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





     THE CHALLENGES FACING THE NEXT COMMISSIONER OF SOCIAL SECURITY

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

                                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

                               __________

                             APRIL 26, 2013

                               __________

                             Serial 113-SS4

                               __________

         Printed for the use of the Committee on Ways and Means


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[[Page ii]]



                      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

[[Page iii]]













                            C O N T E N T S

                               __________
                                                                   Page

Advisory of April 26, 2013 announcing the hearing................     2

                               WITNESSES

The Honorable Patrick P. O'Carroll Jr., Inspector General, Social 
  Security Administration, Testimony.............................    11
Daniel Bertoni, Director, Education, Workforce, and Income 
  Security, Government Accountability Office, Testimony..........    21

                   PUBLIC SUBMISSIONS FOR THE RECORD

American Association of University Women.........................    56
Daniel Solomon...................................................    60
Social Security Works............................................    61

[[Page (1)]]




 
                     THE CHALLENGES FACING THE NEXT
                    COMMISSIONER OF SOCIAL SECURITY

                              ----------                              


                         FRIDAY, APRIL 26, 2013

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:30 a.m., in 
Room B-318, Rayburn House Office Building, the Honorable Sam 
Johnson [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]

[[Page 2]]

HEARING ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                 Chairman Johnson Announces Hearing on

                     The Challenges Facing the Next

                    Commissioner of Social Security

B-318 Rayburn House Office Building at 9:30 AM

Washington, April 19, 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 the challenges facing the next Commissioner of 
Social Security. The hearing will take place on Friday, April 26, 2013, 
in B-318 Rayburn House Office Building, beginning at 9:30 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:

      
    The Social Security Administration (SSA) is responsible for 
delivering services that impact the lives of nearly every American. In 
fiscal year 2012, the SSA paid over 65 million people a total of more 
than $800 billion in retirement, survivors, disability, and 
Supplemental Security Income (SSI) benefits. During the same year, the 
SSA processed over 5 million retirement and survivor applications and 
3.2 million disability applications, posted 245 million earnings items 
to workers' records, assisted nearly 45 million visitors at their local 
offices, and completed more than 56 million transactions on their 
National 800 number. In addition to serving the public, the SSA 
completed 443,000 medical continuing disability reviews and 2.6 million 
SSI redeterminations as part of its program integrity work.
      
    As the nation ages, the SSA will continue to face unprecedented 
service delivery demands even as it moves to automate many of its core 
functions. With Congress and the President agreeing on nearly static 
annual SSA budgets for the last three years, along with tight budgetary 
caps for future federal agency spending, the SSA has reached a 
crossroad in terms of how it will continue to deliver services to the 
public in a constrained fiscal environment.
      
    In response, the SSA is already operating under a self-imposed 
hiring freeze for the last 2.5 years and has reduced the hours its 
offices are open to the public. At the same time, the agency has 
significantly increased online services, where today 45 percent of 
retirement applications and 33 percent of disability applications are 
being filed on line.
      
    In March 2011, the Social Security Advisory Board (SSAB) issued a 
report, ``A Vision of the Future for the Social Security 
Administration'' criticizing the lack of strategic planning by SSA. To 
meet its mission, the SSAB urged the agency to prepare itself to manage 
its current and future mission-related objectives, including critical 
post-entitlement and program integrity activities, and efficiently use 
existing financial and other resources to balance its service delivery 
policies with its stewardship responsibilities.
      
    The SSA will be led by a new Commissioner once the President 
chooses his nominee and the Senate completes its confirmation process. 
Former Commissioner Michael J. Astrue's six-year term expired in 
January 2013. Carolyn Colvin, who served as the Deputy Commissioner, is 
currently serving as Acting Commissioner until a new Commissioner is 
confirmed.
      

[[Page 3]]

    In announcing the hearing, Social Security Subcommittee Chairman 
Sam Johnson (R-TX) said, ``Today, nearly 10,000 Americans sign up for 
retirement benefits every day. The recession coupled with a slow 
economic recovery has resulted in a wave of new disability claims, 
increased backlogs and growing wait times for a frustrated public. 
Moreover, the Disability Insurance program remains on the Government 
Accountability Office's ``High Risk'' list. With ever increasing 
demands on Social Security, the time is now for bold and decisive 
leadership by the next Commissioner of Social Security. This hearing 
will lay the groundwork for the challenges facing the new Commissioner 
and strategies for how best to address them, in order to adequately 
meet the needs of the American people.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on the challenges facing the next 
Commissioner, including those related to service delivery capacity, 
human capital management, strategic planning, information technology, 
physical infrastructure and the agency's ability to effectively 
administer Social Security programs.
      

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 Friday, May 10, 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.
      

[[Page 4]]

    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 

    Chairman JOHNSON. Good morning to both of you.
    Every 6 years, a new Commissioner is nominated and 
confirmed to lead the Social Security Administration. Congress 
deliberately created a term that might straddle political 
changes in the executive branch to underscore the importance of 
strong and independent leadership of this agency that touches 
the lives of every American. Former Commissioner Astrue's 6-
year term expired in January. Carolyn Colvin, formally the 
Deputy Commissioner, is currently serving as Acting 
Commissioner until a new Commissioner is confirmed.
    Every new Commissioner should first and foremost make sure 
that Social Security serves the American public well. Every 
Commissioner faces challenges at Social Security, some new, 
some that seem to never go away, and it will be no different 
for the next Commissioner.
    As part of its oversight responsibilities, this 
subcommittee takes the time to lay out the challenges facing 
the new Commissioner and strategies for how best to address 
them in order to meet the needs of the American public. Today, 
Social Security stands at a crucial crossroads, and it is going 
to be up to the new Commissioner to pick the right path.
    But no matter what path he or she chooses, two facts are 
indisputable. First, Social Security faces a predictable 
workload. Not only are on average 10,000 baby boomers applying 
for benefits each day, but applications for disability 
triggered by the great recession and weak recovery have never 
been higher. In just 4 years, the number of applications has 
grown from 2.3 million in 2008 to 3.2 million last year. That 
is an increase of 40 percent.
    Worse, in recent years the number of people filing for 
benefits far exceeded the number of new jobs being created. 
Since 2010, the average number of people filing for disability 
benefits is just over 249,000. At the same time, the average 
number of new jobs created is about 148,000 each month. For the 
sake of the disability program and the sake of our great 
country, we have got to grow our economy and get Americans back 
to work.
    Second, budget constraints are not going away. Congress has 
repeatedly approved bipartisan legislation signed into law by 
the President placing stringent and necessary spending caps on 
appropriations, including President Obama's sequestration 
proposal. To assist the next Commissioner, I have asked the 
Government Accountability Office, or GAO, to take a look at the 
key challenges facing Social Security and what Social Security 
is doing about them. And as we will soon hear, Social 
Security's key management challenges include workforce 
planning, managing its disability programs, modernizing 
information technology, and effectively utilizing its office 
space.
    GAO concludes that Social Security needs a long-term 
strategy to address all these issues, which it doesn't have 
today. The Social Security Inspector General agrees, and 
several important watchdog groups, including the Social 
Security Advisory Board, have already

