Good afternoon. I am pleased to welcome everyone to this afternoon’s joint hearing on payment accuracy in programs administered by the Social Security Administration. As with past Subcommittee on Oversight hearings on Medicare fraud and refundable tax credits, today’s hearing is aimed at better understanding improper payments in Social Security programs and how taxpayer dollars might be better protected.
Next year alone, the Social Security Administration is tasked with the enormous responsibility of distributing nearly $820 billion to over 60 million beneficiaries. With the staggering size and complexity of these programs, Social Security is particularly vulnerable to erroneous payments, fraud, and management challenges. We’re here today to explore these challenges and consider what might be done to correct them and better protect both beneficiaries and taxpayers.
By any standard, the scope of these problems is considerable. Social Security issued at least $8 billion in improper payments in fiscal year 2010. According to GAO and the Social Security Inspector General, this number does not capture the full extent of overpayments.
Regardless of whether a payment occurs because of simple error or outright fraud, improper payments harm Social Security programs in the long term, jeopardizing benefits for those who may need them in the future. They also cost taxpayers billions of dollars each year. With publicly held federal debt set to eclipse GDP in the coming years, we can no longer ignore billions of dollars in overpayments, regardless of how they occur.
While the numbers involved with wasteful Social Security spending might be overwhelming, the solutions that would reduce them are no mystery. Today we’ll be discussing proven methods for reducing improper payments, such as “Continuing Disability Reviews” and “Redeterminations,” which can save the taxpayer as much as $15 for every dollar spent. We’ll also be discussing how these cost-saving activities are on the decline – falling as much as 65% in recent years – adding billions of dollars in additional overpayments that might have otherwise been prevented.
There is much that needs to be done to reduce improper payments and better protect taxpayer dollars. Social Security should build on past successes with data exchanges, using information the government and beneficiaries already have to make payments more accurate. And they not only need to get this information in a timely fashion, but they need to put it to use more quickly than they have in the past.
Too often, the agency is not responsive to beneficiaries. Many of us have heard reports from constituents about the agency waiting months or years to send out overpayment notices, which can lead to tens of thousands of dollars in additional overpayments and underpayments. In other cases, beneficiaries may inform the agency of a change in their income or medical status, and years go by without action by Social Security. This has to change. I look forward to hearing from the witnesses today about how these problems occur and what might be done to prevent them.
With these programs, like others, every dollar spent on an improper payment is a dollar that does not go to a legitimate beneficiary and each one further weakens the program. And with the Social Security program heading towards insolvency, the time when we could just kick this can down the road is past, if it was ever here at all.
As the Ways and Means Subcommittees on Oversight and Social Security, we have an obligation to Social Security beneficiaries and taxpayers to understand the size of the problem and what might be done to improve it. I hope today’s hearing will cast new light on these issues, and thank our guests for joining us for this important discussion.