Statement of Greg Heineman, President, National Council of Social Security Management Associations, Inc., Norfolk, Nebraska

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

May 06, 2008

Chairman McNulty, Congressman Johnson and Members of the Subcommittee, my name is Greg Heineman and I represent the National Council of Social Security Management Associations (NCSSMA).  I have been the manager of the Social Security office in Norfolk, NE for fourteen years and have worked for the Social Security Administration for nearly thirty years.  On behalf of our membership I am pleased to have the opportunity to submit this written testimony to the Subcommittee, to address our concerns about the workload challenges that would be created by the various proposals to increase the role of the Social Security Administration (SSA) in employment verification activities.

NCSSMA is a membership organization of over 3,400 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 Use of Social Security Number Records for Employment Eligibility and Identity Purposes

When the Social Security Act was enacted in 1935, Social Security Numbers (SSN) were established in order to credit workers with the earnings they accumulated that eventually entitled them to benefits.  The Social Security Number is not now, nor was it ever meant to be, a national identifier.  Use of the Social Security Card to assist in determining eligibility for employment in the United States was first authorized in 1986, more than 50 years after the first SSN was issued.  At that time, employers were required to confirm the eligibility of their new employees by reviewing the original Social Security Card.  If the card was not available, the employer was allowed to contact Social Security to verify that the SSN matched the new employee’s name and age.  A voluntary Employer Enumeration Verification System (EEVS) was created to allow employers with a large volume of new hires to check their status quickly.

Because of the prevalence of undocumented workers in certain areas of the country, an electronic verification system known as “Basic Pilot” was established as a joint venture between the Immigration and Naturalization Service (INS, now part of the Department of Homeland Security [DHS]) and SSA’s EEVS as part of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.  The pilot was originally limited to five states: California, Illinois, Florida, New York and Texas, as these were the states with the largest estimated populations of non-citizens not lawfully present in the United States.  Nebraska was added to the Basic Pilot in 1999 due to the prevalence of undocumented workers in the meat packing industry in that state.  Employers in these six states were then allowed to expand the program to their locations in other states.  National use of the Basic Pilot was authorized in 2003.

In 2007, an updated version of Basic Pilot was introduced by DHS.  Known as “e-Verify,” employers may use the program once a hiring commitment is made to an employee to check the new employee’s employment eligibility on DHS and SSA records.  If information on either record is discrepant, the employer receives a “tentative non-confirmation notice.”  The notice indicates generally the source of the discrepancy, and issues a notice to the employee giving them eight days to contact DHS or SSA as appropriate to correct the discrepancy.  If SSA requires additional information from the employee to correct the discrepancy, additional time will be provided to correct the record.  While the program is still voluntary on the national level, five states: Arizona, Colorado, Georgia, Missouri and Oklahoma have mandated use of the e-Verify system by all employers in their state.  By the end of February 2008, nearly 54,000 employers had registered for the program, with DHS officials estimating that enrollment is growing at a rate of 1,000 employers a week.

Challenges for SSA with the Current Verification Systems

Any electronic or manual employer verification conducted by SSA is based on information from the agency’s Numident records, which include information provided at the time an SSN is issued.  SSA checks the SSN, name and date of birth provided by the new employee, and if the information matches, confirms eligibility to the employer.  If the information does not match, SSA advises the employer to send the employee to our office to resolve the issue.  If the verification is done through e-Verify, the employee with a discrepant record receives a tentative non-confirmation notice.  However, the Social Security Administration testified to this Subcommittee last year that an OIG study of Numident records indicated that 4.1% of records could result in a tentative non-confirmation letter requiring recontact with SSA.  Additionally 7% of recently naturalized citizens have not updated their Numident records since becoming citizens, thus creating a tentative non-confirmation situation even though the new citizens were eligible to work as resident aliens before their attainment of citizenship. 

Because e-Verify is still just a pilot program, it is difficult to project exactly how great an impact it would have on SSA’s workload if it were made nationally mandatory, especially because the current pilot lacks adequate evaluation and auditing of how employers and employees are reacting to “tentative non-confirmations.”  Nonetheless, early information from an Arizona Social Security Administration Card Center indicated that in the first three months of the year 1.28% of their 700 visitors each day came for issues related to e-Verify letters.  An Arizona Daily Star article of April 3, 2008 indicated that only 15% of Arizona employers were enrolled in e-Verify during this period.  Universal use of e-Verify could increase such visitors to this facility to 60 visitors a day, or approximately 8.57% of visitors.  If extended over the entire country, 8.57% of our 42 million visitors from 2007 would result in 3.6 million visitors coming to our offices to resolve e-Verify issues.  E-Verify contacts take 20 minutes on average of work time to resolve.  We estimate that such an increase in verification traffic would result in a need for an additional 889 work years to process, at a cost of nearly $100 million.

