Statement of Marty Ford, Co-Chair, Social Security Task Force and Work Incentives Implementation Task Force, Consortium for Citizens with Disabilities
Before the Subcommittee on Social Security,
House Committee on Ways and Means
Hearing on Challenges Facing the New Commissioner of Social Security
May 2, 2002
Chairman Shaw, Representative Matsui, and Members of the Subcommittee, thank you for this opportunity to testify regarding the challenges facing the new Commissioner of the Social Security Administration.
I am Director of Legal Advocacy for The Arc of the United States. I am testifying here today in my role as co-chair of the Social Security Task Force and the Work Incentives Implementation Task Force of the Consortium for Citizens with Disabilities. CCD is a working coalition of national consumer, advocacy, provider, and professional organizations working together with and on behalf of the 54 million children and adults with disabilities and their families living in the United States. The CCD Social Security and Work Incentives Implementation Task Forces focus on disability policy issues in the Title XVI Supplemental Security Income program and the Title II disability programs.
CCD welcomes the opportunity to testify here today and appreciates your holding a hearing at the beginning of Jo Anne Barnhart’s service as Commissioner. From the perspective of people with disabilities, there are numerous issues that we believe pose challenges for Commissioner Barnhart and her staff. We look forward to working with the Commissioner and the Subcommittee in meeting these challenges.
In our experience with the Social Security Administration, we have learned that there is great value in working together to address problems and concerns before they reach crisis proportions. We want to continue this approach with SSA under Commissioner Barnhart’s leadership. We expect that there will be times when we are in disagreement over an issue; however, working with input from consumer advocates, SSA would be in a better position to devise solutions which work to the greatest extent possible to meet the needs of people with disabilities.
The disability community has raised numerous concerns about the potential impact of Social Security reform proposals on people with disabilities. In January 2001, the General Accounting Office issued a report which reinforces our concerns about the negative impacts many of the reform proposals would have on people with disabilities, Social Security Reform: Potential Effects on SSA’s Disability Programs and Beneficiaries, GAO-01-35 (Jan. 2001).
In December 2001, the President’s Commission to Strengthen Social Security published its final report. The Commission chose not to hear formal testimony from people with disabilities. However, the CCD Task Forces met with about half of the members of the Commission to discuss the interests of people with disabilities. We are disappointed that the report failed to deal with many of the important issues that we raised. Furthermore, the Commission acknowledged that applying their recommended retirement program changes to the Social Security Disability Insurance program could result in reduced benefits for people with disabilities. The Commission recommended that the President and Congress further study how to address the DI program issues. At the same time, the report failed to address the issues for dependents and survivors with disabilities whose benefits come from the retirement and survivors programs, rather than the DI program, and whose benefits too would suffer cuts under the Commission’s proposals. In fact, in all of the proposals, the benefit reductions would impact people with disabilities regardless of which Trust Fund pays the benefits.
The Commission’s decision to leave people with disabilities out of the public hearings was based on the members’ belief that the Commission’s charge did not include the disability programs. At the meeting with the Commissioners, we emphasized that people with disabilities benefit from all parts of Title II, not just the Disability Insurance program. Categories and sources of benefits include:
Beneficiaries with disabilities depend on Social Security for a significant proportion of their income. The more limited capacity of beneficiaries with disabilities to work and to save for the future and the reality of their higher rates of poverty must be taken into consideration in any efforts to change the Title II programs.
The nature of the OASDI programs as insurance against poverty is essential to the protection of people with disabilities. The programs are unique in providing benefits to multiple beneficiaries and across multiple generations under coverage earned by a single wage earner's contributions. Proposals that partially or fully eliminate the current sharing of risk and replace it with the risks of private investment will be harmful to people with disabilities who must rely on the OASDI programs for life’s essentials. Diversion of Social Security revenues to private investment accounts would shift the risks from the federal government back to the individual. This could have a devastating impact on people with disabilities and their families as they try to plan for the future. The basic safety nets of retirement, survivors, and disability insurance would be substantially limited and individuals, including those with limited decision-making capacity, would be at the mercy of fluctuations in the financial markets.
For these and other reasons, the CCD Task Forces have urged that Congress request a beneficiary impact statement from SSA on every major proposal, or component of a proposal, under serious consideration. SSA will need to play a major role in the evaluation of reform proposals for their impact on people with disabilities.
