Statement of The Honorable Barbara Kennelly, President and Chief Executive Officer, National Committee to Preserve Social Security and Medicare

Testimony Before the Subcommittee on Social Security
of the House Committee on Ways and Means

May 06, 2008

Chairman McNulty and Members of the Subcommittee, thank you for inviting me to testify today about the impact of a national employment verification system on the Social Security Administration’s ability to serve retirees, people with disabilities, and workers of all ages. As a former Member of this Committee, I am delighted to appear before you on behalf of the millions of senior citizens who are members and supporters of the National Committee to Preserve Social Security and Medicare.

Mr. Chairman, America’s seniors are very concerned about the negative consequences of several proposals before you today that would assign new immigration-related workloads to an already overburdened Social Security Administration (SSA). These proposals would divert SSA from its central mission of serving its own beneficiaries and would ask it instead to create a national employment verification system, using SSA databases and employees, to confirm the employment status of every American worker. As the President and CEO of an organization that has worked tirelessly to enhance the financial resources of the Social Security Administration, I am deeply troubled by the effect this new, mandatory workload would have on the agency’s ability to continue providing services to its core beneficiaries – the American workers who contribute their Social Security payroll taxes year after year to this program and who have earned a right to collect Social Security benefits in a timely manner.

I cannot say strongly enough what a serious disservice would be done to America’s seniors, people with disabilities, and workers of all ages if Social Security were required to carry the burden of the enormous, costly and unrelated workload imposed by these immigration-related bills. The National Committee was dismayed to learn that, according to the Congressional Budget Office, the cost to SSA of the major immigration proposal would be more than $1 billion – nearly 10 percent of the agency’s administrative budget – in just the first year of implementation. Over 10 years, the plan would cost over $9 billion. Even though the authors of these bills have the highest expectations that sufficient appropriations will be provided to cover these costs, recent experience with Medicare Part D leads us to believe that SSA would not be provided with sufficient resources to handle this massive new workload.

As you are well aware, the Social Security Administration is already facing several significant challenges, chief among them a disability claims adjudication crisis. Disability cases are piling up and needy people are waiting years to receive their benefits. While SSA is working hard to slow the growth of these backlogged cases and to reduce waiting times at the initial stages of the disability process, the number of applications continues to increase and pending cases at the initial level remain stubbornly above 500,000. At the hearing level, over 750,000 people are currently awaiting a decision by an administrative law judge. As of February 2008, the average wait for a decision by an adjudicator was over 500 days. Conditions are likely to get worse before they get better. With the Baby Boom generation just moving through its most disability-prone years, SSA will surely be devoting much of its scarce resources to the disability claims process for some time to come.

At the same time that SSA is straining under the increasing workload of disability cases, the agency is coping with increased strains on its current customer services. The disability backlog challenge has diverted precious resources away from other important workloads and threatened the quality of service SSA provides. Already phones calls from people needing assistance from SSA are going unanswered; lines at local Social Security offices are increasing; and, as many of you know, some local offices are being closed. These are all services central to SSA customer service, and they are all suffering from a significant lack of resources.

While facing these demands on current services, the front edge of the Baby Boom generation is just beginning to move into its retirement years. In January, Kathleen Casey-Kirschling, the nation's first Baby Boomer, applied for Social Security retirement benefits. While she made her application through an online procedure which SSA hopes to continue to test and streamline, she will be followed by nearly 80 million additional Boomers who will also expect swift and accurate processing of their retirement claims.

The American people have come to expect a high level of service from their Social Security Administration. SSA has been a model among both public and private institutions in the efficient administration of a very large and vital program. Every month, the Social Security Administration delivers Social Security retirement, survivor and disability benefits on time and in the correct amounts to 50 million people – one in every six Americans. At the same time, the agency collects and records information on the annual earnings of more than 165 million current workers – nearly ninety-six percent of the American workforce. Year-in and year-out, SSA administers the bedrock retirement, life insurance and disability insurance plans of nearly every American. All of this is accomplished at the unmatched administrative cost of less than one percent. This is a remarkable record that millions of Americans – especially America’s seniors – have come to rely upon.

Older Americans aren’t the only ones who have benefited from Social Security’s steadfast focus on paying benefits with speed and accuracy. On October 3, 2001, only three weeks after the horrible events of September 11^th, Social Security made its first payments to the survivors of those killed on that day. Today over 850 widowed spouses and almost 2,400 children of people killed in the attacks receive earned Social Security benefits. Similarly, after Hurricane Katrina, the Social Security Administration made a committed effort to seek out Social Security beneficiaries so that their payments could be continued. SSA employees were at evacuation centers and other shelters to make sure that those people who no longer had mailboxes or banks could receive their Social Security benefits on time.

SSA’s administrative budget has been severely underfunded for some time. For many years, the agency has been deprived of the funding needed to keep up with its increased workloads. From fiscal year 2000 to 2007, the President requested over $3 billion less than the Commissioner of Social Security had requested to run the agency, and the Congress appropriated $1 billion less than the President’s request. These reductions were occurring at the same time the agency was being asked to administer portions of the new Medicare prescription drug program and take on the homeland security pilot program. I need not remind you that SSA has also suffered severe reductions in staffing over many decades.

In fiscal year 2008, the funding picture for SSA improved somewhat. For that fiscal year, Congress appropriated $150 million more than the President had requested. SSA has made good use of the money by hiring more Administrative Law Judges, but SSA’s funding concerns continue. While the FY 2009 budget resolutions in both the House and Senate have made room for an additional $240 million for SSA, the appropriations process is not yet complete. Competition for limited resources remains intense, and appropriations for essential services continue to be subjected to threats of a Presidential veto.

Some supporters of the legislation before the Subcommittee have suggested that, if SSA receives additional funding to develop a national employment verification system, the agency’s overall computer systems would be improved. Nothing could be further from reality. As past experience demonstrates, new electronic processes take years to develop, test, and refine. They divert resources and employees away from other pressing workloads. People familiar with SSA’s current efforts to reform the disability process will recognize the many “developing” processes that begin with the letter “E” – eDib and eCAT and many more. I am very concerned that “E-Verify” would turn out to be a much larger, complex and costly project than any of its authors can currently envision. While SSA employees have continued to have a “can do” attitude in the face of many hurdles, they may be unable to overcome this new obstacle placed in their path.

A large portion of the workload and cost produced by this legislation would result from one provision. Under the proposal, in any case where personal or work status information provided by the employer failed to match that in SSA’s databases, a “non-confirmation” notice would be sent out. The employee would be required to correct any inaccurate information within a brief period of time or be terminated by his employer. Thus, in order to keep his job, a legitimate worker would have to contact SSA or the Department of Homeland Security to correct the mismatch. Experts project that this proposal would result in a deluge of phone calls and visits to Social Security field offices around the country. The National Committee is extremely concerned that this new demand on customer services would swamp other crucial SSA activities and severely impair the agency’s ability to provide adequate services to its core beneficiaries.

The National Committee is not taking a position on the underlying goals of any of the immigration bills before the Congress. However, we believe it would be a significant mistake to require SSA to take on the burden of verifying the work status of every American for immigration-related purposes. Given the limited resources that SSA currently has, or is likely to have in the future, to carry out its obligations to America’s seniors and people with disabilities, we believe it would be unwise to encumber the Social Security Administration with these costly and unrelated responsibilities.