[Senate Hearing 113-678]
[From the U.S. Government Publishing Office]
S. Hrg. 113-678
NOMINATION OF CAROLYN WATTS COLVIN
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
ON THE
NOMINATION OF
CAROLYN WATTS COLVIN, TO BE COMMISSIONER,
SOCIAL SECURITY ADMINISTRATION
__________
JULY 31, 2014
__________
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COMMITTEE ON FINANCE
RON WYDEN, Oregon, Chairman
JOHN D. ROCKEFELLER IV, West ORRIN G. HATCH, Utah
Virginia CHUCK GRASSLEY, Iowa
CHARLES E. SCHUMER, New York MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan PAT ROBERTS, Kansas
MARIA CANTWELL, Washington MICHAEL B. ENZI, Wyoming
BILL NELSON, Florida JOHN CORNYN, Texas
ROBERT MENENDEZ, New Jersey JOHN THUNE, South Dakota
THOMAS R. CARPER, Delaware RICHARD BURR, North Carolina
BENJAMIN L. CARDIN, Maryland JOHNNY ISAKSON, Georgia
SHERROD BROWN, Ohio ROB PORTMAN, Ohio
MICHAEL F. BENNET, Colorado PATRICK J. TOOMEY, Pennsylvania
ROBERT P. CASEY, Jr., Pennsylvania
MARK R. WARNER, Virginia
Joshua Sheinkman, Staff Director
Chris Campbell, Republican Staff Director
(ii)
C O N T E N T S
__________
OPENING STATEMENTS
Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee
on Finance..................................................... 1
Hatch, Hon. Orrin G., a U.S. Senator from Utah................... 2
Cardin, Hon. Benjamin L., a U.S. Senator from Maryland........... 7
CONGRESSIONAL WITNESS
Mikulski, Hon. Barbara A., a U.S. Senator from Maryland.......... 5
ADMINISTRATION NOMINEE
Colvin, Hon. Carolyn Watts, nominated to be Commissioner, Social
Security Administration, Baltimore, MD......................... 8
ALPHABETICAL LISTING AND APPENDIX MATERIAL
Cardin, Hon. Benjamin L.:
Opening statement............................................ 7
Colvin, Hon. Carolyn Watts:
Testimony.................................................... 8
Prepared statement........................................... 19
Biographical information..................................... 25
Responses to questions from committee members................ 39
Hatch, Hon. Orrin G.:
Opening statement............................................ 2
Prepared statement........................................... 106
Mikulski, Hon. Barbara A.:
Testimony.................................................... 5
.................................................................
Letter from the National Committee to Preserve Social
Security and Medicare to Senator Mikulski, dated July 28,
2014....................................................... 109
.................................................................
Letter from AARP in support of the nomination of Carolyn
Watts Colvin to be Commissioner of the Social Security
Administration, dated June 10, 2014........................ 110
Wyden, Hon. Ron:
Opening statement............................................ 1
Prepared statement........................................... 111
Fiscal Year 2013 Title II Payment Accuracy Report, Office of
Budget, Finance, Quality, and Management, May 2014......... 112
(iii)
NOMINATION OF CAROLYN WATTS COLVIN,
TO BE COMMISSIONER,
SOCIAL SECURITY ADMINISTRATION
----------
THURSDAY, JULY 31, 2014
U.S. Senate,
Committee on Finance,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:07
a.m., in room SD-215, Dirksen Senate Office Building, Hon. Ron
Wyden (chairman of the committee) presiding.
Present: Senators Carper, Cardin, Brown, Hatch, and Thune.
Also present: Democratic Staff: Michael Evans, General
Counsel; Anderson Heiman, International Competitiveness and
Innovation Advisor; Tom Klouda, Senior Advisor for Domestic
Policy; Jocelyn Moore, Deputy Staff Director; Joshua Sheinkman,
Staff Director; and Kelly Tribble Spencer, Detailee. Republican
Staff: Chris Campbell, Staff Director; Nicholas Wyatt, Tax and
Nominations Professional Staff Member; and Jeff Wrase, Chief
Economist.
OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM
OREGON, CHAIRMAN, COMMITTEE ON FINANCE
The Chairman. The Finance Committee will come to order.
The Finance Committee is here today to consider the
nomination of Carolyn Watts Colvin to fill a role of
extraordinary importance to millions of Americas; that is, the
position of Commissioner of the Social Security Administration.
If confirmed, Ms. Colvin will be managing the nuts and bolts of
the Social Security program, a vital task given that more than
62 million Americans depend on Social Security as an economic
lifeline.
I thought, Ms. Colvin and Chairman Mikulski, I would just
hold up a Social Security statement, the reason being that I
believe that, when Americans get this document that
demonstrates what amount they have paid for their Social
Security insurance and what benefits they have earned, they
will hang onto this document, because it is a testament to just
how important this program is. If you are confirmed, Americans
are going to depend on you to ensure that Social Security is
operating efficiently and providing the right amount to the
right person at the right time.
We all know that this is not a new role for you, because
you have been the Acting Commissioner since February of 2013.
Before that, you served as the Deputy Commissioner for more
than 2 years, coming out of a well-deserved retirement to
engage in this critical public service. Colleagues, as we begin
consideration of the nominee, I would just like to note for the
record that the Finance Committee approved Ms. Colvin's
nomination for that position by a vote of 23-0. Sometimes--I
will tell you, Ms. Colvin--I am not sure I could get a 23-0
vote. So you have very strong support.
Senator Hatch. I am not so sure either. [Laughter.]
The Chairman. I was leading with my chin on that one.
Senator Hatch. I think so. [Laughter.]
The Chairman. Because of Ms. Colvin's years of experience,
Ms. Colvin is well-versed with the challenges involved with
running the Social Security Administration. One of those
challenges is working within a tight budget and fiscal
constraints. Social Security felt the same fiscal squeeze that
every Federal agency has in recent years, and Social Security
has worked hard to maintain critical services. That has
required making some tough decisions, including reducing field
office hours and consolidating some offices to address budget
and staffing challenges.