[[Page 5]]

called on Social Security to move quickly on developing a long-
term plan. Congress and the President have also called for a 
long-term strategy in the agency's funding for fiscal year 
2012. Then Social Security was directed to work with the 
National Academy of Public Administration to produce a long-
range strategic plan. But to date, Social Security has failed 
to act. I will urge the new Commissioner to make this a 
priority after confirmation.
    As we all know, this subcommittee continues to take a hard 
look at the challenges Social Security faces in managing the 
disability program. In spite of the vast number of people who 
still wait over a year for a hearing, I was outraged to learn 
that the union which represents Administrative Law Judges just 
filed a lawsuit in Federal Court asking for an injunction 
against Social Security's guidelines for judges, to handle 500 
to 700 cases a year. The union claims these goals are illegal 
quotas and that management's efforts to meet Congress and the 
public expectations for timely decisions interfere with the 
judges' decision-making independence. I have talked to Federal 
judges. They don't think that is unreasonable, by the way.
    This is the same union that argues that these highly paid 
Federal employees, who have no performance standards and cannot 
be fired without going through a time-consuming and expensive 
process, should be allowed to work at home at least 1 day a 
week.
    Let me be clear. No one is telling any judge what decision 
to make, so their independence is protected, and despite what 
the union argues, in fiscal year 2012, 79 percent of the judges 
were hearing at least 500 cases a year--79 percent, not very 
good, huh? Most taxpayers would be surprised to learn that last 
year the union representing judges spent $1 million in taxpayer 
dollars not on holding hearings, but on union activities. That 
is enough to fund a full year's salary for nine judges. In 
fact, total taxpayer dollars spent by all four unions at Social 
Security reached $14.3 million last year, enough to fund a full 
year's salary for about 206 employees.
    You would love to have that in your automobile dealership, 
wouldn't you?
    Taxpayers fund the operations of this program and the 
essential benefits Social Security provides. They have a right 
to expect the agency will be well managed. To that end, I hope 
our hearing will help the President nominate the kind of 
experience, talented and decisive leader Social Security and 
America needs, wants, and deserves.
    Chairman JOHNSON. I now recognize the ranking member, Mr. 
Becerra, for his opening remarks, anything you care to say.
    Mr. BECERRA. Thank you, Mr. Chairman.
    Mr. Chairman, I am pleased that we are doing this hearing 
on Social Security today. Social Security, as I have always 
said, is a bedrock of American society. In nearly 78 years, 
Social Security has weathered 13 recessions and during that 
time it has always paid benefits in full and on time. But 
Social Security will face challenges in the future. In roughly 
a quarter of a century, we know that because of the baby boom 
generation retiring we have to deal with the fact that we have 
more people retiring and fewer people working to pay in 
benefits, and so we do have to face these challenges.

[[Page 6]]

    And with all due respect to our distinguished panel, I am 
concerned that we don't have all the right experts here today 
to talk about what is clearly the biggest challenge facing the 
new Social Security Commissioner: budget cuts that have left 
the Social Security Administration without enough resources to 
serve the public the way the public would like and the way 
Social Security should serve all of those who paid into the 
system.
    Americans, remember, have contributed----
    [Audio malfunction in hearing room.]
    Mr. BECERRA. OK, are we back? And, Mr. Chairman, if I could 
just make sure that--the clock kept running while we were 
stalled there, so if you could just do me a favor and grant me 
a little extra time there.
    But as I was saying, with all due respect to our panel who 
I believe have always provided us with excellent testimony as 
distinguished witnesses, I am concerned that not all the right 
experts are here today to talk about what is clearly the 
biggest challenge facing the new Social Security Commissioner. 
As I said, it is budget cuts, budget cuts that have left the 
Social Security Administration without enough resources to 
serve the public the way Social Security should and the way 
Americans want the program they have paid for to serve them.
    And let's not forget, Americans have paid for their Social 
Security. Every paycheck, we take money out of their check to 
pay for Social Security and Medicare. Yet this Congress has 
prevented Social Security Administration from investing what is 
needed in order to provide Americans with the services that 
they have paid for.
    Let's remember, even before the budget cuts, Social 
Security was extremely efficient, spending something around a 
penny, actually less than a penny on program administration for 
every dollar it spends paying the benefits American workers 
have earned.
    So who is missing from today's hearing? Well, Mr. Chairman, 
as I discussed with you before and as I indicated in the letter 
that I sent to you, and I would like to submit that for the 
record at this stage----
    Chairman JOHNSON. Without objection.
    Mr. BECERRA. Thank you. We don't have the Commissioner, the 
person who is in charge of running the entire agency here to 
tell us what the challenges are that she will face in leading 
the Social Security Administration. We don't have any of the 
front line employees from the district offices in our districts 
that provide the services every day to Americans who have 
earned their Social Security benefits. And certainly, as you 
can see at this table, we don't have anyone who is an American 
citizen who is receiving benefits and could tell us: These are 
the challenges I think the agency faces as I walk through the 
doors to receive the benefits that I have paid for.
    Mr. Chairman, there are consequences in not funding Social 
Security properly. And I have pulled together some charts that 
we can see here today. Three years of cuts have taken a toll on 
Social Security.
    We can go to the next slide.

[[Page 7]]

    Let's remember, the number of people that have been paying 
into and are now beginning to collect their benefits because 
they paid into it is not shrinking, it is growing.
    Next slide.
    At the same time what has happened to the budget of the 
Social Security Administration while it tries to serve a 
growing population of people who have earned benefits? It has 
been shrinking.
    Next slide.
    What is the result? Well, Social Security at some point had 
to give. And what has happened is you see that staff reductions 
have occurred throughout the United States, an average of a 10 
percent cut. So one in 10 of those workers we saw a few years 
back are no longer there. In some places it is as high as one 
in every five of those Social Security workers is no longer 
there providing services.
    Next chart.
    What has happened to the caseload of people coming to the 
Social Security Administration's offices? Well, you can see it 
is not shrinking at a time that we are shrinking the budget. It 
continues to increase increase.
    Next slide.
    What happens to the wait time that people now are 
experiencing, Americans who paid for these benefits, what is 
going on right now? You can see it right there. People are 
waiting twice as long just to get on the phone to talk to 
folks. This is like going to the grocery store and the grocer 
saying: I am going to tell their cashiers to go take their 
break or take a furlough at the time that I am most busiest 
with the most patrons in my grocery store trying to shop and 
pay for the goods that they are going to get ready to pay for.
    Next slide.
    What is the result? Well, remember, most of us on this 
committee have been working for some time to reduce the backlog 
of American citizens who are waiting in some cases years to 
receive the benefits they paid for. We took a course of action 
a few years back to provide Social Security with the resources 
it needed to deal with that, and there is where you see the 
downtrend in the number of disability wait times, the amount of 
time. Guess what has happened as a result of the budget cuts? 
You see it creeping back up again.
    Next slide.
    By the way, when we talk about the disability wait times, 
remember, we are talking about people waiting 500 days, over a 
year. We got that down to about 150 days by fiscal year 2011. 
But now it is going up again, as you can see there in that 
chart that we reverted you back to. That is what happens when 
you underfund the agency even though it has the money to pay 
because people have paid for those things.
    Next chart.
    Unprocessed work. Well, we talked about the disability 
casework that is not being handled in a timely way. This 
unprocessed work is work that has not yet begun to be 
processed. You can see what is happening. It is mounting and 
mounting, and these are cases that at some point will have to 
be opened.
    Next chart.

