Statement of Anthony T. Pezza, President, National Council of Social Security Management Associations Inc., Hackensack, New Jersey

Chairman Shaw and Members of the Subcommittee, my name is Anthony T. Pezza and I am submitting this statement for the record on behalf of the National Council of Social Security Management Associations (NCSSMA).

As you know, Mr. Chairman, the NCSSMA is a membership organization of more than 3000 Social Security managers and supervisors who work in SSA's 1400 field offices and teleservice centers throughout the nation.  It is most often our members who work with your staffs when problems and issues arise with Social Security recipients in your Congressional Districts.  Since our organization was founded thirty-two years ago, the NCSSMA has been a strong advocate of locally delivered services nationwide to meet the variety of needs of beneficiaries, claimants and the general public.  We, like you, consider our top priority to be a strong and stable Social Security Administration that delivers quality services to our clients and your constituents.

The new Commissioner of Social Security faces a myriad of challenges as she assumes her new responsibilities.  This is a critical time for the Social Security Administration and the programs it administers.  Demographic, economic, technological and cultural forces are combining to stress and test an agency that has, since its inception during the Great Depression, been a paragon of service to the American public.  Now SSA will be tested as never before and it will be the new Commissioner who will have to lead the agency in meeting the challenges ahead.

In discussing the challenges facing the Commissioner, we will do so from the perspective of SSA's front-line managers and supervisors.  We experience first hand the impact of SSA's programs and processes on the lives of our citizens and consequently are in a prime position to identify and assess the challenges ahead.

SSA is, in a manner of speaking, a growth industry.  With the aging of the 76 million strong "Baby Boomers" will come a burgeoning in the agency's workloads.  Between now and the year 2010, SSA's actuaries project that the number of retirement and survivor beneficiaries will increase by 16 percent, the number of disability beneficiaries by a staggering 50 percent and the number of SSI recipients by almost 15 percent.  At the same time, SSA estimates that 28,000 of its employees will be eligible to retire and another 10,000 will leave for other reasons.  This amounts to more than half the current workforce and could result in a significant loss of experienced people and a drain of institutional knowledge.  Additionally, it has been estimated that if SSA attempts to process its projected workload in the year 2010 using the methods it currently employs there will be a 20,000 shortfall in workyears.

With this as background we see the following as among the major challenges facing the new Commissioner:

Resources and Service Levels

One of the first issues and challenges facing the Commissioner is the question of whether SSA has the resources appropriate to the levels of service it must deliver to the American public.  The Social Security Advisory Board in its September, 1999 report entitled: "How The Social Security Administration Can Improve Its Service To The Public" summarized this issue by saying, "…the agency has a serious administrative deficit at present in that the level of service that is being provided is less than is required to meet the needs of the public."  Over the two years since that was written, the situation has not improved.  Agency resources have not kept pace with the growth in workloads.  SSA simply does not have enough staff to deliver the level of service currently expected of the agency.

This leads inexorably, to the issue of how SSA's administrative costs are funded.  SSA's administrative costs like its program costs are funded by the Social Security Trust Funds through an account entitled the "Limitation on Administrative Expenses" (LAE).  As pointed out by the Social Security Advisory Board in its February, 2001 report entitled, "Agenda For Social Security: Challenges For The New Congress And The New Administration":  "Both workers and employers contribute to the self-financed Social Security System, and are entitled to receive service that is of high quality."   We agree with the Board that SSA's administrative spending should be set at a level that fits the needs of Social Security's contributors and beneficiaries.  Under no circumstances should SSA be required to compete for funding with health, education and other human services functions.

Citizens contributing over their working lives to the Social Security Trust Funds are paying not only for their benefits, but also for the service necessary to process their claims, answer their questions, send them their payments and the myriad other functions performed by SSA to administer the Social Security programs.  Each citizen has a right to expect the best service possible.

We urge that SSA's budget requests be considered separate from others in the HHS/Labor appropriations process.  Because the LAE is funded by the Social Security Trust Funds its budget should be considered outside of the discretionary budget allocation, although we recognize the importance of continued Congressional oversight of this account.

Current Service

The issue of funding SSA's administrative costs notwithstanding, the service SSA is providing today is, in our judgement, the most important challenge facing the Commissioner.  SSA needs to provide the best service possible to those who seek service now, no matter how they choose to seek that service.  The Staffing Survey released by the National Council of Social Security Management Associations early last year, as well as recent reports issued by the Social Security Advisory Board have raised troubling questions about whether adequate resources are being allocated to the direct service being provided by SSA's network of field offices and teleservice centers.   As a direct result of its survey, the NCSSMA called for an increase in frontline staffing in SSA's network of field offices.  It asked that SSA's budget establish a base of 33,500 full-time equivalents (FTEs) in SSA's field offices, an increase of approximately 5000 FTEs over current staffing levels.