Not only would the universal use of e-Verify generate a significant number of additional contacts with SSA, there are also significant problems and limitations related to the process that render the e-Verify program of questionable value as an employment eligibility verification system.  Some of these issues include:

·         Employer Input Error: The accuracy of the Numident check is only as good as the information input by the employer using the system.  Sometimes the difference of a letter in a name (i.e. “Gregg” instead of “Greg”) can create a tentative non-confirmation message.  Date of birth and SSN input errors can also create this problem.  These errors can cause workers to make unnecessary trips to Social Security Field Offices in order to correct problems that do not exist.

·         Discrepancies in Names Due to Marriage or Language: While newly married individuals who take their spouse’s name should change their records with the Social Security Administration, there is often a delay in doing so.  This discrepancy can cause a tentative non-confirmation message.  Also, differences in language customs can cause discrepancies between DHS and SSA records.  In either case, eligible employees will be placed into the non-verification system.

·         Repeat Visits to SSA Field Offices to Resolve Discrepancies: When an employee receives a tentative non-confirmation notice from e-Verify, it is not clear to either the employer or employee what the discrepancy is which caused the problem.  The message, “SSN Does Not Match” could relate to any of four discrepancies between the information input into the system and the SSA Numident database.  The employee does not learn the real reason behind the discrepancy until he or she reports to the Social Security Field Office with the letter.  Once at the office, the SSA Service Representative reviews the case, and informs the employee of the evidence needed.  If the problem is due to a date of birth discrepancy, the employee must return with a birth certificate.  If it is a name discrepancy due to marriage, a marriage certificate would be needed.  If the problem is because the citizenship status is discrepant, then an employee may need to bring immigration or naturalization documents to SSA.  If any of these documents are not in the employee’s possession, the employee would need to order a replacement document form the source, sometimes taking weeks or months to obtain.  Meanwhile, the employee’s employment status remains in limbo.  At the very least, the employee must make multiple trips to the local SSA Field Office to resolve the problem.

·         Lack of Employer Confidence in the System: In my home state of Nebraska, we have one major meat packer who has used Basic Pilot and then e-Verify since 1999, but sends 25 consent-based SSN verification requests to my office each week at a cost of $46 for the first verification and $20 for each additional verification.  The employer requests these second verifications because their experience with Basic Pilot and e-Verify showed that many workers who were confirmed by the process were, in fact, still ineligible to work in the United States.  This additional review has resulted in payments of over $11,000 by the employer since October 1, 2007 to my office alone.  Our visual check of the previously e-Verify confirmed records resulted in calling an additional 20% of the new employees into our office to correct their records.  One recent check of 23 records provided by this employer resulted in 10 non-confirmations by my reviewer.  My reviewer spends close to 25% of her time each week on this workload, a workload that e-Verify is meant to prevent.

·         Ineffectiveness of e-Verify in Identity Theft Cases: Recent incidents in Nebraska, Minnesota, Texas, Iowa and Utah communities showed that concern about the effectiveness of e-Verify checks are well placed.  Swift & Company meat packing plants were raided by DHS officers in December 2006, resulting in the detainment of 1282 employees, many later found to be ineligible to work in the United States.  At the time of the raid, Swift was exonerated of any wrongdoing as they were using the Basic Pilot as prescribed by DHS.  Identity theft was cited as the cause of undocumented worker employment in this case.  In this instance it was found that Basic Pilot or e-Verify was useless in stolen identity cases.  DHS Secretary Michael Chertoff said at the time of the raids that Basic Pilot was, “not a magic bullet for every kind of problem.”

Problems with Other Immigration Verification Proposals

The discussion above relates to expansion of e-Verify to all new hires, which is how the program is employed today.  Another proposal currently before Congress would expand the use of e-Verify to confirm the eligibility of ALL employees.  Currently, 160 million people are employed in the United States.  Earlier, I stated that a universal e-Verify check of all new hires would result in 3.6 million additional contacts with SSA.  Expanding the program to all employees could cause an onslaught of over 10 million visits to SSA Field Offices.  That would be a nearly 25% increase in visitors to SSA Field Offices, at a time when our resources are already stressed.

In 2007, the Department of Homeland Security issued rules requiring that employers who receive “no-match letters” from SSA terminate the employees referenced if those employees have failed to correct their records within 90 days.  Although there is currently a US District Court injunction preventing enforcement of the 2007 rule, DHS has published substitute rules this year in an attempt to lift the injunction and proceed with this program.  In this case, both the weaknesses with the Numident records described above as well as additional chances for transcription errors on W-2 forms come into play.  The United States Chamber of Commerce estimates that this provision could result in the loss of $1 billion in wages to legal workers.  A consultant hired by the Chamber indicated that as many as 2% of legal workers could lose their jobs because they could not clear up discrepancies in their records in time.  Obviously, this proposal would also significantly increase visits to Social Security Field Offices to resolve the discrepancies.