Ms. Colvin has been actively working on ways for Social
Security to effectively manage its program integrity workload.
As Acting Commissioner of Social Security, Ms. Colvin has also
made several service improvements. She has made a strong push
to make Social Security information more user-friendly and
accessible to a broader swath of Americans. She has made Social
Security work more efficiently with other Federal partners, and
she has devoted significant time and significant resources to
addressing the needs of the many disabled Americans the agency
serves.
And I am very pleased that that is the case, Ms. Colvin,
because just a few weeks ago we had a hearing looking at
chronic disease and those who are disabled. Right next to where
Chairman Mikulski is sitting was Ms. Dempsey from Georgia, a
woman who had done everything right in America. Ms Dempsey had
been pounded with one illness after another, the daily
medications for which nearly overflowed her table. For those,
she depends on the Disability program that you have focused on.
So I have no doubt that you are going to continue that
important work, that advocacy work, for disabled Americans,
once confirmed.
Today's hearing, of course, is an opportunity for the
Finance Committee, Ms. Colvin, to discuss how to guarantee the
Social Security promise for today's seniors and future
generations. I hope to see this nomination for head of Social
Security move through the committee and the full Senate quickly
so that Social Security will have a confirmed leader in place.
[The prepared statement of Chairman Wyden appears in the
appendix.]
The Chairman. Senator Hatch will make his opening
statement, and I am very pleased to be working with my
colleague on this, again, in a bipartisan way. Then we will
have an introduction from Chairman Mikulski and also from
Senator Cardin.
Senator Hatch?
OPENING STATEMENT OF HON. ORRIN G. HATCH,
A U.S. SENATOR FROM UTAH
Senator Hatch. Thank you, Mr. Chairman.
Welcome, Ms. Colvin. I think it is a little unfair of you
to bring Barbara Mikulski here to talk for you. We are all
scared to death of her. We do whatever she tells us to do, is
all I can say. We learned that a long time ago. [Laughter.]
I have enjoyed meeting with you in the past. Today, and
with questions to follow, we have an opportunity to learn more
about your past management performance and how you would, if
confirmed, face the challenges of the future.
Over the past 10 years, the Social Security
Administration's administrative budget has increased by 34
percent. That is well above the 24-percent growth in the number
of disabled and retired beneficiaries, to a level of almost
$11.7 billion. The budget has grown at an average annual pace
of more than 3.5 percent above the average growth of even
nominal GDP.
Social Security's administrative funding continues to take
up greater shares of the Labor-HHS appropriations bill,
inevitably crowding out other programs relating to health and
education. Yet, all we seem to hear from SSA is the need for
more and that any problems in administering programs can be
solved if only SSA receives more funds. That is true of almost
every agency today.
In a hearing on this committee last week that was supposed
to be a fresh look at the Disability program, the
representative of SSA devoted significant time to repeating
what are, in my view, becoming stale talking points, demanding
more funds for the agency. SSA officials have been marching to
the Hill repeatedly to decry staffing reductions that SSA
itself decided to make, just as the agency decided to pay $244
million in bonuses between fiscal years 2008 and 2013.
What I would like to learn more about today, Ms. Colvin, is
what you have done in managing administrative funding provided
to SSA, which has accumulated to more than $104 billion over
the past 10 years, and what you would do moving forward. I
think those are fair questions, and hopefully we can enjoy
working together on these things. And I hope that your answers
will not simply be that SSA needs more funds.
I hope to learn more today and in follow-up questions about
what you have done and what you would do, if confirmed, to
increase efficiency in the SSA, to reduce billions of dollars
of administrative waste and overpayments associated with Social
Security programs, and, of course, to fight fraud.
And while there are many concerns to discuss, let me
briefly identify just a few items. The first is fraud and
overpayments. To give you an example, uncollected overpayments
in the Disability program have recently grown to more than $10
billion. Think about that. Overpayments in the Disability
program alone are almost equal to the Social Security
Administration's entire annual administrative budget.
There also is an unacceptably high overpayment rate in the
SSI program, and there have been discoveries of fraud, as in
the Puerto Rico cases, the New York City cases, and the West
Virginia cases.
As for fraud, a bipartisan investigation by a Senate
subcommittee led by Senators McCain, Coburn, Carper, and Levin
has presented compelling evidence of fraud in the DI program in
West Virginia. And even so, it is my understanding that an
alleged rogue disability insurance attorney involved in the
West Virginia cases is still representing claimants in Social
Security's DI program. And, as I understand it, allegedly
corrupt administrative law judges have retired with full
retirement benefits from SSA.
Now, it is hard to see how that is an adequate response and
how, if this is indeed the case, we can effectively provide
deterrence against future fraud. Ms. Colvin, I hope that today
we will hear from you about your plans to address fraud and
overpayments in the Social Security programs.
The second item of concern is waste. There have been recent
revelations that Social Security spent nearly $300 million over
6 years on a computer processing system for disability cases
that has been identified by an outside evaluator as having,
quote, ``delivered limited functionality.'' The chairman of the
House Ways and Means Subcommittee on Social Security has called
for you to stop further spending on the system and has called
for an investigation into the failed implementation of the
system.
That is just one example of waste at SSA that has been
uncovered. There are a number of other examples I could
mention. Indeed, it is not hard to find enormous amounts of
questionable and likely wasteful spending and payments when you
read thoroughly the numerous reports by Social Security's
Office of Inspector General. Now, Ms. Colvin, during today's
hearing, I hope to get a better sense from you what your plans
are to eliminate the obvious instances of wasteful spending we
have been seeing at SSA.
As you can see, Mr. Chairman, we have a lot to discuss
today, and I am pleased, Ms. Colvin, that you are here today.
And I honor you and expect a great deal from you as we go into
the future. But naturally, today we want to learn more about
your stewardship of a staggeringly large administrative budget
and what your plans would be to improve SSA's management and to
fight the disturbing amount of fraud and waste at Social
Security, should you be confirmed.
