[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE SOCIAL SECURITY ADMINISTRATION'S
PROVISIONS IN THE AMERICAN RECOVERY
AND REINVESTMENT ACT OF 2009
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
APRIL 28, 2009
__________
Serial No. 111-16
__________
Printed for the use of the Committee on Ways and Means
----------
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For sale by the Superintendent of Documents, U.S. Government Printing
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COMMITTEE ON WAYS AND MEANS
CHARLES B. RANGEL, New York, Chairman
FORTNEY PETE STARK, CALIFORNIA DAVE CAMP, MICHIGAN
SANDER M. LEVIN, MICHIGAN WALLY HERGER, CALIFORNIA
JIM MCDERMOTT, WASHINGTON SAM JOHNSON, TEXAS
JOHN LEWIS, GEORGIA KEVIN BRADY, TEXAS
RICHARD E. NEAL, MASSACHUSETTS PAUL RYAN, WISCONSIN
JOHN S. TANNER, TENNESSEE ERIC CANTOR, VIRGINIA
XAVIER BECERRA, CALIFORNIA JOHN LINDER, GEORGIA
LLOYD DOGGETT, TEXAS DEVIN NUNES, CALIFORNIA
EARL POMEROY, NORTH DAKOTA PATRICK J. TIBERI, OHIO
MIKE THOMPSON, CALIFORNIA GINNY BROWN-WAITE, FLORIDA
JOHN B. LARSON, CONNECTICUT GEOFF DAVIS, KENTUCKY
EARL BLUMENAUER, OREGON DAVID G. REICHERT, WASHINGTON
RON KIND, WISCONSIN CHARLES W. BOUSTANY, JR.,
BILL PASCRELL, JR., NEW JERSEY LOUISIANA
SHELLEY BERKLEY, NEVADA DEAN HELLER, NEVADA
JOSEPH CROWLEY, NEW YORK PETER J. ROSKAM, ILLINOIS
CHRIS VAN HOLLEN, MARYLAND
KENDRICK B. MEEK, FLORIDA
ALLYSON Y. SCHWARTZ, PENNSYLVANIA
ARTUR DAVIS, ALABAMA
DANNY K. DAVIS, ILLINOIS
BOB ETHERIDGE, NORTH CAROLINA
LINDA T. SANCHEZ, CALIFORNIA
BRIAN HIGGINS, NEW YORK
JOHN A. YARMUTH, KENTUCKY
Janice Mays, Chief Counsel and Staff Director
Jon Traub, Minority Staff Director
______
SUBCOMMITTEE ON SOCIAL SECURITY
JOHN S. TANNER, Tennessee, Chairman
EARL POMEROY, North Dakota SAM JOHNSON, Texas, Ranking Member
ALLYSON Y. SCHWARTZ, Pennsylvania KEVIN BRADY, Texas
XAVIER BECERRA, California PATRICK J. TIBERI, Ohio
LLOYD DOGGETT, Texas GINNY BROWN-WAITE, Florida
RON KIND, Wisconsin DAVID G. REICHERT, Washington
JOSEPH CROWLEY, New York
LINDA T. SANCHEZ, California
JOHN A. YARMUTH, Kentucky
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
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C O N T E N T S
__________
Page
Advisory of April 21, 2009 announcing the hearing................ 2
WITNESSES
Mary Glenn-Croft, Deputy Commissioner for Budget, Finance and
Management, Social Security Administration..................... 7
Robert Hewell, Acting Deputy Commissioner, Public Buildings
Service, United States General Services Administration......... 14
The Honorable Patrick P. O'Carroll, Inspector General, Social
Security Administration........................................ 22
Valerie Melvin, Director of Information Management and Human
Capital Issues, U.S. Government Accountability Office.......... 26
Sylvester J. Schieber, Chairman, Social Security Advisory Board.. 42
SUBMISSIONS FOR THE RECORD
Dale and Linda Walker, Statement................................. 91
Larry S. Stoudemire, Letter...................................... 91
The National Association of Disability Examiners, Statement...... 91
THE SOCIAL SECURITY ADMINISTRATION'S
PROVISIONS IN THE AMERICAN RECOVERY
AND REINVESTMENT ACT OF 2009
----------
TUESDAY, APRIL 28, 2009
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to call, at 2:01 p.m., in
room B-318, Rayburn House Office Building, the Honorable John
Tanner (Chairman of the Subcommittee) presiding.
[The advisory of the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
April 21, 2009
SS-2
Congressman Tanner Announces Oversight
Hearing on the Social Security Administration's
Provisions in the American Recovery
and Reinvestment Act of 2009
Congressman John S. Tanner (D-TN), Chairman, Subcommittee on Social
Security, announced an oversight hearing on the progress made by the
Social Security Administration (SSA) in implementing the American
Recovery and Reinvestment Act of 2009. The hearing will take place on
Tuesday, April 28, 2009 in room B-318 Rayburn House Office Building,
beginning at 2:00 p.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
In February, Congress passed and the President signed the American
Recovery and Reinvestment Act of 2009 (ARRA, Pub. L. 111-5), landmark
legislation designed to create jobs, promote economic recovery, assist
people most impacted by the recession, and make investments in
infrastructure and technology to increase economic efficiency and
provide long-term economic benefits.
The Recovery Act made a significant and strategic investment in
SSA, to ensure that the agency is capable of continuing its vital role
in helping American families meet their financial needs during
retirement, in case of disability, or after the death of a wage earner.
A decade of funding below the President's request had left SSA with a
decreased ability to meet the requirements of serving an aging society.
As a result, the agency was also ill-prepared to deal with a
significant increase in retirement and disability benefit claims caused
by the current economic downturn. Post-9/11 enhancements to Government
requirements for systems continuity in case of a disaster combined with
SSA's increasing use of electronic processes also require modernization
of its information technology systems, including complete replacement
of its nearly obsolete National Computer Center (NCC). Moreover, ARRA's
provision of one-time economic recovery payments to Social Security
beneficiaries is intended to give some financial help to retired and
disabled Americans, who are most likely to be impacted by the economic
crisis.
SSA's national computer processing and data storage facility, the
NCC, houses 450 million records of Americans' earnings and benefit data
for almost 56 million beneficiaries. It performs a billion electronic
transactions annually in the administration of benefits and data-
matching agreements with other Federal, state and local agencies. As
reliance on electronic processing and technology grows--both within SSA
and among other Federal, state and local agencies--so does the need to
ensure the NCC is able to function effectively. The NCC is nearly
thirty years old. It is nearing the end of its useful physical life,
its capacity is inadequate to meet anticipated future needs, and
deterioration of the facility is posing increasing risks to SSA
operations. Questions have been raised concerning why replacement of
the NCC became an unforeseen and urgent priority, and whether steps can
be taken by SSA to avoid such crises in the future. ARRA provided SSA
with $500 million to begin the process of replacing the existing NCC.
This amount is expected to cover the cost of building a new facility
and part of the cost of equipping it.
In addition, SSA's workload in processing new claims for retirement
and disability benefits began to increase significantly in FY 2009 as a
result of the economic downturn combined with the aging of the
population. SSA estimated that processing the increased number of
claims will cost the agency $900 million more in FY 2009-10 than was
previously projected. ARRA provided SSA with $500 million as a down-
payment on the cost of processing these recession-driven claims.
Finally, ARRA provided most Social Security, Railroad Retirement
Board, Veterans Administration, and Supplemental Security Income (SSI)
beneficiaries with a one-time, additional payment of $250 to help
stimulate economic recovery. Direct payments to retirees and people
with disabilities have a beneficial impact on the economy, as
beneficiaries with modest incomes are more likely to spend the money on
immediate needs rather than save it. SSA has notified its beneficiaries
of the upcoming payments and anticipates their distribution several
weeks ahead of the June statutory deadline.
In announcing the hearing, Chairman John Tanner (D-TN) stated,
``Congress counts on the Social Security Administration to reliably
serve America's retirees, people with disabilities and survivors,
providing needed benefits in a timely manner. In the Recovery Act,
Congress made a significant investment in SSA's capacity to continue to
effectively serve our constituents. This hearing will allow the
Subcommittee to learn how SSA is managing this investment, to ensure
that waste is avoided and all due effort is made to maintain the high
level of customer service for which the agency historically has been
known.''
FOCUS OF THE HEARING:
The hearing will focus on the progress made by SSA and other
involved agencies in using ARRA resources to replace the NCC; SSA's use
of ARRA funding to process recession-driven claims; and the agency's
plans for distributing the $250 economic recovery payments to over 50
million recipients.
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Chairman TANNER [presiding]. If Mr. Brady has arrived, we
could come to order.
I thank all of you for being here, particularly our
witnesses.
This hearing today is about the implementation of the so-
called stimulus bill, the American Recovery and Reinvestment
Act, and, basically, there are two or three things that we want
to talk about here with our witnesses. One, of course, is the
resources that were made available for the backlog and the
problems that we have been having with that, and secondly is
the somewhat urgent need to move on a new facility for the
Social Security Administration.
This came to us late in the day, as one might say, about
the urgency of the problems out at the site, the National
Computer Center, and, therefore, Congress responded with some
moneys in the stimulus package to address this issue. And,
finally, we will talk a little about the stimulus bill and the
recovery payments and so forth that is contained therein.
Unfortunately, Mr. Johnson, our Ranking Member on the
Subcommittee, could not be here today, and so, at this time, I
would like to ask Mr. Brady for any comments he may have as the
Ranking Member. And thank you.
Mr. BRADY. Great, Chairman. Thanks for having us.
I am pleased to be filling for our Ranking Member, Sam
Johnson, who is remaining in Texas for part of the day and will
start by reading his opening statement for today's hearing.
This Committee, as the chairman said, has long worked on a
bipartisan basis to ensure Social Security has the resources it
needs. In the last 2 years, Congress has provided funding at
levels higher than the President's request, and the Recovery
Act provides an additional $1 billion to build a new computer
center and to process increased workloads due to the economic
downturn.
Today, we will begin to learn how Social Security is using
these funds and whether they are doing so in ways that provide
real results to the American people without squandering
substantial taxpayer investments.
First, these results must include restoring service
delivery and protecting Americans' personal information and in
the event of a major failure at the 30-year-old National
Computer Center. Second, delays our constituents face when they
visit or contact the local Social Security office, call the 800
number, or wait over 16 months for a decision on their
disability appeal before administrative law judge must be
reversed.
Third, efforts to address program waste, fraud, and abuse,
including conducting continuing disability reviews, must be
increased in order to save billions in program dollars and
build taxpayer confidence. Finally, whether Social Security
will achieve these results now and in the future depends on
their ability to effectively and strategically modernize its
technology infrastructure as it purchases a new National
Computer Center and builds the capacity of the second data
center in Durham.
As said in a recently released bipartisan Social Security
Advisory Board report, ``There is much that remains to be done
to establish a truly robust and modern IT infrastructure that
will truly support service delivery in the 21st century, and
time may be running short.''
In closing, as we address Social Security service delivery
challenges, we cannot just ignore the fiscal challenge Social
Security faces. President Obama has expressed his commitment to
advance Social Security reform. We all know the sooner we act
to protect and strengthen Social Security, the better.
So I hope this Subcommittee can begin work on a bipartisan
basis as soon as possible to examine options and find
solutions.
Thank you, Chairman.
Chairman TANNER. Thank you, Mr. Brady.
The Chair would ask unanimous consent that his statement
and all others on the Committee be inserted into the record.
Without objection.
[The statement of Mr. Johnson follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TANNER. In addition, I would like to ask unanimous
consent that all of the statements of the witnesses that are
going to testify be inserted into the record. Without
objection. Thank you.
And now may I call on Ms. Glenn-Croft first for your
testimony. You are recognized. And, please, if you could
observe the 5-minute rule, we would appreciate it.
STATEMENT OF MS. MARY GLENN-CROFT, DEPUTY COMMISSIONER FOR
BUDGET, FINANCE AND MANAGEMENT, SOCIAL SECURITY ADMINISTRATION
Ms. GLENN-CROFT. I will do that.
Chairman Tanner, Ranking Member Brady, and Members of the
Subcommittee, good afternoon. I am Mary Glenn-Croft, Social
Security senior accountable official for the use of Recovery
Act funds.
On behalf of Commissioner Astrue, I appreciate the
opportunity to discuss how these funds will help us process our
increasing workloads and replace our aging National Computer
Center. I will also share our plan to oversee our Recovery Act
responsibilities, including issuing one-time $250 economic
recovery payments to Social Security and SSI beneficiaries.
Let me begin by thanking you for the significant investment
you are making in our agency and for the trust that you have in
us to get the job done.
The Recovery Act provides us with $500 million to process
what we expect to be the highest levels of disability and
retirement claims we have ever seen. This fiscal year, because
of the twin forces of the economic downturn and the first baby
boomers retiring, we expect to receive over 300,000 more
retirement claims, about a 9-percent increase, and 300,000 more
disability claims, about a 12-percent increase, over last year.
Fiscal year 2009 appropriations and Recovery Act funding will
allow us to process most, if not all, of the additional
retirement claims, hold 75,000 additional hearings, and process
an additional 30,000 disability claims.
We will also hire more than 2,000 people with the Recovery
Act funding this fiscal year. About 1,500 of these new hires
will provide direct service to help people file claims,
adjudicate applications, and answer the public's questions. We
will hire 35 additional administrative law judges and 550
support staff in hearing offices, and we will provide funding
for 300 new employees in the state disability determination
services.
In addition, we will authorize overtime and frontline
components to process critical workloads. We have already
recruited and hired a highly diverse group of more than 1,400
new employees. New hires will make a real difference in the
service we provide to the American public, although it will
take some time for us to fully train them. Our combined fiscal
year 2009 annual appropriation and the Recovery Act funding
will allow us to hire over 7,000 employees by September.
The Recovery Act authorized us to spend part of the $500
million on technology investments, including health information
technology. We will spend about $16 million dollars of Recovery
Act funding on computers and other equipment our new hires will
need. We will also invest in video-conferencing equipment and
increased bandwidth to support the hearings process. We intend
to spend $24 million to contract with the health care community
to provide us with electronic health records to improve the
speed and accuracy of our disability determination process.
Congress also acknowledged our long-term information
technology needs by providing $500 million to replace and
partially equip our national Computer Center. The NCC is the
technological heart of the agency, housing critical computer
operations and data essential to provide prompt and accurate
benefit payments to millions of Americans. Because the NCC is
30 years old, eventually, it will be unable to support the
growing demand of our computer systems and electronic services.
This funding will ensure that a new data center will be
operational as the NCC nears the end of its functional life.
We are working collaboratively with the General Services
Administration to formulate specific requirements for a state-
of-the-art data center and to develop criteria for a building
site. As of April 1, GSA awarded a contract to a construction
management firm, and we are currently providing that firm with
information to define building requirements and land
specifications.
We strongly support the accountability and transparency
standards Congress established for Recovery Act funds. As
recommended by OMB, our executive internal control Committee
will oversee Recovery Act performance across the agency. We
have established oversight workgroups for each of our Recovery
Act efforts, and in compliance with reporting requirements, we
were one of the first agencies to put up a recovery Web site
and submit our weekly reports to OMB. We are also working
closely with our inspector general's office as it plans
additional oversight of Recovery Act funding.
Finally, the Recovery Act provides for one-time $250
economic recovery payments to Social Security and SSI
recipients. Although implementing this legislation required
extensive coordination with other Federal agencies, we are on
track to issue these payments in May, 3 weeks earlier than the
statute requires. These payments to more than 50 million people
will inject over $13 billion into the economy.
Again, we greatly appreciate the actions of Congress to
provide assistance to the American people in this time of
economic hardship, and we thank you for providing us with the
funding we need to help in these efforts. We will keep the
Committee apprised of our progress, and we look forward to your
continued support as we implement the plans I have described
above.
I would be happy to answer any of your questions.
Thank you.
[The statement of Ms. Glenn-Croft follows:]
Statement of Mary Glenn-Croft, Deputy Commissioner for Budget,
Finance and Management, Social Security Administration
Thank you for the opportunity to describe the important and
ambitious projects that we at the Social Security Administration are
undertaking with the funds that you appropriated to us through the
American Recovery and Reinvestment Act of 2009 (Recovery Act) I want to
thank you on the agency's behalf for the significant investment you are
making in us and for the trust that you have in us to get the job done.
We realize that many of our fellow citizens are suffering because
of the current economic downturn. Jobs have become scarcer; homes have
been lost, and too many of our neighbors are facing increased
difficulty in making ends meet. Undoubtedly, these are challenging
times. Nevertheless, we believe that we have a unique opportunity to
serve the millions of Americans who rely upon our programs and to
continue to provide them with the quality service they deserve.
As the Senior Accountable Official, I am responsible for overseeing
how we use the Recovery Act resources. Under the Recovery Act, you
afforded us $500 million to tackle our retirement and disability
workloads--$40 million of which we may use for health information
technology initiatives. You also gave us $90 million to administer
economic recovery payments and $500 million to construct and partially
equip a new data center to replace our aging National Computer Center
(NCC). This substantial investment will help us address the
dramatically increasing service demands caused by the combination of a
weakened economy and increased baby boomer retirements.
Today, I will discuss how these Recovery Act resources will help us
process our increasing workloads and replace our aging NCC. I will
share with you the agency's plan to oversee all of our Recovery Act
responsibilities, including paying $250 to millions of Social Security
and Supplemental Security Income (SSI) beneficiaries.
PUTTING RECOVERY FUNDS TO WORK--HIRING AND PROCESSING WORKLOADS
The Recovery Act gives us $500 million to process the increased
number of disability and retirement claims we are seeing because of the
economic downturn and the beginning of the baby boomer retirement wave.
If our projections hold true, we will receive and process more claims
this year than in any prior year. With the fiscal year (FY) 2009
appropriation and the Recovery Act funding, we plan to process over
300,000 more retirement claims, 30,000 more disability claims, and
nearly 75,000 more hearing requests this fiscal year than we did in FY
2008.
We will use a significant portion of this funding to hire and train
new employees and to provide additional overtime so that we can process
critical workloads. Of more than 7,000 new hires that we are making
this fiscal year, the Recovery Act funding will allow us to hire more
than 2,000 Federal employees and the States to hire additional
disability examiners. Specifically, in the near term:
Our field operations will hire 1,500 employees in
local field offices, teleservice centers, and processing
centers;
Our hearings offices will hire 550 new employees and
35 additional administrative law judges, and
State disability determination services (DDS)
throughout the country will hire 300 additional disability
examiners.
In total, by September of this year, with our FY 2009 appropriation
and the Recovery Act funding, we will hire over 7,000 employees. We
will assign these new employees throughout the agency and across the
country to provide a much-needed increase in our staffing level.
Additional employees, of course, require additional space to house
them. As Commissioner Astrue said during his appearance before this
Subcommittee last month, we will open 10 new hearing offices in the
near future.\1\ Earlier this month, he also decided to add 3 more
offices, bringing the total number of new hearing offices to 13.
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\1\ St. Petersburg, FL; Tallahassee, FL; Atlanta South, GA; Topeka,
KS; Mt. Pleasant, MI; Livonia, MI; Akron, OH; Toledo, OH; Fayetteville,
NC, and Madison, WI. The three additional offices will be in Auburn,
WA; Phoenix, AZ, and either Danville or Portage, IN.
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New hires will make a real difference in the service we will
deliver to the public. With this increased staffing, we will be able to
take more claims, whether in person or by telephone, to adjudicate more
claims, and to serve callers to our national 800 number.
Recruitment and Training--A Long-Term Investment
Hiring new employees is critical. Accordingly, as the Recovery Act
moved through Congress, we instructed personnel offices and managers to
be ready to hire as soon as we had an appropriation. To achieve a
diverse and high-performing workforce, we will continue to seek
employees through announcements on USAJOBS. We also will utilize the
full range of hiring flexibilities, such as the excepted service
appointment authorities for Veterans Recruitment Appointments and the
Federal Career Intern Program. We are also working with the Office of
Personnel Management (OPM) to obtain the necessary authority to hire
reemployed annuitants for some of our highly technical positions since
these individuals already possess the skill sets necessary to do the
job.
Realistically, new employees will not have an immediate impact on
our current or backlogged workloads, as hiring and fully training new
employees is a lengthy and resource-intensive process. The hiring
process includes reviewing applications and resumes, conducting
interviews, conducting background checks, and offering positions.
