Appropriations Committee
Subcommittee on Labor, Health and Human Services, and
Education, and Related Agencies
Written Testimony for the Record
of Richard E. Warsinskey, Past President
National Council of Social Security Management Associations Inc.
February 28, 2008
Chairman Obey, Congressman Walsh and Members of the Subcommittee, my name is Richard Warsinskey and I represent the National Council of Social Security Management Associations (NCSSMA). I have been the manager of the Social Security office in Downtown Cleveland, Ohio for nearly thirteen years and have worked for the Social Security Administration for thirty-two years. I also help coordinate the activities of the SSA Advocacy Group. This group works to improve SSA’s services at all levels. Members include many senior organizations, a number of disability support groups, SSA and Disability Determination Service associations, and Federal employee unions. On behalf of our membership and in support of our Advocacy Group, I am pleased to have the opportunity to submit this written testimony to the Subcommittee.
NCSSMA is a membership organization of nearly 3,500 Social Security Administration (SSA) managers and supervisors who provide leadership in over 1,300 Field Offices and Teleservice Centers throughout the country. We are the front-line service providers for SSA in communities all over the nation. We are also the federal employees with whom many of your staff members work to resolve problems and issues for your constituents who receive Social Security retirement benefits, survivors or disability benefits, or Supplemental Security Income. From the time our organization was founded over thirty-seven years ago, NCSSMA has been a strong advocate of efficient and prompt locally delivered services nationwide to meet the variety of needs of beneficiaries, claimants, and the general public. We consider our top priority to be a strong and stable Social Security Administration, one that delivers quality and prompt community based service to the people we serve, your constituents.
The Fiscal Year 2009 Budget and Past Budgets
The President has proposed a budget of $10.327 billion for SSA’s Limitation on Administrative Expenses (LAE) account for FY 2009. This is an increase of $582 million over the FY 2008 funding level. It is also $730 million more than what the President proposed for FY 2007. This significant increase in the President’s recommended funding level for SSA is quite a departure from budget requests that have been proposed in recent years. In FY 2007, the President’s proposed budget for SSA’s administrative funding was only $100 million over the proposed funding level for FY 2006.
We are supportive of this increased funding proposed by the President. We are also appreciative of the fact that Congress appropriated $150 million more for SSA in FY 2008 than the President recommended. This reverses a five-year trend in which SSA has been appropriated on average about $150 million less per year than the President’s budget request. However, we believe that in order to meet all of SSA’s service delivery responsibilities additional funding above the President’s budget is necessary. We believe an additional $200-$250 million above a potential reserve fund of no less than $240 million for program integrity workloads would begin to address the areas where SSA’s services must be improved and upgraded. Thus we recommend total SSA FY 2009 administrative funding be no less than $10.767-$10.817 billion. Our testimony below will detail the reasons why we believe additional resources are necessary.
How Reduced Investments Have Affected SSA Disability Services
The level of administrative funding that SSA has received in recent years has affected the agency’s delivery of disability services in many ways. The following is a summary of a few key impacts:
As of January 2008 about 751,000 cases, a near record high, were awaiting a hearing on an appealed claim, compared to only 312,000 cases at the beginning of FY 2000. Nearly 300,000 of these appeals are over 1 year old. Approximately 91,000 veterans have pending hearings. The average processing time for a hearing is currently over 500 days, up about 200 days from earlier this decade. These delays are in addition to the nearly nine months that precede most appeals for a hearing for the initial claim and reconsideration claim filing. In addition, if a hearing is denied claimants wait on average another 200 days for the decision from the Appeals Council.
The delays have wreaked havoc on the lives of thousands of individual Americans and their families. There have been many major media stories reported in the past year chronicling how disability applicants have lost their homes and families, and become more and more desperate as they wait for an answer from SSA. Many do not have health insurance, and without approval for Social Security and SSI, will not be able to get any insurance. Thus, their health continues to decline. Tragically, thousands of disability applicants have died while waiting for a hearing.
The Disability Determination Services (DDSs) have lost over 1,100 positions since the beginning of FY 2006. As a result, their staffing levels are down nearly 8%. The attrition rate in recent years at the DDSs has averaged 12.7 % versus 6.8% for Federal government employees. (This is due primarily to the lower wage level of these jobs compared to other jobs within the area where these examiners work.) This has forced the DDSs to invest large sums of money in training new staff. This diverts precious dollars away from making quicker decisions.
The Office of Disability Operations which handles the back end of disability cases currently has over 750,000 actions pending. This compares to 511,000 pending at the beginning of FY 2007. The average amount of time it takes for a Benefit Authorizer to process a case they are assigned as of the end of January 2008 is 401 days. For Claims Authorizers it is 484 days. This is a primary reason why Congressional offices receive so many requests for assistance regarding this part of the operation in SSA. This is occurring even though the Office of Disability Operations currently makes available 8 hours of overtime on Saturdays and 6 hours on Sunday. This Program Center has lost almost 600 positions since the beginning of FY 2005 and is losing a great deal of its institutional knowledge due to the retirement wave. The seven Program Centers nationwide have lost nearly 1,400 positions since the beginning of FY 2005, and can only replace 1 for every 2 losses this year.
In past years, funding shortages have forced SSA to cut back on program integrity activities, such as Continuing Disability Reviews (CDRs), which save $10.30 in program costs for every $1 spent in administrative dollars; and SSI eligibility redeterminations, which save $7 for every $1 spent in administration dollars. This year SSA plans to process only 235,000 CDRs. Due to reductions in processing CDRs in recent years, SSA is expected to have 1.225 million CDRs that should have been worked, but were instead deferred.
How Reduced Investments in SSA Field Offices Have Reduced Services
The level of administrative funding that SSA has received in recent years has affected the agency’s Field Office services in many ways. The following is a summary of a few key impacts:
51% of callers who try to reach a Field Office receive a busy signal.
Since the beginning of FY 2006, SSA’s 1,267 Field Offices have lost over 1,700 Claims Representatives and over 520 Service Representatives.
The combined impact of staffing reductions, the lack of funds for overtime to address ever-increasing workloads, and more visitors coming into Field Offices, has resulted in significant increases in waiting times in many offices for the public we serve. In many of SSA’s larger urban offices, it is not uncommon for the public to wait in excess of two to four hours to be served by an SSA representative.
