[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]








                        ENCOURAGING WORK THROUGH
                     THE SOCIAL SECURITY DISABILITY
                           INSURANCE PROGRAM

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 19, 2013

                               __________

                             Serial 113-SS7

                               __________

         Printed for the use of the Committee on Ways and Means



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







                         U.S. GOVERNMENT PUBLISHING OFFICE 

89-583                         WASHINGTON : 2016 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001
   
   
   
   
   
   
   
   
   
   
   
   
   




                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM McDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, Jr., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, Jr., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel
                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON HUMAN RESOURCES

                      SAM JOHNSON, Texas, Chairman

PATRICK J. TIBERI, Ohio              XAVIER BECERRA, California
TIM GRIFFIN, Arkansas                LLOYD DOGGETT, Texas
JIM RENACCI, Ohio                    MIKE THOMPSON, California
AARON SCHOCK, Illinois               ALLYSON SCHWARTZ, Pennsylvania
MIKE KELLY, Pennsylvania
KEVIN BRADY, Texas



















                            C O N T E N T S

                               __________
                                                                   Page

Advisory of June 19, 2013 announcing the hearing.................     2

                               WITNESSES

Mark G. Duggan, Ph.D., Professor, The Wharton School, University 
  of Pennsylvania, Testimony.....................................    10
Mary C. Daly, Ph.D., Group Vice President and Associate Director 
  of Research, Federal Reserve Bank of San Francisco, Testimony..    25
Kevin Ufier, National Director Managed Disability, GENEX 
  Services, Testimony............................................    38
Lisa D. Ekman, Director of Federal Policy, Health & Disability 
  Advocates, on behalf of the Consortium for Citizens with 
  Disabilities Social Security Task Force, Testimony.............    49
James Smith, Budget and Policy Manger, Division of Vocational 
  Rehabilitation, Vermont Agency of Human Services, Burlington, 
  Vermont,
  Testimony......................................................    63
David Weaver, Ph.D., Associate Commissioner, Office of Program 
  Development and Research, accompanied by Robert Williams, 
  Associate Commissioner, Office of Employment Support Programs, 
  Social Security Administration, Testimony......................    74

                        QUESTIONS FOR THE RECORD

David Weaver.....................................................   108
James Smith......................................................   115
Kevin Ufier......................................................   118
Mark Duggan......................................................   123
Mary Daly........................................................   127

                   PUBLIC SUBMISSIONS FOR THE RECORD

Health and Disability Advocates..................................   129
National Disability Rights Network...............................   136
National Employment Network Association..........................   139
Pamela Villarreal................................................   143
Paralyzed Veterans of America....................................   149
R. Larkin Taylor Parker..........................................   158
 
                        ENCOURAGING WORK THROUGH
                     THE SOCIAL SECURITY DISABILITY
                           INSURANCE PROGRAM

                              ----------                              


                        WEDNESDAY, JUNE 19, 2013

             U.S. House of Representatives,
                       Committee on Ways and Means,
                            Subcommittee on Social Security
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room B-318, Cannon House Office Building, the Honorable Sam 
Johnson [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]

HEARING ADVISORY

                 Chairman Johnson Announces Hearing on

                      Encouraging Work Through the

              Social Security Disability Insurance Program

Washington, June 12, 2013

    U.S. Congressman Sam Johnson (R-TX), Chairman of the House 
Committee on Ways and Means Subcommittee on Social Security, today 
announced a hearing on encouraging work through the Social Security 
Disability Insurance program. The hearing will take place on Wednesday, 
June 19, 2013, in B-318 Rayburn House Office Building beginning at 
10:00 a.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 Subcommittee and 
for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    Disability Insurance (DI) benefits provide an essential income 
safety net for disabled workers and their families. Between calendar 
years (CY) 1970 and 2012, the number of people paying into the DI 
program increased 72 percent, but those receiving disability benefits 
(both disabled workers and their dependent family members) increased by 
over 300 percent from 2.7 million to over 10.9 million, according to 
the Congressional Budget Office (CBO). This growth is primarily due to 
the aging of the population, more women in the workforce and eligible 
for DI, changes in federal policy, and changes in opportunities for 
employment and compensation. In its May update, CBO projects that over 
12.4 million beneficiaries will receive $207 billion in benefits in 
fiscal year 2023, up from $135 billion in 2012. According to the 
recently released 2013 Social Security Trustees report, in 2016, DI 
program revenues will only be able to finance 80 percent of benefits, 
unless Congress acts.
      
    The recession and slow economic recovery resulted in an increase in 
disabled worker applications and benefit awards. Benefit awards grew 
from 818,000 in CY 2007 to a peak of 1.04 million in 2010. In CY 2012, 
984,000 disabled workers were awarded benefits. Approximately 30 
percent of those receiving disabled worker benefits were under 50 years 
of age in 2011.
      
    After being awarded benefits based on an inability to work, 
individuals may attempt to return to work and are offered a variety of 
programs and support by the Social Security Administration (SSA). Work 
incentive provisions are designed to encourage return-to-work by 
allowing disability beneficiaries to test their capacity to sustain 
work before their benefits are ceased. The SSA also administers the 
Ticket to Work program, which provides additional return-to-work 
support. Among beneficiaries tracked over 10 years, 28 percent worked 
at some point, but only 4 percent had sufficient earnings to have their 
benefits ended. Younger beneficiaries--those under 40--were more likely 
to work than older beneficiaries.
      
    Overall, according to the SSA, among all workers who exited the 
disability rolls in 2011, 52 percent converted to retirement benefits, 
36 percent died, 4 percent medically improved to the extent they no 
longer met the eligibility criteria, and 6 percent returned to work.
      
    Increasingly, experts are researching the challenges facing the 
disability program and developing new proposals intended to help more 
individuals remain in the workforce or return to work once they begin 
receiving disability benefits. In the most recent beneficiary survey, 
40 percent of beneficiaries expressed an interest in working. Recently, 
other countries, such as the Netherlands and Norway, have undertaken 
reforms to reduce the growth in their disability rolls by focusing 
efforts on keeping applicants in the workforce or returning 
beneficiaries to work as soon as possible.
      
    In announcing the hearing, Social Security Subcommittee Chairman 
Sam Johnson (R-TX) said, ``It's just plain wrong that those receiving 
disability benefits who want to work are sentenced to a lifetime of 
near poverty with no way out. Social Security's return-to-work efforts 
are simply failing do their job of helping our fellow citizens find 
work. We must find ways to help these Americans trade in their 
disability check for a paycheck that can provide a better life.''
      

FOCUS OF THE HEARING:

      
    The hearing will examine the impact of the DI program on the 
economy, efforts by Social Security to return individuals to work, 
efforts internationally to return individuals to work, and other 
options to encourage work.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov/, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word or 
WordPerfect document, in compliance with the formatting requirements 
listed below, by the close of business on Wednesday July 3, 2013. 
Finally, please note that due to the change in House mail policy, the 
U.S. Capitol Police will refuse sealed-package deliveries to all House 
Office Buildings. For questions, or if you encounter technical 
problems, please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word or WordPerfect format and MUST NOT exceed a total of 10 pages, 
including attachments. Witnesses and submitters are advised that the 
Committee relies on electronic submissions for printing the official 
hearing record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days' notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.
                                 