We welcome you to the committee, and these are matters that
concern me greatly.
Thanks, Mr. Chairman.
The Chairman. Thank you, Senator Hatch.
[The prepared statement of Senator Hatch appears in the
appendix.]
The Chairman. Carolyn Watts Colvin has been nominated to be
the Commissioner of the Social Security Administration.
It is our practice, Ms. Colvin, to give you the opportunity
to introduce your family.
Ms. Colvin. Thank you, Chairman Wyden.
I would like to introduce my sister, Genevieve Unger, a
resident of Maryland, who is here. And, if I may, I would like
to introduce my colleagues Shirley Marcus-Allen, a long-term
State employee, and Ernest Eley and his wife, Stacy Eley.
Thank you.
The Chairman. We are glad that you all are here. I would
only say, as I reflect on Chairman Mikulski's being with us,
that we have served together both in the Senate and in the
other body. I would just say, Ms. Colvin, you are running with
the right crowd when you are with Chairman Mikulski.
Chairman Mikulski, we are pleased to have you do the
opening introduction. You will be followed by Senator Cardin.
Please proceed.
STATEMENT OF HON. BARBARA A. MIKULSKI,
A U.S. SENATOR FROM MARYLAND
Senator Mikulski. Thank you very much, Senator Wyden. I
want to thank you for expediting this hearing on our last day
in session before the August break, when there is much pressure
on you, particularly in matters related to moving the highway
trust fund. So we thank you for this courtesy.
To both you and Senator Hatch, it is an honor to be here in
the Finance Committee. Your committee, the Finance Committee,
and my committee, the Appropriations Committee, are the only
two committees in the Constitution. They are the only two
committees that the founders of the United States of America
felt important enough to put into the Constitution, because it
is the revenue committee and the spending committee working
hand-in-hand to provide the checks and the balances to ensure
the functioning of the democracy, not an elected monarchy.
I think when we look at this, your job is to be looking at,
really, the significant issues of the solvency of the Social
Security trust fund, what do we do to ensure the future
viability of Medicare and Medicaid. But there is also the
administration of these agencies, often overlooked in today's
media-driven Congress where the headlines are not in the nuts
and bolts of management. But under the leadership of you two,
working with Senator Shelby and I, let us take a look at how
Social Security is run. Does it have the right staff, the right
technology, and the right way to do that, both at the Social
Security Administration and, also, at CMS?
So, hands across the aisle, hands across the committee,
shoulder-to-shoulder, but no matter what we do, every agency
needs a good leader. This is why I am so pleased to join with
Senator Cardin today in bringing Carolyn Colvin to you to be
nominated for the permanent Social Security Commissioner.
I first met Carolyn Colvin when she came into government
under the legendary William Donald Schaefer, and I worked
hands-on with Carolyn under William Donald Schaefer as both the
Mayor, she in the health department, I in the city council, and
as Governor--I had moved to the Senate.
William Donald Schaefer was known for many things, one of
which was his passion for making sure that government worked.
He was a legendary figure with his spoken, ``Do it now and do
it right.'' So he recruited people who were intellectually
brilliant, had enormous competency in terms of management
skills, and possessed the sense of urgency about solving
problems of ``do it now and do it right.'' But he also did
something else. He reached out to people of color to make sure
that they were actually coming into government, and, for all of
their previous service, were actually promoted in government.
Carolyn Colvin was over there at the health department.
Bishop Robinson was our police commissioner. It was a new day,
a new profile, a new demographic, and a new buzz in Baltimore.
Carolyn was part of that reform movement. That buzz, that ``do
it now and do it right,'' she has carried with her in the many
positions that she has had in government.
After William Donald Schaefer moved on, she was the
Director of Human Services in the District of Columbia, was the
Director of the Montgomery County Health and Human Services
Department, was a special assistant in the Maryland Department
of Transportation, and then became the Deputy Commissioner of
Social Security, and, in February, also then was appointed the
Acting Commissioner.
So you know her resume, and, in each position, it was the
nuts and bolts of government: fix problems, do it now, do it
right.
She has inherited many significant issues at Social
Security: backlogs, techno boondoggles, some of the issues that
Senator Hatch has enumerated. But I think she is up for the
job, and I think I am not the only one. The National Committee
to Preserve Social Security and Medicare has supported her
nomination. The AARP has submitted a letter.
I ask unanimous consent that those letters be submitted
into the record.
The Chairman. Without objection, so ordered.
[The letters appear in the appendix on p. 109.]
Senator Mikulski. So I bring this to your attention and,
also, that she has been recognized by many of the women's
groups and leadership groups in Maryland. She is part of a
group called Leadership Maryland to actually train people in
working together in bipartisan relationships. Also, she is part
of the Maryland 100. She and I joined. We are now part of the
Maryland 1,000 people who have achieved prominence.
But what I so admire about Carolyn is that she is ready to
do the job, and I am just going to close with one example.
When I became the chair of the Appropriations Committee,
one of the perplexing issues was the disability backlog at the
Veterans Administration. And as we talked then with General
Shinseki, it resulted because Social Security and IRS were
dragging out their response to the information VA needed from
both of those agencies.
Working with Senators Tim Johnson and Mark Kirk, I convened
an all-hands-on-deck hearing with these agencies. Social
Security immediately responded under Carolyn's leadership to
make sure that the VA gets on a biweekly basis--biweekly, am I
correct?--the information it needs so that the Veterans
Administration can deal with its backlog.
But she has her own backlog of disability cases, this
techno boondoggle plagued by, once again--before she took
over--no one in charge, everybody in charge, everybody
dithering and moving their microchips around. You know that
deal. And we saw it in the health exchange. We see it over
here. But I think she is the person to fix it.
So, Mr. Chairman and Senator Hatch, you can see my
enthusiasm for her. And, if you want William Donald Schaefer
smiling on you today about ``do it now and do it right,''
confirm Carolyn Colvin.