[[Page 8]]

    The worst perhaps sin I think that we can think of is the 
fact that when we know that we can save money--and I think our 
two witnesses that are here today can talk about this--when we 
go after the cases of abuse where people, maybe even by 
innocent mistake, claim benefits when they shouldn't be getting 
them, we should be able to go after that. We know we save $9 
for every dollar we use to do those reviews of people to ensure 
the integrity of the system. We can't even get the funding for 
that. It has been cut.
    Mr. Chairman, we need to move forward. We need to make sure 
that we all face the challenges that Social Security will 
encounter together. Social Security has been a bedrock of our 
Nation. People have paid for this. And so I would just urge us 
to work together to make sure that we have the full testimony 
of everyone who can add some good word on what we can do.
    I look forward to the testimony of our two witnesses who I 
know will add a great deal. I hope at some point soon, Mr. 
Chairman, we will finally have a hearing in this committee with 
jurisdiction on the issue of the Social Security 
Administration's budget which has been cut to the point where 
American citizens and those who paid into this are paying the 
price. Yield back.
    Chairman JOHNSON. The gentleman's time has expired.
    Chairman JOHNSON. And I am going to make a couple of points 
in response to what the Ranking Member said.
    Number one, we have got at least three judges out there in 
Social Security that do not handle any cases. And they are 
wanting our judges to handle less than what they do right now.
    I would like to make a couple of points. First, the percent 
of the people rating Social Security as excellent, good, or 
very good reached 81 percent in 2012, up 3 percent since 2010. 
Second, failing to get our fiscal house in order will 
jeopardize the very safety net the Ranking Member cares so much 
about. And at the close of fiscal year 2009, the year President 
Obama took office, our Nation's debt was $11.8 trillion, and 
this year it is going to reach $17 trillion. And under the 
President's budget, an additional $8 trillion of debt will be 
added.
    The fact is the President, along with the Democrats and 
Republicans, have agreed to Social Security's funding levels. 
The appropriators have kept Social Security's budget level when 
most other agencies have seen sharp declines.
    I will end this by saying, as the authorizing committee for 
this essential program we need to focus on what we can change. 
We can start by working together to remove outdated provisions 
in the law to help the agency more effectively serve the 
public.
    As is customary, any member is welcome to submit a 
statement for the hearing record.
    Chairman JOHNSON. Before we move on to our testimony today, 
I want to remind our witnesses to please limit their oral 
statement 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 
Patrick O'Carroll Jr., Inspector General, Social Security 
Administration; and Dan Bertoni, the Director of Education, 
Workforce, and Income Security Issues at the U.S. Government 
Accountability Office.
    Welcome to both of you for being here.

[[Page 9]]

    And Mr. O'Carroll, please go ahead with your testimony.

STATEMENT OF THE HONORABLE PATRICK P. O'CARROLL, JR., INSPECTOR 
            GENERAL, SOCIAL SECURITY ADMINISTRATION

    Mr. O'CARROLL. Good morning, Chairman Johnson, Ranking 
Member Becerra, and Members of the Subcommittee. Thank you very 
much for having me here today.
    The next Commissioner of Social Security faces challenges 
that require forward thinking and long-term planning. SSA has 
been a model of government customer service for more than 75 
years. To continue that record of success, the agency must 
invest in information technology, modernize systems and 
services, and focus on program integrity. And SSA must achieve 
this in a national spotlight shining on Federal spending and 
entitlement program solvency.
    More people are coming to Social Security at a time when 
resources and staffing are limited. SSA must improve strategic 
planning and take greater advantage of technology to meet this 
demand. For example, the agency expects to receive almost half 
of all benefit claims online by the end of the fiscal year. 
Future generations will expect to do all business with SSA 
electronically. SSA's strategic plan, however, does not include 
a detailed roadmap to expand electronic and mobile capabilities 
to meet these expectations.
    The plan should address not only short-term, but also long-
term service challenges. SSA and DDS staff must also balance 
service initiatives, such as processing new claims, with 
stewardship reviews to ensure the integrity of agency programs.
    Reducing the complexity of SSA's benefit programs and 
evaluating current policies could streamline operations and 
save millions of dollars each year. I have included several 
recommendations in my written statement, but I am pleased to 
see SSA is moving forward with the Disability Claims Processing 
System. DCPS is a nationwide state-of-the-art computer system 
that could significantly improve the disability decision 
process. It will integrate case analysis tools and electronic 
medical records and should provide consistent case processing 
across the country. DCPS is currently being tested at several 
offices. The system could be exactly the type of tool SSA needs 
to efficiently manage future workloads.
    Technology and data analysis can help SSA meet customer 
demands, and it can also improve program integrity. For years, 
my office has encouraged SSA to pursue data matches among 
Federal, State, and local agencies to improve payment accuracy. 
Government maintains a wealth of data that if matched among 
agencies could reduce payment error and prevent fraud. Some of 
the data matches we have recommended include seeking pension 
data from State and local governments, accessing workers' comp 
data maintained by States and the Department of Labor, and 
working with State bureaus of vital statistics to obtain death 
data and information on beneficiaries' marital status.
    I should also take this time to say, as SSA develops a 
long-term IT plan, it is critical that the agency closely 
monitor the construction of the new National Support Center. 
The NSC will replace the aging National Computer Center. A 
timely transition to the new center will eliminate the risk of 
an extended outage that could affect SSA's ability to provide 
critical services.

[[Page 10]]

    A related issue is SSA's long reliance on its cost analysis 
system to examine data and allocate administrative costs to 
agency programs. In recent years, we have recommended that SSA 
update its cost allocation methodology to account for changes 
in business processes and technology. As SSA and its workloads 
and systems evolve, so, too, should its cost accounting system.
    In conclusion, SSA exists to serve the beneficiaries of 
today, but also to safeguard funds for the beneficiaries of the 
future. So, again, to meet the goals of today and tomorrow, SSA 
should invest in information technology, modernize systems and 
services, and focus on program integrity. Doing so will improve 
service, speed and accuracy, and protect taxpayer dollars for 
future generations. I look forward to working constructively 
with the next Commissioner of Social Security to meet the 
challenges ahead. I thank you, again, for the invitation to 
testify, and I will be happy to answer any questions.
    Chairman JOHNSON. Thank you sir. Thank you for your 
testimony.
    [The prepared statement of Mr. O'Carroll follows:]

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    Chairman JOHNSON. Mr. Bertoni, welcome again, please 
proceed.