Short of obtaining more resources, the Commissioner will be faced with the challenge of apportioning current scarce resources among SSA's various components.  In our judgement, this should be done with a view toward allocating direct service components first. There is nothing more important than the service SSA provides our citizens today.

Disability

SSA's disability programs have been under severe stress for a number of years.  As reported by the Social Security Advisory Board in its January 2001 report entitled, "Charting the Future of Social Security's Disability Programs: The Need for Fundamental Change", SSA's actuaries project that between now and 2010 the number of Title II disability beneficiaries will increase by 50% and the number of SSI disability recipients by 15%.  This tremendous increase in disability claims workloads will further strain a system that is already at the breaking point.  Disability claims workloads are rising around the country.   It was reported a few months ago that 134,000 disability cases were waiting to be assigned to Disability Examiners in various Disability Determination Services. This is just the "tip of the iceberg".  SSA has been attempting to deal with its problems in the disability area for many years, but when all is said and done, from the claimant's perspective, little has changed.  The root causes of the disability dilemma were accurately described by the Social Security Advisory Board when it reported: "…the structural problems of the agency's disability determinations and appeals process…are at the heart of many of the agency's service delivery problems." 

While we believe that it is appropriate and desirable for the Commissioner to develop a proposal to revamp our national disability program, we also believe that given the burgeoning workload (which is unrelenting) and the political realities (which will be difficult and time-consuming to deal with), it would not be prudent to count on a new national disability program in time to avoid a service delivery meltdown in the current program.

The challenge for the Commissioner will be to move quickly to improve performance under the current system.  The experience and data obtained from the many pilots and studies over recent years should be used to make necessary adjustments in the current process pending a more expansive solution.

Workforce Transition

The impending "Retirement Wave" presents the Commissioner with the immediate and critical challenge of replacing experienced personnel with new hires who must be trained and mentored while workloads and service demands are increasing.  More than half of SSA's current workforce could leave by the year 2010.  Many of the people leaving will be those with years of priceless experience in administering the most complex laws and regulations on the federal books.  It is tempting to think that technological aids can be developed to guide employees through the complexities to the right answer or course of action in any particular case or situation.  It is also tempting to think that a combination of technological aids and new training protocols will make our new employees more productive more quickly.  But consider this, it literally takes years for a Claims Representative (SSA's chief technical/direct service operative) to become a fully competent journeyman.  It takes about the same length of time to develop a journeyman Disability Examiner.  The luxury of time to deal with the workforce transition issue diminishes daily.

We urge the Commissioner to seek from the Administration and the Congress the authority and funding to do advance hiring, in significant numbers, of "replacement" personnel so that workforce transition can take place in a measured and effective manner.  SSA needs to be in a position to take advantage of the opportunity of having the new workforce trained and mentored by the experienced people who will be retiring in increasing numbers over the next few years.

Organizational Framework

The Social Security Advisory Board has recommended that SSA consider organizational changes in order to create a more service-oriented organization.  We believe that this is a challenge facing the Commissioner.  Increased pressure and demand for SSA's essential public services have exacerbated the need for change.  SSA's organizational structure must be revamped to put its operational mission first. 

SSA needs an organizational structure that pares support functions to realistic levels. While support functions performed at the central office, regional and area levels are often essential, they should not be staffed at the expense of direct public service. 

In addition, SSA needs to ensure that a larger percentage of its key executives, especially those with operational responsibilities, bring with them the knowledge and experience that comes from having spent significant time working in SSA's direct service facilities.

Manager/Supervisor Ratios

More than ample evidence exists to suggest that SSA went too far in the delayering of its managers and supervisors.  According to former Acting Commissioner Massanari, as a result of the delayering effort initiated by the now defunct NPR, SSA has suffered a net loss of 1423 supervisory positions since 1993.  The vast majority of these losses came in SSA's front-line field offices and teleservice centers.  The impact of these losses in terms of diminished public service cannot be overstated.

In its September, 1999 report entitled "How the Social Security Administration Can Improve Its Service to the Public" the Social Security Advisory Board wrote:  "As implemented by SSA, the reduction in the number of managers and supervisors is particularly problematic."  SSA achieved the management-staff ratio recommended by the NPR, but in the view of the Board, this achievement came at a "high price."  More recently, the National Council of Social Security Management Associations Staffing Survey released in March, 2001 revealed quality, training and service delivery problems attributed in large measure to the decline in the number of management and supervisory positions in SSA's field offices.  As a pertinent aside, OMB Director Mitch Daniels has defined direct service positions as "positions that interact with citizens."  By that definition, every management and supervisory position in every field office and teleservice center is a direct service position.  They all interact with citizens on a daily basis and consequently, by the definition applied by the current OMB Director, each manager and supervisor lost to delayering was a loss in direct service to the American public.