Other legislative proposals on this topic would give SSA Field Offices additional responsibilities without commensurate resources or additional staff by specifying that anyone who receives more than one earnings record in a year would be required to verify their identity with the Social Security Administration and provide proof of the earnings to SSA.  Currently more than 45 million people receive more than one W-2 form in a year, almost all of whom are US citizens or legal aliens eligible to work.  Most reasons for multiple W-2 forms are obvious: many people work more than one job, many people change jobs during the year, students have different jobs on campus during the school year and at home during the summer, businesses are sold and more than one W-2 form is issued.  While it is true that some multiple W-2 situations occur due to identity theft, this provision would essentially force tens of millions of legal workers to prove they have done nothing wrong.  In addition, this provision would DOUBLE the number of people coming to Social Security Field Offices, at a nearly incalculable cost in funds and service delivery capabilities to SSA.

Current Challenges Facing SSA

The level of FY 2008 funding provided for SSA’s Limitation on Administrative Expenses (LAE) account broke a 14-year streak of reductions from the President’s original budget request, exceeding the President’s proposal by $148 million.  However, the reduced levels of administrative funding that SSA has received in prior years have affected the agency’s delivery of services in many ways.  The following is a summary of a few key impacts:

Field Office Challenges

The level of administrative funding that SSA has received in recent years has affected the agency’s Field Office services in many ways: 

·         51% of callers who eventually reached a Field Office by telephone said that they had received a busy signal or were told to call back at another time on an earlier call.

·       The combined impact of staffing reductions and more visitors coming into Field Offices has resulted in significant increases in waiting times in many offices for the public we serve.  For the first 16 full weeks of 2008, SSA Field Offices have had over 14 million visitors, an increase of about 1 million visitors over the same period in 2007.  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. 

·       In past years, funding shortfalls forced SSA to cut back on program integrity activities such as Continuing Disability Reviews (CDRs) and Supplemental Security Income (SSI) redeterminations.  CDRs save $10.30 in program costs for every $1 spent in administrative costs.  SSI redeterminations save $7 in program costs for every administrative dollar spent.  This year, SSA plans to process 235,000 CDRs and1.2 million SSI redeterminations.  This is 565,000 fewer CDRs and 1 million fewer SSI redeterminations than were processed per year earlier this decade.  These reductions cost taxpayers 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 CY 2006, SSA has eliminated 19 Field Offices due to closing or merging of locations as the agency attempts to handle its increasing workloads with insufficient resources.  SSA has also closed hundreds of contact stations in the past decade.

Disability Challenges

·         At the end of April 2008 about 756,000 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 92,000 veterans have pending hearings.  The average processing time for a hearing as of April 2008 was 517 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 about 1,300 positions from the beginning of FY 2006 to the end of April 2008.  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 695,000 actions pending.  This compares to 511,000 pending at the beginning of FY 2007.  Although priority is given to claims and appeal effectuation workloads, many critical post-entitlement workloads are delayed.  The average amount of time it takes for a Benefit Authorizer to process a post-entitlement case they are assigned as of May 2, 2008 is 265 days.  For Claims Authorizers it is 330 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.

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.  80 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 significant 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.”

The Commissioner of Social Security recently testified that SSA expects the number of online filings to increase from 13% to 50% in 5 years.  We believe that even such an increase in internet filings will not significantly reduce the demand or need for trained staff in Field Offices. With such a significant part of their retirement income at stake, individuals deserve to have caring and knowledgeable staff available to discuss this crucial decision.

SSA Service Challenges

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.  As mentioned previously, we have seen 1 million more visitors through the first four months of this year compared to the same period in 2007.  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 employees 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.

What Increasing SSA’s Role in Immigration Workloads Means to SSA Service Delivery

As described in the paragraphs above, SSA’s service delivery system is already stressed nearly to the breaking point.  While SSA is looking for ways to streamline our service by means of internet claims and post-entitlement services, the need for trained and caring employees to assist American citizens in receiving our services will continue to be required.  In many communities the Social Security Administration Field Office is the face of the federal government, and we take great pride in providing a high level of caring service.  Yet, even the dedication of SSA employees and management would be sorely tested if the provisions of current immigration legislation are enacted as proposed.  Increases of 50% or 25% or even 7% in visitors as discussed in the proposals currently under consideration will further delay already strained services to vulnerable populations.  Already, SSA managers are making difficult service delivery decisions which have extended waiting times and caused Field Office phones to go unanswered.  Any addition of a workload that is outside of our core responsibilities will only exacerbate those problems.

In addition, while costs and staffing figures could be calculated to provide for increased immigration verification services, the infrastructure required to increase the staff and systems capacity and capability to provide these services could not be provided overnight.  We described above the 3 to 4 year training period necessary to properly prepare a Claims Representative to perform their duties.  Such an effort means taking some of our most productive employees off of the front lines to provide this training.  Efforts to improve SSA computer systems to deal with already increasing internal and external demands would also be delayed to implement these proposed programs.  The bottom line is that SSA is not in a position to provide the additional services called for in the current proposed immigration verification legislation, and requiring SSA to provide these services would cause the agency to fall further behind in the areas currently causing pain to many Americans.

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 believe the adoption of the provisions being discussed in current immigration legislation will jeopardize our ability to provide these services.

On behalf of the members of the NCSSMA, 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.