The chronic problem of overpayments to beneficiaries in both Title II and Title XVI is a major barrier to beneficiaries’ ability to take advantage of the work incentives programs, including the new incentives of the Ticket to Work and Work Incentives Improvement Act (TWWIIA). If not addressed, beneficiaries will continue to be fearful of working.
As the system now operates, chronic overpayments to beneficiaries result from significant delays in, and sometimes complete failure of, SSA personnel recording earnings reports for working beneficiaries. We believe that part of the problem may be that SSA workers do not get any credit for this work in their work evaluations. In addition, there is not a well-defined process for beneficiaries to use in reporting earnings. Beneficiaries often tell us that they are very conscientious in reporting their earnings, but the overpayments still occur over significant periods of time. When that happens, beneficiaries are not equipped to know whether the benefit amount they are receiving is correct or whether SSA has made an error or failed to record earnings. Over time, overpayments build and it is not unusual for beneficiaries to be told to pay back tens of thousands of dollars. Beneficiaries are so fearful of overpayments and the inadequate notices from SSA that go with them that the Ticket program and other work incentives could fail.
We urge SSA to establish a reliable, efficient, beneficiary-friendly method of collecting and recording, in a timely manner, information regarding a worker’s earnings. In addition, SSA must adjust benefits in a timely manner. CCD has further recommended that Congress require SSA to forgive overpayments if the beneficiary is not notified within a reasonable period of time. We appreciate the inclusion in the Social Security Program Protection Act of 2002, H.R. 4070, of a requirement that SSA provide a receipt to the beneficiary whenever a change in earnings or work status is reported. This could go a long way in helping to resolve some of the problems with earnings reports.
1. Ticket to Work Program
As you know, the CCD Task Forces supported the Ticket to Work and Work Incentives Improvement Act on behalf of people with disabilities who wanted to work but were prevented from doing so by the barriers that existed in the Title II and SSI programs and Medicare and Medicaid. We believe that the purpose of the bill was to ensure that people with severe disabilities would not permanently lose needed supports if they attempted to work and to expand their opportunities to make those attempts.
However, after the proposed regulations were published last year, we testified that certain significant changes must be made to the proposed regulations if the purposes of the program are to be fulfilled. We urged that speedy implementation not come at the expense of ensuring that the program works for the intended purpose. While we were pleased to see that President Bush included the implementation of the new work incentives in his New Freedom Initiative early last year, we were still concerned that speedy implementation of problematic regulations could create new barriers rather than eliminate barriers to work. Our concerns included, among others, the limitation on one ticket per period of disability; the measures for timely progress on a work plan; and the structure of the outcome and milestone payment systems.
SSA must seriously consider the issues raised by advocates if the program is expected to accomplish its purpose. Although SSA responded somewhat to a few of the concerns expressed over the proposed rules, the agency left in place many policies that advocates felt could be problematic for successful implementation of the Ticket to Work Program. SSA has chosen to maintain eligibility criteria for the ticket that will deny entrance to the program to many beneficiaries who are legitimately entitled to its opportunities. In addition, it appears that an attempt to work must ultimately be successful or the individual will not be able to receive another ticket to try again at some point in the future. While we are pleased that SSA increased the number and the amount of milestone payments, the current payment systems – in particular, the milestone payment system – are still considered inadequate and threaten the success of the Ticket to Work program. Adequate payment systems will help ensure the program works as this Committee intended.
Leaving in place a dispute resolution process that favors employment networks over beneficiaries, SSA insists that beneficiaries will still have access to protection and advocacy services — even as the agency has severely restricted the services that the Protection and Advocacy Systems (P&As) are allowed to offer. SSA appears not to understand the structure, authority, and role that Protection and Advocacy systems should play in providing independent legal advocacy services within the new Protection and Advocacy for Beneficiaries of Social Security (PABSS). SSA has restricted the scope of both the types of cases and the remedies available to resolve issues and has prohibited P&As from working on appeals involving overpayments, continuing disability reviews, plans for achieving self-support, subsidies, and impairment related work expenses. While the P&As are allowed to offer assistance or advice in filling out necessary paperwork, for example, to request a reconsideration or a waiver of an overpayment, they are not allowed to provide representation in those matters. This raises a number of issues, one of which is an ethical dilemma for the attorneys. They are permitted to provide some advice and counseling regarding certain problems, but at some point must refuse to provide representation to the client as the issue progresses. We want to thank the Subcommittee for addressing some of these concerns through language included in H.R. 4070.
