SSA administers three major benefit programs: Old-Age and Survivors Insurance (OASI), which provides benefits to retired workers and their families and to families of deceased workers; (2) Disability Insurance (DI), which provides benefits to eligible workers with disabilities and their family members; and (3) Supplemental Security Income (SSI), which provides income for aged, blind, or disabled individuals with limited income and resources. In addition to paying benefits through these three programs, SSA also issues Social Security cards, maintains earnings records, and performs various other functions through a network of field, state and headquarter offices. SSA’s field offices are the agency’s primary points for providing face-to- face service to the public. In addition to processing new disability and retirement claims, field offices manage other workloads related to program integrity, such as determining whether certain individuals with disabilities remain eligible to receive disability payments based on program criteria. Besides field offices, SSA operates Social Security Card Centers, which issue Social Security numbers; Teleservice Centers, which offer services nationally via a toll-free telephone number; and Program Service Centers, which maintain earnings records, in addition to other functions. In 2008, SSA’s administrative budget for managing its operations was $11.1 billion. The process for deciding who is eligible for SSA disability benefits is complex, consuming a large portion of SSA’s administrative budget. Several state and federal offices, and several adjudication levels are involved in determining whether a claimant is eligible for benefits. The process begins when an individual files an application for disability benefits at an SSA field office, online or over SSA’s toll-free number. In each case, an SSA representative determines whether a claimant meets the non-medical eligibility criteria of each program, such as ensuring that an SSI applicant meets income requirements, or determining if a DI applicant has a sufficient number of work credits. If applicants meet the non- medical eligibility criteria, field office personnel will help claimants complete their applications and obtain claimants’ detailed medical, education, and work histories. The completeness of the information gathered at this time can affect the accuracy and speed of the decision. After the field office determines that an applicant has met SSA’s non- medical eligibility requirements for disability benefits, up to four adjudicative levels may review the applicant’s claim for eligibility generally based on medical criteria. The first adjudicative level is the state Disability Determination Services (DDS), where a disability examiner, working with medical staff, must make every reasonable effort to help the claimant get medical reports from physicians, hospitals, clinics, or other institutions where the claimant has received past medical treatments. After assembling all medical and vocational information for the claim, the DDS examiner in consultation with appropriate medical staff determines whether the claimant meets the requirements of the law for having a disability. In doing so, the DDS examiner uses a five-step, sequential evaluation process that includes a review of the claimant’s current work activity, severity of impairment, and vocational factors. See figure 1. Claimants who are dissatisfied with the initial DDS determination have up to three additional levels of adjudicative appeal. The claimant may request a “reconsideration” of the claim, which is conducted by DDS personnel who were not involved in the original decision. If the reconsideration team concurs with the initial denial of benefits, the claimant then has 60 days from the time of this decision to appeal and request a hearing before an administrative law judge (ALJ). ALJs, who are based in 140 hearing offices located throughout the nation, can consider new evidence and request additional information including medical evidence or medical and vocational expert testimony. A claimant who is dissatisfied with the hearings decision may request, within 60 days of the ALJ’s decision, that the Appeals Council review the claim. The Appeals Council is SSA’s fourth and final adjudicative appeals level and is comprised of administrative appeals judges. The Appeals Council may uphold, modify, or reverse the ALJ’s action, or it may return the claim back to the ALJ for another hearing and issuance of a new decision. The decision of the Appeals Council is the Commissioner’s final decision. To appeal this decision, the claimant must file an action in Federal Court. SSA measures its performance in managing its workloads in various ways. For its disability claims process, at each level of the claims process SSA tracks the number of claims pending a decision each year and the time it takes to issue a decision. The agency also uses a relative measure to determine the backlog by considering how many cases should optimally be pending at year-end. This relative measure is referred to as “target pending” and is set for each level of the disability process with the exception of the reconsideration