    Chairman JOHNSON. The committee will come to order.
    Good morning. Welcome to our hearing on Encouraging Work in 
Social Security Disability. The Disability Insurance program 
provides essential income security to people with disabilities 
and their families. And we are glad to have all of you here 
today.
    Over the past 40 years, changes in demographics, Federal 
policy, and the availability of jobs have driven a 300 percent 
increase in the number of people receiving Disability Insurance 
benefits from 2.7 million to over 10 million. Within 10 years, 
over 12.4 million beneficiaries will receive $207 billion in 
benefits. That is up 53 percent from the $135 billion paid last 
year. So it ought to come as no surprise that in their 2013 
Annual Report, the Social Security Trustees again warned us 
that these most vulnerable beneficiaries face a 20 percent 
across-the-board benefit cut in just 3 years unless Congress 
acts. Those who depend on this critical benefit are counting on 
us to act, and we will.
    In the last 3 years, this subcommittee has held 10 hearings 
on disability. As we work to protect and preserve this vital 
program, we also need to consider how to help those who can and 
want to work. Work contributes to an individual's well-being. 
Work sustains families. Work drives our economy. When people 
aren't working, we all suffer.
    Unemployment in this country remains unacceptably high at 
7.6 percent. Those with disabilities seeking to get back into 
the workforce face a higher unemployment rate of 13.4 percent. 
But the unemployment rate only tells part of the story. It 
doesn't count those who are no longer looking for jobs because 
they are out of the labor market. And it doesn't consider the 
toll on human dignity as those who may want to work can be 
trapped by the disability program since earning a dollar too 
much could mean losing thousands of dollars in cash benefits.
    While not everyone receiving disability benefits can return 
to work, experts tell us more people would return to or stay at 
work if given the right kind of help to do so. Surveys show 40 
percent of beneficiaries are interested in working, yet only 
one-half of 1 percent leave the rolls annually due to earnings 
from work.
    And today we are going to examine the views of our expert 
witnesses regarding the impact of the disability program on the 
economy, efforts by other countries to return individuals to 
work, and new ways to encourage work. We will hear from a 
frontline service provider about the challenges facing those 
with disabilities trying to stay on the job and the help that 
enables them to stay at work or get back to work as soon as 
possible. We will also get an update from the Social Security 
Administration regarding its efforts to help those individuals 
return to work.
    Now more than ever, how every dollar is spent matters to 
our country and to our taxpayers. Programs that don't achieve 
positive results must be reformed or end. I have seen firsthand 
how beneficiaries and employers benefit when the system works. 
We went to the Walgreens distribution center in Waxahachie, 
Texas, where they are working. There, with the help of the 
Texas Department of Assistive and Rehabilitative Services, 
those with disabilities, including former beneficiaries, work 
side-by-side with the other workers doing the same job for the 
same pay. Those who can and want to work should not be 
sentenced to a lifetime of near poverty with no way out. We can 
and we must achieve the results taxpayers expect and those with 
disabilities deserve.
    I now recognize the ranking member Mr. Becerra for his 
opening statement.
    Mr. BECERRA. Thank you, Mr. Chairman. Thank you for holding 
this hearing. And we thank all of the witnesses for being here.
    American workers earn their Social Security Disability 
Insurance. Nearly 160 million Americans contribute to Social 
Security, earning protection for themselves and their families 
when they retire or if they should die or if they become 
severely disabled.
    We should support the work efforts of disabled Americans. 
But at the same time, it is essential that we do no harm to 
those who cannot work and need the Social Security benefits 
that they have earned. This requires a careful balancing. On 
the one hand, Social Security should not be a barrier to work. 
That is, individuals who qualify for benefits but may be able 
to return to work should be able to try to work without risking 
their income and their health.
    At the same time, we should keep in mind that only those 
who have demonstrated that they are unable to work qualify for 
Disability Insurance. Although many Disability Insurance 
recipients would prefer to be working, most are simply too sick 
or impaired to sustain work. Only about four in 10 applicants, 
the sickest and most severely disabled, qualify for DI. A 
significant number of DI beneficiaries have terminal illness. 
In fact, about one in five men and about one in seven women die 
within a few years of becoming eligible for the benefits.
    By law, workers with disabilities that do not prevent them 
from working do not qualify for benefits. DI benefits replace 
only about half of a typical worker's predisability earnings. 
So, few beneficiaries would give up their work for DI if they 
were able to work.
    Studies of actual DI beneficiaries show that while many DI 
beneficiaries make an attempt to work, most are not able to 
sustain employment.
    Another point: budget cuts and the so-called sequester law 
undermine the Social Security Administration's work promotion 
efforts. The Social Security Administration's budget is about 
$800 million lower this year than it was in 2010 due to a 
series of budget cuts and the sequester. As a result, local SSA 
offices have lost more than 10 percent of their staff, 
including some of their most experienced case workers. With 
less staff and the loss of various senior, more experienced 
staff, Social Security often struggles to administer the 
complicated rules intended to protect beneficiaries who try to 
return to work.
    Before we institute any new rules or requirements for 
disabled workers, we need to consider carefully whether we are 
prepared to pay for the cost of assisting them. Our track 
record quite honestly is a cautionary tale on this point.
    Finally, Social Security Disability Insurance payments are 
just one small part of our overall national strategy to promote 
fairness and work for disabled Americans. DI is for those with 
the most severe impairments with almost no capacity to work. 
For the majority of disabled Americans who are able to work, we 
also have a Federal State vocational rehabilitation system, 
anti-discrimination and accommodation requirements through the 
Americans with Disabilities Act. We have special education 
services for every child who needs them. We have various 
pathways to affordable health insurance, and we have a Federal 
income tax credit program for those who are disabled.
    I think our discussion here today will demonstrate that 
there is a need to improve support for those with partial 
impairments, a much larger group of people than those who 
qualify for Disability Insurance. But in such tight fiscal 
times, we need to be fully aware of the costs and trade-offs. 
As a rule, Americans who are able to work with some support are 
not eligible for any benefits from Social Security because 
Social Security is not meant to be a partial disability system. 
If we are going to talk about changing the rules to allow more 
people to combine work and Disability Insurance, we also need 
to discuss how we will pay for the added cost of coverage for 
less disabled workers.
    There is no doubt that there is room for improvement in our 
national policy for supporting people with disabilities, 
including those who can work and those who cannot. However, we 
cannot pretend that this can be done on the cheap, that all we 
need to do is make a few tweaks, and thousands of DI recipients 
will all of a sudden be able to support themselves through 
work. And we must be careful not to do so at the expense of 
those Americans who have no choice but to rely on the 
disability benefits that they paid for and have earned.
    The question I have for my colleagues and our witnesses is, 
what are we, Congress, willing to invest to support work among 
people with disabilities? Should our efforts be aimed primarily 
at the sickest and most disabled, the people who qualify for 
Social Security Disability Insurance? If so, the first step is 
to provide SSA with adequate resources to administer the work 
incentives and support services Congress has already 
authorized. Or should we cast the net more broadly to assist 
those who are struggling to work, despite the effects of their 
impairments, but do not meet the very strict eligibility 
criteria for Social Security? I look forward to hearing from 
our witnesses today as we sort through these challenges.
    I yield back, Mr. Chairman.
    Chairman JOHNSON. Thank you.
    As is customary, any member is welcome to submit a 
statement for the hearing record.
    And before we move on to our testimony today, I want to 
remind our witnesses to please limit your oral statements to 5 
minutes.
    However, without objection, all of the written testimony 
will be made part of the hearing record.
    We have one witness panel today. Seated at the table are 
Mark Duggan, a professor from the Wharton School, University of 
Pennsylvania, PhD.
    Mary C. Daly, another PhD, group vice president and 
Associate Director of Research, Federal Reserve Bank of San 
Francisco; Kevin Ufier, National Director, Managed Disability, 
GENEX Services; Lisa Ekman, Director of Federal Policy, Health 
& Disability Advocates, on behalf of the Consortium for 
Citizens With Disabilities Social Security Task Force; James 
Smith, Budget and Policy Manager, Division of Vocational 
Rehabilitation, Vermont Agency of Human Services.
    Thank you for being here.
    David Weaver, PhD, Associate Commissioner for the Office of 
Program Development and Research, accompanied by Bob Williams, 
Associate Commissioner for the Office of Employment Support 
Programs, Social Security Administration.
    Mr. Duggan, welcome. Thanks for being here. Please proceed.

  STATEMENT OF MARK G. DUGGAN, PH.D., PROFESSOR, THE WHARTON 
 SCHOOL, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA, PENNSYLVANIA

    Mr. DUGGAN. Chairman Johnson, Ranking Member Becerra, and 
Members of the Committee, it is truly an honor to be with you 
here today. The Social Security Disability Insurance program 
currently provides insurance against the risk of disability to 
more than 150 million American adults. The program represents 
an extremely important part of our Nation's safety net, as it 
protects workers and their families from the risk of a 
disability that prevents or greatly inhibits a person's ability 
to work. As shown in figure one, enrollment in the SSDI program 
has grown steadily since the late 1980s, from 2.3 percent of 
adults 25 to 64 in 1989 to 5.0 percent in 2012.
    As I outlined in my written testimony, several factors have 
contributed to this growth in SSDI enrollment, including an 
aging of the Baby Boom population. As people at higher ages are 
more likely to receive SSDI has contributed as has a growth in 
employment among women, which has made more of them insured for 
the program. But these factors contribute less than a third to 
the growth in SSDI enrollment outlined above.
    A more important factor outlined in figure two has been an 
evolution of the diagnoses with which individuals have been 
qualifying for SSDI benefits resulting from a liberalization of 
the program's medical eligibility criteria that occurred in the 
mid 1980s. Looking at the figure, you can see that conditions 
circulatory and neoplasms award rates have remained roughly 
flat. Strokes, heart attack, cancer, and so forth has been very 
little change in the award rates. Those are the four series in 
the middle. And each bar represents an award rate in 1983, 
1989, 1999 or 2009.
    On the other hand, if one looks at, for example, diseases 
of the musculoskeletal system, an example of that would be very 
severe back pain, the award rate over this period has increased 
by a factor of five, from 0.4 to 2.0, as measured above.
    Another important driver of the growth factor in SSDI 
enrollment is the sensitivity of the program to economic 
conditions. As outlined in figure three, applications to the 
SSDI program are highly responsive to the unemployment rate, 
with applications rising during economic downturns and falling 
when the economy improves. Several other factors have 
contributed as well. But my research and the research of many 
others suggests that the SSDI program is having a large and 
growing important impact on the U.S. labor market.
    In order to receive an SSDI award, a person must be deemed 
unable to engage in substantial gainful activity. Once on the 
program, SSDI recipients have little incentive to return to 
work, as earnings beyond the SGA threshold will lead to a 
termination of benefits. And given that the present value of an 
average SSDI award is $270,000, including Medicare benefits, 
that is a risk many SSDI recipients will be reluctant to take.
    The growth in SSDI has coincided with a significant 
reduction in employment rates among individuals with 
disabilities. For example, from 1988 to 2008, the employment 
rate of men in their 40s and 50s with a work-limiting 
disability fell from 28 percent to 16 percent. As shown in 
figure four, there has been a growing gap in employment rates 
between workers with and without disabilities that has 
coincided with the growth in SSDI enrollment.
    Previous research has also shown that workers have become 
much more likely to respond to adverse demand shocks in the 
economy by applying for SSDI rather than seeking a new job. 
This is going to serve to reduce both the unemployment rate and 
the labor force participation rate below what it otherwise 
would be, and it also reduces employment, as SSDI recipients so 
rarely leave the program to return to the workforce.
    My analysis of the application data shown in figure two 
indicates that more than 2.5 million people have applied for 
SSDI as a result of the economic downturn. The steady increase 
in SSDI enrollment since the 1980s has contributed to a 
differential decline in labor force participation among both 
men and women in the U.S. relative to other industrialized 
countries.
    One way to improve incentives for workers in the SSDI 
program is to intervene sooner for individuals with work-
limiting conditions so that they can continue to work. Many 
people with more subjective disorders, such as back pain, could 
benefit from such early intervention.
    In a recent paper, David Autor and I have proposed adding a 
front end to the SSDI system that would include early 
intervention for rehabilitation-related services with the goal 
of keeping workers with work-related disabilities in the labor 
market.
    An additional approach would be to improve work incentives 
for people on the SSDI program to return to the workforce. 
Recent evidence from Norway indicates that programs that 
increase the incentive to work among people on Disability 
Insurance can lead to a large growth in their labor supply.
    The lack of progress and improving work incentives in SSDI 
stands in marked contrast to the Temporary Assistance to Needy 
Families program. Reforms introduced in the late 1990s led to 
substantial gains in employment among past, current, and 
potential future TANF recipients and to a steady drop in 
program enrollment and expenditures. Based on my own research 
and that of many others, I believe similar progress is possible 
within SSDI and the need for such progress is, indeed, urgent 
both because of a pending expiration of the trust fund and the 
trends in the U.S. labor market as described above.
    Thank you.
    Chairman JOHNSON. Thank you, sir. You sped that up and made 
it on time. Congratulations.
    Mr. DUGGAN. I did. I was watching that clock.
    [The statement of Mr. Duggan follows:]
    
    
    
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
 

    Chairman JOHNSON. Dr. Daly, welcome. Please proceed.