This year SSA plans to process 1.2 million SSI redeterminations. This is 1 million fewer SSI redeterminations than were processed per year earlier this decade. These reductions are costing taxpayers a great deal of money: Billions of dollars. This is a key reason why the SSI benefit payment error rate has increased from 6.4% to 7.9% from FY 2005 to FY 2006.
Since FY 2006, SSA has reduced the number of Field Offices by about 17 due to closing or merging of offices as the agency attempts to handle its increasing workloads with insufficient resources. SSA has also closed hundreds of contact stations in the past decade.
Impact of the FY 2008 Budget on SSA’s Resources
SSA is planning to hire a net increase of at least 150 Administrative Law Judges this year with the increased funding for FY 2008. A judge clears an average of 500 hearings a year. This should begin to address the very large backlog of hearing claims.
SSA is planning on replacing these losses of positions during the actual period of this Fiscal Year:
7 of 10 losses in Field Offices
1.2 to 1 losses in Teleservice Centers
2 for 5 losses in Payment Centers
1 of 2 losses in the Disability Determinations Services (DDSs)
These replacements will not address the staffing losses that have occurred at the agency over the past several years and will only barely (except for the Teleservice Centers) address the losses this year. Thus, they will clearly not make these critical service components “whole.”
SSA’s New Workload Challenges: The Baby Boomers
SSA will continue to face significant workload challenges in future years. Due in large part to the aging of the baby boomers, the number of workers receiving Social Security retirement benefits will increase by 13 million over the next 10 years. 78 million baby boomers will be eligible for benefits, or over 16,000 per working day. In a recent survey of NCSSMA members, one SSA Field Office supervisor made this fairly typical comment: “We know that the baby boomers will be flooding SSA with applications. At the same time, SSA's baby boomer employees will be retiring too. We need to start hiring in the Field Offices so that the experienced employees can mentor/train the new employees to take over.”
Those retiring have important decisions to make about collecting their Social Security. Many will receive over a quarter of a million dollars in benefits. In fact the maximum benefit at full retirement this year is over $26,000 per year. There are many options to consider when filing for benefits. Should you take your benefit as early as 62 if you are retired? Should you wait until your full retirement age of 66? Or even delay drawing benefits until age 70 and receive an even larger amount? When should a spouse take benefits? When should a widow take benefits? How will working affect your benefits?
These are complicated decisions that will affect the retiree for the rest of their life, and SSA Field Offices have trained Claims Representatives that work with applicants to help them make these decisions. But in order to provide this very important service SSA needs to have a trained staff available.
On average, it takes 3 to 4 years for a Claims Representative to be fully trained. SSA makes a major investment in these positions. SSA is now facing a retirement wave of the employees brought on in the 1970s, resulting in a significant loss of the agency’s institutional knowledge. It is imperative that SSA has an adequate number of Claims Representatives, an extremely important position in the agency. The challenge of the retirement wave is described in this statement by a Field Office Assistant Manager in our recent survey: “We are trying to keep too many plates spinning with continual reductions in staff, due to retirement, promotions, and transfers. The best people; those with the institutional knowledge needed to keep this boat afloat, have been leaving, and will continue to leave. Quality of work has fallen by the wayside to ensure that percentages (goals) are met.”
It is also important to note that the increased effort by SSA to offer an expanded number of internet applications does not significantly reduce the need for trained staff in the Field Offices. Claims filed over the internet need to be thoroughly reviewed by Claims Representatives. There also needs to be a thorough discussion with each applicant for benefits after they file to ensure they understand their options for receiving benefits. This challenge can be seen by a comment by a Field Office Manager from our recent survey: “One would think that the internet availability and the TSCs are taking the majority of the workloads away from the Field Offices. But the reality is that the number of people visiting and calling the offices continues to increase. Having to take care of the public prevents us from processing pending workloads. Claims submitted in electronic format need Field Office intervention/review.”
SSA Lifetime Warranty Service
SSA provides a lifetime of ‘warranty service’ to its beneficiaries. As the number of beneficiaries continues to increase SSA will need an adequate level of staff to provide the service they deserve and expect. The primary position that provides this assistance is the Service Representative position in the Field Offices and Teleservice Centers.
The agency is beginning to see the leading edge of the increasing demands of providing this ‘warranty service’ with the baby boomers now filing. Last year, an average of 870,000 people visited SSA Field Offices each week. Since June 2007, Field Offices have seen a significant increase in the number of visitors every week compared to the same time last year in all but a couple of weeks. Since the beginning of 2008, SSA Field Offices have been averaging about 950,000 visitors per week. In two separate weeks this Calendar Year, SSA Field Offices set all time record highs for recorded visitors. One Manager stated this in our recent survey: “The staff usually feels overburdened with the never-ending volume of interviews. They are usually one after the other daily with no ending. They are in need of time at their desks to process the numerous listings and actions that go with them.”
The above quote is a fairly typical description of life in SSA Field Offices. The staffs are running all day and have little time to train and complete thorough reviews of their cases. In October 2007, the AARP Bulletin published an article sent to approximately 30 million households entitled, “Social Security Meltdown: Will Anyone be Left to Help You?” The article provided a number of examples of how service has been degrading in Field Offices. The article concludes with this statement by a retiring employee: “I think what Social Security is looking at is the perfect storm.” (See: http://www.aarp.org/bulletin/socialsec/the_line_starts_here.html.)
It is important to note that SSA pays out about $600 billion a year to all Social Security beneficiaries including $100 billion to Social Security Disability beneficiaries. It also pays out about $40 billion a year to SSI recipients. With these substantial amounts of funds being paid out it is imperative that the SSA staffs who administer these funds have the necessary training and time to accurately process cases. Otherwise it is pennywise and pound foolish.
SSA’s Inadequate Field Office Telephone Service
SSA also handles an enormous volume of telephone calls to local Field Offices and Teleservice Centers. About 120 million calls are received by Field Offices and Teleservice Centers every year. The 800 Number had a busy rate of 7.5% in FY 2007 and handled about 59 million calls through agents and automation. At the same time over 60 million phone calls are directed to SSA Field Offices each year. In FY 2006, 51% of callers who tried to reach a local Field Office received a busy signal.