 STATEMENT OF DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE, 
       AND INCOME SECURITY, GENERAL ACCOUNTABILITY OFFICE

    Mr. BERTONI. Good morning. Chairman Johnson, Ranking Member 
Becerra, Members of the Subcommittee, good morning. I am 
pleased to discuss our work on the Social Security 
Administration's critical management challenges. SSA provides 
benefits and services that touch the lives of nearly every 
American and last year paid out over $800 billion in benefits.
    However, with the aging of the baby boom generation, the 
agency faces increased workloads and large numbers of potential 
retirements over the long term. It is within this context that 
a new Commissioner will soon head the agency and face many 
complex issues.
    My statement today is based on our ongoing work and 
describes key management challenges SSA faces in meeting its 
mission and the extent to which the agency's planning efforts 
address those challenges.
    In summary, over the next decade, SSA will experience 
challenges related to human capital management, disability 
program issues, information technology, and physical 
infrastructure.
    First, an expected wave of retirements, coupled with an 
extended hiring freeze, represents a challenge for the agency 
in meeting a projected growth in workloads. However, our 
preliminary work suggests that SSA's strategies for preventing 
a loss of leadership and needed skills may be insufficient due 
to the lack of an updated succession plan and curtailment of 
leadership development programs which have historically 
provided a pipeline of future leaders.
    Second, SSA also continues to face challenges in 
modernizing the medical record criteria and labor market 
information that underlies disability programs while balancing 
competing needs to reduce disability claims backlogs and 
conduct program integrity activities. In particular, the agency 
still lacks a formalized cost estimate and research and 
development plan for its modernization efforts and faces 
uncertainty in its ability to meet disability case processing 
and program integrity review targets due in part to resource 
constraints and how it has prioritized its workloads.
    Third, while SSA has made strides in updating its IT 
systems, which are critical to addressing growing work demands, 
the agency continues to be challenged in ensuring its IT plan 
is periodically refreshed and adhered to, that outdated legacy 
applications are modernized to improve service delivery, and 
information security controls sufficiently protect sensitive 
information.
    And fourth, although SSA has taken steps to centralize its 
facilities management and has initiated some efforts to reduce 
its physical footprint, the agency has not systematically 
assessed potential approaches for consolidating or realigning 
its staff and organizational structure to better support 
changing methods of service delivery, such as more online 
transactions and other nonface-to-face interactions, which are 
more likely over the next decade and beyond, further 
challenging its ability to leverage limited program and staff 
resources.

[[Page 20]]

    Mr. Chairman, staying out in front of these challenges will 
require thoughtful long-term planning on SSA's part. However, 
the agency's current strategic plan and draft service delivery 
plan maintain a short-term focus, rather than articulating 
longer-term strategies to address the issues discussed today.
    For years, we and others have recommended that SSA propose 
a long-term vision to ensure it has the processes, staff, and 
infrastructure to provide services in the future. However, 
absent a dedicated entity within SSA to spearhead such an 
initiative and uncertainty with SSA's budget, such activities 
have not been an agency priority for many years.
    In conclusion, the challenges SSA faces will affect its 
ability to address critical concerns in the coming years. 
However, SSA's efforts to meet many of its challenges have been 
complicated by budgetary constraints and uncertainty about the 
current and future fiscal environment. Despite these 
constraints, SSA still needs to balance competing resource 
demands both in terms of managing day-to-day budget decisions 
and planning for longer-term issues. And absent prompt action 
early in the new Commissioner's term, the agency jeopardizes 
its ability to provide quality service to the public in the 
coming years.
    Moreover, the interrelated nature of SSA's challenges calls 
for a longer-term integrated strategy to ensure actions taken 
are coordinated and effective. However, without focus and 
sustained leadership across the agency's many organizational 
silos, SSA may miss an opportunity to assess and make sound 
decisions, including how many and what types of employees are 
needed in the future, how the agency will service competing 
workloads, and more strategically use information technology 
and physical infrastructure to best deliver services.
    Mr. Chairman, this concludes my statement. I am happy to 
answer any questions that you or other Members of the 
Subcommittee may have. Thank you.
    Chairman JOHNSON. Thank you for your testimony.
    [The prepared statement of Mr. Bertoni follows:]




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    Chairman JOHNSON. As is customary, we will ask questions. 
In each round I will limit my time to 5 minutes and ask my 
colleagues to also limit their time during the questioning 
session.
    Mr. O'Carroll, one of the concerns I have is the safety of 
Social Security's huge databanks of sensitive information. I 
understand you share this concern and, in fact, have raised a 
red flag, Social Security's first-ever material weakness in 
their audit report be

[[Page 44]]

cause internal systems could be accessed by auditors. Social 
Security was warned about this the year before and did nothing.
    Tell me, have they fixed the problem?
    Mr. O'CARROLL. Mr. Chairman, it is an ongoing process of 
repair on it. I must say that the Acting Commissioner has made 
it a priority, and as a result of that my office and Grant 
Thornton, the contract auditor that identified the problems, 
meet probably on a monthly basis with the agency. We met as 
recently as last week, management teams, to discuss it. They 
have tiger teams working to correct the problem on it. So I 
must say SSA is aggressively taking steps to identify the 
issues that were raised, and we are hoping that they will be 
able to alleviate the problem as soon as possible. So I have to 
say we are on top of it, we are watching it very closely, and I 
am seeing at least a commitment on the part of SSA to fix it.
    Chairman JOHNSON. Well, are they accessing that system from 
outside or at the local offices or up here?
    Mr. O'CARROLL. The way they are doing is, is that they 
have--they, Grant Thornton, hires hackers that are constantly 
pinging SSA to see if there are any vulnerabilities. And what 
they were finding is, is that by not outside, which is good 
news, so it is not an external penetration on it, but from 
internal use of any of the--what they are doing is, is that by 
accessing internal systems in SSA, they can get much better 
permissions and then get deeper into the security functions. 
That is what happened last year, and that is what is being 
prevented now.
    Chairman JOHNSON. Are they stealing Social Security 
numbers?
    Mr. O'CARROLL. No, they are not. And what that is, is it is 
really, as I said, it is internal, there hasn't been any extent 
of where they are being able to do it from externally or a 
different country doing it or anything else. So at the moment 
the internal ones are being fixed.
    Chairman JOHNSON. Well, for both of you, do you believe the 
way Social Security serves the public today will work in the 
future? And if not, what does Social Security need to do to 
modernize the way it does business? You going to let Bertoni go 
first?
    Mr. BERTONI. I think one area, it is structural in design 
but it really has an operational aspect here, and it is the 
agency really needs to modernize its medical and vocational 
criteria and develop an occupational information system that is 
really reflective of what it means to have a work disability in 
this country, what jobs are in the national economy. We have 
long said that they need that, to have criteria that is more 
reflective of what it means to be disabled today.
    We know they are working on modernization of their 
criteria, they are moving forward with an occupational 
information system. They are behind. We have some real concerns 
with design and implementation. But if they get this right, I 
think it really has operational implications to help them free 
up resources that they are now expending and sometimes not 
expending and to the great concern of the Congress. That is, if 
we can really get people on the rolls who are truly reflective 
of what it means to be disabled today, we will likely have less 
instance of folks violating the work rules,