The Chairman. Ms. Colvin, that is some kind of send-off.
Thank you very much, Chairman Mikulski. Your passion and
your commitment to these programs is renowned, and I especially
appreciate your bringing up Mr. Schaefer, because I remember
meeing him and realizing you could have a head and a heart,
that you could focus on making sure you stretch resources while
also caring for people. So you said it very well.
Now, Senator Cardin has the challenging job of trying to
match that.
Senator Cardin?
OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
A U.S. SENATOR FROM MARYLAND
Senator Cardin. Thank you, Mr. Chairman. I agree with
Senator Mikulski. [Laughter.] You are not going to get away
quite that easily, Senator Hatch.
But let me first concur completely in Senator Mikulski's
comments about Carolyn Colvin. She is an extraordinary person.
We have only had 15 permanent Commissioners of the Social
Security Administration. It is interesting: Franklin Delano
Roosevelt announced that he wanted to send to Congress the law
creating the Social Security Administration. He announced that
in June of 1934, 80 years ago. He then, by executive order, set
up a commission to report back to him. By the end of the year,
he introduced legislation. Congress took it up, and by August
1935 it was signed into law.
That is a model for us in taking up issues and resolving
issues, and, of course, Social Security is a critically
important program to millions of Americans; it is the only
inflation-proof, guaranteed lifetime income source for millions
of Americans.
The permanent Commissioner is an extraordinarily important
position, as Chairman Wyden has said. Not only are millions of
Americans dependent upon the agency's services, but it has more
than 68,000 employees.
We are very proud, Senator Mikulski and I, that the
headquarters of the Social Security Administration is in
Woodlawn in Baltimore County, MD, and we are very proud of the
dedicated workforce that is committed to the mission and to
public service. One-fifth of Americans depend upon the agency's
services directly.
I have known Carolyn Colvin for 30 years, Mr. Chairman, and
I concur completely in Senator Mikulski's evaluations. When I
think of Carolyn Colvin, I think of a person who is dedicated
and who has commitment and integrity. Carolyn is dedicated to
public service and improving the lives of others. Throughout
her career, she has carried with her an unmatched level of
commitment.
To her current position of Acting Commissioner, she has
brought the integrity needed to ensure that beneficiaries,
applicants, and the SSA workforce are treated fairly and that
the benefits are administered according to the law.
Mr. Chairman, Senator Mikulski brought out many parts of
Carolyn Colvin's career, but it is interesting that she began
at SSA in August of 1963 when she was hired as a clerk
stenographer, and now she is Acting Commissioner. This really
is the American story of a person who has worked hard, is
dedicated to public service for the right reasons, and has
accomplished so very much.
She has experience working for municipalities, for
counties, for the State, and for the Federal Government. She
has also worked in the private sector. So she brings all of
that, and this commitment, to this position.
I might also say that she was the director of field
operations for my predecessor, Senator Paul Sarbanes. So she
brings a great deal of experience. She knows us, and she also
knows how to deal with challenges, whether it is the budget
challenges facing Social Security, modernizing the disability
claims system, or restoring a constructive, positive
relationship between labor and management at SSA.
There is one thing I know: Carolyn Colvin has never shied
away from a challenge, and I know that she will give her best.
I know she has the talent. I know she is there for the right
reasons, and I strongly support her nomination and hope that we
will confirm her shortly.
The Chairman. Thank you, Senator Cardin.
Ms. Colvin, with the ringing endorsement of 100 percent of
Maryland Senators, you are now going to have the opportunity to
make a statement. Your prepared statement is automatically
going to be made part of the record. If you could perhaps take
5 minutes or so to summarize, we would like you to proceed.
Chairman Mikulski, you are welcome to stay, and, of course,
I know you have a very hectic day, so we appreciate your
coming.
STATEMENT OF HON. CAROLYN WATTS COLVIN, NOMINATED TO BE
COMMISSIONER, SOCIAL SECURITY ADMINISTRATION, BALTIMORE, MD
Ms. Colvin. Chairman Wyden, Ranking Member Hatch, and
members of the committee, my name is Carolyn Colvin, and I am
the Acting Commissioner of the Social Security Administration.
I am honored and grateful to appear before you today as
President Obama's nominee for Commissioner of Social Security.
I want to thank Senator Mikulski and Senator Cardin for
their very, very kind introductions. I would also like to thank
the Senators and their staff for taking time out of their busy
schedules to meet with me during this confirmation process.
It is a privilege to have the opportunity to lead the
Social Security Administration as the Commissioner. The scope
of what we do is truly enormous, and it is both a humbling and
rewarding experience to go to work every day knowing that what
my colleagues and I do for families helps our fellow citizens.
We serve with the same spirit of compassionate public
service that President Roosevelt envisioned. I am very
fortunate to have spent so much of my life in public service,
most of it leading Federal, State, and local health and human
service organizations that provide critical safety net services
to those most in need. Quite often I have led these
organizations through periods of change and uncertainty. My
career has included several executive positions in policy and
operations at SSA. Most recently, I was confirmed as the Deputy
Commissioner on December 22, 2010, and, since February 14,
2013, I have served as the Acting Commissioner.
One of my top priorities since becoming the Acting
Commissioner has been to position SSA to provide excellent
service for future generations. At SSA, we have not always
engaged in truly long-range strategic planning. This is why I
created the position of Chief Strategic Officer, who reports
directly to me and is responsible for developing strategy and
promoting innovation across SSA. We are well on our way toward
developing a long-range plan.
I am committed to protecting SSA's programs from waste,
fraud, and abuse, and I am proud to serve as the agency's
Accountable Official for Improper Payments. I have promoted new
and innovative ways to prevent, detect, and recover improper
payments.