  STATEMENT OF MARY C. DALY, PH.D., GROUP VICE PRESIDENT AND 
  ASSOCIATE DIRECTOR OF RESEARCH, FEDERAL RESERVE BANK OF SAN 
              FRANCISCO, SAN FRANCISCO, CALIFORNIA

    Ms. DALY. Thank you. Chairman Johnson and Members of the 
Committee, it is an honor to be here. I will say that my 
remarks today are my views and do not necessarily reflect those 
of the Federal Reserve System.
    That said, I wanted to make three points this morning. The 
first point is referenced in figure one and basically is the 
following: That the growth in the DI program that we have 
witnessed over the last couple of decades is not completely 
explained by factors that are transitory, such as the aging of 
the population, the entry of women onto the DI program because 
of their increased eligibility, or the increase in the normal 
retirement age.
    In fact, if I control for those three things, similar to 
Professor Duggan, what we find is that the red line, which 
shows growth controlling for those factors, has continued to 
rise. And that is the portion that is unexplained by these 
transitory variables. And if you extrapolate out that growth, 
you think that the program might be in an unsustainable 
position.
    The second point I would like to make is that, in the 
United States, we are not alone in having these types of 
challenges. In fact, our European counterparts faced similar 
challenges more than a decade ago. They had rapidly rising 
disability recipiency rates that were not explained by 
demographic or health trends. They undertook particular reforms 
in those areas to try to curb the growth in the benefit roles 
and stem the tide of new beneficiaries in particular.
    I want to focus on figure two on two countries. There are 
other countries you could use as an example, but these two 
countries I think paint a nice picture. I want to refer your 
attention to Sweden and the Netherlands. Both of those 
countries had very rapidly rising disability recipiency rates 
and recipiency rates that, on average, have been far higher 
than the United States. When the OECD evaluated these rates, 
they concluded that the difference in the U.S. and these 
countries is that these countries have much more generous 
systems that replace a larger share of earnings.
    The important thing though in this chart for today's 
discussion I believe is to look at the last decade of the 
experience. And you see notably that, in Sweden and the 
Netherlands, caseloads have begun to come down. The recipiency 
rates falling. In contrast, the U.S. recipiency rate continues 
to rise. So the question before us is, how did they do this? 
And what happened?
    And for the rest of my remarks, I want to focus on a 
30,000-foot level view of what they did. So, in both the 
Netherlands and Sweden, they began the program with fundamental 
reforms. They had tried many times to tweak the existing system 
and reduce caseloads and found those attempts lacking. So they 
attempted fundamental reform.
    The very first stage of fundamental reform was to modernize 
the definition of disability and no longer consider it to mean 
incapacity. They had programs similar to ours, that in order to 
get any kind of services, you had to prove that you were 
unable. They said, this is not the right expectation. It is not 
good for people with disabilities. And it is certainly not good 
for our economy when we need all the productive assets to be 
able to contribute.
    With that in mind, they then made the following 
observation: They said just because we observe that many people 
with even severe disabilities do not work is not empirical 
evidence that they cannot work. So we don't want to confuse--
this is their words, not mine--we don't want to confuse what we 
observe today under a particular program design with what is 
possible in the future if we change the program design.
    Importantly, both countries attempted different program 
designs. They took different trajectories. In the Netherlands, 
they incentivized employers by making them pay for the first 2 
years of support for disability if you put your worker into a 
disability system, and you are experience rated if you move 
them onto long-term benefits. You have to pay a higher DI 
premium.
    In Sweden, they work through the state adjudicators to put 
time limits at 3, 6 months, 12 months and 30 months. They would 
have checkpoints, evaluate your functional capacity. And if 
people were able to find jobs and work up to that capacity, 
their earnings were subsidized. If they didn't, they considered 
that noncompliance and would remove them from the benefit 
system.
    The point of both of those projects or both of those 
reforms is this: Early intervention matters. Getting in right 
when a person has an impairment is the critical component of 
those reforms. And enforcing that with a social expectation 
that you work if you have a disability unless you can't and you 
demonstrate you cannot, but then also having a commitment--and 
I think we heard this earlier in the opening remarks--a 
commitment to support work, very similar to what we did with 
TANF, if you recall, that the expectation is that you work, but 
there is support for work.
    The other thing I would note is that they had much less 
success in reducing the stock of existing beneficiaries. Both 
those countries have now said that that is a much more 
difficult problem to solve and that the returns on investments 
are best made to reduce the flow of new beneficiaries onto the 
system.
    I will conclude by saying that the important metric I think 
for evaluating any reform is to ask, did people with 
disabilities suffer? Were people made worse off? And in these 
countries, they were not. Incomes remained and the same, and 
employment rates rose.
    Chairman JOHNSON. Thank you.
    [The statement of Ms. Daly follows:]
    
    
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
     Chairman JOHNSON. Mr. Ufier, you are now recognized.

STATEMENT OF KEVIN UFIER, NATIONAL DIRECTOR MANAGED DISABILITY, 
              GENEX SERVICES, WAYNE, PENNSYLVANIA

    Mr. UFIER. Thank you, Mr. Chairman and Members of the 
Committee.
    I appreciate this opportunity to testify concerning the 
best practices for returning employees back to work who have 
medical impairments and facilitating return to work for these 
employees on their stay-at-work programs.
    Many of GENEX Services' business clients include 
individuals, small employers, mid-sized companies, Fortune 500 
corporations. I would like to discuss our perspective of what 
we have seen in terms of what disability is and assessing 
employees to stay at work.
    Disability is not merely having a medical condition. 
Disability is a medical-legal construct. A medical diagnosis 
alone does not equate to the adjudication of disability or a 
lifetime entitlement to unemployment, though many individuals 
perceive disability benefits as everlasting once they begin.
    Disability is usually considered of a limited duration, 
except in those instances where there is a rapidly 
deteriorating condition without a reasonable expectation of 
improvement exists for terminal cases. For our customers, 
disability episode can result in millions of dollars a year 
beyond just the sick time benefits. Most importantly, the 
episodes result in lost productivity, lost revenue for 
employers. Employers and insurers engage GENEX to develop 
strategies to help keep people at work under stay-at-work--
return-to-work programs or rapid return to works.
    We understand that motivated employees who want to return 
to work are the best candidates to be successful in returning 
to work. We also recognize that the sooner the intervention by 
employers and claim administrators in providing support through 
processes of return to work promote better improved outcomes.
    When employers provide return-to-work programs and 
immediate support of an employee upon a disability event, there 
is an expectation that the employee will make an effort to 
immediately attempt to return to work or start on that process. 
Typically, the return-to-work programs will have formal written 
policies in place that encourage return to work once the 
employee is on disability. These are known as transitional 
return-to-work programs. The employer should provide the 
training of operations and other essential staff concerning the 
return-to-work process. Employer management, human resource, 
and benefit team members know their assigned roles and 
responsibilities in the process. There is usually an internal 
corporate sponsor that promotes the program internally, 
basically a champion within the company.
    The return-to-work process permits increased incremental 
ability for someone to try to go back to work through a 
scheduled duration. Often an option of light duty is written 
into a program that will allow for safe work functioning during 
a period of adjustment back to the work environment. The 
return-to-work program always applies accommodation principles 
to provide for minimum risk of additional loss of functioning 
during the attempt for return to work. Each individual worker 
will have their own return-to-work plans specific to the 
requirements of their own job and their own medical 
restrictions.
    Transitional work is not permanent. It is meant to be a 
short duration. The goal is always to return a person to their 
own job full time. Conditioning programs, such as work 
hardening, can be utilized to accelerate the work capacity when 
appropriate. When an individual worker has developed 
restrictions or limitations prior to filing a disability claim, 
many employers utilize a stay-at-work program to encourage 
continued productivity at work, yet accommodating the employees 
for a designated function and for a short period of time. Stay-
at-work programs include many of the same elements as 
transitional work but are deployed prior to the actual 
disability event. Many programs also employ ergonomic programs, 
which is assessing the interaction between the work site and 
the human psychology and physical activities. And that can be 
invaluable in preventing additional limitations to the 
individual that is going back to work as well as preventing, 
even, disability.
    In general, employers and claims administrators should 
engage the workers as soon as possible about continuing to work 
in some capacity or planning to return to work. Steps include 
setting up expectations that employees will go back to work, 
have employers involved in the return to work for employees, 
monetary incentives for work return to work, pay for adaptive 
equipment, day and elder care issues, dedicated support or 
professional staff promoting return to work within the 
organization, and corporate human resource operational 
structure which outlines roles and responsibilities for return 
to work. This outlines our philosophy that we have experienced 
at GENEX. And I thank you for the opportunity to express these 
views.
    Chairman JOHNSON. Thank you, sir.
    [The statement of Mr. Ufier follows:]
    
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    
    Chairman JOHNSON. Ms. Ekman, welcome aboard. Please go 
ahead.

