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S. HRG. 110–1043

MORE WORK, LESS RESOURCES:

SOCIAL SECURITY FIELD OFFICES STRUGGLE

TO DELIVER SERVICE TO THE PUBLIC

HEARING

BEFORE THE

COMMITTEE ON FINANCE

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

SECOND SESSION

MAY 8, 2008

(

Printed for the use of the Committee on Finance

COMMITTEE ON FINANCE

MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West Virginia

KENT CONRAD, North Dakota

JEFF BINGAMAN, New Mexico

JOHN F. KERRY, Massachusetts

BLANCHE L. LINCOLN, Arkansas

RON WYDEN, Oregon

CHARLES E. SCHUMER, New York

DEBBIE STABENOW, Michigan

MARIA CANTWELL, Washington

KEN SALAZAR, Colorado

CHUCK GRASSLEY, Iowa

ORRIN G. HATCH, Utah

OLYMPIA J. SNOWE, Maine

JON KYL, Arizona

GORDON SMITH, Oregon

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

PAT ROBERTS, Kansas

JOHN ENSIGN, Nevada

JOHN E. SUNUNU, New Hampshire

RUSSELL SULLIVAN, Staff Director

KOLAN DAVIS, Republican Staff Director and Chief Counsel

(II)

C O N T E N T S

OPENING STATEMENTS

Page

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

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

Grassley, Hon. Chuck, a U.S. Senator from Iowa ................................................. 3

WITNESSES

Bovbjerg, Barbara D., Director, Education, Workforce, and Income Security,

Government Accountability Office, Washington, DC ........................................ 4

McMahon, Linda S., Deputy Commissioner for Operations, Social Security

Administration, Baltimore, MD .......................................................................... 5

Warsinskey, Richard E., immediate past president, National Council of Social

Security Management Associations, Washington, DC ...................................... 7

Skwierczynski, Witold, president, National Council of Social Security Administration Field Operations Locals, AFL–CIO, Baltimore, MD .......................... 9

ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:

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

Bovbjerg, Barbara D.:

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 31

Responses to questions from committee members ......................................... 59

Grassley, Hon. Chuck:

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

McMahon, Linda S.:

Testimony .......................................................................................................... 5

Prepared statement .......................................................................................... 62

Salazar, Hon. Ken:

Prepared statement .......................................................................................... 73

Skwierczynski, Witold:

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 75

Responses to questions from committee members, with attachment ........... 92

Snowe, Hon. Olympia J.:

Prepared statement .......................................................................................... 103

Warsinskey, Richard E.:

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

Prepared statement .......................................................................................... 105

Responses to questions from committee members ......................................... 126

COMMUNICATIONS

American Civil Liberties Union .............................................................................. 133

National Law Center on Homelessness and Poverty, National Policy and

Advocacy Council on Homelessness, National Health Care for the Homeless

Council, and Advocacy and Training Center ..................................................... 139

(III)

(1)

MORE WORK, LESS RESOURCES:

SOCIAL SECURITY FIELD OFFICES STRUGGLE

TO DELIVER SERVICE TO THE PUBLIC

THURSDAY, MAY 8, 2008

U.S. SENATE,

COMMITTEE ON FINANCE,

Washington, DC.

The hearing was convened, pursuant to notice, at 10:06 a.m., in

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

(chairman of the committee) presiding.

Present: Senators Kerry, Schumer, Salazar, Grassley, Snowe,

and Bunning.

Also present: Democratic staff: Bill Dauster, Deputy Staff Director and General Counsel; Alan Cohen, Senior Budget Analyst; Tom

Klouda, Professional Staff Member, Social Security; Suzanne

Payne, Detailee; Connie Cookson, Detailee; Hyacinth Hinojosa,

Detailee; and Paraskevi Maddox, Detailee. Republican staff: Steve

Robinson, Chief Social Security Advisor.

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

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

The CHAIRMAN. The hearing will come to order.

In recent years, Social Security field offices have faced three obstacles: their traditional workloads have grown, they have been

given new jobs, and the budget cuts have reduced their staffing levels. As a result, the levels of many services in the field offices have

sunk, and that is in spite of substantial increases in the productivity of their workers.

Probably the worst case is telephone service. GAO found inadequate telephone service in 13 of the 21 field offices that it examined. Two of the offices did not answer the phones at all. My staff

found that many Montanans who tried to phone the field offices got

busy signals for weeks. In desperation, many of those folks gave up

trying to telephone the field offices and they had to drive hundreds

of miles to the offices and back; clearly unacceptable.

In 2006, Social Security surveyed people who reached the field offices by telephone. They found that most callers—51 percent—had

encountered busy signals earlier that day, and the 51 percent figure was only the tip of the iceberg. Social Security could survey

only the people who actually got through to the field offices’ automated answering services or to an employee. If you got a busy signal for weeks on end and you never got through, you are not even

part of the survey sample.

2

What about people who visit the field offices? Unfortunately, people often have to wait a long time before staff can serve them. GAO

found that, across the country last year, more than 2.5 million people had to wait between 1 and 2 hours before they were served;

more than 400,000 people had to wait more than 2 hours.

The National Association of Field Office Managers reports that

in many of the SSA’s largest field offices in urban areas, it is not

uncommon for the public to wait in excess of 2 to 4 hours to be

served. Many beneficiaries are elderly or disabled. These waiting

times are unacceptable.

And the problem is getting worse. In the first 16 weeks of this

year, the number of visitors to field offices has increased by one

million. Another result of the staff shortage is that the field offices

are simply deferring some important work, and this causes further

delays in services.

For example, the Agency has cut back on the number of medical

Continuing Disability Reviews of beneficiaries receiving Disability

benefits. These reviews determine whether beneficiaries are still

disabled. These reviews save the Federal Government $10 for every

$1 spent, yet they are being cut back.

Earlier in the decade, Social Security performed 800,000 of these

reviews every year. This year, Social Security will perform fewer

than 240,000 of these reviews, a little less than one-quarter. The

President’s budget for 2009 provides for fewer than 330,000 of

these reviews. Remember, earlier in the decade Social Security performed 800,000 of these reviews every year. There has also been

a serious reduction in the number of SSI redeterminations done annually. Those reviews save $7 for every dollar spent.

And Social Security is also putting off many other important

jobs. For example, Social Security Disability beneficiaries are supposed to report any earnings promptly so that their benefits can be

reduced accordingly, but these earnings are not being recorded in

a timely fashion.

Toward the end of last year, Social Security indicated that there

was already a backlog of 1,000 work years for the workloads that

are being deferred. That is not even including the deferred medical

Continuing Disability Reviews and SSI redeterminations. By the

end of next year, that backlog is expected to grow to 8,100 work

years. The deferral of these jobs means that important services are

not being provided when they need to be.

Social Security must improve its service. Social Security needs to

continue to make some processes more efficient. It needs to try to

get more done over the Internet without sacrificing service and accuracy in helping retirees to make informed choices. And Social Security needs more staff, and that requires Congress to appropriate

more money.

From 2000 to 2007, Congress cut appropriations by a total of

$1 billion below the amounts requested by the President, and for

2008 and 2009 the President’s requests were themselves inadequate. With the efforts of many of my colleagues and many concerned people, we were able to increase the funding for 2008 by

$150 million. This allowed for a modest increase in staff, but the

staff shortage is still severe. I believe that an increase of at least

$240 million over the President’s budget is needed for the upcomVerDate 11-MAY-2000 15:37 Jun 28, 2010 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 56618.000 TIMD PsN: TIMD
3

ing year. Additional resources and efficiencies must continue in future years, and I hope that my colleagues will join me in seeking

to achieve these objectives.

So let us ask Social Security to continue to make its operations

more efficient, and let us give Social Security the resources that it

needs to get the job done. Let us work together to ensure that, for

the benefit of applicants and beneficiaries, Social Security is able

to provide something better than the poorest service.

I will now turn to my colleague and good friend, Senator Grassley.

OPENING STATEMENT OF HON. CHUCK GRASSLEY,

A U.S. SENATOR FROM IOWA

Senator GRASSLEY. Thank you, Mr. Chairman.

In March of 2006, we held a hearing on administrative challenges facing Social Security. The witnesses at that hearing told us

that increased workloads and limited funding were adversely affecting service delivery.

Today’s hearing focuses specifically upon field offices, but the testimony, I think, will be much the same. We will hear how our constituents are waiting for hours to meet with field office personnel

or how phone calls are met with busy signals, or maybe do not get

answered. I think we all agree that Americans need better service.

More money is part of the answer. The Social Security Administration has staffing shortages, disability backlogs, and deferred workloads that must be addressed. In the short run, this can only be

done with additional resources.

However, too often we try to solve problems by throwing money,

and that is not a long-term solution either. More resources are necessary, but how it is done is very important. The truth is, Social

Security policies, systems, and procedures are in need of major

overhaul. Several witnesses stated that it takes 2 to 3 years, or 3

to 4 years to fully train a field office employee. That is longer than

it takes NASA to train an astronaut. Of course, anyone who has

taken a look at the SSI deeming rules or the Workers’ Compensation offset rules knows just how complicated these programs have

become. I hope it does not have to be that way.