[[Page 45]]

going out and working later on. In essence they are having to 
chase that money through the work CDRs and the medical reviews.
    Right now we know that the bulk of overpayments in the work 
at the back end is to follow up on work activity. So if we 
really have a system that says you cannot work in the national 
economy, there is no job in the national economy for you, then 
perhaps you will have fewer folks wading into this unauthorized 
work activity and in essence having to chase it at great 
administrative cost and the Congress asking them why they are 
not doing that work because they are making some priority 
choices.
    Beyond that, I think there are real opportunities to look 
at services that they should be providing, modes of services, 
electronic access, online access, smart phones, kiosk in remote 
locations. Those are ways to leverage their limited resources 
and to work smarter. I think they need to be part of that 
vision, to say: Here is where we can move, here is where it is 
not feasible, and here is what it is going to cost for us to do 
that.
    Chairman JOHNSON. How many of those are you catching every 
day in the IG's office?
    Mr. O'CARROLL. We are catching quite a few of those. And I 
will go into those a little bit more in depth later. But I 
agree with what Dan said in terms of electronic service. That 
should be the role of the future.
    Chairman JOHNSON. Okay. My time has expired.
    Mr. Becerra, you are recognized.
    Mr. BECERRA. Thank you, Mr. Chairman.
    And once again thank you for the work that you are doing 
and we hope that you will continue to work--I know you are 
going to continue to work with Social Security Administration 
on this. And we need to make progress on technology, the 
modernization, and I hope we are able to do that, because the 
workload for Social Security is not going to decrease, it is 
going to increase.
    And I think, Mr. Bertoni, in your, I think, if I am looking 
at your testimony, your written testimony, you point out that, 
in a chart, back in 2002 there were 50.8 million, about 51 
million Americans who were receiving benefits from Social 
Security. So 51 million Americans who were coming into Social 
Security to get services; 2012, last year, 62 million Americans 
receiving benefits and services. By 2025 the projection, 85.5 
million people. So it is not going to stop, it is just going to 
grow. And so we have got to deal with the fact that we need the 
capacity to deal with more folks quickly and accurately so we 
don't pay out benefits to people who don't deserve them and we 
don't delay benefits for those who have earned them.
    But I think you would agree that you need people to do some 
of this stuff. It would be great if we could handle this 
through just automation and computers, but we will need people, 
and the growing workload will require you to have smart, 
intelligent people. And I think you point out that the folks 
that Social Security seems to be losing now with these budget 
cuts are people who are very experienced. The retirements, the 
chart that you point out, retirements, it is a little ominous. 
We are losing a lot of the folks who have done the work for a 
long time, and we may not have the re

[[Page 46]]

sources at the Social Security Administration to do the 
training for any folks who might come in.
    The worst part of this, of course, is the Social Security 
has a hiring freeze, right, so they are losing experienced 
people and they are not able to hire folks to replace them. Is 
that a good prescription to try to deal with the growing 
workload that we have?
    Mr. BERTONI. I think the prescription for dealing with the 
growing workload is certainly to have the right people in the 
right place at the right time with the correct knowledge, 
skills, and abilities. And there is no question that the agency 
is stretched to the limit, near limits, in what they are doing 
with the staff they have now. But I do believe world class 
organizations, regardless of the budget situation, you have to 
do something. And right now it looks like there is almost no 
succession plan. We have been told this was a luxury. But I 
don't think it is a luxury. I think it is more than that. I 
think there are opportunities to leverage what they are doing 
in the human capital office to have some level of succession 
planning.
    Mr. BECERRA. Have you had a conversation with the interim 
administrator, Social Security administrator, on what she plans 
to do on this issue of successor----
    Mr. BERTONI. Ms. Colvin? Ms. Colvin.
    Mr. BECERRA. Yes.
    Mr. BERTONI. No, we have not. We have talked to folks in 
the offices associated with----
    Mr. BECERRA. As I said, Mr. Chairman, Ms. Colvin should be 
here. We should be able to hear from her. Because when you tell 
us you testify about things that need to happen, it would be 
great to then say: So, Ms. Colvin, what do you say? How do you 
respond?
    Your testimony is critical. But we are missing a piece. We 
are missing a piece from the folks who could tell us, well, 
this is what we are trying to do in response to what we have 
been told by GAO or the Inspector General. We should have 
someone at this table who is from the district offices who 
could say, we would love to do what Mr. Bertoni is asking us to 
do, but this is the problem, or this is what we are doing. We 
are missing that. And of course the person who actually 
receives the service at the end of the day, the person who paid 
for your salary, my salary, and put the money in the bank for 
Social Security so the benefits could be paid, the American 
person, the American citizen, beneficiary, not here.
    This is a good hearing, but it is an incomplete hearing. 
And I hope we don't give people this impression that this is 
all we can do, is talk to two very important witnesses without 
hearing from the others as well.
    Mr. Bertoni, you mentioned in your testimony the growth in 
the caseload. What has happened to Social Security 
Administration's budget in the last 2, 3 years?
    Mr. BERTONI. It has remained fairly static.
    Mr. BECERRA. Okay, steady. While the caseload keeps growing 
its budget number--is the budget today as big as it was in 
2011?
    Mr. BERTONI. I believe it is.
    Mr. BECERRA. In 2010?
    Mr. BERTONI. I can get those figures. I don't have them 
specifically.

[[Page 47]]

    Mr. BECERRA. My understanding is that the budget today has 
gone down to what it was back in 2010, and in those 3 years we 
have added hundreds of thousands, if not millions of people to 
the caseload.
    So by the way, I think a point we should make, Mr. 
Chairman, is that Social Security has money to pay for its 
administration. We pay taxes for that. As I mentioned before, 
about one penny out of every dollar that people contribute in 
taxes is used for the cost of administration. We are 
shortchanging SSA from the ability to provide services to 
people who paid for those benefits even though the money is 
there to pay for the cost of administering the programs. Unlike 
other agencies in the Federal Government, Social Security does 
have money to pay for administration and it does it very 
efficiently. But once again we don't have anyone from SSA to 
tell us about that.
    And with that, I will yield back the balance of my time.
    Chairman JOHNSON. Mr. Renacci, you are recognized.
    Mr. RENACCI. Thank you, Mr. Chairman. And I want to thank 
the witnesses for being here.
    You know, it is interesting, as I hear, we talk about 
budget cuts and operations, I think of being a small business 
owner for almost 20 years and a CPA who had to deal with many 
small business owners who every day had to get up with limited 
dollars and get things accomplished and still provide the same 
services. So I am not sure it is always budget issues. I think 
sometimes we are really have to be more efficient.
    We have a program here in Social Security that we need to 
make sure is solvent for the long term, that its systems are 
working properly. But it is interesting because I was sitting 
here listening, I am thinking, boy, as a small business owner, 
which there are many of them out there in America right now 
listening, they wish they had more money but they know every 
day they have to run more efficiently with what they have. And 
I think that is probably the most important thing that I hope 
here in the government we can start doing, living with bringing 
efficiencies into the system.
    So a couple things, though, when I think about some of the 
issues that we are talking about, we are talking about a 
Commissioner and having the Acting Commissioner here. Mr. 
Bertoni, we have had acting managers in the business world. We 
real really need a Commissioner. It would be probably important 
if the administration would nominate a Commissioner so we can 
move forward. But what can an Acting Commissioner do when he or 
she knows that maybe another Commissioner will come in and 
change things?
    Mr. BERTONI. I think that is an excellent question, and I 
think if you look government-wide whenever we have acting 
situations you don't see big, bold moves. You are going to see 
administration of the current priorities and the recent 
priorities of the prior Commissioner. I think it is very 
difficult for an Acting Commissioner to be big and bold and to 
begin to articulate a vision that represents considerable 
change to convince folks in the agency who will be there when 
they potentially leave, if they don't convert to the 
Commissioner, and to convince you all that you should buy into 
some grand vision for change.