Often, new employees must relocate to their duty stations or give their
employers sufficient notice so that the employer may seek a
replacement. Once new employees report to work, they will receive
training that because of the complexity of our programs, generally
lasts from 13 to 17 weeks. After this initial training, we assign a
mentor to most new employees to help them learn the intricacies of
processing our work. This on-the-job training typically lasts a full
year. By the end of that year, though still not fully proficient in all
parts of the job, these employees will begin to contribute
significantly to workload processing. The time spent training and
mentoring, however, reduces the time our more experienced employees
have to process their own work, reducing productivity in the short run.
Whenever we recruit and hire, we remain mindful of our firm
commitment to a high-performing, diverse workforce. We are making a
concerted effort to hire persons with disabilities by reaching out to
Wounded Warrior transitional programs and Ticket to Work beneficiaries
who are trying to return to the workforce. For example, on May 28, we
will hold our second annual Hiring Heroes Career Fair at our Baltimore
headquarters, and we expect over 100 military personnel and veterans
with disabilities to attend. With Recovery Act funding, we have already
hired a highly-diverse group of more than 1,400 employees.
Fully Funded and Staffed DDSs Are Essential to Meeting Our Commitments
When States are hiring DDS employees, they confront some of the
same obstacles that we face when we hire employees. A number of States
have introduced an additional challenge to fully staffing their DDSs by
furloughing DDS employees in an effort to balance their budgets.\2\
Such practices are unnecessary since we fully fund the DDSs and
reimburse the States for the salaries and benefits of all DDS
employees. This fiscal year over 16,000 DDS employees will process more
than 2.6 million disability claims. We will pay about $2 billion to the
States to cover all payroll costs as well as the costs to obtain the
health records and to perform the medical examinations necessary to
adjudicate disability claims.
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\2\ DDS employees in California, Maryland, Massachusetts, Ohio, and
Oregon are currently subject to furloughs.
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We empathize with the budget struggles that States face in these
difficult economic times, but States do not save any money when they
furlough or lay off DDS employees. We estimate that if all States
furloughed DDS employees for one day, they would lose $7.8 million in
administrative funding that we pay to them. In addition, such furloughs
would delay the processing of approximately 15,000 claims and the
payment of $4.2 million of monthly benefits to their disabled
residents. Furloughs and restrictions on hiring and overtime only delay
payments to their disabled citizens who have applied for benefits.
We appreciate your efforts in communicating with State leaders to
help them understand the importance of having enough trained, full-time
DDS employees on hand to process the influx of disability claims--an
influx that we project will grow by more than 12 percent this fiscal
year. Without enough fully trained and fully productive DDS employees,
we risk limiting the processing gains that we can achieve with Recovery
Act funds.
We will need Congress's continued support as we work with
Governors, legislators, and other elected officials to ensure that DDSs
have the staff needed to adjudicate the increased number of disability
claims that we expect to arrive at their doors because of the economic
downturn.
Technology Investment Is Critical To Maintain and Expand Our Service to
the American People
The Recovery Act also authorizes us to spend part of the $500
million for technology investments including health information
technology. We will spend about $16 million of Recovery Act funding on
computers for our new employees, as well as video conferencing
equipment and increased bandwidth, which will improve our
telecommunications network. With this funding, we will be able to
continue to reduce the hearings backlog.
While all hearing offices now have at least one video conference
connection, we are increasing the availability of video hearings in
remote areas in order to reduce travel time for claimants and
representatives who would otherwise have to drive long distances to
reach a hearing office. The inability of some claimants and their
representatives to attend face-to-face hearings can delay the
disposition of their claims. Video conferencing addresses this
situation by allowing claimants and their representatives to attend
hearings remotely.
Indeed, two weeks ago, Commissioner Astrue officially opened our
new National Hearing Center (NHC) in Albuquerque, New Mexico. The
Albuquerque NHC utilizes video conferencing that enables administrative
law judges to hold remote disability hearings providing relief to those
hearing offices that are struggling the most. Initially, the
Albuquerque NHC will hear disability claims pending in Kansas City,
Missouri and Portland, Oregon--two of the most backlogged offices in
the country.
Moreover, we are a leader in the Federal Government in health
information technology. We intend to spend $24 million of our Recovery
Act funding to contract with a diverse group of health care providers
and networks to provide us with electronic health records to improve
the speed and accuracy of the disability determination process. As
Commissioner Astrue told this subcommittee last month, we conducted a
pilot project in Boston that allowed us to receive health records
electronically in seconds and minutes, rather than the usual weeks and
months that it takes to gather paper records. To improve the speed and
quality of our disability determinations, we will use this funding to
expand the number and kinds of health care records that providers can,
with the claimant's consent, send to us electronically. This funding
will also be used to implement any new requirements that may be issued
under the HITECH Act. Providers will be required to transmit to us
structured electronic medical data based on standards established for
use by the Nationwide Health Information Network.
Significant Headway in Workload Processing
Use of Recovery Act funds for hiring and technology will help us
process our increasing workloads; however, improvements to processing
times and claims pending will not happen overnight. Our current
hearings backlog developed over time, and it will take time and
sustained funding for us to reduce that workload to acceptable levels.
In the near term, initial disability receipts will outpace our capacity
to process them, and the initial disability claims backlog will rise.
Just as we did with the hearings backlog, we are currently developing a
multi-year plan to deal with the future increases of pending initial
disability claims.
The substantial investment you made to increase our staffing levels
will allow us to make significant headway in workload processing over
the next several years. The additional employees we hire and train this
fiscal year will enable us to increase our capacity to process critical
workloads in FY 2010.
INCREASING OUR COMPUTER PROCESSING CAPABILITIES
Of course, these hiring and technological gains are only a part of
the solution. To move forward in this environment of increasing
workloads, we must continue to be innovative and find additional
efficiencies. We must use every tool at our disposal to meet the
standard of service the public has come to expect from us.
National Computer Center (NCC)--Limitations of the Existing Facility
Congress acknowledged our long-term information technology needs in
the Recovery Act by allocating $500 million to replace and partially
equip our NCC. The NCC houses critical data and computer operations
essential for promptly and accurately paying benefits to millions of
Americans. Because it plays such an important role in our data
processing operations and automation initiatives, I especially
appreciate this opportunity to describe our prior efforts to maintain
the NCC and the analysis that led us to realize that a new facility was
essential.
The NCC was designed over 30 years ago. Technology has changed
radically since then, and we must upgrade the building's cooling,
electrical, and fire suppression systems to accommodate these new
technologies. As a result, the NCC's infrastructure systems will not be
capable of accommodating the information technology necessary to handle
our increasing volumes of work, our new and expanded responsibilities,
and our new ways of doing business. Our transition to full electronic
processing of our core workloads and the growth of electronic service
delivery over the last decade resulted in a dramatic increase in our
needs for data storage and network capacity. While we have modernized
our hardware, we are facing finite limitations on our ability to
distribute electrical power to our servers and mainframes.
Updated servers and mainframes have significant electrical
requirements. Until recently, each server required only one power
supply to operate; now, a server requires two to four power supplies to
function, which the NCC can accommodate at this time. The current
electrical panels will not be able to accommodate the more than four
power supplies that we will need to run servers in the future.
As the NCC has aged, we have continuously upgraded and repaired
structural, electrical, and data processing capabilities. Incrementally
upgrading a facility of this kind is a best industry practice for
maintaining facilities beyond their life cycle. We must incrementally
repair these infrastructure systems because we cannot totally replace
them in the existing NCC. To replace them, we would have to shut down
the building completely for an extended period of weeks or months.\3\
Such a shutdown would result in an unacceptably long interruption of
service to the public.
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\3\ Presently, we have only a single 30-hour window each year to
perform all maintenance on the NCC.
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We also considered the possibility of renovating the existing
building; however, renovations of this magnitude would require us to
vacate the building and design and lease a facility to temporarily
house the data and employees. The expense of doing this would be almost
as costly as simply building a new, up-to-date data center and would
create a risk of a major interruption in service.
Even if we could overcome the obstacles to repair and upgrade the
NCC and its infrastructure, we would still have a building designed
around a 1970s' mainframe environment. In the seventies, redundant
electrical, heating, and cooling systems were not state-of-the-art
requirements for data centers. In addition, fire suppression systems
were not designed to cover an entire floor.
In short, the current facility will not be able to meet the
industry standards for data centers in the future.
In February 2008, we received a report from Lockheed Martin, whom
we had asked to independently analyze the condition of the NCC's
infrastructure and recommend ways to upgrade it, if necessary. The
Lockheed Martin consultants identified no chronic structural defects
and verified that over the years, we have maintained the building well.
Lockheed Martin also confirmed the NCC's structural limitations and
recommended we build a new facility.
The New Data Center
We thank you for your support of funding to construct a new
facility, which we are calling the National Support Center, and
appreciate your acknowledging that in an environment of evolving
cyberthreats, we must continue to protect beneficiary records with
unmatched vigilance.
I am pleased to report that the facility that will replace the NCC
will not only be a state-of-the-art data center, but it will also
incorporate green building technology. Compared to the existing
facility, the new center will be substantially more energy efficient.
We have started working with our colleagues at the General Services
Administration (GSA) on all aspects of this project. GSA will manage
the design and construction activities for the project, as only GSA has
the authority to own or lease Federal facilities for us. However, we
are working very closely with GSA in designing and constructing the new
facility. We have a history of working very successfully on
construction projects with GSA, both at the national and regional
levels. For this project, GSA assigned some of its most highly
qualified project managers, as have we, to ensure the work is completed
on time without cost overruns and in full compliance with our
requirements. We look forward to this important collaboration, and I
would like to thank GSA for its vital support of this particular
project, as well as our other building and space needs.
We have started the formal planning process with GSA. Initial
activities include:
(1) formulating specific requirements for constructing a
state-of-the-art data center;
(2) developing the criteria for selecting a site; and
(3) developing a detailed construction project plan. GSA will
execute these steps, and we will provide input and oversight to
ensure the facility's design fully meets our needs and
requirements. Additionally, GSA has awarded a contract to a
construction management firm. The firm, Jacobs, will work with
GSA and us to develop a detailed Program of Requirements, also
known as a ``scope of work.'' We are currently providing Jacobs
with necessary background information on the objectives of the
project that it will use to define building requirements and
land specifications.
In addition to replacing the NCC, we have proactively addressed our
increased data processing demands and enhanced our disaster recovery
strategy by bringing up a Secondary Support Center. We have begun to
install equipment at that site, and we are ahead of schedule for
bringing up the facility. Within approximately 6 months, we will be
able to process about half of our production workloads at this
facility, thus providing necessary backup to the NCC. The Secondary
Support Center will eventually be able to provide full backup and
recovery for our data and daily processing needs.
SUPPORTING ACCOUNTABILITY AND TRANSPARENCY FOR RECOVERY ACT RESOURCES
We strongly support the accountability and transparency standards
for Recovery Act resources established by Congress. To emphasize the
importance of these standards, we are holding executives and staff
accountable for monitoring and achieving the goals of all of the
Recovery Act initiatives for which we are responsible. Because the
Recovery Act invests in our core mission work, our existing internal
controls will help us effectively account for our use of Recovery Act
funding. However, we will also add any internal controls that we may
need to assess our implementation of the Recovery Act.
As recommended by the Office of Management and Budget (OMB), we are
using existing entities to review, assess, and manage Recovery Act
risk. We have designated our Executive Internal Control Committee (EIC)
to serve as our Senior Management Council, overseeing Recovery Act
performance across the agency, including risk management. The Deputy
Commissioner of Social Security chairs the EIC, and the Inspector
General and I serve on the committee. The EIC oversees the results of
our internal controls that, among other things, test our financial
reporting processes, systems development, and validation processes. The
EIC also helps ensure our compliance with administrative, security, and
management policies.
As the Senior Accountable Official, I oversee all aspects of
Recovery Act planning, implementation, reporting, and performance. I
report progress, total obligations, and disbursements through a weekly
update report, which we post to our website and submit to recovery.gov.
As an indication of our readiness and ability to meet our
responsibilities, we were one of the first agencies to place these
reports on our website. We will be working with OMB to finalize our
Recovery Act implementation plans by early May.
We have formed intra-agency workgroups at both the executive and
staff levels to manage the implementation of our three key Recovery Act
responsibilities. These groups meet on an ongoing basis to ensure
progress, resolve issues, and as needed, take corrective actions.
Finally, we are working with the Office of the Inspector General
(OIG) on seven of its audits that are directly related to the Recovery
Act and four audits related to information technology processing. At
this time, the Recovery Act audits focus on the adequacy of our
planning processes. We understand that later OIG will perform
additional audits on program results.
ISSUING ECONOMIC RECOVERY PAYMENTS--AHEAD OF SCHEDULE
Among the projects that we are monitoring very closely is, of
course, the disbursement of economic recovery payments. The Recovery
Act provides for immediate and direct assistance by issuing one-time
$250 economic recovery payments to Social Security, Railroad
Retirement, Veterans, and SSI recipients. We serve as the clearinghouse
for the Railroad Retirement Board and Veterans Affairs to match the
lists of eligible beneficiaries on our various systems to avoid
duplicate payments.
We have already notified beneficiaries that they need not take any
action to receive their payments. We are also informing the public
about the recovery payments through a recorded message on our national
800 number, a prominent link about these payments on our website
(www.socialsecurity.gov), and an informational leaflet available at all
field offices and Wal-Mart stores across the country. We also have
knowledgeable employees in our field offices across the country ready
to answer what we anticipate will be millions of questions about these
payments.
Our extensive planning with the Department of the Treasury, the
Railroad Retirement Board, and the Department of Veterans Affairs will
allow us to issue these payments to the more than 50 million eligible
individuals during the month of May--3 to 6 weeks before the statutory
deadline. We will automatically mail the payments to them or deposit
the payments into their bank accounts.
The Social Security and SSI Recovery Act payments will inject more
than $13 billion into the economy, helping beneficiaries put extra
meals on the table and pay increasingly high utility bills. We
appreciate the support of Congress in our administration of the
economic recovery payments.
GOING FORWARD
Thank you for the opportunity to describe the very real and
tangible opportunities the Recovery Act provides to us to improve our
service to the public, as well as assist in the Nation's economic
recovery. Despite the many challenges we face, Social Security is a
can-do agency. We have made a commitment to the American public to work
down our backlogs, and we will continue to do so. The Recovery Act
provides us with resources to tackle the increase in the work we expect
this year and to collaborate with GSA to build a new data center that
will meet our future needs. With the cooperation of colleagues at the
Department of the Treasury, the Department of Veterans Affairs, and the
Railroad Retirement Board, we have mapped out a plan to deliver $250
recovery payments to millions of Americans.
For more than 70 years, we have served as a cornerstone of American
economic security. We are proud of this role and see our Recovery Act
responsibilities as a continuance of our mission. Going forward, we
will maintain the highest level of oversight over all of our
responsibilities funded in full or in part by Recovery Act resources.
We will do our part to implement Recovery Act initiatives efficiently
and effectively to help the American people as quickly as possible.
However, the higher workloads the agency is experiencing require
ongoing attention. We will need your continued support and timely
action on the President's FY 2010 budget in order to maintain our
momentum and obtain the full benefit from Recovery Act funding for
dealing with our workloads. We will keep this Subcommittee apprised of
our progress and look forward to your continued support as we implement
the plans I have described today.
We appreciate the actions of Congress to provide assistance to the
American people in this time of economic hardship, and we thank you for
providing us with the resources we need to help in these efforts.
Chairman TANNER. Thank you very much, Ms. Glenn-Croft.
With the permission of the panel, may we go ahead with all
of the testimony before we go to questions?
Mr. Hewell, you are recognized, sir.
STATEMENT OF MR. ROBERT HEWELL, ACTING DEPUTY COMMISSIONER,
PUBLIC BUILDINGS SERVICE, UNITED STATES GENERAL SERVICES
ADMINISTRATION
Mr. HEWELL. Thank you. Excuse me. Thank you, Chairman
Tanner and Ranking Member Brady and Members of the
Subcommittee.
My name is Rob Hewell. I am the Acting Deputy Commissioner
of the General Services Administration's Public Buildings
Service. Thank you for the opportunity to be here today to
discuss GSA's delivery of a new Social Security Administration
National Support Center.
As you know, as part of the Recovery Act of 2009, SSA
received $500 million to replace their existing National
Computer Center in Woodlawn, Maryland. SSA turned to GSA for
help in locating, designing, and building a new data center to
meet their long-term needs. Today, I will highlight our
approach to this project.
We are working closing with the SSA in defining their
requirements for site, building infrastructure, and workspace.
We are planning for a facility that will increase data, office,
and warehouse space. It will meet Tier 3 standards established
by the Uptime Institute, sustainable design goals, and the
Interagency Security Council Level 4 security requirements.
To deliver this new data center, we are using our design
excellence and construction excellence program processes, time
proven to provide outstanding cost-effective Federal
facilities. We are also using a multiphased approach to
concurrently develop criteria for both site acquisition and
design. Concurrent development streamlines the processes and
ensures consistency between site elements and design elements.
In fiscal year 2008, prior to the enactment of the ARRA, we
received funding from SSA to develop a program of requirements
for the National Support Center. On April 1, GSA awarded a
contract to Jacobs Facilities to assist in all aspects of
developing this project. In addition, Jacobs will conduct an
energy optimization study to help us achieve our energy goals.
Selecting a site for the National Support Center is of
great importance to SSA, GSA, and local communities. We are
committed to provide our customers with well-located, high
quality sites. We will use established processes to research,
evaluate, and select a site that can best serve the interests
of the Federal Government, the end users, and the community.
There are many factors associated with selecting and
acquiring a site, and this kind of facility creates additional
challenges. For example, the data center demands high-capacity
utility services, as well as redundant power, communications,
and other utility infrastructure services. Proximity to SSA
headquarters in Woodlawn, Maryland, is also required to
facilitate the transition to a new data center and for employee
access in the event of a local or national emergency. These are
all factors both GSA and SSA will use to identify the area of
consideration.
We intend to negotiate and award a contract for land
acquisition in the second quarter of 2010, less than a year
from now.
Concurrent with site selection, we will be working with SSA
and technical experts to develop SSA's program of requirements
for the data center. Once the site is acquired, we can begin
developing the site's specific design requirements associated
with the solicitation for a design-build contract. We
anticipate contract award for design and construction of the
National Support Center in the second quarter of fiscal year
2011 with construction completed scheduled for October 2013.
SSA will then begin their information technology migration.
Projects of this size and scope present challenges, such as
potential contractor protests, environmental impacts identified
during the process of environmental studies and the changing
nature of the fast-paced and ever-changing IT world. There are
a number of steps we intend to take to minimize these risks,
including establishing a detailed source selection plan for the
design-build contract, screening possible sites for potential
environmental impacts early in the process, and designing a
flexible facility capable of accommodating expansion, mission-
related changes, and advancements in technology.
As leaders in sustainably designed buildings, we will build
a facility that incorporates the Guiding Principles for Federal
Leadership in High Performance and Sustainable Buildings. We
will use industry experts in data center technology and energy
experts from the Lawrence Berkeley National Laboratory. And we
have staffed this project with our most seasoned technical
experts and project managers.
GSA is well prepared to meet SSA's data center requirements
on schedule, within budget, and with careful consideration to
our responsibilities to the American taxpayers. We have a long
partnership and an excellent working relationship with SSA, and
we are eager to work with them and Members of this Subcommittee
in the successful delivery of the National Support Center as
part of this nation's economic recovery.
Chairman Tanner, Ranking Member Brady, and Members of this
Subcommittee, this concludes my statement. I will be pleased to
support my colleagues from SSA in answering any questions you
have.
[The statement of Mr. Hewell follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TANNER. Thank you very much, Mr. Hewell. We will
probably have some questions about your timeline later on.
Mr. O'Carroll, you are certainly recognized. Thank you,
sir.
STATEMENT OF MR. PATRICK P. O'CARROLL, JR.,
INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION
Mr. O'CARROLL. Good afternoon, Mr. Chairman, Mr. Brady, and
Members of the Subcommittee.
I am pleased to be here today to discuss the initial work
of the Social Security Administration's Office of the Inspector
General under the American Recovery and Reinvestment Act, and I
thank you for inviting me.
As you know, my office was provided with $2 million in
funding for the oversight of programs, projects, and activities
funded by the Act.
The Act stresses the need for transparency in our oversight
efforts, and we take this responsibility very seriously. As you
can from our chart over there, our Internet home page already
displays a prominent link to Recovery Act reporting as well as
a means of reporting Recovery Act fraud.
