has been achieved 
so far under the pilot? Do you have plans to use the asset verification 
system nationwide, and if so, when?
    Answer: We have been piloting a financial account verification 
system in field offices located in New York and New Jersey. Part of 
this pilot involved a comprehensive study to measure the value of such 
a system for SSI applicants as well as recipients already on the 
payment rolls. This study did identify a small percentage (about 5 
percent) of applicants and recipients who were overpaid based on this 
financial account verification system that, without this system, would 
not have been detected. The average amount of overpayment for these 
overpaid study cases was $3,654. Therefore, for the 3,287 study cases 
only, we saved about $805,000 in incorrect SSI payments. Although the 
percentage of incorrect payments detected through the financial account 
verification system is relatively small, if we project these results to 
the full population of SSI applicants/recipients, we believe 
significant program savings could be achieved.
    We are continuing to analyze the study results with an eye to the 
potential return on investment that nationwide implementation might 
yield relative to our other stewardship activities.

    Question: Please provide an update on the hiring of Administrative 
Law Judges (ALJs) since the Azdell litigation was resolved, your plans 
and timeframe for returning to a full corps of ALJs, the status of the 
registry of ALJ candidates maintained by the Office of Personnel 
Management, and the anticipated timeline for producing a new registry.
    Answer: The U.S. Court of Appeals for the Federal Circuit issued a 
decision in favor of the Office of Personnel Management (OPM) on 
February 20, 2003. Since that time, we filled 102 ALJ positions in 
2004, 98 in 2005, and I expect to hire 42 ALJs in 2006. I had planned 
to hire 100 ALJs this year, but because we received $294 million less 
than the President requested, we revised our plans.
    With regard to the new registry, on December 13, 2005, OPM 
published a Notice of Proposed Rulemaking (NPRM) to revise the ALJ 
program. The NPRM was open for public comment through February 13, 
2006, and OPM tells us that the regulation will be final in about 3 
months. We understand that the test will become available at that time, 
and OPM will administer the exam. Based on this information, we hope to 
have a new registry for ALJs by the end of this year.

    Question: The SSA has reported that it will not be able to replace 
every employee who leaves the Agency this year due to budget 
constraints, and the President's FY 2007 budget request reflects a 
reduction of more than 2,500 workers. Given these limitations, how does 
the SSA intend to implement the new Federal Reviewing Official 
component of the Disability Service Improvement plan, including hiring 
and training the reviewing officials and their support staff, and 
providing for necessary infrastructure?
    Answer: The central goal of the new disability determination 
process is to arrive at the correct decision on each claim as early in 
the process as possible. DSI replaces the current four-step 
adjudicative process (i.e., DDS initial decision, DDS reconsideration 
decision, ALJ hearing and Appeals Council review) with a new three-step 
process (i.e., DDS initial decision, Federal Reviewing Official 
decision and ALJ hearing) followed by a discretionary review by the 
Decision Review Board. During FY 2007, implementation of SSA's new DSI 
process for making disability determinations will take place only in 
the Boston Region.
    Because initial disability claims in the Boston Region currently 
represent less than 4 percent of all initial disability claims filed in 
the Nation, the immediate staffing and support demands for the new 
Federal Reviewing Official component of the DSI process can be easily 
met without disrupting any ongoing operations of the Agency. It is 
anticipated that successful implementation of the DSI process will 
result in significant improvement in the timeliness of case 
decisionmaking, which will, in turn, allow sufficient resources now 
committed to the latter stages of the disability determination process 
to be shifted to support the expanded staffing earlier.

    [Questions submitted by Representative Becerra to the 
Honorable Jo Anne B. Barnhart and her responses follow:]

    Question: How many DAC Beneficiaries are there? Could you provide 
subtotals according to the basis of their entitlement--i.e. by a 
parent's retirement, disability or death? How many received SSI 
benefits prior to their DAC entitlement?
    Answer: As of December 2005, the numbers of childhood disability 
beneficiaries (also commonly referred to as DAC beneficiaries) by basis 
of entitlement were:

                                                                   Total                   768,535
                                                          Retired worker                   191,979
                                                         Deceased worker                   507,961
                                                         Disabled worker                    68,595

    Using a 10 percent sample as of December 2005, we estimate that 
approximately 448,530 of these DAC beneficiaries received Supplemental 
Security Income (SSI) benefits prior to their DAC entitlement.

    Question: How does SSA ensure that potential DAC Beneficiaries, 
their parents or other guardians--as well as community organizations 
and others who work with them--are aware of the availability of this 
benefit? Please describe all outreach and information activities 
conducted by SSA to alert potential beneficiaries, their parents or 
other representatives (e.g. guardians, representative payees or 
trustees), and community organizations who work with this population.
    Answer: Social Security is very diligent in ensuring that claims 
technicians explore all possibilities for benefit entitlement. We ask 
on every claim (including all retirement, disability, lump sum death 
payment, and survivor claims) if there is any child over the age of 18 
who has a disability that began before age 22 so that we can ensure 
that a Childhood Disability Benefit (CDB) claim is taken if 
appropriate. In addition, when a child attains age 18 in the Title XVI 
program, we redetermine the child's eligibility under the adult 
disability criteria. During these interviews, we also explore 
entitlement to other benefits to which the individual may be entitled, 
including entitlement to CDB.
    We also provide speakers nationwide, through a network of local 
offices, to conduct seminars for disability organizations, support 
groups, hospitals, and social workers interested in educating their 
Members, their employees and their patients and families about Social 
Security's disability programs. Social Security employs 1,300 field 
office managers and almost 150 full-time public affairs specialists to 
educate Americans on Social Security programs. Each year, working in 
their local communities, these professionals deliver thousands of 
speeches, write numerous newspaper articles, and participate in 
countless radio and television interviews where they discuss all 
aspects of Social Security, including benefits provided through the 
program. Speakers can be requested either online at 
www.socialsecurity.gov/organizations or by contacting any local Social 
Security field office.
    We participate in over 90 national conferences each year, providing 
attendees with information about the various programs administered by 
Social Security. This year Social Security will be attending over 50 
conferences, at which we will be reaching out specifically to 
disability organizations and medical provider groups in an effort to 
educate and inform.
    We actively partner with organizations, schools, and advocacy 
groups that work with the disabled community. We maintain these 
relationships by educating these various groups about our programs, 
including CDBs. As noted above, we do this by conducting seminars and 
workshops, writing articles for newsletters, and establishing 
partnerships. These partnerships allow us to spread the word about our 
disability programs and the work incentives for those already enrolled 
in our programs.
    Additionally, we maintain informative pamphlets and brochures on 
our disability programs along with Medicare and Medicaid services. 
These are distributed to schools, centers for the developmentally 
disabled, and community centers, which are all places that disabled 
children and their families attend. We also maintain on our website 
extensive information on our programs and other help for students with 
disabilities. We are making changes to our website so that disabled 
adult children and the people who are helping them can more easily see 
that these benefits are potentially available to them. We created on 
the front page of our website a new link entitled ``Adults disabled 
before age 22'' and added a new page to the website discussing these 
benefits. We also have added a separate question about these benefits 
to our list of ``frequently asked questions'' about disability, which 
we also link to the new web page.

    Question: When a worker applies for Social Security retirement or 
disability benefits, or a spouse applies for survivors benefits, does 
SSA probe for whether there might be a potentially eligible DAC 
beneficiary? If so, is this true for all application settings--field 
office, telephone, and online? If not, why not?
    Answer: When a worker or a spouse applies for any type of Social 
Security benefit, the question about children with disabilities is 
investigated with every claim. This is true for all application 
settings, either in the field office, telephone, or online. In fact, 
the interviewer or person filing online cannot continue through the 
path of a claim without answering this essential question.

    Question: When a disabled adult applies for SSI benefits, does SSA 
probe for whether he or she might be eligible for DAC benefits, either 
at that time or in the future? If the individual is not immediately 
eligible (because his or her parents are not retired, disabled, or 
deceased), is any kind of notation put on the file to flag for future 
DAC entitlement?
    Answer: The SSI application is also an application for any Title II 
benefit to which the applicant is eligible, including CDBs. Existing 
procedure specifically instructs SSI interviewers to investigate 
eligibility for such benefits. The SSI application also asks about 
other Members of the household. This gives the interviewer the 
opportunity to explore leads for other benefits that could be 
available. If future entitlement is indicated, the interviewer can 
annotate the remarks portion of the application. These questions 
concerning children and children with disabilities will be addressed, 
in the future, in the event that the parent files for retirement or 
disability benefits, or if the parent dies. If the disabled adult 
remains eligible for SSI benefits, we will check potential eligibility 
for CDB during each SSI redetermination.
    Social Security is currently working on systems enhancements that 
would collect and store parental information for disabled adults who 
became disabled prior to age 22. Using this information, the system 
would periodically interface with the Master Beneficiary Record and 
Social Security's death records to determine if the SSI recipient is 
eligible for CDB on the parent's record.

    Question: Can DAC benefits be applied for online? If not, please 
explain why.
    Answer: Childhood disability benefits cannot be applied for online. 
At the present time our online services do not include filing for 
survivor's or auxiliary child's benefits. Any claimant seeking benefits 
on a worker's record must establish his/her relationship to the worker. 
For some categories of children, dependency on the worker must also be 
proven. Both can be very complex and sensitive. In an in-person 
setting, a trained adjudicator using targeted lead and appropriate 
follow-up questions and explanations can elicit the necessary 
information. In the Internet self-help arena, all related information 
would need to be elicited through detailed questions and associated 
help screens. Our experience suggests that adjudicator recontact would 
be necessary to confirm the child's relationship in many cases, thus 
detracting from the purpose of the online application. However, we 
continue to evaluate the feasibility for including these types of 
claims online.
    It should be noted that the disability report form, which is a 
critical part of the CDB application process, can be completed online 
by the beneficiary, his or her representative, or an organization, to 
be accessed by the claims technician and included with the claim. This 
facilitates the claims process for these applicants.

    Question: Has SSA undertaken any analysis aimed at determining 
whether all potentially eligible DAC beneficiaries are receiving 
benefits? If so, what are the results? If not, why not? Has SSA 
evaluated its outreach activities in order to assure that they are 
effective and that the DAC benefit is not underutilized? If so, are any 
additional steps planned to improve outreach?
    Answer: Social Security is always looking to improve our processes 
and outreach to ensure that disabled individuals receive all the 
benefits to which they are entitled. In fact, we have done some 
analysis on cases where some potentially eligible disabled individuals 
might have been entitled to CDBs. We are currently reviewing these 
cases to ensure that CDBs will be paid to these individuals, as 
appropriate.
    Social Security has always had a forward-thinking approach about 
outreach efforts and activities. All Social Security regions have 
public affairs specialists who conduct numerous outreach activities 
with organizations committed to helping the disabled community, 
including disabled children. We are continually monitoring and 
evaluating our outreach activities so that we are responsive to the 
needs of the communities within each servicing field office. 
Additionally, all of these specialists attend annual conferences that 
offer training on a variety of topics specifically geared toward 
ensuring that they are providing essential Social Security program 
information to all the key organizations in their communities.

    Question: Could SSA and state-administered SSI supplementation 
programs provide written notices describing the DAC benefit, the 
grounds for eligibility and the application process to disabled minor 
and adult recipients of SSI and to appropriate third parties, such as 
parents, conservators, trustees and representative payees? Could such 
information be included with other notices or letters sent to disabled 
SSI recipients and their representatives? Based on your experience, 
would written notifications be an effective outreach tool?
    Answer: We will explore the possibility of including information 
about CDBs in notices to SSI recipients and their representative 
payees. The target group would be individuals disabled prior to age 22 
who remain unmarried.
    However, currently during the SSI application and redetermination 
process, Social Security does ask questions to determine if eligibility 
for other benefits exists. We also provide a written referral (Social 
Security Administration Supplemental Security Income Referral Notice 
for Social Security Benefits) when the SSI applicant is potentially 
eligible for Social Security benefits, including CDBs.
    Additionally, we have numerous publications that provide 
information on all of our programs and their benefits. The 100-page 
booklet, ``Understanding Supplemental Security Income,'' includes a 
chapter that provides information for SSI applicants, beneficiaries, 
and their representatives about potential eligibility for Social 
Security benefits, including CDBs. The booklet is published in English 
and Spanish and is provided to other agencies, community organizations, 
and Members of the public upon request. Social Security's publication, 
``Benefits for Children with Disabilities,'' is geared toward providing 
information to parents and care givers of individuals who have been 
disabled since childhood. It helps individuals decide if their child, 
or someone they know, may be eligible for Social Security or SSI. There 
are links to both publications on Social Security's Web site 
www.socialsecurity.gov.

    [Submissions for the record follow:]

 Statement of Witold Skwierczynski, American Federation of Government 
 Employees, Social Security General Committee, and National Council of 
                  Social Security Administration Field

                           Operations Locals

    Chairman McCrery, Ranking Member Levin, and members of the Social 
Security Subcommittee, I respectfully submit this statement regarding 
Social Security's Service Delivery Challenges that face the Social 
Security Administration. As a representative of AFGE Social Security 
General Committee and President of the National Council of SSA Field 
Operations Locals, I speak on behalf of approximately 50,000 Social 
Security Administration (SSA) employees in over 1500 facilities. These 
employees work in Field Offices, Offices of Hearings & Appeals, Program 
Service Centers, Teleservice Centers, Regional Offices of Quality 
Assurance, and other facilities throughout the country where 
retirement, survivor and disability benefit applications and appeal 
requests are received, processed, and reviewed.
    SSA employees are dedicated to providing the highest quality of 
service to the public in a compassionate manner. AFGE represents 
employees who are committed to serving our communities in the face of a 
significant increase of work and decrease of staff. However, the severe 
cuts in budget and staff have had a detrimental effect on employee 
morale and, also, the ability for SSA to fulfill Congressional 
mandates.
    Although SSA's workloads have increased by 12.6 percent over the 
last 5 years, and 2.7 percent in FY 05, Congress appropriated $300 
million less for SSA than proposed in the President's FY06 budget 
request. The result was a 2368 reduction in budgeted work years. While 
SSA's proposed budget requests have compared favorably compared to many 
other agencies, AFGE is concerned that the recent budget cuts may 
result in dangerous levels of inadequate service to the public and 
stewardship of the programs under SSA's jurisdiction.
    In February 2006, SSA informed AFGE that the budget cuts would be 
absorbed in staffing resources. Additionally, Commissioner Barnhart 
imposed a hiring reduction wherein the Agency will replace only 1 of 3 
employees engaged in direct public service who leave SSA. In recent 
weeks, AFGE has received reports that the replacement ratio for 
employees in field offices may have dropped to one hire for every 8 
employees who leave the Agency. (SSA has failed to communicate this 
staffing replacement decision to the Union.)
    AFGE is very disturbed by the reports we have received of the 
public's inability to access SSA's 800 number. AFGE has requested 
documentation of the SSA 800 number's lost call and waiting time rates. 
However, those reports are not being made available to the Union. AFGE 
has received reports that many field offices around the country have, 
also experienced a substantial increase in interviews. It has been 
reported that in some locations there are lines of 100-200 people that 
wait all day and some never even get inside of the Social Security 
office. The waiting process begins again the next day in these 
locations. It is disturbing that the public's waiting times in these 
offices can be measured in days, rather than minutes or hours. However, 
SSA officials will not take appropriate action to verify the actual 
time the public waits to get into the office. SSA waiting times are 
measured only after the public enters the office and registers through 
the Visitor Intake Process. Additionally, we are told that SSA 
officials are not taking appropriate action to protect the filing dates 
of potential applicant's who cannot attain access to the office or 
speak to an SSA employee because of these long lines. These actions may 
result in a loss of benefits for the potential applicant.
SSA Workloads
    In FY 2006, SSA workers will process approximately:

      6.5 million claims for benefits;
      528,000 Medicare Part D low income subsidy applications;
      560,000 hearings;
      18 million new and replacement Social Security cards;
      261 million earnings items for workers' earnings records;
      58 million transactions through SSA's 800-number;
      42 million visitors to our field offices;
      1.2 million continuing disability reviews (CDR);
      1.2 million non-disability Supplemental Security Income 
(SSI) re-determinations.