The combined pressures of the increasing numbers of visitors and telephone calls can be seen in this recent statement in our survey by a Field Office Manager: “We are juggling the impossible. The employees are dedicated and proud of their service to the public. The shortage of staff makes it even harder to get done what needs to be done in an accurate and timely manner. We have all but given up on answering the phones because there is no one to do it!”
For many years SSA has stated that it wants to improve the 800 Number services. The FY 2009 budget states that SSA plans to have a 10% busy rate for FY 2009 and an average of a 330-second answering time for a call. (This is unchanged from FY 2008.) However, few resources have gone into improving the Field Office telephone service. There is no mention of any additional staffing resources being allocated in the FY 2009 budget to improve the telephone service provided by SSA’s Field Offices.
SSA Field Offices receive slightly more calls than the Teleservice Centers due in large part to language in the Omnibus Budget and Reconciliation Act of 1990. Two provisions in this act that apply are:
Social Security Notices-
Requires Social Security notices issued on or after July 1, 1991, to be written in clear and simple language and to contain the address and telephone number of the local office that serves the individual. If the notice is not produced in a local office, it must include the address of the local office servicing the individual and a telephone number through which that office can be reached.
Telephone Access-
Requires SSA to restore telephone access to local Social Security offices to the level generally available as of September 30, 1989, and to request the publication, in telephone directories, of telephone numbers and addresses of local offices that provide direct telephone access by May 4, 1991…
As a result of the provisions above, all SSA notices must include the local telephone number. This means the public has the telephone number of the local Field Office to call in addition to the 800 Number. SSA must also publish the Field Office phone number in the local phone directories and online for those offices that published their phone number as of September 30, 1989.
Consequently, SSA Field Offices are being overwhelmed with phone calls. This has created two classes of phone service: The 800 Number which provides a barely adequate level of service and the Field Office telephone service, which NCSSMA must describe as deplorable.
Program Integrity Workloads
Earlier this decade, SSA Field Offices were processing 2 million SSI redeterminations and 800,000 medical Continuing Disability Reviews (CDRs) per year. The FY 2009 budget calls for 1,486,000 SSI redeterminations and 329,000 medical CDRs. This is over 700,000 fewer redeterminations and over 450,000 fewer CDRs per year than earlier this decade.
In FY 2006, the agency’s SSI accuracy rate with respect to overpayments was 92.1 percent with an error rate of 7.9 percent, which represented improper payments of $3.2 billion. This is a statistically significant difference from the FY 2005 error rate with respect to overpayments of 6.4%, which represented $2.5 billion in improper payments. SSA directly attributes this increase in the error rate to the reduction in the number of redeterminations conducted in FY 2006.
In the Appendix (http://www.whitehouse.gov/omb/budget/fy2009/pdf/appendix/ssa.pdf) to the President’s FY 2009 budget, it states that $240 million should be used to perform additional CDRs and SSI redeterminations. The language indicates that of this $240 million, $40 million may be used to improve the disability claims process and $34 million may be directed to SSI asset verification. Page 1126 of the Appendix provides a cross reference to the Budget Reform Proposals chapter in the Analytical Perspectives volume.
(See: http://www.whitehouse.gov/omb/budget/fy2009/pdf/spec.pdf ).
Pages 216-219 of the Analytical Perspectives volume cover program cap adjustments and a possible reserve fund for SSA. These pages also mention the possibility of creating a scoring rule in the Budget Resolution for specific program integrity activities. The Analytical Perspectives state that a cap adjustment of $240 million would allow SSA to conduct an additional 140,000 CDRs and 635,000 SSI redeterminations in FY 2009. The Analytical Perspectives also mention that $74 million can be used to improve the disability process and SSI asset verification. This section also states that with $240 million of expenses there would be $2.6 billion in savings. (The Analytical Perspectives also propose a cap adjustment of $485 million in FY 2010 and $518 million in FY 2011.)
On pages 22 and 23 of the Executive Summary: Annual Performance Plan for FY 2009 and Revised Final Performance Plan for FY 2008 (http://www.ssa.gov/budget/2009cjapp.pdf) which are included in the SSA Justification of Estimates for Appropriations Committees (FY 2009), it states that SSA plans to increase the number of SSI redeterminations from 1,200,000 in FY 2008 to 1,486,000 in FY 2009. This is an increase of only 286,000 instead of the 635,000 if a reserve fund were to be set up. Pages 22 and 23 also mention that the number of medical CDRs will increase from 235,000 in FY 2008 to 329,000 in FY 2009. This is an increase of 94,000 instead of the 140,000 if a reserve fund were established.
The Analytical Perspectives pages indicate that by setting up a cap adjustment or adding a reserve fund of $240 million for FY 2009 it would allow the agency to process 349,000 more SSI redeterminations (635,000-286,000) and 46,000 more medical CDRs (140,000-94,000). In order to do this there would need to be a $240 million cap adjustment or the creation of a reserve fund above the President’s proposed funding level of $10.327 billion. Again this would create a savings of $2.6 billion.
Thus, if increased dollars could be set aside for SSA, the number of SSI redeterminations and medical CDRs that SSA performs could be increased substantially. This would result in a significant savings of funds for taxpayers.
The Case for Increased Investment in SSA
As mentioned earlier in this statement, the President’s proposed FY 2009 funding level for SSA’s administrative resources is $582 million above the FY 2008 level. Unfortunately, these additional funds would not provide sufficient funds to cover many very crucial funding needs for SSA. Examples of just a few of the areas that need to be addressed at the agency:
Nearly $400 million of the $582 million would be expended just to address mandatory cost increases such as rent, guards, postage, pay raises, and employee benefits.
The hearings backlog is projected to remain at 682,000 hearings in FY 2009, well over the 312,000 hearings pending at the beginning of this decade. Hearing processing times are projected to still be in the 500-day range in FY 2009. The Appeals Council is not projected to have any improvement in their processing times with the target time staying at 240 days. This is true even with the additional hiring of Administrative Law Judges and many initiatives undertaken by SSA to streamline the hearings process. Most of this is due to the increased number of hearings that are expected to be filed. As a result, more resources will need to be invested in reducing the hearings backlog to a much more acceptable level, thus lessening the severe financial, physical and emotional impact of the protracted wait times.