STATEMENT OF LISA D. EKMAN, DIRECTOR OF FEDERAL POLICY, HEALTH 
    & DISABILITY ADVOCATES, ON BEHALF OF THE CONSORTIUM FOR 
     CITIZENS WITH DISABILITIES SOCIAL SECURITY TASK FORCE

    Mr. EKMAN. Good morning.
    Chairman Johnson, Ranking Member Becerra and Members of the 
Subcommittee, thank you for the opportunity to testify at this 
hearing on encouraging work through the SSDI program.
    My name is Lisa Ekman, and director of Federal policy for 
Health & Disability Advocates, and I am testifying today on 
behalf of the cochairs of the Social Security Task Force of the 
Consortium for Citizens with Disabilities. The SSDI program 
provides vital income security to millions of people with 
impairments so severe that they are unable to perform 
substantial work, many of whom would live in abject poverty and 
be homeless without them.
    And only, as Ranking Member Becerra said, people with the 
most significant disabilities receive SSDI benefits. Of the 57 
million Americans with disabilities and the 38 million with 
significant disabilities, only about 14 million receive any 
type of income support through the Social Security system.
    The U.S. already has one of the strictest if not the 
strictest definition of disability in the developed world. The 
people receiving benefits are diverse, including for example 
people with heart disease, end stage renal failure, significant 
intellectual disabilities, severe mental illnesses, severe 
physical disabilities, advanced stage cancers, debilitating 
arthritis, deafness, and blindness. And the vast majority of 
the people receiving SSDI simply do not have the capacity to 
work at any meaningful level.
    Many factors must be present for people with significant 
disabilities to be able to obtain and sustain work. The 
person's health and impairment must allow them to do so. And 
this is the most important factor. More than eight out of 10 
people with disabilities who weren't working, in a recent 
Bureau of Labor Statistics survey, said it was their disability 
itself that prevented them from doing so. But they also must 
have access to affordable housing and transportation, health 
insurance, and the services and supports required to work, 
including personal attendant care and assistive technology for 
many.
    The Social Security system does not provide nor should it 
provide any of the items on that list besides income support. 
SSDI does exactly what it was designed to do, replace wages for 
people who are no longer able to work due to a severe 
impairment. And although we strongly support efforts to 
increase employment of people receiving SSDI and people with 
disabilities who do not receive SSDI, we do not believe such 
efforts will result in significant numbers of people achieving 
economic self-sufficiency or no longer requiring SSDI benefits 
if they already do.
    Contrary to assertions made by some, SSDI is not a 
disincentive to work for people with work capacity. Many SSDI 
beneficiaries do work, but it rarely results in earnings that 
allow people to leave the rolls and stay off of them. 
Researchers examined earnings of a group of beneficiaries for 
10 years and found that 28 percent of them attempted work and 4 
percent had benefits terminated due to earnings. The same 
Bureau of Labor Statistics survey mentioned before found that 
income support from any government program, including SSDI, had 
absolutely no effect on the work efforts of 92.5 percent of 
people with disabilities surveyed.
    And SSDI benefits are modest, the least generous of all 
OECD countries, except for South Korea. Wage replacement rates 
are very low, as Mr. Becerra pointed out, less than half of 
what their prebenefit wages for more than a majority of 
beneficiaries. And many people live near or below poverty, 
despite receiving SSDI benefits.
    We cannot examine SSDI in a vacuum. We have to look at the 
entire disability support system. And we should not blame SSDI 
for the failure of other programs in that system. We need to 
look at Medicaid, which provides health care and supports and 
services, such as personal attendant care; the Department of 
Labor programs, which provide training and job search 
assistance; and the vocational rehabilitation program, the sole 
mission of which is to assist people with disabilities to 
obtain or maintain employment. We also need to look at the 
funding for these programs, which are already inadequate and 
provide more funding to them to help accomplish the goals of 
helping people with disabilities work.
    It is the role of these other programs to help people with 
disabilities work. SSA does not have the infrastructure or 
expertise to do so. Any new programs to delay or prevent 
workers who develop workers from applying for SSDI should not 
be administered by or funded through the Social Security 
system. The best time to intervene is at least several years 
before people apply for SSDI. And we explain the reasons for 
that fully in our testimony.
    In addition, the Social Security Administration already 
lacks sufficient resources to do their existing workload, let 
alone to take on a new role. And the resulting overpayments, 
due in large part to inadequate staff, are a major disincentive 
to work and could be avoided by increasing SSA's budget and 
dedicating staff to this important workload.
    We do believe there are improvements that could be made to 
the SSDI work incentives, and we outlined those in our 
testimony.
    In conclusion, when considering the reforms suggested here 
today, we urge Congress to evaluate them based on the 
principles contained in our written statement, avoid any 
proposal that could have the unintended consequence of having 
less people be hired who have disabilities, such as experience 
rating SSDI taxes, and to use caution in making international 
comparisons with other countries with less stringent disability 
definitions, much more generous benefits, much more expensive 
social insurance and pension programs, and provide already much 
more adequate services and supports. Thank you.
    Chairman JOHNSON. Thank you.
    [The statement of Ms. Ekman follows:]
    
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    

    Chairman JOHNSON. Mr. Smith, please, go ahead.

 STATEMENT OF JAMES SMITH, BUDGET AND POLICY MANAGER, DIVISION 
OF VOCATIONAL REHABILITATION, VERMONT AGENCY OF HUMAN SERVICES, 
                      BURLINGTON, VERMONT

    Mr. SMITH. Chairman Johnson, Ranking Member Becerra, and 
Members of the Subcommittee, thank you for this opportunity to 
talk to you about a major disincentive to return to work for 
SSDI beneficiaries.
    My name is James Smith, and I have worked directly with 
SSDI beneficiaries since 1986. Over the years, I and my staff 
have talked with thousands of SSDI beneficiaries about their 
efforts to return to work. Based on this experience, I am 
convinced the current SSDI work rules undermine their efforts 
because they do not make work pay.
    In fact, the rules do the opposite. In particular, I am 
referring to the so-called cash cliff built into the SSDI work 
rules. The cash cliff works as follows: If a beneficiary earns 
above the so called substantial gainful activity or SGA level, 
the amount that is already below the poverty line, that single 
dollar results in a complete loss of SSDI cash benefits.
    In my written testimony, I provided you with a typical case 
study of how the SGA cash cliff works. In this case, Joe's 
total monthly income is actually reduced if he increases his 
working hours from 15 to 20 hours per week. He would actually 
have to work 31 hours simply to match the income he had working 
15 hours a week. At the same time, he would risk complete 
detachment from the program. Because Joe has schizophrenia and 
his illness is unpredictable, this is a very risky proposition 
for him. As a result, Joe does not attempt to increase his 
earnings, and continues to receive his full SSDI benefits. 
Nobody wins.
    Joe's case is not an exception or an outlier. My staff and 
I see this issue play out every day. The obvious alternative to 
the SSDI cash cliff is a gradual $1 for $2 earnings offset, 
whereby benefits are decreased by $1 for every $2 of earnings. 
So the beneficiary is always better off the more they work.
    To its great credit, Congress has already implemented an 
earnings offset in the SSI program. The SSI earnings offset has 
been in place for over three decades and provides SSI 
beneficiaries with a clear incentive to work. So this is by no 
means a new or untested approach.
    While the merit of an earnings offset for SSDI seems common 
sense, until recently, there has been no research data to 
support it. However, data from a four-State pilot, including 
Connecticut Wisconsin Utah and my State Vermont, provides clear 
evidence that an earnings offset for SSDI benefits would result 
in increased earnings. Just over 1,800 SSDI beneficiaries 
participated across the State, using a rigorous random 
assignment experimental design. Overall, the studies showed the 
offset led to a 25 percent increase in the number of 
beneficiaries earning above the annualized SGA or cash cliff 
amount. So, clearly, the 1 for 2 did increase beneficiary 
earnings.
    The question is, what were the policy implications? How do 
we improve the SSDI work incentives and still be cost-
effective? First, implement a graduated 1 for 2 earnings offset 
to always make work pay. Second, Congress should consider 
starting the threshold for the offset at less than SGA. Right 
now, Social Security pays 100 percent of a beneficiary's 
benefits unless the beneficiary earns above the SGA threshold. 
Therefore, most work activity does not result in any savings to 
the program. If you were to start the offset at, for example, 
50 percent of SGA, you would be much more likely to generate 
savings to the program, just like the SSI program.
    Third, eliminate the trial work period. Right now, Social 
Security pays 100 percent of benefits during the 9-month trial 
work period, regardless of how much a beneficiary is earning. 
With an offset, savings would be generated from the first month 
a beneficiary goes to work, just like the SSI program.
    Four, allow beneficiaries continued attachment to the SSDI 
program regardless of work activity. This would be as long as 
they continue to be medically eligible. Disability can be 
unstable and unpredictable. Beneficiaries with schizophrenia or 
multiple sclerosis, for example, may have periods of time when 
they can work 40 hours a week and other periods where they 
cannot work at all. Continued attachment would give 
beneficiaries the security they need to try to work, without 
the fear of being completely cut off.
    Finally, implementing a graduated offset would eliminate a 
major barrier to the success of the ticket-to-work program. 
Unless the SSDI work rules always make work pay, the ticket-to-
work program will never achieve its full potential.
    So, in summary, what I propose is to support return to work 
by always making work pay within the SSDI program. You can 
potentially increase savings to the SSDI program by starting 
the offsets at a point less than SGA, simplify the work 
incentives for both beneficiaries and Social Security, and 
align the SSDI program work rules with the goals of the ticket 
to work program. Thank you.
    Chairman JOHNSON. Thank you, sir.
    [The statement of Mr. Smith follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    Chairman JOHNSON. Dr. Weaver, welcome. Please proceed.