We want to thank Commissioner Barnhart for resolving the recent dispute regarding funding of the P&A systems by restoring the funding allocation to the full amount. This is critical in ensuring that individuals will be able to navigate their way through the system.
In the final rule, SSA asserts that it will "monitor" and "evaluate" many of the potential pitfalls identified by advocates. We urge Commissioner Barnhart to ensure that the agency lives up to these promises and takes action where it is determined that the policies are denying beneficiaries the possibility of increased independence and self-sufficiency. We pledge to work with the Commissioner in identifying those areas that continue to prove problematic and in recommending changes to make the system work for individuals who want to become more independent.
We believe that SSA must design an Adequacy of Incentives study (as required by TWWIIA) that includes the best information in the field about employment for people with significant disabilities. The AOI report is critical for: people with a need for ongoing supports and services; people with a need for high-cost accommodation; people who earn a sub-minimum wage; and people who work and receive partial cash benefits. Advocates urge SSA to ensure that this is a strong and effective study that will lead to alternative payments for people with significant disabilities. SSA must move quickly on this so that any deficiencies in incentives may be addressed by the time the Ticket program is fully implemented.
In addition, we believe that the earnings offset ($1 benefit offset for $2 earned) demonstration is a critical part of the law, particularly for those whose earnings will remain low, and that it should be implemented as soon as possible. Again, the demonstration must be designed to reflect realities for people with severe disabilities in their attempts to work and to maintain an income over the course of their lives. We have had numerous discussions with SSA staff regarding these issues. In addition, the Work Incentives Advisory Panel convened an expert panel to address some of the issues involved. Based on the discussions at that meeting, many advocates are very concerned about the possibility of a mandatory assignment of beneficiaries to a demonstration program that may deprive them of benefits to which they are entitled (for instance, a mandatory demonstration where the earnings offset begins below the SGA level). Furthermore, there are concerns about the possibility of beneficiaries in the demonstration being rejected by employment networks because of the longer time that it will take for ENs to be reimbursed. We urge SSA to consider these concerns in refining its plans for the demonstration and to move quickly towards its implementation.
3. Disabled Adult Child Issues
There are several issues which have surfaced regarding the treatment of disabled adult children under the Ticket to Work and Work Incentives Improvement Act. It is important that these issues get resolved if the work incentives are to operate as intended by TWWIIA. First, we are concerned that people with disabilities who are disabled adult children (DAC) in the Title II program should be able to move on and off the program to the same extent that other people with disabilities are able to under TWWIIA. Since the rules regarding DAC eligibility have some unique requirements, it is important that the regulations clearly outline the impact of work on disabled adult children who use a ticket.
There is also a concern about how work supports are treated for a disabled adult child, depending on whether the beneficiary receives such supports from his/her employer or whether the supports are provided by a third party, such as a supported employment provider. SSA has made some efforts to address this issue through the Program Operations Manual System (POMS), however, it appears that the issue has not been fully resolved. If disabled adult children are to be encouraged to use the new work incentive provisions, there must be a cohesive, understandable policy, embodied in regulations, upon which disabled adult children and their advisors may rely in making employment decisions. We urge the Commissioner to work with us in identifying and clarifying these issues and to resolve them through regulations.
The backlog of cases waiting for ALJ and Appeals Council decisions is unacceptably long. People with severe disabilities who by definition have limited earnings from work are often forced to wait years for a final decision from the time of application through the final Appeals Council decision. This is damaging not only to the individual with a disability and his/her family, but also to the public perception of and integrity of the program.
Bringing the waiting times down in these two areas must be a high priority. We urge commitment of resources and personnel to resolve the exorbitant waiting times and make the process work better for people with disabilities. First, SSA must be provided with the resources to fully meet its administrative responsibilities. As noted later in this testimony, this requires that SSA’s Limitation on Administrative Expenses budget authority be removed from the domestic discretionary spending category.