According to SSA’s Budget Appendix for FY 2009, SSA’s civilian full-time staff employment for Fiscal Year 2009 is expected to drop by about 864 employees. (See line 1001 on page 1126.) This, after already losing thousands of Claims Representatives, Service Representatives, DDS employees and employees in the Payment Centers in the last few years. Based on this level of staffing it is clear there will be little or no resources available to address the very deficient Field Office telephone service. NCSSMA has never seen SSA cost out what level of resources it would take to bring the Field Office telephone service up to the level provided by the 800 Number. We estimate that it would require many thousands more employees in local Field Offices to raise the level of service in these offices to an acceptable level. This single area of concern would justify a substantial increase in appropriated funding for SSA.
At a minimum, we believe SSA Field Offices need to add, on average, at least four members to the staff of an average size office of around 21 employees to address the phone traffic, deal with the increasing number of visitors, especially with the baby boomers filing, and process more SSI redeterminations and CDRs. This investment would certainly have a tangible long-term positive impact on providing improved services at SSA.
SSA Field Offices focus on hiring staff for a career. The base positions in Field Offices are the Claims Representative and Service Representative positions. It is widely acknowledged that the Field Office structure also serves as the future “farm club” for the rest of SSA, as these positions provide the in-depth understanding of the Social Security program necessary to work in management and other staff positions in SSA. An investment in additional Field Office staff would have many years of long-term return for SSA as a whole.
We also believe that a major infusion of resources is needed in the Office of Disability Operations which has over 750,000 actions pending. As mentioned above, the average length of time it takes for a Benefit Authorizer to process a case they are assigned as of the end of January 2008 is 401 days. For Claims Authorizers it is 484 days.
The DDSs have also suffered significant staffing losses. They will need more staff to process additional CDRs. In addition, with increased staffing levels they could review certain hearing cases to see if they can be approved. Since the DDS started looking at some of the hearings last year, they have approved nearly 13,000 cases.
One area where we believe that an increased investment in the disability area would reduce the backlogs and improve the fairness of the program is a truly random review of all initial and reconsideration disability cases. The review would be equally split between approvals and denials. Currently the law requires that 50% of all approved initial and reconsideration Title II disability cases and Title XVI adult disability and blindness cases be reviewed before a final approval is made. The intent of this was to lead to more consistency in approvals in all states as this review is done by SSA (a Federal Review) not the by DDSs.
However no more than 5% of the disapproved cases are reviewed. Thus, at least 95% of the denied cases are not reviewed. As a result, there is no early opportunity to prevent some cases from heading to the Hearings Office. This revised review method might actually be less expensive in the long run as it could reduce the very high cost resulting from a hearing on a case.
The Teleservice Centers need more staff to support the internet workload. The public needs to have online and phone support to contact when they have questions as they are filling out an internet transaction.
What will the cost be to provide these services? If a budget mechanism could be implemented to establish a reserve fund or cap adjustment for SSA this would certainly help pay for additional CDRs and SSI redeterminations to be processed. The President’s budget suggests this amount should be $240 million in FY 2009, $485 million in FY 2010 and $518 million in FY 2011. NCSSMA supports placing at least $240 million into this fund. This is a very wise investment as $240 million would save taxpayers $2.6 billion in savings over a ten-year period.
In addition we support increased funding to begin to bring the Field Office telephone service up to the level of service provided by the Teleservice Centers and to provide the necessary staff to support the increasing number of visitors who need to be provided with a high level of quality advice. The Office of Disability Operations desperately needs more staff. This component receives a very high number of Congressional inquiries. The DDSs also need additional funding to improve their processing of disability cases and to assist the Hearings Offices.
And finally, more resources directed to the Hearings Offices and Appeals Council would lower the backlog.
The AARP Bulletin ran a second article in November 2007 entitled, “They Died Waiting—Lost in Social Security Hell.” (See: http://www.aarp.org/bulletin/socialsec/sick_of_waiting.html). This article along with well over 100 other articles and news reports from all over the country published in the last year describe in vivid detail the damage that the growing backlogs have caused to so many Americans in recent years. We believe we must find a solution to this situation, and soon.
We recognize that Congress will not be able to fund all of these resource needs in FY 2009. The SSA Advocacy Group sent a letter signed by 44 group members to the Office of Management and Budget in November suggesting that SSA’s funding for FY 2009 should be $11.0 billion. We certainly recognize this would represent a considerable increase in SSA’s budget. This is the amount that we believe is necessary to address the many challenges we have cited above. But, at the same time, we believe an additional $200-$250 million above a potential reserve fund of no less than $240 million would begin to immediately address the areas where SSA’s services need to be improved and upgraded. (The reserve fund could be higher to increase savings.) Therefore, the total SSA FY 2009 administrative funding we recommend for FY 2009 is no less than $10.767-$10.817 billion ($10.527-$10.577 billion plus a reserve fund of no less than $240 million). We realize that this is a significant increase in funding, but truly believe it is the level of funding necessary to begin to address the growing challenges faced by the agency. If we do not address these challenges now, there will be a very real and negative impact on the citizens that we are obligated to serve every day.
It is very important to note that SSA’s staff is at its lowest level since 1972, prior to SSA’s assumption of the Supplemental Security Income program, while SSA’s workloads are growing and will continue to grow at a very fast pace. In addition to the increased responsibilities mentioned above, SSA has also assumed responsibility for processing applications for the Low Income Subsidy and Income Related Medicare Adjustment provisions of the Medicare Modernization Act. With staff adjustments made only in 2005, and staffing gains due to MMA long since been lost to attrition.
SSA has a trust fund of about $2.2 trillion dollars. The Social Security Trust Fund is intended to pay benefits to future beneficiaries and finance the operations of the Social Security Administration. The additional funding and investment we are proposing for SSA represent only a very small fraction of $2.2 trillion. Certainly the workers of America deserve to have their taxes utilized to provide a fair and adequate level of service for the very benefits they worked so hard to receive.
Conclusion
We believe that the American public demands and deserves to receive good and timely service for the tax dollars they have paid to receive Social Security. We urge that SSA be given increased funding above the President’s FY 2009 budget request. This additional investment in SSA would certainly begin the necessary process to restore the levels of service that the public deserves from SSA.