    These workloads total more than 346.5 million actions processed by 
SSA employees.
Continuing Disability Reviews (CDRs)
    SSA must consistently and accurately evaluate initial and ongoing 
eligibility for beneficiaries with disabilities. CDRs are a cost-
effective program integrity workload, which saves $10 in program 
benefits for every $1 spent in administering them. However, the 
Subcommittee heard Commissioner Barnhart testify that SSA will perform 
fewer CDRs in FY 2006. Because of the budget cuts, she imposed a 
moratorium on CDR production in February 2006.
    Commissioner Barnhart has also stated to the Subcommittee that an 
increase in the number of CDRs conducted in FY 2007 will result in 
greater program savings. AFGE believes that unless Congress 
significantly increases the appropriations to SSA for administrative 
expenses beyond the President's request, there will be insufficient 
staff to process the CDR workload. President Bush proposed deeper cuts 
of 2412 work years in the FY 07 budget. AFGE believes CDRs will 
continue to backlog. This will ultimately affect the integrity of SSA's 
disability programs as many beneficiaries will continue to receive 
Social Security and Supplemental Security Income (SSI) disability 
benefits although they are no longer qualified for such benefits. The 
CDR moratorium will result in additional overpayments and unnecessary 
trust fund expenditures. Much of these improper payments will never be 
recovered by the Agency.
Supplemental Security Income
    SSA has a continuing responsibility to periodically review SSI 
eligibility. It also has responsibility to recover SSI overpayments, to 
combat fraud, and to develop and carry out program management policies. 
In February 2006, Commissioner Barnhart placed caps on the total number 
of redeterminations that could be processed in FY 06, resulting in a 
virtual shutdown of redetermination production. Redeterminations save 
the Agency an average of $10 per $1 of expenditure. Again, Commissioner 
Barnhart blamed budget cuts by Congress for her decision to limit SSI 
redeterminations in FY06. Without these ongoing reviews of SSI 
benefits, SSA's ability to improve and maintain the integrity of the 
SSI program is severely compromised and recipients will experience both 
significant overpayments and underpayments.
Statistical Manipulation
    Despite severe budgetary constraints, the Commissioner instituted a 
policy change in 2004 which directed SSA employees to take and process 
disability claims from individuals who were clearly not eligible for 
benefits. This policy requires SSA Claims Representatives to take and 
process concurrent Title II (SSA) and Title XVI (SSI) claims whenever 
anyone filed for disability benefits. Interviewers can usually 
determine through questioning potential eligiblity for benefits. If 
they can't, or if dual eligibility appears possible, SSA employees have 
always been trained to take and process concurrent SSA-SSI claims. 
However, requiring such claims in every situation results in an 
enormous amount of unnecessary work. Claims for individuals who are 
obviously ineligible for either Title II or Title XVI disability 
benefits are taken as ``technical denials'' which can be processed in a 
few days. Many claimants object to filing both applications. 
Interviewers are told to take these claims anyway.
    SSA states that instructions to take concurrent Title II and Title 
XVI applications for every disability claimant are intended to prevent 
a recurrence of the Special Title II Disability Workload fiasco wherein 
approximately = million Title XVI recipients are owed billions of 
dollars in retroactive Title II benefits. However, this injustice 
occurred due to gross program mismanagement. SSA, despite knowledge of 
the problem, refuses to take the necessary action to both program the 
computer system and also emphasize processing of systems alerts which 
indicate Title II eligibility. In fact, SSA appears to have little 
actual concern for the 500,000 SSI recipients who appear eligible for 
retroactive Title II benefits. Plans to clear up this work backlog are 
projected to be completed well into the next decade. Congress should 
certainly demand that this outrageous situation be rectified 
immediately; otherwise, many of these destitute SSI beneficiaries will 
die prior to receiving their retroactive benefits.
    Special Title II workloads are low on SSA's priority list. Instead, 
the Union feels that the real purpose of wasting government resources 
to process unnecessary disability claims is to create a false picture 
of the health of the Agency. SSA achieves a substantial reduction in 
processing time by adding the short processing time of technical 
denials to the processing time of claims that require a disability 
decision. Thus, SSA can report to Congress that processing time for 
disability cases is 93 days. This appears to be an improvement over the 
120 day processing time of 5 years ago. However, the real time for 
processing legitimate disability claims is much higher. Congress should 
demand an end to this practice and that the Agency provide separate 
statistical reports regarding processing time for claims that require a 
disability decision vs claims that don't (i.e., technical denials).
    SSA argues that technological improvements such as the Electronic 
Disability Claims System (EDCS) have reduced processing time. SSA's 
budget request contains millions of dollars for technological 
improvements which arguably result in better service. However, the 
statistics are unreliable. Congress must demand accountability. 
Processing time must reflect the actual time it takes to process 
``real'' disability claims. When resources are limited, how can we 
afford to do unnecessary work?
    Another problem that is of concern regarding taking claims from 
obviously ineligible claimants is the excessively intrusive information 
that the government is gathering from its citizens and maintaining on 
databases. Why should someone who files for SSA disability benefits 
supply information to the government regarding their income, resources, 
assets, etc, that are determining factors for Title XVI entitlement, 
when this person is clearly ineligible? Such an invasion of privacy is 
unwarranted and not in the public interest.
    Also, how can Commissioner Barnhart place a moratorium on CDRs and 
redeterminations when the Agency is demanding that its employees 
process thousands of unnecessary claims? This is an outrageous waste of 
government resources and should be investigated by Congress.
New Medicare Workloads
    Although SSA has experienced staff cuts for FY06 and is projected 
to experience additional cuts in FY 07 of 2412 work years based on the 
President's proposed budget, SSA workers have been given additional 
responsibilities under the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA). SSA's 2005 budget provided for a 
modest increase in staffing levels to prepare for the implementation of 
Medicare Part D. Unfortunately while Congress appropriated some staff 
for Medicare Part D, SSA total work years were reduced in FY06. The end 
result was more work and less staff and overtime--not a recipe for 
success.
    AFGE has received reports that the ongoing confusion and 
communication problems experienced by the public have had a significant 
adverse impact on both SSA's 800 number and field offices interview 
waiting times.
    SSA workers have reported the public's complaints of not being able 
to access our 800 number due to constant busy signals. Once access is 
gained, long waits in queue occur. SSA workers reported that the public 
had the misperception that SSA administers Medicare Part D. This 
resulted in great frustration when SSA workers properly referred calls 
to the Center for Medicare and Medicaid Services (CMS). SSA field 
office employees reported a heavy overflow of callers and visitors 
seeking advice due to their failure to understand the complexities of 
Medicare Part D. To date SSA workers have processed nearly 4 million 
subsidy application for Medicare Part D. AFGE applauds the 
professionalism and patience of the 800 number agents and field office 
employees who struggled to provide quality service under the stressful 
environment of these circumstances. Unfortunately, the Commissioner did 
not make an effective case for more staff to process this new workload. 
Instead 800# workers experienced severe leave restrictions and 
increased scrutiny of their work performance. Punishing overworked 
employees for the Agency's failure to obtain sufficient resources is a 
misguided approach.
    Although the initial enrollment period has elapsed, the impact of 
the MMA will continue to put a drain on SSA resources. The MMA requires 
redeterminations of Medicare Part D subsidy applications. AFGE 
understands those redeterminations should begin in FY06. Yet, 
Commissioner Barnhart has suspended processing of the SSI scheduled 
redeterminations for FY06 and possibly FY07 because of cuts to SSA's 
budgets. AFGE seriously doubts that SSA will be able to initiate 
Medicare Part D redeterminations in FY06.
    Congress should be very concerned about the integrity compromises 
that this will present for this program. Without a major increase of 
staffing, Medicare Part D may become one of the many SSA programs where 
integrity takes a back seat to expediency.
    As Commissioner Barnhart has testified, SSA will face new Medicare 
challenges at the beginning of FY 2007. Section 811 of the MMA 
establishes a new Medicare Part B tax for those with higher incomes.
    Beginning in January 2007, the federal Part B tax will be increased 
so that beneficiaries with higher incomes pay higher Part B premiums. 
This will affect beneficiaries who have income of more than $80,000 if 
they are single and more than $160,000 for married couples. MMA 
requires SSA to use IRS data to determine who is affected and the 
amount of the additional premium they will have to pay.
    Unfortunately, the IRS data that SSA will receive will be 2 to 3 
years old. This will provide good cause for many Medicare beneficiaries 
to provide more recent tax return data to determine the correct 
premium. MMA allows beneficiaries to request corrected premiums when 
they have a life-changing event that significantly reduces their income 
or to provide corrected or amended tax returns.
    The implementation of Medicare Part B will certainly cause an 
increase of calls and visits to SSA offices. Congress provided no 
additional staff for SSA to process this new Medicare Part B workload. 
In fact, the President's FY 07 proposed budget cuts work years. The 
Agency projects up to 5 million Medicare Part B beneficiaries who may 
be impacted by the increased Medicare tax. Many will appeal their tax 
determinations since their incomes have changed in the last 2 or 3 
years. This means lengthy interviews and more work with less staff.
    AFGE is very concerned with the Administration's communication plan 
regarding Medicare Part B. The Federal Register notice is not a 
document that is well read by the general public. The Federal Register 
should not be the public's first and only notice of such changes that 
affect the cost of medical insurance.
    SSA should engage in a well publicized communication campaign to 
inform the public of these changes. Without such a campaign, the first 
official and personal notice that the beneficiaries receive in November 
may cause an unnecessary influx in calls and visits to Social Security 
offices that have limited resources. Commissioner Barnhart severely 
limited Christmas and holiday leave for 800 number workers last year 
because of the implementation of Medicare Part D. This may have been 
avoided if an in-depth public relations campaign had been accomplished 
prior to implementation. SSA has already notified teleservice center 
employees of their intentions to limit 800 number workers' Christmas 
and holiday leave to just 10% of the workforce again this year. This is 
unfair and unjust treatment of the more than 7000 employees who answer 
800# calls who are being made to pay the price for Agency's lack of 
preparation.
    The Commissioner has testified that the impact of calls relating to 
Medicare Part B is foreseeable. However, she has not offered a public 
education plan to diminish the need to call or visit an SSA office. 
AFGE strongly urges Congress to demand such a plan from the 
Commissioner. Both the public and SSA workers deserve efforts to reduce 
the impact of this event.
Legislative Mandates
    The implementation of the Intelligence Reform and Terrorism 
Prevention Act of 2004 (IRTPA) required SSA to verify all original 
Social Security number requests. Since implementation of this 
legislation in December 2005, the impact of this legislation on SSA's 
operations and resources has been significant, resulting in increased:

      number of visits to Social Security field offices;
      SSA contacts with State and Local vital record 
custodians;
      costs to verify and purchase necessary vital records;
      length of the Social Security number process

    The implementation of IRTPA did not involve a public relations 
campaign to educate the public on the new identity requirements for 
Social Security numbers. The lack of public education created chaos and 
frustration for the public. SSA estimates that over \1/3\ of the 
interviews regarding Social Security Number issues were repeat 
interviews. The lack of coordination with the State and local vital 
record custodians has caused more work time to resolve problems and 
complete processing the Social Security number requests.
    Unfortunately, Congress did not provide additional funding to SSA 
to implement the IRTPA. This has caused an added hardship on a 
workforce that has many other workloads.
Commissioner Barnhart's Disability Initiative
    AFGE continues to be very concerned about the Commissioner's plans 
to move forward with her disability initiative.
    Currently 55 million Americans have a disability, of which 8.3 
million Americans and their families receive Social Security Disability 
Insurance (SSDI) (17.1% of all Social Security benefits are paid to 
disabled beneficiaries and their families.) Some disabilities are long 
term (e.g., broken back) while others are permanent (e.g., blindness, 
quadriplegia).
    As explained previously, real processing time for initial 
disability claims that require a disability decision is unknown. 
However, processing time for hearings appeals has dramatically 
increased. Prior administrations attempted to develop different methods 
to streamline the disability determination process. Some pilot 
projects, such as the Disability Claims Manager, were considered to be 
successful (i.e., resulted in applicants receiving benefits twice as 
fast) and were overwhelmingly supported by the public. However, 
Commissioner Barnhart refused to implement those pilots and instead 
developed a new, untested approach to alter the process. It is the 
Union's belief that the Commissioner's approach will do little to get 
benefits to the disabled applicant faster or improve service. The 
commissioner's plan eliminates one appeal step and implements new legal 
barriers to obtaining benefits:

      The rules provide for the establishment of a Quick Claims 
Unit for claims filed by individuals who have obvious disabilities. 
Claims that are sent to this unit are targeted to have a completed 
disability decision within 20 days. The union favors the establishment 
of such a unit. The union opposes placement of the unit in the State 
Disability Determination Service (DDS). This is an unnecessary handoff. 
Employees who work in SSA field offices are entirely capable of being 
trained to make such disability determinations. The DCM pilot proved 
that fact. SSA public surveys indicate that there is overwhelming 
desire from the public that disability decisions be made by the person 
who interviews them. The Quick Decision Units provide the Agency with 
an opportunity to streamline the process by eliminating a handoff and, 
at the same time, satisfy the public desire for a caseworker to be 
empowered to decide both the disability and non-disability portions of 
their claim. Allowing federal employees in field offices to make 
disability decisions would require Congress to change the exclusivity 
portions of the law that currently reserve such decisions to the state. 
It is time for Congress to enact such a change in the law and improve 
public service.
      In place of the current Reconsideration process, 
attorneys (Federal Reviewing Officials) will review cases and write a 
``legal decision'' that will serve as the SSA's legal position on the 
case. In spite of the Commissioner's hiring freeze for direct service 
positions and her claim of budget shortages, an army of attorneys are 
being hired as this statement is written. The trust fund (SSA) and 
general revenue (SSI) impact of eliminating reconsiderations and 
replacing them with a reviewing official review is unknown. Failure to 
pilot this change is risky and reckless. Substantial deviation from the 
current disability approval rates could lead to unwarranted 
expenditures or, conversely, more stringent policy decisions regarding 
the definition of a disability.
      The Administrative Law Judge (ALJ) will now be limited in 
what he/she can consider as evidence from the claimant as all medical 
evidence must be presented five days prior to the hearing. The ALJ is 
limited in what he/she can consider good cause for late medical 
evidence notwithstanding its relevance. Prior to the Commissioner's new 
approach, the ALJ was allowed total discretion to accept and evaluate 
evidence. Under the new rules the ALJ's written decision must explain 
in detail why he/she agrees or disagrees with the substantive findings 
and overall rationale of the Federal Reviewing Official's legal 
decision. The ALJ must rebut SSA's legal decision if benefits are to be 
awarded to a claimant. One can anticipate that hearing reversal rates 
will decrease due to the pressure on the ALJ to uphold the Reviewing 
Official decision.
      The disability application or ``record'' will be closed 
effective with the ALJ's decision, prohibiting U.S. District Courts 
from accepting or considering relevant and material evidence that might 
prove that the claimant is disabled. This likely will result in 
thousands of new disability claims each year in the form of 
reapplications. This subtle bureaucratic change realistically could 
result in the loss of significant retroactive benefits for those who 
refile with evidence of disability with an onset date within the scope 
of the previous application. There is no reason to close the record at 
any time other than to reduce the ability of claimants to present 
relevant evidence to support their claim. This will surely lead to 
decisions to deny benefits to claimants who are disabled under the law. 
Some of the adverse affects of this new closing of the record 
regulations are:

            Loss of complete or partial coverage for Social 
        Security Disability Insurance
            Loss of coverage for Medicare benefits entirely
            Loss of retroactive Medicaid and Medicare coverage 
        for a period of time covered by current rules (from the date 
        the claim was initially filed to the date of the subsequent 
        application).

    Such uncertainty regarding a key element of this change in the 
appellate process causes the Union to strongly suggest piloting any of 
these changes. Commissioner Barnhart has rejected pilots. Besides 
piloting the Reviewing Official step replacing the reconsideration, the 
Union feels that the Agency should pilot the decision to require that 
the reviewing official be an attorney. This decision ignores the fact 
that there are many highly qualified non-attorney employees in both SSA 
and the DDS's who are fully capable of deciding disability appeals and 
writing logical decisions. The Commissioner both insults the current 
workforce and creates difficult legal barriers for claimants to 
overcome in appeals. In an attorney dominated process (i.e., Reviewing 
Official and ALJ) claimants will almost be required to hire an attorney 
to manage their appeals at the earliest level. This adds an element of 
litigation that does not currently exist in the reconsideration appeal.
    The Commissioner will replace the Appeals Council Review with a 
Decision Review Board (DRB). The DRB will be appointed by the 
Commissioner to review and correct ALJ decisions including approved 
claims. The DRB will not review decisions by state officials (DDSs) or 
federal Reviewing Officials (FRO). This will prevent processing payment 
of an approved claim and will render the ALJ's decision as not final. 
The process by which cases will be selected for review will be entirely 
at the DRB discretion and will provide the DRB with carte blanche 
authority to pick cases in a non-random manner. Such unregulated 
authority is an invitation for abuse
    The Appeals Council currently either reverses or remands 30% of 
claims that they review.
    Eliminating an appeal where such a large number of cases are either 
reversed or where all the evidence was not properly assessed insures 
that many claimants will be denied benefits that would be approved 
under the current system. Is this the desire of Congress? Does Congress 
really want to scale back the SSA disability program so that claimants 
approved under the current system are now denied benefits?

      A claimant's last appeal, U.S. District Court, requires 
legal representation. This will severely disadvantage claimants who 
lack the financial resources to either hire an attorney or travel to 
District Court. Additionally, the U.S. District Court system which is 
already overwhelmed is not prepared to absorb this influx of additional 
cases.

    Commissioner Barnhart's new approach fails to address the problems 
and inadequacies of the State Disability Determination Services (DDS), 
which is responsible for the initial disability decision in all claims.
    There is no consistency in State DDS disability determinations. The 
taxpayer's chances of being approved for disability benefits continue 
to depend more on where they live and their income.
    For example, State Agency Operations records indicate that those 
who can obtain medical attention early and often have a better chance 
of being approved for benefits than those who have a limited income or 
resources. (See Chart Below) Nationwide, those applying for Social 
Security disability have a much greater chance of being approved than 
those who may only apply for the Supplement Security Income (SSI) 
program. State Agency records clearly expose the inconsistencies of the 
State DDS decisions.
    More than 66 percent of Social Security disability claims for 
benefits are approved in the Washington DC DDS, while only less than 28 
percent of those who file for benefits are approved in the South 
Carolina DDS. Of those who applied for SSI benefits, the State of New 
Hampshire leads with more than a 59 percent allowance rate. However, 
residents from the States of Michigan, Ohio, Iowa and Georgia are 
approved less than 35 % of the time by their respective DDS. The 
concurrent disability process shows inexplicable variable allowance 
rates depending on the state of residence. Allowance rates are low in 
every state. The states of New Hampshire, Arizona and the District of 
Columbia approve more than 43 percent of the concurrent claims. Less 
than 18 percent of those filing concurrent disability claims are 
approved in Iowa, Missouri, and South Carolina.
    As an illustration, following is a compilation of the allowance 
rates in a sample of states:

----------------------------------------------------------------------------------------------------------------
                                                     T2 Initial            T16 Initial       Concurrent Initial
                                               -----------------------------------------------------------------
                                                  Allow       Deny      Allow       Deny      Allow       Deny
----------------------------------------------------------------------------------------------------------------
NATIONAL AVERAGE                                    44.2       55.8       36.4       63.6       25.3       74.7
----------------------------------------------------------------------------------------------------------------
BOSTON Region                                       53.7       46.3       43.6       56.4         33         68
----------------------------------------------------------------------------------------------------------------
Boston, MA                                          56.9       43.1       48.7       51.3       36.6       63.4
----------------------------------------------------------------------------------------------------------------
New Hampshire                                       63.8       36.2       59.2       40.8       48.2       51.8
----------------------------------------------------------------------------------------------------------------
Connecticut                                         47.3       52.7       34.3       66.7       23.5       76.5
----------------------------------------------------------------------------------------------------------------
New York Region                                     51.4       48.6       42.8       57.2         33         67
----------------------------------------------------------------------------------------------------------------
Buffalo, NY                                           47         53       33.8       66.2         23         77
----------------------------------------------------------------------------------------------------------------
Newark, NJ                                          60.8       39.6       42.1       57.9       34.9       65.1
----------------------------------------------------------------------------------------------------------------
Puerto Rico                                         34.2       65.8         --         --         --         --
----------------------------------------------------------------------------------------------------------------
Philadelphia Region                                 51.7       48.3       40.3       59.7       28.9       71.1
----------------------------------------------------------------------------------------------------------------
Maryland                                            49.9       50.1       35.4       64.6       24.9       75.1
----------------------------------------------------------------------------------------------------------------
PA                                                  53.3       46.7       41.8       58.2       28.1       71.9
----------------------------------------------------------------------------------------------------------------
VA, DC                                              66.1       33.9       54.8       45.2       45.5       54.5
----------------------------------------------------------------------------------------------------------------
Atlanta Region                                      34.9       65.1       30.1       69.9       21.2       78.8
----------------------------------------------------------------------------------------------------------------
Georgia                                             30.3       69.7       27.1       72.9       19.1       80.9
----------------------------------------------------------------------------------------------------------------
Kentucky                                            39.4       60.6       33.3       66.7       21.1       78.9
----------------------------------------------------------------------------------------------------------------
Birmingham                                          38.4       61.6       27.5       72.5       20.7       79.3
----------------------------------------------------------------------------------------------------------------
Florida                                             38.5       61.5       35.5       64.5       26.4       73.6
----------------------------------------------------------------------------------------------------------------
Miami                                               43.7       56.3       44.8       55.2       35.6       64.4
----------------------------------------------------------------------------------------------------------------
S. Carolina                                         28.2       71.8         26         74       17.7       82.3
----------------------------------------------------------------------------------------------------------------
Chicago Region                                      41.9       58.1       30.8       69.2       21.4       78.6
----------------------------------------------------------------------------------------------------------------
Illinois                                            43.8       56.2       30.4       69.6       23.9       76.1
----------------------------------------------------------------------------------------------------------------
Michigan                                            39.3       60.7       29.9       70.1       19.7       80.3
----------------------------------------------------------------------------------------------------------------
Detroit                                               32         68       26.4       73.6       16.5       83.5
----------------------------------------------------------------------------------------------------------------
Ohio                                                39.4       60.6       27.1       72.9       19.1       80.9
----------------------------------------------------------------------------------------------------------------
Wisconsin                                           46.9       53.1         34         66       21.4       78.6
----------------------------------------------------------------------------------------------------------------
Dallas Region                                       44.2       55.8       39.2       60.8       28.2       71.8
----------------------------------------------------------------------------------------------------------------
Texas                                               42.7       57.3       41.6       58.4       28.6       71.4
----------------------------------------------------------------------------------------------------------------
New Mexico                                            47         53       44.8       55.2       31.2       68.8
----------------------------------------------------------------------------------------------------------------
Oklahoma                                            43.1       56.7       36.8       63.2       24.4       75.6
----------------------------------------------------------------------------------------------------------------
Shreveport                                          53.8       46.2       37.3       62.7       35.3       64.7
----------------------------------------------------------------------------------------------------------------
Kansas City Region                                  43.6       56.4       30.5       69.5       17.9       82.1
----------------------------------------------------------------------------------------------------------------
Missouri                                            42.9       57.1       29.8       70.2       17.4       82.6
----------------------------------------------------------------------------------------------------------------
Iowa                                                45.5       54.5       32.3       67.7       16.4       83.6
----------------------------------------------------------------------------------------------------------------
Denver Region                                       38.5       61.5       39.1       60.9       21.5       78.5
----------------------------------------------------------------------------------------------------------------
Colorado                                              35         65       38.6       61.4       20.5       79.5
----------------------------------------------------------------------------------------------------------------
N. Dakota                                           51.2       48.8       39.6       60.4       28.1       71.9
----------------------------------------------------------------------------------------------------------------
S. Dakota                                           45.4       54.6       34.9       65.1       18.9       81.1
----------------------------------------------------------------------------------------------------------------
San Francisco Region                                50.9       49.1       44.4       55.6       32.4       67.4
----------------------------------------------------------------------------------------------------------------
Arizona                                             59.3       40.7       51.8       48.2       43.3       56.7
----------------------------------------------------------------------------------------------------------------
California                                          50.8       49.2       43.9       56.1       31.8       68.2
----------------------------------------------------------------------------------------------------------------
Bay Area                                            60.6       39.4       52.5       47.5       36.6       63.4
----------------------------------------------------------------------------------------------------------------
L. A. East                                          49.4       50.6       49.8       50.2       37.4       92.5
----------------------------------------------------------------------------------------------------------------
L. A. West                                          54.4       45.6       49.6       50.4       34.5       65.5
----------------------------------------------------------------------------------------------------------------
Central Valley                                      48.1       51.9       39.3       60.7       28.2       71.8
----------------------------------------------------------------------------------------------------------------
Sacramento                                            54         46         38         62       29.7       70.3
----------------------------------------------------------------------------------------------------------------
Seattle Region                                      43.1       56.9       41.3       58.7       24.3       75.7
----------------------------------------------------------------------------------------------------------------
Oregon                                              35.4       64.6       34.7       65.3       18.8       81.2
----------------------------------------------------------------------------------------------------------------
Seattle                                             45.4       54.6       45.4       54.6       27.1       72.9
----------------------------------------------------------------------------------------------------------------