I recently instructed my staff, Mr. Chairman, to begin a comprehensive review to identify ways to reduce administrative complexity and improve program integrity. This is an ongoing effort

that is still in progress. I hope to introduce legislation before the

end of this summer. Obviously I will discuss that with you. In the

meantime, we should consider the testimony of our witnesses today

as we look at additional ways to help the Social Security Administration improve service.

Thank you.

The CHAIRMAN. Thank you, Senator.

I would like, now, to introduce the panel. Our first witness is

Barbara Bovbjerg, Director of the Education, Workforce, and Income Security team at the Government Accountability Office. Next,

we will have Linda McMahon, the Deputy Commissioner for Operations at the Social Security Administration; then Richard

Warsinskey, immediate past president of the National Council of

Social Security Management Associations; and finally we have

4

Witold Skwierczynski, who is president of the National Council of

Social Security Administration Field Operations Locals, AFL–CIO.

Thank you all for coming.

Ms. Bovbjerg, you are first.

STATEMENT OF BARBARA D. BOVBJERG, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, DC

Ms. BOVBJERG. Thank you very much, Mr. Chairman and members of the committee. I am really pleased to be here today to

speak about the Social Security Administration’s field office services. SSA’s 1,300 field offices serve as the Agency’s primary means

of face-to-face contact with the public, and thus are a vital component of its operations.

People visit these offices to apply for Social Security cards and

benefits or to do anything dealing with SSA programs where an individual needs, or simply prefers, face-to-face contact.

My testimony today focuses on the effect that declining staff

numbers may be having on field office service and the challenges

SSA will face in providing such service in the future. My statement

is based upon ongoing work for this committee and reflects our

analysis of SSA administrative data, our visits to more than 20

SSA field offices, and interviews with those field office personnel.

With regard to today’s service levels, SSA is trying to meet a rising demand for field office services with fewer staff. The number

of field office employees has declined 7 percent since 2005, yet

workloads in the Agency have risen, in part in response to an aging

population and in part as a result of increased identity verification

responsibilities and activities associated with the Medicare Prescription Drug Act.

Some of this increasing workload has resulted in larger numbers

of field office visits. Although the field offices have increased their

productivity, in part by shifting workloads from busier offices to locations with some excess capacity, some activities are not being

completed in a timely way, or in some cases at all.

Today in SSA field offices, customers wait longer. Average waiting times nationwide have risen from 15 to 21 minutes between

2002 and 2006. It may not sound like much, but 8 percent of SSA

customers—and that is nearly 3 million people—have waited more

than an hour for service. Further, more than half of those trying

to reach field offices by telephone cannot because phone lines are

busy or are not answered; there just are not the staff available to

do it.

While processing card and benefit applications is a priority in

most field offices, if the office is extremely busy with these activities, other important work, such as benefit redeterminations, is put

aside and completed only as time permits. This sort of work, while

not an immediate service to customers, is a critical aspect of maintaining program integrity.

Without redeterminations, for example, people who should not be

receiving benefits will still get them. Even when the work is completed but delayed, overpayments will ensue that are difficult and

expensive to collect, and of course if left uncollected will have a

negative impact on trust fund balances.

5

So, although a great deal of work is being completed by field office staff, important work is delayed, service quality is declining,

and staff morale is falling in response. These findings paint a picture of service that is still being provided, and mostly in a timely

way, but it is extremely fragile.

However, the impact of baby boomer aging is likely to bring even

more pressure to field offices. Retirement and disability filings are

expected to increase SSA’s workloads significantly in the next several years, at exactly the same time that SSA’s own staff will also

retire at greater rates.

SSA estimates a 22-percent rise in beneficiaries and a 13-percent

rise in claims that will be filed in the next 10 years, yet today 25

percent of all SSA employees are eligible to retire, and that figure

will grow to almost 40 percent in the next 5 years. This rise in employee retirement eligibility is actually very similar to changes expected in other Federal departments and agencies, but nowhere

else in the government will service demands rise so greatly at the

same time.

Although SSA uses a variety of incentives to hire and retain

staff, the Agency currently lacks a plan to address its mounting

service delivery challenges in this environment of fiscal constraint.

Officials tell us that they are completing a revision to their strategic plan, and we are hopeful that this document will help.

However, as long ago as 1993 we recommended that the Agency

develop a detailed service plan to meet its responsibilities in the

face of resource constraints and demographic challenges, and still

look forward to seeing that detailed document.

An effective plan would spell out who would be providing what

types of services in the future and where these services will be

made available. In the absence of this kind of over-arching strategy, SSA may be unable to effectively marshal its key resources to

meet the difficult challenges ahead.

In conclusion, SSA has tried hard to maintain its field services

in the face of rising demand and declining staff resources and has

largely succeeded, albeit by deferring some workloads. But they are

treading water and, absent effective action, will be swamped by rising service demand and staff retirements, both functions of the

aging American population. Strategic planning for future service

delivery is essential, but the time for SSA to prepare itself for the

future is running out.

The CHAIRMAN. Thank you, Ms. Bovbjerg, very much.

[The prepared statement of Ms. Bovbjerg appears in the appendix.]

The CHAIRMAN. Ms. McMahon?

STATEMENT OF LINDA S. McMAHON, DEPUTY COMMISSIONER

FOR OPERATIONS, SOCIAL SECURITY ADMINISTRATION,

BALTIMORE, MD

Ms. MCMAHON. Thank you, Mr. Chairman and members of the

committee. I welcome this opportunity to update you on the many

challenges that are facing our field offices today.

This fiscal year is the first time SSA received an appropriation

at or above the President’s budget request level since 1993, and we

appreciate your support. The funding, while dedicated in large

6

measure to reducing the disability hearings backlog, will allow us

to replace all direct-service employees who leave the Agency this

year, and it will give us a head-start on replacing some of the employees who will leave us next year. However, we need sustained,

adequate, and timely resources to overcome years of budget shortfalls and surmount the challenges facing us.

Our network of field offices provides vital service to the American

public. Last year, over 42 million individuals visited their local offices, and this year the number of visitors is on pace to be even

higher. Keeping up with the growing number of visitors is very

challenging. Our employees service individuals who have many different needs: some are filing claims for retirement, survivor, or disability benefits; others need an immediate payment so that they

can replace a lost check to pay the rent or mortgage, or they need

a replacement Social Security card; and still others come in to file

appeals or to get a Social Security benefit verification so they can

apply for other government benefits. The list goes on and on.

At the same time, our employees must also try to answer the

ever-ringing telephones, return claimant calls, conduct public outreach, and attend training to keep up with new legislation and our

complex policies. Furthermore, our employees are being asked to do

work for other agencies, such as Medicare Part D for CMS and employment verifications for DHS. The time our employees spend assisting other agencies takes them away from doing traditional SSA

work.

In spite of our best efforts to do it all, many calls do go unanswered and waiting times in our offices, as you have noted, are increasing. This is very frustrating to our employees, who are dedicated to providing outstanding service to the public.

Each year, to help our field office staff deal with the many challenges they face, we develop an operating plan. This plan is built

upon available resources, Agency goals, and a common-sense approach to prioritizing and balancing all the work that we have to

do.

Since we know we cannot process all that work due to limited

funding, our priority remains on processing claims. We expect to

process nearly 7 million claims this fiscal year, and that number

of course will rise dramatically as the nearly 80 million baby

boomers start to retire.

As our employees focus on processing claims, they have had to

defer processing millions of post-entitlement and program integrity

actions, such as payment adjustments, earnings corrections, overpayments, and Continuing Disability Reviews. The consequences of

not processing these less-visible, yet critical actions are significant,

both to the individuals affected and to program costs overall.

The foundation of our future success depends on a talented, welltrained workforce and stable, upgraded technology infrastructure,

as well as service delivery innovation. Without sustained, adequate, and timely funding, those things will not be in place.

Yet, we understand that the Agency has to move forward. We

must automate our business processes, streamline our policies, and

seek new ways to provide service. This is increasingly important

with the impending tidal wave of baby boomers reaching our doorstep. However, I assure you we will move cautiously and judiVerDate 11-MAY-2000 15:37 Jun 28, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 56618.000 TIMD PsN: TIMD
7

ciously when implementing such changes, ensuring that we have

confidence that these changes will perform as expected. The fiscal year 2009 President’s budget for SSA of $10.46 billion

is a good first step to improving service to the American people.

Our primary focus in fiscal year 2009 will be on our rapidly growing core service workloads. We plan to reduce the hearing backlog

by nearly 70,000 cases and to process over 200,000 more retirement

and survivors’ claims, and handle 4 million more 800–number calls

compared to fiscal year 2008. Disability waiting times and processing times should decrease, especially since the increased funding

will be in connection with continued productivity improvements.

