oversight

Social Security: Comments on S. 2453--The Social Security Restoration Act of 1990

Published by the Government Accountability Office on 1990-05-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   UnitedStatierGcneml       Accounting Omrce /4’/3VG
                   Testimony


                                                                    141342

For Release       SOCIAL.SECORITY:
on Delivery       Comments on S. 2453--The Social
Expected    at    Security Restoration  Act of 199ii
10:00 a.m. EDT
Friday
May 11, 1990




                  Statement  of Joseph F. Delfico
                  Director,  Income Security   Issues
                  Human Resources   Division


                  Before    the
                  Subcommittee         on Social   Security   and
                     Family     Policy
                  Committee      on Finance
                  United    States      Senate




                                              \4134&
GAO/T-HKD-90-29
                       SUMMARYOF TESTIMONY ON
         THE SOCIAL SECURITY RESTORATIONACT OF 1990, S.2453.

GAO has testified      on most of the bill's provisions  in the past.   It
presents a brief      summary of the major points of its past positions
in Appendix I.
Today's testimony      focuses on three   sections   of 5.2453 dealing   with
changes to the hearings and appeals process, establishing  a minimum
staffing  level at SSA, and changes to telephone access at SSA.
Regarding     the appeals process, GAO believes that the process now
takes too      long.   Changes which the bill   would mandate will shorten
the time     required   for appeals but S.2453 raises a significant
number of     unanswered questions about costs and services.        Before
proceeding       GAO suggests testing  the process in a limited   number of
locations     to determine the cost implications     of the bill.
SSA staff     levels need to be reassessed to determine if
reallocations      due to staff imbalances can mitigate staff       needs.
Though GAO is aware of areas where staff may be needed,           increases
should only follow thorough work force planning.
The bill     proposes to improve telephone access by publishing        local
SSA office      phone numbers in the phone book.       Though this action may
appear inconsequential,       it has the potential     to undermine the
efficiencies      and service monitoring  capabilities     of the new 800
system.      Recent SSA actions giving local numbers to those that
request them may improve access and should be given a chance to
work.
Mr.      Chairman                  and     Members            of         the         Subcommittee:


We are              pleased           to        be here            today             to        testify           on S.            2453.              The bill

would           (1)        establish                the      Social             Security                  Administration                             (SSA)       as an
independent                     agency,             (2)      require                development                    of        a prototype

counterfeit-resistant                                     social             security                card,            (3)        shorten             the     time

frames              for     mandatory                annual             dissemination                        of        social             security

account              statements,                    (4)     make          administrative                           and           operational

changes              to     the      social              security               hearings                  and      appeals                process,               (5)

establish                  a minimum                number              (70,000)                of       federal             employees                 at    SSA,

(6)      expand             telephone                access             to      SSA’s             field          offices,                 and         (7)

improile             federal             tax        forms.



Our      position                  on many           of      the         suggested                   changes                is    addressed                 in
prior          testimonies                     before         this            committee                   and      others               in      both        houses

of      the     Congress.                      A brief             summary                of      the      major             points             in     these

prior          statements                  is       contained                  in       appendix             1.         My testimony                        today

will          focus         on three                provisions                  of        the        legislation--changes                                   to    the

hearings                  and      appeals           process,                 establishing                       a minimum                   staffing

level          at         SSA,      and        changes             to     telephone                      access         to        SSA.



TITLE          IV--STREAMLINING                            THE APPEALS PROCESS



The bill                  makes      several               significant                     changes               to     the            social          security

appeals              process.                  S.    2453          affects                two        stages            in        the      current

process              that          appear           to     delay          many disability                             applicants                     in

receiving                  their         benefits.                  By mandating                          time         limits             under           which

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appeals          must        be handled,                      the         bill          appears               to      have        the         effect          of

eliminating                 the      reconsideration                              phase             of      the       process--now                     the

function            of      the         state          Disability                     Determination                      Services                   (DDSs)--
and      eliminate                SSA’s          Appeals                 Council.



The current                 process.             takes             too         long          for         applicants               who appeal

original            state          decisions,                      and      we support                      efforts            to       shorten              this

time       and      reduce           the         associated                      human             costs           resulting             from          these

delays.             If      this         bill          is     implemented,                          and       the      necessary                    resources

are      provided,                social          security                     applicants                   will        receive               more      timely

decisions                on appeal               and have                 access              to         judicial           review              sooner          than
they       do now.



However,            in      our      view,             there             are      a number                  of      unanswered                  questions

about:           (1)        the         impact          of         the         legislation                    on the           appeal               rates       of

the    denied             disability                   applicants,                      (2)         how substantial                           the

increased                ALJ workloads                      will          be,          (3)         the      effect          of      new time                 limits

on the        quality              of      disability                     determinations,                             and        (4)     the         cost       to

SSA and          related             resource                 implications                          for       the      state            DDSs.