Under the Act, all inspector generals are charged with
receiving and investigating whistleblower claims from employees
of private firms and state and local Governments receiving
recovery funds. My office has taken on a central role in this
regard, coordinating the efforts of the entire inspector
general community to ensure consistency in the application of
the Act's whistleblower provisions across the Federal
Government.
The OIG's primary responsibility under the Act, however,
remains the oversight of SSA's expenditure of the
$1,090,000,000 provided to the agency for three specific
purposes: $500 million for the replacement of the National
Computer Center, $90 million to be used to issue about $13
billion in one-time economic recovery payments of $250 each to
beneficiaries, and $500 million for the processing of
disability and retirement workloads.
Our efforts in this oversight role are already well
underway. In particular, the replacement of SSA's National
Computer Center is a critical matter for the American people.
The NCC is the repository for the applications and data that
support all of SSA's functions, but it is at the very end of
its lifespan. As early as 1997, we issued an audit with some 29
recommendations for the protection of the NCC, and, in 2004, we
provided information on alternate facility options in the event
of a catastrophic event at the NCC. SSA considered our comments
in planning their second data center.
We are now conducting a review of the plan, status, and
data processing capacity of the second data center as well as a
review of SSA's plans to address its data processing needs 5 to
20 years into the future. These reviews stem in part from a
recent OIG report that concluded that the agency needed to
focus its efforts on detailed plans to acquire, construct, and
operate a new data center; to estimate costs for the use or
disposal of the NCC; and for IT requirements for the next 5,
10, and 20 years. Further, we urged SSA to identify the
underlying factors that allowed the current NCC crisis to occur
and implement controls to prevent it from reoccurring.
To round out our initial work in this area, we are in the
process of acquiring a vendor to evaluate SSA's process for
selecting the replacement strategy for the NCC and to
independently evaluate SSA's efforts toward implementing that
strategy.
The $90 provided to SSA for issuing one-time recovery
payments is also the subject of OIG oversight with two
evaluations already underway. One will assess the agency's
controls and procedures for administering the one-time
payments, and another will evaluate the processes put in place
by SSA to identify and report costs incurred in the
administration of these payments.
The agency also received $500 million toward the processing
of retirement and disability workloads. In a series of
evaluations, we will examine SSA's hiring, training, and
placement of employees with the Recovery Act funds. Of the $500
million provided for processing disability and retirement
workloads, $40 million was earmarked for health information
technology.
One of our planned evaluations will examine the use of $24
million which SSA plans to direct toward contract-based
demonstration projects and pilot tests focused on electronic
medical record retrieval. These efforts are only the first of
many by SSA OIG to comply not only with the letter of the
Recovery Act, but with its spirit of transparency, oversight,
and accountability.
I thank you again for the invitation to speak with you
today, and I will be happy to answer any questions.
[The statement of Mr. O'Carroll follows:]
Statement of The Honorable Patrick O'Carroll,
Inspector General, Social Security Administration
Good afternoon, Mr. Chairman, Ranking Member Johnson, and Members
of the Subcommittee. It's a pleasure to be here today to present our
initial efforts under the American Recovery and Reinvestment Act of
2009 (ARRA), as well as our future plans geared toward transparency and
accountability. Thank you for the invitation to testify.
The ARRA provided the Social Security Administration (SSA) with
$1.09 billion, to be used as follows:
$500 million for necessary expenses for the
replacement of the National Computer Center (NCC) and
associated information technology costs. This funding is
available until expended.
$90 million to be used to issue approximately $13
billion in one-time Social Security and Supplemental Security
Income payments of $250 each.
$500 million for the processing of disability and
retirement workloads, including information technology
acquisition and research in support of such activities.
The ARRA also provided the Office of the Inspector General (OIG)
with $2 million for salaries and expenses necessary for the oversight
and audit of programs, projects, and activities funded by the ARRA.
This funding is available through September 30, 2012.
While the majority of substantive SSA-related activities mandated
by the ARRA are to be carried out by SSA itself, the OIG is bound by
two types of requirements: those which the ARRA imposes on all
Inspectors General, and those related to this OIG's specific SSA-
related oversight activities.
To briefly address the former, the ARRA requires all Inspectors
General to review, as appropriate, any concerns raised by the public
about specific investments using Recovery Act funds. Any findings of
such reviews, if not related to an ongoing criminal proceeding, must be
relayed immediately to the head of the Agency; in this case, the
Commissioner of Social Security. Additionally, the ultimate findings of
such reviews, along with any audits conducted by any Inspector General
of the use of Recovery Act funds, must be posted on the individual
Inspector General's website and hyperlinked to Recovery.gov.
To accomplish this, Inspectors General are authorized by the ARRA
(in addition to their existing authorities) to examine any records of
any contractor, subcontractor, grantee, or subgrantee, and to interview
any officer or employee of any contractor, grantee, subgrantee, or
agency, if the matter pertains to Recovery Act funds.
Finally, the ARRA also places significant responsibilities on all
Inspectors General, who will now play a central role in expanded
whistleblower protections. Employees of private employers or State or
local Governments that receive Recovery funds may not be retaliated
against for making allegations concerning such funds to certain
sources, including Inspectors General. Inspectors General have 180 days
to investigate and make appropriate reports, and the whistleblower has,
with certain exceptions, access to the investigative file during that
time.
The SSA OIG has taken on a key role in the Inspector General
community in this regard, responding to a call from the Chair of the
Council of Inspectors General for Integrity and Efficiency (CIGIE). In
light of the increased responsibilities of the Inspector General
community with respect to whistleblower allegations, it was felt that
the community would be best served, and the ARRA best observed, by
creating consistency and reliability across the community. As such, the
SSA OIG has taken on the task of developing this cross-cutting issue on
behalf of the community, beginning with a survey and study of
approaches, interpretations, and best practices.
The CIGIE has also formed a working group to support the Recovery
Accountability and Transparency Board in its statutory function, and my
office is a participant and proponent of that group.
The Office of Management and Budget has issued implementing
guidance on the ARRA, and the SSA OIG is compliant with that guidance--
we are fully prepared to receive and investigate all ARRA-related
whistleblower claims. The SSA OIG's website is not only compliant with
ARRA requirements, but goes a step beyond--our internet home page,
www.socialsecurity.gov/oig, already displays a prominent link to our
Recovery Act reporting, as well as a means of reporting Recovery Act
fraud.
The SSA OIG's specific responsibilities, however, rest in its
oversight of the Agency's use of Recovery Act funds for the purposes
enumerated in the Act: the replacement of the NCC, the processing of
retirement and disability workloads, and the issuance of one-time
stimulus payments. My office has already completed work in these areas,
has additional audits underway, and has still more audits planned.
Replacement of the NCC
The NCC is the repository for the applications and data that
support all of SSA's functions, as well as other Government functions
that rely on SSA data. It was constructed in 1979 and, with current
trends, it is estimated that the NCC will reach its maximum data
capacity within three to five years. In addition, the NCC's
infrastructure, including heating, ventilation, and air conditioning,
as well as its electrical components, are at the end of their useful
lives. Failure of any large component of the uninterruptible power
supply (UPS) cannot be repaired, and the UPS manufacturer will
discontinue maintenance of the outdated model at the end of 2015.
As early as 1997, only two years into the OIG's existence, we
issued an audit entitled Review of Physical Security at the Social
Security Administration's National Computer Center. In that audit, we
made some 29 recommendations for the protection of the NCC, most of
which SSA agreed with. In 2004, the OIG issued a memorandum, SSA's
Alternate Facility Options for the NCC, in which we provided
information on alternate facility options in the event of a
catastrophic event--such as a terrorist attack--at the NCC. SSA
considered our comments in its planning of the Second Data Center, also
referred to as the Second Support Center.
In 2008, Lockheed Martin completed an NCC Feasibility Study of the
facility that identified infrastructure and data processing capacity
issues that pose a significant risk to SSA's continuity of operations.
That study recommended that SSA undertake 17 projects to sustain
existing information technology operations through Calendar Year 2014.
Under the ARRA, we recently issued a report entitled Quick Response
Evaluation: The Social Security Administration's Ability to Address
Future Processing Requirements. In this limited distribution report, we
sought to assess SSA's efforts to address future processing needs and
infrastructure issues at the NCC. Specifically, we assessed SSA's
actions in addressing the significant issues identified in the Lockheed
Martin study. We noted the importance of ensuring the continued
operation of the NCC. SSA estimates that it would cost the taxpayers
$25 million for each day that the NCC was not operational. Moreover,
during such outages, the Agency would be unable to process tens of
thousands of retirement, survivors, and disability claims, as well as
Social Security number verifications. This type of service interruption
would likely hamper people's ability to obtain employment, driver's
licenses, even loans and mortgages.
We found that SSA had already taken or planned some corrective
action on 13 of the 17 recommended projects. (Lockheed Martin had
recommended that 3 of the 17 be deferred due to changes in the NCC's
functional role.) Lockheed Martin concluded that there were four
options for resolving the Agency's long-term data processing needs: a
new, on-campus data center; a new, off-campus data center; lease of an
existing off-campus data center; or renovation of the existing NCC.
SSA is progressing on both immediate and long-term solutions.
However, until the significant issues identified by Lockheed Martin are
fully addressed, and a long-term data center solution is implemented,
the Agency's operations remain vulnerable.
In our report, we concluded that, going forward, the Agency needs
to focus its efforts on detailed plans:
1. to acquire, construct, and operate a new Data Center;
2. to estimate costs for the use and/or disposal of the NCC
should a new primary Data Center be built; and
3. for IT requirements for the next 5, 10, and 20 years.
Further, we urged SSA to identify the underlying factors that
allowed the current NCC crisis to occur, and implement the necessary
controls to prevent it from reoccurring.
In another ARRA project focused on the NCC, we are in the process
of acquiring a vendor with the necessary highly technical skill sets to
evaluate SSA's process for selecting the replacement strategy for the
NCC, and to independently evaluate SSA's efforts toward implementing
that strategy. While a contract award of this type would normally take
almost 180 days from the date that funding was made available, SSA's
Office of Acquisition and Grants has expedited the process on our
behalf. We anticipate that the contract will be awarded mid-June--
approximately 90 days from the date that OMB apportioned the funds to
us.
On February 19, the OIG began an ongoing study, Congressional
Response Report: The Social Security Administration's Information
Technology Strategic Planning. In that report, we will review SSA's
plan to address its data processing requirements 5 to 20 years into the
future, and examine what actions SSA has taken to meet those
requirements.
Another ongoing audit, The Social Security Administration's Second
Data Center, is reviewing the plan, status, and data processing
capacity of SSA's Second Data Center. SSA's Information Technology
Operations Assurance (ITOA) initiative is designed to mitigate the
risks of having a single point of failure associated with having a
single, national computing facility. The ITOA project seeks to
alleviate these risks by establishing a second, fully functional, co-
processing data center.
This Second Data Center will be designed to process a portion of
SSA's workloads, and this new center and SSA's main data center will
back up each other, so that in the event of a catastrophe, operations
can continue. SSA estimates that the Second Data Center will be fully
functional in 2013; we will recommend that they accelerate that process
to bring the Second Data Center fully online by 2010. I recently toured
both the NCC and the Second Data Center, and while I was struck by the
condition of the NCC, I was impressed in equal measure by the state-of-
the-art facility at the new location, and the foresight evident in its
planning and execution. This contrast between the NCC and the Second
Data Center only highlights the importance of accelerating the
completion of the new Center.
As SSA continues to plan and implement changes to ensure its
continued data processing operations, the OIG will undertake additional
audits and reviews to assess and evaluate the Agency's progress.
One-Time Economic Recovery Payments
We've undertaken two evaluations associated with the distribution
of approximately $13 billion to Social Security and Supplemental
Security Income (SSI) beneficiaries in the form of $250 individual
payments. The ARRA provides SSA with $90 million to ensure these
payments can be made efficiently and accurately.
Our first evaluation, Quick Response Evaluation: Economic Recovery
Payments for Social Security and SSI Beneficiaries, is assessing the
Agency's controls and procedures for administering the ARRA-mandated
payments. Under the ARRA, individuals who receive Social Security or
SSI benefits, as well as either Railroad Retirement Board or Veterans'
Affairs benefits, will receive only one $250 payment. Our review will
determine whether SSA has adequate controls in place for the accurate
distribution of ARRA funds.
Our second review, Quick Response Evaluation: Administrative
Expenses Incurred to Provide Economic Recovery Payments, will evaluate
the processes put in place by SSA to identify and report costs incurred
in the administration of the one-time ARRA payments.
Retirement and Disability Workload Processing
The ARRA also provided SSA with $500 million to process retirement
and disability workloads, of which $40 million may be set aside for
Health Information Technology development. The OIG is already at work
overseeing the use of these ARRA funds.
A series of reports already underway will evaluate hiring
practices. One of these reports, Quick Response Evaluation: ODAR Hiring
Under the Recovery Act, began earlier this month, and will examine
SSA's Office of Disability Adjudication and Review staffing plans
associated with ARRA funds. Similar reports have also been initiated to
examine hiring strategies for State Disability Determination Services,
and for SSA's Office of Operations, which includes all SSA field
offices.
Another planned evaluation, Quick Response Evaluation: Funding for
Health Information Technology, will evaluate SSA's plans for the $40
million earmarked for this purpose. In March of this year, SSA informed
us that it will invest the $40 million as follows:
$16 million in direct support of IT needs to reduce
the backlogs, including video conference equipment for hearings
and workstations; and
$24 million specifically for Health Information
Technology, including contracts for ``proof of concept''
demonstration projects and pilot tests focused on electronic
medical record retrieval.
Our audit will focus on the planned use of the $24 million
designated specifically for Health Information Technology, whereas the
$16 million will be reviewed as part of a separate audit that is
already underway.
These completed, ongoing, and planned efforts are only the first of
many by the SSA OIG to comply not only with the letter of the ARRA, but
with its spirit of transparency, oversight, and accountability. We will
continue to report to the Subcommittee, post the results of our work on
our own website and on Recovery.gov, and ensure that the funding
provided both to SSA and to the OIG is spent well and wisely.
I thank you again for the invitation to speak with you today, and
I'd be happy to answer any questions.
Chairman TANNER. Thank you very much.
Ms. Melvin, you have the floor.
STATEMENT OF MS. VALERIE C. MELVIN, DIRECTOR OF INFORMATION
MANAGEMENT AND HUMAN CAPITAL ISSUES, UNITED STATES GOVERNMENT
ACCOUNTABILITY OFFICE
Ms. MELVIN. Thank you, Chairman Tanner, Ranking Member
Brady, and Members of the Subcommittee.
I am pleased to be here today to comment on SSA's use of
resources provided by the American Recovery and Reinvestment
Act to replace its National Computer Center. While GAO has not
reviewed the agency's plans for this initiative, by all
indications, it represents a significant undertaking, and its
success will depend on how effectively it is carried out from
inception through completion.
As our work has noted, investments in information
technology can improve organizational performance, but, if not
well planned and managed, they can become costly and
unproductive, yielding disappointing results. Our research into
IT management best practices and our reviews of agency
performance have identified essential management disciplines
that agencies can use to help ensure that investments achieve
their potential benefits. For all IT investments, including
SSA's new data center initiative, it is important to follow
effective practices in key management areas. At your request, I
will summarize several of these areas.
First, effective strategic planning helps an agency set
priorities and decide how best to coordinate activities to
achieve its goals. In this regard, an agency should describe
its goals, the strategies it will use to achieve them, and
performance measures that allow it to determine how well it is
doing.
For example, when a strategic plan identifies
interdependencies among project activities, the agency is
better able to understand and manage them so that projects and
their results are effectively integrated. Given the new data
center is to form the backbone of SSA's automated operations,
it is important that the agency identify goals and resources
and dependencies in the context of its strategic vision.
Further, an agency's enterprise architecture is important
to help avoid developing operations and systems that are
ineffective in supporting mission goals. It is a blueprint for
organizational change describing how an organization operates
now, how it intends to operate in the future, and how it plans
to transition from present to future. Thus, it should be
closely aligned with the IT strategic plan. An enterprise
architecture can help ensure that those planning and
implementing SSA's data center take full account of the
business and technology environment in which the center and its
systems are to operate.
Also, an agency should follow a portfolio-based approach in
which investments are selected, controlled, and monitored from
an agency-wide perspective. Such an approach helps ensure that
resources are allocated effectively. Thus, robust investment
management processes can help agencies like SSA meet the
accountability requirements of the Recovery Act and align with
its goal.
Projects funded under the Act are to avoid unnecessary
delays and cost overruns and achieve specific program outcomes.
Investment management is aimed at precisely such goals. As one
important aspect, accurate cost estimates provide a sound basis
for establishing a baseline so that agencies can effectively
formulate budgets and measure program performance.
Finally, information security is essential to any
organization that depends on information systems and networks
to carry out its mission. This is especially true for
Government agencies like SSA where maintaining the public's
trust is essential. As such, security should be considered
throughout the planning, development, and implementation of the
data center.
A vital part of information security management is
contingency and continuity of operations planning. Data centers
are vulnerable to a variety of service disruptions, including
accidental file deletions, network failures, and disasters.
Accordingly, defining plans that govern how information will be
processed, retrieved, and protected in the event of minor
interruptions or a full-blown disaster is essential.
Thus, overall, these capabilities will be important in
helping SSA ensure that it accomplishes its objectives
consistent with Recovery Act requirements. With a solid grasp
of its current IT environment, a clear vision of what
capabilities a new data center is to provide, and an informed
and sound approach to getting there, SSA will be better
positioned for success.
Mr. Chairman, this completes my prepared statement. I would
be pleased to respond to any questions that you or other
Members of the Subcommittee may have.
[The statement of Ms. Melvin follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman TANNER. Thank you very much.
Mr. Schieber, thank you for being here today. You are
recognized, sir.
STATEMENT OF MR. SYLVESTER J. SCHIEBER, CHAIRMAN, SOCIAL
SECURITY ADVISORY BOARD
Mr. SCHIEBER. Thank you, Chairman Tanner, Mr. Brady,
Members of the Subcommittee. I am pleased to have this
opportunity to appear before you on behalf of the Social
Security Advisory Board.
Over its history, the agency has been a diligent steward of
the public's trust, overseeing the programs that so many
individuals and families depend on. Because of chronic
underfunding and the ever-increasing growth in new claims
applications, SSA's ability to fulfill its mission has been
under constant pressure in recent years.
Today, the economic downturn is creating a dramatic spike
in workloads, and just down the road, the baby boomers will be
in their peak disability-prone years just ahead of their
retirement applications. The infusion of resources provided by
the Recovery Act should allow SSA to meet current backlogs and
to manage increased workloads going forward. It should help in
addressing the data system and processing issues under
consideration today.
Recent workload pressures have been compounded because the
agency has not widely undertaken business process reviews and
reengineering common in other business and Government settings,
has relied too long, in our opinion, on outmoded technology
that has reached its processing capacity. The agency has
recently begun to move to address these problems, but the
bounds of what these new process and planning tools can do are
narrow without a robust and flexible IT foundation.
In the intermediate term, Social Security's data processing
operations are at serious risk because of inadequate backup
capabilities if some sort of breakdown should beset the
National Computing Center at Baltimore headquarters. This
problem is being addressed with the construction of a second
data center in North Carolina. Backup capability between the
two sites is scheduled to be fully operational in 2013, and the
agency executives are working to accelerate that schedule
because of the problems with the National Computer Center.
In the meantime, the agency's disaster recovery plans are
of grave concern. Today, we are talking about the critical need
to replace SSA's National Computer Center. Its capacity is
inadequate to meet future processing needs and assure the
security of data. We have been told that in just three more
years, by 2012, the NCC will not be able to meet Social
Security's workloads. We have also been told that, in the best-
case scenario, it will take 4 or 5 years to plan, develop, and
build a new data center and another 2 to 3 years to complete
its setup and integration. In short, the new NCC will not be
fully operational until 2016, possibly 4 years too late.
Frankly, this is a bit like a slow-motion wreck playing out in
front of our eyes that might be entertaining if it were not
such an important matter.
Through the services it provides, the Social Security
Administration touches the lives of nearly 60 million
beneficiaries every month and gathers earning data on some 145
million workers necessary to run the program. The backlogs that
have pestered the disability insurance program in recent years
are going to look like a cakewalk compared to the issues that
you will be getting constituent calls about if the SSA computer
systems break down.
I do not think the timelines we have heard on building and
bringing a new computer center online are acceptable. In my
prepared remarks, I tell how the Pentagon went from first
concept to occupation in 18 months at the beginning of World
War II. The building was completed in 18 months from the time
it was initially conceived. It was done on an extraordinary
schedule because of the importance of our responding to a
daunting challenge that we were facing.