   STATEMENT OF DAVID WEAVER, PH.D., ASSOCIATE COMMISSIONER, 
  OFFICE OF PROGRAM DEVELOPMENT AND RESEARCH, ACCOMPANIED BY 
 ROBERT WILLIAMS, ASSOCIATE COMMISSIONER, OFFICE OF EMPLOYMENT 
        SUPPORT PROGRAMS, SOCIAL SECURITY ADMINISTRATION

    Dr. WEAVER. Chairman Johnson, Ranking Member Becerra, and 
Members of the Subcommittee, thank you for the opportunity to 
discuss our responsibility to help beneficiaries with 
disabilities to return to work.
    My name is David Weaver, and I am the Associate 
Commissioner for Program Development and Research. Joining me 
today is Bob Williams. He is the Associate Commissioner for the 
Office of Employment Support Programs.
    Congress has included a number of incentives in the Social 
Security Act to encourage disability beneficiaries to work. My 
written testimony provides further detail. Generally, these 
incentives provide beneficiaries with continued benefits and 
medical coverage while attempting to return to work or pursuing 
an employment goal. As illustrated by the work incentive chart 
in my written testimony, our work incentive provisions are 
complex and difficult for disability beneficiaries to 
understand and for us to administer. Simplifying these rules 
would help our beneficiaries and would streamline our 
administrative process.
    Since the beginning of the disability program, State 
vocational rehabilitation, or VR, agencies have been the 
primary providers of employment support for our beneficiaries 
with disabilities. The 1999 legislation that created the 
ticket-to-work program expanded the universe of service 
providers and gave beneficiaries choices beyond the State VR 
agencies to obtain services and supports needed to secure and 
maintain employment.
    Under our current ticket program rules, any adult 
disability beneficiary is eligible to participate in the ticket 
program. Individuals eligible to participate in the ticket 
program may choose to receive services from a State VR agency 
or an employment network. We contract with employment networks, 
or ENs, to provide or coordinate the delivery of employment 
support services to our disability beneficiaries. Some State VR 
agencies also act as ENs.
    In order to become an EN, an entity must apply and meet our 
qualifications. In addition, ENs must meet performance 
standards that are part of every agreement that we sign with 
the ENs. As of May 31, 2013, there are 44,452 tickets assigned 
to 653 ENs.
    The Ticket Act created two other programs to supplement the 
assistance available at our field offices. The Work Incentives 
Planning and Assistance, or WIPA, program and the protection 
and advocacy for beneficiaries of Social Security program. The 
two programs authorize grants to organizations with ties to the 
disability community at the local level. These programs are 
useful tools in our return-to-work efforts, and we thank you 
for your continued support of them.
    The Ticket Act authorized us to test how certain statutory 
changes to the disability program would affect beneficiary work 
activity. Pursuant to this demonstration authority, we 
initiated four demonstration projects, including the Benefit 
Offset National Demonstration, or BOND, and the Youth 
Transition Demonstration, or YTD. The BOND will measure the 
effect of reducing Title II disability benefits by $1 for every 
$2 a beneficiary earns above substantial gainful activity, or 
SGA. The YTD identified services, implement service 
interventions, and test modified Supplemental Security Income 
and resource exclusion, intended to lead to better education 
and employment outcomes for youth with disabilities.
    Demonstration projects are the best vehicle for identifying 
promising program changes and measuring their effects on 
disability beneficiaries and potential beneficiaries. For 
example, we completed a four State pilot for the BOND in 2008, 
which we used to inform the design of a nationwide BOND. The 
pilot also yielded some preliminary outcomes, such as more 
beneficiaries earning above SGA and more beneficiaries 
receiving higher benefit amounts.
    We also found that YTD services increased the paid 
employment rate for disabled youth relative to control groups 
from 24 percent to 43 percent in West Virginia, and from 13 
percent to 23 percent in Miami, Florida. Based on these 
research findings, we have asked the WIPAs to focus outreach in 
the coming year to families with disabled youth. The YTD 
demonstration shows that WIPA services to this population can 
increase employment among disabled youth.
    Our authority to initiate disability demonstration projects 
under Title II of the act expired in December 2005. The 
President's budget for fiscal year 2014 includes a legislative 
proposal that would authorize us to test ways to help people 
with disabilities remain in the workforce. In addition to 
providing new authority to test early interventions, it would 
re-establish and broaden the Title II demonstration authority 
that we previously had. Thus, we would be able to further test 
effective ways to boost employment and support current 
disability beneficiaries who are seeking to return to work.
    We urge you to support this important proposal. We are 
proud of the role our disability programs play in the Nation's 
social safety net. It is not realistic to expect every 
disability beneficiary to become financially independent by 
working. However, we must find ways to improve work outcomes 
for those who can. Thank you for the opportunity to testify at 
today's hearing.
    Bob Williams and I are happy to respond to any questions.
    Chairman JOHNSON. Thank you, sir. We appreciate your 
testimony.
    [The statement of Dr. Weaver follows:]
    