The bill            would          affect              resources                  in         two     ways.             First,            the         increased

workload            resulting                   from        eliminating                       reconsideration                          will          increase

ALJ staffing                 requirements.                               Second,              the         new,        shorter            mandated               time

frames        for         conducting                   hearings                  and         issuing             decisions               will          probably

add      to   these          staffing                  needs.               As many                 as      180,000            additional                    cases

could’be            expected               to     go to             administrative                            law      judges            (ALJs)             each

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y-r        I which          would          add between                    $100        and         200 million                        in    new

administrative                      costs.              We do not,                 however,                know            the        impact              of     the

timeframe             requirements                      on ALJ workloads                               and costs.                     Some of              the

additional                cost        due         to    increased                workloads                 and          shortened                  time

frames        could              be offset              by     savings             from           eliminating                    the            earlier             case

reviews         at        the       state          level,           many         of     which            are       reviewed-again                              by

ALJs.         But,          estimating                  these            savings            is     difficult.



There        also         will        probably               be a large                workload                  impact               on the              U.S.
courts.             The bill               appears             to    eliminate                    the      Appeals               Council,

although            the          Secretary              would        have          30 days               in      which               to    review              any

ALJ decisions                     before           they        become            final.                 This       provision                     has       the

potential            for          increasing                 the     workloads                    of     the       federal                 district

courts.             Currently,                 about           57,000            applicants                    appeal            to        the         Appeals

Council,            and while                less         than           15 percent                are         successful,                       the

district            courts            now only               receive             about            7,000          of       them            on subsequent

appeal.             Under           the      proposed               process,                the         potential                exists                that         all

57,000        applicants                   could          appeal           directly                to      the          courts.



Because        of         the       uncertainties                    concerning                    the         bill’s            impact,                we
suggest        that          before            mandating                  such        a major              change               to        the      appeals
process,            the          legislation                 be modified                    to     require                SSA to            experiment
in    selected             states            or        areas        of     the        country              with           different                  appeal

structures,                such        as those                provided               for         in     this           bill.




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TITLE        V--SOCIAL           SECURITY              ADMINISTRATION                          EMPLOYEES



S.     2453      mandates            a staffing                  floor          for      SSA of             70,000           “full-time

positions,”            effective               October              1,      1990.              This         represents                a

significant            increase               over         the      63,000             full-time               equivalents                       that

the       administration               has          proposed              for         fiscal           year        1991.



Though        we have          noted          areas          where          there          may be a need                       for         more

staff--       such     as      for      the         800 number                  telephone                  system         and        for

Supplemental               Security             Income            outreach               activities--we                        are         not      aware

of     any    comprehensive                   studies             to      determine               what            SSA’s        actual             staff

needs        are.      We have,               for      several              years,             recommended                   that          SSA

develop          a work        force          plan         and      this          has      not         been        done.             SSA needs

such       a plan      to      determine               its        staff           needs          and        the       extent          to         which

they       can      be met      through              a redistribution                            of        existing            resources.

Most       information               we have           seen         on SSA needs                       is     anecdotal               and,          to

some       degree,           unsubstantiated.                             A thorough                   study          needs          to     be

undertaken            before          wholesale                  increases                in     staffing              are      made.



We of        course        recognize                that         provisions                in         S.    2453       place          many          new

requirements               on SSA that                 would             result           in     the        need       for      mote             staff.

Just       how much          staff       is         needed          to      comply             with         the       provisions                   of     the

bill       would      also      need          to     be determined                       by      SSA.
TITLE           VI--TELEPHONE                          ACCESS



Title       VI         of    the          bill           would         provide             increased                  telephone              access            to

SSA field               offices.                    Specifically,                         SSA would              be required                    to     (1)
advise           all        callers               to      the         800     system            that        they        have         an option                 to

call       a local                field           office           and        (2)         publish           in     phone         directories                    the

numbers            of       local           offices.                   At     present,               SSA’s         policy            is      to      publish
in      phone          directories                       only      the        800 phone                number           and      not         the       local
office          numbers.                    However,               SSA modified                      its     policy             in     January               1990,

in      response             to      pressure                   from        the         Congress            and        others          to       provide
greater           access             to          local          offices.                  Now SSA provides                       the         local        office

number          to      users             of      the       800        service             on request.



In      a September                  1988           report,              we supported                      SSA’s        decision                to

establish               nationwide                       800     service.                  Compared              to     SSA’s          old         system,

800 service                  was designed                        to      be more            efficient.                    Efficiency                  gains

are      realized              by centralized                            phone            service           delivery,                which           requires

fewer       staff            to      provide               a given                level         of     service.                 The       800 system

also      provides                 comprehensive                        management                   information                 on the              quality

of      access,             as measured                    by      the        rate         of    busy        signals             and         the      wait

time      on      hold.              With           such         information,                    SSA has,               for      the         first        time,

data       to     monitor                 the       quality              of       its      service           and manage                   its        telephone
workloads.