On behalf of the members of the NCSSMA and in support of the SSA Advocacy Group, I thank you again for the opportunity to submit this written testimony to the Subcommittee. NCSSMA members are not only dedicated SSA employees, but they are also personally committed to the mission of the agency and to providing the best service possible to the American public. We respectfully ask that you consider our comments and would appreciate any assistance you can provide in ensuring that the American public receives the necessary service that they deserve from the Social Security Administration.
NCSSMA is a membership organization of nearly 3,500 Social Security Administration (SSA) managers and supervisors who provide leadership in over 1,300 Field Offices and Teleservice Centers throughout the country. We are the front-line service providers for SSA in communities all over the nation. We are also the federal employees with whom many of your staff members work to resolve problems and issues for your constituents who receive Social Security retirement benefits, survivors or disability benefits, or Supplemental Security Income. From the time our organization was founded over thirty-seven years ago, NCSSMA has been a strong advocate of efficient and prompt locally delivered services nationwide to meet the variety of needs of beneficiaries, claimants, and the general public. We consider our top priority to be a strong and stable Social Security Administration, one that delivers quality and prompt community based service to the people we serve, your constituents.
The Fiscal Year 2009 Budget and Past Budgets
The President has proposed a budget of $10.327 billion for SSA’s Limitation on Administrative Expenses (LAE) account for FY 2009. This is an increase of $582 million over the FY 2008 funding level. It is also $730 million more than what the President proposed for FY 2007. This significant increase in the President’s recommended funding level for SSA is quite a departure from budget requests that have been proposed in recent years. In FY 2007, the President’s proposed budget for SSA’s administrative funding was only $100 million over the proposed funding level for FY 2006.
We are supportive of this increased funding proposed by the President. We are also appreciative of the fact that Congress appropriated $150 million more for SSA in FY 2008 than the President recommended. This reverses a five-year trend in which SSA has been appropriated on average about $150 million less per year than the President’s budget request. However, we believe that in order to meet all of SSA’s service delivery responsibilities additional funding above the President’s budget is necessary. We believe an additional $200-$250 million above a potential reserve fund of no less than $240 million for program integrity workloads would begin to address the areas where SSA’s services must be improved and upgraded. Thus we recommend total SSA FY 2009 administrative funding be no less than $10.767-$10.817 billion. Our testimony below will detail the reasons why we believe additional resources are necessary.
How Reduced Investments Have Affected SSA Disability Services
The level of administrative funding that SSA has received in recent years has affected the agency’s delivery of disability services in many ways. The following is a summary of a few key impacts:
As of January 2008 about 751,000 cases, a near record high, were awaiting a hearing on an appealed claim, compared to only 312,000 cases at the beginning of FY 2000. Nearly 300,000 of these appeals are over 1 year old. Approximately 91,000 veterans have pending hearings. The average processing time for a hearing is currently over 500 days, up about 200 days from earlier this decade. These delays are in addition to the nearly nine months that precede most appeals for a hearing for the initial claim and reconsideration claim filing. In addition, if a hearing is denied claimants wait on average another 200 days for the decision from the Appeals Council.
The delays have wreaked havoc on the lives of thousands of individual Americans and their families. There have been many major media stories reported in the past year chronicling how disability applicants have lost their homes and families, and become more and more desperate as they wait for an answer from SSA. Many do not have health insurance, and without approval for Social Security and SSI, will not be able to get any insurance. Thus, their health continues to decline. Tragically, thousands of disability applicants have died while waiting for a hearing.
The Disability Determination Services (DDSs) have lost over 1,100 positions since the beginning of FY 2006. As a result, their staffing levels are down nearly 8%. The attrition rate in recent years at the DDSs has averaged 12.7 % versus 6.8% for Federal government employees. (This is due primarily to the lower wage level of these jobs compared to other jobs within the area where these examiners work.) This has forced the DDSs to invest large sums of money in training new staff. This diverts precious dollars away from making quicker decisions.
The Office of Disability Operations which handles the back end of disability cases currently has over 750,000 actions pending. This compares to 511,000 pending at the beginning of FY 2007. The average amount of time it takes for a Benefit Authorizer to process a case they are assigned as of the end of January 2008 is 401 days. For Claims Authorizers it is 484 days. This is a primary reason why Congressional offices receive so many requests for assistance regarding this part of the operation in SSA. This is occurring even though the Office of Disability Operations currently makes available 8 hours of overtime on Saturdays and 6 hours on Sunday. This Program Center has lost almost 600 positions since the beginning of FY 2005 and is losing a great deal of its institutional knowledge due to the retirement wave. The seven Program Centers nationwide have lost nearly 1,400 positions since the beginning of FY 2005, and can only replace 1 for every 2 losses this year.
In past years, funding shortages have forced SSA to cut back on program integrity activities, such as Continuing Disability Reviews (CDRs), which save $10.30 in program costs for every $1 spent in administrative dollars; and SSI eligibility redeterminations, which save $7 for every $1 spent in administration dollars. This year SSA plans to process only 235,000 CDRs. Due to reductions in processing CDRs in recent years, SSA is expected to have 1.225 million CDRs that should have been worked, but were instead deferred.
How Reduced Investments in SSA Field Offices Have Reduced Services
The level of administrative funding that SSA has received in recent years has affected the agency’s Field Office services in many ways. The following is a summary of a few key impacts:
51% of callers who try to reach a Field Office receive a busy signal.
Since the beginning of FY 2006, SSA’s 1,267 Field Offices have lost over 1,700 Claims Representatives and over 520 Service Representatives.
The combined impact of staffing reductions, the lack of funds for overtime to address ever-increasing workloads, and more visitors coming into Field Offices, has resulted in significant increases in waiting times in many offices for the public we serve. In many of SSA’s larger urban offices, it is not uncommon for the public to wait in excess of two to four hours to be served by an SSA representative.
This year SSA plans to process 1.2 million SSI redeterminations. This is 1 million fewer SSI redeterminations than were processed per year earlier this decade. These reductions are costing taxpayers a great deal of money: Billions of dollars. This is a key reason why the SSI benefit payment error rate has increased from 6.4% to 7.9% from FY 2005 to FY 2006.