[[Page 48]]

    So I do think that the acting status is not helpful to SSA 
for an extended period of time.
    Mr. RENACCI. Mr. O'Carroll, I think in your testimony you 
talked about a system, it has not been updated since 1976, I am 
talking about the Social Security time and cost accounting 
systems. I understand this has been covered in a series of 
audits. Tell us what you did find and what actions Social 
Security has taken in response to that.
    Mr. O'CARROLL. Yes, Mr. Renacci. What we found is, is that 
basically that system is not capturing the work level that it 
is reporting. And when you think back in the 1970s when it was 
designed, it was basically taking a look at different functions 
that SSA was doing. And since then computers have taken over a 
lot. A lot of the workload that was done in paper and tally 
sheets and that type of information has all been replaced by 
computers. So what we are hoping for is that SSA would start 
updating that system so it would be more reflective of the 
workloads that it is reporting.
    And the other part is anything that goes back to the 1970s 
isn't as automated, and a lot of the information is manually 
put into it, and when you have the manual input in these days 
that is where oftentimes you are having your problems in terms 
of, it is when we did our audit we were finding that the 
accuracy level was very low when it is done manually.
    So again it is a top priority, SSA's Acting Commissioner is 
looking at this, Grant Thornton gave a briefing on it about 2 
weeks ago, and we are doing everything we can to support having 
that updated.
    Mr. RENACCI. Mr. O'Carroll, can you also talk about the 
work incentive simplification pilot? Could you tell us a little 
more about the pilot program? And do you feel it could yield 
savings?
    Mr. O'CARROLL. Yes, Mr. Renacci. To be truthful, I can't 
really comment on it because it is a pilot that is being done 
by SSA right now trying to simplify the work incentives on it. 
One of the other thing that we have worked on is Ticket to 
Work, and we are finding that that hasn't been all that 
successful, and we are finding that the work incentives 
simplication program is going to probably be--what we are 
hoping for is better than the Ticket to Work in terms of 
simplifying the incentive program.
    Mr. RENACCI. Thank you. I see my time has run out. I yield 
back.
    Chairman JOHNSON. Thank you.
    Mr. Thompson, do you care to question?
    Mr. THOMPSON. Thank you, Mr. Chairman. I do. Thank you for 
holding the hearing.
    And thanks to both of you for the work that you are doing.
    Mr. O'Carroll, there have been a number of reports lately, 
most of these have been on the radio, portraying Social 
Security disability as the new unemployment. Can you comment on 
that?
    Mr. O'CARROLL. Yes Mr. Thompson. Well, first I guess was it 
last month that the actuary of Social Security testified before 
this committee and was talking about how a lot that is 
effecting the rise in the number of claims that are going 
towards SSA is being driven mostly by demographics. And one of 
the things that we have been finding and I think everybody has 
found is, is that there has been

[[Page 49]]

a 93 percent increase in unemployment, and at the same time 
there has been about a 33 percent increase in disability claims 
towards SSA. So we are finding that they are not necessarily 
rising dramatically or identically.
    And what we are also finding, too, is, is that the SSA's 
amount of allowances has been decreasing. So again it hasn't 
been SSA is putting more people on the rolls. In fact, they are 
decreasing the number of allowances that are happening. So 
again I think what we are trying to, or at least what the 
agency was trying to do and the actuary is saying is, is that 
at this point now 10 years ago they were predicting that there 
would be the raise in the amount of people applying for 
disability mostly because the demographics of the baby boomers 
are all coming into that time period. They are of the age 50-
plus, which is the time when most disabilities are being 
reported. So is that sufficient?
    Mr. THOMPSON. Thank you.
    Mr. O'CARROLL. You are welcome.
    Mr. THOMPSON. Also in your testimony you estimate that for 
every dollar that is spent on continuing disability reviews 
that you yield $9 in savings. And you also note that there is a 
little over a million cases in backlog. So if your budget were 
increased or if it hadn't been cut to the extent that it been 
over the course of the last 3 years, would that help process 
this backlog and maybe even return some money for the program?
    Mr. O'CARROLL. Absolutely. Something that we have been 
insisting on is that SSA has to do that balance between 
stewardship and service. And what oftentimes happens is, is 
that SSA feels that when resources decline, they are going to 
go more for service than for the stewardship. And just as we 
were saying, is you get anywhere from 15 to 1 on a work CDR, 
you are getting about a 9 to 1 on a medical CDR. And then again 
if you even do with redeterminations are a 7 to 1. That is why 
we are usually saying it is averaging out right in the 9 to 1 
range on the benefit of them.
    One thing that we feel on it is, is that it is really an 
SSA decision where they put their resources, and what we are 
hoping for is, is that they put more resources towards the 
redeterminations in the continuing disability reviews no matter 
what, that should always be a priority when they are balancing 
out the service and stewardship. But it is a decision that 
management at SSA makes.
    Mr. THOMPSON. Thank you. My last question is a little out 
of the ordinary and I apologize upfront for asking it. But 
since Congress has been talking about ways to minimize or 
prevent gun violence prevention, I know my office, I don't know 
about the rest of you all, but we have had an inordinate number 
of contacts from people who are claiming that the Social 
Security Administration, along with I believe NOAA, is 
stockpiling hollow point bullets.
    Are you all trying to take over the world? Or is there some 
explanation for this?
    Mr. O'CARROLL. Believe it or not, I have got this answer 
quite well because I just testified with another committee 
yesterday about this. One, what we are trying to do--or, one, 
all of our agents are 1811 law enforcement officers. And part 
of our having law enforcement authority is that we have to 
qualify with our duty weapon on a quarterly basis. And what 
happened was is that when

[[Page 50]]