I am convinced that the American public believes that where
there is a will, there is a way to get things done in a timely
fashion, even by our modern-day Government. If we were able to
take a building as complex and large as the Pentagon from
nothing to occupancy in 18 months, we should be able to build
and furnish a new Social Security computer center in something
less than 5 to 8 years when the current one will be inadequate
for the task in half that time. The urgency of our response in
this case has to match the urgency of the task before us.
Rather than guess as to how this situation arose, it is
more productive to consider how to ensure that the problem does
not happen again. The Board has come to question the governance
of the agency's IT investments. The current process is
decentralized, and IT oversight is split among a number of
senior executives. Originally intended to ensure transparency
and foster shared responsibility, the result has diluted
ownership and management of the overall IT process. We believe
that there needs to be a realignment of responsibility and
accountability and a new governance structure established.
Finally, I would offer that without a map the road ahead is
not always clear. In recent years, SSA's strategic plans have
often reflected narrow, short-term goals that address immediate
issues. They are tactical plans. They are not strategic plans.
Perhaps a longer planning horizon that was broader in scope
would have identified earlier the need to replace the NCC. We
continue to urge Social Security to focus on longer range
service delivery needs and develop the infrastructure that will
carry them well into the 21st century.
Mr. Chairman, I hope these comments are helpful, and I will
be happy to answer any questions you might have.
[The statement of Mr. Schieber follows:]
Statement of Sylvester J. Schieber, Chairman,
Social Security Advisory Board
Chairman Tanner, Mr. Johnson, Members of the Subcommittee. I am
pleased to have this opportunity to appear on behalf of the Social
Security Advisory Board to present the Board's view on the progress
made by the Social Security Administration in implementing the American
Recovery and Reinvestment Act of 2009 (ARRA). The investment that the
Congress has made in the Social Security Administration will ensure
that the agency is able to fulfill its vital role in helping American
families when they need it most.
Through the services it provides, the Social Security
Administration (SSA) touches the lives of nearly 60 million
beneficiaries, 145 million workers and nearly every American. One out
of every six individuals receives monthly cash benefits from Social
Security or Supplemental Security Income (SSI), the major programs that
SSA administers. This fact alone should be an indicator of the
importance of continuous, smooth operations of this agency.
The role of Social Security in our society is not only pervasive;
it is an extremely important economic lifeline for millions of
vulnerable citizens. The beneficiaries and recipients of Social
Security's monthly check include aged individuals and persons with
disabilities, their spouses, other dependents, and survivors. In fiscal
year 2008, 41.2 million people were receiving retirement and survivor
benefits and another 15.1 million were receiving disability benefits.
SSA processed nearly 4.1 million retirement and survivor claims, 2.3
million initial disability claims, and 559,000 disability hearings
during that same fiscal year. The agency provided services to the
public in general by processing over 19 million requests for new or
replacement Social Security cards, posting 273 million earnings items
to individual earnings records, answering 63 million calls to its 800-
number and handling over 42 million visitors to local field offices.
Over the past 74 years, the agency has been a diligent steward of
the public's trust, overseeing the benefit programs that so many
individuals and families depend on. In recent years, however, SSA's
ability to fulfill its mission has been severely strained. Chronic
underfunding despite growing workloads exacerbated the situation. The
expansion of electronic disability case processing coupled with the
need to request and store millions of images of electronic medical
records has sorely tested the agency's processing and storage capacity.
Moreover, they have continued, far too long in our opinion, to operate
with outmoded information technology and database structures that could
not support new and more efficient business rules and processes.
Last April I had the opportunity to testify before the Committee on
Ways and Means. The issue under discussion was whether SSA had the
resources to substantially reduce the growing disability claims
backlog. At that time over 756,000 people were waiting nearly 500 days
for disability decisions from administrative law judges. The increased
productivity in the hearings offices this year has aided the growing
momentum in reducing the backlog. These backlogs were-and still are-
alarming in their own right, but become even more so when they are
juxtaposed with the anticipated rise in claims over the next 10 years.
SSA's workload will increase dramatically. Retirement claims will jump
by over 40 percent and disability claims will rise by nearly 10
percent. The 2008 OASDI Trustees Report estimated that by 2015 there
will be 50 million retirees, widows and widowers, and dependents
receiving benefits and they will be expecting efficient and modern
service from the Social Security Administration.
But the anticipated growth in claims does not stop there. The baby
boomers are entering their disability prone years and the number of
initial disability claims is projected to rise steadily from the 2.5
million claims received in 2008. A year ago SSA's actuaries estimated
in Fiscal Year 2009 SSA could expect to receive over 2.6 million new
disability claims.
The economic downturn that became apparent at the end of last year
is having a significant impact on SSA's workloads in the current year
and is expected to continue to affect workloads over the next couple of
years. DDSs have already received over 11 percent more claims this year
than at this same point in time last year. Over 664,000 new initial
claims are pending in the DDS. This is over 100,000 more than they had
at the start of the fiscal year in October 2008. It is highly likely
that SSA will receive approximately 2.9 million disability claims this
year: 300,000 more than anticipated. About 75 percent of those who are
denied benefits at the DDS level eventually find their way to the
hearings level and this will lead to another 50,000 claims in the
hearings backlog. All of this puts immense stress on the agency's
ability to provide timely, accurate, and efficient service.
SSA's Approach to Managing the Increased Workload
SSA has experienced extraordinary spikes in its workload before and
has always stepped up to meet the challenge. These prior surges in
workload were, for the most part, fairly well defined and eventually
leveled off. But this time it is different. Now there are burgeoning
workloads that are not likely to decline for several years. Significant
numbers of experienced staff are leaving through retirement and the
agency's ability to replace them has been uncertain. The additional
funding provided by an increased FY 2009 appropriation and the American
Recovery and Reinvestment Act has allowed SSA to hire a significant
number of new staff to fill the critical vacancies in the field
offices, DDSs, and hearings offices. While this new staff will not
bring relief in the short run, they are essential for the agency's
future.
Business Process Modeling and Performance Management
Throughout the Board's existence, we have spent the vast majority
of our time studying the disability program and how well it serves the
public. In our 1999 report on how SSA can improve service to the
public, we noted that more sophisticated performance management tools
were needed. This is an agency that collects a wealth of data on case
characteristics, decisional outcomes, timeliness, productivity,
quality, and cost. The data are tallied and put into charts and called
``management information.''
We have commented in the past that the Office of Disability
Adjudication and Review's (ODAR) Case Processing Management System
(CPMS) technology makes it possible to create and retrieve information
and yet historically there has been little innovative analysis
occurring. The only way to understand and improve performance is by
identifying and targeting the root cause of bottlenecks and vulnerable
processes and then implementing measures that track outcomes.
The Board was recently briefed on several new initiatives underway
in ODAR and it appears to us that there is a growing emphasis on data
analysis and process management. They have developed an electronic
business process model that simulates how work currently is processed,
and for the first time, will be able to systematically identify steps
in the process that create bottlenecks or do not add value to the
process. While this initiative is very new and still in the validation
stage, it does hold promise for improving workload management
throughout the hearings process.
We have been assured by senior management that the modeling
capabilities being developed to help identify problems in the hearings
process will be able to isolate variance in performance from office-to-
office and determine the root cause for that variance. If this approach
proves effective, through process modeling, ODAR will be able to plan
proactively for changes in receipts and how to redistribute workload,
anticipate the need for changes in staffing mix, and determine what
legitimately can be mitigated by improved management practices. The
current use is focused on assuring the success of the agency's plan to
reduce the backlog and going forward it will give them the capability
to manage proactively, not just reactively. It is a new direction for
ODAR and we are encouraged by this initiative.
Overall workload management can be dramatically improved through
sophisticated forecasting and modeling tools. SSAB continues to urge
the agency to use its research capacity more broadly and tap those
resources in order to take a more systematic long range look at growth
in workload, where it is happening and the underlying causes, and then
develop simulation models that demonstrate the effects of different
variables on all parts of the adjudication process. ODAR is in the
early stages of analyzing the characteristics of the hearings
population and this will better inform the agency leadership about
managing cases at that level; but we believe that there is much that
SSA can learn about the characteristics of potential filers at the
initial claim level as well.
Current State of Data Center Operations
SSA's main computer operations center, the National Computer Center
or NCC, is a thirty year old facility located on SSA's main campus in
Baltimore. While originally designed to house the agency's large
mainframe processing units and associated peripheral equipment, the NCC
has been retooled and modernized over the years in an attempt to keep
pace with SSA's ever-growing computer needs. But growing workloads,
expanding telecommunications, storage requirements for huge volumes of
electronic images, the electronic disability folder process, and ever
tighter security measures have pushed the NCC's capacity to the limit.
We were recently told that the storage capacity at the NCC has been
expanded from 12 terabytes in 2000 to 483 terabytes in 2009 and the
agency is estimating that storage requirements could increase by four
times that amount in the next five years.
Coupled with these processing capacity issues, we learned in late
2008 that the NCC also has significant structural problems. Electrical
supplies into the building are rapidly becoming inadequate; the backup
power supplies are so old that it is virtually impossible to get
replacement parts; and the fire suppression system needs upgrading. In
addition, the General Services Administration (GSA) has advised the
agency that in order to keep the NCC functioning, SSA would have to
significantly increase the number of times it shuts down the data
center on an annual basis to do routine maintenance, potentially
curtailing the agency's ongoing operations to a considerable degree. To
identify options for shoring up the NCC operation the agency consulted
with external experts and learned that by the end of 2012 the NCC would
no longer be viable and replacing it could not wait until the second
data center was fully up and running.
We have been told by agency executives that, in the best case
scenario, a new NCC will take 4 to 5 years to plan, develop, and build;
another 2 to 3 years would be needed to complete all systems set-up and
integration activities. The agency has estimated that the replacement
facility would be fully operational by January 2016; however, given the
typically long lead time to build and outfit such a governmental
facility, there is some risk that it could take longer to complete. In
fact, we recently learned that the process for acquiring the land may
not be complete until March 2010. The $500 million the agency received
in the economic stimulus package for the NCC is a sizeable and
necessary investment and speaks to the urgency of this project. Making
this project a reality is the shared responsibility of SSA and the
General Services Administration. In our view, pursuing this building
project in a ``business as usual'' process is unacceptable and I would
guess that much of the American public would find the timelines I have
outlined here laughable if they were not so appalling. Due diligence is
essential, but areas where red tape can be cut or timeframes shortened
should be pursued.
You might wonder why I would suggest that many in the American
public would find taking five years or more to build a new computer
center and another two to three years to get the operating equipment in
place as laughable. I do not believe that most people would consider
the five-to-eight-year time frame involved would reflect the urgency
this project deserves given the national dependence on this agency. I
do not believe that most people would accept that we could not do this
on a more timely basis if we were truly committed to the task.
By way of contrast, I would like to offer a little lesson from
history. Early in World War II, the Government was pressed for office
space for the growing military effort associated with our joining the
war. On Thursday July 17, 1941, Brigadier General Brehon B. Somervell
summoned two of his subordinates and told them that by the following
Monday morning he wanted basic plans and an architectural perspective
for an air-conditioned office building to house 40,000 workers in four
million square feet of space, not more than four stories high and with
no elevators. After what Lt. Col. Hugh Casey called a busy weekend, he
and his staff completed the basic layout of a five-sided building by
the following Monday. The building's basic concept was approved that
Monday by General Somervell and by the Secretary of War the next day
who then informed President Roosevelt of his plans. At the same time
President Roosevelt was being briefed, General Somervell was presenting
the plan to Congress. Congress and the President moved quickly to
approve the supplemental appropriation bill to fund the project.
Construction commenced on Sept. 11, 1941. One section was completed by
the end of April 1942 and the first tenants moved in. The basic shell
and roof were finished in one year, and the building was completed by
Jan. 15, 1943.\1\ Since then, we have known that building just across
the Potomac River as the Pentagon which today still is the central
administration facility for the U.S. Defense Department.
---------------------------------------------------------------------------
\1\ Summary derived from http://pentagon.afis.osd.mil/history.html
as read at 3:10 p.m., 23 April 2009.
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I believe that the American public believes that where there is a
will, there is a way to get things done in a timely fashion even by our
Government. If we were able to take a building as complex and large as
the Pentagon from nothing to complete in 18 months while we were in the
middle of one of the most daunting military conflicts in world history,
then assuming we cannot do something better than five to eight years in
building a new Social Security computer center is, well, laughable.
Second Data Center and Plans for Disaster Recovery
In researching our recent report on SSA's information technology
infrastructure, we learned that the agency began planning a second data
center more than five years ago as part of a new strategy for
comprehensive data backup and recovery. In response to September 11,
2001, the Department of Homeland Security issued a directive in 2003
requiring all Federal agencies to develop plans that identify,
prioritize and protect critical infrastructure. At that time, SSA had
not updated its disaster recovery plans in over ten years and,
therefore, had not taken into account the impact of the electronic
disability processing system or the disability electronic folder.
Agency executive recognized that their contingency plans were not
nearly sufficient. In the event of a disaster, plans called for the use
of private backup and recovery facilities at an offsite commercial hot
site. However, the arrangements only allow for the recovery of 25 to 30
percent of the agency's production capability and recovery would take
seven to nine days. In addition, SSA would have to queue up with other
businesses or governmental agencies for access to the facility. This
is, in fact, the disaster recovery plan still in effect today; the plan
that will remain in effect until the two data center strategy is fully
operational.
The vision for a second data center is that it would function in
tandem with the primary NCC as ``a fully functional, co-processing
facility.'' The plans call for about 50 percent of the work currently
processed in the NCC to be transferred to the second center.
Functionally, the two facilities would ``mirror'' each other and
provide backup capability. In the event of a disaster, the second
center would have the capacity to process virtually all of SSA's
priority workloads almost immediately. The new site would also have
sufficient space available so that additional equipment and staff could
be brought in to handle 100 percent of the agency's computing needs in
the event the NCC was non-operational. SSA took occupancy of the new
facility in Durham, North Carolina in January 2009. Over the next 12
months, the agency will be installing the data processing and storage
infrastructure. Backup capability between the NCC and the second center
is scheduled to be operational by the end of the second year with full
functionality in place by 2013. However, in discussions with the
agency's executives, we have learned that they are trying to accelerate
the schedule because of the problems with the NCC.
Continued Risk
Where does all this leave the agency in terms of operational
capacity and its ability to backup data and recover operations as the
transition between data centers takes place? Sometime within the next
two years the second data center should have sufficient capacity to
process some workloads on an ongoing basis as well as provide
additional backup and recovery for other critical workloads. This will
certainly improve the situation for a period of time. However, by late
2012 when the NCC is at the end of its projected life-cycle, the second
data center will most likely need to serve as the agency's primary
computing center with disaster recovery once again reliant on
commercial hot sites. To date, we are unaware of any efforts the agency
has taken to actively pursue alternative recovery scenarios such as
contracting for the use of other governmental or commercial hot sites
in the event the NCC becomes non-operational.
The National Research Council referred to the data stored by SSA as
the ``crown jewels.'' The current two data center strategy affords some
assurance that the data are secure and recoverable. The agency recently
appointed a highly talented Future Systems Technical Advisory Panel to
advise them on emerging technologies and infrastructure needs. We
suggest that this panel be enlisted to perform a quick analysis of the
situation and provide recommendations to the Commissioner within 30
days.
In the interim, over the next seven years until the new NCC and the
second data center are fully operational, there is a risk that at some
point benefit checks could be significantly delayed or not delivered
and important data could be lost. Given the economic role that Social
Security plays in the lives of a large segment of the American
population, I find this situation deeply disturbing.
How did SSA get in this situation?
As I mentioned previously, the Board has just finished a two-year
study that focused on how SSA's public service can be improved through
technology. During that time we met with several agency executives on a
host of issues, including systems development, strategic planning,
infrastructure needs, and resource allocation. Discussions relative to
the NCC revolved around its limited capacity to meet future workload
demands and how the second data center in Durham would fulfill the need
to expand processing and backup capacity. In fact, the Board first
learned of the critical nature of the NCC's physical plant from the
Commissioner in the fall of 2008 and I believe he informed the Board
virtually immediately upon becoming aware of the problems himself.
I can only hazard a guess as to why this issue has only come before
our viewfinder in the last several months and I doubt that my guessing
about root causes would add much of value. Instead, I believe that it
will be more productive to ensure that this potential for great risk to
SSA's infrastructure does not happen again. The Board strongly urges
SSA to undertake a self-assessment that would identify the underlying
factors that allowed the current NCC situation to occur. While this
particular story is about the development and maintenance of systems
operations at Social Security, the root of the problems associated with
it are about the role of senior career managers in the agency, their
sense of fiduciary responsibility in their roles and how they handle
these roles when the agency leadership is not open to the messages
being delivered.
SSA needs to develop a governance structure of shared ownership and
accountability that is committed to diligently identifying and managing
all risk factors and strengthening its strategic and tactical planning
processes.
Governance of the Information Technology (IT) Investments
Given the recent developments with regard to the National Computer
Center, there is clearly reason to question the governance of the
agency's IT investments. With different planning and oversight of the
IT process, perhaps the critical situation the agency finds itself in
could have been avoided. As the Board looked at the IT planning and
management process at SSA, there is evidence that the current process
could be more effective.
Governance of IT investments at the agency is a decentralized
process. While the Chief Information Officer (CIO) and the Deputy
Commissioner for Systems (DCS) are the principle players, IT oversight
is split among a number of senior executives. The CIO has
responsibility for such functions as IT capital planning and investment
management, overall enterprise architecture, strategic planning for IT,
and e-Government initiatives. The DCS has responsibility for systems
acquisition, development, and integration. All of these disparate
functions are supposed to be brought together and managed under the
auspices of the Information Technology Advisory Board (ITAB). The ITAB
has the overall responsibility for shaping the agency's IT strategy and
for approving and allocating resources for the hundreds of projects
that are proposed each year. While originally designed as a way to
ensure transparency and foster shared responsibility for IT investment,
the result has been more of a dilution of ownership and management of
the agency's overall IT process.
During our research, we talked with a number of organizations, both
public and private, and found some major differences in the way IT
governance is handled. For most of these organizations, the
responsibility for governance is a centralized process with ultimate
accountability invested with the CIO. The CIO is responsible for
comprehensive planning, development, and implementation of new IT
projects as well as for the ongoing maintenance of current systems. It
is the CIO's responsibility to ensure IT investments are aligned with
the organization's strategic plan and that they are properly evaluated
to measure their success or failure. I believe that this is the type of
oversight that the Congress intended when it passed the 1996 Clinger-
Cohen Act. This Act requires agencies to designate a CIO to help
control risk, better manage technology spending, and achieve real,
measurable improvements in agency performance through the use of
technology.
The Board has recommended that the agency restructure its
governance process and that it centralize overall responsibility for
all IT processes. I believe that the current structure has left the
agency open to the type of risk we are talking about here. While some
may argue that capital planning and the management of the overall
enterprise architecture are separate and distinct functions from the
more tactical responsibilities for systems acquisition, development and
implementation, this bifurcated process, for whatever reason, simply
has not worked at SSA. The agency's ability to deliver public service
will increasingly depend on technology and governance of the IT process
must have strong leadership who is empowered to make critical decisions
and is held accountable for those decisions.
Further, the more theoretical process of assessing emerging
technologies and new IT-related strategies has for too long been
divorced from the practical development of processing systems. The
result has been that an agency once considered a pioneer in systems
automation is now struggling to provide service with an outdated
technology infrastructure. The recently appointed Future Systems
Technical Advisory Panel will be instrumental in helping the agency
create a system for the future. However, I believe it will take strong
leadership to ensure that the agency breaks out of its insular view of
technology and embraces what it can bring to the delivery of quality
public service.
Strategic Planning
SSA's original endeavors in strategic planning described a
comprehensive and ambitious vision for the future of the agency. While
high-level in nature, these early plans described in broad terms the
necessary steps that would be needed to carry out that vision. In
recent years SSA's strategic plans have been primarily narrowly focused
shorter range tactical plans designed to address a more immediate
issue. While it is only conjecture, it is possible that the failure of
SSA to anticipate and adequately plan for a replacement national
computer center when the current building came to the end of its
lifecycle is partly the result of inadequate enterprise-wide long-range
planning. The more immediate need to support the agency's computing
capacity with a second data center may have overshadowed the need to
develop a longer-range plan for replacing and transitioning out of the
current NCC facility.