Since FY 2006, SSA has reduced the number of Field Offices by about 17 due to closing or merging of offices as the agency attempts to handle its increasing workloads with insufficient resources. SSA has also closed hundreds of contact stations in the past decade.
Impact of the FY 2008 Budget on SSA’s Resources
SSA is planning to hire a net increase of at least 150 Administrative Law Judges this year with the increased funding for FY 2008. A judge clears an average of 500 hearings a year. This should begin to address the very large backlog of hearing claims.
SSA is planning on replacing these losses of positions during the actual period of this Fiscal Year:
7 of 10 losses in Field Offices
1.2 to 1 losses in Teleservice Centers
2 for 5 losses in Payment Centers
1 of 2 losses in the Disability Determinations Services (DDSs)
These replacements will not address the staffing losses that have occurred at the agency over the past several years and will only barely (except for the Teleservice Centers) address the losses this year. Thus, they will clearly not make these critical service components “whole.”
SSA’s New Workload Challenges: The Baby Boomers
SSA will continue to face significant workload challenges in future years. Due in large part to the aging of the baby boomers, the number of workers receiving Social Security retirement benefits will increase by 13 million over the next 10 years. 78 million baby boomers will be eligible for benefits, or over 16,000 per working day. In a recent survey of NCSSMA members, one SSA Field Office supervisor made this fairly typical comment: “We know that the baby boomers will be flooding SSA with applications. At the same time, SSA's baby boomer employees will be retiring too. We need to start hiring in the Field Offices so that the experienced employees can mentor/train the new employees to take over.”
Those retiring have important decisions to make about collecting their Social Security. Many will receive over a quarter of a million dollars in benefits. In fact the maximum benefit at full retirement this year is over $26,000 per year. There are many options to consider when filing for benefits. Should you take your benefit as early as 62 if you are retired? Should you wait until your full retirement age of 66? Or even delay drawing benefits until age 70 and receive an even larger amount? When should a spouse take benefits? When should a widow take benefits? How will working affect your benefits?
These are complicated decisions that will affect the retiree for the rest of their life, and SSA Field Offices have trained Claims Representatives that work with applicants to help them make these decisions. But in order to provide this very important service SSA needs to have a trained staff available.
On average, it takes 3 to 4 years for a Claims Representative to be fully trained. SSA makes a major investment in these positions. SSA is now facing a retirement wave of the employees brought on in the 1970s, resulting in a significant loss of the agency’s institutional knowledge. It is imperative that SSA has an adequate number of Claims Representatives, an extremely important position in the agency. The challenge of the retirement wave is described in this statement by a Field Office Assistant Manager in our recent survey: “We are trying to keep too many plates spinning with continual reductions in staff, due to retirement, promotions, and transfers. The best people; those with the institutional knowledge needed to keep this boat afloat, have been leaving, and will continue to leave. Quality of work has fallen by the wayside to ensure that percentages (goals) are met.”
It is also important to note that the increased effort by SSA to offer an expanded number of internet applications does not significantly reduce the need for trained staff in the Field Offices. Claims filed over the internet need to be thoroughly reviewed by Claims Representatives. There also needs to be a thorough discussion with each applicant for benefits after they file to ensure they understand their options for receiving benefits. This challenge can be seen by a comment by a Field Office Manager from our recent survey: “One would think that the internet availability and the TSCs are taking the majority of the workloads away from the Field Offices. But the reality is that the number of people visiting and calling the offices continues to increase. Having to take care of the public prevents us from processing pending workloads. Claims submitted in electronic format need Field Office intervention/review.”
SSA Lifetime Warranty Service
SSA provides a lifetime of ‘warranty service’ to its beneficiaries. As the number of beneficiaries continues to increase SSA will need an adequate level of staff to provide the service they deserve and expect. The primary position that provides this assistance is the Service Representative position in the Field Offices and Teleservice Centers.
The agency is beginning to see the leading edge of the increasing demands of providing this ‘warranty service’ with the baby boomers now filing. Last year, an average of 870,000 people visited SSA Field Offices each week. Since June 2007, Field Offices have seen a significant increase in the number of visitors every week compared to the same time last year in all but a couple of weeks. Since the beginning of 2008, SSA Field Offices have been averaging about 950,000 visitors per week. In two separate weeks this Calendar Year, SSA Field Offices set all time record highs for recorded visitors. One Manager stated this in our recent survey: “The staff usually feels overburdened with the never-ending volume of interviews. They are usually one after the other daily with no ending. They are in need of time at their desks to process the numerous listings and actions that go with them.”
The above quote is a fairly typical description of life in SSA Field Offices. The staffs are running all day and have little time to train and complete thorough reviews of their cases. In October 2007, the AARP Bulletin published an article sent to approximately 30 million households entitled, “Social Security Meltdown: Will Anyone be Left to Help You?” The article provided a number of examples of how service has been degrading in Field Offices. The article concludes with this statement by a retiring employee: “I think what Social Security is looking at is the perfect storm.” (See: http://www.aarp.org/bulletin/socialsec/the_line_starts_here.html.)
It is important to note that SSA pays out about $600 billion a year to all Social Security beneficiaries including $100 billion to Social Security Disability beneficiaries. It also pays out about $40 billion a year to SSI recipients. With these substantial amounts of funds being paid out it is imperative that the SSA staffs who administer these funds have the necessary training and time to accurately process cases. Otherwise it is pennywise and pound foolish.
SSA’s Inadequate Field Office Telephone Service
SSA also handles an enormous volume of telephone calls to local Field Offices and Teleservice Centers. About 120 million calls are received by Field Offices and Teleservice Centers every year. The 800 Number had a busy rate of 7.5% in FY 2007 and handled about 59 million calls through agents and automation. At the same time over 60 million phone calls are directed to SSA Field Offices each year. In FY 2006, 51% of callers who tried to reach a local Field Office received a busy signal.
The combined pressures of the increasing numbers of visitors and telephone calls can be seen in this recent statement in our survey by a Field Office Manager: “We are juggling the impossible. The employees are dedicated and proud of their service to the public. The shortage of staff makes it even harder to get done what needs to be done in an accurate and timely manner. We have all but given up on answering the phones because there is no one to do it!”