The need to address these cutbacks so as to achieve and maintain adequate levels of quality, training and public service will be another challenge facing the Commissioner.

Organizational Culture

The Social Security Advisory Board in both its September, 1999 report and in its February, 2001 report made reference to the need for the agency's leadership to address what they termed "long standing institutional problems."  In both reports the Board states that "…SSA has a strong institutional resistance to open discussion of the agency's problems.  Although this attitude has apparently persisted for many years and may be related to the agency's historic "can do" approach, it is particularly inappropriate and troubling today, given the scope and magnitude of the agency's problems."

Related to this problem is a belief among field office and teleservice center management that their offices are being micromanaged.  There appears to be a strong emphasis on top down management. There is a proliferation of numeric goals that are increasingly remotely monitored.  A negative consequence of this approach is that onsite mangers are restricted in their use of judgement and initiative and are constrained in their use of resources to obtain optimum public service given local circumstances.

The challenge for the Commissioner is to be sensitive to these issues and to the perceptions arising therefrom. 

Public Awareness

For a long time there has been recognition of the fact that there is a critical need to strengthen public understanding of Social Security programs.   The agency has set a strategic objective of increasing public awareness of Social Security programs in five critical areas: (1) Basic program facts, (2) Financial value to individuals, (3) Economic and social impact of programs, (4) How programs are financed today, (5) Financing issues and options.  The goal is to have 9 out of 10 Americans knowledgeable in these areas by 2005.  This is a desirable goal and represents a significant challenge for the Commissioner.

If this challenge is to be met, it is essential that SSA reinvigorate the role and capacity of our local community based field offices in the area of public information. 

Technology

SSA's Service Vision details a very impressive array of technological enhancements that are intended to enable the agency to deal with increased workloads and public demand within assumed budgetary constraints.  These enhancements are desirable and arguably essential to the future viability of SSA's service.  But technology is only effective if used and used correctly by employees.  The challenge for the Commissioner is to make that happen.

The Commissioner needs to examine how technology is utilized in SSA.   Does the agency have the skilled programmers required to develop needed software timely and efficiently?  Does the agency have in place the skilled resources necessary to ensure the effective maintenance and updating of its computer systems?  And, importantly from the viewpoint of field management, does that agency effectively provide for systems support in field offices and teleservice centers?

Regarding this last question, we feel there is a definite need to take a fresh look at systems support at the field office and teleservice center level.  Line employees need to receive ongoing, hands on training in the effective use of available software.  Managers and supervisors should not have the prime responsibility for handling hardware maintenance and problems.  The challenge here for the Commissioner is to develop a comprehensive, effective and uniform approach, which may extend to the development of new positions to fulfill these needs.

Special Title II Disability Workload

SSA is currently faced with a huge and essentially unanticipated workload in the form of literally hundreds of thousands of cases that have come to be termed Special Title II Disability cases.  These involve situations wherein there was a failure to properly identify SSI recipients who, after becoming entitled to SSI payments, subsequently became potentially eligible for Title II benefits.  At that point an application for Title II benefits should have been solicited and processed.  Having now identified these cases, SSA is now obligated to secure and process applications.  This will involve a very significant and unanticipated expenditure of SSA's frontline field office resources.  This is a very difficult challenge for the Commissioner because it will take a significant number of SSA's best and brightest frontline Technical Experts to handle this workload.  These people will not be available to help handle the normal and expected workload, which continues to grow.  This is also not a situation that can be resolved with additional money alone.  The Commissioner needs the option and authority to hire additional frontline field office Claims Representatives to help ease the additional burden that will result from using the afore mentioned "experts" on this unanticipated workload.  Without this option and authority, service to the public, in terms of current service, will undoubtedly suffer.

Summary

As indicated at the beginning of my statement, the challenges discussed are from the perspective of SSA's frontline managers and supervisors.  They are by no means comprehensive, but they are, in our judgement, directly related to the level and quality of service SSA provides to our citizens on a daily basis.  The NCSSMA is anxious to work with and help SSA's new Commissioner as she tackles the difficult challenges ahead.

We have every hope and confidence that she will be successful and that SSA will continue to be among the premier organizations in government.

Again Mr. Chairman, I thank you for this opportunity to address the Subcommittee.  I would welcome any questions that you or your colleagues may have.