The Board believes SSA needs to return to longer-range planning
that envisions how the agency will deliver service and what the
supporting infrastructure must be to make this plan a reality. We urge
SSA to begin the planning process for the next decade and develop a
``to be'' 2020 vision. The process must include a broad scan of
environmental factors that will arise within the next decade, a
thorough assessment of future technologies, a comprehensive review of
all major business processes, and in-depth analyses of service delivery
channels and opportunities for change or improvement. Short-term
planning and implementation strategies are not sufficient for the type
of technological changes SSA will need to make if it is to meet future
challenges.
The Advisory for this hearing rightly noted that Congress has made
a significant investment in SSA's capacity to continue to effectively
serve the American public. We firmly believe that your confidence has
not been misplaced and that this investment will yield significant
dividends. In our role as an Advisory Board that serves the President,
the Congress, and the Social Security Administration, we are committed
to ensuring SSA's ability to fulfill its mission. FORCED BREAK
TO KEEP BODONI DASH FROM TOP OF PAGE deg.
Mr. Chairman, I hope these comments are helpful to the
Subcommittee. I would be happy to provide any additional assistance you
may want, and I would be happy to answer any questions you may have.
Chairman TANNER. Thank you very much, Mr. Schieber.
And I want to thank all of you all for your time and for
your expertise, for your devotion to duty, and for being here
today with respect to this. Actually, a critical part of
America's dependence on its social safety net as represented
here today, and we wanted to take time to look and see where we
are with respect to the recovery funds that have been made
available to accomplish a purpose that we all foresee.
I guess, Ms. Glenn-Croft, Mr. Hewell, is there a way,
without, of course, sacrificing quality or any sort of
capability, to speed this process up some because if you have a
glitch and we have a life expectancy out there at the computer
center of 2013. If we do not have something to take its place,
as Mr. Schieber said, we have a monumental problem here.
Ms. GLENN-CROFT. Well, I certainly appreciate that
question, and I certainly expected you to ask that question,
Chairman.
Let me provide a little bit of background here. In addition
to being responsible for Recovery Act funds for Social
Security, I am also the deputy commissioner for budget,
finance, and management. So facilities are part of my
responsibility.
I have been in this role now a little over a year, and,
obviously, I have looked at this very question that you raised,
and this is a little bit of context here. The NCC is headed
toward its 30th birthday. We have taken good care of that
building. We have maintained it at high levels of high
standards, but, as you know, the infrastructure in that
building is getting old.
I would like to say, though, that we are very confident
that we are going to be able to keep that building operational
until the point in time that we finish the new data center and
we actually transition from the NCC to the new data center, and
I certainly can provide either verbal comments on or
information for the record as to how we believe that we can do
that. But we are very confident that we can keep that building
going well past the 2012 date that you have heard, okay.
What I would also like to tell you, as part of this good
news story--and I know the commissioner mentioned this when he
was here at the hearing last month--is that we have moved into
the Durham site, and we are moving rapidly with that Durham
site, and part of the situation that we are very happy to tell
you about is that probably by late calendar year or early 2010,
we will have enough equipment, hardware, and software in the
Durham site that should the NCC have a catastrophic event
occur, which, obviously, we hope will not happen, but should
that occur, we will be able to use that site to bring up our
critical production workloads, okay. That is a new situation
that I am not sure that the committee is aware of.
The reason I go through these two points about being able
to keep the NCC operational and the enhanced capacity that we
will have in Durham is that that does take off some of the
pressure and the timeframes that you were talking about in
terms of getting the new data site up and operational.
Obviously, we will work with GSA. We will do everything
that we can to get the new data center up and operating as
quickly as possible. We are going to do that to keep us moving
forward on time and within costs, but this is a very difficult
build. There is a lot of logistics. This is not like building
an office building. This is a huge project. We have to do it
right. We have to do it to avoid protests and disputes.
There is a lot of environmental factors and issues and
studies that have to occur, and working with GSA, we will do
everything we can to get that building done as rapidly as
possible, but, again, while this is happening, we believe we
can keep the NCC going, and we will have much more capability
and backup potential in Durham as that build occurs.
Chairman TANNER. Thank you.
Mr. Hewell, do you have anything to add to that with
respect to--that addressed partially my question. My question
is: Is there any way to accelerate this schedule without
sacrificing competency or capability of the installation?
Mr. HEWELL. Yes, Mr. Chairman. We think there may be.
We have compared our schedule to what we are told are
normal private-industry schedules for similar facilities, and
it is pretty much right in line with that. What some private-
sector companies have done to get data centers done more
quickly is double or even double and a half the timing of work
schedules and things like that, by going to what is called--
this was a new term to me--a 6/20 week. Excuse me. We will
certainly be looking at that.
We also think right now that probably the most promising
area that we could achieve some savings in is the period
between site purchase and award of the design-build contract by
doing as much of the development of the requirements for the
facility at the same time that we are acquiring the site. If
that goes well, we may be able to cut as much as 6 months off
of the year in between those two.
So we are looking at ways to make the schedule shorter.
Chairman TANNER. Well, I do not know why that could not
happen. I get a little nervous when I realize the steps to the
House side of the Capitol took longer to replace than it did to
build a new football stadium out in Maryland. So you get a
little nervous about these timeframes if you are looking at
them.
Mr. O'Carroll, we appreciate what you do because, as
stewards of the money, we are trying to get money into the
economy quickly, but, in doing so, we do not want to sacrifice
anything with respect to transparency, oversight, auditing, and
so on. Do you have any comments about speeding up and what your
office might encounter were that to be done?
Mr. O'CARROLL. Yes, Mr. Chairman. One of the things that we
are looking at now is hiring a vendor that is technically
competent and knows the state of the art in terms of being able
to evaluate the plans, be able to take a look at the location,
the timelines, et cetera, on it, to make sure that, you know,
all the i's are dotted and t's are crossed in relation to this.
And another one that--you know, although you did not ask,
but just to say one of our concerns on this thing is that we
were very encouraged by the 2010 with the secondary site being
able to take on some of the redundancy of a lot of the
operations that are going on, but, again, our biggest concern
is up until 2010 where we are still using an offsite vendor in
a different state and competing with other entities, you know,
recoup in, you know, a catastrophic instance, you know, at the
NCC.
So we are watching very carefully that, and we are going
to, you know, be encouraging everyone to go as fast as they
can, but being as cautious along the way.
Chairman TANNER. We want to avoid haste makes waste if we
can, and I know you all do as well.
Did either of you have a comment? Mr. Schieber.
Mr. SCHIEBER. Redundancy is redundancy. What we are facing
if we have a catastrophe may be still a precarious situation.
We first discovered or were told about the problems with the
National Computer Center in November. The commissioner came and
met with us, and that was the first time it was brought to our
attention.
We immediately became concerned and started asking
questions about bringing the North Carolina facility online and
were given timelines and capacity loads that it would be able
to carry. I believe right now the recovery provisions
supposedly will allow them to recover their critical production
workloads in a period of a week, so they would be back up on
what they call their critical production work. But that is only
about 30 percent of their operating capacity. If they did that,
at that juncture, they would have no Internet, they would have
no intranet, they would have probably no phone system.
So I think we need to make sure when we say that we are
going to cover certain things, we understand what that means,
and it is not that they are not working hard at trying to get
this. In some regards, my sense is that, for senior management,
this has been as much a surprise to them as it has been to us.
So I think there is an urgency here that we all need to
keep our eyes on, and we need to make sure exactly what bases
we are covering when we say we can cover certain bases.
Ms. MELVIN. I would add, speaking from the standpoint of
not having reviewed exactly what they are doing, but
recognizing the urgency of what they are doing, I think it is
also important to advocate for caution from the standpoint of
them proceeding in a disciplined approach so it is kind of
moving quickly, but, at the same, making sure that they have
plans that really identify what it is that they need to put in
place, that they have a strategy identified for doing that, and
that they have a means of measuring their progress and their
performance along the way.
Again, it goes back to a point I made in my oral statement
earlier about the--just many times money is invested in
projects, but if you do not have a disciplined approach to
managing that, you can still waste that, even in the sight of
urgency and even recognizing the importance of what you are
trying to do.
Chairman TANNER. Mr. Brady.
Mr. BRADY. Well, thank you, Chairman. I share your
concerns. I would take Ms. Glenn-Croft up on her offer to
outline for the committee some of the things that can be done
to extend the life of the current computer center, and I do
urge you, Mr. Hewell, and others to find ways to accelerate
this. So rarely do things stay on budget and on time, but we
could have a major gap for capacity in Social Security, and
that is a concern to both parties on this Committee.
Two questions really--well, Ms. Glenn-Croft, obviously,
Social Security is receiving $1 billion in stimulus, some to
pay for the computer center, others to deal with the new
workload and to improve service delivery. What real benefits
will our taxpayers see as far as, you know, will they wait less
long to get their disability reviews and appeals heard? Will
they spend less time waiting in the Social Security office or
getting a busy signal when they call SSA for services? When
will we see--when is a fair timetable to see improvements in
service delivery as a result of the extra money?
Ms. GLENN-CROFT. As you know, we are expecting 300,000
additional retirement claims this year and 300,000 additional
initial disability claims this year as well as 50,000
additional hearings. We are very pleased and thankful for the
Recovery Act funding that we received, and upon receipt of that
money, we immediately--immediately--very aggressively started
hiring. We expect with Recovery Act funding to hire over 2,000
people. As of today, coming in to this hearing, we have already
in 1 month hired 1,400.
Before we received the Recovery Act funding, we had already
started going out and doing recruitment efforts, broad-based
recruitment efforts, so that we would be ready to go if we did
get the funding. And, again, we are thankful for that. So we
are bringing in quite a number of new people into our front-
line components, our field offices, our teleservice centers,
our hearing offices.
When you bring new folks in, you do not see immediate
productivity from new staff. Our programs, as you know, are
very complex. Training lasts anywhere from 10 to 15 weeks, and
when they come out, then we put them under a mentoring program.
Mr. BRADY. Sure. That is exactly right. You cannot change
things overnight, and those additional resources will help. But
that was my question. Where is the fair timetable where we will
see improvement?
Ms. GLENN-CROFT. Well, I was just going to get to that.
That was just a little bit of context. We expect that we will
really see productivity from our new hires starting in fiscal
year 2010.
Mr. BRADY. What kind of measurements can you produce for
the Committee as we go forward so we can measure those wait
times, the quality of service?
Ms. GLENN-CROFT. We have a number of performance measures
that we have included in our Recovery Act plans that we have
submitted in draft to the Office of Management and Budget, and
we have included performance measures, such as the number of
retirement claims we will process, the number of initial
disability claims processed, hearings processed. We will also
obviously have processing time data. So we will be able to
provide you with performance measures along those lines.
Mr. BRADY. Okay. Great.
If I may, I think every Member of this Subcommittee is on
here because we want to see Social Security preserved for every
generation, and Social Security is not immune to the economic
downturn. We have some charts, I think, that in the March
update, CBO now projects Social Security surpluses will be very
low over the next 4 years, as low as $3 billion in 2010, which
is very nearly breakeven. There you can see the dramatic change
just in a year as a result of the recession. That is almost
breakeven next year there. It disappears by 2017.
CBO has lowered its Social Security surplus projections
pretty dramatically over the past year, and what that chart
does not show is the disability program is already experiencing
cash flow deficits. CBO projects that the insurance trust fund
balance will reach zero in 2019, and, under current law,
program revenues will be unable to pay the full benefit
schedule.
For years, the Social Security board of trustees has warned
of the financing challenges we face in Social Security. I think
there is a general belief the sooner we act to protect and
strengthen Social Security, the better. A 2009 annual Trustees'
Report is expected as soon as next week, and I am hopeful
Chairman Tanner will schedule a hearing of the Subcommittee to
closely examine the report.
So my question to you, Mr. Schieber--and then to Ms. Glenn-
Croft is knowing the bipartisan advisory group has done so much
on this issue, is it better that we act sooner rather than
later on this issue?
And then to Ms. Glenn-Croft, are you sharing your expertise
with the administration about what these challenges are and how
we move forward on that?
Mr. Schieber.
Mr. SCHIEBER. The Board over the years of my tenure on it
has issued three separate reports. We like the title we put on
the first one so much, we have used the title on all three
reports saying that action sooner rather than later is
preferable. We probably should have issued a repeat of that
report under my tenure as chairman, but, once you have said
something three times, saying it a fourth sometimes does not
seem maybe so valuable. Maybe it is. My wife oftentimes tells
me twice is enough to hear me say something.
So we also have issued a couple of other reports. One we
titled ``The Unfolding of a Predictable Surprise'' about the
general state of our retirement system. This was before the
recent collapse in the financial markets. And in the last
couple of months, we have issued a report on the value of
encouraging people to work longer. These all have ramifications
for the financing of Social Security.
At this juncture, I guess I would say that it is extremely
important. This program is a vital foundation of retirement
security for the overwhelming majority of Americans. Even
people at middle-income levels rely to some substantial extent
on Social Security, and having this program defined not only in
a way that they understand what the benefits are going to be is
extremely important to them, but there is another side as well.
We have to have a program that our children and their children
can afford.
I have done some work recently that suggests if we continue
to allow health costs to increase the way they have over my
working career and we let Social Security costs go up the way
the Social Security actuaries project they will under current
law if we try to deliver current law benefits and people try to
save on their own that, for the middle-income worker and down,
any additional disposable income that they may earn because of
increased productivity is going to be eaten up by what they are
paying for their own health insurance, for Medicare and
Medicaid to provide to the elderly, and for retirement
benefits.
Now do we want this to be the end of growing prosperity
from generation to generation in America? And I am not talking
about something in 2042 or 2050. I am talking about my son and
his wife who are 30 years old, trying to start a family, trying
to buy a house. They may have reached the pinnacle of their
standard of living if we let this play out.
It is time we look at these programs on a serious basis,
including how we are going to control health costs, and start a
conversation with the American people about how we are going to
address these issues. It is of critical importance, and it is
of critical importance to at least three-fourths of the
American population. The people who are well-off, I assume,
will continue to do fairly well, but many of the rest are going
to struggle if we do not address these problems, and we ought
to do it now.
Mr. BRADY. I thank you.
And I am over my time, so the chairman can decide if Ms.
Glenn-Croft gets to answer or not, but I do think--we all may
have different ideas on how we strengthen it, that is fair, but
I think every Member on this Subcommittee thinks sooner rather
than later would be helpful, as difficult as it can get.
Mr. SCHIEBER. If you want the board to begin exploration
here, you know, a request of some sort would be helpful. Our
Members--we are political appointees also, and we are reluctant
to weigh very much further into these issues on our own without
some sense that maybe somebody has something that we could help
with. We have spoken out. I would be willing--my tenure as
Chair is going to be relatively short here. I would be willing
to try and get the board started in a discussion if it would be
helpful to the committee and to moving this discussion along.
Mr. BRADY. Thank you, Chairman.
Chairman TANNER. Thank you, Mr. Brady.
Thank you, Mr. Schieber. We will be back in touch with you
on that point.
Ms. Schwartz, you are recognized.
Ms. SCHWARTZ. Thank you, Mr. Chairman, and I appreciate
some of your comments, and, of course, as you well know, the
broader issue of health care and health care reform is one that
is very much on the agenda of this President, and should we be
successful in voting the budget this afternoon and in the
Senate this week, we will certainly have it on the agenda.
So, more broadly speaking, it is not unrelated because, of
course, if we do a better job of containing costs in both the
public and the private sector that will help and help Americans
be healthier, maybe you would have fewer claims for disability.
Wouldn't that be a good thing? The goal is to have Americans be
healthier.
But what I wanted to ask was a bit about the health care,
particularly the disability, and one of the aspects of the
extra money that was provided to Social Security Administration
was for health information technology, and there have been some
comments about the difficulties of information technology, but
I understand that using some demonstration projects that have
been quite successful--the idea was--as we are again more
broadly in the health care sector, certainly under Medicare--
different jurisdiction, Ways and Means, but nonetheless
jurisdiction.
We have invested quite a bit in health information
technology as a way to improve quality and monitor what we are
doing, but I understand that these demonstration programs have
been very successful having--I will just be clear. I understand
it to be able to have your staff be able to review claims and
get medical records online. And that one of those difficulties
in time delays in processing the claims is the many calls back
and forth for medical records that can be quite dispersed. And
getting all that information, getting it accurately, getting it
in a timely way is dramatically changed, I understand, to the
point of seconds rather than days, that that information can be
available to the reviewer.
So my question really is severalfold. One is: Can you tell
me--I think I am directing this maybe most appropriately toward
Ms. Glenn-Croft. I think you would be the one to answer it. Ms.
Melvin, if you have some add-on, you can as well. But what I
want to know is how far does that $40 million that we have
provided from recovery funds to be able to move the electronic
medical records and the ability to get this information in a
timely fashion--given what you just said about how long it
takes to train personnel, 8 to 10 months, which is somewhat
staggering, you said it is--that is what you said. You started
training them, but until they are fully operational, it is 8 to
10 months. That may be a different question someone else wants
to ask about whether we could speed that up.
But they are training in the use of the information
technology, medical records. How quickly can we see a
shortening of the number of days? That is one of the major
complaints we certainly hear from people who have applied,
think they are eligible, you think they are eligible, but you
do not have all the documentation, and it literally takes
months and months and months for them to be approved, and these
are people who are in critical situations sometimes certainly.
So these are not people who have months and months necessarily
to wait.
So can you speak to how quickly, how broadly this is going
to impact the literally tens of thousands, hundreds of
thousands claimants that we hear from all the time and how much
this will help move that forward?
Ms. GLENN-CROFT. Health information technology really is a
thing of beauty for this agency. We have been a leader in this
area. As you know, we have done several pilots, one in Boston
and one now in Virginia, and just to add some context, we
process new--request medical evidence or health records about
15 million times a year from about 900,000 sources, so making
movement forward with HIT is absolutely critical to us in terms
of adjudicating cases on a much more timely basis because now
it takes us, oftentimes, weeks to get records when we get them
in hard copies through them mail, okay.
What we are going to do with money received under the
Recovery Act is we are going to use $24 million of the Recovery
Act money. The commissioner has just identified a new executive
to lead this effort, is getting high visibility in the agency.
In the July timeframe, we are going to go out and solicit for
interest. We will be picking on--we will be contracting with a
limited number of medical sources as a proof of concept, pilot-
type scenario, so that we can get it more experience in
requesting medical evidence from them electronically and then
having them send it back to us electronically. Every hospital
and every doctor's office has its own type of automation----
Ms. SCHWARTZ. Right.
Ms. GLENN-CROFT [continuing]. How they keep their records,
the format of their records, how they code their records, and
we need to get experience, broader experience, on how we can
share that information electronically, watch the format the
medical evidence and information should be in, how coding
should work, and we are going to experience.
Again, we will solicit for offers in the July timeframe. We
believe we will start to let the contracts probably in the
December timeframe.
Ms. SCHWARTZ. Two questions on that--of course, you are
well aware that in the ultimate Recovery and Reinvestment Act,
we did put in quite a bit of dollars for HHS, and one of the--
--
Ms. GLENN-CROFT. Yes.
Ms. SCHWARTZ [continuing]. The responsibilities for HHS
going forward is to establish Federal guidelines for
interoperable secure medical records that should help in the
sense of what kind of formatting you will see----
Ms. GLENN-CROFT. That is correct. And we need that.
Ms. SCHWARTZ [continuing]. Different hospitals and doctors,
but how--so what are you going to do with the rest of the
money? That is $40 million. You are putting out $24 million.
Ms. GLENN-CROFT. We could spend up to $40 million. We have
chosen at this point in time to spend $24 million. The
remainder of that $40 million--we are spending $16 million of
it, the balance of that $40 million, to buy supplies--not
supplies, but equipment, computers, those types of----
Ms. SCHWARTZ. So you can receive the information.
Ms. GLENN-CROFT. Yes. And that equipment will be used,
obviously, to review the electronic medical records. We will
also use some of that money just to provide systems support on
the Social Security end so that we can work with the hospitals
to modify their systems so that we can talk to each other.
Ms. SCHWARTZ. Do you have any idea yet how many claims that
will affect and how many people it will affect?
Ms. GLENN-CROFT. No, I do not. At this point in time, I
cannot give you that scope. I certainly can go back and check
that out and provide it for the record if we have it. But, no,
I do not know that.