we did a procurement about a year ago for more ammunition, the 
Web sites picked it up and the blogosphere had it out that we 
were arming Social Security offices and bringing ammunition in 
should there be civil unrest.
    Mr. BECERRA. You may have to do that if you keep cutting 
the number of employees.
    Mr. O'CARROLL. And then what we reported back, in fact, to 
the Chairman on it and we put it on our blog was that the 
number of ammunition that we order is identical to the amount 
that we shoot every year for our qualifications, and it is not 
like we are trying to stockpile weapons. And I have to say, 
give ourselves a plug, is yesterday we credited with keeping 
better track of all the ammunition that we have in comparison 
to the Department of Homeland Security. We were used as sort of 
the model for accountability when it came to the ammunition 
that we have.
    Mr. THOMPSON. Well, thank you. I will sleep better tonight.
    Chairman JOHNSON. I remember in Korea and Vietnam we didn't 
have to account for them, we just shot them.
    Mister----
    Mr. TIBERI. Me?
    Chairman JOHNSON. Yeah, you.
    Mr. TIBERI. Is that a yes or a no?
    Chairman JOHNSON. Tiberi, you are recognized.
    Mr. O'CARROLL. On civil unrest or----
    Mr. TIBERI. On Mr. Thompson's question.
    Mr. Bertoni, have you ever been to Disney World.
    Mr. BERTONI. Yes.
    Mr. TIBERI. Been there lately?
    Mr. BERTONI. Yes.
    Mr. TIBERI. Pretty special place.
    Mr. BERTONI. Agree.
    Mr. BECERRA. Careful now.
    Mr. TIBERI. This has nothing to do with this particular 
testimony that you have, but you are an auditor. Does it ever 
cross your mind of what you do at GAO and where you audit, wow, 
what they do at Disney World is pretty special in terms of 
something Mr. Renacci talked about, efficiency, stewardship, 
and service that you mentioned. I was thinking of that when you 
all were talking. And by the way, one of my daughters recently 
said, boy, all these people are so nice, people who work there, 
whether they were 18 or 80 and in between, everybody was so 
nice and they weren't getting paid $100,000 to be nice. The 
culture was unbelievable.
    Have you ever thought as a GAO auditor that maybe there is 
something that we could do at the Federal level to change the 
culture, that it is not all about money, that it is about 
efficiency, service, stewardship? What can we do to implement 
what you talked about, what you found concerning succession 
planning, disability issues, information technology, and 
physical infrastructure? Some of that has to do with money, but 
does it all have to do with money?
    Mr. BERTONI. I would say no. And to all due respect to Mr. 
Becerra, I think most agencies today would say we could use 
more resources. But I don't see a lot of resources on the 
horizon. So efficiency and stewardship has to come into play. 
And again I think

[[Page 51]]

even with the resources they have been given over the last 
several years, while some might think that is insufficient, I 
can give you numerous examples where SSA has rolled out 
initiatives to fix the disability programs and make it better 
that were poorly designed, were poorly implemented, and never 
evaluated. So when you look at funds expended versus funds 
received, efficiency didn't wring out. And we have had numerous 
occasions where a backlog reduction initiative had made it 
worse.
    So I think there are opportunities to lay some of this on 
the management doorstep, say you need to work more efficiently 
within the resources you have, you need to define business 
plans, define plans that articulate return on investment, 
evidence of due diligence before you strike out on very large 
pilots and demonstration projects. We haven't seen that. I have 
been in this business for many years, and we haven't seen 
enough of that.
    We certainly are frustrated. I can understand frustration 
on the part of the overseers who, when the agency comes to the 
table for more resources, these business plans, these documents 
that would document return on investment, if you give us X, we 
can deliver Y, we haven't seen, I think, if they could come to 
the table in some critical areas with those information, I 
think the Congress would have more information to make those 
funding decisions, better information.
    Mr. TIBERI. So I know you don't have the ability to audit 
Disney, but would it be worthwhile for GAO to maybe give maybe 
some additional guidance to some of these agencies based upon 
what other people have done successfully to use fewer dollars 
to implement better programs?
    Mr. BERTONI. Absolutely, and we do that on a regular basis.
    Mr. TIBERI. You do already do that?
    Mr. BERTONI. We can talk best practices, we talk what is 
common in the various communities for managing backlogs for 
demonstration projects, pilots, years and years of 
recommendations. Sometimes they take them up, sometimes they 
don't.
    Mr. TIBERI. Mr. O'Carroll, you have provided some 
information to Social Security, I understand, in your testimony 
where they could save billions of dollars based upon your 
audits, but they have not implemented them. Do you know why?
    Mr. O'CARROLL. Mr. Tiberi, again this would probably be 
best answered by the agency on it. What we do is, is we track 
what recommendations that we make and then go back to see which 
ones have been implemented by the agency.
    Mr. TIBERI. But you would contend that you have made 
recommendations for them to save billions of dollars that has 
not been done yet?
    Mr. O'CARROLL. Yes. Amongst which is the continuing 
disability reviews that we just talked about. Billions could be 
saved if they were done on a regular basis and prioritized.
    Mr. TIBERI. Would you argue as a taxpayer that maybe we 
should make sure that those recommendations are done before 
more money is given?
    Mr. O'CARROLL. Yes. But what I would do on that same line, 
Mr. Tiberi, would be is if this committee or the appropriators 
could designate that CDRs have to be done, make it a condition 
on any

[[Page 52]]

type of appropriation that they get that they have to do a 
certain number of them. And in the past that has been 
designated in the appropriation and they were done and at that 
time it was very efficient.
    Mr. TIBERI. Thank you. I yield back.
    Chairman JOHNSON. Is it a lack of people to do those 
follow-up things or money?
    Mr. O'CARROLL. I think it is probably a combination. I 
think it is prioritizing, deciding which ones are the most 
important things to do for the agency. And that is what we have 
always said is, is that, as everybody, when you have a pot of 
money in front of you, you have to make your decisions which 
area you want to put it into. And our feeling is, is that in 
the fraud prevention and the identifying of money before and 
after is important.
    Chairman JOHNSON. Thank you.
    Mr. Griffin, you are recognized.
    Mr. GRIFFIN. Thank you, Mr. Chairman.
    Thank you all for being here today. I suspect if you went 
around the city of Washington and brought just about any agency 
in to Congress and asked them if they needed more money, I 
don't know one that would say that they have got sufficient 
money.
    When I look at this, particularly with the systems that are 
used, and it is not just Social Security Administration, it is 
throughout government, there is a lot more going on than just 
funding.
    The VA has a big backlog, and their computer systems can't 
talk to DOD. Now, a lot of that has to do with, I think, 
contractors making unique systems so they will have jobs 
forever. And this goes on all around Washington.
    It seems to me that asking for more money to support a 1976 
accounting system is like a race car driver telling us that if 
we will just give him more money he can win with his 1975 
Pinto.
    Mr. GRIFFIN. It can't happen. It just can't happen. And the 
sad thing is, it is not just Social Security Administration. 
Pick the agency. Just pick one. They are all top down. They are 
all lost in the old. They are all working on 20-, 30-, 40-year 
paradigms. They are trying. They are trying. But look at what 
the VA has done with the backlog. It is disgusting. It is 
ridiculous. And a lot of it is not that they need more money. 
It hasn't worked with the VA. We throw money away.
    And so what a lot of us are saying is, show some 
innovation, change your culture, do things differently. Maybe 
you are hampered in large part by the laws that this Congress 
has passed, the civil service system or whatever, you know. 
Congress can bear some blame there. But the idea that you are 
going to give more money to a Federal agency and everything is 
going to be just okay, it is just a bunch of nonsense.
    I was running with a general down the mall the other day 
and I said, how is sequester affecting DOD? And he said, you 
know, you are not going to hear this a lot but I am being told 
at the Pentagon that we may not be able to spend all the money.
    And I said, what?
    He said, yeah, you know, we are going to find places to 
spend it.