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    Chairman JOHNSON. Thank you all.
    As is customary for each round of questions, I will limit 
my time to 5 minutes, and I will ask my colleagues to also 
limit their time to 5 minutes.
    Mr. BECERRA. Yes, sir.
    Chairman JOHNSON. Dr. Daly, you referred to the 
transformation of the DI program from a last-resort cash income 
program for those not able to hold any substantial gainful 
employment to a long-term unemployment program. What are the 
causes of that transformation?
    Ms. DALY. By my read of the evidence, the program has 
become, as Professor Duggan has indicated, more cyclically 
sensitive. Am I supposed to answer now, by the way?
    Chairman JOHNSON. Sure.
    Ms. DALY. I realize I don't know the rules.
    Chairman JOHNSON. You are following them perfectly.
    Ms. DALY. Absolutely brilliant.
    So the programs become more cyclically sensitive. When 
academics evaluate why it has been more cyclically sensitive, I 
think they form a consensus--academic economists, anyway--form 
a consensus that the eligibility rules that allow vocational 
and functional criteria to be part of the decision and not just 
the medical criteria allow people when they get displaced in 
downturns to think about moving on to benefits--disability 
benefits as opposed to searching for work. So that makes the 
program potentially another avenue since we don't have long-
term unemployment insurance in the United States, another 
avenue for getting income support that is outside of the 
original intention of the disability program but is obviously a 
good way, a potentially good way, to guarantee yourself an 
income when work is hard to find, especially when you have 
impairments.
    Chairman JOHNSON. Dr. Duggan, do you have anything to add 
to that?
    Mr. DUGGAN. Thanks for the question.
    I agree with what Dr. Daly, with the thrust of her 
comments.
    I think an additional point worth making is there are a 
number of factors that show there is a strong connection 
between economic conditions and enrollment applications to this 
program, the sensitivity of it to the unemployment rate. Also 
over time, we have seen a steady decline in employment rate 
among individuals with disabilities. That is just sort of 
ongoing, and beyond that, a real shift in the conditions with 
which people are qualifying for benefits into somewhat more 
subjective, which is not to say that they are not valid, but it 
is just somewhat more subjective conditions. And recent 
research by Till von Wachter and others has show that the 
employment potential of the individuals in these rapidly 
growing diagnoses is much higher than among let's say a person 
with late stage cancer or ALS or something else. So there 
really has been a steadily growing effect of the program on the 
labor market.
    Chairman JOHNSON. And you told us that 2.5 million extra 
people have applied for disability. How does that growth impact 
our economy? And how do we reverse that trend?
    Mr. DUGGAN. Yes. So if one just sort of traces out the 
additional applications that have occurred over the last 
several years as a result of economic conditions, it is about 
2.5 million, perhaps a bit more. And I think that is going to--
research by David Autor and myself in the past has shown that 
has led to--that kind of response leads to a reduction in the 
labor force participation rate and in the unemployment rate. So 
the unemployment rate right now, if you look economy-wide, we 
see this unemployment rate coming down from 10 to 7.5 percent, 
but labor force participation has come down even more, so that 
the employment population ratio hasn't really grown. And I 
think it has a measurable effect on the Nation's overall 
unemployment rate and the overall labor force participation 
rate.
    And I think there is a lot of concern about this among 
people I think across the ideological spectrum. Is it going to 
be the case that this recent decline in the labor force 
participation rate is pretty problematic, given the demographic 
changes that are now going on?
    Chairman JOHNSON. We can't get them back to work, is what 
you are saying?
    Mr. DUGGAN. I think there is some potential to get these 
individuals back to work through the programs that were 
mentioned in some of the other testimony today.
    But I agree that the biggest bang for the buck is going to 
be from intervening with people somewhat sooner. And the path 
to that potentially is really high. With the typical DI award, 
if you look at what the Federal Government disburses--and this 
doesn't even take into account the foregone tax revenue from 
the person not working--is $270,000. If we can figure out a way 
to sort of get in there sooner with people so that they can 
return to work, that is going to have a huge payoff for the 
economy.
    But I do think that improving incentives among existing 
recipients is something worth doing, and there is evidence that 
it can make some progress, too. But I think it alone is not 
going to be enough to reverse things.
    Chairman JOHNSON. Yeah.
    Dr. Daly, do you want to add to that?
    Ms. DALY. I do want to add to that and put a calculation on 
this. Myself, as part of my role in thinking about unemployment 
rates in the United States, at the Federal Reserve Bank, we 
calculated how much--if we use historical allowance rates on 
disability for the number of applications we have, it accounts 
for about a quarter of the decline in labor force participation 
that we have seen. So that would be, if history is any guide, 
that would be a permanent decline in labor force participation 
in the United States, as Professor Duggan has noted, because 
those individuals rarely come off the rolls.
    I will say one more thing about that. If you look back at 
Sweden in particular--but you can look at other countries. 
Sweden is a good example. After the great financial crisis that 
they had in 1990, their incapacity rate went from something 
like 8 percent to 16 percent. And those were permanent 
reductions in their labor force until they dramatically 
reformed their system. So I think these are real issues that 
add to the urgency of reforms in addition to the insolvency.
    Chairman JOHNSON. Thank you, ma'am.
    Mr. Becerra, you are recognized.
    Mr. BECERRA. Thank you, Mr. Chairman.
    And thank you all for your testimony. It is very 
enlightening.
    Mr. Duggan, I think what I gather from your testimony is 
that early intervention is very important. And improving 
incentives to keep people working--very important because once 
they get into this nose-dive of becoming disabled and feeling 
disabled, it is tougher to get them to sort of come out of that 
and stay up in the air flying.
    Ms. Daly, I think the same sort of thing, periodic 
evaluations in my notes here. Early intervention matters. 
Support work. And you asked a really important question: Did 
people suffer or were they made worse off as a standard to sort 
of decide whether we are doing something better or not?
    And then, Mr. Ufier, you mentioned all the services that 
your company is providing to try to keep people at work, even 
if they are starting to tip into that area of disability.
    All that, I think we have to sort of internalize and do 
more of. But from what I hear Dr. Weaver and Mr. Williams say, 
SSDI, as Ms. Ekman says, doesn't do any of that. Social 
Security Disability Insurance is simply to pay someone who is 
now fully disabled. It is the vocational rehab programs and all 
the rest that are really there to do that. And so my sense, 
from everything I hear you saying is, we have got to really 
beef up the work we are doing to give people the incentive to 
stay working and to make sure we capture them before they 
become too disabled to stay at work or at least work for good 
periods of time. So I think we have a lot of work to do, as Mr. 
Ufier is doing with his company, to try to make sure we are 
doing everything we can from letting anyone fall over the cliff 
and become permanent--you know disabled to the point where you 
can't work.
    So a quick question, Mr. Ufier. What kinds of services--
give us very quickly because I am going to run out of time. 
What are the most important services that you think we need to 
provide folks to stop them from tipping over to becoming folks 
who just won't go back to work?
    Mr. UFIER. It is an early intervention, being involved 
right at the beginning of a claim when an individual goes out, 
employers being involved. So some kind of pressure on the 
employers to be immediately involved within the first weeks of 
disability. I deal with a lot of the private sector, which is 
short-term and long-term disability. So as soon as a person 
goes out, there is involvement from the employer to engage the 
employee to stay at work and to think about, okay, you can't 
work at the moment, but you will in the near future. Let's see 
what we can do about that.
    Mr. BECERRA. So what does ``see what we can do about that'' 
mean? What kind of services do you offer?
    Mr. UFIER. We would be offering medical intervention with 
assessing how limited the person is functionally. As I 
mentioned, disability is not just having a diagnosis but how 
that diagnosis impairs a person to return to work. So perhaps 
up front, a person may have a diagnosis, a back injury. But 
what is the likelihood? How long will they stay out of work?
    Mr. BECERRA. So a medical diagnosis, probably follow up, 
rehab? You are investing money to keep that person at work.
    Mr. UFIER. Absolutely.
    Mr. BECERRA. So this is not free?
    Mr. UFIER. No.
    Mr. BECERRA. Your company is paying money to--you are 
probably figuring, it is better to keep an experienced, capable 
employee on board than try to train someone to do all this 
stuff anew.
    Mr. UFIER. Yes. We use nurse case managers and voc rehab 
people up front rather than later in the process to say, let's 
keep you at work.
    Mr. BECERRA. But you have to invest money to make this 
work.
    Now, Dr. Weaver and Mr. Williams, my biggest concern is 
that we keep cutting the budget of the Social Security 
Administration at a time that we are talking about investing 
more to keep people at work to make sure that we intervene 
early and that we do everything we can to keep someone from 
tipping over, based on their disability, to the point where 
they can't work. How do you manage if 10 percent of your Social 
Security Administration offices--I mean, 10 percent of the 
staff in your Social Security Administration offices in the 
field have been cut?
    Dr. WEAVER. Thank you for the question. I think staffing is 
an issue at the agency. You mentioned the reductions in our 
workforce. Particularly in this area where we talk about the 
complex work incentives in the law. As our Inspector General 
said, it is a very work-intensive process. You actually have to 
put staff on these cases to make sure that beneficiaries don't 
have their benefits inappropriately stopped. And they can take 
advantage of all the employment supports that Congress has put 
in the law. So, in general, I would say that our experience 
with administering the employment supports and work incentives 
already in law has been difficult.
    Mr. BECERRA. So, Ms. Ekman, you probably deal more with 
folks who have these disabilities, and they are on that verge 
of becoming unemployable. What does SSA need to do to try to 
deal with the fact that they are getting cut?
    Mr. EKMAN. Well, first, thank you, Ranking Member Becerra. 
I think first, I will reiterate that we do not believe that the 
Social Security Administration is the right agency to perform 
early intervention or provide these work services to people who 
are still in the labor force. We think it is a few years 
before, at least, application. We find that people try to work 
for as long as they can, often beyond when it is healthy for 
them, exhaust their savings, and all their other resources, 
trying not to apply before they walk through Social Security's 
door.
    So I think the Congress needs to give Social Security more 
resources to perform program integrity work as well as to 
process earnings reports and to make sure that the person gets 
the right payment at the right time. It can take up to 8 months 
on average to process a report. And by that time, a person may 
have tens of thousands of dollars of overpayments, which will 
require them in most cases to quit their job and go back on 
benefits. So it is very counterproductive. And providing enough 
resources to handle that workload would go a long way towards 
supporting work.
    Mr. BECERRA. Thank you.
    Thank you, Mr. Chairman.
    Chairman JOHNSON. Thank you.
    Mr. Renacci, you are recognized.
    Mr. RENACCI. Thank you, Mr. Chairman.
    I want to thank all the witnesses for their testimony.
    As I listen to all the testimony, I am thinking that we 
have got to get to a way of making SSDI better. And I want to 
start with the one thing that I know the Chairman mentioned in 
his opening statement. In a most recent beneficiaries' survey, 
40 percent of beneficiaries said they were interested in 
working and getting back to work. Yet in 2010, only 0.5 percent 
left the rolls due to the earnings from work. That is where we 
should start. We should figure out how we can make things 
better for those 40 percent.
    If we can get 25 of the 40 percent back to work, that is a 
10 percent savings, and that is what the taxpayers are looking 
for. That is what they are asking Congress to do, figure out 
ways to make the program work better.
    I want to talk about two individuals in my district. And 