    In a system where everyone is taxed equally, this is difficult to 
explain or justify. Claimants are entitled to quality consistent 
decisions not withstanding their state of residence or whether they are 
filing for Social Security or SSI disability benefits.
    According to GAO,\1\ a majority of DDSs do not conduct long-term, 
comprehensive workforce planning, which should include key strategies 
for recruiting, retaining, training and otherwise developing a 
workforce capable of meeting long term goals. The State DDS' lack 
uniform minimum qualifications for examiners, have high turnover rates 
for employees and do not provide ongoing training for examiners. This 
seems to be mostly attributed to State employee pay and benefit scales 
and budget constraints.
---------------------------------------------------------------------------
    \1\ GAO-04-121
---------------------------------------------------------------------------
    AFGE is convinced that SSA is not able to correct these problems. 
AFGE has expressed these very concerns to the Subcommittee for several 
years and has seen little improvement with the State DDS situation.
    AFGE has recently become aware of the preliminary Systems Impact 
Assessment of SSA program modifications needed to accommodate the new 
disability determination process. The modifications considered 
necessary will be massive, leaving few programs untouched. Some of the 
systems changes may or may not require outside contractors; the changes 
will involve modifications to State DDS systems, which will have to be 
coordinated; SSA firewalls will require safeguarding; all software 
written for such modifications will require approval and such approval 
from the Architectural Review Board is not certain; and programs should 
require extensive testing before use.
    AFGE finds the extent of these required modifications to be 
alarming. Is it reasonable, to begin implementation in the Boston 
Region before such systems changes can be made? SSA's budgets for FY06 
and FY07 do not provide the money that will be needed to accomplish the 
systems changes necessary. Where do the resources come from to make 
these changes?
    With staffing cuts and heavy workloads that continue to rise, is it 
reasonable to use resources for an untested, unpiloted theory, rather 
than to provide staffing on the front lines to improve public service? 
AFGE believes the answer is clearly NO.
    Commissioner Barnhart's approach fails to implement new 
communication or adjudicative techniques either that improve service to 
the disabled claimant or result in a more accurate or expeditious 
decision. More importantly, these changes will not protect the rights 
and interests of people with disabilities.
    The record should be clarified with regards to Commissioner 
Barnhart's statement that she met with the organizations that represent 
SSA employees. She did. She held one meeting with all 6 SSA council 
presidents for the purpose of introducing her plan. That was 3 years 
ago. Ms. Barnhart was not receptive to our constructive criticisms. The 
leadership of six bargaining councils has more than 150 years of 
specialized experience with SSA and represents 50,000 bargaining unit 
employees. She refused to include experienced bargaining unit employees 
in strategy sessions or workgroups that helped design the new plan. The 
Union rejected this plan and Ms. Barnhart has since refused to meet 
and/or discuss any subject matter with AFGE. Ms. Barnhart does not have 
the support or the buy-in of SSA workers. In fact, SSA employees 
overwhelmingly oppose this disability plan.
Effects on SSA Workers
    The constant pressure to accomplish workloads with inadequate staff 
has taken its toll on the employee morale at SSA. AFGE if very 
concerned about the stressful working conditions of SSA employees and 
the long term effects of such conditions on employee health.
    SSA employees have always risen to the challenge of meeting the 
public service needs, and processing escalating workloads timely. SSA 
workers understand that budget shortages are often not under the 
control of their managers.
    AFGE believes the plummeting employee morale at SSA is caused by 
issues that are in the control of the Commissioner. Such issues 
include:

      Implementation of unannounced service observations of 800 
number personnel, which would automatically elevate stress factors on 
the job, adding additional pressure when understaffing is a known 
problem.
      Implementation of leave restrictions and/or limitations 
for vacations and holidays.
      Numeric Performance goals which require 800# operators to 
be ``plugged in'' for certain minimum periods and require employees to 
interview a minimum number of claimants per day.
      Recent changes in the labor contract demanded by the 
Commissioner, which require employees to do SSA work instead of care 
for emergency situations in their families such as unforeseen child 
care emergencies.
      Refusal to meet with employee's union representatives to 
discuss and resolve issues.
      Disempowering employees by not soliciting their ideas 
when considering and implementing new programs (i.e., Disability 
Initiative, Medicare Part D) and eliminating prior employee involvement 
in the awards and merit promotion process.

    At a time when SSA employees should be encouraged because of huge 
public demands and when employees have largely met these demands, the 
Commissioner has chosen to take a hard line, punitive approach with 
employees.
    SSA has also informed AFGE of its intention to implement a new 
performance appraisal system in October 2006. This will be a 3 tiered 
performance system, similar to a performance system SSA used many years 
ago. Like the former tiered appraisal system, this will be a huge drain 
on management resources. The current appraisal system has resulted in 
increased productivity, high levels of accuracy, low Agency 
administrative overhead expenses and widespread public satisfaction. 
SSA wants to change the appraisal system to one which emphasizes 
statistical performance, competition and, inevitably, manipulation of 
data. Why SSA wants to create an adversarial environment at the 
worksite is a mystery to many.
    SSA may argue that the union agreed to a new appraisal system in 
contract negotiations. The truth is that the nature of the appraisal 
system is largely a management right which SSA made quite clear during 
negotiations. The bottom line is that despite the budget squeeze, SSA 
employees have come through in the clutch for the Agency and for 
America. Why create a different system which will cause work place 
conflict rather than cooperation? Congress should ask the Commissioner 
to reconsider this appraisal system which will result in great turmoil 
at the job site.
In Conclusion
    There will always be budget priorities. However, both workers and 
employers contribute to the Social Security system and are entitled to 
receive high quality service. It is entirely appropriate that spending 
for the administration of SSA programs be set at a level that fits the 
needs of Social Security's contributors and beneficiaries, rather than 
an arbitrary level that fits within the current political process.
    In 2000, then Chairman Shaw and Rep. Benjamin Cardin reintroduced 
the Social Security Preparedness Act of 2000 (formerly H.R. 5447), a 
bipartisan bill to prepare Social Security for the retiring baby 
boomers. AFGE strongly encourages this Subcommittee to reconsider 
introducing legislation that will provide SSA with the appropriate 
funding level to process all claims and all post-entitlement workloads 
timely.
    Taking SSA's administrative expenses ``off-budget'' has vast 
support, not only from AFGE and SSA workers, but from senior and 
disability advocacy organizations. This would include AARP, the 
National Committee to Preserve Social Security and Medicare, the 
Alliance for Retired Americans, the Consortium for Citizens with 
Disabilities, and the Social Security Disability Coalition, just to 
name a few.
     AFGE believes that by taking these costs OFF-BUDGET with the rest 
of the Social Security program, Social Security funds will be protected 
for the future and allow for new legislation, such as the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 and the 
Intelligence Reform and Terrorism Prevention Act of 2004 to be 
implemented without comprising public service integrity. We believe 
this can be accomplished with strict congressional oversight to ensure 
the administrative resources are being spent efficiently.
    AFGE is committed to serve, as we always have in the past, as not 
only the employees' advocate, but also as a watchdog for clients, for 
taxpayers, and for their elected representatives.

                                 

Statement of Consortium for Citizens with Disabilities Social Security 
                               Task Force
    This statement for the record is submitted by Ethel Zelenske on 
behalf of the Consortium for Citizens with Disabilities Social Security 
Task Force. CCD is a working coalition of national consumer, advocacy, 
provider and professional organizations working together with, and on 
behalf of, the 54 million children and adults with disabilities and 
their families in the United States. The CCD Social Security Task Force 
focuses on disability policy issues in the Title II disability program 
and in the Title XVI Supplemental Security Income (SSI) program.
    The topic of this hearing is especially important to people with 
disabilities who rely upon the Social Security Administration: to 
adjudicate completely and fairly their applications for disability 
benefits; for payment of their monthly Social Security and Supplemental 
Security Income benefits; to withhold their Medicare Part B and Part D 
premiums from their benefits; to determine their eligibility for Part D 
drug subsidies, also known as ``extra help;'' and to make accurate and 
timely determinations on post-entitlement issues that may arise in 
their cases. Like millions of others across the nation, people with 
disabilities count upon SSA to issue Social Security numbers for their 
newborn children, to issue replacement SSN cards when needed, to record 
and maintain their earnings records, to correctly answer their 
questions when they call the ``800'' number, and to meet with them when 
they visit one of the approximately 1,300 SSA field offices with 
questions or reports.
    This statement addresses four key points related to SSA's 
administrative challenges.
    First, SSA is doing a good job with limited resources. There is 
much that remains to be done and some workloads that need more 
attention, but Commissioner Barnhart has made great strides in 
improving the agency's technological capacity in ways that will help it 
accomplish its work. We are concerned, however, that SSA does not have 
adequate funds for the current fiscal year and will not have sufficient 
funding under its proposed budget for fiscal year 2007. SSA's budget 
materials for FY 2007 indicate that at the funding levels being 
requested, the recent progress will not be able to be sustained.
    Second, we believe that SSA needs more funding to provide the level 
of post-entitlement work that is required in both the Social Security 
and SSI programs. By ``post-entitlement'' work, we mean the contacts 
that SSA has (or should have) with a beneficiary once the person begins 
to receive Social Security or SSI benefits.
    Third, we are concerned that SSA have sufficient funds to maintain 
the level of continuing disability reviews (CDRs) that it should be 
doing in Social Security and SSI disability cases. These reviews are 
essential to maintaining the integrity of the disability determination 
process.
    Fourth, without additional resources, SSA is not going to be able 
to keep up with the technological challenges it faces. SSA's future 
success may be threatened by Congressional interest in adding to its 
workload, especially in verifying employee SSNs and immigration status, 
unless SSA is provided with adequate additional resources to address 
the new workloads over the long term. Further, Congress should try to 
identify a way to ensure that SSA's budget is not reduced arbitrarily 
through across-the-board cuts or affected in ways that compromise the 
service that SSA provides, as a result of pressure from very tight 
ceilings on total discretionary funding.
    The remainder of this statement discusses these points in greater 
detail.
I. SSA is doing a good job with limited resources. But there is much 
        that still needs to be done, and SSA will not be able to 
        sustain recent progress as the funding levels that have been 
        requested.
    Overall, SSA currently is a well-managed agency. Commissioner 
Barnhart has taken numerous steps to improve SSA's technology and 
procedures so the agency is better able to accomplish its missions. 
However, we are concerned that SSA does not have adequate resources to 
meet all of its current responsibilities, including some of importance 
to people with disabilities.
    Of greatest concern, even with the increase that SSA seeks for FY 
2007, SSA will need to reduce its staff. SSA is seeking $387 million 
more for fiscal year 2007 than it has received for fiscal year 2006, 
but this figure will not even leave the agency staffing whole. This 
budget request will result in a loss of 2,545 full-time staff 
positions/work years.\1\ This is a result of increased costs for 
salaries and benefits for existing staff. As a result, we believe SSA 
needs more funds than it is seeking.
---------------------------------------------------------------------------
    \1\ See FY 2007 President's Budget, February 6, 2006, Congressional 
Briefings (hereinafter, ``SSA FY 2007 Congressoinal Briefings,'' page 
11, ``SSA's FY 2007 Administrative Budget: Full-Time Equivalents and 
Workyears.'' The chart provides the following information:
     2006  2007  +/-
     estimate  estimate
     SSA FTEs (including OIG) 63,998  62,036  -1,962
     SSA overtime and lump sum leave 2,398  1,948  -450
     DDS Workyears 14,398  14,265  -133
     Total SSA/DDS Workyears 80,794  78,249  -2,545
---------------------------------------------------------------------------
    These staffing reductions may translate into SSA being less able to 
do post-entitlement work and not being able to reduce the backlogs in 
the administrative appeals process. Both of those tasks require 
sufficient commitments of staff time. Without adequate staffing, these 
are areas of work that tend to stagnate quickly, resulting in increased 
backlogs or, with post-entitlement work, cases being ignored.
    SSA's progress in reducing delays related to administrative appeals 
is projected to slow down--actually to worsen in some cases--in fiscal 
year 2006. For example, in fiscal year 2005, SSA's average processing 
time for initial disability claims was 93 days. SSA had proposed to 
reduce that figure to 91 days in the President's fiscal year 2006 
budget, but with its enacted fiscal year 2006 appropriation, SSA 
expects only to maintain, not reduce, this processing time--keeping it 
at 93 days. Further, SSA is not proposing to reduce this figure in 
fiscal year 2007, when it will again be 93 days.
    More troubling, the average processing time for hearing decisions 
at the Administrative Law Judge level was 415 days in fiscal year 2005. 
That is far too long. Yet, in fiscal year 2006, SSA expects that the 
average time frame will climb to 467 days, an additional 52 days.\2\ 
SSA expects this to be the average figure in fiscal year 2007 as well. 
While this will include processing an additional 17,000 hearing 
decisions in fiscal year 2007, SSA should be provided sufficient funds 
to reduce the delays while also processing more decisions.\3\ This 
suggests that SSA is not asking for sufficient funds in its overall 
Limitation on Administrative Expenses (LAE) request to reduce these 
delays.
---------------------------------------------------------------------------
    \2\ SSA, SSA FY 2007 Congressional Briefings, pages 8 and 14.
    \3\ SSA processed 519,000 cases at the appeals level through ALJ 
decision in fiscal year 2005 and expects to process 560,000 cases 
through the ALJ decision in fiscal year 2006 and 577,000 cases through 
the ALJ decision in fiscal year 2007. Id., pp. 9 and 15.
---------------------------------------------------------------------------
II. SSA doe snot have the resources it needs to fully address its post-
        entitlemment workloads.
    Not surprisingly, with millions of new applications each year, SSA 
emphasizes the importance of processing applications, determining 
eligibility, and providing benefits. Once a person begins to receive 
monthly benefits, there are many reasons why SSA may need to respond to 
contacts from the person or to initiate a contact. This is known as 
``post-entitlement work'' and generally does not receive the priority 
it should. All too often, when SSA is short on staff and local offices 
are overwhelmed by incoming applications and inquiries, they are less 
attentive to post-entitlement issues. For people with disabilities, 
this can discourage efforts to return to work, undermining an important 
national goal of assisting people with disabilities to secure and 
maintain employment. Also, the lack of resources results in diminished 
accessibility to the process for people with disabilities. For example, 
one ongoing problem has been the lack of communications in accessible 
formats for recipients who are blind or visually impaired or deaf-
blind.
    One example of post-entitlement work that has fallen by the wayside 
in the past is the processing of earnings reports filed by people with 
disabilities. For many years, beneficiaries of Social Security or SSI 
disability payments who wish to return to work have found that they can 
end up owing SSA substantial sums as a result of overpayments for which 
they were not at fault. Typically, this has happened when the 
individual calls SSA and reports work and earnings or brings the 
information into an SSA field office, but SSA fails to input the 
information into its computer system and does not make the needed 
adjustments in the person's benefits. Then, months or years later, 
after a computer match with earnings records, SSA determines that the 
person was overpaid and sends a notice to this effect. All too often, 
after receiving the overpayment notice, the beneficiary will tell SSA 
that he or she reported the income as required and SSA will reply that 
it has no record of the reports.
    Depending on which program the person participates in--Social 
Security or SSI--discovery that the person is working may result in 
complete loss of cash benefits (Social Security) or a reduction in cash 
assistance (SSI). It also can affect the person's health care coverage. 
To collect the overpayment, SSA may decide to withhold all or a portion 
of any current benefits owed, or SSA may demand repayment from the 
beneficiary if the person is not currently eligible for benefits. The 
result of this is that some individuals with disabilities are wary of 
attempting to return to work, out of fear that this may give rise to 
the overpayment scenario and result in a loss of economic stability and 
potentially of health care coverage upon which they rely. As a result 
of this long-term administrative problem, anecdotal evidence indicates 
that there is a widespread belief among people with disabilities that 
it is too risky to attempt to return to work, because the beneficiary 
may end up in a frightening bureaucratic morass of overpayment notices, 
demands for repayment, and benefit termination.
    Recently, SSA has been making some significant progress on this 
issue. It has developed the ``e-Work'' system, a new computer process 
through which SSA staff record reports of earnings from Social Security 
disability beneficiaries. The system is designed so that office 
managers know when there is additional work to be done on the case in 
order to ensure that the information is input completely into the 
system and acted upon in a timely manner. SSA is working on a parallel 
system for SSI, but that system is not yet operational. As a result of 
SSA's effort on ``e-Work,'' SSA theoretically and practically is 
situated to resolve this long-standing problem and hopefully to 
eliminate a serious work disincentive. But that will not occur if this 
work is not given priority. Without the staffing needed to conduct this 
post-entitlement work, we are concerned that these cases will continue 
to not be processed in a timely manner.
    SSA's ability to respond to work reports submitted by Social 
Security and SSI disability beneficiaries in a timely manner is 
essential if progress is to be made in realizing Congress' goal of 
reducing work disincentives in the Social Security and SSI disability 
programs and encouraging more beneficiaries to attempt to return to 
work. With the increases expected in applications from retirees and 
people with disabilities over the next few years--and the staff 
reductions already being built into SSA's budget request--the 
encouraging work now underway on earnings reports is likely to be 
pushed to the side if SSA does not have sufficient funding to do the 
requisite post-entitlement work.
III. SSA needs additional funds to conduct more continuing disability 
        reviews and to remain current on SSI redeterminations.
    In 1984, Congress corrected some very troubling problems that were 
occurring--individuals with severe disabilities were being arbitrarily 
terminated from the program--by developing and enacting the current 
continuing disability review (CDR) rules. It is essential both to 
beneficiaries and to SSA that Congress provide SSA with sufficient 
funds to conduct these reviews.
    In fiscal year 2007, SSA seeks a total of $490 million to conduct 
continuing disability reviews. This includes $289 million in base 
funding and another $201 million in additional funds.\4\ SSA has 
reported that each dollar spent on CDRs returns $10 in benefit savings 
to the program.\5\
---------------------------------------------------------------------------
    \4\ The $289 million in base funding includes $60 million for SSI 
CDRs and $229 million for Social Security disability CDRs. The $201 
million in additional funding being requested for fiscal year 2007 
includes $60 million for SSI CDRs and $141 million for Social Security 
disability CDRs. Social Security Administration: Fiscal Year 2007, 
Justification of Estimates for Appropriations Committees, Social 
Security Administration, SSA Pub. No. 22-017, February 2006, page 63, 
footnote 2.
    \5\ See SSA: The Fiscal Year 2007 Budget Press Release, SSA, page 
12.
---------------------------------------------------------------------------
    Failure to provide SSA with adequate funds to stay current with the 
processing of continuing disability reviews would, over time, diminish 
the integrity and accuracy of the disability programs. To protect 
program integrity and avert improper payments, it is essential that SSA 
conduct ongoing, regular reviews (CDRs) to determine whether recipients 
with disabilities continue to be eligible.
    Failure to conduct the full complement of CDRs would have adverse 
consequences for the federal budget and the deficit. As noted, SSA has 
determined that CDRs result in $10 in program savings for each $1 spent 
in administrative costs in conducting these reviews. SSA estimates that 
the CDRs it conducted in 2002 ``are expected to yield $6 billion in 
lifetime program savings.'' \6\ To put this figure in context, of the 
one million Social Security continuing disability reviews that SSA 
conducted in fiscal year 2001, SSA continued benefits in 96 percent of 
the cases reviewed and terminated benefits in four percent of the 
cases.\7\ Even though the great majority of CDRs result in continuation 
of benefits, the savings from those CDRs that result in terminations 
are substantial because of the size of the program and the value of the 
benefits provided.
---------------------------------------------------------------------------
    \6\ Social Security Administration: Fiscal Year 2005: Justification 
of Estimates for the Appropriations Committee, SSA Pub. No. 22-017, 
February 2004, page 74.
    \7\ 2004 Green Book, Committee on Ways and Means, U.S. House of 
Representatives, Table I-44, page I-70.
---------------------------------------------------------------------------
    The number of CDRs that SSA will conduct is directly related to 
whether SSA receives the additional funds it needs to conduct these 
reviews. SSA conducted 537,000 medical CDRs in fiscal year 2005 and had 
proposed to conduct 750,000 such reviews in fiscal year 2006. However, 
that number has been reduced to 360,000 for fiscal year 2006 due to the 
lower level of appropriations provided for SSA. In fiscal year 2007, 
with some funds sought outside the discretionary caps through a cap 
adjustment, SSA hopes to do 597,000 CDRs.\8\ We urge Congress to ensure 
the funding is there to undertake these reviews.
---------------------------------------------------------------------------
    \8\ SSA FY 2007 Congressional Briefings, pages 9, 15. The President 
seeks $201 million for CDRs in fiscal year 2007 and $213 million in 
fiscal year 2008 that would be outside the normal ceiling on 
discretionary appropriations. The budget proposal also includes $289 
million for CDRs within the discretionary ceiling in fiscal year 2007. 
See also, footnote 4, above.
---------------------------------------------------------------------------
IV. SSA's future success depends on Congress acting to find ways to 
        boost its budget now--and to significantly supplement its 
        budget over the long term as caseloads grow and when new 
        workloads otherwise are added.
    SSA's appropriation competes with that for other programs under the 
Labor, Health and Human Services, Education and Related Agencies 
Appropriations Subcommittee. In addition, when there is an across-the-
board cut in funding, SSA is affected. Finally, new work often is added 
by Congress, without new funds provided to undertake the required work.
    When Congress imposed the across-the-board cut on discretionary 
funding for fiscal year 2006, SSA lost close to $91 million.\9\ 
Although the President originally requested $9.403 billion for SSA for 
fiscal year 2006, Congress had appropriated $9.199 billion prior to the 
across-the-board cut. With the loss of the additional $91 million, SSA 
received almost $300 million less than the President requested.\10\
---------------------------------------------------------------------------
    \9\ Social Security Adminitrations: Fiscal Year 2007: Justification 
of Estimates for Appropriations Committees, SSA Office of Budget, SSA 
Pub. No. 22-017, February 2006, page 75.
    \10\ SSA requested $9,403,000,000 in fiscal year 2006. Congress 
appropriated $9,199,400,00 and then rescinded $90,794,000 in Public Law 
109-148, Department of Defense Appropriations Act of 2005. Social 
Security Administration: Fiscal Year 2007, Justification of Estimates 
for Appropriations Committees, Social Security Administration, SSA Pub. 
No. 22-017, February 2006, pages 75-77 and footnote 22.
---------------------------------------------------------------------------
    In addition, Congress sometimes passes provisions that show savings 
in entitlement costs while failing to recognize the administrative 
costs to SSA of implementing those provisions. Three recent examples 
are:

    1.  The Deficit Reduction Act (DRA) signed into law on February 8, 
2006 requires that SSA conduct pre-effectuation reviews on 20 percent 
of initial SSI allowances at the state disability determination service 
level in fiscal year 2006. This number grows to 50 percent of 
allowances in fiscal year 2008 and thereafter.\11\ These are cases in 
which SSA has determined that the person is eligible for benefits and 
SSA now must review a percentage of those decisions prior to finalizing 
the allowances. Under the new rules, SSA must review these cases for 
accuracy (and possibly change its decision) prior to issuing the 
decision.
---------------------------------------------------------------------------
    \11\ Section 7501, Deficit Reduction Act of 2005, Pub. L. 109-171, 
signed February 8, 2006.
---------------------------------------------------------------------------
    2.  Also in the DRA, Congress changed how SSI lump sum benefits are 
to be paid to recipients. Under the change, SSA is required to issue 
lump sum retroactive awards beginning with a first payment equivalent 
to three months of benefits. This previously had been 12 months.\12\ 
The underlying provision that the DRA changed makes clear that in cases 
where the amount of the first installment payment works a hardship for 
the individual because he or she has debts that need to be repaid, SSA 
will provide a higher amount to help cover these debts.\13\ Until now, 
because the first installment equaled up to 12 months of benefits, few 
new SSI recipients apparently have needed to avail themselves of the 
ability to request that SSA issue a different, higher amount. Now that 
the first installment will be limited to three months of SSI benefits 
(even though SSI disability beneficiaries may have been made to wait 
much longer than that to begin receiving benefits and thus may have 
incurred substantial debts), it is likely that many more beneficiaries 
will need to ask SSA to make the special determination and issue a 
larger first payment. This will be a new workload for SSA staff.
---------------------------------------------------------------------------
    \12\ Id., Section 7502.
    \13\ Section 1631(a)(10)(B)(iii), 42 U.S.C.  1383(a)(10)(B)(iii).
---------------------------------------------------------------------------
    3.  In the Social Security Protection Act of 2004, Congress 
expanded SSA's workload related to ``fleeing felons.''\14\ Since 
January 2005, the ban on felons and probation and parole violators 
receiving benefits applies not only to SSI (the rule has applied since 
1996 in SSI) but also to Social Security beneficiaries. Also, there now 
is a ``good cause'' exception that allows payment of benefits under 
certain circumstances. It may sound simple to do a computer match, 
determine that a person is a fleeing felon or violating probation or 
parole and then terminate benefits, but these are people who sometimes 
have serious mental impairments or terminal illnesses and they may 
require assistance in figuring out what happened and how to respond. 
They may need to meet with SSA staff in the field offices to understand 
the process and what action they need to take, as well as to determine 
if they are eligible for continuation of benefits under the ``good 
cause'' exception. Staff time is a valuable SSA resource, one that it 
needs more of. The less time that SSA spends on these cases, the more 
that individuals can be harmed by inappropriate applications of the 
rule.
---------------------------------------------------------------------------
    \14\ Section 203, Pub. L. 108-203.

    In none of these cases did Congress provide separate funding for 
SSA to do the additional work. The assumption is that SSA will work it 
out and, if needed, will seek additional funding as part of its next 
annual request. That would make sense if it were not for the tight 
discretionary spending ceilings the budget resolutions are imposing and 
the fact that SSA's budget must compete with the budgets of many 
smaller but important discretionary programs that are in the Labor, 
HHS, and Education appropriations bill. Unless Congress acts to 
identify another way to secure additional funds for SSA on a reliable 
basis--not simply for a year or two, as happened with the additional 
Medicare Part D funds--we worry that SSA's workload will continue to 
grow but its administrative funding will not follow suit.
    An example of potential long-term costs are the efforts to expand 
employer verification of Social Security Numbers (SSNs) to employers 
and employees, as Congress is currently contemplating. Without 
expressing an opinion on these proposals, should Congress pass such a 
law, it is essential that it provide funds for SSA to implement this 
very large increase in workload--not just for a year or two, but out 
past 2010 when CBO says the caseload costs would rise very 
substantially.\15\ If Congress does not do this, then one can 
anticipate that something else important at SSA will not get done or 
will be done inadequately. Would it be the continuing disability 
reviews? Longer processing times for applications? Longer times to 
issue SSNs and replacement SSNs?
---------------------------------------------------------------------------
    \15\ CBO estimates that the cost to SSA of implementing its 
responsibilities under HR 4437, the Border Protection, Antiterrorism, 
and Illegal Immigration Control Act of 2005, would be $200 million over 
the 2006 to 2010 period. SSA's costs will continue at high levels 
outside the five-year window; CBO estimates that SSA's costs will be 
about $640 million over the 2006 to 2015 period. ``Under the bill, the 
agency's cost to process employment verification inquiries would 
increase substantially after 2010 when all private employers would be 
required to check the eligibility of their entire workforce by 2012.'' 
CBO Cost Estimate on HR 4437, December 13, 2005, page 4, http://
www.cbo.gov/ftpdocs/69xx/doc6954/hr4437.pdf.
---------------------------------------------------------------------------
Conclusion
    The CCD Social Security Task Force believes that SSA has been 
making strides in addressing delays in the disability determination 
process and in the post-entitlement workloads but recognizes that much 
more is needed. And, we worry that SSA will not be provided sufficient 
funds to conduct the continuing disability reviews. We are concerned 
that, at the level of funding provided in fiscal year 2006 and the 
level requested for fiscal year 2007, some progress that already has 
been made will be eroded. We urge Congress to ensure that SSA receives 
adequate funds to maintain and improve upon its vital work.

ON BEHALF OF:

American Association of People with Disabilities
American Association on Mental Retardation
American Council of the Blind
American Network of Community Options and Resources
Association of University Centers on Disabilities
Bazelon Center for Mental Health Law
Brain Injury Association of America
Center on Budget and Policy Priorities
National Alliance on Mental Illness
National Association of Councils on Developmental Disabilities
National Association of Disability Representatives
National Multiple Sclerosis Society
National Organization of Social Security Claimants' Representatives
Research Institute for Independent Living
Title II Community AIDS National Network
The Arc of the United States
United Cerebral Palsy
United Spinal Association

                                 

 Statement of Michael A. Steinberg, Michael Steinberg and Associates, 
                             Tampa, Florida
    Mr. Chairman and Members of the Subcommittee on Social Security:
    Thank you for the opportunity to present a written statement for 
the printed record of the above referenced hearing.
    I am an attorney who has been practicing in the area of Social 
Security Disability law for over 23 years. I have written articles for 
periodicals and have lectured at National Social Security Disability 
Law Conferences. I have handled thousands of cases at all levels of the 
administrative and appeals process. Although my office is located in 
Tampa, Florida, I have handled cases for claimants throughout the 
country.
    When I first started practicing, the waiting time for a hearing 
before an Administrative Law Judge was just a few months. In 1983, we 
all knew that as the babyboomers began to age, more claims for 
disability would be filed and that Social Security needed to be 
prepared for the increased workload.
    As time went on, the volume of claims grew as expected, as well as 
the backlog. In the late 1980's and early 1990's, I recall speaking 
with my Congressman, Sam Gibbons, who at the time was on this 
committee, about the delays in processing claims. It certain cases, he 
would write to the local Office of Hearings and Appeals inquiring as to 
the status, and somehow, those cases would be expedited. Nonetheless, 
nothing effective was done to reduce the backlog and the delays. They 
just kept getting worse.
    When Congressman Jim Davis was running for the U.S. House of 
Representatives for the first time, I was Chairman of the Social 
Security Subcommittee of the Hillsborough County Bar Association. In 
one of our meetings we invited him to speak and we asked him what he 
would do about the delays in processing disability claims. He vowed to 
work toward reducing the waiting period for claimants. The backlog 
continued to grow.
    Over the past year, several of my clients died while their claims 
were pending. In fact the day before this hearing, I received a call 
from the daughter of a client who advised that her mother died the 
night before. This woman had hypertension, but could not afford proper 
medical care. While waiting for her hearing she had a stroke. Perhaps 
she would be alive today had she been approved for disability benefits 
and Medicaid earlier.
    During the time it takes to process their disability claims, many 
people lose their homes and have to move in with relatives or friends. 
Quite a few end up living on the streets.
    Today, in most cases, the time it takes for a hearing to be held 
and a decision rendered is more than 2 years from the date of the 
Request for Hearing. This is unacceptable.
    Congress can make all kinds of excuses for the delays. Some blame 
the millions of undocumented aliens tying up personnel and resources. 
Others say that the Medicare, Part D Plan has diverted Social Security 
employees who would otherwise be working on disability claims. Still, 
other say that Congress and Social Security were not prepared for the 
increase in Social Security Disability and SSI claims. Such claims 
demonstrate either ignorance or are disingenuous.
    Everyone of us who has been involved with this program for the past 
several decades, including members of the Social Security Advisory 
Board, Congress, Commissioners of Social Security, and Social Security 
Disability attorneys, have known for a long time that insufficient 
funds have been appropriated to Social Security to process Disability 
and SSI claims in a fair and timely basis.
    Regardless of what procedural changes are made or clever names are 
given to process changes, without sufficient personnel, the backlog and 
delays will continue to increase.
    In my opinion, there is one effective way to reverse this trend and 
that is to enact legislation to amend the Social Security Act to 
provide for interim benefits for those people who have waited more than 
a certain period of time (for example, 18 months) to receive a hearing 
and decision. In order to prevent overpayments, Congress will then be 
required to appropriate sufficient money to Social Security so they can 
do the job they are mandated to do.
    Thank you for your consideration of the above and the attached.

                                 

Statement of Shari Bratt, National Association of Disability Examiners, 
                           Lincoln, Nebraska
    Chairman McCrery and members of the Committee, thank you for 
providing this opportunity for the National Association of Disability 
Examiners (NADE) to present our views on Social Security Service 
Delivery Challenges.
    NADE is a professional association whose purpose is to promote the 
art and science of disability evaluation. The majority of our members 
work in the state Disability Determination Service (DDS) agencies and 
thus are on the ``front-line'' of the disability evaluation process. 
However, our membership also includes SSA Central Office personnel, 
attorneys, physicians, and claimant advocates. It is the diversity of 
our membership, combined with our extensive program knowledge and 
``hands on'' experience, which enables NADE to offer a perspective on 
disability issues that is both unique and which reflects a programmatic 
realism.
    NADE members, whether in the state DDSs, the SSA Regional Office, 
SSA Headquarters, OHA offices or in the private sector, are deeply 
concerned about the integrity and efficiency of both the Social 
Security and the SSI disability programs. Simply stated, we believe 
that those who are entitled to disability benefits under the law should 
receive them; those who are not, should not. We also believe decisions 
should be reached in a timely, efficient and equitable manner.
    The challenges facing the Social Security Administration involve 
all of the various programs administered by the agency. Significant 
challenges facing SSA in the disability program include the proposed 
Disability Service Improvement regulation (DSI), the implementation of 
the electronic disability process (eDib), management of the Continuing 
Disability Review (CDR) program, the impact of the Supplemental 
Security Income (SSI) Pre-effectuation Reviews required under the 
Deficit Reduction Act of 2005 and the continuing hardships imposed by 
the Five Month Waiting Period and the 24 month Medicare Waiting Period.
Disability Service Improvement (DSI) Regulation
    In July 2005, the Social Security Administration published a Notice 
of Proposed Rule Making to improve the disability determination 
process. NADE believes that one of the most important challenges facing 
SSA is the need for an effective and affordable disability claims 
process. We have some ongoing concerns about the DSI as it has been 
proposed in the final regulation.
    NADE agrees that changes in the disability determination process 
are needed to reduce processing time, particularly at certain steps in 
the process. The processing delays of greatest concern currently occur 
in association with the appeals process at the Administrative Law Judge 
(ALJ) level. It currently takes approximately 1,100 days to process an 
average claim for any individual who goes through every stage of the 
process. This is unconscionable and certainly needs reform. However, we 
would like to point out that only about 150 days of the current 
processing time take place in the DDS, yet the regulation appears to 
make the most changes at this step, by introducing quick decision units 
and eliminating the reconsideration step. It is our belief that this 
regulation, as written, will do little to change the extensively long 
delays that occur when an individual submits a request for an 
administrative law judge hearing. In fact, NADE believes that the 
insertion of two new federal bureaucracies--the Medical Vocational 
Expert Unit and the Reviewing Official--have the potential to 
significantly increase the amount of time it takes to arrive at a 
disability decision, especially at the first appeal step.
    For the past decade, SSA has attempted to redesign the disability 
claims process in an effort to create a new process that will result in 
more timely and accurate disability decisions. Results of numerous 
tests undertaken by SSA to improve the disability process have not 
produced the results expected.
    There is a pervasive public perception that ``almost everyone'' is 
denied disability benefits at the initial and reconsideration levels, 
and that claimants are found disabled only when they reach the 
Administrative Law Judge level of appeal. This perception is totally 
inaccurate as SSA statistics show that 75-80 out of 100 disability 
beneficiaries were allowed benefits by the DDS. Numerous references are 
made in the regulation about ``making the right decision as early in 
the process as possible.'' NADE certainly supports that goal, but we 
wish to point out that sometimes the right decision is a denial of 
benefits.

    Quick Decision Determination (QDD) claims--In the regulation, 
appropriate QDD claims would be identified and referred to special 
units within the DDSs for expedited action with a goal of processing 
the claim within 20 days.
    In our considerable practical experience with such cases, we have 
found that the complexity of these cases is minimal and we believe that 
the expertise of the more experienced disability adjudicators is best 
allocated to process more complex cases. If the disability 
determination is made by the most experienced disability adjudicators 
to process QDD cases, then NADE believes that it is not necessary to 
require a medical consultant's signature on fully favorable allowances. 
A Single Decision Maker (SDM) pilot is in place in 20 states and is 
effective in reducing program costs, increasing efficiency and 
decreasing processing time. At the very least, the SDM authority should 
be continued for the QDD cases.
    It is imperative that predictive software used to identify QDD 
cases be manageable and that it accurately identify the appropriate 
cases for quick determinations. Selection criteria should include 
issues other than diagnosis, including involvement in current 
treatment, current insured status and a specifically identifiable 
impairment proven most likely to result in a totally favorable 
allowance decision.
    It is important to note that in Title II claims, those persons 
found disabled under the Social Security Disability program must 
complete a five month waiting period to receive benefits. A disability 
allowance decision, no matter how quickly it is processed, will not 
solve the problem of having to wait five full calendar months before 
being able to receive any cash benefits.

    Specialists and Training (Reviewing Official and Medical Vocational 
Expert Units)--NADE is concerned that the Disability Process 
Improvement Initiative, with its increased reliance on medical 
specialists and attorneys, and its elimination of the triage approach 
currently being used in 20 DDSs, could increase both administrative and 
program costs. The first level of appeal following a denial by the DDS 
is to be handled by a Reviewing Official who is an attorney, rather 
than by a trained disability adjudicator, such as a disability hearing 
officer. If medical specialists replace programmatically trained DDS 
medical consultants, the disability program's administrative costs will 
almost certainly increase. We also suspect program costs will increase 
as more claims are allowed on appeal by individuals who lack the 
requisite medical and vocational training to view such claims from the 
perspective of SSA's definition of disability.
    Adjudicators evaluating Social Security and SSI disability claims 
must appropriately and interchangeably, during the course of 
adjudication, apply the ``logic'' of a doctor, a lawyer, or 
rehabilitation counselor, following SSA's complex regulations and 
policies to arrive at a disability decision. Training in all of these 
areas is critical to effectively adjudicate these cases accurately and 
in a timely manner. Failure to do so carries enormous consequences for 
the Social Security Administration and the huge number of citizens who 
call upon the Agency for assistance. NADE places a high value on 
initial and on-going continuing education training to maintain and 
enhance disability expertise in the Social Security disability program.
    If the RO component will be responsible for obtaining additional 
medical evidence, an extensive administrative support structure will 
need to be developed to obtain medical evidence of record and to 
implement, maintain and monitor a separate consultative examination 
process in addition to the system already in place at the DDS.

    Reviewing Official--The regulation stipulates establishing a 
federal Reviewing Official (RO) as an interim step between the DDS 
decision and the Office of Hearings and Appeals (OHA). An interim step 
outlining the facts of the case and requiring resolution of issues 
involved could help improve the quality and consistency of decisions 
between the DDS and OHA components. NADE supports an interim step 
because of the structure it imposes, the potential for improving 
consistency of decisions, reducing processing time on appeals, and 
correcting obvious decisional errors at the initial level.
    There is little, if any data to support a conclusion that the 
interim step between the DDS decision and OHA must be handled by an 
attorney. Assessment of eligibility under the Social Security 
Disability program requires that the adjudicator at every level possess 
a great deal of program, medical and legal knowledge. As currently 
outlined in the regulation, the only qualification indicated for a 
Reviewing Official is that he/she be an attorney. Individuals who are 
hired into this new position without previous experience in the 
disability program will require extensive training and mentoring for a 
period of a least one year. It is also unclear in the proposal who 
would be responsible for training and supervision of the RO.
    NADE feels that a review at this interim step should be conducted 
by a medically and programmatically trained individual such as a 
disability hearing officer (DHO). The DHO has received additional 
training in conducting administrative and evidentiary hearings, 
decision writing, and making findings of fact, along with detailed case 
analysis and program information. The DHO currently makes complex 
medical-vocational-legal decisions using the Medical Improvement Review 
Standard (MIRS). There is currently a training program in place for 
DHOs through a contract that SSA has with McGeorge School of Law. The 
DHO training program could be easily adapted to train experienced 
disability professionals who already have extensive medical and 
vocational expertise and disability program knowledge, to perform RO 
duties. Since a DHO infrastructure is already in place, national 
implementation of the DHO alternative could occur quickly and 
effectively. Using an already established structure will prevent costly 
and less claimant-friendly federal bureaucracy. There will be extreme 
cost considerations if attorneys are to fill these positions as is 
currently suggested
    SSA previously piloted a disability redesign project called the 
Adjudicative Officer. These pilots proved that non-attorneys could 
produce a high quality product and a well documented and well reasoned 
case for the Office of Hearings and Appeals Administrative Law Judge.