[[Page 53]]

    I met with a commander at an air base in my district who 
said--I asked him about sequester--he said, you know, in a 
weird way I think the Air Force is going to be stronger than 
ever.
    I said, really?
    He said, we have never had to make choices before now. We 
have always had plenty of money to waste. And now we have to 
make smart decisions. That is the commander.
    So, you know, I think that innovation and efficiency and 
reform is the path forward. And I want to ask you, Mr. 
Bertoni--and I enjoyed our meeting in our office and I know we 
are going to have some more. I think you are doing some great 
stuff.
    Mr. Bertoni--and since I have talked with you so such, I am 
going to ask Mr. Bertoni a question--a recent GAO report looked 
at the technology spending and how it is divided between 
maintaining and investing in new technology. Could you talk a 
little bit about that split and why maintenance costs have been 
growing so rapidly?
    Mr. BERTONI. Actually, that wasn't a part of the scope of 
this review, so I am not your best expert to touch on those 
issues. That had to do with sort of rise of maintenance costs 
versus the decision to go to new modernized technology. I 
believe that report noted that there are a range of factors 
that can drive maintenance costs, including salaries, but that 
report made no definitive linkage between what actually was the 
driver of those costs.
    So I would defer to our IT folks, happy to submit a 
question for the record. I do know from an IT standpoint at 
SSA, they had historically not had sound or rigorous business 
plans to justify why they are moving forward on expensive 
initiatives, on initiatives in general.
    Mr. GRIFFIN. So they are buying systems, spending money on 
systems that may or may not be part of a coherent plan. Is that 
what you are telling me?
    Mr. BERTONI. Exactly. They didn't have sufficient business 
plans to support investment or metrics that could be used to 
prove how this initiative will have an impact on the area that 
it was being applied to. We have made recommendations that they 
do so, that they have a more rigorous business plan. That is a 
good thing. We also know that they haven't historically updated 
their IT strategic plan and they haven't adhered to it. 
Instead, they have tended to be bound by the shorter-term 
budget cycle.
    We have recommended that they continue to update this plan; 
that they abide by it; that they remain consistent with their 
longer-term goals. And hopefully that will result in a more 
strategic purchasing of the systems they need to make the 
process work better. We have those recommendations. I believe 
they have agreed, and what we are waiting to see is how they 
play out.
    Again, that is another team. I can get you a more 
definitive answer. If you want to submit that for the record, 
we can certainly do that.
    Mr. GRIFFIN. That would be great. Thank you so much. 
Appreciate you.
    Chairman JOHNSON. Thank you.
    Mr. Schock, do you care to question?

[[Page 54]]

    Mr. SCHOCK. Thank you, Mr. Chairman. And thank you both to 
our witnesses. I think a lot of good comments have already been 
made, but particularly I want to follow up on a line of 
questions I had last year about the Social Security 
Administration's ability to keep the public informed about the 
status of their accounts. And particularly, I know most of us 
who have been getting paper statements for a while, the 
administration, the agency made the call that because of the 
lack of funding they disbanded the paper statements. I know the 
President's request, he asked for somewhere in the $100 million 
to $200 million to reinstitute the process of mailing those 
paper statements. I would be interested in you commenting on 
that request, whether you think that is a wise use of funds, 
number one.
    Number two, we have made significant investment in going 
online, to allow people if they register with SSI to be able to 
get their information online. However, I am always surprised 
back home how no one seems to know that they can get their 
information online or that Social Security Administration has 
disbanded the practice of giving their statements. I don't know 
if they notified people that was being done or they just went 
ahead and did it. But I know that folks ask me all the time why 
they don't get the statement anymore, and I tell them, but 
messengers of one aren't all that effective.
    So I guess my question is, what do you think the best way 
is of moving forward? Obviously, if people don't know what is 
in their account, that is problematic, and I am not sure the 
President's request of $100 million to $200 million to go back 
to the 20th century of mailing statements, which is not in my 
opinion a long-term solution. Wouldn't it be better to spend 
money to inform the public that they can go online and get 
their information, register online, so it is a much more 
efficient and cost-effective way to continue that communication 
moving forward?
    Mr. O'CARROLL. I will take the first part, Mr. Schock, on 
this one. And that one of the things that is of concern to us 
is, and it ties into what we have been talking about before 
with strategic planning for the agency, is really looking at 
electronic service. And that would be part of the, you know, 
the long-range strategic plan for the agency is to incorporate 
in how electronic service is going to replace the paper that we 
were talking about. And I agree with you that it does seem 
almost like a giant leap backwards to be focusing so much on 
paper statements at the same time when the SSA has released my 
SSA, which is pretty much a one-stop electronic location where 
any of your constituents can go, can register and get their 
information, the same one they would be getting from their 
paper statement.
    And I have got to say, this is something that you have to 
be checking with your constituents in terms of what is the 
public's request for these paper statements or not. Because I 
think a lot of times it is because of the public request for 
paper statements that that keeps coming up as an issue on it.
    Mr. SCHOCK. Let me ask you, though, do you think that is 
because they are not aware? I mean, look in the 21st century, 
you go and open a bank account, you open a credit card account, 
you open anything now financial, they want your email address. 
Be

[[Page 55]]

cause unless you specifically request your broker send you 
paper trades, your bank send you paper statements, everything 
is electronic. Because people move around. It is more 
expensive. And we all know why.
    And so part of me believes the reason why people are asking 
for the paper statements because that is all they know, and we 
have done a lousy job, if a job at all, of either collecting 
the information--I don't know whether that should be employer 
responsibility or the request needs to be sent out--but I 
interject because I know that people are still asking for it. I 
just happen to believe that the same people who get their bank 
statements online and their broker statements online and in 
some cases pay their taxes online, or real estate taxes online, 
would prefer to just get their SSI information online as well. 
They just don't know about it.
    Mr. O'CARROLL. I agree with you. I think, you know, papers 
is, you know, a sort of a step backwards on it. And I think 
that, you know, the publicizing of the electronic services of 
SSA is important. There are 21 services that they have. We feel 
that they should be expanding them dramatically. We are 
thinking up to and including, very supportive if we can get the 
security put into it, of mobile application, so that instead of 
getting that statement that you are talking about in the mail, 
that you could actually do it on a mobile device.
    But again, our concern with all of that is the security. It 
is keeping everyone's information safe. And I have got to 
assure you that that is what we are looking at very closely 
with all of SSA's programs, and looking very closely at my SSA 
just to make sure that the fraudsters aren't trying to get your 
information electronically.
    The other one, too, goes back to why we disagree with paper 
is, is that that is a lot of information that you really don't 
want in the mail anyway. So we would like to see it electronic.
    Mr. SCHOCK. Okay. Thank you.
    Chairman JOHNSON. Thank you for that question. I agree with 
you, but, you know, there are still some people who don't have 
access to computers, although you can get to them almost 
anywhere you need to.
    I thank you to our witnesses for your testimony, and I 
think we have had a good session on how Social Security needs 
to prepare for the future. And I am sure we will be talking to 
both of you in the future.
    I thank also our Members for being here. In the meantime, 
we look forward to the White House nominating a new 
Commissioner as quickly as possible. Americans want, need, and 
deserve no less.
    With that, the committee stands adjourned. Thank you.
    [Whereupon, at 10:36 a.m., the subcommittee was adjourned.]
    [Public Submissions for the Record follows:]

                                 


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                American Association of University Women


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