level. From 1999 to 2006, SSA’s target pending was 400,000 for claims at the initial stage and 300,000 and 40,000 for the hearings and Appeals Council stages, respectively. The number of pending claims that exceed these numbers represents the backlog. With respect to service delivery, SSA uses various measures of performance, including work productivity (average work units performed per year, per employee), customer wait times at field offices, and overall customer satisfaction with service delivery. SSA has experienced increased backlogs and processing times associated with disability claims in recent years, as well as declines in measures of field office service. These trends are likely due to rising workloads and staffing shortfalls. The total number of backlogged disability claims in SSA more than doubled over the last decade, with the greatest accumulation of claims occurring at the hearing level. By the close of fiscal year 2006, the total number of backlogged disability claims, by SSA’s measure, reached 576,000, which represented an overall growth rate of more than 120 percent from fiscal year 1997. As shown in figure 2, backlogs of varying degree have occurred at all stages of the claims process where backlogs are calculated. However, since fiscal year 2001, these claims were concentrated most heavily at the hearings level and, to a lesser extent, at the initial processing level within the DDS offices. The hearings level accounted for the largest share of backlogged claims for 7 of the 10 years we reviewed. In fiscal years 2000 and 2001, the DDS level accounted for the largest share of the backlog. The Appeals Council had the largest backlog in fiscal year 1999, but dramatically reduced these numbers by 2006. In concert with changes in the total claims backlog, average processing times for disability claims at most adjudicative levels increased. As shown in figure 3, although processing times decreased dramatically at the Appeals Council level, they increased markedly at the hearings level, and somewhat at the initial and reconsideration levels. For example, from 1997 to 2006, processing times increased about 20 days at the DDS level and 95 days at the hearings level. Further, in fiscal year 2006, 39 percent of all hearing decisions took between 365 to 599 days to process; 28 percent took 600 to 999 days to process; and 2 percent took over 1,000 days. For two regions (region 5 in Chicago and region 10 in Seattle), nearly half of all hearing decisions made in fiscal year 2006 took longer than 600 days to complete. One contributor to increased disability claims backlogs has been spikes in new applications. For example, the number of initial applications for DI and SSI benefits increased by 21 percent overall from fiscal years 1997 to 2006, contributing to the claims backlog and adding additional pressures to field office personnel who initially review these claims. These increases can be attributed to a number of influences: periodic downturns in the economy, the aging of the baby boom population, increased referrals from other programs, previous changes in program eligibility requirements and regulations, and increased program outreach. Officials in one region recounted one initiative that targeted outreach to the homeless, which increased applications and also added to processing times. They also attributed some processing delays to the time required to track homeless candidates and help them document their disabilities. With respect to the economy, SSA officials, DDS senior managers, and our prior work all attest to the fact that economic downturns from a failing industry or natural disaster can precipitate new disability applications. The growth in the disability claims backlogs has also coincided with losses in key personnel associated with the disability claims process. For example, although DDS staff increased about 4 percent from 1997 to 2006, DDSs have experienced high rates of staff turnover and attrition. Attrition rates for DDS disability examiners, who are state employees, were almost double that of SSA federal staff. Many DDS senior managers we spoke with said that turnover of experienced disability examiners has affected productivity. For example, from September 1998 to January 2006, over 20 percent of disability examiners hired during that period left or were terminated within their first year. DDS officials said the loss of experienced staff affects DDS’ ability to process disability claims workloads because it generally takes newly hired examiners about 2 years to become proficient in their role. Further, at the hearings level, SSA generally experienced shortfalls in ALJs and support staff—decision writers, staff that prepare case files for review, attorneys, and claims technicians. The number of ALJs available to conduct hearings ranged from a high of 1,087 in 1998 to a low of 919 in 2001, ending at 1,018 in 2006. Although SSA has had fewer than 1,100 ALJs over the last 10 years, in May 2006, SSA’s Commissioner noted that the agency requires no less than 1,250 ALJs to properly manage its current pending workload. With respect to support staff, numbers ranged from a high of 5,500 in 1999 to a low of 4,700 in 2006.