    Medical Vocational Expert Unit--NADE believes the Medical 
Vocational Expert Unit (MVEU) can provide DDSs with additional access 
to medical and vocational expertise. Qualification standards for 
inclusion in the MVEU should not exclude the knowledgeable state agency 
medical consultant. DDS medical consultants are trained in program 
requirements and the majority of cases they review include multiple 
impairments. Having specialists review impairments individually is a 
time consuming, costly proposal. Specialty consultants with limited 
scope and experience cannot fully assess the combined effects of 
multiple impairments on the claimant's functioning. DDS medical 
consultants are not only medical specialists--physicians, 
psychologists, and speech/language pathologists--they are also SSA 
program specialists.
    Adjudication of cases that have more than a single impairment 
require assessment of how all impairments, alone or in combination 
affect an individual's ability to function. The use of specialists 
alone would result in numerous hand-offs, adding significantly to 
processing time. This would also decrease the quality of decisions if 
there were no method in place to pull all of the specialty conditions 
together into an overall, global assessment of their impact on 
functioning.
    Although members of the MVEU will surely be qualified to treat 
patients in their respective fields of specialty, they will also 
require extensive training in the area of determining disability. 
Evaluating disability for Social Security purposes is a far different 
area of expertise than treating patients. There is a very real 
difference between clinical and regulatory medicine, and it takes at 
least a year to become proficient in Social Security disability rules 
and regulations. Again, the responsibility for training, mentoring, and 
supervising these experts is not established in the proposed rules. 
While NADE supports the concept of the MVEU being used to supplement 
the expertise of the medical consultant at the DDS, we feel that most 
cases at the initial level of adjudication should continue to be 
reviewed and evaluated by state agency medical consultants.
    NADE recognizes that the qualification standards for medical 
experts have not yet been determined, but we are concerned that primary 
care medical consultants will be excluded from the MVEU. At risk of 
exclusion also appear to be administrative or semi-retired physicians 
who may not choose to keep up their clinical board certification.
    Currently, all DDSs have a contingent of state agency medical 
consultants. In some states, they are state employees, and in other 
states, they are under contract. These consultants possess a wealth of 
knowledge and experience, not only in the medical field and in 
specialty areas, but in the SSA disability program, as well as 
important knowledge of state health care systems. They are an extremely 
valuable resource to the DDSs and the Social Security disability 
program as a whole. It is difficult for the DDS to recruit and retain 
good medical consultants, and it is NADE's hope that any established 
new qualification standards do not make it even more difficult to do 
so.
Electronic Disability Process (eDib)
    In initial comments about a new disability approach, the 
Commissioner indicated the foundation for the approach was the 
successful implementation of an electronic folder system. NADE fully 
agrees with the Commissioner on this fact. NADE remains very supportive 
of these new technologies as a means for more efficient service to the 
public. The proposed disability process improvements are predicated on 
the new electronic folder system. For eDib to be successful, it is 
critically important that adequate infrastructure support and proper 
equipment is in place to make the process work effectively and 
efficiently. Until eDib is fully implemented nationwide, it is 
impossible to determine critical service delivery issues that impact on 
daily case processing. NADE supports continued rollout of an electronic 
disability folder for the obvious reasons of administrative cost 
savings in terms of postage and folder storage, as well as time savings 
from mailing and retrieving paper folders. At the same time, it must be 
recognized that an electronic disability case process may have a 
negative impact on case production capacities at the DDS level.
    While eDib may be rolled out nationally, it is not in use by all 
adjudicators in all components, and it remains to be seen how the 
system will handle the increased volume of work and number of users 
when it is implemented completely in all components of disability case 
processing. Until eDib is fully operational, (including predictive 
software to identify Quick Disability Decisions) we do not believe it 
is appropriate to make widespread changes in the adjudicative process. 
The full implementation of eDib in itself may result in a significant 
reduction in processing time at all levels of adjudication without 
additional sweeping changes to the adjudicative process.
    Because eDib is still a work in progress, refinements, upgrades and 
improvements are frequently necessary. The impact on the system as a 
whole when these refinements are accomplished is unpredictable, but 
presently they frequently result in a slowing or shutting down of the 
system, or parts thereof. Since DDSs process over 2.5 million cases on 
an annual basis, any shut down of the system equates to a significant 
loss of production capacity. Even a shut-down of only 5 minutes a day 
equates to over 1,250 work hours lost on a daily basis due to system 
instability. Currently, many DDSs experience far more than 5 minutes 
per day of system instability problems.
    In addition, some upgrades and improvements to the system require 
that the adjudicator relearn basic functionality which again impacts on 
the ability of the DDSs to process the large volume of cases they 
receive in a year. Upgrades to the system are essential to insure that 
the system operates as efficiently as possible, but it must be 
recognized that there is a resource impact every time a change is made.
    While NADE recognizes the need for, and supports, SSA's commitment 
to move to an electronic disability claims process, this tool will not 
replace the highly skilled and trained disability adjudicator who 
evaluates the claim and determines an individual's eligibility for 
disability benefits in accordance with SSA's rules and regulations.
Continuing Disability Reviews (CDR)
    Limited resources have forced SSA to reduce the number of CDRs 
performed this year. There is a past history of the agency falling 
behind in these critical reviews. It took a great deal of effort by all 
components of SSA to reach a point where these reviews were being 
conducted as scheduled. There is now a real danger that we will again 
find ourselves in the position of having backlogs of overdue CDRs. 
While there are increased program costs (including overtime, additional 
purchase of medical evidence, claimant transportation costs and 
increased utilization of contract medical consultants), there is a 
potential significant savings in program costs with the elimination of 
benefits paid to claimants who are found to be no longer eligible under 
the SSA Disability program requirements. The estimate is that for every 
$1 spent on conducting CDRs, $10 of program funds is saved. While 
necessary given the current budget situation, the decision to reduce 
the number of CDRs has been described as ``penny-wise and pound-
foolish''. We agree. It is essential to program integrity that these 
reviews be conducted in a timely manner. Experience has shown that 
dedicated funding for CDRs is the best means of getting ``current'' 
with the CDR backlog.
SSI Pre-Effectuation Reviews
    The Deficit Reduction Act of 2005 includes the following 
requirement:
    `(e)(1) The Commissioner of Social Security shall review 
determinations, made by State agencies pursuant to subsection (a) in 
connection with applications for benefits under this title on the basis 
of blindness or disability, that individuals who have attained 18 years 
of age are blind or disabled as of a specified onset date. The 
Commissioner of Social Security shall review such a determination 
before any action is taken to implement the determination.
    `(2)(A) In carrying out paragraph (1), the Commissioner of Social 
Security shall review--
    `(i) at least 20 percent of all determinations referred to in 
paragraph (1) that are made in fiscal year 2006;
    `(ii) at least 40 percent of all such determinations that are made 
in fiscal year 2007; and
    `(iii) at least 50 percent of all such determinations that are made 
in fiscal year 2008 or thereafter.
    `(B) In carrying out subparagraph (A), the Commissioner of Social 
Security shall, to the extent feasible, select for review the 
determinations which the Commissioner of Social Security identifies as 
being the most likely to be incorrect.'.
    The implementation of SSI Pre-Effectuation Reviews will have an 
impact on program costs, utilization of resources and processing time. 
Budgets and agency goals must be adjusted to reflect this impact.
Five month Waiting Period and 24 month Medicare Waiting Period
    It is important to note that in Title II claims, those persons 
found disabled under the Social Security Disability program must 
complete a five month waiting period to receive benefits. A disability 
allowance decision, no matter how quickly it is processed, will not 
solve the problem of having to wait five full calendar months before 
being able to receive any cash benefits. NADE believes that requiring 
some individuals to serve a waiting period before becoming eligible to 
receive disability cash benefits while not requiring others to serve 
the same (or any type of a) waiting period is a gross inequity to 
American citizens with disabilities and a disservice to the American 
public.
    In addition, members of the National Association of Disability 
Examiners are deeply concerned about the hardship the 24 month Medicare 
waiting period creates for these disabled individuals, and their 
families, at one of the most vulnerable periods of their lives. Most 
Social Security disability beneficiaries have serious health problems, 
low incomes and limited access to health insurance. Many cannot afford 
private health insurance due to the high cost secondary to their pre-
existing health conditions.
    NADE supports the elimination or, at the very least a reduction, of 
the Five Month and 24 Month (Title II) Medicare Waiting Periods.
Summary

      Any national rollout of DSI must be closely monitored and 
the process must be adjusted to accommodate the ``real world'' 
application of the regulation.
      Single Decision Maker authority should be continued, at 
least for QDD cases.
      The Disability Hearing Officer should be utilized in the 
current infrastructure as an interim appeals step. It is not necessary 
that this position be filled by an attorney.
      Qualification standards for inclusion in the MVEU should 
not exclude the knowledgeable state agency medical or vocational 
consultants. Board certification is not a practical standard and, if 
required for State Agency Medical Consultants, could significantly 
reduce the effectiveness and efficiency of the DDS medical review.
      Necessary programmatic training and ongoing 
administrative support for the ROs and MVEUs will result in significant 
expense.
       Resources should not be diverted from eDib until the 
system is fully operational in all DDS locations. It is critical that 
necessary refinements be made to the system in order for it to produce 
the anticipated and desired efficiencies.
      Dedicated funding is necessary in order to avoid the 
costly possibility of again having a backlog of overdue CDRs.
      There must be recognition that the implementation of SSI 
Pre-effectuation reviews will have an impact on the DDSs budget and 
processing time.
      The five month cash benefit and 24 month Medicare waiting 
periods for Social Security disability beneficiaries should be 
eliminated or reduced.

                                 

Statement of Richard E. Warsinskey, National Council of Social Security 
                      Management Associations Inc.
    Chairman McCrery, Congressman Levin and Members of the 
Subcommittee, my name is Richard Warsinskey and I represent the 
National Council of Social Security Management Associations (NCSSMA). I 
have been the manager of the Social Security office in Downtown 
Cleveland, Ohio for 11 years and have worked for the Social Security 
Administration for 30 years. On behalf of our membership, I am pleased 
to have the opportunity to submit this testimony to the Subcommittee.
    The NCSSMA is a membership organization of nearly 3,400 Social 
Security Administration (SSA) managers and supervisors who provide 
leadership in SSA's 1,374 Field Offices and Teleservice Centers 
throughout the country. We are the front-line service providers for SSA 
in communities all over the nation. We are also the federal employees 
with whom many of your staff work to resolve problems and issues for 
your constituents who receive Social Security retirement, survivors or 
disability benefits, or Supplemental Security Income. From the time our 
organization was founded over thirty-five years ago, the NCSSMA has 
been a strong advocate of locally delivered services nationwide to meet 
the variety of needs of beneficiaries, claimants, and the general 
public. We consider our top priority to be a strong and stable Social 
Security Administration that delivers quality service to the people we 
serve--your constituents.
    SSA is facing many service delivery challenges this year. My 
testimony today will focus on the following areas: limited resources 
and ever-increasing workloads and responsibilities.
Resources
    The President's Fiscal Year 2007 budget proposes $9.496 billion for 
the Social Security Administration's Limitation on Administrative 
Expenses (LAE) account. This account, which is included as part of the 
Labor, Health and Human Services, and Education Appropriations Bill, 
supplies the resources for SSA's administrative budget. The budget 
request for FY 2007 represents less than a 1.0% increase over the 
amount requested for FY 2006. The Agency did not receive the full 
President's budget request for FY 2006--the final appropriation was 
reduced by nearly $300 million during the appropriations process.
    The Commissioner of Social Security is required by law to submit 
her own budget. This budget reflects what she sees as the level of 
funding necessary to meet the Agency's service delivery improvements 
and fiscal stewardship plans through 2011. This budget also factors in 
that SSA has received less than the President's budget request in 
recent years, thus leading to the need for additional resources in 
future years to meet the full service delivery plan. The budget amount 
submitted by the Commissioner of Social Security to the President for 
SSA's FY 2007 administrative expenses was $10.23 billion. The budget 
submitted by the Commissioner takes into consideration the increasing 
workloads and new mandates that are confronting the Agency. The budget 
shortfalls in comparison to the Agency's real needs, increased 
workloads, and new mandates have, and will continue to have, a 
tremendous impact on SSA's service delivery.
    It is important to note that SSA's administrative budget 
constitutes less than 2% of program expenditures for the current fiscal 
year which is an outstanding value. This becomes all the more 
noteworthy when compared to private sector insurance companies which, 
as pointed out in a report issued by the Social Security Advisory 
Board, commonly have cost ratios of 10 to 20 percent or more. Certainly 
the American people deserve to have the Social Security 
Administration's excellent service while maintaining such value.
    A good example of this value can be seen by the service SSA 
provided after the hurricanes this past fall. SSA detailed people 
throughout the country and moved a huge amount of equipment around to 
assist people in receiving their benefits after the hurricanes. 
Commenting on SSA's efforts the Social Security Advisory Board wrote, 
``. . . we have been continually impressed by the commitment and 
expertise of the agency, its management, and its employees at all 
levels to providing excellent service to the beneficiaries who depend 
on Social Security. Last year's hurricanes showed that commitment to be 
deep and solid.'' ``The agency and its employees... have every reason 
to be proud of their preparedness, resourcefulness, and dedication in 
meeting the needs of the population they serve under the most trying 
circumstances.''
Increasing Workloads
    The following are some key current and future workload trends that 
are impacting SSA:

      In 1999 SSA had 311,000 hearings pending. As of the end 
of April there are now about 727,000 hearings pending, an increase of 
133%. The average hearing processing time continues to go up.
      Current processing times are 481 days, up from 443 days 
last fiscal year. The average Administrative Law Judge has 
approximately 709 cases pending per available judge. As a result the 
average time to receive a hearing decision is often more than two 
years.
      SSA's Program Service Centers (PSCs) have seen their 
pending cases more than double in the past two years, increasing by 
about 275,000 cases. The PSC backlogs have been exacerbated because so 
many of the employees must assist in answering the 1-800 number. 
Waiting times in Field Offices rose dramatically for the first six 
weeks of the year. Walk-in traffic increased by approximately 40% for 
the first six weeks of the year. Since then traffic has moderated 
somewhat but walk-in traffic is currently up an estimated 20%.
      SSA's 1-800 number has received nearly 4 million more 
calls this year compared to the same time last year.
      Failure to receive an adequate appropriation led the 
Commissioner to make the difficult but unavoidable decision to cut back 
on processing Medical Continuing Disability Reviews. This year SSA has 
reduced the number by about 390,000. SSA estimates that every one 
dollar spent on a Continuing Disability Review saves ten dollars in 
program costs. SSA also estimates that the CDRs conducted in 2002 are 
expected to yield $6 billion in lifetime program savings.
      Failure to receive an adequate appropriation led SSA to 
make the decision to cut back on processing SSI redeterminations by 
approximately 808,000 this year. SSA estimates that every one dollar 
spent on an SSI redetermination saves seven dollars in program costs.
      In FY 2005, SSA processed 64% more new claims for Title 
II and Title XVI disability claims than it did in FY 2000.
      SSA will process an increasing number of retirement 
claims as the baby boom generation retires. Last year SSA Field Offices 
processed 16% more retirement claims than the previous year.
      In August 2006, SSA will send out an estimated 2 million 
letters for those that qualified for Extra Help for Part D Medicare to 
determine whether the amount of Extra Help will change. Many of these 
cases will need to be reworked by SSA Field Offices.
      This fall, SSA will also mail out an estimated 2 million 
letters for those potentially affected by the Income-Related increased 
Medicare Part B Premiums. Many of those affected will contact SSA Field 
Offices and Teleservice Centers with questions and will require 
assistance in determining the correct premium to pay.
Increasing Responsibilities
    One of the areas where SSA Field Offices have seen the most 
significant impact on their workloads and on the public has been due to 
the implementation of the Intelligence Reform and Terrorism Prevention 
Act of 2004 (IRTPA) on December 17, 2005. This law significantly 
strengthened the rules for issuing new and replacement Social Security 
numbers and cards. Immediately after this law went into effect, SSA 
Field Offices throughout the country saw a dramatic increase in waiting 
times and number of visitors. This is due to the need to complete a 
much more intensive interview of those applying for Social Security 
numbers. This more intensive interview process and review of documents 
has led to an increased number of visitors that must go home and return 
with additional documents, sometimes multiple times.
    We estimate that nearly one-third of the people currently coming 
into SSA Field Offices to apply for an original or duplicate Social 
Security number card have to return to the office with additional 
documentation for their card. We have seen countless numbers of people 
leaving our offices angry and frustrated because of the inconvenience.
    Last year SSA processed 13.4 million requests for Social Security 
cards. If one-third of the public has to obtain additional 
documentation and return to an SSA Field Office to complete the 
interview process this is affecting nearly 4.5 million people.
    Some of the challenges faced by Field Offices can be seen by one 
Louisiana office which reports:
    A major impediment to providing acceptable service to the public 
has been our increase in daily visitors to the office, the majority of 
which are there to apply for Social Security cards. In the first 
quarter of 2006, we had 10,938 visitors for Social Security cards. 
During that same time period, we processed 7,184 cards. Based on these 
numbers, 52.25% of our visitors needing a Social Security card 
consisted of repeat traffic.
    Overall, we had 20,208 visitors to our office in the first quarter 
of 2006. 10,938 of these visitors were here for Social Security cards 
which equates to 54.1% of all visitors to the office during that 
quarter.
    To meet the demand for Social Security cards, we have two service 
representatives (windows 1 and 2) who do nothing but Social Security 
card requests all day. If the volume becomes too great, we bring in two 
more service representatives to focus solely on this workload (windows 
3 and 4). Four other service representatives are engaged in meeting and 
dealing with the rest of the public that is not in the office to file a 
claim, and two are answering the phones.
    The same office in Louisiana also reported the following lingering 
effects from Hurricane Katrina:

      Still receiving mail for 87 beneficiaries/recipients (all 
types of mail--not just SSA-related) at the Field Office
      Receiving death notices from New Orleans area funeral 
homes
      70% increase in non-receipts of checks from the same time 
last year
      37% increase in Social Security Title II changes from the 
same time last year