In addition, the President’s budget will allow us to process more

program integrity work. However, while the fiscal year 2009 budget

will make important strides in these core areas, SSA will still have

a growing backlog of 4,800 work years in its less visible work, the

work that generally is done after an individual is approved for benefits.

It is also important to note that, while the President’s budget

will allow us to process significantly more Continuing Disability

Reviews and SSI non-disability redeterminations than in fiscal

years 2007 and 2008, we will not be able to process as much program integrity work as we did just a few years ago. As you know,

and as stated here, these workloads are an important source of efforts that protect the integrity of the trust funds and the taxpayers’

money.

Also in fiscal year 2009, costs for guard service, rents, and other similar expenditures will increase more than $400 million. These

costs, combined with an extended Continuing Resolution, would

have a devastating consequence for us. Therefore, your timely support of the President’s budget is critical for our continued progress.

I appreciate the opportunity to tell you our story and would be

happy to answer questions.

The CHAIRMAN. Thank you, Ms. McMahon, very much.

[The prepared statement of Ms. McMahon appears in the appendix.]

The CHAIRMAN. Mr. Warsinskey?

STATEMENT OF RICHARD E. WARSINSKEY, IMMEDIATE PAST

PRESIDENT, NATIONAL COUNCIL OF SOCIAL SECURITY

MANAGEMENT ASSOCIATIONS, WASHINGTON, DC

Mr. WARSINSKEY. Chairman Baucus, Senator Grassley, and

members of the committee, my name is Rick Warsinskey, and I

represent the National Council of Social Security Management Associations. Our organization includes most of the members of field

and teleservice management at SSA.

I also help coordinate the activities of the SSA advocacy group,

and I have been the manager of the Social Security office in downtown Cleveland for nearly 13 years. I am pleased to have this opportunity to submit this testimony.

Social Security is a vital program for Americans, yet in the past

year we have heard many tragic stories of the lives of many Americans due to severe backlogs in the disability program. About 200

media articles have been written in the past year describing very

severe hardships experienced by the public. But less attention has

8

been focused on the fact that the services in field offices have been

steadily degrading and will only get worse as millions of baby

boomers file for benefits starting this year. I am here today to discuss that issue with you. Our Agency desperately needs your assistance and support to reverse that trend.

Last week we polled our members about the field offices, and 79

percent said that they did not have enough staff to keep the workloads current; 64 percent stated waiting times for the public were

longer than a year ago; and 65 percent said that the quality of

their work product had declined in recent years.

Our members have told us that our phone service is deplorable.

I repeat: deplorable. This is driven by the fact that the majority of

the time the public cannot get through to a local Social Security office. SSA field offices are seeing record numbers of visitors coming

in. Over a million have come in already this year compared to the

same time last year. Many field offices have severely over-crowded

reception areas with standing room only. People can wait hours to

be seen.

SSA estimates that by fiscal year 2009, the Agency will have a

staff deficit of essentially 9,100 full-time staff, compared to fiscal

year 2007 staffing levels, for workloads and services in support of

the public, even if the level of funding requested by the President

is approved.

SSA has also cut back significantly on the number of medical

Continuing Disability Reviews and SSI redeterminations. The

President’s proposed funding for fiscal year 2009 will mean $4.75

billion will be lost to the reduction in these workloads from higher

levels earlier this decade.

Over the past decade, SSA’s level of funding has been about $1 billion less than the President’s budget request, and over $4 billion less than the Commissioner’s budget. This has been the key

reason for the severe challenges SSA is facing. These problems

would be even worse if not for the consistent productivity increases

in the field offices.

We have also had many new workloads given to the Agency without the necessary funding to complete these tasks. We will face

incredible challenges if immigration legislation is passed that requires SSA to administer nationwide employment eligibility

verification. If immigration enforcement legislation is passed without the necessary funding, SSA could have a catastrophic drop in

service.

In the end, what matters most is that the American public receives excellent service from SSA, which they have already paid for

through their employment taxes. But to provide this service, we

need the proper resources. In a recent survey of our members, one

manager told us how important the public service we provide is.

This manager said, ‘‘Our office serves a military base that receives

a lot of wounded soldiers returning from Iraq and Afghanistan. In

the past 60 days, our pending military workload has increased 4

times. We do not have the staff to continue to handle this highprofile critical workload and provide the service our soldiers deserve.’’

We owe it to all Americans to provide the service they deserve.

Please help us do that by providing the resources that SSA needs.

9

This certainly needs to be more than the President’s fiscal year

2009 budget proposal for SSA.

Mr. Chairman, I thank you for this opportunity to appear before

this committee. I will be happy to answer questions at any time.

The CHAIRMAN. Thank you, Mr. Warsinskey.

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

The CHAIRMAN. Mr. Skwierczynski?

STATEMENT OF WITOLD SKWIERCZYNSKI, PRESIDENT, NATIONAL COUNCIL OF SOCIAL SECURITY ADMINISTRATION

FIELD OPERATIONS LOCALS, AFL–CIO, BALTIMORE, MD

Mr. SKWIERCZYNSKI. Thank you, Senator Baucus, Senator Grassley, for the opportunity to address the committee regarding the important issue of SSA’s service delivery problem.

I represent the 48,000 Social Security employees who are represented by AFGE, who work throughout the United States in

1,300 field offices, 36 teleservice centers, about 140 hearings offices, and a number of processing centers.

Staffing cuts due to inadequate appropriations certainly have

had an adverse effect on SSA’s ability to process its work. Decisions

by Congress and the Bush administration to add workloads without

providing funding for additional staff is partially responsible for

the current crisis, which is in evidence where the disability appeals

workload has 750,000 backlogged cases and the processing time for

a hearing is over 500 days.

The Agency this year will only be able to process less than 50

percent of its SSI redeterminations than it did just 5 years ago,

and only 35 percent of its Continuing Disability Reviews than it

did 4 years ago. Larger appropriations and more staff are essential

to allow it to function normally and to provide the service that the

public deserves.

AFGE recommends that the administrative budget for fiscal year

2009 be $11 billion. While we appreciate Senator Baucus’s support

of a $240 million increase, we think that just scratches the surface.

We also believe that the Congress should seriously consider taking

administrative expenses off-budget so that Congress can evaluate

SSA’s resource needs without the pressures of other competing interests.

However, today I would like to address a service delivery issue

that has fallen under the radar screen while Congress, justifiably,

expresses its concern about the obscene processing times of the disability hearings workload. This issue is the Ready Retirement initiative and its vehicle, the Internet Social Security Benefit Application.

Using staff shortages as an excuse, SSA has decided to implement a policy whereby claimants are encouraged to file claims on

the Internet, with the goal of eliminating any SSA employee review

of such claims. SSA has already implemented the beginning steps

to enact this policy. Recently in February, SSA has eliminated

proof of age for most cases of people who file for retirement, and

also proof of citizenship, in most cases, for people who file. This has

been done without any rulemaking and without any public debate.

10

Since February, anyone who lies about their age when they applied for a Social Security card and used the same false date when

they filed for retirement benefits will get away with such fraud because SSA is no longer checking proof of age. The same would

apply to citizenship. If an illegal alien came to the United States

and obtained a Social Security card and alleged that they were

born in the United States when they file a claim, if they repeat

that they are born in the United States, we no longer check and

verify. This will lead to a certain amount of fraud, and we have

asked the Agency to provide any statistical data or studies that

they have done to see how much fraud and how many overpayments will occur with these policies, and they have not provided it.

SSA also eliminated lag wage development. Lag wages are, when

people file for retirement claims, frequently the previous year we

do not have a record of their wages yet. In most cases that raises

their benefit rate. By not asking for evidence of their wages, it will

take months before those individuals will get the proper benefit. In

other words, we are under-paying them by policy for a period of

time in order to save staff resources.

Even more disturbing is the plan that SSA has to implement

what they call Ready Retirement. Now, this is a policy that

changes the entire methodology by which SSA delivers service. The

Agency plans to eliminate the longstanding role of SSA employees

explaining to claimants the advantages and disadvantages for filing

for either widows’ or retirement benefits, and when would be the

most advantageous time to start their benefits. The Agency plans

to introduce this in September.

Currently, claimants can, and do, file Internet benefit applications. All such applications are reviewed by SSA claims representatives. AFGE recently surveyed claims representatives who review

Internet applications. Most employees responding to the survey indicated that the majority of applicants on the Internet choose to

start their retirement and widows’ benefits in a disadvantageous

month. This would result in the loss of thousands of dollars in lifetime benefits.

Eighty-six percent of SSA employee survey respondents opposed

eliminating advice to claimants on which month of election is most

advantageous. SSA is already requiring employees to engage in a

campaign to encourage the public to file for benefits on the Internet. Eighty-seven percent of SSA employees responding to the

AFGE survey stated that the quality of current Internet claims is

so poor that over 75 percent of claimants must be contacted due to

critical missing information, clearly disadvantageous decisions, or

inconsistent information on the application. Seventy-one percent of

survey respondents stated that over 90 percent of Internet claimants must be recontacted by SSA due to such errors.