Ms. SCHWARTZ. I think it would be helpful, particularly--
Mr. O'Carroll might want to know what your plans are, what you
expect to be able to accomplish, how many people you expect
to--the timeframe----
Ms. GLENN-CROFT. Again, this is----
Ms. SCHWARTZ [continuing]. What your goals are so that at
least you can measure your own success against them.
Ms. GLENN-CROFT. Yes. And we will be doing that, but,
again, this is a proof of concept. It is so that we can learn
what we need to do, what needs to be changed. There will be a
lot of lessons learned that will come out of this, but,
obviously, we will have measures to measure our success as we
go forward.
Ms. SCHWARTZ. Again, I think all of us would say, you know,
move in a way that actually does not have you moving too fast
and you are doing the wrong thing, to learn from the initial
experiences, but we also have a sense that this is something
that done right, done well, do not take too long if it actually
could, in fact, change literally the lives of so many of the
people who are applicants.
Ms. GLENN-CROFT. We are moving aggressively on this, and I
have to tell you, from the standpoint of an employee who
receives evidence via this method, it is very exciting when you
can process a claim in a matter of hours versus a matter of
months.
Ms. SCHWARTZ. I think we would all appreciate it quite
personally as well as, of course, the people we represent.
Thank you, Mr. Chairman. I yield back.
Chairman TANNER. In keeping with who was here when the
gavel went down, we have Mr. Becerra and then Ms. Brown-Waite.
Mr. Becerra, you are recognized.
Mr. BECERRA. Thank you, Mr. Chairman.
And thank you all for your testimony today.
I would like to begin by asking both the Social Security
Administration and the GSA if they have a high level of
confidence that they will adhere to their current timeline for
completing the replacement of the National Computing Center
project.
Actually, Ms. Glenn-Croft, why don't you go first in terms
of whether SSA has a high degree of confidence that--my
understanding is by 2014, you expect to complete the building
and, within another 18 months, equip and migrate data and
processing from the existing building.
Ms. GLENN-CROFT. I have a very high degree of confidence
that we will do this. There is a strong partnership with GSA.
SSA has put their strongest technicians on this project. We
have an executive that is----
Mr. BECERRA. That is good. Good.
Ms. GLENN-CROFT. And I believe that GSA would say the same.
Mr. BECERRA. Okay.
Mr. HEWELL. Yes? Okay.
And you are prepared to notify this Committee and any other
oversight bodies if you fall behind in that process?
Ms. GLENN-CROFT. Yes, we will. As a matter of fact, we will
be providing monthly reports to this Committee on our progress
with all aspects of the Recovery Act funding.
Mr. BECERRA. Can I ask, Ms. Glenn-Croft, why was it that
SSA waited so long to tell us of the urgent need to replace the
existing NCC building in the first place?
Ms. GLENN-CROFT. Well, what happened----
Mr. BECERRA. And just a brief answer. I do not want to get
in too much detail.
Ms. GLENN-CROFT. All right. Well, basically, what happened
is, in the 2005-2006 timeframe--and, again, this is based upon
my going back and looking at the situation when I came into
this role--the way we did business at Social Security
dramatically changed. We became basically an electronic
business process agency. We moved from paper to electronics.
Our disability process is totally electronic now, and, as a
result of that, our need for servers to store electronic data
dramatically changed, and----
Mr. BECERRA. Okay. So you became aware of the fact that now
with this new electronic world you actually would need to have
a better facility and----
Ms. GLENN-CROFT. Well, what really pushed it over the edge,
sir, was the fact that with the need for servers in this ever-
changing technological world, servers now come with two plugs
versus one plug because of the need for redundancy. Previously,
for the years past, they came with one plug. You get a server,
you plug it into the wall. Now, when you get a server, you have
to plug it with two plugs.
And what happened is--I know this seems simplistic, but
what we realized is we were running out of electrical
distribution capacity. Basically, we are adding 25 servers a
month, and we realized that with that increased server capacity
that by 2012, 2013, we were going to run out of ability to plug
servers in, and when that happened, we realized that we needed
to go to look at what our options were for the NCC, and that is
when we went out and we got a neutral vendor, Lockheed Martin,
to come in----
Mr. BECERRA. Let me ask----
Ms. GLENN-CROFT [continuing]. And do a study.
Mr. BECERRA. Let me ask a couple other questions. And I
appreciate your response there. And I know the chairman has
asked if there is any chance to accelerate the completion
because of the concern that if there are any delays, it could
jeopardize a lot of that data and what we do with the data, if,
indeed, you slip on the deadline. So I hope that you are able
to give some response, if you believe and GSA believes that
there is any chance to accelerate the completion.
I also hope that you will give us some additional
information on what you are doing to work with the Office of
Management and Budget to try to get the additional moneys. I
understand you need about another quarter of a million dollars
to complete the project, and what you are doing to try to make
sure you get the money both in the President's budget and,
obviously, finally from the Congress to make sure you do not
fall behind. Because the last thing we need is to find that you
fall behind because of money concerns, and we or White House or
the OMB are responsible for delaying SSA. I think too many of
us have seen what happens when SSA does not get the money it
needs, and ultimately our constituents, our beneficiaries are
the ones that pay the price. So I hope you will keep us abreast
of that.
Can I also finally ask--I am concerned--and, Mr. O'Carroll,
maybe I should ask this of you. Why would we allow an agency to
cannibalize its resources that are meant for IT at a time when
we have just heard that we are shifting over so much toward a
world of IT to try to deal with the millions--I should say
billions--of bits of information that are needed to transact
all the affairs of people who paid into a system to now be able
to get their disability benefits or their retirement benefits?
Doesn't it seem disconcerting that--and I know part of the
problem is Congress and OMB, that we have not given them money?
But how can we enable SSA to ask for the money it needs to gear
itself up to deal with this technology and information
requirements?
Mr. O'CARROLL. Well, let me go backward first, I guess it
would be, on the reason things have happened the way they have
in terms of, you know, the robbing Peter to pay Paul with the
agency on it. I have to say--and it is partially our issue as
the inspector general on it, is that we were more interested in
terms of continuity of operations and making sure that the new
processes that were being put in place for the disability
programs and different things like that.
We were spending most of our time looking at that and not
really looking at the building and looking at, you know, the
structures that were, you know, falling into disrepair, and I
have to tell you this. You know, I even go to my employees that
walk down the hall every day past, you know, wires sticking out
of walls and stuff and say, ``Why didn't somebody tell us that
this place is falling apart?''
So, on that regard, you have my assurance that we are
looking very hard on at least the hardware side of things and
the building of it, and one of the answers before that you were
asking on is monitoring SSA. We are going to start--we are
taking a look at their plans for the future. We are looking at
how their funding is being done.
We are going to come out with a report in June on sort of
an overview of what will be going forward on it, to make sure
that the funds are coming from the right places, it is not
taking it from the other programs. And then we are also going
to be planning on doing quarterly reports just to update what
is near the Committee and any of the other oversight entities,
in terms of where the SSA is going with it and whether they are
staying on their time with their one--so I guess the best I can
assure you is it is kind of, you know, as the agency has said,
is we are all kind of, you know, looking very hard at this
thing and making sure that the right resources will be, you
know, put to use.
Mr. BECERRA. Thank you.
Thank you, Mr. Chairman.
Chairman TANNER. Thank you.
Mr. Yarmuth, you are recognized for----
Mr. YARMUTH. Thank you, Mr. Chairman.
I just want to get some clarification on some of the
funding that is going to be spent from the Recovery Act out of
the $500 million for processing of claims. Ms Schwartz talked
about the $40 million for IT. Is the other $460 million
dedicated primarily to salaries of the employees, or could you
break that down for us, how you intend to use that?
Ms. GLENN-CROFT. Yes, I can. The remaining portion of that
$500 million will be primarily spent for salaries and benefits
for employees that we are hiring, the new employees that we are
hiring, for the remainder of this year and over next year, and
it will also allow us to provide significant amounts of
overtime to our frontline components so that they can process
critical workloads, better handle the 800 number calls that are
coming in, and handle visitors to the field offices. So that is
basically how the remainder of that money, really the bulk of
that money, is being spent.
Mr. YARMUTH. Okay. So that is for essentially 2,000 new
employees over the 2-year period, however much it is----
Ms. GLENN-CROFT. Basically, the remaining 6 months of this
fiscal year and then all of next fiscal year.
Mr. YARMUTH. So 2 months plus overtime? That is----
Ms. GLENN-CROFT. Yes, that is correct.
Mr. YARMUTH. That is all I wanted to ask, Mr. Chairman. I
yield back. Thank you.
Chairman TANNER. Thank you, Mr. Yarmuth.
Ms. Brown-Waite.
Ms. BROWN-WAITE. Thank you. Thank you very much, Mr.
Chairman.
Commissioner Glenn-Croft, in your testimony, you stated
that there are going to be about 10 additional field hearing
offices, and I know when Commissioner Astrue was in Florida, he
stated that there were going to be two additional ones in
Florida. Other than in the near future, as in your testimony,
do you have an estimate of when you anticipate that these
offices will be up and running, even the two in Florida, and
what are the obstacles if there is going to be a delay? What
obstacles do we need to overcome?
Ms. GLENN-CROFT. Well, the two new--there are 13 new
hearing offices that are planned. I believe the commissioner
mentioned that when he was here a month ago, and I think he may
have mentioned it to you when he was recently with you on a
Florida visit.
Ms. BROWN-WAITE. He did.
Ms. GLENN-CROFT. And the two new hearing offices in
Florida, I believe, are going to be in Tallahassee and St.
Petersburg. I believe? Is that correct?
Ms. BROWN-WAITE. I believe that is accurate.
Ms. GLENN-CROFT. Those are the two locations. We have
facilities staff that are working very hard, working with GSA,
the counterparts of GSA, in Region 4, and we are very
comfortable that those sites will be up sometime--and I can
give you exact dates, but I know it is sometime during fiscal
year 2010 that those sites will be up. We are working with GSA
to expedite getting those sites and building those sites out.
We have a great need for those sites in those 13 locations
across the country, so we are doing everything that we can to
eliminate any roadblocks and make sure that they are up and
operational and staffed as quickly as feasible. Usually, it is
a, you know, 18-month process, roughly. I am looking at my GSA
colleague for him to shake his head on that. You know, 18
months or so is usually the time for the entire process, but I
can give you more specific dates for the record.
Ms. BROWN-WAITE. If you could back to the chairman----
Ms. GLENN-CROFT. I will be glad to do that.
Ms. BROWN-WAITE [continuing]. With the dates, not just for
Florida, for all of the----
Ms. GLENN-CROFT. I certainly can do that for you----
Ms. BROWN-WAITE [continuing]. Anticipated offices.
Ms. GLENN-CROFT [continuing]. For all 13.
Ms. BROWN-WAITE. I apologize. I thought you said 10.
Ms. GLENN-CROFT. The commissioner did say 10 originally,
and he has recently added three additional. So now the number
is 13.
Ms. BROWN-WAITE. Oh, okay. Okay.
Now the other question that I have--and I asked staff this
a moment ago--I got a call from a constituent this past weekend
who never hesitates to call me at home because my number is
listed, and she was upset that she got a mailing from Social
Security telling her that she was going to receive a $250 check
as a result of the recovery plan, and she said, ``I do not need
that money.'' Now my first instinct was, ``Send it to me'' or
``Donate it to a wonderful charity'' in my district.''
She asked me two questions. One was, ``How much did that
mailing cost?'' And, second of all, ``Did the agency really
believe it was necessary with all of the information that was
out there? `` If she did want to send that check back, her
comment was, ``I do not want it just to go to the General
Treasury where it is going to be blanked away.'' She wanted it
to go directly into Social Security. If that check is sent back
to Social Security, does it go directly into Social Security?
Ms. GLENN-CROFT. All right. You asked two questions, and
let me take them one at a time.
Ms. BROWN-WAITE. Okay.
Ms. GLENN-CROFT. In terms of sending the $250 check back, I
just heard this week that that was a question that had arisen.
I am sure--and multiple times that we had gotten that question,
and we are in the process of trying to figure out policy-wise
what we will do if someone walks into a field office and wants
to return that check.
Since this is an administrative payment, if they return the
$250, it will not go back into the trust fund. So, if that is
the question of your constituent, will it go back into the
trust fund, no, it will not. I assume it will go back into
general revenue, but, again, that is my belief at this point in
time.
Ms. BROWN-WAITE. That was what I told her I believed, but I
just wanted to check because----
Ms. GLENN-CROFT. That is correct. That is correct.
Ms. BROWN-WAITE [continuing]. She said, ``If that is the
case, I am not sending it back.''
Ms. GLENN-CROFT. But she can----
Ms. BROWN-WAITE. But----
Ms. GLENN-CROFT. She can certainly come in, and, obviously,
by the time checks are received in the month of May, we will
have procedures for that. It is not a new concept. We have had
individuals walk in and return Social Security checks in the
past, regular monthly benefit checks, so we do have a current
process in place, but we need to make sure that it is
applicable for these $250 checks. But, again, they will not go
to the trust fund.
Ms. BROWN-WAITE. Okay. And when you have that policy in
place, if you would----
Ms. GLENN-CROFT. We can share that.
Ms. BROWN-WAITE. That would be wonderful. And how much did
it cost to send this notice out?
Ms. GLENN-CROFT. We sent out about 52 million notices. The
notices will all be out by the end of this week. I am giving
you rough numbers here, but it probably cost between $20
million and $24 million in total to print and to mail those. I
am going to say it was under 50 cents a notice.
But the reason we do notices like this is because, if we do
not, our field offices and 800 number will be besieged with
calls and inquiries about these checks. So our history has
shown that it is a more effective and actually a more economic
approach to send out a notice when checks of this nature are
issued.
Ms. BROWN-WAITE. And this had been done in the past?
Ms. GLENN-CROFT. We have done similar notices. We did
similar notices when Part D first started. I have been with the
agency now 30 years, started out on the frontline. We have been
doing these kind of notices for special type of situations like
this for years, and they are very effective. We have proven
that this is a more economic and business-wise process to use.
Ms. BROWN-WAITE. Mr. Chairman, would you indulge one other
question?
While you are putting together the new building and buying
additional computers, software, hardware, will those computers
work in concert with the Medicare computers at CMS because once
Part--when the Medicare Advantage plans started saying, ``Okay.
We will pay your Part B or we will reimburse you for your Part
B,'' as you all know, it was a nightmare for your agency as
well as for CMS because the computers did not talk to each
other. Are we going to overcome this?
Ms. GLENN-CROFT. Well, it was really a matter of exchanging
data and the format of data and the completeness of data as we
were trying to exchange data that CMS was sending us for this
Part D activity. So, yes, we are going to continue to work with
CMS so that we can share data more easily than our experience
with Part D was, okay. Our computers talk together. It was just
the format of the data that CMS was trying to share with us
that, I understand, was the issue.
Ms. BROWN-WAITE. So are you saying CMS was the problem
because quite honestly----
Ms. GLENN-CROFT. I never like to say any other agency is
the problem, but we had difficulty meshing their data with
ours, and so it was a data exchange issue, but we worked it
through. It was not an easy problem, and I would suggest that
maybe I could provide more clarity for that for the record for
you.
Ms. BROWN-WAITE. Well, you are very kind in your
description. It was a nightmare because----
Ms. GLENN-CROFT. Yes, it was. It was a difficult situation.
Yes, it was, but we had difficulty with the CMS data.
Ms. BROWN-WAITE. Okay. Thank you.
Mr. Chairman, I yield back.
Chairman TANNER. Thank you.
Mr. Kind, you are recognized.
Mr. KIND. Great. Thank you, Mr. Chairman.
I want to thank all our witnesses for your testimony today.
It is always very helpful and very illuminating.
But, Ms. Glenn-Croft, let me get back to the previous line
of questioning about the mailing of the notices. You said about
$20 million to $24 million to notify roughly 53 million
recipients or so. Is that right?
Ms. GLENN-CROFT. Yes. And I might be a little high on that
dollar amount, but it is, I would say, at least $20 million.
Mr. KIND. Has the department gone through any other options
of how best to notify people who have inquires? Because it is a
little bit of a pet peeve of mine because last year, when we
had the stimulus and rebate checks sent out, IRS sent out not
one but two notices at a cost of almost $100 million, basically
telling people that you do not have to file anything, you do
not have to take any affirmative action, in fact, you do not
have to do a thing, and you are still going to get those rebate
checks, which is the same situation here with the Social
Security or SSI recipients, is they do not have to take any
affirmation action and they are still going to get economic
recovery payments that will be going out.
I would think that setting up some type of automated voice
mail for people to punch 4 if you have a question about the
economic recovery payments that will be going out and just have
a standard response. And, if there is any further inquiries,
you can direct them to the Web site where I am sure there is a
more detailed explanation, they could get in touch with our
congressional offices, and we would be happy to field some of
these questions as well.
You are shaking your head, so, apparently, you have thought
through all this and----
Ms. GLENN-CROFT. Yes. And you know what? We have basically
done everything that you suggested. So we are thinking alike
here.
In addition to sending out the informational notices,
Congressman, we have Frequently Asked Questions on our Web site
in a very prominent location. If someone would go into SSA.gov,
you would find prominently Q's and A's that the public could
look at if they had questions.
We have put a scripted message on the 800 number. So, if
you call our 800 number, you can get all the information you
could potentially need from listening to that script.
We have created a pamphlet which we are putting in our
field offices. When people visit the field offices, they can
pick up the pamphlet. And not only is the pamphlet in field
offices, it is in Wal-Mart stores all across the country.
And in addition, we have specially trained our employees on
the frontlines to answer any questions that they might get.
So we are trying to use every means of communication so
that the public will get answers, should they have questions
on----
Mr. KIND. And you still fear that without the official
notice being mailed out, you would be overwhelmed, the system
would be overwhelmed----
Ms. GLENN-CROFT. Yes, we would, and we have also----
Mr. KIND [continuing]. With inquiries and----
Ms. GLENN-CROFT. Yes. And we found that it will cut down
dramatically on field office visits, 800 number visits, and the
one thing I have to say with great pride about Social Security,
when Social Security sends a letter to the members of the
public, they open it up and they read it. We are a trusted
agency, and they read our notices----
Mr. KIND. That is funny how that works.
Ms. GLENN-CROFT [continuing]. And so it is a very effective
approach for us.
Mr. KIND. Mr. O'Carroll, let me ask you has the inspector
general's office looked at this at all as far as how we can
streamline or find some savings on notification issues like
this as it relates to the Social Security Administration.
Mr. O'CARROLL. Congressman, no, we have not. But what we
are looking at is, in terms of the money that SSA was given for
issuing these checks, that that money is being used correctly,
and probably what a lot of people do not realize is there is a
lot of behind-the-scenes work going into it in terms of the
Railroad Retirement Board and the Veterans Administration are
both sending out the same checks at the same time. And what we
are making sure of is that SSA is working with the other
agencies so only one check goes out. So that is most of our
background work on it.
Mr. KIND. Okay. All right.
Well, Ms. Glenn-Croft, we have a June statutory deadline as
far as the payments. Are we going to be able to meet that, or
how is that looking?
Ms. GLENN-CROFT. We definitely are. Actually, all checks
will be issued in the month of May. The first checks should
start to arrive around May 4. We have phased them out
throughout the money. Last checks should probably be received
no later than May 26, and we will finish processing these
checks at least 3 weeks ahead of the statutory deadline.
Mr. KIND. Are there any fraud or crime issues that we
should be sensitive about with the mailing of these payments?
Ms. GLENN-CROFT. At this point in time, I am not aware of
any, but, obviously, should these issues arise, we will work
with our colleagues in the IG to address them.
Mr. KIND. Yeah, because I know last year--I think when the
rebate checks were sent out, a lot of the Social Security
recipients who normally do not file taxes found that someone
else was doing it for them in order to qualify for the rebate
checks, and that became a bit of a problem. So, hopefully, we
have some overseers keeping an eye on any possible fraud that
might occur. Great.
Ms. GLENN-CROFT. And, again, we are working closely with
our colleagues and the IG.
Mr. O'CARROLL. Congressman, if I could just add to that,
one, of course, you know, as we could see from the Web site, we
have our antenna up. We are trying to ask anybody to report
fraud, if there is anything along those lines. Hopefully, we
will find out about it. The other thing that we are a little
bit concerned with is that representative payees, when those
checks are going out to them, how they are going to account for
the $250 getting to the person that they represent, so----
Mr. KIND. Sure.
Mr. O'CARROLL [continuing]. We are kind of making sure that
that will not be a vehicle for fraud. The other one that was a
concern, too, is deceased payees in terms of that, by the time
the checks come out, if the person dies and then the check is
delivered to him, what is the process for reclaiming that
money.