We strongly support efforts to reduce unnecessary delays for claimants and to make the process more efficient, so long as they do not affect the fairness of the process to determine a claimant’s entitlement to benefits.
1. The right to a full and fair hearing before an Administrative Law Judge. The key aspect of the adjudication process for a claimant is the right to a full and fair hearing by an Administrative Law Judge (ALJ), who is an independent decision-maker, providing impartial fact-finding and adjudication. The ALJ asks questions of and takes testimony from the claimant, may develop evidence when necessary, and applies the law and agency policy to the facts of the case. Claimants have the right to present new evidence in person to the ALJ and to receive a decision from the ALJ that is based on all available evidence. This should be preserved.
2. Keeping the record open for new evidence. Many recent proposals to change the disability determination process recommend that the record be closed to new evidence either after the DDS decision or, at least, after the ALJ level. In the past, both Congress and SSA have recognized that such proposals are neither beneficial to claimants nor administratively efficient for the agency.
We strongly support the submission of evidence as early as possible. The benefit is obvious: the earlier a claim is adequately developed, the sooner it can be approved and the sooner payment can begin. However, there are a number of reasons why closing the record is not beneficial to claimants including: (1) possible worsening of the medical condition which forms the basis of the claim; (2) the fact that the ability to submit evidence is not always in the claimant’s or representative’s control, e.g., providers delay sending evidence; and (3) the need to keep the process informal. Early submission of evidence also is necessary under current law which limits the ability to submit evidence and have it considered at the Appeals Council (must be "new and material" and relate to pre-ALJ decision period) and federal court (record closed; remand possible if evidence "new and material" and "good cause" for failure to submit earlier).
Filing a new application is not a viable option because it does not improve the process and may in fact severely jeopardize, if not permanently foreclose, eligibility for benefits. A claimant should not be required to file a new application merely to have new evidence considered where it is relevant to the prior claim. If such a rule were established, SSA would need to handle more applications, unnecessarily clogging the front end of the process.
3. Representing the agency at the ALJ level. We do not support efforts to have SSA represented at the ALJ hearing because past experience shows that it does not result in better decision-making and reducing delays, but instead injects a level of adversity, formality and technicality in a system meant to be informal and nonadversarial. In the 1980’s, SSA tested, and abandoned, a pilot project to have the agency represented. It was terminated following Congressional criticism and a judicial finding that it was unconstitutional and violated the Social Security Act. In the end, the pilot did not enhance the integrity of the administrative process.
4. Retain review by the Appeals Council. We oppose the elimination of a claimant’s right to request review by the Appeals Council. The Appeals Council currently provides relief to nearly one-fourth of the claimants who request review of ALJ denials, either through outright reversal or remand back to the ALJ. Review by the Appeals Council, when it is able to operate properly and in a timely manner, provides claimants, and SSA, with effective review of ALJ decisions. Given the low percentage of appeals to federal court, it appears that claimants largely accept decisions by the Appeals Council as the final adjudication of their claims. As a result, the Appeals Council acts as the initial screen for ALJ denials, a position for which the district courts are not equipped, given their other responsibilities.
5. Access to judicial review in the federal court system. We believe that both individual claimants and the system as a whole benefit from the federal courts deciding Social Security cases. Over the years, the federal courts have played a critical role in protecting the rights of claimants. The system is well-served by regular, and not specialized, federal judges who hear a wide variety of federal cases and have a broad background against which to measure the reasonableness of SSA’s practices.
We urge Commissioner Barnhart to take these concerns into account in efforts to reduce the backlog in disability cases.
Over the last few years, SSA has engaged in a deliberate process to study how it assesses children with disabilities for purposes of the SSI program. These efforts have resulted in important clarifications and streamlining of the process, embodied in final regulations published in September 2000 which became effective in January 2001. SSA continues to evaluate its procedures regarding such things as the kind of evidence necessary to assess disability, including appropriate tests, and the kind of consultative examinations which will yield the most useful evidence. Knowledge gained through this evaluation, conducted in partnership with disability assessment experts through the Association of University Centers on Disabilities, can help inform SSA’s future policy decisions regarding the childhood SSI program. We urge that this work continue. In addition, we urge that SSA consider adopting a similar approach to evaluate the way in which adults are assessed for purposes of eligibility in the disability programs.