In conjunction with SSA’s plan to implement the Ready Retirement plan, SSA plans to give expanded access to the system to

third parties. The idea here is to reduce the role of expert experience and unbiased SSA employees and substitute third parties who

will charge a fee for these services. SSA plans to allow third parties

greater access to the SSA database. The opportunity for fraud and

identity theft is an increasing AFGE concern.

11

SSA employees who currently review third-party Internet applications find that the error rates of the products for third parties

are as high as the error rates for claimants themselves. It is the

belief of AFGE that the Ready Retirement scheme and its Internet

application tools are an attempt to undermine SSA as the government agency that has a comprehensive network of communitybased offices with an expert workforce of trained employees devoted to helping retirement, disability, survivors, and SSI applicants receive the maximum benefits to which they are entitled.

Implementation of these proposals will result in reduced workload, more office closings, and emergence of a plethora of thirdparty companies who will charge the public for their services.

Eventually we can envision pressure to privatize the administration as a service delivery role of SSA. Although the Bush administration was unsuccessful in privatizing——

The CHAIRMAN. I am going to have to ask you to summarize, Mr.

Skwierczynski.

Mr. SKWIERCZYNSKI. All right. We urge Congress to take action

to investigate this attempt to implement this plan and radically

change the nature of the service delivery in Social Security.

The CHAIRMAN. Thank you.

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

The CHAIRMAN. We will start questions. Ms. McMahon, what

about that? What about this Ready Retirement program?

Ms. MCMAHON. Well, it is not an accurate statement of what we

are doing.

The CHAIRMAN. I do not want to get into an argument here, but

if you could just, for the record, explain.

Ms. MCMAHON. Yes. I would like to explain on the record.

The CHAIRMAN. And discuss his concerns.

Ms. MCMAHON. Right. I would like to explain in more detail. Let

me just quickly say that the application that we are implementing,

which will be ready in September, is intended to improve our online retirement applications. We want to make it easier for people.

We want to use more of our own information in our records so

when people interact with us they do not have to input too much

data. So, we think it is going to be a much better product for people.

The issue of Ready Retirement—which is a larger proposal that

includes improving the Internet form, as well as making some policy changes to simplify the whole process, getting to that piece at

the end where we allow things to be adjudicated through the automated process as opposed to by our employees reviewing every

claim—that is something we would not do before February of 2010.

We will only do it if we find that we can do it in a way that it protects all of the concerns and issues that have been expressed here.

One of the changes that has been mentioned is the fact that we

are going to change our policy on what we explain to people about

what their options are. We are only changing one thing in that policy. We are no longer going to use a so-called break-even calculation, which has been around for 40 years and which most folks, including AARP, tell us is no longer relevant to the world that we

live in. It really only gives people part of the information they need

12

to make an informed decision, and it is really doing a disservice to

people in terms of the choices they make. All the other things that

we currently explain, we will continue to do.

The CHAIRMAN. What about dropping the age and citizenship?

Ms. MCMAHON. Yes. The age and citizenship. We performed a

year-long study. It was statistically valid. There were over 10,000

people who applied for benefits whom we checked at the time. We

followed the current policy, or what was the current policy at that

time, and had them give us the birth certificates so that we could

make sure that the information matched what they were telling us

and what is in our records.

We followed those claims for a full year to make sure that we

saw them all the way to fruition. Some were disability claims

which took longer. We looked at every single one of those people

to say, all right, at the very end of the process when we actually

determined their eligibility and gave them benefits, was the allegation that they made about when they were born and where consistent with what was on our records, and was that consistent with

the proof they gave us? And in 99.84 percent of the cases it was

correct. So the risk that we are taking is very small. In less than

2/10ths of a percent of cases, people will have some erroneous information. Frankly, when we look at the cost of the follow-up that we

have had to do, by eliminating the requirement, it is less expensive

than any erroneous benefits that we might have. So, we did study

that.

The CHAIRMAN. I appreciate that. I may get back to this a little

later.

Let me ask this question. What could you do with the additional $240 million, and what will the cost be to the beneficiaries and to

SSA without the additional $240 million?

Ms. MCMAHON. Well, the things that we would do with $240 million over the President’s 2009 budget would be, first of all, to continue to drive down the backlog in hearings. We would add 5 to 7

hearings offices and about 50 administrative law judges over and

above the 1,250 level that we expect to get to next year. We would

also have the right support staff for them. So that would be one.

A second thing would be to drive down the initial disability

claims pending further, to about 443,000, so it will be another

50,000 claims we would do. Of particular interest based on today’s

hearing, we would put about 1,700 work years—which would be a

combination of both overtime and actually hiring individuals (I do

not have specific numbers)—into our front-line services so that we

could handle the kinds of things that you were told about today

and that you are already aware of that we are not able to do.

Then one other potential thing. We have been working with the

Disability Determination Services, and we think we are close to

getting an agreement with them to come up with a common disability case processing system that would be the foundation for a

system that would really work across all parts of the disability

process. We would put some money into that and get it started.

The CHAIRMAN. Have you developed a benchmark or a standard

for all these different functions? That is, what is an acceptable

backlog, what is an acceptable waiting time for the phones, what

is acceptable in the redeterminations, and so forth? I mean, do you

13

have benchmarks that you think are acceptable for the Agency and

for beneficiaries, maybe industry benchmarks that might be applicable here? I am just curious. Even though you do not have the resources, do you have the benchmarks that you would like to reach,

and further efficiencies, et cetera?

Ms. MCMAHON. Right. Let me give you an example with the 800

number. We set our goal at 10 percent busy rate and 330 seconds

average speed of answer. Those are not industry standards by any

means, and that is not particularly great service. We really do set

goals at the level that we think we can achieve given the resources

and trying to balance all the resources.

If I were to come up with an actual benchmark, if I looked at industry standards, we would try to answer calls within 30 seconds

and basically have no busy rate. That is not going to happen, so

setting that up as a standard really is self-defeating. It just further

frustrates us about what we cannot do.

The CHAIRMAN. My time has expired.

Senator Grassley?

Senator GRASSLEY. Thanks, all of you, for your participation in

this very important hearing for the 44 million people who use your

offices now, and the 77 million people who will soon be going into

retirement as baby boomers.

Over the past several years, the Social Security Administration

has conducted periodic reviews of local field offices. These reviews

include a written report justifying the decision to close an office.

Despite these efforts, a decision to close the local office is never

welcome news in that affected community.

The Social Security Administration recently decided to close the

office of Clinton, IA and transferred staff to Davenport, IA. But last

week this decision was overturned. Of course, on behalf of the citizens of Clinton, I want to thank the Commissioner.

Now, while the Clinton office dodged the bullet, the future remains uncertain. We have limited resources and an aging workforce, meaning that the Social Security employees are retiring faster than they are being replaced. For many smaller field offices,

maintaining adequate staff will become increasingly difficult.

Given this fact, how should the Social Security Administration

deal with the challenges of managing its local field offices? Is there

some way to objectively determine the most optimal field office locations that would maximize access and service to the public? Ms.

McMahon, and then anybody else who wants to comment.

Ms. MCMAHON. Well, first of all, unfortunately, optimal is probably in the eye of the beholder. But we do have a process that we

use to determine, looking at service delivery across areas, where is

the best place to have an office relative to where people mostly

come from to visit that office. We also have a situation where, as

we have already talked about, we have about 2 percent fewer offices today than we had 10 years ago, but about 7 percent fewer

staff since 2005. It does make it more difficult in those smaller offices to maintain coverage.

So, where we have offices that are not that distant—we have a

number of offices that are 3 miles from another office—to me it

really makes good common sense and better service delivery to

merge those offices so you have more people to cover, and people

14

do not have that much farther to go to deal with them. We have

a process where we are required, every 5 years, at minimum, to

look at, is this the best way to deliver service in this particular

area? We consult with the local community and with local congressional offices. We have even added a step now that we notify the

congressional offices in Washington.

We actually have made closures over the years where people do

not disagree and there is no controversy, and we are able to improve service in those areas and people are fine.

Where we have great controversy, we do tend to back away because we have other fights that we have to make. So one of the

things we are doing for the smaller, more remote offices, particularly in the Denver region, is where, State by State, we are creating the facilitation for people to go to a place and, by video, be

able to be in contact with someone in a field office without having

to drive there and without us having to have a small office wherever they live. So these things are just starting. I think there are

a number of things that we can do and that we are working on

doing to try to make improvements in those areas, but it will never

be easy.

Senator GRASSLEY. The local field offices have more than 40 million visitors each year. I would like to focus on two of these workloads. More than 10 million people contact their local field offices

because they need proof of their Social Security benefits to obtain

some other form of government assistance. State and Federal agencies could implement a consent-based verification process that

would allow them to electronically verify the monthly benefit

amount directly with the Social Security Administration.