Mr. KIND. So you are already looking into this, as far as--
--
Mr. O'CARROLL. Yeah, we are looking into those, too.
Mr. KIND [continuing]. Safeguards that can be implemented?
Mr. O'CARROLL. Yes, sir.
Mr. KIND. Yeah, because I think we found last year, Mr.
Chairman, if I am not correct, that there were over $60 million
of farm payments that went out to already deceased farmers
under the USDA program. So that could be a major issue,
especially when we are talking about Social Security recipients
out there.
Great. Well, thank you. That is all the questions I had.
Thank you, again, for being here.
Thank you, Mr. Chairman.
Chairman TANNER. Thank you, Mr. Kind.
Mr. Tiberi.
Mr. TIBERI. Thank you, Mr. Chairman.
Ms. Glenn-Croft----
Ms. GLENN-CROFT. Yes.
Mr. TIBERI [continuing]. In your written testimony, you
mentioned various obstacles that you all have when facing--
well, that you face when you are hiring employees. You also
mentioned a number of states have made it even more difficult
by furloughing DDS employees. Ohio is one of those seven states
furloughing those federally paid employees, 550 in the Columbus
office that I represent, which has one of the worst backlogs in
terms of processing times in the country. We all know there are
extensive backlogs throughout our nation.
I have three questions if you could answer the three. Can
you please discuss the effects that the furloughs are going to
have on the backlogs? If states are not drawing down that
Federal money for those employees while they are on furlough,
what is happening to that Federal money? And, finally, can you
discuss what you all at Social Security are doing to work with
states and local offices to resolve the furlough issue? In
Ohio, they have been notified that they are going to be
furloughed in July.
Ms. GLENN-CROFT. Yes, I certainly can address those issues,
and, obviously, that is of grave concern to us. It is my
understanding that in Ohio--and I may have this wrong--I think
that they are proposing 10 furlough days over----
Mr. TIBERI. Correct.
Ms. GLENN-CROFT [continuing]. A 2-year period.
Mr. TIBERI. Oh, I did not know it was the 2 years.
Ms. GLENN-CROFT. That is my understanding at this point in
time, although the circumstances for each of the states
continues to change.
Mr. TIBERI. Well, those furloughs will begin in July.
Ms. GLENN-CROFT. Yes, I think that is correct.
Right now, there are seven states that have hiring freezes
and five that have furlough plans, and, obviously, the
commissioner has aggressively taken steps to work with the
Governors of these states to try to get the Governors and the
state Governments to exempt DDS employees from these furloughs.
Furloughing or freezing hires really does not make any
sense, we believe, from the state's perspective. We understand
that oftentimes the state does make these decisions because
they want to be equitable, to treat all state employees the
same.
Mr. TIBERI. But it does not save them any money.
Ms. GLENN-CROFT. But it does not save them any money. If
anything, they lose money by doing this. They do not get
administrative funding, which we provide, for every day that
they have furloughs or, you know, freezes, whatever the case
may be. Fifteen thousand cases a day nationwide do not get
processed and are not paid that would be allowances. Millions
of dollars that would be paid in benefits are delayed. So this
is really a lose-lose----
Mr. TIBERI. What happens to the money that they are not
drawing down? It just sits in the account?
Ms. GLENN-CROFT. Well, it comes back, you know, into SSA's
budget.
Mr. TIBERI. It gets sent to Texas probably.
Ms. GLENN-CROFT. No. No, it does not get sent to Texas.
But we are working very hard with each of the involved
states to try to get that exemption. Really this is a lose-
lose. The state employees lose. Your constituents in your state
lose. Benefits are delayed. And we are paying the bills and we
have the money and we want to keep the state employees working
because it is just going to increase the backlog of cases that
are out there.
Mr. TIBERI. Can you touch on Ohio at all in terms of are
you making any progress with the state to rescind the order?
Ms. GLENN-CROFT. I know that we have had contacts with the
governor. I know that we have had contacts, obviously, with the
parent agent and the head of the DDS. I do not have any last-
minute details on that. No, I do not.
Mr. TIBERI. Can we follow up with your office on that?
Ms. GLENN-CROFT. I certainly can follow up on that and get
back to you. Obviously, we would ask your help in any way that
you could to----
Mr. TIBERI. You bet.
Ms. GLENN-CROFT [continuing]. Help us move that issue
along. It is really a lose-lose situation for everybody
involved.
Mr. TIBERI. Well, particularly, when we are so far behind
the national average anyway--and this has to put us, I would
think, further behind.
Ms. GLENN-CROFT. Absolutely. Your area is so far behind,
especially in the hearing area, that this is just going to make
everything worse.
Mr. TIBERI. Mr. O'Carroll, I understand that you issued a
report in March about the concerning effects of furloughing DDS
employees. In your report somewhere, you mentioned the impact
these actions will have on disability claims and the economy in
these states. Can you expand on that?
Mr. O'CARROLL. Yes, Congressman. One of the things we have
been trying to do is get what we call quick response
evaluations out, and as we saw the furloughs were coming up, we
knew the backlogs that SSA was facing, we decided to try to
size the issue, and what we found at the time in March was that
five states were looking at furloughs. Since then, events have
overtaken us. In a sense, New Jersey, I think, and Ohio now
are. So it is seven.
The biggest one that we looked at the hardest was
California, and we were finding that by having the furloughs--
and I think they were doing 2 furlough days per month--so what
we were sizing that with is that it would be about a 10 percent
reduction in terms of people getting on to disability benefits,
and then when we size that, we are taking a look at about
$648,000 a month in disability benefits are not being paid
because of the furloughs.
So, again, if you are taking a look at Ohio on it, you
could probably, you know, be using sort of that 10 percent
number that we were doing or that we used on this one. You
could see it is probably going to be in--I would say, about
$100,000 a month.
Mr. TIBERI. Is that available, that report?
Mr. O'CARROLL. Yeah. I can get you that information on it,
and I will get you the working papers where we calculated it
for California, and I am pretty sure you can substitute Ohio
numbers for that, but what my staff was saying--when we were
just kind of talking about the different states and the impacts
on it, we were talking, I think, about $100,000 to $120,000 a
month would be the effect on Ohio.
Ms. GLENN-CROFT. Actually, I think I have a little bit of a
different figure. I think it is about $345,000 a month in
administrative money that is not--a month would be lost with
furloughs.
Mr. TIBERI. Wow. Thank you.
Thank you, Mr. Chairman, for your indulgence.
Chairman TANNER. Mr. Pomeroy, you are recognized.
Mr. POMEROY. Thank you, Mr. Chairman.
I apologize for being in and out of this meeting. It seemed
like I had about 14 things scheduled during this time. But I
very much wanted to attend the hearing. I appreciate you
convening it.
For a start, I wanted to thank you, Mr. Chairman, for
making sure the funds that we have been talking about in the
stimulus package got into the stimulus package in the first
place. I think the matter of year-in and year-out tied
appropriations spikes relative to SSA infrastructure, critical,
though it is, for the operation of the Social Security program,
this funding increase to address the growing computer crisis as
well as the crisis in backlog was absolutely central and it
would not have happened without at the table. I was able to
watch some of that and really admire your leadership as a
brand-spanking-new chairman when those discussions were coming
together.
Chairman TANNER. The gentleman is recognized for 5 more
minutes!
[Laughter.]
Mr. POMEROY. That is good.
It has been my pleasure to know and work with Mr. Schieber
for some time, and I have come to respect significantly his
expertise on many retirement income security matters.
My questions would relate, first of all, to the interaction
between the advisory Committee for Social Security and the
administration of the program itself. My reference point is the
IRS advisory Committee, which I am not sure if you are familiar
with. They have a fairly, I think, robust level of interaction
and have been extremely helpful to the oversight Committee in
terms of watching IRS governance. Would you--is your
relationship with SSA similar to the IRS and their advisory
Committee, or is it dialog less well developed?
Mr. SCHIEBER. Well, I certainly do not know the inner
workings of the IRS relationship.
Mr. POMEROY. Yes, understood.
Mr. SCHIEBER. In our case, we meet on a regular basis with
the commissioner and with many other senior managers from
Social Security as we look into various aspects of these
issues. We hope we are helping. I am sure that from time to
time when we issue reports, they wish we had been focusing on
the moon program or something else. But we have had very
cordial relations with most of the people that we have
interacted with, and we have tried to be as supportive and
directive as we can, understanding that we are an advisory
board and, you know, we are not a management oversight
Committee in any way, shape, or form.
Mr. POMEROY. I think the role of an advisory Committee can
be incredibly helpful. We, obviously, have the tremendous
resources and expertise within SSA, but a third-party look,
bringing expertise to that look, is helpful. We tend to be
quite generalist in our backgrounds, even though I have been on
this Subcommittee for several years.
Mr. SCHIEBER. And have a much broader set of issues to deal
with than our narrowly focused group.
Mr. POMEROY. And especially when it comes to operation as
opposed to philosophical design of the program.
Mr. SCHIEBER. Right, right, right.
Mr. POMEROY. In other words, how is it working? What do we
need? So, in that regard still, I mean, I think your testimony
today is as close to a witness setting his hair on fire in
front of us as you are going to find, and you better not do
that. You cannot afford----
Mr. SCHIEBER. No, I do not have that much to--it would not
be a big fire.
[Laughter.]
Mr. POMEROY. But there is urgency on this computer issue.
Mr. SCHIEBER. I believe there is.
Mr. POMEROY. For the last several years, I have been
obsessing on ALJs. I believe that failure to address it in a
timely way----
Mr. SCHIEBER. I agree.
Mr. POMEROY [continuing]. Led to a horrible diminishment
of----
Mr. SCHIEBER. I saw your hair close to being on fire when
they----
Mr. POMEROY. Yes. I so miss Stephanie Tubbs-Jones because,
by golly, no one has set their hair on fire better than her.
But I believe that she would be highly energized by what you
told us today. I am as well.
I think we need to get this across not just the panel,
which I am sure shares your concerns, but we need to somehow--
if there is some role that this Committee can play in cranking
up the urgency, and you offered at the end of your testimony to
have a more vigorous level of interaction, advisory Committee
and SSA management. You know, I applaud the director of SSA,
the administrator, for essentially being the first to really
call this to our attention.
Mr. SCHIEBER. Absolutely.
Mr. POMEROY. It was in much worse shape than I had any
idea, again having long been a Member of this Subcommittee.
Mr. SCHIEBER. We were totally shocked when he brought it to
our attention last November.
Mr. POMEROY. So it is a shared concern. This is not you----
Mr. SCHIEBER. Correct.
Mr. POMEROY [continuing]. Telling him everything is
horrible and they are saying everything is great. It is a
shared concern. But maybe we can pool resources to really
identify this as the highest priority and getting it up and
running. I applaud the----
Mr. SCHIEBER. One----
Mr. POMEROY. Yeah. Go ahead, Syl.
Mr. SCHIEBER. One of the things that--you go back and you
look at the original act that created Social Security as an
independent agency back in 1994. It required that the
commissioner put together an annual budget that reflected the
resources that would be needed for the commissioner and the
agency to do the work that they have unfolding on their plate.
That budget is regularly prepared, and it is submitted to
OMB, and there are discussions between OMB and the commissioner
on that budget, and it enlightens the process of developing the
President's budget that is ultimately submitted to the
Congress, but, by the time that budget gets to Capitol Hill, it
is a singular number embedded in the President's budget.
Now my guess is that singular number in all those pages of
documents is not very informative. We have not had great detail
on all of the matters that are actually embedded in the
commissioner's budget from year to year and my guess is you
have not either. If we want to begin to understand the
resources they really need, then somewhere there needs to be a
viewing of that budget on the part of some of the other players
involved.
Mr. POMEROY. That is absolutely correct.
Ms. Glenn-Croft, could you speak to that?
Ms. GLENN-CROFT. I would be glad to. I would have to say
under this commissioner that this commissioner is a very
collaborative commissioner. He is a very transparent
commissioner, and I would say since he came in the spring of
2007 that we have spent more time working with Hill staff,
communicating with Hill staff on our budget needs than I
believe has ever historically been done.
Mr. POMEROY. I think that is good, but I remember, you
know, like on an oversight Subcommittee, I would have the
advisory Committee budget and some text of what they had
recommended. You know, I have never seen any of that from the
advisory Committee. I am not suggesting that is anybody's
fault. I just think more information from the advisory
Committee analysis----
Ms. GLENN-CROFT. I----
Mr. SCHIEBER. We----
Mr. POMEROY [continuing]. And comment and review of the
budget would be helpful.
Mr. SCHIEBER. We have not had the kind of detail that would
allow us to prepare that sort of document. This is not in any
way, shape, or form an implication that the current
commissioner is not forthcoming. He has been remarkably
forthcoming and, I think, is doing a tremendous job. Anything I
said here today should not be considered----
Mr. POMEROY. I understood it that way. I think he is doing
a good job, too.
I see in a PowerPoint--and I know my time is up, so I need
to hurry--prepared by SSA for a staff briefing in October of
2008 talking about 3 to 5 years out of electrical capacity on
the data center floor. I mean, we are talking about the thing
literally maxing out.
Now I know that you have shifted functions into new
facilities to some extent, rewired some other things, but I am
telling you this sounds a little bit piecemeal for the Social
Security system of the United States of America. I mean, it
really does seem as though we are up against it in terms of an
appalling deficiency in terms of state-of-the-art
infrastructure to administer a program so critically important
to the financial security of so many millions of Americans.
Ms. GLENN-CROFT. And we take that responsibility very
seriously, but, really, if I could have just a minute, I really
would like to leave this hearing with making clear just really
where we stand with this situation.
It is true that we probably are going to run out of
electrical capacity to be able to plug in those servers, let's
say, sometime in 2012 or 2013. And we could extend and put in
more electrical capacity in the NCC, but we are not going to
need to do that. We have Durham that is coming up. Durham will
be able to take on additional work by that point in time.
So the issue of the electrical capacity, because of Durham
coming up, is really becoming less and less of an issue all the
time. Again, I want to reiterate we believe that we can keep
the NCC going an indefinite period of time through preventative
maintenance, regular maintenance. We believe that we can keep
it up until the computer center is built.
Mr. POMEROY. Well, I appreciate that, but, I mean, I looked
at some pictures of some of the wiring coming into that
building, and I know that that--I have not toured the facility,
so, I mean, you cannot draw too much from that. But I believe
the will of Congress is reflected in the $500 million dedicated
to this project, put into the stimulus by the chairman with the
support of the membership.
I do not think making do, getting by, Scotch tape, and
bailing wire is the way we need to treat the electronic
infrastructure for the Social Security program of this country,
and I think that Congress has made a decisive commitment of
resources to get on with it. I mean, I would look for a robust
level of interaction, advisory Committee, Social Security
Administration, and this Committee in terms of making sure we
keep this on task as the highest priority.
I hope, Mr. Chairman, we will be meeting regularly on this.
I have something more than ALJs to obsess about now.
[Laughter.]
Ms. GLENN-CROFT. Okay.
Mr. POMEROY. Thank you very much.
Ms. GLENN-CROFT. We will do that.
Chairman TANNER. Thank you, Mr. Pomeroy.
I want to again thank all the witnesses for this and to
tell you that we may well have another hearing sooner rather
than later to see how we are coming along because of all the
concerns that all of the Members have expressed with regard to
this situation.
Let me ask one other question, if I could, Mr. Hewell. As
the Administration tries to acquire space for more hearings to
address the backlog, we are running into some problems from GSA
being able to acquire some of this space in a timely fashion,
sometimes as much as 2 years. Could you look into that for us?
I mean, I know most of us rent from GSA back in our districts,
and I might say if their rent is like mine, it is not a matter
of you not having the resources to----
[Laughter.]
Chairman TANNER. No, I am kidding. But, seriously, it is
taking an extraordinarily long period of time to acquire some
of this space, so we are told.
Mr. HEWELL. We will get you----
Chairman TANNER. Up to 2 years.
Mr. HEWELL [continuing]. Information on that.
Chairman TANNER. Yes.
Mr. HEWELL. I do not have it with me, and I would not want
to get the facts wrong
Chairman TANNER. Well, if you could respond to facilitate
this, because that is exactly what the recovery bill was
intended to do, is try to address some of these problems that
are real. When people are dying before they can get a hearing
because of the backlog, sometimes over a year, that is a pretty
sad commentary on our ability to function as an efficient
Government.
So, anyway, thank all of you. We may be back in touch, and
if there are any questions we may submit, we may ask that you
entertain those in a timely fashion.
If not, the meeting is adjourned. Thank you.
[Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]
[Questions for the Record follow:]
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[Submissions for the Record follow:]
Statement in Support of HR322
May 4, 2009
There are over 30,000 grandparents like us in Arkansas who are
raising grandchildren. We have been forced to return to work in order
to provide for our new families.
HR322 will help us tremendously. Currently, I am working as an
adjunct for two Arkansas universities but because of the earnings
limits on Social Security I can only teach 8 classes a year. My wife is
disabled, so she is unable to work.
If the earnings limitation is eliminated I can teach more classes
and adequately provide for my family.
I am presently in a doctoral program and hope to complete it in
2011. At that time I should be in a position for a fulltime faculty
position. Also, I will be 66 and the earnings limit will not apply.
In the meantime, I need for HR322 to pass this year so I can teach
more classes until I finish my doctorate.
My thanks to Congressman Gene Green (TX) for his sponsorship of
this tremendously important bill.
I encourage you to pass this bill as soon as possible. It has long
reaching benefits for grandparents raising grandchildren.
The passage of HR322 also increases tax payments to the Treasury
and additional payments to the Social Security system.
This is a win-win piece of legislation.
Dale and Linda Walker
To the Ways and Means Chairperson:
This is in response to Social Security Disability Appeals. I have
applied to disability since Feb. 2007 and have been awaiting for a
hearing with ALS Judge for a review. Due to the long waiting process it
has caused applicants to lose all health benefits and become homeless
due to such waiting periods. I propose to SSA that when people apply
for disability that they be granted approval upon request to receive
disability payments and Medicare benefits at time of applying. If
applicants aren't eligible or approved for these benefits then SSA can
take these benefits back at age 62 or 65 when they receive social
security. By this process, we cut health care costs, homelessness, and
relieve the burden that currently hampers social security
administration to be more effective in there day to day operations of
serving the people. I myself have been out of work due to medical
illness and continue to wait on appeal process causes me to suffer
daily due to no insurance and having to go into foreclosure on my home.
So please I insist that this committee work more efficient to resolve
these social security cases.
Thank You,
Larry S. Stoudemire
Chairman Tanner, Congressman Johnson, Members of the Subcommittee
on Social Security: This hearing was called for the purpose of
reviewing the progress made by the Social Security Administration (SSA)
and other involved agencies in appropriately using the resources
allocated by the American Recovery and Reinvestment Act of 2009 (ARRA).
The National Association of Disability Examiners (NADE) appreciates
this opportunity to submit comments on this important subject and we
commend the Subcommittee for its continuing oversight of this important
issue.
Who We Are
NADE is a professional association whose purpose is to promote the
art and science of disability evaluation. The majority of our members
work in the State Disability Determination Service (DDS) agencies
adjudicating claims for Social Security and/or Supplemental Security
Income (SSI) disability benefits. As such, our members constitute the
``front lines'' of disability evaluation. However, our membership also
includes SSA Central and Regional Office personnel, attorneys,
physicians, non attorney claimant representatives, and claimant
advocates. It is the diversity of our membership, combined with our
extensive program knowledge and ``hands on'' experience, which enables
NADE to offer a perspective on disability issues that, we believe, is
both unique and reflective of a programmatic realism.
NADE members--throughout the DDSs, SSA Regional Offices, SSA
Central Office, ODAR offices and throughout the private sector, are
deeply concerned about the integrity and efficiency of the Social
Security and the SSI disability programs. Simply stated, we believe
those who are entitled to disability benefits under the law should
receive them; those who are not, should not. Decisions on disability
claims should be reached in a timely, efficient and equitable manner.
The continuing backlogs in disability claims are an embarrassment to
all of us within the disability program as is the length of time
claimants wait for a decision. Our embarrassment, however, is nothing
compared to the nightmare experienced by those waiting for a decision.
A large portion of the monies allocated in ARRA was to aid SSA's
efforts to significantly reduce the backlogs of disability claims and
improve the timeliness of its decisions on these claims.