I am pleased with the progress we have made in expanding
our electronic services. We have created secure and convenient
electronic services for individuals who want to do business
with us online. As of June 2014, over 12.5 million users had
registered for my Social Security online accounts. With the
success of our online services, we are able to conserve field
office resources for those who prefer to visit the offices. We
are fully committed, now and in the future, to sustaining a
field office structure that provides face-to-face service and
is responsive to members of the public who need or prefer to
come into the local office.
I have appreciated the opportunity to collaborate with my
colleagues across the government and contribute toward
improving the overall efficiency and effectiveness of our
service to the public. I am particularly proud of our
collaboration with the Departments of Veterans Affairs and
Defense, which has led to several initiatives that improve
services to America's veterans.
SSA has many challenges ahead of it. If confirmed, I look
forward to addressing them. First, we must complete a long-
range plan that will help us adapt to a rapidly changing world
and continue to provide excellent service for generations to
come.
Second, we must make wise investments in technology. If
confirmed, I will continue aggressively to increase the
agency's use of modern technology that maximizes the return on
the taxpayers' investment.
Third, I am committed to ensuring that we balance timely,
high-quality service with our program integrity
responsibilities.
Fourth, we must do more to help individuals with
significant disabilities succeed in the workforce. Accordingly,
the President's fiscal year 2015 budget contains a proposal
requesting resources and demonstration authority for us to
collaborate with other agencies to test early intervention
strategies to help people with disabilities remain in the
workforce.
Finally, if confirmed, I will continue to work to provide
the best service possible for the American people. In the few
years before fiscal year 2014, limited funding and
sequestration constrained our ability to meet our mission. We
lost employees, and we had to cut back on services.
Our employees are our best asset. Despite tight budgets and
growing workloads, I have witnessed our employees make often
heroic efforts to serve our customers quickly and
compassionately. However, without adequate resources, they can
do only so much to serve the public. The fiscal year 2014
funding level positioned us to begin to restore services to the
public and increase our program integrity efforts. I ask you to
support the President's fiscal year 2015 budget request, which
will keep us on this path.
In conclusion, I believe that my policymaking experience,
management expertise, problem-solving skills, and passion for
the work make me well-suited to be Commissioner of this
wonderful agency.
Thank you for the opportunity to appear before you today. I
would be happy to answer any questions you have.
The Chairman. Ms. Colvin, thank you.
[The prepared statement of Ms. Colvin appears in the
appendix.]
The Chairman. Now, I think you have been advised by the
staff that we have a number of standard nominee questions that
we simply have to go through with all of our nominees.
The first is, is there anything you are aware of in your
background that might present a conflict of interest with the
duties of the office to which you have been nominated?
Ms. Colvin. No.
The Chairman. Do you know of any reasons, personal or
otherwise, that would in any way prevent you from fully and
honorably discharging the responsibilities of the office to
which you have been nominated?
Ms. Colvin. No.
The Chairman. Do you agree, without reservation, to respond
to any reasonable summons to appear and testify before any duly
constituted committee of the Congress, if you are confirmed?
Ms. Colvin. Yes.
The Chairman. And do you commit to provide a prompt
response in writing to any questions addressed to you by any
Senator of the committee?
Ms. Colvin. Yes.
The Chairman. Very good. Let me start by reflecting on your
plans after confirmation. I am particularly struck by how the
agency has changed over the years. You were there between 1994
and 2001. You joined the agency as Deputy Commissioner in 2010.
So, obviously, you have seen a lot, and you have learned a lot.
Particularly, in terms of your plans for the next 2 years,
I have been struck by the comments that you have made about new
technologies and how you would apply new technologies. And I
note that the recent report from the National Academy of Public
Administration addresses that as well.
So let us start with that. What are your thoughts about
how, given the report, you can use new technologies, again, to
better serve people and make better use of scarce resources?
Ms. Colvin. Thank you, Mr. Chairman.
Social Security is a wonderful organization, and we have
known for some time that our rolls would increase. Right now,
we have about 10,000 individuals per week who are turning 65.
So, it is not surprising that our rolls are increasing as a
result of the demographics.
In order to be able to keep up with those increasing
workloads and to get the efficiencies we need, technology is
the solution. We have already begun to make great strides in
online services. We have the my Social Security service where
individuals can sign up for an account, go online, and transact
much of their business. We have had great success with my
Social Security. Well over 12 million individuals have already
signed up in the short time that we have had this service.
We also have other applications, such as disability and
retirement applications, and about 50 percent of all people who
apply for those benefits now apply online. But we realize we
have to continue to expand in that area, and the reason is
because our population is not homogenous. There will be people
who must, in fact, have the availability of coming into the
office to be personally served. Their situation may be complex,
or they may just simply not be comfortable with the Internet,
or they may prefer face-to-face services. So we will always
have a field presence.
On the other hand, my goal is to develop systems that will
be easy to use and convenient, so that those who prefer to, can
handle their business in the privacy of their home. What that
does, Mr. Chairman, is allow us to free up employees in the
offices to serve people who need face-to-face service.
We have been very successful in developing applications.
For instance, we know that the Supplemental Security Income
error rate is partially due to people's inability or
unwillingness to report their wages. We now have both a
telephone process where they can call in their wages and a
mobile application where they can report their wages. This
mobile application has already seen well over 80,000 people use
it in the very short time since its inception. My goal would be
to get most of those people who are in need of reporting their
wages using those systems.
We want to also have a process where individuals would be
able to go online and get the service that they need online in
real time, including a chat service; where they would be able
to complete their business and then not have to come back
another time.
So for us, technology is extremely important, and it is
what we need in order to continue.
The Chairman. That is helpful, Ms. Colvin, and I appreciate
it.
Let me ask you about one other aspect of this whole IT
issue. It is no surprise that we are focusing on that, and this
has been a special priority of mine since coming to the Senate.
My State was always about wood products and forestry--it
always will be--but we have also put a major focus on
information technology, and that is what I wanted to ask you
about in regard to Social Security.
Now, I have been informed that the agency has nearly 3,000
data exchange agreements with Federal, State, and private
entities and processes an average daily volume of 150 million
individual transactions.