    As these increased demands on SSA facilities throughout the country 
have hit the Agency, we are faced with a reduction in staffing of 500 
positions this year and an estimated 2,000 people next year. This 
reduction in staffing will occur even if SSA's LAE account is funded at 
the full level of $9.496 billion as proposed in the President's budget. 
It is estimated that SSA will have 500 fewer employees on duty next 
year than before the Agency started working on Medicare Part D cases. 
Moving forward, we realize that we no longer have the large workloads 
associated with the start up of Part D. Although resources were 
provided by the Congress in Fiscal Years 2004-2006 to address the 
initial workload related to Medicare Part D, there are still incredible 
challenges to be met in addressing the ongoing Medicare Part D 
workloads, rule changes in issuing Social Security number cards, and 
new Medicare Part B premium increase cases, as well as increased 
retirement and disability claims and telephone calls.
    There has been an increasing awareness of the approaching 
retirement wave in all Federal Agencies. For SSA this is especially 
serious. Not only does the Agency have a significant number of 
employees currently eligible to retire, but the training time to create 
a proficient field employee is very long. The complex program features 
and the wide range of benefits and entitlements, in addition to the 
programmatic complexity of many issues occurring after a person is 
drawing benefits mean many employees do not achieve journeyman 
proficiency for at least three and more likely five years. This problem 
will be exacerbated by the loss of institutional knowledge when the 
senior employees retire.
    SSA Field Offices receive about the same number of telephone calls 
as SSA's 1-800 number. This is because many people prefer to talk to 
the local Field Office and because all letters that are mailed out must 
include the local Field Office telephone number on the letter. Yet most 
local Field Offices do not have adequate staff to answer telephone 
calls. In the NCSSMA's 2005 Survey of Management, 78% of the 2,400 
respondents stated they did not have enough staff to provide adequate 
local telephone service. In addition, Field Office telephones systems 
are antiquated and desperately need to be replaced. Field Offices 
nationwide are forced to cannibalize parts to keep some telephone 
systems running.
    SSA has also made enormous investments in the electronic Disability 
Claims Process (e-Dib) which will revolutionize the way the Agency 
handles disability claims. While these changes will lead to significant 
savings and improve processing times down the line, it is actually a 
more labor-intensive process and results in longer interview times for 
local Field Offices. In fact it takes nearly 30 minutes longer to take 
an interview under e-Dib because of the amount of information that must 
be formatted electronically.
    The $9.496 billion requested by the President for FY 2007 is 
insufficient to fully address all backlogs and increasing workloads 
described above. We do understand the fiscal constraints of today's 
budget environment, but at a minimum, it is absolutely critical that 
Congress match the President's FY 2007 budget request for SSA. Each 
year that SSA receives less than adequate funding for the LAE account 
has a compounding negative effect on our workloads. This compounding 
has meant that we have over 8,000 fewer work years than we would have 
received had we received the full level of funding recommended in 
recent years in the President's budget.
    This staffing shortage is one of the key reasons for massive 
backlogs in the Hearings Offices and Program Service Centers, 
reductions in processing stewardship workloads such as SSI 
redeterminations and Continuing Disability Reviews in Field Offices, 
major strains on Field Office employees to handle the increased walk-in 
traffic, and for Field Offices and Teleservice Centers to handle the 
nearly 135 million calls per year.
    The key problem is that SSA is being given more and more 
responsibilities without sufficient funding to handle these 
responsibilities. On the horizon is another enormous workload that SSA 
could receive due to language in the Border Security Act that could 
require the Agency to verify approximately 50 million Social Security 
numbers a year. SSA would need additional funds to administer the 
provisions of this bill if it becomes law. The Agency also needs 
additional funds for IRTPA, ongoing workloads associated with Medicare 
Part D, and the upcoming Income-Related Medicare Part B premium changes 
that take effect in January 2007.
    SSA is making every effort it can to address these increasing 
mandates. Our Agency's productivity continues to rise, and in fact has 
risen at least 2% a year this decade. When you invest the people's 
money in SSA they get their money's worth and much more. Think of the 
hundreds of millions of dollars that would be saved if SSA could 
process more Continuing Disability Reviews and SSI redeterminations. 
This is simply not possible without additional funding.
Supplemental Appropriation
    The Senate has included a provision in the FY 2006 Hurricane-War 
Supplemental Appropriations Bill that would provide $38 million to the 
Social Security Administration. We strongly support this additional 
funding. This funding will help cover additional expenses SSA had to 
incur due to the hurricanes in 2005. SSA assisted more than 528,000 
individuals in FEMA Disaster Recovery Centers and shelters and helped 
countless others at local Field Offices. SSA's additional expenses 
include the need for temporary space, renovating damaged offices and 
replacing damaged furniture and equipment. SSA also had to cover 
additional overtime and travel expenses for details that assisted in 
these workloads. The Agency also incurred costs to help employees who 
were forced to relocate due to damaged or destroyed homes and offices.
    Unfortunately for SSA, the Agency's final budget for FY 2006 was 
already $300 million below the President's FY 2006 request. The reduced 
level of funding provided for FY 2006 makes it very difficult for the 
Agency to absorb the additional costs of the hurricanes and their 
aftermath. The additional $38 million would help deal with the 
reductions in service and additional delays which have occurred 
throughout SSA's Field Offices.
Conclusion
    SSA is facing an enormous challenge to keep up with all of its 
workloads. Without additional funding backlogs will increase and we 
will not be able to provide the level of service we believe the 
American public deserves. At a minimum, SSA needs to receive the FY 
2007 budget proposed by the President. We applaud Commissioner 
Barnhart's ongoing efforts to request adequate resources for SSA. We 
also strongly support the Senate's request for an additional $38 
million in supplemental appropriations for FY 2006. It is imperative 
that our Agency receives additional funds for new tasks we are given 
such as those mandated by IRTPA and the proposed Border Security Act, 
which has the potential to task SSA with a new and immense workload. 
Without additional funding for these new workloads, the Agency will 
have to delay processing various existing workloads, leading to even 
more backlogs and delays. Ultimately, this will lead to increased 
costs.
    We understand the current budgetary constraints, but we hope that 
when Congress is making decisions about how limited appropriated funds 
should be allocated, you and your colleagues keep in mind that SSA has 
a reputation as an Agency that gets results, and it has earned that 
reputation. As the only face of government a broad number of Americans 
ever see, it is important to retain confidence in our government by 
providing these Americans with the efficient, accurate, and 
compassionate service they deserve.
    On behalf of the members of the NCSSMA, I thank you again for the 
opportunity to submit this testimony to the Subcommittee.

                                 

              Statement of National Council on Disability
    Americans with Disabilities remain underemployed, despite the fact 
that many are willing and able to work. Although the Social Security 
Administration (SSA) has instituted a number of incentives to reduce 
the numerous obstacles to employment faced by its Supplemental Security 
Income (SSI) and Social Security Disability Insurance (DI) 
beneficiaries, such efforts have had little impact because few 
beneficiaries are aware of these incentives and how they affect 
benefits and access to health care.
    The National Council on Disability's (NCD) findings reinforce what 
has been known for decades by SSI and SSDI beneficiaries with 
disabilities who want to enter, re-enter, or increase their employment 
within the U.S. workforce. The major findings in NCD's report include:

      The Social Security Administration's demonstration 
authority has not resulted in the validation of evidence-based 
practices that promote employment or return to work for beneficiaries.
      The culture of SSA is not geared toward providing 
rehabilitation services and returning individuals to work or promoting 
work for SSI recipients. The complexity of program rules, coupled with 
the inability of the agency to accurately track and record post-
eligibility earnings, frequently penalizes beneficiaries who attempt to 
enter or re-enter employment.
      The definition of disability in the current SSA 
eligibility process is based on a 50 year old conceptualization of 
disability that is in direct conflict with the policy premises of more 
recent federal policies and programs. The present eligibility 
determination process fails to acknowledge the concepts of partial 
disability or temporary disability. Rather than facilitating early 
intervention services by making rehabilitation services available to 
individuals early in the disability process, it delays eligibility for 
those services that might enable individuals to return to work.
      SSA is not and should not be solely responsible for 
providing all of the services and supports necessary to enable 
beneficiaries to enter employment and return to work. Coordination and 
collaboration across multiple federal and state agencies remains a 
significant challenge for the agency.

    NCD considers the most important recommendations in this report to 
be in the areas of beneficiary perspective and self-direction; income 
issues and incentives; and coordination and collaboration among 
multiple public and private systems. NCD's report recommendations 
include the following:

      Congress and SSA should implement a series of procedural 
reforms to reduce overpayment to beneficiaries by increasing the use of 
electronic quarterly earnings data, piloting the creation of 
centralized work Continuing Disability Review processing cadres, and 
enhancing efforts to educate beneficiaries on reporting requirements, 
the impact of wages on benefits, and available work incentives. One way 
of addressing the last part of this recommendation would be to allow 
beneficiaries to access benefits planning services through an 
integrated, coordinated program across multiple federal systems.
      Congress and SSA should address current shortcomings in 
the Ticket to Work program by expanding eligibility to include 
beneficiaries whose conditions are expected to improve, and to 
beneficiaries under the age of 18. Further, Ticket to Work regulations 
should be modified to ensure that Ticket assignment practices do not 
violate the voluntary nature of the program and beneficiary rights to 
give informed consent.
      Congress should modify the current Title II disability 
legislation to eliminate Substantial Gainful Activity (SGA) as a post-
entitlement consideration for continued eligibility and provide a 
gradual reduction in DI cash benefits based on increases in earned 
income.
      Congress should direct SSA to simplify regulatory 
earnings definitions and wage verification processes so they are 
consistent across the SSI and DI programs, as well as modify 
regulations related to the treatment of earnings in the DI program by 
applying the same rules currently applied in the SSI program.
      Congress should direct SSA develop and test program 
additions and regulatory modifications that will enable SSI 
beneficiaries to accumulate assets beyond existing limits through 
protected accounts and other savings programs. Also, SSA should change 
current program rules and work with other federal agencies to modify 
and expand the value of Individual Development Accounts for all 
beneficiaries with disabilities.
      SSA should modify Ticket to Work program regulations to 
allow the SSA Vocational Rehabilitation traditional Cost Reimbursement 
Program to carry on as a parallel program to the Employment Network 
Outcome or Outcome Milestone payment mechanisms and ensure that an EN 
is able to accept a Ticket from a beneficiary and refer that individual 
to a VR agency for services without having to reimburse VR for those 
services.
      Congress should direct SSA to work with the Department of 
Education to expand the current Student Earned Income Exclusion and the 
Plan for Achieving Self Support programs to encourage involvement of 
transitioning beneficiaries in postsecondary education and training. 
SSA should implement a policy change that would disregard all earned 
income and asset accumulation limits of transitioning beneficiaries for 
at least one year after post secondary education or training is 
completed.
      The Centers for Medicare and Medicaid Services and SSA 
should work closely together to modify existing program regulations in 
order to uncouple Medicare and Medicaid coverage from SSI or DI cash 
payments; eliminate the many employment disincentives built into CMS's 
Medicaid waiver, Medicaid Buy-in, and Health Insurance Premium Payment 
programs; and work collaboratively with public and private insurance 
providers and business representatives to design insurance partnerships 
that will expand access to health care for individuals with 
disabilities.

    The release of this report today is yet another call for the 
leadership of this country and those designing disability policy, to 
recognize that most social security beneficiaries, indeed most 
Americans, want to work. With the appropriate supports, including a 
forward thinking income support program, this can happen.
                                 ______
                                 
The Social Security Administration's Efforts to Promote Employment for 
People with Disabilities

New Solutions for Old Problems
National Council on Disability
November 30, 2005
National Council on Disability
1331 F Street, NW, Suite 850
Washington, DC 20004

    This report is also available in alternative formats and on the 
award-winning National Council on Disability (NCD) Web site 
(www.ncd.gov).
    Publication date: November 30, 2005
    The views contained in this report do not necessarily represent 
those of the Administration as this and all NCD documents are not 
subject to the A-19 Executive Branch review process.
Web Address for complete report:
http://www.ncd.gov/newsroom/publications/2005/ssa-promoteemployment.htm
Executive Summary
    Americans with disabilities remain underemployed, despite the fact 
that many are willing and able to work. Although the Social Security 
Administration (SSA) has instituted a number of incentives to reduce 
the numerous obstacles to employment faced by its Supplemental Security 
Income (SSI) and Social Security Disability Insurance (DI) 
beneficiaries, such efforts have had little impact because few 
beneficiaries are aware of these incentives and how they affect 
benefits and access to health care.
Introduction to the Problem
    Social Security beneficiaries with disabilities must spend months 
or even years convincing SSA that they are unable to work as a 
condition of eligibility. Yet, upon their receipt of benefits, SSA 
begins to communicate to beneficiaries that work is an expectation for 
them. Congress and SSA have developed a variety of work incentives and 
special programs designed to encourage beneficiaries to attempt to 
obtain and sustain employment. Yet SSA's efforts to eliminate work 
disincentives have often added to the complexity of the entire program, 
confusing beneficiaries and making them leery of any actions that might 
unknowingly jeopardize their benefits.
    Current SSA benefit amounts are quite small and merely allow 
beneficiaries to live at a basic subsistence level. SSI resource limits 
make it very difficult to accumulate the financial resources necessary 
to move toward economic self-sufficiency. Tying eligibility for 
Medicaid or Medicare to eligibility for SSA benefits forces individuals 
with high-cost medical needs who could otherwise work to choose between 
pursuing a career and retaining the medical insurance that sustains 
their very lives.
    The fear of losing benefits and medical insurance through an 
unsuccessful employment attempt starts well before adulthood with SSI 
beneficiaries. Many SSI recipients first apply for benefits as children 
while enrolled in public schools. These individuals often remain on the 
rolls well into adulthood, with very few transitioning from high school 
into substantial employment after graduation (GAO, 1996b; GAO, 1998b). 
Failure to focus on Social Security and other public benefits during 
transition is not only a missed opportunity, but harm may be caused 
when students and family members are not educated or prepared for the 
effect of earnings on cash benefits and medical insurance (Miller and 
O'Mara, 2003).
    There is also the problem with poor educational attainment of DI 
beneficiaries who enter the disability system later in life. Efforts to 
help this population return to work are stymied by their lack of 
education and marketable job skills--particularly in today's highly 
competitive information economy. It is now more important than ever 
that people of all ages have access to higher education and the 
financial means with which to pay for training and education (Moore, 
2003).
Response of Congress and the Social Security Administration to the 
        Problem
    Well aware of the enormity and seeming intractability of this 
problem, Congress and SSA have initiated multiple efforts to promote 
employment and return to work among SSA beneficiaries. In recent years, 
a number of work incentives for SSI and DI beneficiaries have been 
implemented, allowing individuals to keep more of their earnings while 
retaining their benefits. Work incentives are aimed at reducing the 
risks and costs associated with the loss of benefit support and medical 
services as a result of returning to work. Some of the most commonly 
used incentives are Section 1619(a) and (b) provisions; impairment-
related work expenses (IRWE); trial work period (TWP); Plan for 
Achieving Self-Support (PASS); extended period of eligibility (EPE); 
and continued payment under a vocational rehabilitation program.
    However, despite efforts by SSA and the Federal Government that 
have led to more favorable conditions for returning to work, most SSI 
and DI beneficiaries continue to stay on the disability rolls. The work 
incentives offered by SSA remain largely underutilized; in March 2000, 
of the total number of eligible working beneficiaries, only 0.3 percent 
were using PASS, 2.8 percent were using IRWEs, 7.5 percent were 
receiving Section 1619(a) cash benefits, and 20.4 percent were 
receiving Section 1619(b) extended Medicare coverage (SSA, 2000). The 
major reasons cited for the extreme underutilization of these work 
incentives by beneficiaries were (1) few beneficiaries knew that the 
work incentives existed, and (2) those who were aware of the incentives 
thought they were complex, difficult to understand, and of limited use 
when entering low-paying employment (GAO, 1999).
    The Office of Program Development and Research (OPDR) and the 
Office of Employment Support Programs (OESP) under the Deputy 
Commissioner for Disability and Income Security Programs are primarily 
responsible for the implementation of multiple components of the Ticket 
to Work and Work Incentives Improvement Act of 1999 (TWWIIA). The 
TWWIIA provides a number of new program opportunities and work 
incentives for both SSI and DI beneficiaries, including the Ticket to 
Work (TTW) and Self-Sufficiency Program; development of a work-
incentives support plan through the creation of national network of 
Benefits Planning, Assistance, and Outreach (BPAO) programs; and new 
work incentives, including expedited reinstatement (EXR) of benefits 
and postponement of continuing disability reviews.
The National Council on Disability's Study of the Problem
    It is not known whether the new TWWIIA programs will have any more 
success than past attempts by SSA to impact the employment rate and 
earnings of beneficiaries. What is clear is that there has not been, in 
recent times, a comprehensive, research-based examination of the 
practices that are most likely to support the employment of SSI and DI 
beneficiaries. This study has been undertaken in response to the need 
for such a comprehensive analysis. The study was designed to address 
four research questions:

    1.  What are the evidence-based practices that promote the return 
to work of working-age beneficiaries of DI and SSI programs?
    2.  What policy changes are needed, given recent trends in program 
participation and employment?
    3.  Are there proven and documented practices that work better for 
some populations of people with disabilities and not others?
    4.  Which factors ensure that documented and evidence-based 
practices could be adapted/adopted by SSA and other entities that seek 
to ensure the employment of people with disabilities? Which factors 
prevent adaptation/adoption?