The Issue
The American Recovery and Reinvestment Act of 2009 provided nearly
$1.1 billion to the Social Security Administration. Included in this
amount were $500 million for a new National Computer Center and an
additional $500 million for new staff and supporting infrastructure to
help the Agency deal with a backlog of claims while also assisting the
Agency in the processing of an expected increase in the number of
claims for disability and retirement benefits.
NADE members are very appreciative of this renewed support Congress
has provided to SSA, especially after nearly two decades of less than
adequate financial support that left the Agency ill prepared to handle
the growing number of claims. The recognition by Congress of the
critical need for adequate resources at SSA, and the willingness
demonstrated by Congress to accept a leadership responsibility on this
matter, has resulted in vital funding urgently needed for SSA. We
greatly appreciate the support for funding at a level above the
President's proposed FY 2009 budget and for the $1.092 billion in
funding included for SSA in the American Recovery and Reinvestment Act
of 2009. We hope you will also support the President's FY 2010 Budget
Request of $11.6 billion for SSA's administrative expenses.
Having provided these funds, it is only to be expected that
Congress would exercise its oversight authority to insure that these
funds are spent appropriately and that the problem of backlogged claims
and lengthy waiting times is resolved. NADE has confidence in the
current leadership at SSA to apply these monies as directed by the
legislation and also by a decision making process that is fully aware
of the problems and the need for requisite resources to address these
issues. We will not address the spending issue as that is a
responsibility for which other witnesses appearing before this
subcommittee have greater knowledge. However, while it is too early to
determine if the new funding will aid in the resolution of the issues
for which the funds were appropriated, NADE members are confident that
these monies will have their desired impact.
SSA is facing an unprecedented backlog of more than 1.3 million
claims for Social Security and Supplemental Security Income disability
benefits. This backlog of claims is particularly problematic at the
hearings stage, where the backlogs have more than doubled since 2000--
from about 310,000 claims to more than 765,000--and the average waiting
time per claim has soared to over 500 days. At the DDS level, the
average processing time for an initial claim has risen from less than
40 days two decades ago to nearly 100 days in the past year. Not
coincidentally, this increase in processing times and backlogs have
occurred simultaneously with congressional budgets that included less
funding for SSA than what numerous Commissioners of Social Security and
other witnesses, including this Association, have testified was
absolutely necessary for the Agency.
Presidents requesting less money than SSA indicated it needed and
Congresses appropriating even less money than the President requested
for SSA must share in the responsibility for the current crisis with
Agency managers who sought to downsize SSA to utilize precious
financial resources in other areas rather than filling vacant
positions. Now the situation is reversed and the President and Congress
recognize that SSA must have the requisite staff and supporting
infrastructure to process the growing number of claims. However, just
as the current crisis did not occur overnight, it will not be resolved
overnight.
Addressing the Issues
SSA has immediately taken action to begin the hiring of new staff
at its Field Offices, in its hearing offices and in its supporting
offices. Concurrently, the state DDS have been given funding for new
hires. All total, SSA projects it will hire 7000 new employees in this
fiscal year. This level of hiring will tax the Agency's resources to
adequately train these new personnel but, once trained and allowed to
become proficient in their jobs, these new personnel are expected to
make a positive impact on the Agency's ability to process the growing
number of disability and retirement claims that is expected to continue
flooding the Agency.
Hiring these new personnel is a critical first step. The ability to
recruit the best and brightest, to hire, and then train these
personnel, is a process that will take some time. In addition, new
employees are not expected to have an immediate impact on current or
backlogged claims as they must be allowed sufficient time to become
proficient in the performance of their work duties and
responsibilities. In addition, current staff must be allocated to
provide the requisite training and mentoring of new staff. This reduces
the amount of time experienced personnel will have to process their own
work, thereby reducing their productivity in the short term. However,
we firmly believe positive benefits are to be gained from the funding
provided by ARRA and will be fully realized in a matter of 2-3 years.
SSA and the DDSs will have to invest heavily in staff retention in
future years. Both are facing a massive retirement wave and, prior to
the onset of the current economic downturn, both were reporting heavy
staff turnover (15 percent in the DDSs) due to low salaries and
increasing job stress.
Why Is It Important to Provide Increased Funding for SSA?
NADE believes SSA's ability to provide timely customer service is
critical. No other agency in Government has the potential to impact so
many people and the vast majority of Americans will judge the
Government's ability to serve their needs based on how effective and
how efficient SSA is able to meet their needs. SSA is America's
``Window'' to its Government. It can ill afford to fail in its mission
and must be provided with the resources necessary for the Agency to
achieve its mission in a timely manner. The growing complexity of the
Social Security and SSI Disability Programs, coupled with the need to
produce a huge volume of work, justifies even more the need for
adequate resources in order to provide the service that the American
public has come to expect and deserves from SSA.
In FY 2008, Congress appropriated more money for SSA's
administrative budget than the President had requested, marking the
first time in 15 years Congress had acted so favorably. At the time
Congress took this action, a former Chairman of this Social Security
Subcommittee offered the observation that constant under-funding of the
disability program by the Congress over the past two decades had
contributed heavily to the current crisis. We do not dispute such
wisdom! We do believe, however, that the congressional action of FY
2008 and the additional funding provided for SSA in the ARRA of 2009
are the first steps in a long road back to management stability for
SSA. It now falls to SSA, and its components, to utilize these funds
for actions that will produce the desired outcome.
State Furloughs of DDS Personnel
The best intentions of Congress in appropriating increased funding
for SSA to deal with its backlogs of claims and to process the growing
number of new claims is being undermined in many states by Governors
who, faced with their own budget crises, have implemented furloughs for
their state employees and hiring freezes for all state agencies. NADE,
and other witnesses appearing before this Subcommittee, have previously
pointed out that many of these states have adopted these actions
unilaterally, failing to provide an exemption for DDS employees, who
are 100 percent federally funded and who have no impact on any state's
budget problems.
These actions fly in the face of the positive actions taken by this
Congress to appropriate funds to resolve the crises of backlogged
claims at SSA and lengthy waiting times for applicants. In spite of
numerous requests from the Commissioner of Social Security, from
Members of Congress and from the media, the Governors have not backed
off of their decisions, either because they don't want to treat one set
of state employees differently from any other or because they simply
refuse to acknowledge the absurdity of their actions. These actions not
only punish DDS employees (since furloughing DDS employees does not
save any state any money, there can be no other reason to furlough
these employees other than to punish them for being state employees)
but remove a key investment in America's economic recovery. More
importantly, such actions by these Governors to furlough DDS employees
and to reduce and/or eliminate the DDSs ability to hire new staff will
only enhance the growth of the backlogs of disability claims, add to
the processing time of current claims and remove from the workforce the
opportunity for many citizens to obtain much needed jobs. How
Governors, when their actions otherwise have no positive benefit to
resolving their state budget crises, can maintain such insensitivity to
the needs of their own citizens, is beyond reason.
Recent data has shown applications for initial disability claims
have, not surprisingly, increased by 10 percent since the beginning of
this fiscal year. Each week, the number of initial claim filings has
increased from the week before and the number of new claims in calendar
year 2009 is up 13.7 percent. The actions to furlough DDS employees and
to reduce or eliminate the DDS' ability to hire new staff have the
effect of reducing the size of the workforce processing these claims or
reducing the hours available for the workforce to process these claims,
thereby reversing the action taken by Congress to address the crisis in
backlogs and lengthy processing times. If these state actions are not
abated, then the disabled citizens seeking benefits will almost
certainly face the prospect of even longer processing times and
extended appeal times.
The current level of furloughs of DDS personnel is estimated to
cost the States $7.8 million in administrative funding paid to them by
SSA. How can losing money save money? The current level of furloughs of
DDS personnel is also estimated to delay the processing of 15,000
claims and the payment of $4.2 million in benefits each month! How can
Governors continue to justify their actions?
We call upon Congress to intercede on behalf of all state employees
who are 100 percent federally funded. We recognize difficult times
require difficult decisions but difficult times do not require
foolhardy decisions.
Program Integrity Issues
Limited resources in recent years have forced SSA to reduce the
number of Continuing Disability Reviews (CDRs) performed. Of concern to
NADE is the past history similar actions have had as the agency fell
behind in these critical reviews. When a backlog of CDRs occurred
previously it took several years of dedicated funding and a tremendous
effort by SSA and DDS staff before SSA was, again, current with CDR
reviews. With the decrease in the number of CDR reviews done in the
past few years, there is now a real danger the Agency will, once again,
find itself in the position of having backlogs of overdue CDRs. Thus,
it is possible the Agency will work itself out of one backlog into
another.
While there are increased administrative costs (including the
purchase of medical evidence, claimant transportation costs and
increased utilization of contract medical consultants) with the
performance of CDRs, there is a potential for significant savings in
program costs with the elimination of benefits paid to beneficiaries
who are found to be no longer eligible for disability benefits due to
no longer meeting the SSA Disability program requirements. A recent
estimate by GAO revealed that, for every $1 in administrative cost
spent on conducting CDRs, nearly $15 of program funds was saved. This
data was significantly higher than the historical ratio of 10-1
savings. Regardless of which statistic has current validity, there are
significant savings to be realized if SSA can remain current on CDRs.
It is essential to program integrity that CDR reviews be conducted in a
timely manner to ensure that only those who continue to be eligible are
receiving disability benefits.
Anti-fraud efforts such as the Cooperative Disability Investigative
(CDI) units which effectively utilize the strengths and talents of
SSA's Office of Inspector General (OIG), local law enforcement, and
disability examiners, offer a visible and effective front-line defense
for program integrity and serve as a visible and effective deterrent to
fraud. SSA's Inspector General attributed the success of the CDI units
to investigate fraud allegations to the efforts of ``. . . those most
qualified to detect fraud--DDS adjudicators.'' NADE supports the
continued expansion of the CDI units to combat fraud and abuse in the
disability program.
5 Month Cash Benefit Waiting Period and 24 Month Medicare Waiting
Period
It is important to note that persons found disabled under Title II
of the Social Security Disability Act must complete a full five month
waiting period before they can receive cash benefits. So, a disability
allowance decision, even when it is processed quickly, will not resolve
the issue of having to wait five full calendar months before the
claimant receives any cash benefits. NADE believes this five month
waiting period is a gross inequity to American citizens with
disabilities.
Likewise, we are deeply concerned about the hardship the 24 month
Medicare waiting period creates for these disabled individuals, and
their families, at one of the most vulnerable periods of their lives.
Social Security disability beneficiaries have serious health problems
and limited access to health insurance. Many cannot afford private
health insurance due to the high cost secondary to their pre-existing
health conditions. Since earlier medical intervention could help many
disabled individuals return to work, NADE supports the elimination of
the Five Month Waiting Period for Cash Benefits and the 24 Month
Waiting Period for Medicare eligibility.
Summary
The operational challenges facing SSA are substantial and are
expected to become even more acute in the coming years as our society
ages, as baby boomers continue to prove the actuaries correct regarding
their forecasts of the baby boomers most disability prone years, as the
economy continues to offer periodic setbacks, etc. Decades of
inadequate resources for SSA, combined with increased workloads and
less than desirable results from multiple redesign efforts, have not
only caused backlogs in the number of disability claims pending at the
initial and hearing levels, but has allowed existing backlogs to
increase. Processing time, expected to decline with the introduction of
new technology has, instead, increased due to insufficient resources in
personnel.
Recent increases in funding for SSA's administrative budget and
additional funding provided through the American Recovery and
Reinvestment Act of 2009 can be expected, in the years ahead, to
produce significant reductions in, or elimination of, SSA's backlogged
claims and lead to improvements in processing times at all levels.
However, this new funding cannot, and will not, overnight, make up for
mistakes of the past. The need to hire, train and deploy new staff will
take several years before any realistic expectation that they will
contribute significantly toward efforts to reduce the backlogs of
claims.
No amount of planning by SSA or Congress can reverse the negative
impact on production and processing times caused by state hiring
freezes and furloughs of state employees which also affect DDS
personnel. Congress must support the Commissioner's efforts to force
the states to exempt DDS employees, who are 100 percent federally
funded, from such actions.
The crisis of backlogged disability claims, while a significant
problem, cannot be used as a reason to abandon program integrity
initiatives. It remains critically important that the public's
confidence in the disability program not only be restored but
maintained.
A lot of effort has been made to improve the speed at which
disability claims are processed and to eliminate/reduce the backlogs of
claims. NADE agrees improvements are needed and we support recent
initiatives, such as the Compassionate Allowance (CAL) initiative and
the Quick Disability Determination (QDD) initiative. However, the 5
month waiting period for cash benefits and the 24 month waiting period
for Medicare eligibility negate the positive impact of faster
processing times and reduced backlogs. These waiting periods should be
eliminated.
No other agency has a greater impact on the quality of life in this
nation and the American public will judge the ability of their
Government to meet their needs almost solely by the quality of service
provided by SSA. Social Security can and must do better in fulfilling
its promise to America and NADE stands ready, willing, and able to
assist in fulfilling that promise. People with disabilities, already
burdened by the challenges of their illness/injury, are often in
desperate need of benefits to replace lost income. They deserve, and
should receive, timely and accurate decisions through a fair and
understandable process. Our challenge, and one which must be met, then
is to ensure the disability determination and appeals process meets
those criteria.
We commend the Subcommittee for exercising its oversight authority
and we look forward to working with the Subcommittee to achieve the
goals we have outlined in this statement.
Exhibit I--Furlough Status of State DDSs
Status of Furlough/Hiring Freeze by DDS--as of 4/28/09
------------------------------------------------------------------------
Hiring Freeze
DDS Furlough Status Status Remarks
------------------------------------------------------------------------
Alabama No furlough DDS exempt from
state hiring
freeze
------------------------------------------------------------------------
Alaska No furlough Hiring freeze
but DDS exempt
------------------------------------------------------------------------
Arizona Furlough but DDS Hiring freeze
exempt but DDS exempt
------------------------------------------------------------------------
Arkansas No furlough No hiring freeze
------------------------------------------------------------------------
California Furlough in place DDS exempt from All DDS
state hiring employees
freeze furloughed 2
days per month--
started in
February 2009.
Employees will
earn one ``self-
directed''
furlough leave
day per month,
which allows
employees
personal
discretion when
to use their
furlough leave.
Also per the
agreement,
employees must
use the earned
leave furlough
leave by July
1, 2012.
Employees will
also have their
pay reduced by
4.62 percent
per month
through June
2010.
------------------------------------------------------------------------
Colorado Considering Hiring freeze Possible
furloughs, DDS but DDS exempt furlough of DDS
not likely exempt employees up to
2 days per
month (next
state FY)
------------------------------------------------------------------------
Connecticut Administrator took Hiring freeze
one voluntary but DDS exempt
furlough day. The
governor extended
the request for
voluntary
furloughs to all
state employees
through June 1
------------------------------------------------------------------------
Delaware No furlough Hiring freeze The Delaware
but DDS exempt governor has
proposed an 8
percent across
the board pay
cut and an
increase in the
employee share
of health
insurance
premiums,
effective July
1st. The net
effect is
approximately a
10 percent
decrease in
employee take
home pay. The
Governor has
stated that he
is proposing
this to avoid
furloughs.
------------------------------------------------------------------------
District of No furlough No hiring freeze
Columbia
------------------------------------------------------------------------
Florida No furlough No hiring freeze
------------------------------------------------------------------------
Georgia Furlough but DDS Hiring freeze
exempt but DDS exempt
------------------------------------------------------------------------
Hawaii Considering Hiring freeze
furloughs but DDS but DDS exempt
likely exempt
------------------------------------------------------------------------
Idaho Furloughs but DDS Hiring freeze
exempt but DDS exempt
------------------------------------------------------------------------
Illinois No furlough No hiring freeze
------------------------------------------------------------------------
Indiana No furlough Hiring freeze Several
for DDS positions
``deactivated,'
' including 30
disability
examiners.
These positions
are temporarily
eliminated and
would require
``reactivation'
' to be filled
again.
------------------------------------------------------------------------
Iowa No furlough Hiring freeze
but DDS exempt
------------------------------------------------------------------------
Kansas No furlough Hiring freeze ``Soft'' freeze--
hiring is
restricted but
occurs as
warranted. DDS
hired 75
percent of
positions.
------------------------------------------------------------------------
Kentucky No furlough Hiring freeze
but DDS exempt
------------------------------------------------------------------------
Louisiana No furlough Hiring freeze DDS hiring
freeze but
given a limited
number of
hires.
------------------------------------------------------------------------
Maine No furlough Hiring freeze
but DDS exempt.
------------------------------------------------------------------------
Maryland Furloughs in place Hiring freeze Furlough between
but DDS exempt 2 and 3 days
depending on
salary.
------------------------------------------------------------------------
Massachusetts Furloughs in place Considering a Furloughing 3
hiring freeze days for DDS
and DDS not managers. Most
likely exempt are going to
work the days
and be
compensated
after
retirement.
They can also
work without
pay. Hiring cap
RO successful
in getting the
cap lifted for
DDS disability
examiner
positions.
------------------------------------------------------------------------
Michigan No furlough No hiring freeze Furlough may be
possible in
2010.
------------------------------------------------------------------------
Minnesota No furlough No hiring freeze
------------------------------------------------------------------------
Mississippi No furlough No hiring freeze
------------------------------------------------------------------------
Missouri No furlough No hiring freeze
------------------------------------------------------------------------
Montana No furlough No hiring freeze
------------------------------------------------------------------------
Nebraska No furlough No hiring freeze
------------------------------------------------------------------------
Nevada Considering Hiring freeze
furloughs but DDS but DDS exempt
likely exempt
------------------------------------------------------------------------
New Hampshire No furlough Hiring freeze Staffing CAP in
but DDS exempt DDS
------------------------------------------------------------------------
New Jersey DDS employees No hiring freeze
exempt from
furlough
------------------------------------------------------------------------
New Mexico No furlough Hiring freeze
------------------------------------------------------------------------
New York Considering Hiring freeze
layoffs that but DDS exempt
would include DDS
employees
------------------------------------------------------------------------
North Carolina Furloughs just Hiring freeze DDS hiring is
ordered by the considered on
Governor. case-by-case
Questionable as situation (some
to whether DDS is DDS hires have
exempt. been approved)
------------------------------------------------------------------------
North Dakota No furlough No hiring freeze
------------------------------------------------------------------------
Ohio Furlough to take Hiring freeze State announced
effect on July but DDS exempt furloughs to be
2009. effective 7/09.
All DDS
employees
expected to be
furloughed 10
days over 2
state FYs.------------------------------------------------------------------------
Oklahoma No furlough No hiring freeze
------------------------------------------------------------------------
Oregon Furlough in place Hiring freeze Furlough for
but DDS exempt management
staff from 2 to
4 days
depending on
salary range.
Furloughs
expected for
represented
staff but the
number of days
has not been
finalized.
Governor is
proposing 26
furlough days.
------------------------------------------------------------------------
Pennsylvania No furloughs Hiring freeze All out of state
but DDS exempt travel
restricted.
------------------------------------------------------------------------
Puerto Rico Layoffs planned Hiring freeze
but DDS likely but DDS exempt
exempt.
------------------------------------------------------------------------
Rhode Island No furlough DDS exempt from
state-wide
hiring freeze
------------------------------------------------------------------------
South Carolina Considering Considering
furloughs but DDS hiring freeze
likely exempt but DDS likely
exempt
------------------------------------------------------------------------
South Dakota No furlough Hiring freeze DDS hiring is
considered on
case-by-case
situation (some
DDS hires have
been approved)
------------------------------------------------------------------------
Tennessee No furlough Hiring freeze
but DDS exempt
------------------------------------------------------------------------
Texas No furlough No hiring freeze
------------------------------------------------------------------------
Utah No furlough Hiring freeze
but DDS exempt
------------------------------------------------------------------------
Vermont Considering No hiring freeze Staffing CAP in
furloughs, DDS DDS
not likely exempt
------------------------------------------------------------------------
Virginia No furlough DDS exempt from
state-wide
hiring freeze
------------------------------------------------------------------------
Washington No furlough Hiring freeze
but DDS exempt
------------------------------------------------------------------------
West Virginia No furlough Temporary Hiring
restriction on restriction
hiring through maybe extended
6/30/09. through 9/30/
09. Also, all
personnel
actions
(including
promotions) in
the State are
not being acted
upon until
further
guidance is
received by the
governor.
------------------------------------------------------------------------
Wisconsin No furlough Hiring freeze
for DDS
------------------------------------------------------------------------
Wyoming No furlough DDS likely
exempt from
state-wide
hiring freeze
------------------------------------------------------------------------