For many years SSA has stated that it wants to improve the 800 Number services. The FY 2009 budget states that SSA plans to have a 10% busy rate for FY 2009 and an average of a 330-second answering time for a call. (This is unchanged from FY 2008.) However, few resources have gone into improving the Field Office telephone service. There is no mention of any additional staffing resources being allocated in the FY 2009 budget to improve the telephone service provided by SSA’s Field Offices.
SSA Field Offices receive slightly more calls than the Teleservice Centers due in large part to language in the Omnibus Budget and Reconciliation Act of 1990. Two provisions in this act that apply are:
Social Security Notices-
Requires Social Security notices issued on or after July 1, 1991, to be written in clear and simple language and to contain the address and telephone number of the local office that serves the individual. If the notice is not produced in a local office, it must include the address of the local office servicing the individual and a telephone number through which that office can be reached.
Telephone Access-
Requires SSA to restore telephone access to local Social Security offices to the level generally available as of September 30, 1989, and to request the publication, in telephone directories, of telephone numbers and addresses of local offices that provide direct telephone access by May 4, 1991…
As a result of the provisions above, all SSA notices must include the local telephone number. This means the public has the telephone number of the local Field Office to call in addition to the 800 Number. SSA must also publish the Field Office phone number in the local phone directories and online for those offices that published their phone number as of September 30, 1989.
Consequently, SSA Field Offices are being overwhelmed with phone calls. This has created two classes of phone service: The 800 Number which provides a barely adequate level of service and the Field Office telephone service, which NCSSMA must describe as deplorable.
Program Integrity Workloads
Earlier this decade, SSA Field Offices were processing 2 million SSI redeterminations and 800,000 medical Continuing Disability Reviews (CDRs) per year. The FY 2009 budget calls for 1,486,000 SSI redeterminations and 329,000 medical CDRs. This is over 700,000 fewer redeterminations and over 450,000 fewer CDRs per year than earlier this decade.
In FY 2006, the agency’s SSI accuracy rate with respect to overpayments was 92.1 percent with an error rate of 7.9 percent, which represented improper payments of $3.2 billion. This is a statistically significant difference from the FY 2005 error rate with respect to overpayments of 6.4%, which represented $2.5 billion in improper payments. SSA directly attributes this increase in the error rate to the reduction in the number of redeterminations conducted in FY 2006.
In the Appendix (http://www.whitehouse.gov/omb/budget/fy2009/pdf/appendix/ssa.pdf) to the President’s FY 2009 budget, it states that $240 million should be used to perform additional CDRs and SSI redeterminations. The language indicates that of this $240 million, $40 million may be used to improve the disability claims process and $34 million may be directed to SSI asset verification. Page 1126 of the Appendix provides a cross reference to the Budget Reform Proposals chapter in the Analytical Perspectives volume.
(See: http://www.whitehouse.gov/omb/budget/fy2009/pdf/spec.pdf ).
Pages 216-219 of the Analytical Perspectives volume cover program cap adjustments and a possible reserve fund for SSA. These pages also mention the possibility of creating a scoring rule in the Budget Resolution for specific program integrity activities. The Analytical Perspectives state that a cap adjustment of $240 million would allow SSA to conduct an additional 140,000 CDRs and 635,000 SSI redeterminations in FY 2009. The Analytical Perspectives also mention that $74 million can be used to improve the disability process and SSI asset verification. This section also states that with $240 million of expenses there would be $2.6 billion in savings. (The Analytical Perspectives also propose a cap adjustment of $485 million in FY 2010 and $518 million in FY 2011.)
On pages 22 and 23 of the Executive Summary: Annual Performance Plan for FY 2009 and Revised Final Performance Plan for FY 2008 (http://www.ssa.gov/budget/2009cjapp.pdf) which are included in the SSA Justification of Estimates for Appropriations Committees (FY 2009), it states that SSA plans to increase the number of SSI redeterminations from 1,200,000 in FY 2008 to 1,486,000 in FY 2009. This is an increase of only 286,000 instead of the 635,000 if a reserve fund were to be set up. Pages 22 and 23 also mention that the number of medical CDRs will increase from 235,000 in FY 2008 to 329,000 in FY 2009. This is an increase of 94,000 instead of the 140,000 if a reserve fund were established.
The Analytical Perspectives pages indicate that by setting up a cap adjustment or adding a reserve fund of $240 million for FY 2009 it would allow the agency to process 349,000 more SSI redeterminations (635,000-286,000) and 46,000 more medical CDRs (140,000-94,000). In order to do this there would need to be a $240 million cap adjustment or the creation of a reserve fund above the President’s proposed funding level of $10.327 billion. Again this would create a savings of $2.6 billion.
Thus, if increased dollars could be set aside for SSA, the number of SSI redeterminations and medical CDRs that SSA performs could be increased substantially. This would result in a significant savings of funds for taxpayers.
The Case for Increased Investment in SSA
As mentioned earlier in this statement, the President’s proposed FY 2009 funding level for SSA’s administrative resources is $582 million above the FY 2008 level. Unfortunately, these additional funds would not provide sufficient funds to cover many very crucial funding needs for SSA. Examples of just a few of the areas that need to be addressed at the agency:
Nearly $400 million of the $582 million would be expended just to address mandatory cost increases such as rent, guards, postage, pay raises, and employee benefits.
The hearings backlog is projected to remain at 682,000 hearings in FY 2009, well over the 312,000 hearings pending at the beginning of this decade. Hearing processing times are projected to still be in the 500-day range in FY 2009. The Appeals Council is not projected to have any improvement in their processing times with the target time staying at 240 days. This is true even with the additional hiring of Administrative Law Judges and many initiatives undertaken by SSA to streamline the hearings process. Most of this is due to the increased number of hearings that are expected to be filed. As a result, more resources will need to be invested in reducing the hearings backlog to a much more acceptable level, thus lessening the severe financial, physical and emotional impact of the protracted wait times.
According to SSA’s Budget Appendix for FY 2009, SSA’s civilian full-time staff employment for Fiscal Year 2009 is expected to drop by about 864 employees. (See line 1001 on page 1126.) This, after already losing thousands of Claims Representatives, Service Representatives, DDS employees and employees in the Payment Centers in the last few years. Based on this level of staffing it is clear there will be little or no resources available to address the very deficient Field Office telephone service. NCSSMA has never seen SSA cost out what level of resources it would take to bring the Field Office telephone service up to the level provided by the 800 Number. We estimate that it would require many thousands more employees in local Field Offices to raise the level of service in these offices to an acceptable level. This single area of concern would justify a substantial increase in appropriated funding for SSA.