In fact, many government agencies already verify names and Social Security numbers electronically. Benefit verification could be

added to the current process. Given this fact, there seems to be

very little justification for maintaining this workload in local field

offices. In addition, more than 12 million people contact local field

offices to obtain replacement cards. The Social Security Administration has instituted a number of on-line verification systems for

verifying name and Social Security number.

Again, given the ability to conduct on-line verification, there

seems to be little reason to maintain this workload in local field offices. Eliminating paper benefit verifications and replacement cards

would reduce field office visits by nearly one-third, thereby freeing

up staff and resources to devote more time to critical workload

needs.

I would like to have comments from anybody on this.

Ms. MCMAHON. Well, we absolutely agree that those are the

things that we pursue. In fact, we are just starting a campaign

with employers right now to make sure they understand you do not

need to see a Social Security card to verify someone’s number for

employment purposes. So, we hope they will stop sending people

into our office to get a replacement card if they do not have one.

Relative to the benefit verification, we think there are some instances where that can already be done, but we will certainly take

that as an action to go back and work on making that happen. We

cannot make people verify online, but we do have campaigns to try

to make it clear to them why that makes sense.

15

Senator GRASSLEY. All right.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator.

Senator Bunning?

Senator BUNNING. Thank you, Mr. Chairman.

Thank you all for being here.

Are you all familiar with the law that was passed in 1996 that

created the independent agency of Social Security? Can I read?

‘‘The Social Security Administration was separated from the Department of Health and Human Services and established as an

independent Federal agency on March 31, 1995. Within the

LHHSED bill, however, SSA merely was transferred from DHS to

the status of related agency. The operation of the Social Security

Trust Fund is considered off-budget. Of the $819 billion total for

LHHSED departments and agencies in fiscal year 1997, Social Security accounted for $395.6 billion, or 48.4 percent of the total. The

SSA amount represented $36.3 billion for designated on-budget activities, and $359 billion for off-budget activities.’’

I read that only to the point of, Senator Moynihan, if he were

still alive and here, would be so furious with you that he would not

be able to talk because it was his baby to get Social Security out

of OMB’s reign. I know the chairman and I have a major disagreement, but I was in the room, because I carried that bill in the

House of Representatives as chairman of the Social Security Subcommittee, with Representative Barbara Keneally as my co-chairman.

Why have you not operated independently? Ms. McMahon?

Ms. MCMAHON. Well, my understanding is that we are operating

the way we are required to operate.

Senator BUNNING. Well, have you ever tested how you are required to operate? Have you ever had a legal opinion to the point

of saying to OMB, no, we do not have to submit our budget? That

we can submit our own budget on our own as an independent agency to the Congress of the United States?

Ms. MCMAHON. Well, my understanding is that we, at the same

time, submit our budget, when the President’s budget is submitted.

Senator BUNNING. Yes. But——

Ms. MCMAHON. Congress knows what we ask for and what the

President is asking for.

Senator BUNNING. Well, we get back the President’s request. We

do not get yours separately. We get the President’s request. So, if

you need $240 million more, as Senator Baucus would like to do

and I believe is essential if we are going to get the backlog down

from what it was in 1996—250,000 people needing Social Security

Disability benefits and the refusal of those and the backlog that

was created. Now we are at 750,000. If you are going to get the

money necessary to get that down, submitting your budget through

OMB is not going to solve the problem.

But if you come directly to the Congress and ask for that money,

you will have a little better reception. Believe me, you will, because

we understand. I have been in them. I have been in the offices out

in the field, more than one, more than Ashland, KY, more than

northern Kentucky, Louisville, and all the offices in Kentucky, but

all across this country. They all have the same problem. I do not

16

care how many surveys you take from your employees, you are

going to get the same results of the surveys that, if you walk into

that office, you see. You are over-burdened and staffed to a limit

that is not equipped to handle the many additional things that you

have been given to do.

I know I have not asked a real basic question. But you ought to

look at your charter and you ought to look at the 1996 law that

was passed, because if Senator Moynihan were here he would be

coming right out of his seat.

Thank you.

Mr. SKWIERCZYNSKI. Senator?

The CHAIRMAN. Very briefly.

Mr. SKWIERCZYNSKI. Yes, Senator. I agree with you, Senator

Bunning. The independent agency law makes it optional for the

Commissioner to submit a budget to Congress. There is a bill on

the House side by Congressman Higgins which would make it mandatory. The AFGE supports that bill. It also would require agencies

to notify Congress in advance any time they close an office and

would require them to establish criteria for office closings, which

would include not only assessing the impact on the Agency workload, but also the impact it would have on the communities and the

public’s ability to access the agency.

The CHAIRMAN. Senator, I just want you to know I have deep respect for your long-term interest in Social Security. You have done

yeoman’s work. I do not know that we have much of a disagreement here. Basically, it is getting better service, and you are trying

to help find ways to make that happen. I deeply appreciate it, and

your interest and the questions you have asked.

Senator Salazar?

Senator SALAZAR. Thank you very much, Senator Baucus, for

holding this hearing on this very important issue. I have a statement for the record that I will submit for the record, and I have

a couple of questions.

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

Senator SALAZAR. First, in terms of the Government Accountability Office, your job is to help us in Congress do a better job in

doing our responsibilities here with respect to the efforts that we

do on behalf of our Nation. In your GAO report, Ms. Bovbjerg, what

you have found is one of your key conclusions is that customers are

waiting longer to be served, their calls to field offices frequently go

unanswered, certain stewardship activities are being deferred, and

staff are stressed.

Can you tell me how that set of findings applies specifically to

rural communities and whether there is a disparity in terms of

those findings with respect to Social Security recipients in the processing of claims and complaints out in rural areas versus urban

areas?

Ms. BOVBJERG. I am not sure that I can, Senator. The examination we did did not specifically sample for rural versus urban. We

did go to a variety of field locations. I think one of the most rural

was in North Dakota. But it is not really enough to say, well, rural

services are like this, and urban services are like that, or border

17

service looks this other way. So I would not want to draw a conclusion as to that.

I will say that virtually everywhere we went we were told, ‘‘We

are struggling, waiting times are going up.’’ Even in places where

waiting times were not long, not an hour or anything like that,

they were still inching up, and the most common complaints were

waiting times and the telephone service.

Senator SALAZAR. Ms. McMahon, from the point of view of the

Commissioner’s office, what is your sense of that? Is there a difference between the quality of service provided for people depending on whether it was an urban area or a rural area, or is it——

Ms. MCMAHON. I do not think it breaks exactly that way, although I do not believe you would find any rural offices in the top

200 offices with the most visitors, that kind of thing, or with the

highest waiting times, so in some ways you might get better service

in a rural office. I think that in reality we are struggling across the

board in terms of keeping up with everything, but if you were to

make a direct correlation between, do you wait longer in an urban

office, the answer would be yes. Are there other difficulties in rural

offices? That may be the case. If they are extremely rural and very

remote, small areas, it is very hard to keep staffing there.

Senator SALAZAR. Ms. Bovbjerg, also in your findings in your report, you say very clearly that the time for SSA to prepare itself

for the future is running out, and without a clear direction SSA

will not be prepared to meet its service delivery challenges.

Can you expound on that and tell us what it is that Social Security should be doing to try to meet those future challenges?

Ms. BOVBJERG. I would be happy to, Senator.

Senator SALAZAR. And tell me what you think about the Agency’s

response to your findings that are included in your report.

Ms. BOVBJERG. I would also just like to start off by saying how

impressed we were with what the field office staff were achieving.

These are people who are working incredibly hard. They are extremely stressed, although even if they do not always want——

Senator SALAZAR. All right. We know that. Now you are looking

ahead. You are looking at going from 42 million to whatever the

number is going to be, 80 million. So you are saying here that there

is no way they are prepared, and time is running out. So what

would you do in terms of making sure that the Agency is ready before time runs out?

Ms. BOVBJERG. I think they need to consider how specifically

they will provide service on the ground, because they are about to

be hit with, as my former boss is fond of saying, a tsunami. They

are going to be hit with this avalanche, if you will, of claims and

people coming to the field offices. They really need to think about

how exactly they will be able to——

Senator SALAZAR. And is it your view, based on having conducted

this GAO report, that in fact SSA is already doing that, or are they

just neglecting that tsunami?

Ms. BOVBJERG. I want to acknowledge that I think they are doing

some things that hold real promise. I was pleased to hear, for example, this morning when Ms. McMahon talked about the analysis

they had done of the web improvements. I think it is important to

think creatively.

18

Senator SALAZAR. Ms. McMahon, are you ready to meet the tsunami?

Ms. MCMAHON. Well, I think that we have a lot of plans in place

that may cost money.

Senator SALAZAR. How much money?

Ms. MCMAHON. So we have decided the kinds of things we need

to do.

Senator SALAZAR. What is the shortfall? Would the $240 million

or so that we are advocating help you?

Ms. MCMAHON. Well, this is not something that can be done

within 1 year. I mean, we have been laying these plans out for a

number of years. We have been moving toward—we have gotten

into the Internet in many ways over the last 5, 6, 7 years.