Ms. Colvin. Yes.
The Chairman. We compared that to Amazon, and Amazon has
only 27 million transactions. That was the case back on Cyber
Monday in 2012.
Now, we understand that much of this IT is, at its core,
COBOL-based. It is the computer language developed in 1959,
essentially before color television. And, while many of the IT
managers acknowledged that a COBOL-based system works, they
also have indicated that it is less efficient and agile than
more modern computer languages. So what can the agency do to
update the technology that it must possess to manage this eye-
popping amount of data that you are dealing with every day?
Ms. Colvin. I think one of the underlying challenges you
just mentioned is the tremendous volume of data that we
process. We recognize that we have to move away from COBOL to
some extent, but not fully, because in some instances, it is
the best language.
So, there is a transition to modernize our systems. One of
the challenges will be how quickly we can do that, because
there are still other types of Information Technology projects
that we must also develop at the same time to make our system
useful and efficient, both for our employees and for the
public. We have an IT plan that will, in fact, gradually remove
some of that COBOL language and replace it with other types of
language, but not fully replace it.
The Chairman. My time has expired.
Senator Hatch?
Senator Hatch. Thank you, Mr. Chairman.
Ms. Colvin, Social Security has long been criticized for
not formulating long-term plans. Last year, the nonpartisan
Government Accountability Office identified that SSA faces four
key areas of management challenge over the next decade. These
are SSA's lack of an updated succession plan, even though the
agency faces a retirement wave; Disability program issues,
including a need to incorporate what GAO says is, quote, ``a
more modern concept of disability;'' information technology,
including internal weaknesses in information security; and
physical infrastructure.
I have a note that the lack of funding was not identified
as a key area of management challenge. GAO wrote that, quote,
``SSA has ongoing planning efforts, but they do not address the
long-term nature of these management challenges.''
Now, Ms. Colvin, how will you, if confirmed, confront those
challenges in human capital, Disability modernization,
information technology, and physical infrastructure?
Ms. Colvin. Senator Hatch, we have recognized that the
agency does need to have a long-term vision. We are in the
process of doing that right now. We have the National
Association of Public Administrators that was commissioned by
Congress to help in this process. They have submitted their
report.
We will use some of that report to inform decisions as we
finish our own planning process. We expect to have a long-term
vision plan around the first of the year. We need to make sure
that we have extensive engagement with our stakeholders,
Congress, our advocates, and customers, et cetera.
So, we are looking at making sure that all of that has been
done, but we do expect to have a long-term vision document
completed by the beginning of the new fiscal year. The last
vision document was, in fact, done in 2000 when I was at SSA,
and it was for the years up to 2010. So, we recognize the need
there.
We are also in the process of developing a human capital
plan which looks at succession planning and at the gaps that we
need to fill. Probably about half of our employees are now
eligible for retirement. The fact that our program is very
complex means that this will be a major problem for us. So we
are, in fact, doing skill gap training.
Senator Hatch. Well, look at those four critical ones.
Ms. Colvin. And we are, in fact, modernizing our system. So
those three areas that were identified, we are currently
addressing.
Senator Hatch. All right. Well, thank you. In our hearing
last week about the Disability program, views were expressed
that the DI trust fund exhaustion has been foreseen for 20
years, and that increases in the Disability rolls have been
expected for some time.
Now, this means that SSA has ample time to update its DI
program to adapt to changes. However, as I understand it,
decision-makers in the DI program utilize tens of thousands of
pages of instructions to decide who should get benefits,
including 37-year-old medical criteria, 35-year-old vocational
criteria, and 23-year-old guidelines to determine what jobs
exist for individuals with disabilities.
Now, according to the nonpartisan GAO's high-risk list in
2013, disability programs managed by SSA, quote, ``rely on out-
of-date criteria to a great extent in making disability
decisions.''
So I have two questions about this. The first is whether
2013 was the first time that GAO identified high risk in SSA's
Disability program, and the second is why it is taking so long
for SSA to update its criteria and guidelines, especially since
you have had so much time and foresight about troubles with
Disability finances.
If you could address those, I would appreciate it.
Ms. Colvin. Senator Hatch, it is my understanding that
there have been other earlier recommendations related to the
need to update some of the medical tools that we use in
determining disability.
The Disability program, as you know, is a very complex
program. Any change is going to generate significant discussion
both here in Congress and the community. So any change that is
made has to be evidence-based. It has to be based on research
and medical advancements.
We are in the process right now of working with the
Department of Labor to update the occupational list that we
use, and that has been happening for some time. The
occupational standards that we currently use are, in fact, not
going to be updated. We are working with the Department of
Labor to develop a tool that will be helpful in making our
disability decisions. We do not have a timeline, but we have
been working aggressively on development of that tool.
Our medical listings are updated on an ongoing basis. These
are the criteria that are used in making the disability
determination. Most have been updated and are presently on a
cycle to be reviewed every 3 years. We follow the advances in
medicine. So if, in fact, there are new developments in science
that make disability decisions different, then we use that
information.
This update is something that is ongoing and therefore is
always going to be in need of review. There is tremendous
progress going on within the agency, so I do not want to leave
the impression that we are not making advances. The changes
that we are making, though, will not have a significant impact
on the trust funds. It is our hope that Congress will find a
bipartisan way to address the need to have additional funding
there.
You are aware that Congress many times in the past has
reallocated between the two trust funds. The President has
indicated that he hopes that they do this again so that we have
adequate time to make long-term decisions, and that whatever is
decided will be a bipartisan decision. We know that that will
take a lot of discussion.
Senator Hatch. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Hatch.
Senator Brown?
Senator Brown. Thank you, Mr. Chairman.
It is good to see you, Ms. Colvin. Thank you for joining
us.
First, I just wanted to exhort you to work hard in terms of
improving and expanding SSA's communication with the general
public.