    A four-step approach was taken to implement the study. First, a 
comprehensive literature synthesis was completed through a review of 
published and unpublished literature. Second, detailed structured 
interviews were conducted with key stakeholders, including SSA 
beneficiaries, federal SSA officials, representatives of other federal 
agencies, consumer and advocacy organizations, service organizations, 
community service providers, and business representatives. Third, a 
preliminary list of findings, evidence-based practices, and 
recommendations based on the literature review and structured 
interviews was used to develop seven topic papers. These papers were 
used to facilitate discussion and obtain reaction from participants who 
were invited to a consensus-building conference at the end of January 
2005. Individuals with disabilities (including current and former SSI 
and DI beneficiaries), advocacy organizations, service providers, and 
policymakers who attended the conference had the opportunity to further 
develop the recommendations that appear throughout the report.
Major Findings of the Study
Purpose and Mission of SSA's Disability Benefit Programs
    Our nation's current disability benefit programs are based on a 
policy principle that assumes that the presence of a significant 
disability and lack of substantial earnings equates to a complete 
inability to work. The current SSA eligibility determination process 
thwarts return-to-work efforts, because applicants are required to 
demonstrate a complete inability to engage in substantial gainful 
activity (SGA) in order to qualify for benefits. The definition fails 
to recognize that, for many consumers, disability is a dynamic 
condition. The length of the application process in our current 
programs actually contributes to the ineffectiveness of our return-to-
work efforts and our inability to intervene early in the disability 
process.
    For DI individuals, lack of a gradual reduction in benefits as 
earnings increase and lack of attachment to the DI and Medicare 
programs after an individual has maintained employment for an extended 
period of time make return to work unfeasible. For SSI beneficiaries, 
the program's stringent asset limitations thwart efforts toward asset 
development and economic self-sufficiency. Inconsistencies in program 
provisions lead to confusion and inequities for beneficiaries of both 
programs.
Beneficiary Perspective and Self-Direction
    To receive benefits, applicants must characterize their situation 
as an inability to work long-term. They must demonstrate that they are 
unable to work in any significant way. Once they are determined to be 
eligible for disability benefits, beneficiaries face a host of complex 
program rules and policies related to continuing eligibility for cash 
benefits and access to health care. Many beneficiaries are confused or 
uninformed about the impact of return to work on their life situation 
and have shied away from opportunities to become self-sufficient 
through work.
    Beneficiaries report that their experience with SSA is often 
unfavorable. Insufficient staffing has led to long lines and poor 
services. Misinformation is frequent, and mistrust common. Local SSA 
field office staff members are overburdened with accurate and timely 
processing of post-entitlement earnings reporting, which often leads to 
overpayments to beneficiaries. Beneficiaries do not trust SSA to make 
appropriate and timely decisions. There is prevalent fear that work 
attempts would result in either a determination that the disability had 
ended or the need to repay benefits.
    SSA has implemented many legislative changes, program 
modifications, training initiatives, and automation efforts in the past 
15 years to improve its customer service. Although efforts to 
streamline processing and improve customer service should be lauded, 
they have not significantly improved beneficiaries' ability to direct 
and control their own careers.
Income Issues and Incentives
    A multitude of rules regarding employment income, continued 
eligibility for disability benefits, waiting periods, earnings 
reporting, management of benefit payments, and management of assets 
(among many others) come into play once an individual is determined to 
be eligible for DI or SSI. SSA rules regarding employment and income 
are such that many beneficiaries will actually be worse off financially 
if they work full time. Disincentives to employment in the current 
benefits programs include a sudden loss of cash benefits as a result of 
earnings above the SGA level for DI beneficiaries. Despite a number of 
programs that are designed to encourage asset building among SSI 
beneficiaries, it remains very difficult for beneficiaries to save and 
accumulate resources under SSI, which contributes to long-term 
impoverishment and dependence on public benefits.
    Over the past decade, SSA has devoted considerable resources to 
promoting employment and return to work among SSI and DI beneficiaries. 
The agency has aggressively implemented a number of new initiatives 
authorized under the TWWIIA, such as the Ticket to Work and Self-
Sufficiency Program, the BPAO program, area work incentive 
coordinators, and Protection and Advocacy for Beneficiaries of Social 
Security. It has modified program rules to provide increased work 
incentives to beneficiaries, such as the EXR and protection from 
continuing disability review provisions of TWWIIA, indexing the SGA 
threshold, and increasing the level of earnings allowed during the 
Trial Work Period (TWP). The agency has also launched or is planning to 
initiate a number of demonstrations that will test the efficacy of new 
modifications to work incentives within the DI program and services 
targeted toward youth with disabilities. Yet, while SSA has taken steps 
to improve its return-to-work services through the provision of work 
incentives, these efforts are hampered by the underlying program rules 
that were designed for individuals assumed to be permanently retired 
from the workforce and individuals who were viewed as unable or 
unlikely to work in the future.
Coordination and Collaboration Among Systems
    Expansion of the disability programs and the poor employment rates 
of adults with disabilities have become major concerns for SSA and 
disability policymakers across the country. Too often, the alarming 
growth of the Social Security disability rolls has been represented and 
perceived as SSA's problem to solve in isolation, when in fact it is a 
larger societal problem with myriad complex causes. Receipt of Social 
Security disability benefits is merely the last stop on a long journey 
that many people with disabilities make from the point of disability 
onset to the point at which disability is so severe that work is not 
possible. All along this journey, individuals encounter the policies 
and practices of the other systems involved in disability and 
employment issues. When these systems fail to stem the progression of 
disability or work at cross-purposes with one another to prevent 
successful employment retention or return to work, it is the Social 
Security disability system that bears the eventual brunt of this 
failure. Any meaningful effort to slow down or reverse this relentless 
march toward federal disability benefits will require significant and 
sustained collaboration and coordination among SSA and the other 
federal agencies with a stake in developing disability and employment 
policy.
    The complex obstacles to employment faced by SSA beneficiaries 
require a comprehensive set of solutions. New approaches must be 
identified that emphasize beneficiary control of career planning and 
the ability to access self-selected services and supports. Public and 
private health care providers must develop new collaborations and new 
approaches to combining coverage from multiple sources to improve 
program efficiencies. SSA must continue to work with the Rehabilitation 
Services Administration (RSA) and the Department of Labor (DOL) to 
improve implementation of the TTW program and identify new approaches 
that will overcome the traditional inability of SSA beneficiaries to 
benefit from services provided by the nation's employment and training 
programs. Secondary and postsecondary educational institutions must 
emphasize benefits counseling and financial management training as the 
foundation for beneficiary self-direction and economic self-
sufficiency. Federal agencies and the business community must realize 
that collaborative approaches to incorporating beneficiaries into the 
workforce are needed as a way to reduce dependence on federal benefits 
while simultaneously enhancing the productivity and competitiveness of 
large and small business.
Recommendations
    A total of 38 specific recommendations have been developed in the 
areas of Beneficiary Perspective and Self-Direction, Income Issues and 
Incentives, and Coordination and Collaboration Among Multiple Public 
and Private Systems. The recommendations are presented and justified in 
Chapters III, IV, and V of the report, and a complete list is provided 
in Chapter VI. The key recommendations resulting from the study are 
summarized below.
    Beneficiary Perspective and Self-Direction Customer Service--SSA 
should take immediate steps to improve the services provided to 
beneficiaries by improving the accessibility of SSA field offices and 
Web sites; redesigning field office personnel roles, staffing patterns 
and work assignments; continuing efforts to automate work reporting 
procedures; and enhancing outreach efforts to beneficiaries.
    Ticket to Work Program--Congress and SSA should address current 
shortcomings in the TTW program by (1) expanding Ticket eligibility to 
include beneficiaries whose conditions are expected to improve and who 
have not had at least one continuing disability review (CDR), childhood 
SSI beneficiaries who have attained age 18 but who have not had a 
redetermination under the adult disability standard, and beneficiaries 
who have not attained age 18; (2) modifying the TTW regulations to 
ensure that Ticket assignment practices do not violate the voluntary 
nature of the program and beneficiary rights to grant informed consent; 
and (3) implementing a strong national marketing program to inform 
beneficiaries about TTW and other SSA programs.
    Facilitate Beneficiary Choice--Congress should authorize and direct 
SSA, the Rehabilitation Services Administration (RSA), the Centers for 
Medicare and Medicaid Services (CMS), the Department of Housing and 
Urban Development (HUD), and the Department of Labor Employment and 
Training Administration (DOLETA) to develop and implement an integrated 
benefits planning and assistance program that coordinates resources and 
oversight across several agencies that enables beneficiaries to access 
benefit planning services within multiple federal systems. Congress 
should also authorize and direct these agencies to consider changes to 
the existing BPAO initiative to improve the accuracy and quality of 
services provided to individual beneficiaries.
    Reduce SSA Overpayments to Beneficiaries--Congress and SSA should 
implement a series of procedural reforms to reduce overpayment to 
beneficiaries by increasing the use of electronic quarterly earnings 
data and automated improvements to expedite the processing of work 
activity and earnings; piloting the creation of centralized work CDR 
processing in cadres similar to PASS and Special Disability Workload 
Cadres; and enhancing efforts to educate beneficiaries on reporting 
requirements, the impact of wages on benefits, and available work 
incentives.
    Eliminate the Marriage Penalty--Congress and SSA should undertake a 
complete review of the SSI program and make program modifications that 
eliminate the financial disincentive to marriage inherent in the 
present program, including amending the current Title XVI disability 
legislation to modify the manner in which 1619(b) eligibility is 
applied to eligible couples.
Income Issues and Incentives
    Ease the SGA Cash Cliff for DI Beneficiaries--Congress should 
modify the current Title II disability legislation to eliminate SGA as 
a post-entitlement consideration for continued eligibility for Title II 
disability benefits and provide for a gradual reduction in DI cash 
benefits based on increases in earned income.
    Reduce Restrictions on Assets for SSI Beneficiaries--Congress 
should direct SSA to (1) develop and test program additions and 
regulatory modifications that will enable SSI beneficiaries to 
accumulate assets beyond existing limits through protected accounts and 
other savings programs, and (2) change current program rules and work 
with other federal agencies to modify and expand the value of 
individual development account (IDA) programs to SSA beneficiaries.
    Decrease the Complexity of the DI/SSI Program Rules Governing 
Income and Resources--Congress should direct SSA to (1) simplify 
regulatory earnings definitions and wage verification processes so that 
they are consistent across the SSI and DI programs, and (2) direct SSA 
to modify regulations related to the treatment of earnings in the DI 
program by applying the same rules currently applied in the SSI 
program.
Coordination and Collaboration Among Multiple Public and Private 
        Systems
    Health Care Systems--Centers for Medicare and Medicaid Services 
(CMS) and SSA should work together closely to (1) modify existing 
program regulations in order to uncouple Medicare and Medicaid coverage 
from DI/SSI cash payments; (2) identify and eliminate the many 
employment disincentives currently built into the Medicaid waiver, 
Medicaid buy-in, and Health Insurance Premium Payment (HIPP) programs; 
(3) expand benefits counseling services to include the full range of 
financial education and advisement services; and (4) work 
collaboratively with public and private insurance providers and 
business representatives to design public-private insurance 
partnerships that will expand access to health care for individuals 
with disabilities.
    Vocational Rehabilitation (VR) System--SSA should modify TTW 
program regulations to allow the SSA's traditional VR cost 
reimbursement program to carry on as a parallel program to the 
Employment Network (EN) outcome or outcome-milestone payment 
mechanisms, and ensure that an EN is able to accept Ticket assignment 
from a beneficiary, refer that individual to the VR agency for needed 
services, and not be required to reimburse the VR agency for those 
services.
    Federal Employment and Training System--Congress, SSA, and the 
Department of Labor should undertake an analysis of the impact of 
allowing DOL One-Stop Career Centers to receive cost reimbursement 
payments for successfully serving beneficiaries under the TTW program, 
evaluate the impact of the Workforce Investment Act (WIA) performance 
standards on beneficiary participation in WIA programs, and design and 
test a set of waivers that will assist beneficiaries in accessing and 
benefiting from WIA core and intensive services, as well as individual 
training accounts.
    Educational System--Congress should direct SSA to work with the 
Department of Education (ED) to (1) ensure that benefits planning and 
financial management services are available to the transition-aged 
population; (2) expand the current student earned income exclusion 
(SEIE) and the Plan for Achieving Self-Support (PASS) to encourage 
involvement of SSA beneficiaries in postsecondary education and 
training; and (3) implement a policy change that would disregard all 
earned income and asset accumulation limits for beneficiaries who are 
transitioning from secondary education to postsecondary education or 
employment for at least one year after education or training is 
completed.
    Employers, Business Community, and Private Insurance Industry--
Congress should direct SSA and the Department of the Treasury to (1) 
evaluate the possible effects of a disabled person tax credit as a 
means of increasing the use of disability management programs in 
business to prevent progression of injured and disabled workers onto 
the public disability rolls, and (2) collaborate with Department of 
Labor's Employment and Training Administration (DOLETA), the Small 
Business Administration (SBA), and the Rehabilitation Services 
Administration (RSA) to develop and implement an employer outreach 
program targeted toward small and mid-size businesses.

                                 

         Statement of Hal Daub, Social Security Advisory Board
    Chairman McCrery, Representative Levin, Members of the 
Subcommittee. I am pleased, as Chairman of the Social Security Advisory 
Board, to submit to you this statement concerning the Service Delivery 
Challenges that now face the Social Security Administration.
    This is a timely and important hearing. I think most Americans are 
aware of the Social Security Administration in much the same way that 
we are aware of the sun in the sky. If asked, we would, of course, say 
that we know it exists and that it is important to the proper 
functioning of our lives, but we mostly just expect it to be there and 
to operate smoothly. When we need a Social Security number, we expect 
to be able to get one. As we work, we expect that our wages will be 
properly tracked. Those who are retired and drawing benefits expect 
them to be paid in the right amount and at the right time. Those who 
become disabled or suffer the loss of a breadwinner expect that they 
can turn to the agency and have their eligibility accurately and 
promptly adjudicated.
    To a very great extent, the Social Security Administration lives up 
to and, in many cases, exceeds these expectations. As an excellent 
example, I would mention last year's hurricanes. We all have heard a 
great deal about the things that went wrong. But one of the things that 
went right was the way that the Social Security Administration 
responded to that crisis by making extraordinary efforts that kept its 
payments and other services flowing to the affected population.
    But while the Social Security Administration and its employees have 
a well deserved reputation as a ``can-do'' organization that handles 
both routine and crisis challenges with efficiency and great commitment 
to public service, it is also very much a large scale production 
operation that cannot meet all of its challenges adequately unless it 
is given adequate resources to do so.
    The massiveness of the agency's routine operations is, I think, not 
well understood. It provides benefits to over 53 million Americans 
every month. Now that may not seem like such a big challenge. The 
largest part of that workload is retirement benefits and most of those 
now are paid by direct deposit rather than by physical checks. But, 
that is not really a static workload. People move. People die. Family 
circumstances that affect entitlement can change. People in certain 
categories have benefits that may vary from month to month depending on 
their earnings or income. The Social Security Administration has to 
keep track of these changes, update its benefit rolls, send out 
explanations, handle phone inquiries and office visits asking about 
these changes. On a typical day, the agency has to process more than 
300 thousand actions of this kind.
    Beyond maintaining the benefit rolls, one of the most important 
things that the Social Security Administration does is to handle new 
claims. And again, the magnitude of this operation is so large that it 
is difficult to comprehend. Every week, the agency gets something like 
150 thousand new benefit claims. That's about 8 million per year. Now 
the Social Security Administration has done an excellent job of 
leveraging technology to help it handle this huge workload. Lots of 
information is available on its website to help people understand what 
benefits there are and how to claim them. More and more of these claims 
are actually being filed on the Internet and those who do not have 
Internet access--or, perhaps, do not trust it--can often file their 
claims by telephone. However, technology can take you only so far. For 
most of us, reaching the age for claiming Social Security benefits is 
an important life event, and many want to go to their local Social 
Security field office to talk with a human being and make sure they are 
making the right choices. And, even for retirees, there are important 
choices in this very complex program. Between age 62 and 70, how much 
your permanent benefit rate will be depends on just which month in that 
period you choose to have it start. If you are under 66, the amount you 
work may affect your benefits. And Social Security also handles your 
choice of whether or not to enroll in Part B of Medicare when you reach 
age 65. So even the so-called ``simple claims'' are not so simple.
    But it is in the disability area that the Social Security 
Administration faces the most significant administrative challenges. A 
disability claim--and there are about 2.5 million of them each year--is 
inherently far more complicated than other claims. For retirement and 
survivors claims the availability and evaluation of evidentiary factors 
is generally straightforward: age, relationship, the fact of death--
all, generally, can be shown by official records, and wage history 
information is maintained in the agency's own databases. But a 
disability claim involves a complex interview where the claimant 
explains the nature of the impairment and why he or she thinks it 
prevents employment. The claimant's prior work history and educational 
background also must be recorded. All the doctors and hospitals and 
clinics that have provided treatment are contacted to provide their 
medical findings. In many cases, the claimant will be asked to undergo 
a medical examination by an agency consultant. The claim passes through 
many hands. Generally, it is filed and the initial interview conducted 
at an SSA field office. It then goes to a State disability 
determination agency which gathers the evidence so that a lay 
disability examiner and a medical professional can jointly decide 
whether the claimant meets the statutory definition of disability. 
Because disability is often not clear cut, a large portion of claims go 
on to a lengthy appeals process that may involve a reconsideration by 
the State agency, a hearing before an administrative law judge, further 
administrative review by the Appeals Council, and, in a relatively 
small but still significant number of cases, review by a Federal 
District Court.
    Again, the agency has been making strong efforts to increase its 
efficiency in handling this difficult and complex caseload. Even as 
millions of claims continue to come in the door, it undertook over the 
past couple years to develop a sophisticated new electronic processing 
system for disability claims which should, when fully implemented, 
reduce the costs of handling, storing, and transporting the bulky paper 
claims folders previously used. This new ``eDib'' system also holds 
promise of improving the agency's ability to process claims and 
implement effective quality management measures. But still, the nature 
of the program will continue to involve the labor-intensive functions 
of identifying, gathering, and evaluating evidence for a necessarily 
subjective determination. The agency has been able to make impressive 
productivity gains over the past several years, but with the baby boom 
generation now approaching its most disability prone years, the 
administrative challenge will continue to grow.
    So adequate resources will always be an important factor in the 
Social Security Administration's ability to meet its administrative 
challenges. And, despite its significant record of achievement, it does 
not now have adequate resources to keep up with all its workloads.
    In 1994, Congress decided that the Social Security Administration 
should become an independent agency of the government. In the 
legislation that Congress and the President enacted into law, you gave 
the Commissioner the responsibility of drawing up budgets based on the 
agency's workforce needs and required that these be submitted to the 
Congress along with the President's request. Based on this requirement, 
the Social Security Administration has been submitting budgets which 
would allow it to gradually bring down its backlogs to normal levels. 
The pattern has been for the President's budget to include much, but 
not quite all, of the requested funding, and for the Congress to 
appropriate at a level below the President's recommendation. For the 
current fiscal year, for example, the Social Security Administration 
told Congress that a service delivery budget level of $10.1 billion was 
the amount needed to meet its ongoing responsibilities including a 
glide path to the elimination of backlogs. The President recommended 
that Congress allow $9.4 billion. And the actual administrative funding 
level approved by the Congress was $9.1 billion.
    The Social Security Administration does its best to continue to 
provide a high level of public service with the resources it does 
receive. But, when resources are not adequate, workloads will and do 
suffer. This obviously puts the Commissioner of Social Security into a 
difficult position of deciding what gets done and what gets left 
undone. Some things that get left undone are important stewardship 
activities. Some of those who go on the disability rolls will recover, 
but it takes resources to carry out continuing disability reviews. Some 
of those who are needy and apply for Supplemental Security Income will 
have changed circumstances that lessen (or perhaps increase) their 
entitlement. It takes resources to conduct redeterminations. The 
actuaries have found that a dollar spent on disability reviews yields 
ten dollars in long-term benefit savings and a dollar spent on SSI 
redeterminations has a sevenfold return on investment. So failing to 
provide adequate resources to carry out these stewardship 
responsibilities really is not beneficial to either the Federal budget 
or the trust funds.
    But it is not just stewardship that suffers when resources are 
inadequate. Members of the public coming into Social Security offices 
to do business such as filing a claim or getting a Social Security card 
find themselves waiting longer than necessary. Telephone calls, 
especially those to field offices with inadequate staff and obsolete 
equipment, are not answered and voice mail messages are not returned 
promptly and, in some cases, are not returned at all.
    Again, it is in the complex and difficult disability area that 
service to the public especially suffers when resources are 
insufficient to enable the agency to keep up with growing workloads. 
The number of initial disability claims awaiting a decision is over 
650,000 and growing. In 1980, Congress directed SSA to promulgate 
performance standards for State Disability Determination Services. 
SSA's regulations set a target average processing time for Social 
Security disability claims of 37 days with 50 days as the outside 
threshold of what is ``acceptable.'' In the past three months, the 
average time was over 92 days.
    The situation in the hearings process is even more serious. At the 
end of 1999, there were 265,000 Social Security claimants awaiting a 
hearing on their appeals. By the end of 2003, that had more than 
doubled to 556,000. And the backlog continues to grow. It is now over 
725,000 and by the end of this fiscal year will reach 756,000. That is 
three-quarters of a million Americans with severe disabilities who have 
already waited 3 or 4 months to get a decision on their claim and will 
now face, on average, another year and a quarter awaiting a decision on 
their appeal. And most of them will ultimately be found eligible.
    So, just to carry out its basic ongoing responsibilities, the 
Social Security Administration must have adequate resources. But even 
as it struggles with a less than optimal funding level and still 
attempts to make those investments in technology and improvements in 
process that will make it better able to cope efficiently with its 
workloads, SSA finds its workloads growing because the public and the 
Congress tend to look to this ``can do'' agency when new needs arise. 
The public expected and received extraordinary efforts from the Social 
Security Administration when the hurricanes were shutting down many 
other services. The agency met the challenge, but at a cost. Last 
year's hurricanes absorbed an unplanned for expenditure of over $70 
million that will reduce the agency's capacity to use overtime for some 
of its ongoing workloads. A few months back, the period for enrollment 
in the new Medicare prescription drug program began. Even though this 
was not properly a Social Security Administration responsibility, the 
agency has a presence in the community and is trusted as a source of 
information. As a result, its field offices were swamped with visitors 
and its 800 number experienced a huge spike in calls. Again, this 
absorbed resources that reduce the agency's ability to do its own work. 
In 2004, legislation was enacted requiring increased evidentiary 
standards for issuing new and replacement Social Security cards. This 
does not sound like a huge burden, but the agency processes 18 million 
cards each year. Field offices tell us that many of those who visit the 
office for a Social Security card now need to make a return visit to 
bring additional documents.
    Legislation has been passed by the House that would mandate that 
employers verify the accuracy of the Social Security numbers presented 
to them by their workers. If Congress ultimately does decide to take 
this step or some variant of it, it is important to be aware that this 
does represent another administrative challenge for the Social Security 
Administration. The challenge is not so much in setting up and 
operating the verification system itself--the agency already provides 
such services on a voluntary basis--but rather in the spillover impact 
as Social Security deals with the many cases where the verification 
will be negative and workers will need to straighten out their records. 
This certainly may have some beneficial results in terms of reducing 
the amount of wages that cannot now be properly credited, but, like all 
administrative burdens, it is not free. It will take administrative 
resources, and unless those are provided, it will detract from the 
ability of the agency to provide other services to the public.
    I would like to take a moment to discuss the administrative 
challenges that the Congress placed upon the Social Security 
Administration in connection with the Medicare prescription drug 
program. Recognizing Social Security's presence in American communities 
and its reputation for providing effective and efficient public 
service, you gave it the responsibility for soliciting and adjudicating 
applications for the extra assistance provided to lower income 
beneficiaries in meeting their prescription drug costs. But you very 
wisely, I believe, recognized that this would be a significant 
administrative challenge and, to avoid an adverse impact on the 
agency's other important workloads, you included additional 
administrative funds as an integral part of the same legislation that 
gave the Social Security Administration this new mandate. I think that 
should become a model for the future and one that you should insist 
that other Committees follow if they propose changes that have the 
effect of increasing the Social Security Administration's 
administrative tasks.
    In reports issued by the Social Security Advisory Board in 1999 and 
again in 2002, the Board urged that the administrative budget for the 
Social Security Administration should be ``excluded from any cap that 
sets an arbitrary limit on discretionary spending.'' We also said that 
the Board does not in any sense mean that the agency's budget should be 
exempt from close scrutiny by the Congress. The Social Security program 
and the Social Security trust funds are very important to the workers 
who bear the burden of paying Social Security taxes and to the 
beneficiaries who depend upon the program for economic security. The 
Congress has a responsibility to assure both that this core 
responsibility of government is adequately resourced and efficiently 
carried out and that proper levels of benefit and administrative 
expenditure are maintained. Unfortunately, there is a shortcoming in 
our current budgetary processes that seems to result in the worst of 
both worlds. In a more rational process, the agency would be able to 
devote sufficient resources to its stewardship responsibilities to 
generate a reduction in improper payments that could in turn be 
redirected to carrying out its responsibilities for providing 
excellence in all aspects of its service to the public. I would urge 
the Subcommittee to find ways to resolve this problem.