Senator SALAZAR. And you have those cost items quantified, what

it would take to be able to meet that tsunami head on?

Ms. MCMAHON. No, I do not.

Senator SALAZAR. All right. I think it would be a good idea if you

did because it is a reality, and I think we need to figure out a way

of facing it.

Thank you, Chairman Baucus.

The CHAIRMAN. Thank you, Senator.

That gets to my question about benchmarks, too. I just think it

is very important for the Agency to set benchmarks on what it

takes to get the desired results.

Senator Snowe?

Senator SNOWE. Thank you, Mr. Chairman.

To follow up on that entire issue that Senator Salazar and the

chairman have raised, it is clear that we really need a master plan

to address this crisis. It is obvious from the GAO report that Ms.

Bovbjerg has brought here today, and from Ms. McMahon, that

Congress has not made it easy as well. Just looking at the funding

levels between the administration and the Congress, we have failed

mightily to provide you with the resources necessary for the staffing levels that are so essential for you to meet our obligations, particularly to the most vulnerable of our population. I mean, you are

talking about seniors, you are talking about the disabled, those

who have so little in terms of income, SSI Disability, and Social Security. It is very critical and essential that, given the additional responsibilities that we have placed on SSA, that we invest in your

Agency.

But it is clear to me, given what we have to do just to make up

lost ground, lost money, and subpar staffing levels, not to mention

meeting the future demands that are looming on the horizon that

have been outlined in the GAO report as well, we have a genuine

crisis, not only presently, but also for the future.

We talked about the $240 million. Last year was the first time

in 15 years SSA received more than the administration proposed

in its budget. Again, that was the $150 million that was over and

above what the administration had proposed.

Ms. MCMAHON. This year, actually.

Senator SNOWE. Actually, this year. Actually, you are right, the

year that we are in. You described what you were able to do with

that, and I think that was, what, reduce work years by 1,700?

19

Ms. MCMAHON. That is actually the $240 million over the 2009

budget. If we were to get that, then we would put in 1,700 additional work years.

Senator SNOWE. All right.

Ms. MCMAHON. With $148 million this year, we were actually

able to replace all losses from the front line and get a little head

start on next year.

Senator SNOWE. All right.

Ms. MCMAHON. That is in addition to doing a lot with the hearings backlog, which is where most of that money actually went.

Senator SNOWE. All right.

And then between 2001 and 2007, on average, the Congress appropriated $150 million less than the President proposed in his

budget. So clearly we have an obligation to provide far more in

terms of addressing this shortfall, because you are never going to

gain ground. You are never going to get just to where you should

be today, let alone to meet the demands of the future, as I understand it.

So how many billions are you behind in terms of funding overall

to rectify this problem? Because as I understand it as well, the

$240 million would reduce the work years you talked about from

4,800 to 3,100 in 2009. But that is not taking into account the additional demands that would be placed on you in the workforce between now and 2009.

Ms. MCMAHON. I do not have an actual number, but we will provide something to the committee.

Senator SNOWE. All right. I think that is important. I think it is

also critical that you do develop a master plan: what is it going to

take in terms of funding and staffing, meeting potential retirements for the future and looking at the numbers that were provided by the GAO report. Forty-four percent of the SSA’s workforce

today will retire by 2016; 71 percent of the supervisors in SSA are

eligible to retire in the next 10 years.

So I think that you need to have the benchmarks the chairman

is talking about. We need to understand the funding levels. We are

obviously not providing enough. That gets to the next question:

what will happen to this problem that is going to compound itself

in the future, particularly if you end up having a Continuing Resolution and you are back to a little more than $9 billion in funding?

Ms. MCMAHON. That would be devastating for us because it will

really stop any momentum we have on the hearings backlog reductions. We will have to eat $400 million in costs that we are going

to get, whether you give us money or not, and it will just slow everything down and it will back things up further.

Senator SNOWE. So do you think it is possible to come up with

a master plan of some kind, a strategic plan here?

Ms. MCMAHON. Well, we are working on a strategic plan. We are

actually operating under a strategic plan now. I do not know that

it is exactly what Ms. Bovbjerg was asking from us, but we are not

in the dark. We know the kinds of things we need to do. We have

been working on those things, we are moving in those directions.

We have a number of initiatives that we are working on. We will

have an Agency strategic plan, a new one, even though it is not

20

even due for another year, in the next few months, and we will be

talking to Congress and other stakeholders about it.

But we will be looking at our primary workloads, how we can

deal with those, and we will continue to improve the kind of services we can provide through the Internet. It is not a panacea. It

does not answer all the questions. But we are moving in a direction

to do the best we can with what we have to handle these issues.

Senator SNOWE. Well, we all need to be dealing with the same

set of information, and I think the sooner the better to have that,

and with precision as well. What is that plan going to look like in

terms of funding, in staffing, what is required, and not only to

make up lost ground here, but also to address the future challenges?

Ms. MCMAHON. Thank you.

Senator SNOWE. Thank you.

The CHAIRMAN. Thank you very much, Senator.

While Senator Schumer is getting ready, I just would like you,

Ms. McMahon, to provide this committee with that plan.

Ms. MCMAHON. All right. We certainly are going to be vetting it.

The CHAIRMAN. When will you be in a position to send it to us?

Ms. MCMAHON. I cannot give you an exact date, but I know by

this summer our intent is to be in a position to be having those

discussions.

The CHAIRMAN. So can we say by, what, Independence Day? How

about that? July 4. By July 4?

Ms. MCMAHON. The boss tells me by Independence Day is fine.

The CHAIRMAN. All right. If you could do that, please.

Ms. MCMAHON. All right.

The CHAIRMAN. It is very important. You heard the concerns of

Senator Snowe, myself, and others. We need to know what our

goals are, what our benchmarks are, what our plan is.

Ms. MCMAHON. All right.

The CHAIRMAN. I think it would be mutually beneficial if you

could do that.

Senator Schumer?

Senator SCHUMER. Thank you. I want to thank our witnesses.

This hearing is very timely because, of course, as has been said, we

are starting to see some progress made on the backlogged disability

claims. I think Social Security Administration employees deserve

credit, because the witnesses today have shown that the employees

are overworked and often toil in understaffed field offices.

I think the title of this hearing, ‘‘More Work, Less Resources,’’

says it all. We have seen workloads expand. Everyone has to process Medicare Part D. Employees do not even have the time to tackle their traditional workloads, such as Continuing Disability Reviews, SSI redeterminations, and wage reporting, and at the same

time we face a huge retirement wave. Employees that were hired

back in the 1970s are now eligible to retire, so there is a constant

flow of employees leaving the offices who need to be replaced, yet

the enacted appropriations for SSA consistently fall below the

President’s request.

It is crucial that offices are well-staffed and well-funded, and I

think we have started moving in the right direction. I voted in

21

favor of increasing SSA’s budget by $150 million in 2008; I will continue to support further increases.

Here are my questions, and they are New York-related. Part of

reducing the log-jam at field offices is cutting down on the backlog

of pending disability cases. SSA recently hired 135 new administrative law judges to jump-start the process. Only 10 of those have

been assigned to the four New York hearing offices.

What really concerns me here is that the Buffalo office, which

has one of the longest wait times in the country, has not been assigned additional ALJs. I understand there were concerns about

adequate office space, but quite frankly that could be resolved. Buffalo is not, unfortunately, a place where there is hardly any office

space available. So where there was a will there, there was a way.

Buffalo residents are waiting over a year to get a final decision.

Two weeks ago, Senator Clinton and I sent a letter to Commissioner Astrue asking for a more detailed explanation of the process

of allocating ALJs and whether there could be a second round of

hires for the Buffalo office, and other offices that were passed over.

Could you, Deputy McMahon, shed some light on the process,

and particularly what can be done about Buffalo?

Ms. MCMAHON. I will attempt to do that. It is not really my area

of responsibility, but I can tell you this. I know there were issues

about space. I know that they are specifically looking to put at

least one additional ALJ in Rochester. One of the reasons I understand that Buffalo is as backed up as it is, is because it has a lot

of the Rochester cases. So even though the new ALJs will be in

Rochester, the work can move over there that has been backlogging

in——

Senator SCHUMER. Why could we not get another ALJ in Buffalo?

Ms. MCMAHON. Well, I do not know the exact process they went

through to determine where these needed to go, and I know that

they will be responding to you. But there are not enough to go

every single place. I think they made the decisions on the basis of

the longest wait times—a combination of the longest wait times,

where there is space, any number of other things. There is one

other thing going on——

Senator SCHUMER. Do you disagree that Buffalo has one of the

longest wait times?

Ms. MCMAHON. I do not know what it precisely is. I know that

Atlanta, and I think the Chicago area, have longer wait times. But

I would say that, because we are also proceeding to do these hearing centers, video hearing centers, that again we will be able to offload work from the most impacted offices to other ALJs. We will

not be paying for people to travel. There are a number of things

that will be very positive about these centers that should help to

alleviate the problem. So it is an overall plan. Where one ALJ, or

two, go is only a part of the plan.