Improvements for Surviving Spouses with Disabilities
We support the provisions in the Social Security Benefit Enhancements for Women Act of 2002 (H.R. 4069) to repeal the seven year restriction on eligibility for widow's and widower's insurance benefits based on disability. We believe that this provision and others intended to better protect widows and widowers are important improvements
1. SSI Modernization Act of 2001
The CCD Task Forces believe it is time to make important improvements in the SSI program and we support passage of the SSI Modernization Act of 2001, H.R. 739. This bill is an important and much needed step in increasing the ability of people with disabilities and the elderly to improve the quality of their lives. Many people with disabilities must rely on the Supplemental Security Income program for basic income support and the access it provides to critical medical services through Medicaid. Despite severe, lifelong disability requiring on-going support, many beneficiaries attempt to improve the quality of their lives through earnings. Others receive some income from their past employment efforts. Increasing the value of the small amounts of earned and unearned income to be disregarded by SSI will assist beneficiaries in improving their overall situation and will also reduce the administrative burden of dealing with small adjustments in payments. In addition, removing barriers to education will provide beneficiaries opportunities for further growth and potential for future work.
The SSI Modernization Act addresses several important areas designed to encourage work, savings, and education. These include: an increase in the general income exclusion; increase in the earned income exclusion; increase in the resource limits; and an increase in the irregular or infrequent income disregard. Each of these exclusions, limits, or disregards would be indexed for inflation so that the buying power of beneficiaries’ income is protected. The bill would also ensure that children who are still in school, including those receiving special education services, would be allowed to finish their education prior to their assessment as adults for the SSI program. Finally, the bill would exclude the entire amount of educational grants from income and, for 9 months, from resources.
We believe that these modest, but important, improvements to the SSI program will assist beneficiaries while encouraging work, savings, and educational efforts. We believe that these improvements could also help people better meet their ongoing obligations, providing vital resources to fall back on for housing repairs and the like. We urge that SSA and Members of the Subcommittee support these improvements.
2. Medicaid Retention
There is another issue also needing attention regarding retention of Medicaid when SSI benefits are lost upon entitlement to early retirement benefits. The Social Security Act requires SSI recipients to apply for any and all other benefits to which they may be entitled. Included in this group are a small number of recipients who are not eligible for Social Security Disability Insurance benefits because they were not currently insured at the onset of their disability but who are fully insured for retirement benefits, either on their own account or on the account of a spouse or ex-spouse. These SSI beneficiaries are required to apply for retirement benefits at age 60 or 62. Some of them have earnings records that result in a high enough monthly retirement benefit that renders them financially ineligible for SSI. The loss of eligibility for SSI for these recipients also results in a loss of eligibility for Medicaid, which is only partially averted where some states provide coverage for the elderly and people with disabilities with an income up to 100% of the federal poverty level. Because the beneficiaries are under 65 years of age, they are not entitled to Medicare benefits and often do not have the financial ability to pay for private health insurance. This result is particularly devastating to these former SSI recipients who are still disabled and are experiencing further deterioration in their health as a result of their increasing age.
The Act allows widows and widowers who lose SSI benefits upon entitlement to early retirement benefits to retain Medicaid coverage. 42 U.S.C. § 1383c(d). This protection should be extended to all SSI recipients who lose Medicaid upon entitlement to early retirement benefits. The number of individuals who would benefit from this extension is relatively small but the protection it would provide them is enormous. We urge the Commissioner and Members of the Subcommittee to support closing this gap through which they fall.
3. Expanding SSI Eligibility for Noncitizens
The 1996 welfare law severely restricted the SSI eligibility of noncitizens lawfully residing in the United States. While legislative changes in 1997 and 1998 helped some individuals who entered before August 22, 1996, eligibility remains extremely limited for individuals who entered on or after that date. TANF reauthorization provides an opportunity for the Subcommittee on Human Resources to consider restoring equal access to SSI benefits, such as eligibility for lawfully residing immigrants with disabilities, with appropriate safeguards. We urge Commissioner Barnhart and Members of the Subcommittee to support these efforts.
