Statement of Marie Smith, President-Elect, AARP

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

AARP appreciates the opportunity to present its views regarding the challenges facing the new Commissioner of Social Security.  The Social Security Administration (SSA) has provided quality service throughout most of its history, but as it enters into the 21^st century it will face new problems that need to be addressed in a timely manner.  At her confirmation hearing before the Senate Finance Committee, Commissioner Barnhart identified some of the key issues awaiting her:  ensuring the program's long-term solvency for future generations; providing quality service to the public at the same time as the number of beneficiaries rises because of the aging of the Boomers; and improving program integrity through solid fiscal stewardship.  These areas were identified at the 1998 confirmation hearing for the prior Commissioner.  The agency has made some improvements, but more can and needs to be done.  SSA would be better able to improve service if its administrative costs, funded with trust fund dollars, were removed from congressionally-mandated spending caps that apply mostly to programs funded from the non-Social Security budget.

SSA administers the Old Age, Survivor and Disability Insurance and the Supplemental Security Income (SSI) programs, which provide monthly income support to more than 45 million Americans of all ages.  The agency also maintains wage records for over 150 million workers and provides annual statements of worker earnings and estimated benefits, as well as issuing new Social Security cards.  It is important that the agency respond quickly and courteously to information requests, communicate clearly to the public it serves, maintain complete and adequate records, and safeguard the programs from fraud and abuse.  If SSA falls short, public confidence in Social Security could be undermined. 

I. SERVICE DELIVERY

A. Staffing

SSA has always prided itself on its service to the public.  For much of the agency's history, those who sought assistance and information found employees who took the time and had the interest and expertise to help them.  Today, SSA employees remain dedicated, but in some offices staff shortages or inadequate resources may hinder the performance of even the most well-intentioned individual and could have a significant impact on long-term delivery.

SSA underwent an over twenty-percent staff reduction from 1985 to 1990, which was largely accomplished through attrition.  While SSA was undergoing this downsizing, federal legislation added to SSA's responsibilities by requiring the widespread distribution of Social Security benefit and earning statements and changing the status of some individuals receiving Social Security and SSI benefits.  This further strained the agency's already limited resources and hampered its ability to maintain consistent and quality service.

By 2015 the first wave of Boomers will be in their 60s, and SSA’s retirement and survivor beneficiary population will reach about 50 million.  As the agency prepares for the influx of retiring Boomers, it will have proportionately fewer resources but greater responsibilities.  The situation could worsen because many senior-level managers will be retiring.  The Boomers’ familiarity with technology and the internet and their service delivery expectations differ from current beneficiaries.  Despite the increased familiarity with technology that will differentiate these beneficiaries from previous ones, some Boomers will continue to require more personalized service.  SSA must be prepared to deliver service in a way that satisfies the various clients it serves. 

B.  The 800 Number and Accurate Information

Claimants continue to experience difficulty accessing SSA by phone and obtaining accurate information from the agency.  SSA set up the 800 number to improve service.  While a toll-free number is convenient for simple matters, it does not necessarily work for complex ones.  And, if the caller is unable to speak to an SSA employee and gets repeated busy signals, even the simplest matter is not being handled.

Although the public reports overall satisfaction with SSA's customer service, we continue to hear about 800 number access and service problems.  SSA sometimes reassigns staff to handle calls during peak hours, but that means other duties are being neglected.  AARP believes the 800 number should be used for basic transactions, and 800 number staff should receive sufficient training and/or information to answer basic questions on the phone.

Even an easily accessible 800 number poses hardships for SSA's most vulnerable claimants – many of whom lack the physical ability, language skills, or mental acuity to use the telephone for certain types of information.  Those who are unaccustomed to doing business by phone may find it upsetting to use the telephone to complete a transaction that will have a significant impact on their lives.  Local office visits must continue to accommodate individual needs and preferences as well as to deal with complicated matters.

C.  The Disability Program

SSA has been unable to keep up with the dramatic increase in its disability caseload.  In particular, the agency has a significant backlog of initial applications and those appealing a denial must wait a long period of time before their case is heard.  The agency has taken steps to speed up initial disability application processing time and reduce backlogged appeals.  If the complaints we receive are an indicator, the problem persists.  SSA should resolve these problems since those with disabilities are less likely to be able to work or have the resources to sustain themselves until they begin receiving the benefits to which they are entitled.