Senator SCHUMER. Yes. All right. So we can count on another one

for Rochester, which might help with Buffalo, and you are still

looking at someone in Buffalo. If you need help with finding office

space, give me a call.

Ms. MCMAHON. All right. Thank you.

22

Senator SCHUMER. The next question deals with the Social Security office in Ogdensburg, which is way up on the St. Lawrence

River in St. Lawrence County.

Ms. MCMAHON. Right.

Senator SCHUMER. Recently, SSA and GSA extended the office

lease in the current location for 18 months. The trouble is, the

Ogdensburg office is located in the Ogdensburg Bridge and Tunnel

Authority’s industrial park. It is very far from downtown, inaccessible by public transportation. It is the only office in St. Lawrence

County and serves about 26,000 beneficiaries, 111,000 residents.

Why would you continue to operate an office in a location where

there is no bus service and it is very far for the elderly and disabled to reach on foot?

Ms. MCMAHON. It is actually a timing issue. The reason that

lease was extended is that we are in the middle of a process to find

another place for the office. GSA is actually responsible for that

process. It has not been finalized yet, and so we just extended that

lease so that we have time to determine where we are going to be.

I understand we have two offers. I cannot give you specifics on

that. When GSA finishes their process, we will choose one of those.

Then they will have to have time to complete the space. I do not

know whether it would be to build to suit or to change whatever

configuration in an office they already have. I do not know the details.

Senator SCHUMER. It is way out of the way, and we get a lot of

complaints. There is a downtown municipal building where the office used to be. So I just hope, when you go through this process

that, if it is pennies cheaper in another place, you do not move the

office so that people cannot get to it.

Ms. MCMAHON. Right. No, we would not. And it is our responsibility to make sure that, when we place offices, people have access

to it. So I am not sure why we decided what we did at a former

time, but I know the——

Senator SCHUMER. Yes. Thank you. One final question.

The CHAIRMAN. Yes. Go ahead.

Senator SCHUMER. Thank you. Are you waiting, Senator

Bunning? You have not asked questions yet?

The CHAIRMAN. Actually, both of us are waiting.

Senator SCHUMER. Well, Mr. Chairman, with your usual graciousness you said I could continue.

The CHAIRMAN. I did.

Senator SCHUMER. That is why I did not ask.

The CHAIRMAN. That is right. That is right.

Senator SCHUMER. But I will wait.

The CHAIRMAN. No, no, no, no, no. Go ahead.

Senator SCHUMER. This is the last one.

The CHAIRMAN. Go ahead.

Senator SCHUMER. Is that all right with you, Senator Bunning?

Senator BUNNING. Go ahead.

Senator SCHUMER. All right. Thank you.

Cayuga County is another place. We have an office in Auburn.

There were 17 closed, 4 in New York State. In Auburn, it was the

sole provider for 82,000 residents, 19,000 benefit recipients. We

kept this office open for an extra couple of months, but it was frusVerDate 11-MAY-2000 15:37 Jun 28, 2010 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 56618.000 TIMD PsN: TIMD
23

trating because there was no consultation or adequate advance notice, to either my staff, the district’s office, or the residents themselves when the Auburn office was closed.

The trouble with New York is, we have large distances and a

whole lot of people. So when you close an office, you can say, well,

Syracuse is 45 minutes away, or whatever, but it is hard for people

to get to and you have lots of people affected. So 45 minutes away

in another area might affect 10,000 people, but in New York it affects 100,000 people. We have the third-largest rural population in

the country.

So my question is, what can you do to work more closely with

Congress and district offices to alert us to office closings that might

be pending so we could try to work out an amiable solution?

Ms. MCMAHON. Well, that is part of our process. But we did

learn in the last year that, even though we are notifying the local

offices, apparently there are not enough communications between

your local office and your Washington office. So now a new part of

our protocol is to notify your Washington office at the same time

that we are beginning the discussions about the potential for closures, moves, and other facility issues.

Senator SCHUMER. Thank you, Mr. Chairman. Thank you to Senator Bunning.

The CHAIRMAN. Thank you. Thank you. We need to address the

backlog in this committee, too. [Laughter.] Thank you very much.

Senator SCHUMER. I will assure you we will have consultations.

[Laughter.]

The CHAIRMAN. I was struck, Ms. McMahon and Mr. Warsinskey,

when both of you mentioned one actual and another hypothetical

about other agencies putting legislative demands on SSA. Could

you explain that more fully, please? I found it a little disturbing,

frankly, that other agencies are coming to you and, it sounds like,

having you do some of their work.

Ms. MCMAHON. Maybe that was a little bit of a euphemism, the

way I said it, because the reality is, Congress is directing them to

come to us.

The CHAIRMAN. Oh. All right.

Ms. MCMAHON. So Medicare Part D is an example where we

have a part of the responsibility with another agency for that legislation. Another example is the e-verify process. We are doing employment verifications.

The CHAIRMAN. That is under Part D.

Ms. MCMAHON. Yes.

The CHAIRMAN. And DHS, too?

Ms. MCMAHON. Yes. So we have to work together with DHS for

employment verification and with CMS for Part D.

The CHAIRMAN. All right.

Ms. MCMAHON. The point, I guess, we are making is, as you continue to give us work, more and more of that work is outside our

normal core workload, our traditional work, what we consider to be

our major responsibility. The more of that we get, even with

money, frankly, the more complicated the job is, the more you have

to know, the more things we have to do, the more things we have

to deal with.

The CHAIRMAN. Right.

24

And Mr. Warsinskey, you were concerned about immigration. Although not enacted yet, theoretically that could be an additional

burden. Can you expand on that a little bit, please?

Mr. WARSINSKEY. Well, yes. We are already doing some helping

out, more in States like Arizona where it is required. But there are

bills that are pending in both Houses that would significantly expand our responsibility. One of the bills could have as many as, I

believe, 48 million people coming in where we would have to verify

everything that has more than one W–2. Another bill would probably increase our traffic by 25 percent. Those kind of numbers are

just mind-boggling.

Our services would just go way downhill unless we had the necessary funding. It is not that we do not want to do these things.

We try to do anything we are asked to by Congress. It is just, if

you do not give us the funding and your core service—I mean, our

core mission is to pay benefits. This is really a side thing we are

doing to help out other things that are important in the country.

The CHAIRMAN. Thank you.

Senator Bunning?

Senator BUNNING. Thank you, Mr. Chairman.

Mr. Warsinskey, you mentioned in your testimony the problems

the SSA computer system was facing. It seems to me the automated investment fund in the computer for Social Security received

just shy of $1 billion from 1994 to 1998. This money was used, actually used, for that purpose, which I applaud you for. But the significant problem remains, including that Social Security still relies

on a database system that was developed in the early 1980s which

is now obsolete.

Mr. WARSINSKEY. Right.

Senator BUNNING. So how do you get a match?

Mr. WARSINSKEY. We are using an old COBOL system for a lot

of our mainframe processing.

The CHAIRMAN. What? What?

Mr. WARSINSKEY. COBOL.

The CHAIRMAN. What century is that? [Laughter.]

Mr. WARSINSKEY. Right. It is the beginning of programming.

They do not really train programmers to do this anymore. We have

to train our own people.

Senator BUNNING. I would suspect that they would not, with

modern technology moving the computer past the database that

was developed in the 1980s.

Mr. WARSINSKEY. Right. But this is a major challenge for the

Agency because they just cannot take away that computing software they are using because it processes a major part of their

workloads that we have online, and we do need to redesign it and

invest a lot of money in it, and it is going to take a fair amount

of investment to do that.

Senator BUNNING. Well, $1 billion is not a small investment.

Ms. MCMAHON. If I might make a comment that I think might clarify this to a certain extent. While $1 billion is a lot of money,

we actually have, among other things, been doing as many as 72

million transactions a day—a day—on our system.

Senator BUNNING. That is why you were given $1 billion to update.

25

Ms. MCMAHON. I am sorry?

Senator BUNNING. That is why the billion dollars was given to

update.

Ms. MCMAHON. Well, but we have to maintain the system we

have. Maintaining it is quite complicated and expensive. In addition to which, we have been so desperate to make sure that we increase our productivity so we could stay up as best we can with the

work——

Senator BUNNING. You know, you ought to include that same in

the report that you are going to prepare for the chairman so that

we can look at that and see why you cannot convert and get the

obsolete portion out so you can use an updated system.

Ms. MCMAHON. And, in fact, we are moving in that direction.

But, yes, it does take significant resources. We will be happy to report on that.

Senator BUNNING. All right. Ms. McMahon, there was a recent

IG report on your Agency—April, in fact, of this year—on using

ATM receipts to determine if someone is out of the country and,

therefore, ineligible for SSI. This could potentially save quite a bit

of money. Is Social Security planning to implement such a program?

Ms. MCMAHON. Not without additional resources.