In previous testimony (May 2001), the CCD Social Security Task Force urged the Subcommittee to support a statutory change, similar to the provision in Title II, that would allow SSI claimants to voluntarily enter into agreements with attorneys for SSA to withhold and provide direct payment of attorneys fees from their past due SSI benefits. We support such a provision because it will help ensure that claimants have adequate representation to appeal their cases. The reasons behind the withholding and direct payment of attorneys’ fees in Title II cases apply with equal force to SSI cases.
We appreciate and support your inclusion, in H.R. 4070, of provisions to establish a similar mechanism in SSI. We also thank the Commissioner for increasing the maximum fee cap in Title II cases, an adjustment which had not occurred since 1990.
Approximately 6 million Social Security and Supplemental Security Income beneficiaries have representative payees, often family members or friends, who receive the benefits on behalf of the beneficiaries and have a responsibility to manage the benefits on behalf of these beneficiaries.
As favorably reported by the Subcommittee last week, H.R. 4070 includes provisions strengthening SSA’s ability to address abuses by representative payees. The provisions would: require non-governmental fee-for-services organizational representative payees to be bonded and licensed under state or local law; provide that when an organization has been found to have misused an individual’s benefits, the organization would not qualify for the fee; allow SSA to re-issue benefits to beneficiaries whose funds had been misused; allow SSA to treat misused benefits as “overpayments” to the representative payee, thereby triggering SSA’s authority to recover the money through tax refund offsets, referral to collection agencies, notifying credit bureaus, and offset of any future federal benefits/payments; and require monitoring of representative payees, including monitoring of organizations over a certain size and government agencies serving as representative payees.
We support these provisions, including establishing the definition of “misuse” in the statute, rather than leaving it solely to administration policy. We believe that such provisions should be enacted. In addition, we believe that SSA should address the accountability of state or federal agencies who serve as representative payees and ensure that governmental agencies or institutions are not selected as representative payees where family or friends are available, willing, and capable to serve as payee.
SSA workloads are projected to begin increasing rapidly within the next decade as the baby boom generation begins to reach its peak disability years just prior to reaching early retirement age beginning in 2008. In addition, the SSA workforce is also aging and will begin to lose significant numbers of staff, including senior and leadership staff. About 3,000 employees are expected to retire per year from 2007 through 2009. SSA is also taking on new or more complex responsibilities such as providing increased rehabilitation and employment services for people with disabilities, completing and maintaining an appropriate schedule of continuing disability reviews and other eligibility reviews, and new approaches to prevent fraud and abuse. In FY 1985, SSA’s staffing levels were 80,844 FTEs and 83,406 workyears. The President’s budget requests for FY 2003 include 63,464 FTEs and 64,730 workyears, for a reduction of 17,380 FTEs and 18,676 workyears over the last 18 years.
The CCD Social Security Task Force has voiced concern for some time over the continued long-term downsizing of the SSA workforce. We believe that failure to conduct appropriate and timely CDRs and other eligibility reviews could lead to decreased trust in the integrity of the Social Security and SSI programs. In addition, the new efforts to assist people with disabilities to go to work, through the Ticket to Work and Work Incentives Improvement Act of 1999, require new and expanded approaches for SSA interaction with beneficiaries. Adequate staffing levels are critical for these and other efforts to be successful, especially given the coming disability and retirement years of baby boomers.
For these reasons, we strongly support removing the Social Security Administration’s Limitation on Administrative Expenses (LAE) budget authority from any domestic discretionary spending caps. Even if the LAE were removed from the domestic discretionary caps, SSA’s LAE would still be subject to the annual appropriations process and Congressional oversight. Currently, SSA’s administrative expenses total less than 2% of benefit payments paid annually. Congress would still maintain its role in ensuring continued administrative efficiency.
Most importantly, removal of the LAE from the domestic discretionary spending caps would remove it from competition with other health, education, and human needs programs for limited funds. It would allow for growth that is necessary to meet the needs of the coming baby-boomer retirement years (including the retirement of SSA and state DDS personnel); continue the efforts to improve the processing time for initial applications and appeals; continue the efforts to ensure integrity in the program through CDRs and other redeterminations; and allow for replacement of staff in a timely manner to allow for adequate training and mentoring.
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Thank you for this opportunity to testify on the challenges facing the Commissioner of Social Security. We look forward to working with the Subcommittee and Commissioner Barnhart in addressing these challenges affecting people with disabilities.