At a minimum, we believe SSA Field Offices need to add, on average, at least four members to the staff of an average size office of around 21 employees to address the phone traffic, deal with the increasing number of visitors, especially with the baby boomers filing, and process more SSI redeterminations and CDRs. This investment would certainly have a tangible long-term positive impact on providing improved services at SSA.
SSA Field Offices focus on hiring staff for a career. The base positions in Field Offices are the Claims Representative and Service Representative positions. It is widely acknowledged that the Field Office structure also serves as the future “farm club” for the rest of SSA, as these positions provide the in-depth understanding of the Social Security program necessary to work in management and other staff positions in SSA. An investment in additional Field Office staff would have many years of long-term return for SSA as a whole.
We also believe that a major infusion of resources is needed in the Office of Disability Operations which has over 750,000 actions pending. As mentioned above, the average length of time it takes for a Benefit Authorizer to process a case they are assigned as of the end of January 2008 is 401 days. For Claims Authorizers it is 484 days.
The DDSs have also suffered significant staffing losses. They will need more staff to process additional CDRs. In addition, with increased staffing levels they could review certain hearing cases to see if they can be approved. Since the DDS started looking at some of the hearings last year, they have approved nearly 13,000 cases.
One area where we believe that an increased investment in the disability area would reduce the backlogs and improve the fairness of the program is a truly random review of all initial and reconsideration disability cases. The review would be equally split between approvals and denials. Currently the law requires that 50% of all approved initial and reconsideration Title II disability cases and Title XVI adult disability and blindness cases be reviewed before a final approval is made. The intent of this was to lead to more consistency in approvals in all states as this review is done by SSA (a Federal Review) not the by DDSs.
However no more than 5% of the disapproved cases are reviewed. Thus, at least 95% of the denied cases are not reviewed. As a result, there is no early opportunity to prevent some cases from heading to the Hearings Office. This revised review method might actually be less expensive in the long run as it could reduce the very high cost resulting from a hearing on a case.
The Teleservice Centers need more staff to support the internet workload. The public needs to have online and phone support to contact when they have questions as they are filling out an internet transaction.
What will the cost be to provide these services? If a budget mechanism could be implemented to establish a reserve fund or cap adjustment for SSA this would certainly help pay for additional CDRs and SSI redeterminations to be processed. The President’s budget suggests this amount should be $240 million in FY 2009, $485 million in FY 2010 and $518 million in FY 2011. NCSSMA supports placing at least $240 million into this fund. This is a very wise investment as $240 million would save taxpayers $2.6 billion in savings over a ten-year period.
In addition we support increased funding to begin to bring the Field Office telephone service up to the level of service provided by the Teleservice Centers and to provide the necessary staff to support the increasing number of visitors who need to be provided with a high level of quality advice. The Office of Disability Operations desperately needs more staff. This component receives a very high number of Congressional inquiries. The DDSs also need additional funding to improve their processing of disability cases and to assist the Hearings Offices.
And finally, more resources directed to the Hearings Offices and Appeals Council would lower the backlog.
The AARP Bulletin ran a second article in November 2007 entitled, “They Died Waiting—Lost in Social Security Hell.” (See: http://www.aarp.org/bulletin/socialsec/sick_of_waiting.html). This article along with well over 100 other articles and news reports from all over the country published in the last year describe in vivid detail the damage that the growing backlogs have caused to so many Americans in recent years. We believe we must find a solution to this situation, and soon.
We recognize that Congress will not be able to fund all of these resource needs in FY 2009. The SSA Advocacy Group sent a letter signed by 44 group members to the Office of Management and Budget in November suggesting that SSA’s funding for FY 2009 should be $11.0 billion. We certainly recognize this would represent a considerable increase in SSA’s budget. This is the amount that we believe is necessary to address the many challenges we have cited above. But, at the same time, we believe an additional $200-$250 million above a potential reserve fund of no less than $240 million would begin to immediately address the areas where SSA’s services need to be improved and upgraded. (The reserve fund could be higher to increase savings.) Therefore, the total SSA FY 2009 administrative funding we recommend for FY 2009 is no less than $10.767-$10.817 billion ($10.527-$10.577 billion plus a reserve fund of no less than $240 million). We realize that this is a significant increase in funding, but truly believe it is the level of funding necessary to begin to address the growing challenges faced by the agency. If we do not address these challenges now, there will be a very real and negative impact on the citizens that we are obligated to serve every day.
It is very important to note that SSA’s staff is at its lowest level since 1972, prior to SSA’s assumption of the Supplemental Security Income program, while SSA’s workloads are growing and will continue to grow at a very fast pace. In addition to the increased responsibilities mentioned above, SSA has also assumed responsibility for processing applications for the Low Income Subsidy and Income Related Medicare Adjustment provisions of the Medicare Modernization Act. With staff adjustments made only in 2005, and staffing gains due to MMA long since been lost to attrition.
SSA has a trust fund of about $2.2 trillion dollars. The Social Security Trust Fund is intended to pay benefits to future beneficiaries and finance the operations of the Social Security Administration. The additional funding and investment we are proposing for SSA represent only a very small fraction of $2.2 trillion. Certainly the workers of America deserve to have their taxes utilized to provide a fair and adequate level of service for the very benefits they worked so hard to receive.
Conclusion
We believe that the American public demands and deserves to receive good and timely service for the tax dollars they have paid to receive Social Security. We urge that SSA be given increased funding above the President’s FY 2009 budget request. This additional investment in SSA would certainly begin the necessary process to restore the levels of service that the public deserves from SSA.
On behalf of the members of the NCSSMA and in support of the SSA Advocacy Group, I thank you again for the opportunity to submit this written testimony to the Subcommittee. NCSSMA members are not only dedicated SSA employees, but they are also personally committed to the mission of the agency and to providing the best service possible to the American public. We respectfully ask that you consider our comments and would appreciate any assistance you can provide in ensuring that the American public receives the necessary service that they deserve from the Social Security Administration.