Like I do, as many of us do, I have done literally hundreds
of roundtables and calls with senior groups and various kinds
of tele-town halls, and I hear so many of the same myths about
Social Security, about Disability, that they are not going to
always be there and all the things that people say, and I just
want to exhort you to do what you can to help dispel those
myths.
I know we talked about that; you agree with that. But let
me talk about a couple more serious things, a couple other more
administrative things, if I could.
My office got a copy of a memo to the hearing office of the
chief administrative law judge in the Office of Disability
Adjudication Review in New York. I also received a memo from
the chief administrative law judge that mandates a 600-case-a-
year quota.
The first memo I mentioned contains a number of fairly
mundane details, but it also makes two important assertions. An
ALJ, administrative law judge, should be issuing 500 to 700
legally sufficient and timely decisions each year. If you
continue to fail to consistently and efficiently manage your
workload, the agency may initiate disciplinary action against
you.
Could you, Commissioner Colvin, please elaborate on SSA
policy regarding quotas for administrative law judges?
Ms. Colvin. Senator Brown, we do not have quotas. The
agency has set targets or goals toward which they want to see
the ALJs work. Those targets were developed by chief judges
who, in fact, have held cases. The agency has about 7 years'
experience now with the targets.
The majority of our ALJs do, in fact, reach that target of
between 500 and 700 decisions per year. The reason I say it is
not a quota is that no one gets disciplined because of their
failure to reach that number. It is just a goal that we work
toward.
We are a production agency. Our first priority is quality--
to make sure that the decision is policy-compliant and legally
defensible. But we know it is a high-volume business. When we
train ALJs, we mention that to them. And we have, as in any
other organization, some who meet that target, and some who go
above it, and some who do not meet it. But it is not a quota.
Senator Brown. Thank you for that. It seems, talking to
them, to many of them it feels like a quota, and I do not need
a comment on that, but I just hope that you will sit down and
find a way to open up communications with them and, again,
reinforce what you just said to this committee right now that
it is not a quota, that it is a recommendation and that there
is no discipline. I think they just need to hear that directly
from you.
Let me shift briefly to the labor and management relations.
Even with the presidential executive order calling for labor-
management partnerships throughout the Federal Government, it
seems from our reports that it has only gotten worse, to the
point where some labor organizations tell us it is as bad as it
gets in the entire Federal Government.
What explains this? Why is this? And can I have a
commitment from you to provide my office and this committee
with a detailed update on progress you are making toward fully
implementing your office plans to improve labor relations as
specified in executive order 13522?
Ms. Colvin. Senator Brown, I hear your concern about the
labor-management relationships in the agency. In every
organization I have worked in, we have had very strong and
effective relationships with the union. I think it is very
important when union and management work together, because it
benefits the agency and the employees that we both represent.
And I believe that the unions have the same goal that we have,
which is to do the best we can for our employees and for the
American public.
Historically, there has always been a very acrimonious
relationship in the agency. I worked with the union when I was
here from 1994 to 2001 under President Clinton, and we had what
we call a partnership. In fact, I was the one who signed that
contract at that time, and I felt that relationships had
improved. When I returned, I was amazed to see the
deterioration. But what I have done is, I meet with them on a
regular basis. I have lunch with them without management staff
so that we can begin to just get to know one another.
I have had relationship training given by the Federal Labor
Relations Board to have managers and the union come together to
look at how we can build trust, how we can communicate better,
et cetera. You have my commitment that I will continue to do
that. I will say that, when you have a huge organization like
SSA with 62,000 employees, it takes a long time to change the
culture and the relationships. But you have my commitment to
continue to try to move that gap a little bit closer so that we
can work better together.
Senator Brown. And also, a commitment to report to my
office and to this committee of progress, labor progress.
Ms. Colvin. Absolutely.
Senator Brown. Thank you very much. Good luck in your
confirmation. Thanks.
The Chairman. Thank you, Senator Brown.
Senator Carper?
Senator Carper. Thank you, Mr. Chairman.
First of all, let me just say how pleased I was to meet
with you earlier this morning.
Ms. Colvin. Thank you, sir.
Senator Carper. And thank you for your service and for your
leadership at the Social Security Administration for these many
months as our acting leader. My hope is that you will be
confirmed.
Ms. Colvin. Thank you, sir.
Senator Carper. I went to Ohio State as an undergrad. I get
invited back there from time to time. I was back last year and
had an opportunity to speak to about 400 or 500 young men
between the ages of 18 and 22, some from Ohio State, others
from other States in the Midwest, and I talked to them about
leadership, I talked to them about values, and I talked to them
about some of the challenges that we face.
Among the questions that they asked me were questions
relating to our future as a country, the economy, their ability
to get jobs, and so forth. I asked them a question too. I asked
them a couple of questions. I said, ``How many of you think
that someday you will receive a Social Security check? Raise
your hand.'' Not one person out of 500 guys raised his hand,
not one. And I said, ``How many of you think you will ever
benefit from Medicare?'' Not one. Not one.
I said, ``Our job here is to make sure if you ever need a
Social Security check when you are 65 or 70 or 75, it will be
there, and our job is to make sure that if you ever need
Medicare or you need health care, and you probably will, that
it will be there for you as well.''
I think we have a moral imperative to the least of these in
our society to look out for their needs. I also think we have a
fiscal imperative to make sure that we are meeting that moral
imperative in a fiscally responsible, fiscally sustainable way.
I chair the Committee on Homeland Security and Governmental
Affairs. We have a subcommittee led by Carl Levin and, until a
year ago or so, by Tom Coburn. They did an in-depth analysis,
as you know, of Disability Insurance fraud in one place, in
Huntington, WV. And what they found was--and I mentioned this
to you in our meeting--they had one judge who was, in all his
cases from one attorney, from one law firm, approving about 99
percent of them, and, almost magically, a cash payment was
deposited into the bank account of the judge every month for
year after year after year.
We have to be smart enough to detect that, find it, and do
something about it. In the private sector, they have the
ability to use a technique called predictive analytics.