Senator BUNNING. Well, would you please include that also in the

report that you are preparing for our chairman? Because if, in fact,

it would save Social Security some money and it is illegal to do it

this way and your IG—this is your IG—reports that they are using

this illegally, please put it in the report so we can do something

about it.

Ms. MCMAHON. All right.

Senator BUNNING. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Senator. I appreciate your

pressing and your interest. Thank you.

Senator Kerry?

Senator KERRY. Thanks, Mr. Chairman. I know that a lot of

questions have been asked that I had an interest in, particularly

about some of the field offices and so forth, so I am not going to

go back there.

But let me kind of get to the core of this, if you will. Since fiscal

year 2000, the appropriations for the Social Security Administration have been cut by $1 billion. Can you explain, what is the rationale for that? I do not quite understand it. I do not think a lot

of seniors who are waiting extraordinary amounts of time or have

blocked telephone calls that they cannot get through on for hours,

waiting in line for hours, understand that.

Ms. MCMAHON. Well, specifically what that is, is the Congress

did not appropriate that amount of money that the President asked

for over that period of time.

Senator KERRY. I thought we plussed up over what the President

asked for. I know last year we put in $150 million.

Ms. MCMAHON. Yes, sir. This year was the first time since 1993

that we have actually even gotten the President’s budget request,

much less more.

Senator KERRY. I am surprised to hear that, but I accept that.

26

But it is my understanding that the President set a low ceiling

in each of those years with the total domestic appropriation so that

we were sort of squeezed. I mean, the fact is, this wasn’t something

that we chose to do. We have to squeeze everywhere because the

President gave us a cap on what the total domestic appropriations

were, if I recall correctly. Your heads are nodding.

Mr. Warsinskey, do you want to comment on that?

Mr. WARSINSKEY. Yes.

Senator KERRY. I mean, I am now flashing back and thinking

about, we had a lot of very bad choices.

Mr. WARSINSKEY. Right. Labor and HHS have a cap to it and

there is a competing interest. We are not in a separate budget, so,

if the National Institutes of Health or the Centers for Disease Control need more money, we are competing with them. What has happened is, monies are going other places so we were not getting

what was requested by the President as the money was allocated.

Since they could not raise the total amount for overall Labor and

HHS, something had to give, and Social Security was the one that

was giving.

Senator KERRY. I also recall that we were forced into—the subcommittees, as they were making those allocations, had to actually

use some of those proceeds in order to protect programs that the

President was trying to cut or eliminate completely.

Mr. WARSINSKEY. What that does is, sometimes money has been

specifically directed to do certain workloads, which restricts the

Agency’s flexibility to do other things, which cuts our core services.

Senator KERRY. Well, I think it is a little disingenuous then just

to say that Congress did not do this. I also recall that Congress

was in the control of the Republicans during that largest period of

time, and the President never fought for that additional money in

any of those appropriations negotiations as we came into the final

omnibus budget, or whatever.

But let me come to what really has an impact on people. I also

understand that it is the norm to anticipate somewhere in the vicinity of about 400,000 cases that you carry because there is a certain amount of investigative work, and analysis has to be done to

make sure that cases are legitimate. We certainly accept some reasonableness as to that period.

But 31⁄2 years, it seems to me—and also measured against, I

think we are at, what, 750,000, is it? Seven hundred and fifty thousand backlog. Social Security Disability money does not get paid

out until a determination is made.

Ms. MCMAHON. That is correct.

Senator KERRY. What is the expectation for these people? How

are they supposed to get by? Since they are already coming in because they are low-income and they have low assets, they need

help, what is the theory here by which they ought to wait 31⁄2

years?

Ms. MCMAHON. Well, there is no theory that they should wait.

Commissioner Astrue made it clear when he came on board just

over a year ago that it is a ‘‘moral imperative’’ that we reduce that

backlog that we have pending, that we get the processing time

down significantly. He has instituted a 75-point plan, and we are

working on it.

27

A large part of the $148 million that the Congress gave us over

and above the President’s budget this year is going to work on that

plan. It is a good foundation for us. If we continue to get funding,

if we do not get into a Continuing Resolution for 2009, the expectation is we will start to drive down the actual number of pending

cases for hearings next year.

This year we have reduced the rate of increase in pendings. Next

year we actually expect to reduce the actual number of hearings

that are pending. This is the highest priority in the Agency. Everybody—everybody—in the Agency is contributing. Field offices are

actually helping hearing offices do their work because we see it, as

the Commissioner said, as ‘‘a moral imperative.’’

Senator KERRY. Well, before I came in here I think you said that

by July 4th there will be a plan that you are going to be putting

in front of us. Can you share just quickly what you anticipate putting together as a strategic plan? I would like the groups to have

their opportunity—Mr. Warsinskey and Mr. Skwierczynski, to be

able to have an opportunity to say what they think ought to be

done.

Ms. MCMAHON. Well, I am uncomfortable saying, because we are

just sort of at the point where we are starting to crystallize it, but

obviously disability will be a big issue, retirement will be a big

issue because that is going to bury us if we do not handle that.

Service delivery, generally. How do we improve our service delivery

methods? Then looking at the other kind of underpinnings, in particular, as enablers for us, we have to have the kind of workforce

we need and be able to train that workforce, recruit and retain people. We have to have the IT infrastructure, as we were just talking

about. We have to modernize our system. So those are the kinds

of things that would be in the plan.

Mr. WARSINSKEY. I think you need to look at all the areas where

we are deficient in our services and then say, what service do we

want from those areas and how are we going to get there? An example is our telephone service in the field offices, where the majority of people cannot get through. There is no real plan that I am

aware of to deal with that right now. We are going to need more

resources with that. If you are going to have the waiting times in

some of these offices at 2 to 4 hours, what is it going to take to

get those waiting times down? If you have huge numbers of SSI

redeterminations——

Senator KERRY. What should be the goal? How fast should somebody be served when they come into a public office, Social Security,

a senior citizen? What is the expectation that is appropriate?

Mr. WARSINSKEY. I think if you just walk in, I think it would be

nice if somebody could be served in 10 or 15 minutes, would be

ideal.

Senator KERRY. And if you have an appointment?

Mr. WARSINSKEY. They should be served within 5 minutes, I

would say, if you have an appointment.

Senator KERRY. Is that achievable, Ms. McMahon?

Ms. MCMAHON. Well, actually in some cases where we have appointments, a number of offices, we are able to do it in 5 to 10 minutes, and even walk-ins in some cases. Is it achievable overall for

28

every single office with the budget levels that we have? No, I do

not think it is unless we forego something else.

Mr. SKWIERCZYNSKI. Well, Senator, 10 years ago the processing

time for disability cases was 300 days or less, less than 300 days.

If that was an acceptable processing time at that time—I do not

think it is; three hundred days is a long time to wait for a decision

on a disability appeal—then what we need to do, I would agree

with Senator Baucus, we need to have these benchmarks and then

we need to figure out how much money it costs to meet those

benchmarks.

I think you have to look at some fundamental issues, too. Right

now we have a split system on making a disability decision. We

have Federal employees taking the entitlement information and we

send them to State employees to get a medical decision. We have

54 different State agencies that are run 54 different ways, that

have 54 different pay-and-benefit systems, they have different

training systems, they have different ways of doing the work.

We ought to consider federalizing the whole process so that we

can have one classification and pay-and-benefit system, one method

of training, one instruction that goes out across the board. What we

have, what has been created by having the split system, is some

States’ initial claims or disability approval rates are 55 percent of

those who file claims, in other States they are 25 percent. It is a

radical difference on the initial claims on the decision-making process.

We did a pilot back in the late 1990s and early 2000s of having

a caseworker approach, where somebody would come into a field office and the individual who interviewed them would do both the decision on the disability issue as well as the entitlement issue, and

the public loved it. It had great reviews. Of course, you have to pay

for that. If that is a way to provide better service to the public, that

is something that ought to be examined when you are doing a strategic plan. Is this split system on disability the way to go indefinitely in the future or should we think a little bit out of the box

and think a little bit differently and look at a better way of doing

this?

The CHAIRMAN. Thank you very much. I am going to have to

wrap up this hearing, unless you, Senator Kerry, wanted to continue here.

Senator KERRY. No, no.

The CHAIRMAN. I am very impressed with how hard employees

at SSA work. I mean, they are stressed. I deeply appreciate that.

They are trying to do a good job with the limited resources that

they have, and I just want you to know that, first, I appreciate that

and sense that, and thank them for their very hard work.

Second, I am going to work mightily to get you that additional

$240 million because it is so important, and also to do whatever I

can to prevent any devastation that may occur because of the Continuing Resolution. We have to find some way not to let that happen.

But you make more than a good case. If we are to provide service

for the people we work for, and all the folks whom we serve are

our employers—we are working for them, so at the very least we

should give them the respect that they are due and do a good job

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for them. So, I want to thank all of you. You have all been very,

very helpful at this hearing, and I want to thank you for coming.

The hearing is adjourned.

[Whereupon, at 11:33 a.m., the hearing was concluded.]

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