It is critical that those who are eligible for benefits receive them in a timely and efficient manner.  At the same time, the agency is the guardian of the trust funds and must consistently and accurately evaluate initial and ongoing eligibility for those who have a disability.  In particular, SSA has not conducted the required continuing disability reviews for disabled beneficiaries because of competing demands and limited resources.  Consequently, some beneficiaries continue to receive Social Security disability benefits although they no longer are qualified.  Not only do the trust funds lose money, but also individuals who have been overpaid may have considerable difficulty repaying the program.

II.  SUPPLEMENTAL SECURITY INCOME

The SSI program, that serves 5 million people of all ages, is the largest cash assistance program for low-income individuals.  Since recipients must prove their income and assets fall below certain thresholds, SSA must devote considerable resources and staff time to verifying eligibility on an initial and ongoing basis.  SSA's administration of the program has been criticized in two areas:  providing SSI to some who are not eligible and failing to provide benefits to those who legitimately qualify but do not know about the program and/or how to properly file an application to get benefits.

SSA must continue its efforts to recoup SSI overpayments and reduce fraud and abuse. The SSI program has been put on the General Accounting Office’s (GAO) list of high-risk programs.  The GAO faulted SSA for failing to adequately verify recipients' initial and continuing eligibility, to effectively recover SSI overpayments, to aggressively combat fraud and abuse, and to proactively develop SSI policies or an overall program management plan.

While the SSI program must be carefully monitored to prevent ineligible individuals from defrauding the government, the agency should not erect barriers for those who could qualify for benefits.  Receipt of SSI is critical to the economic well being of very vulnerable individuals and is a gateway to other public benefits.  AARP has undertaken many projects to educate potentially eligible individuals about the availability of SSI and assist them in applying for benefits.  These are highly intensive, one-to-one activities undertaken by dedicated volunteers.  Some AARP projects were in collaboration with SSA and many others required interaction with agency personnel.  While these programs help many individuals to learn about and potentially qualify for SSI, they are not a substitute for an effective SSA-sponsored outreach program.

A sizeable number of individuals do not qualify for SSI on initial application.  Our volunteers report that agency explanations of a denial are confusing and did not clearly describe the appeals process.  Fortunately, our volunteers are familiar with these procedures and could assist in the appeal.  Thus, many more people ultimately received benefits because they had assistance.  AARP believes that SSA should do a better job of recognizing the differing backgrounds and cultures that it serves and make additional efforts to meet their needs.

III.  SSA’s ADMINISTRATIVE EXPENSES

SSA’s administrative expenses are paid with trust fund dollars but are included in congressionally determined, annual, discretionary spending caps.  As a result, the agency does not always receive sufficient funding to address its service delivery needs.  AARP supports removing the administrative expenses from the congressional spending caps as a way of ensuring that current and future service needs are fully funded.  In any event, any savings from constraining SSA’s expenses accrue to the trust funds and are not directly available to finance the operations of other agencies

IV.   HELPING SECURE LONG-TERM SOLVENCY

Although the Social Security Administration itself will not determine how to restore long-term solvency to the Social Security program, the agency will play a significant role in the process.  Social Security Administration actuaries and research staff provide the technical expertise to evaluate solvency proposals and their impact on workers, beneficiaries and the economy.  This is a less visible role than the one the agency plays in educating the public about the program and its financing. 

Polls show the American public is not aware of the many options that could help restore long-term solvency, and does not understand the trade-offs among them.  Over the last few years, the Social Security Administration has undertaken an extensive public education campaign about the options.  We hope the agency will continue to engage Americans of all ages in the national dialogue about the value and future of Social Security as well as the importance of having other savings for retirement.  This information can help forge the consensus that can lead to a bipartisan solution to strengthen Social Security and enhance overall retirement security.

VI.  CONCLUSION

The Social Security Administration touches the lives of all Americans from the issuance of a Social Security number at birth through entrance and departure from the workforce.  Many people will have limited contact with the agency, while others will have greater interaction.  Regardless of the level of contact by each person, the agency should strive to provide the highest quality of service and ensure that no matter who you are, you will be treated courteously, receive accurate and timely information, and have your problem resolved expeditiously.