these are the two that I want to focus on and then maybe ask 
some questions on how we can do it better. One that I talked 
about in a previous hearing, I remember golfing with a guy who 
was on SSDI every week, swinging the golf club, walking with 
his cart. And he was on SSDI. So he is definitely somebody that 
can get back to work out of that 40 percent. But he didn't want 
to get back to work.
    And I also had another individual in my district who 
recently contacted me. He just is on his medical leave. And he 
had his third back surgery. And he just received SSDI. He is 
telling me that he wants to go back to work. His intent is to 
get back to work. And the problem is that he has now received 
his SSDI payments, and he is concerned because he is going to 
fall into what we have talked about, this problem of, you 
receive it, you lose your skills in work, and you start to go 
down this path of, well, I am just going to accept the payment. 
So those are the two that I kind of want to talk about.
    And the first one, Dr. Duggan, how do we help that second 
individual? The first individual definitely shouldn't be on 
SSDI. The second one that I am talking about, how do we help 
that person?
    Mr. DUGGAN. Well, thanks very much for the question. So we 
have heard a bit of discussion of this program in Vermont that 
improved incentives among SSDI recipients there to work and 
that that did generate significant employment gains there. So, 
basically, allowing people who are on the SSDI program, rather 
than having this cliff in benefits, if they go over it, they 
are gone for good potentially, having this benefit offset that 
enhances individuals' incentives to work.
    The recent evidence from Norway, they did an intervention 
that was not even--didn't even enhance incentives as much as 
that one, and it had a big payoff in terms of increasing 
employment among Disability Insurance recipients. So I think 
there is some scope for us with modifications to the program to 
help get people back to work so that it pays for them to do it.
    And the evidence again and again and again shows that 
financial incentives matter. This is an area in which if a 
person works and they can keep more of that earnings, that is 
going to inspire them to push harder to get back to work and 
that will enhance our economic growth. So I think there is a 
lot that we could do there.
    Mr. RENACCI. Dr. Daly, you referred to a Swedish disability 
program, and I know one of the other witnesses said that we 
shouldn't be comparing to some of the other countries. Do you 
agree with that?
    Ms. DALY. No, I don't agree with that. I would agree with 
the following statement: We shouldn't just go and take an off-
the-shelf program from another country that is quite different 
from us and adopt it wholesale and think that that would work. 
But I do think that looking to other countries and seeing where 
they have got similar experiences to ours and see that they 
have been successful.
    And I will point to Sweden as an example, that at the same 
time they were scaling back their disability program, they were 
actually also scaling back their unemployment, long-term 
employment insurance programs and their welfare programs. And 
they were doing this because they were trying to move away from 
a culture that they had had in their country where too many 
working age people, that is their words, not mine, were moving 
on to some sort of a transfer program.
    So I think it is not just the case that these countries 
have much better benefits elsewhere and people move from 
disability to those other benefits. It is actually the case 
that they are trying to--they call it labor market activation--
they are trying to re-enter numbers of people back into their 
labor market.
    I will also conclude, if I may, with the idea that the main 
thing to take from other countries is that the observation--I 
said this in my testimony, I want to reiterate it--the 
observation that people with disabilities currently don't work 
in the United States is not the same as evidence that they 
cannot work if they are given the opportunity to do so. So I 
think that is an important lesson we can learn from other 
countries.
    Mr. RENACCI. Thank you.
    Mr. Ufier, I am going to run out of time, but as an 
employer, I just wanted to make this comment. You know, there 
were two types. When an employee got hurt at work, that was 
Workers' Compensation. Then there was the employee who became 
disabled, and usually, that person just moved off the work 
roll, and we weren't able to get back with them and try and 
bring them back to employment. They had moved on already. The 
person on Workers' Compensation, you know, we were able to work 
through.
    So I am out of time, but at some point in time, I would 
love to hear how you really handle those differences.
    Mr. Chairman, I yield back.
    Chairman JOHNSON. Thank you.
    Mr. Kelly, you are recognized.
    Mr. KELLY. Thank you, Mr. Chairman.
    I would like to go back to Ms. Daly. Why did Sweden--what 
was their driving force? What did they look to reform what they 
were doing? What was the mover for that?
    Ms. DALY. Really they had--really the biggest mover was 
that they were looking at 20 percent of their working age 
population being on some sort of a government transfer program, 
and they--that is fiscally unsustainable for any nation, so 
they were taking a thorough look at those programs, and that 
what they recognized is that the disability program was a 
program that people thought, I have paid in, I pay my taxes, I 
deserve to have this type of support, but that it was getting 
away from the overwhelming evidence that in the modern world of 
disability, that people with disabilities can work.
    And so they were driven fiscally, but they actually felt 
that in their own review of their--in their own policy, they 
felt it was holding to their core values, which is that no 
citizen should be sidelined from the opportunities to 
participate in the labor market and gain a productive life, and 
they should be making those investments.
    Mr. KELLY. And I would think that all would agree.
    Sometimes we have a difficult way, we define people, we try 
to paint them all with the same brush. There are certainly 
people that cannot go back to work. I understand that.
    But what I have a difficult time trying to wrestle with 
today is we have had so many advances in technology, the way we 
treat people after an injury. And I agree, you were talking 
about early intervention, early detection, early intervention 
is the best thing for anybody. It doesn't matter whether it is 
a disease or some type of an injury, you have to get to it 
early. The earlier to it, the better chance of fixing it.
    But, again, going back to this, and because I think it is 
really important what you said about the Netherlands and 
Sweden, it says--and on page 7 of your testimony, in the past 
decade, the Netherlands and Sweden fundamentally reformed their 
disability programs by changing the culture in social 
expectations regarding people with disabilities.
    And I think that is what we constantly wrestle with, 
because sometimes it is the social expectations. I am an 
employer, and I have had people who have gotten hurt on the 
job. They can't work, they can't work; I understand that, but I 
do know this from growing up and from participating in 
athletics: The longer you are away from school, the harder it 
is to go back; and the longer you are off the field, the harder 
it is to get back on field and want to play again. So I think 
that early intervention and getting them back on the field, but 
all of you are dealing with the same thing.
    Now, again, disabilities are defined differently. Some 
people are never going to be able to return to work, I get 
that, but I think the whole process we are talking about now is 
are we incentivizing people to go back to work or are we 
disincentivizing people by the programs that we have right now? 
Again, not painting everybody with the same brush, but explain 
to me, when you say the ``social expectations,'' what are we 
talking about there?
    Ms. DALY. So if you look at documents written by the 
Netherlands and by Sweden, by policymakers, and these were 
bipartisan documents, and also at the OECD level, the OECD 
itself has written these documents, the very first paragraph in 
many of these documents says the following: People with 
disabilities deserve the opportunity to work. People with 
disabilities want to and can do work, and--and this is where 
they put it in underlined or all capped type--people with 
disabilities have the responsible to try to work.
    So that is what I mean by changing the social expectation. 
And the reason I think European countries are a good example of 
this to look to is that traditionally the European nations have 
been more generous with their safety nets--Ms. Ekman mentioned 
this--and more willing to have that be a social contract that 
they would sign. And they actually are saying it is not good 
for the individuals with disabilities, and it is not good for 
our economy, so this is what I mean by changing the culture. 
And the results have been, as I said, to increase the 
employment of people with disabilities, maintain or increase 
their incomes and not move them onto other welfare-type benefit 
programs. So, you know, they are in the first 5 years of their 
reform, so I don't think we should call these all victories, 
but I think it is useful evidence to look to.
    Mr. KELLY. Well, I have got a lot of friends, and I--like 
Mr. Renacci, who have gone through these things, but I will say 
this: It is the excitement about waking up in the morning and 
being able to get out of bed and go somewhere and do something 
productive that really drives, not just Americans, but all 
human beings. And when we have these programs that we can get 
people back into the workforce where they are contributing 
members of society, and by the same token, those that can't, I 
understand that--don't label them as not wanting to go back to 
work or not having that desire to go back to work. Listen, 
there are some people that just can't, and those are the people 
that we want to help, but the other way, we got to get them 
early, and we got to get them back on the field as soon as we 
can. I think that is the best way to work.
    Mr. Williams, I do want to say something to you. You have 
overcome a great deal of adversity, and I think that just 
having you here today and having you present sets a great 
example of what it is that drives the human spirit to make 
them, make them do things and maybe they will say, it is going 
to be harder for me than somebody else, but I don't care, I am 
still going to achieve. So I applaud you for what you have done 
with your life. Thanks so much.
    And I yield back.
    Chairman JOHNSON. Thank you.
    Thank you all for your participation.
    Mr. Griffin, you are recognized.
    Mr. GRIFFIN. Thank you, Mr. Chairman.
    I want to associate myself with the remarks of Mr. Kelly.
    Thank you all for being here.
    Thank you, Mr. Williams.
    This is incredibly important, because I hear about this 
issue a lot back home. And what I have learned from being here 
2 and a half years and from being in politics before is that 
anecdotes are not the end of the story, but usually, they 
indicate something. If you are hearing things on the ground, 
they indicate something is going on. And they are not all 100 
percent truthful, but they indicate that there is some truth 
out there associated with the anecdotes that I hear.
    And I will tell you that in this area, when I am home in 
Arkansas, I hear anecdotes about abuse with regard to this 
program all the time. And I know that they reflect an ongoing 
problem. You don't hear numerous stories, and say, well, those 
are a very small percentage; that almost never happens. I hear 
about these instances, like the golfer, because they are 
relatively common; so much so, that I hear jokes about, well, 
maybe I will just get on disability. And you hear that kind of 
joke all the time. It is almost like the American people know 
that this program doesn't work the right way on the whole, and 
so they know it is relatively easy to game. And it is not only 
a fiscal problem generally, but more importantly, it impacts 
the people who need it, as Representative Kelly pointed out.
    And I want to mention, in addition to the golf situation, 
there are several anecdotes that I have come across, and I 
finally decided that if I were to ignore them, it would be 
malpractice on my part. And there is one lady who volunteered 
to handle all of the arrangements, all of the emailing, all of 
the phone calls for a high school reunion. And the comment that 
she made was, I am on disability, so I can handle all this. 
Well, there are jobs where she could use those skills.
    The other individual is an individual who had been a 
veterinarian for years, and he said, he pulled his back or 
something, and he hasn't worked in years. And he is always 
engaged with me on policy issues and everything--just in his 
free time, because he has lots of it. And he rides motorcycles 
and does all kinds of stuff, and he is on disability, and I 
know him very well. There is another lady, actually related to 
the vet, who is in a similar circumstance.
    This is common. And my constituents that need disability 
because they can't ever go back to work are as angry about it 
as everybody else, because it is really not fair at the end of 
the day.
    And I wanted to ask you, is there some sort of financial 