Predictive analytics. And this is just an area that is ripe for
this.
I think the average approval rate for Disability Insurance
applications is about 40 percent. When somebody, a judge, is at
50 percent, it is not unusual, 60 percent or 70 percent, but 99
percent, 95 percent, 90 percent is unusual, especially when the
bulk of a judge's cases are coming from one lawyer. We should
be able to pick this stuff up. We should be able to pick this
stuff up, and they do it in the private sector all the time.
I just want you to talk to us about how we plan to use the
same kind of tools and techniques in order to defend a fund
that I think is going to run out of money in 2016 or so: the
Disability Insurance fund.
I think the Social Security trust fund will start having to
chop down the benefits in the early to mid-30s, 20s. But just
talk to us about how we are going to use it, how we are using
predictive analytics to get at this problem.
Ms. Colvin. Thank you, Senator Carper. We are enhancing our
anti-fraud activities. We are, in fact, using data analytics.
We are working internally. We also want to be using external
groups so that we can maximize this.
Our fraudsters have become much more sophisticated. So we
are seeing third-party fraud, and that is why data analytics is
going to be so important, because it will show us the trends
that are happening, and we will be able to identify things that
we would not be able to identify without that.
So we are, in fact, working on that. But let me just
mention that we have a zero tolerance for fraud in the agency,
and, even though the Inspector General has indicated in reports
that we have less than 1 percent fraud, even one case is too
many.
Every time we have a case, we look at lessons learned so
that we can benefit from that. Most of the fraud is identified
by our front-line employees who tend to be our best defense
against fraud.
We also have--I do not know if you are familiar with our
Continuing Disability Investigation Units. These are the units
that are partners with the Office of Inspector General, the
local Disability Determination Services, and with local law
enforcement. I initiated the first unit in 1998 when I was
here. We now have 25. As a result of the increased funding that
we got this year for program integrity, I am opening up another
seven.
What these units do is identify fraud before we pay out the
first check. This is important, because it is so much easier to
not pay the money than it is to recoup it once we have made the
benefit payment. So, we are aggressive in that area.
For example, our front-line employees made about 22,500
disability-related fraud referrals to the Office of the
Inspector General in fiscal year 2013. We have been working
with the Department of Justice to try to get them to be more
aggressive in prosecuting the cases, and, in some instances, we
have to defer any administrative action that we take until such
time as the criminal action has been taken. That is a benefit
to us because, if criminal action is taken, we can get
restitution, whereas if we take an administrative action, we do
not know how much of the money we can get back.
Senator Carper. Great. Well, that is encouraging. We want
to be your partner.
I want to say, Mr. Chairman, a special thanks before I
yield. Thanks to you, and I want to thank Senator Hatch and
your staffs for working with Dr. Coburn and me on something
called improper payments, $106 billion in improper payments
last year. And some of those are hard to correct, but a lot of
them can be fixed.
We have a situation where the Social Security
Administration has a Death Master File that pretty much keeps
track of who is alive and who is dead so that we do not pay
benefits to people who are dead, and we need to be able to make
that available to other Federal agencies so that they have the
right and the most accurate information.
But I want to say, Senator Wyden, Mr. Chairman, and to
Senator Hatch, thank you very much for working in concert with
Dr. Coburn and me to make sure that we can address this issue,
$106 billion in improper payments--not all from Social Security
by any means. We are doing better, but we could do better
still, and this bill will help us to. So thank you.
The Chairman. Thank you, Senator Carper.
I want you to know, as I have indicated to Senator Hatch--
because we had a hearing on Disability Insurance--that where
there is fraud, we are going to find it and we are going to
fight it, and the reason we are is because this program is so
important for the kind of person like Ms. Stephanie Dempsey. I
talked about her before you came.
She was really the face of the Disability Insurance program
when she came for our discussion of chronic conditions, and she
did everything right. She just got clobbered by one disease
after another, and she was sitting there at the end of the
table where Chairman Mikulski was with medications piled up one
box after another that she takes every day. So we owe it to
her; we owe it to taxpayers.
I also have this report with respect to Social Security
about the question of improper payments, and I am going to put
that into the record, which would indicate that, in the
overwhelming number of instances, the agency gets it right. But
your point is, when they do not and when there is particularly
fraud, we have to find it, we have to fight it, we have to root
it out, and we are going to do that in a bipartisan way.
[The report appears in the appendix on p. 112.]
The Chairman. So let me recognize Senator Hatch. Would you
like to say anything else, Senator Hatch?
Senator Hatch. Just welcome and we are happy to have you
testify here today. I enjoyed our meeting in our office
together and look forward to working with you.
The Chairman. The only thing I would say in closing, Ms.
Colvin--and you could see this from the remarks of the
Senators--is that sometimes government is kind of an
abstraction: there is ``some agency'' in ``the office of
acoustics and ventilation,'' and the citizen tries to figure
out, well, what does that exactly have to do with me, etc. That
is not the case with Social Security.
This is what I was getting at earlier when I held up an
earnings statement and talked about what receiving one means to
someone. There have been changes in the policy--yes--but people
hold onto this because it tells them what they have earned,
what they have paid in, what they have coming to them.
So I support your nomination, and I think you have
addressed the concerns of the Senators here, and I am doing it
because I think you have the experience. Indeed, you have had
several stints at the agency, so you have seen the changes over
time. And I think you will work with us, particularly in an
area I am personally very interested in, to make sure that we
are using modern technology.
Ms. Colvin. Absolutely.
The Chairman. We have 21st-century challenges, yet what we
have to meet them has been in place since before color TV, sort
of 20th-century technologies. That is why we have to play some
catch-up, and we have to work together, and we have to move
quickly, and we have to do it given the challenge of
constrained resources.
I feel you are going to work closely with us, and I intend
to support your nomination.
With that, the Finance Committee is adjourned.
[Whereupon, at 11:06 a.m., the hearing was concluded.]
A P P E N D I X
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