                                 

 Statement of Social Security Disability Coalition, Rochester, New York
    As a Social Security Disability and Medicare recipient myself, I 
wish to discuss below my concerns on how Social Security service 
delivery challenges affect those two programs.
Social Security Disability Program Issues
    As a person who has gone through the Social Security Disability 
process myself, I know first hand the financial, physical and emotional 
devastation that the current SSDI process can cause. As President/Co-
Founder of the Social Security Disability Coalition and author of the 
Social Security Disability Reform Petition, I see on a daily basis the 
devastating affect, that problems with this program, has on others all 
over the country. I believe that many of the problems an SSD/SSI 
applicant faces are due to insufficient staffing levels and poor 
training of current staff. Since our lives are most directly affected 
by the inadequacies of the SSA, and must deal with the consequences 
when it does not function properly, we know first hand where the 
problems are, and the possible solutions to correct them. SSA customer 
service is extremely poor and in major need of improvement across the 
board. The Social Security Disability claims process in particular, 
which should be done quickly, easily, with the utmost respect and 
compassion for this nation's most fragile population, has instead 
turned into one of dread, tedium, disrespect and devastation. Here is 
just a small sampling of the constant complaints we receive and issues 
we face when applying for our SSD/SSI benefits:

      Severe understaffing of SSD workers at all levels of the 
program
      Extraordinary wait times between the different phases of 
the disability claims process
      Employees not returning calls, outright refusing to 
provide information to claimants (due to high work volume/stress 
levels?)
      Employees greatly lacking in knowledge of Social 
Security/Federal Regulations--including Freedom of Information Act, 
Privacy Act, SSD Pre-Hearing review, and hearing on the record 
processes (due to poor training?)
      Complaints of lack of attention or totally ignoring--
claimants concerns and medical records provided (due to high work 
volume/stress levels?)
      Claimants getting conflicting/erroneous information 
depending on whom they happen to talk to at Social Security--causing 
confusion for claimants and major problems including improper payments 
and financial penalties (due to poor training?)
      Fraud on the part of DDS/OHA offices, ALJ's, IME's--
purposely manipulating/ignoring information provided to deny claims 
(rubber stamping of denials to move paperwork off their desks due to 
high volume of claims and not enough workers?)
      Complaints of lost files and files being purposely thrown 
in the trash (moving paperwork off their desks due to high volume of 
claims and not enough workers?)
      Complaints of having other claimants information 
improperly filed/mixed in where it doesn't belong causing breach of 
security (high stress/work volumes can lead to increased mistakes by 
workers)
      Complaints of backlogs at payment processing centers for 
initial payments once claim is approved (not enough workers?)
      Employees being rude/insensitive to claimants (due to 
high stress levels?)
      Poor/little coordination of information between the 
different departments and phases of the disability process

    These complaints refer to all phases of the SSD process including 
local office, Disability Determinations, Office of Hearings and 
Appeals, Payment Processing Centers and the Social Security main office 
in MD (800 number).
    High priority should be given to increase SSA staffing levels, and 
provide better employee training, in all phases of the disability 
process, especially in the initial contact phases with field offices 
and DSS offices across the board. Instead we are hearing that staff 
levels are being reduced as backlogs in the system are increasing! We 
fear that inadequate staffing levels and increased work load have 
caused and will continue to cause ``rubber stamping'' of SSD case 
denials across all phases of the disability program in order to meet 
paperwork processing goals. Another fear is that we will again 
experience the ``disappearance'' or dumping of case files as was 
discovered in Milwaukee a few years back.
From GAO/T-HEHS-00-22-10/21/99--SSA Has Had Mixed Success In Efforts To 
        Improve Caseload Management:
    ``The cost of administering the disability programs reflects the 
demanding nature of the process: in fiscal year 1998, SSA spent about 
4.3 billion, or almost 66 percent of its administrative budget on its 
disability programs, even though disability beneficiaries are only 
21percent of the agencies total number of beneficiaries.''
    ``The disability process has proved to be a lengthy one that can 
confuse and frustrate applicants. Since the early 1990's, claimants 
applying for disability benefits have had to wait over a year for a 
final decision on their eligibility.''
    ``. . . because of the multiple levels and decision points in the 
process, a great deal of time can pass while a claimant's file is 
passed from one SSA employee or office to another. Moreover as a result 
of these multiple handoffs, and the general complexity of the process, 
SSA believes claimants have had difficulty obtaining meaningful 
information about the status of their claims.''
    ``Long-standing problems with this process were exacerbated when 
the number of claims for disability benefits increased dramtically 
between fiscal years 1991 and 1993--from about 3 million to 3.9 
million, or almost 32 percent. As a result, SSA's disability workload 
began to accumulate during this period. Most dramatically, the number 
of pending hearings almost doubled between 1991 and 1993 from 183, 471 
to 357,564.''
    ``At the end of 1998, there were still over 380,000 backlogged 
hearings. Moreover, SSA expects claims to begin to increase in the near 
future as the baby boom generation approaches its disability-prone 
years.''
    ``The current process also permits inconsistent decision between 
the initial and appeals levels. In 1996, about two-thirds of all those 
whose claims were denied at the reconsideration level filed an appeal, 
and of these, about 65 percent received favorable decisions at the 
hearing level. SSA has determined that at the initial level, denial 
cases are more error-prone than are allowance cases.
    ``This inconsistency of decisions has raised questions about the 
fairness, integrity, and cost of SSA's disability program. In fiscal 
year 1998, the cost of making a determination at the DDS level was $547 
per case, while the cost of an ALJ decision was an additional $1385.''
From--20 CFR Parts 404, 405, 416, and 422
Administrative Review Process for Adjudicating Initial Disability 
Claims--Final Rule
RIN 0960-AG31
http://a257.g.akamaitech.net/7/257/2442/01jan20061800/
edocket.access.gpo.gov/2006/06-3011.htm
[Federal Register: March 31, 2006 (Volume 71, Number 62)]
[Rules and Regulations]
[Page 16423-16462]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr06-22]
Part II--20 CFR Parts 404, 405, 416, and 422
    During the five decades that have elapsed since its enactment, the 
DI program has provided many millions of disabled American workers and 
their families with critically needed income support. The SSI program, 
enacted 34 years ago, has similarly helped many millions of low income 
disabled individuals meet their basic needs. These two programs are a 
vital part of the nation's social insurance and income support systems. 
The number of disability beneficiaries in our programs has grown 
significantly over the years. In January 2005, nearly eight million 
disabled workers and their dependents received DI benefits, double the 
number of beneficiaries in 1985 (about a 100% increase). Nearly six 
million disabled adults and children received SSI disability payments, 
more than double the number in 1985 (a 130% increase). The adjudication 
of disability claims now constitutes the major part of our workload and 
nearly every one of our components has a role in administering the 
disability programs. In fiscal year 2005, the State disability 
determination services (DDSs) processed more than 2.6 million initial 
claims for DI benefits and SSI based on disability or blindness. Our 
hearing offices processed approximately 500,000 disability claims on 
behalf of claimants who appealed their denials.
    Yet with these numbers there is talk of cutting staff levels even 
further? I am sad to say that since these reports were originally 
released, that things have gotten much worse by far, and the outlook, 
even with the institution of the SSA Commissioner's new regulations, is 
extremely grim.
Medicare Program Issues
    In a recent GAO report GAO-06-715T--Quality of CMS Communications 
to Beneficiaries on the Prescription Drug Benefit Could Be Improved--
released on 5/4/06, those eligible for Medicare Part D are experiences 
serious problems due to poor service delivery. One-third of calls to 
the 1-800-MEDICARE Help Line received inaccurate, incomplete or 
inappropriate responses. Some callers had to wait up to 55 minutes to 
get through before actually speaking to someone (based on 500 calls 
made by GAO).
    Another GAO report GAO-05-130--Accuracy of Responses from the 1-
800-Medicare Help Line Should Be Improved--released on 12/8/04, 29% of 
calls received an inaccurate response and 10% received no response at 
all (based on 420 calls in July 2004). This report also states that 
``Training for CSR's meets CMS's requirements, but is not sufficient to 
ensure that CSR's are able to answer questions accurately on the help 
line.''
    Since Medicare penalizes beneficiaries who do not meet sign up 
guidelines and deadlines for the rest of their lives, these mistakes 
create a serious financial burden on those who can least afford it. 
Personally, my own mother has been forced to pay higher Medicare 
premiums for the rest of her life now, because of the inaccurate 
Medicare information she received. We taxpayers should not have to pay 
for the mistakes of poorly trained government employees.
In an effort to correct some of these proglems I suggest the following 
        be done immediately:
    Congress needs to increase funding for all Social Security/Medicare 
programs so more properly trained staff are put in place to handle the 
increased work load that the Social Security/Medicare programs are 
facing. The number of people eligible for these benefits is only going 
to increase over time as the American population ages at a faster pace 
compared to decades of the past.
    Since millions of disabled and elderly Americans rely on Social 
Security Disability, SSI, SS retirement benefits and Medicare as their 
sole source of income, health insurance and prescription coverage, it 
is imperative that Congress act immediately to make sure that these 
programs are administered with the highest priority in regards to 
expediency, efficiency and accuracy. Anything less than that could 
result in disaster, even death for this very fragile population.
    A major bottleneck in the disability process is the state DDS 
offices and their inability to process SSD/SSI claims properly. As a 
result these Federal regulations are constantly being violated on a 
daily basis:
    Code Of Federal Regulations Part 404--Federal Old-Age, Survivors 
And Disability Insurance (1950--):
    404.1642 Processing time standards http://www.ssa.gov/OP_Home/
cfr20/404/404-1642.htm
    (a) General. Title II processing time refers to the average number 
of days, including Saturdays, Sundays, and holidays, it takes a State 
agency to process an initial disability claim from the day the case 
folder is received in the State agency until the day it is released to 
us by the State agency. Title XVI processing time refers to the average 
number of days, including Saturdays, Sundays, and holidays, from the 
day of receipt of the initial disability claim in the State agency 
until systems input of a presumptive disability decision or the day the 
case folder is released to us by the State agency, whichever is 
earlier.
    (b) Target levels. The processing time target levels are:
    (1) 37 days for title II initial claims.
    (2) 43 days for title XVI initial claims.
    (c) Threshold levels. The processing time threshold levels are:
    (1) 49.5 days for title II initial claims.
    (2) 57.9 days for title XVI initial claims.[46 FR 29204, May 29, 
1981, as amended at 56 FR 11020, Mar. 14, 1991]
404.1643 Performance accuracy standard http://www.ssa.gov/OP_Home/
        cfr20/404/404-1643.htm
    (a) General. Performance accuracy refers to the percentage of cases 
that do not have to be returned to State agencies for further 
development or correction of decisions based on evidence in the files 
and as such represents the reliability of State agency adjudication. 
The definition of performance accuracy includes the measurement of 
factors that have a potential for affecting a decision, as well as the 
correctness of the decision. For example, if a particular item of 
medical evidence should have been in the file but was not included, 
even though its inclusion does not change the result in the case, that 
is a performance error. Performance accuracy, therefore, is a higher 
standard than decisional accuracy. As a result, the percentage of 
correct decisions is significantly higher than what is reflected in the 
error rate established by SSA's quality assurance system.
    (b) Target level. The State agency initial performance accuracy 
target level for combined title II and title XVI cases is 97 percent 
with a corresponding decision accuracy rate of 99 percent.
    (c) Intermediate Goals. These goals will be established annually by 
SSA's regional commissioner after negotiation with the State and should 
be used as stepping stones to progress towards our targeted level of 
performance.
    (d) Threshold levels. The State agency initial performance accuracy 
threshold level for combined title II and title XVI cases is 90.6 
percent.
    To date the Social Security Administration has determined that it 
can take up to 1153 days (3\1/4\ years) for a claim to be processed if 
it is denied at every level which often occurs. The SS Commissioner has 
stated that she hopes to reduce that wait time by 25% or down to 2\1/4\ 
years, yet she has passed regulations which will force thousands more 
into the already backlogged Federal Court system which could end up 
increasing wait times to even longer than the 3\1/4\ years. This is 
appalling, and shows that she is totally out of touch with the 
realities that disability applicants face. I am sure that if she, or 
anyone else in the Federal government had to endure living under the 
conditions that a 2\1/4\ year or longer wait time for benefits brings, 
in addition to the hardships caused by one's disabling conditions, they 
could not fix the system fast enough.
    We ask that the SSA create the position of Disability Claims 
Manager--New decision maker position to combine the disability claims 
responsibilities of SSA field office personnel with DDS staff and that 
position be a Federal employees instead of State contract employee to 
insure proper training and consistency of operations and disability 
decisions throughout the country. It is more than apparent that the 
states have been greatly lacking in their duties of processing SSD/SSI 
claims in a swift and proper manner.
    In order to correct these Federal regulation violations and speed 
up the claims process, more effort should be made to thoroughly review 
a disability claim at the start, giving more proper weight to claimants 
treating physicians opinions and medical records, which is part of 
Social Security law, but is often not followed when making decisions 
throughout the claims process. Too much weight at the initial time of 
filing, is put on the independent medical examiner's and SS 
caseworker's opinion of a claim. The independent medical examiner only 
sees the claimant for a few minutes and has no idea how a patient's 
medical problems affect their lives after only a brief visit with them. 
The caseworker at the DDS office never sees a claimant. Often claimants 
are sent to doctors who are not even qualified to comment on a 
patient's disabling conditions as their medical expertise is not 
appropriate for the conditions that the claimant has. In cases where 
SSD required medical exams are necessary, they should only be performed 
by board certified independent doctors who are specialists in the 
claimant's disabling conditions (example--Rheumatologists for 
autoimmune disorders, Psychologists and Psychiatrists for mental 
disorders). Independent medical exams requested by Social Security must 
only be required to be performed by doctors who are located within a 15 
mile radius of a claimants residence. If that is not possible--Social 
Security must provide for transportation or travel expenses incurred 
for this travel by the claimant. If more attention was given to the 
patient's treating physician's reports and test results, it would cut 
down on the need for SS to spend money on Independent Medical 
examinations. When an IME is necessary, sending the claimant to a 
proper IM examiner for their conditions, would save time and money for 
the SSA and reduce unnecessary stress to the claimant, instead of 
wasting these resources on unqualified examiners. We also agree with 
the establishment of a Federal Reviewing Official (RO) level of review, 
that would issue decisions based on review of record. As mentioned 
previously, we feel that currently not enough time is spent looking at 
the medical records supplied by applicants and this results in 
premature denials and more ALJ hearings.
    There should be more effort on the part of SS to assist applicants 
throughout the entire disability claim process, including ongoing 
contact with claims examiners and assistance with developing the 
medical file to ensure all pertinent medical evidence is in the file. 
We ask that Congress institute some new requirements. First, review of 
records by a claimant should be available at any time during all stages 
of the SSD/SSI determination process, not only after a case is denied 
the first time, which is currently the case. Also before a denial is 
issued at any phase of their claim, the applicant must be contacted 
immediately, and given a detailed report as to why a denial might be 
imminent, who made the determination, and a phone number, fax number 
and address, where ALL the sources being used to make the judgment can 
be contacted. This way for anything that the SSA file is missing, or 
inaccurate information was given, the applicant can now provide the 
missing or corrected information before a determination is made. We 
also ask that when a denial is imminent, that the applicant be given an 
additional 3 week time period to submit new evidence in order to 
further prove their disability status. Currently, SSD/SSI cases take so 
long to process, that a majority of claimant's conditions worsen from 
the time it takes to initially file a claim, until a final decision is 
made on it. Since claim status is very hard to track throughout the 
claims process, it makes it very difficult for applicants to submit new 
evidence to further prove their disabilities as their health conditions 
deteriorate over time. Ease of claim status tracking and better 
communication throughout the claims process would eliminate many cases 
from having to advance to the hearing and appeals phase, which again 
would save the SSA time and money to be used elsewhere in the system.
    The Federal quality review process often adds at least an 
additional 4 week waiting period to claims processing, and often 
targets approvals rather than denials and in the future should focus 
more on why cases are denied rather than approved. To better streamline 
and to further speed up the claims process--the DRB (Decision Review 
Board and Federal Quality Review processes should be combined.
    More Federal funding is necessary to create a universal network 
between Social Security, SSD/SSI and all outlets that handle these 
cases so that claimant's info is easily available to caseworkers 
handling claims no matter what level/stage they are at in the system. 
Even with the institution of E-Dib there are still many problems in 
this area. All SSA forms and reports should be made available online 
for claimants, medical professionals, SSD caseworkers and attorneys, 
and be uniform throughout the system. One universal form should be used 
by claimants, doctors, attorneys and SSD/SSI caseworkers, which will 
save time, create ease in tracking status, updating info and reduce 
duplication of paperwork. Forms should be revised to be more 
comprehensive for evaluating a claimant's disability and better 
coordinated with the SS Doctor's Bluebook Listing of Impairments.
    A majority of SSD claimants are forced to file for welfare, food 
stamps and Medicaid, another horrendous process, after they have lost 
everything due to the inadequacies in the Social Security Disability 
offices and huge claims processing backlog. Congress should pass 
regulations that all SSD/SSI case decisions must be determined within 
three months of original filing date. When it is absolutely impossible 
to do so, a maximum of six months will be allowed for appeals, hearings 
etc--NO EXCEPTIONS. Failure to do so on the part of the SSA, will 
constitute a fine of $500 per week, for every week over the six month 
period--payable to claimant in addition to their awarded benefit 
payments, and will be paid immediately along with their retro pay upon 
approval of their claim. In addition the SSA will also be held 
financially responsible for approved claimants who lose property, 
automobiles, IRA's, pension funds, who incur a compromised credit 
rating or lose their health insurance as a result of any delay/failure 
to fully process their claim within the initial allotted three month 
processing period. If a claimant is denied during the three month 
period but appeals and is finally found to be disabled SSA must retro 
equivalent compensation of losses incurred by the claimant from 
original disability date of eligibility.
    Institute a lost records fine--if Social Security loses a claimants 
records or files an immediate $1000 fine must be paid to the claimant. 
Fines of this nature would dramatically cut down the number of lost 
files by the SSA.
    We are not in favor of any changes that would result in more 
hearings, lesser back payments or a greater reliance on attorneys for 
claimants to receive benefits. The claims process should be set up so 
there is no need whatsoever for claimant paid legal representation when 
filing for benefits and very little need for cases to advance to the 
hearing and appeal stage since that is where the major backlog and wait 
time exists. A great number of ALJ decisions are currently appealed due 
to rampant bias against claimants, fraudulent behavior and poor 
performance by the ALJ's currently serving. The need of lawyers/reps to 
navigate the system and file claims, and the high SSD cap on a lawyer's 
retro commission is also a disincentive to expeditious claim 
processing, since purposely delaying the claims process will cause the 
cap to max out--more money to the lawyer/rep for dragging their feet 
adding another cost burden to claimants. Instead, SS should provide 
claimants with a listing in every state, of FREE Social Security 
Disability advocates/reps when a claim is originally filed in case 
their services may be needed.
    The current continuing disability review/CDR process in itself--the 
threat of possible benefits cut off, and stress of a review by Social 
Security again, is very detrimental to a patient's health. Many who 
under SS guidelines, still qualify for benefits are being forced into 
hearing situations and overpayment issues due to mistakes or outright 
fraud on the part of the SSA, which cuts then off from receiving their 
vital benefits. Many people suffer from chronic conditions that have NO 
cures and over time these diseases grow progressively worse with no 
hope of recovery or returning to the work force. This factor needs to 
be taken into consideration when reforming the CDR process. In those 
cases, total elimination of CDR's should be considered or a longer 
period of time between reviews such as 10-15 years rather then every 3-
7 years, which is currently the case. This would save the SSA a great 
deal of time, money and paperwork which could then be used to get new 
claimants through the system faster. It is often said that these 
reviews are done to prevent fraud. Nobody in their right mind would 
want to live under the conditions that the majority of SSD claimants 
and recipients are forced to endure. Most would much rather have their 
health back and the jobs that once had before their lives were changed 
by illness or accidents.
    The Ticket To Work program needs to be revised--SSA forces the 
disabled to go through years of abuse trying to prove that they can no 
longer work ANY job in the national economy due to the severity of 
their illnesses in order to be approved for benefits. Then, sometimes 
weeks after they are finally approved for SSD/SSI benefits, after their 
health and finances have been totally destroyed beyond repair, they 
receive a ``Ticket To Work'' packet in the mail. A cruel joke to say 
the least, and a total waste of SS funds. It is no wonder why many 
disabled Americans distrust the Federal Government! If more resources 
were put into processing disability claims faster, the chances of 
possible health improvement and eventual return to any sort of work 
activity would be greatly increased.
    Congress needs to pass regulations now that prevent tax payer 
contributions and SS budgets for Social Security programs to be used 
for anything else other than to pay Social Security benefits and funds 
necessary to administer its programs properly.
    Currently disabled Americans are forced to wait 2 years to be 
covered under Medicare A, B, or D. Congress needs to legislate a change 
to remove the 24 month waiting period so that coverage under all parts 
of Medicare would start immediately for ALL SSDI/SSI recipients, upon 
disability date of eligibility.
    Congress should pass legislation to remove ALL late enrollment 
penalties for ANY part (A, B, or D) of the Medicare program. Medicare 
is supposed to be there to keep people healthy, not force them into 
having coverage, and penalize them into poverty for the rest of their 
lives, if they miss a sign up deadline. Medicare should be a healthcare 
program that rivals any private insurance coverage offered, and one 
that people would rush to sign up for on their own without the fear of 
penalties.
    Until these issues are addressed, disabled Americans will continue 
to suffer at the hands of a Federal government program that was 
originally put in place to help, not harm them. Current census data 
states that 18% of the US population is disabled and surely that number 
will continue to rise. As we head into a crucial election time in 
November, it is extremely important for the current and future members 
of Congress to take our concerns very seriously. We may be disabled but 
we still vote!
    Social Security Disability Reform Petition--read the horror stories 
from all over the nation:
    http://www.petitiononline.com/SSDC/petition.html
    Social Security Disability Coalition--offering FREE knowledge and 
support with a focus on SSD reform:
    http://groups.msn.com/Social SecurityDisabilityCoalition
    Please check out my website at:
    http://www.frontiernet.net/lindaf1/bump.html
    ``I am disabled and my vote counts too!''

                                  
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