incentive to report the fraud in this area, like a qui tam 
incentive? I guess the first question is, how do people that 
can play golf the way Mr. Renacci's friend did, how do they get 
complete disability? How does that happen? Are the rules such 
that allow it? Is there fraud going on? Are there employees 
that just don't know what they are doing, and they just say, 
you are approved? How does that happen? Deception? Anybody? 
Does anybody have any idea how that happens? Dr. Weaver?
    Dr. WEAVER. Sure. I will respond. I mean, we--there is a 
fraud hotline operated by our Office of Inspector General. We 
provided numbers to Congress to try to quantify that issue. We 
don't think fraud is rampant in our programs. Generally, people 
in our programs have pretty serious health impairments. We try 
to follow the definition Congress put in law that the 
individual can't work a substantial gainful activity for up to 
12 months due to an impairment or an impairment that will 
result in death. So I do think we feel like we run the program 
as Congress has written the definition, but we do have--there 
is a fraud hotline. We don't think fraud is rampant in our 
programs.
    Mr. GRIFFIN. Okay. We need to write a better definition, it 
sounds like. It looks like I am out of time.
    Mr. Chairman, would it be possible to have 30 more seconds?
    I know that all these can't--they look fraudulent to me, 
the ones that I mentioned, may or may not be. I guess we all 
have different definitions of disabled and fraud. Some--yes, 
ma'am.
    Ms. EKMAN. I wanted to make a couple of points. One is that 
disability and ability to work change over time. So just 
because at this point someone is able to golf or ride a 
motorcycle doesn't mean when they were approved for benefits, 
they could have or that they could have worked.
    So one of the things that Congress could do to help with 
that problem is to get more resources to the Social Security 
Administration to perform what--the continuing disability 
reviews that are required by statute. The Social Security 
Administration cannot do them with the resources that they 
have. So a huge----
    Mr. GRIFFIN. Bigger budget.
    Ms. EKMAN. Within--they would need a bigger budget to do 
it. And Congress has previously given funds dedicated to that 
purpose, and they have also cut them in the past few years. So 
if we really are worried about that, I would say, give more 
resources to Social Security to do CDR's on time.
    And the other thing is that, you know, just because 
someone, as I said, looks like they are able to do something on 
a certain day, a lot of disabilities are cyclical or they get 
worse and they get better, and it does not mean that someone is 
committing fraud because on that particular day, they are able 
to drive or, you know, ride a motorcycle or play golf. And so I 
think it is important to draw a distinction between fraud and 
changes in health conditions that Social Security doesn't have 
the resources to accurately monitor.
    Mr. GRIFFIN. Well, I know these individuals, and so I will 
say this: I don't know, you know--whether they are committing 
fraud is another issue, but I can tell you that the people I am 
talking about are able and have been able, and if you are 
playing golf and you are on disability, that is fraudulent to 
me, but, you know, that is not the legal definition.
    Mr. Duggan, you wanted to jump in? By the way, this is the 
same Social Security Administration that uses a 1976 cost 
accounting program. So, you know, I think there is some stuff 
that can be done on your side. Maybe we need to enable you, 
but----
    Mr. DUGGAN. So I think that the data that I showed earlier 
pretty clearly indicates that the characteristics that the 
medical conditions with which people are qualifying for 
disability has changed enormously over time.
    If there is one thing to take away from the SSDI program, 
it is that in the last two or three decades, it has shifted 
from a program that provides benefits to people with stroke, 
heart attack, cancer and so forth to one that differentially 
provides benefits for more subjective conditions, like mental 
disorders and back pain.
    To me, as I look at all the available data--and SSA is 
fabulous in their production of data, I have to say. I am 
just--you know, I know a lot of people there, and they do a 
great job with the data.
    One thing that you can get, just anyone here could go to 
the SSA Web site and see that 40 percent of SSDI awards are 
made on appeal. So basically you have a person who applies, 
they are rejected. They apply again; they are rejected. They 
appear before an ALJ. And it is pretty striking to me that 72 
percent of the cases that appear before ALJ's, cases that have 
been rejected not once, but twice, are overturned, those 
initial decisions.
    And what to me is especially problematic on the incentives 
front is that those people have been rejected twice and appear 
before ALJ's are the very people with perhaps the biggest 
employment potential among the people who are applying for 
SSDI, and yet we are giving them the absolutely worst 
incentives of everyone, because we are basically having them 
languish through this long process. So I think that there is a 
lot of scope for us to sort of rethink what is happening with 
this program. But those numbers don't lie. I mean, that--it is 
a totally different program than it was 20 years ago.
    Mr. GRIFFIN. Yeah. Thank you, Mr. Chairman.
    Mr. Chairman, I would love to join with you in getting 
whatever ideas we have here and putting them into legislation. 
I think this is an area ripe for reform, and I think we could 
have a bipartisan agreement on that.
    Chairman JOHNSON. Well, we need to reform the ALJ program 
to start with, and you probably agree with me.
    Mr. DUGGAN. Yes.
    Chairman JOHNSON. But, you know, our Inspector General, the 
IG, is doing a good job at checking on these people who claim a 
disability, and they are undermanned as well. I am sure you all 
who are familiar with the system know that.
    Mr. Becerra, you had one comment?
    Mr. BECERRA. Yes. And thank you, Mr. Chairman.
    I think, bipartisanly, when we find these bad apples--and 
we saw those videos, Mr. Chairman, in some of the previous 
hearings where some of these folks were walking into the 
disability office with canes and walkers and then leaving, you 
know, virtually doing kicks and all the rest. I think, 
bipartisanly, we want to descend on those folks. We want to 
slice and dice those bad apples so that they are ground to a 
pulp, and they do not show up, because they ruin it for 
everyone else who really is disabled. As Mr. Kelly said, there 
are some folks who just cannot work. And we have to go after 
them.
    And I would say this with all due respect to my colleagues, 
to Mr. Griffin and Mr. Kelly, we talk about these anecdotes as 
if they are the rule. If we know someone who is abusing of the 
system and playing golf, we are Members of Congress, we are 
sworn to uphold the laws of the land. Why aren't we reporting 
those folks ourselves? If we----
    Mr. GRIFFIN. Well----
    Mr. BECERRA. Yeah. If I could just finish, if I could just 
finish. And I hope I do incite some conversation about this, 
because, you know, I hear these stories, and we all hear the 
stories, oh, that, you know, so and so is abusing of the system 
and playing golf and on full disability. Give me the name of 
that person, I will report him, but I don't want even----
    Chairman JOHNSON. Even if they are a Republican?
    Mr. BECERRA. I don't care if they are--I don't care if they 
are D or R. They are making it tough for the folks who are 
truly----
    Mr. RENACCI. Will the gentleman yield for 30 seconds?
    Mr. BECERRA. I will. I will. I absolutely will yield, but 
if I could just make the point. I think we have to, as I just 
said, descend on those folks that are giving a bad rap to an 
essential program that people paid for. People don't get 
Disability Insurance unless they paid into the program, and 
people don't get it unless they are extremely disabled. If we 
find those bad apples that we catch on video abusing the 
system, you know, as I said, I want to lock--I want to throw 
them in the--you know, wherever and lock the key and, as I 
said, slice and dice them, because we can't afford to have 
those folks. But we cannot, we cannot stand here or testify in 
public, because there is a camera here, and we cannot try to 
give the American people the impression that of the millions of 
people who are receiving disability benefits, not all of the 
millions, because there are lots of millions more who are 
disabled under the definition of the Americans Disabilities Act 
and et cetera, who are receiving benefits, but not disability 
benefits. But for those who are receiving disability benefits 
who have proven that they are the most disabled of Americans, I 
would hate for us to tank a system that they have paid for 
simply because of those bad apples. And so I think absolutely 
on a bipartisan basis, we should descend on those folks.
    And with that, let me yield, Mr. Renacci.
    Mr. RENACCI. Thank you, Mr. Becerra.
    I do want to explain that comment. You know, I probably 
haven't golfed for years since I have been in Congress. I have 
only been here about 2 and a half years. This was about 10 or 
12 years ago. But I think the key to that was as we were all 
golfing, we all wondered how this individual was able to get 
Social Security, because I could tell you, if I was golfing 
today and that occurred, I would be reporting him, but this 
is--I think the American----
    Mr. BECERRA. If you give me his name, I will still report 
him.
    Mr. RENACCI. Well, I am not even sure where he is anymore.
    Mr. BECERRA. Let's find him. Let's go after that guy.
    Mr. RENACCI. The question here for the American people is, 
the American people see this and they are fed up with it.
    Mr. BECERRA. Absolutely.
    Mr. RENACCI. And people were fed up 10, 12 years ago. I 
assumed that as an American back then who wasn't in Congress 
that he must be okay, he must have been able to get it, it must 
be a program he is allowed to have. Today, I know different, 
and that is the problem in America.
    Chairman JOHNSON. We are going to let Mr. Kelly make one 
last comment and then we are going to close this down.
    Mr. KELLY. Thanks, Mr. Chairman.
    And I want people to take this personally. There is not a 
better example in the room right now of somebody who has 
disabilities but refused to let that stand in the way of going 
back to work, and that is you. And I mean that sincerely.
    Mr. BECERRA. That is right. Bipartisanly.
    Mr. KELLY. And I know. We talk about bipartisan issues, but 
then we try to slice and dice each other so that one can be the 
hero and one can be the villain. It is not good enough in this 
body anymore to do the right thing. It is okay to do the right 
thing, but you got to make the other side look really bad.
    Listen, the whole purpose of this hearing today, and Mr. 
Young said something in a hearing yesterday that--a saying, and 
he said, Well, now we have run out of money, so we just have to 
start thinking. The whole purpose of this hearing is how do we 
sustain this, because I am not painting anybody with the same 
brush. I know how difficult it is for people who are hurt to 
get back to work, but I also know the path we are on right now 
is unsustainable. And I keep saying this thing, that unless 
Congress acts, unless Congress acts. Well, depending on which 
side you are sitting, what does it mean by ``Congress acts''? 
Is it throwing more money in the program or is it making the 
program more sustainable by really thoughtful responses and 
regulation reform that we need to have?
    You are all working to get people back to work. And again, 
I said about Mr. Williams, what you do every day, you get up 
with a purpose in your life. I can't imagine putting people in 
a position they get up that want to go to work, and we have 
made it impossible for them to see the benefit of working 
anymore, because we have disincentivized that whole process. 
So, again----
    Mr. WILLIAMS. Can I respond?
    Mr. KELLY. Please.
    Mr. WILLIAMS. What has not been said today is there are 
about 4 million Americans with disabilities who are employed. 
Most make less than $20,000 annually.
    I would suggest that a critical question we will need to 
grapple with is, how do we reward those workers? And it is not 
just about services. It is creating opportunities for them to 
get and keep good jobs and careers that can lead to better 
self-supporting futures.
    Mr. KELLY. Well said. And listen, you are a champion. You 
are a champion. And I am going to tell you, you may be hampered 
physically, but mentally you have absolutely no problems 
extolling the human spirit and the desire to somehow overcome 
whatever we have to overcome every day to add to the value of 
this country. So thank you so much.
    And, Mr. Chairman, thank you for what you have done, and I 
yield back.
    Chairman JOHNSON. Thank you.
    I want to thank our witnesses for being here today and for 
your testimony, and also our members who are present today.
    You know, work is important for Americans, their families 
and this economy. We can and must achieve the results taxpayers 
expect for those with disabilities that they deserve.
    With that, the subcommittee stands adjourned.
    [Whereupon, at 11:27 a.m., the subcommittee was adjourned.]
    [Questions for the Record follows:]

 
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
                              [all]