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Our work              4 years               ago        on SSA’s                 old      phone           system             revealed            poor

service             in    many          areas,           the        existence                    of antiquated                       system           design,

and      the        absence             of    meaningful                        information                   on service                 quality.

Further,             given            the      advances               in         telecommunications                               technology                 and

the      state-of-the-art                          telephone                     service               in     the       private           sector,              it

was apparent                   that          SSA’s           phone              system           had major                  structural                problems.

At     that         time,           SSA phone                service              could           best         be described                     as a

patchwork                of    34 teleservice                         centers,                   20 mini-teleservice                             centers,

12 statewide                   answering                 units,                 and      627       local            field         offices.



The transition                        to     800 service                    has          not      been         easy.              The     system             has

been plagued                   by      start-up                problems                  including               high          busy       signal             rates

and     spotty            service.                 Perhaps                 the        most        difficult                   problem           to

address,             hOWeVer,                is    the         concern                by        some about                  the      impersonal

nature         of        the        800      service.                 The         notion            that         someone              very       remote

from      the        caller            is     handling                inquiries                   is        disturbing.                   The

provisions                in        Title         VI    appear              to        be designed                    to       remedy          this,          for

example,             by publishing                       the        phone             number             of     local          offices            in     the

phone         book.            Though             on the            surface                taking             this          action        appears

inconsequential,                            we believe                it         could           seriously                  undermine            the

progress             being           made developing                             an up-to-date                       phone           system.



To the         extent               that      callers               will          call           local         offices               rather           than          the

800 number,                   the      overall               cost          of     phone           service              will          increase           and          the

capability                of        SSA and            the      Congress                   to     monitor              service            quality             will

decre’ase.                Increased                cost         would             be attributed                        to      the      additional


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staffing              resulting                       from          decentralizing                             phone         service                 and      operating

two      phone             systems                  cancurrently--                           the      800 number                  and          the     local              office
system             composed                  of       many          local           offices                 independently                       providing                  phone
service.



The      key        question                   with          respect                to        expanding                   telephone                  access          to      the

field         offices                  is:            What          will          the         volume            be?          At       this       point,              no one

knows.              But          the         answer            has         a direct                   bearing              on the            cost          and       the

feasibility                  of         expanding                     access,                 both        of        which         should              be known

before             proceeding                     with         implementation.                                  To illustrate:                             -If,      for

example,             70 percent                        of      the         public              were            to    call         a local              number

rather             than      the             800 number,                     it         is     possible                   that        many           SSA field
off ices            would          be overwhelmed,                                 resulting                    in        poor        phone           service              and

disruption                  to     other               office              services                   and       operations.                      At        the       same

time,         it      is     possible                    that          many          of        SSA’s            3,300            teleservice                      center

representatives                              would          be        idle         because                of        the      diversion                 of         calls        to

local       offices.



In      summary,             first,                  we believe                    there              needs          to      be a balance                         between

providing                 direct               phone           access              to         local          field           offices             and         the

efficiencies                      realized                  from           more          centralized                       phone         systems,                  such        as
SSA’s       800           system.                     SSA has              recently                  expanded                access             to     local

offices,             and          we believe                     that             this         policy               should            be given               a chance

to    work.               Second,                 we believe                      that         the        idea        of         expanding                 direct

telephone                 access               to      local           offices                 as proposed                       by    title           VI         needs

carefvul            study.                   Little            is      known             at        this         point            on how SSA


                                                                                         7
,




    operations            and    service           to      the    public         would     be affected,        and   this

    impact       could,         in     fact,       be significant.




    Mr.     Chairman,           this       concludes             my prepared             statement.        I will    be

    happy     to    answer           any       questions          you      and    the     committee       members    may

    have.
APPENDIX              I                                                                                                                          APPENDIX             I




SEPARATE AGENCY STATUS FOR SSA



As we have                 stated          in      testimonies                   in     July             1984,         April         1985,            and

June        1989,          independence                 is       not     essential                       to     solving             SSA’s
management                 and      operational                  problems.                  We agree                   with         the      premise

behind           S.       2453      that        SSA*s        management                    problems                are         caused            by

constant              turnover             in      leadership.                    But         it         is     our      conviction                   that       a

single           administrator                     would      be the              best             management                  structure                for

SSA.            Contrary            to     assumptions                  about           the         advantages                  of        boards,             they

do not           provide            for      leadership                 stability                   or         insulate             the      agency            from

political                 and     economic           pressures.                       In      fact,             they        often          cause         more

problems              than        they       cure      in        an agency’s                       day-to-day                  management.                     Our

concerns              about         section           103 of            S.       2453         relating                 to      personnel,

procurement,                     and budgetary                matters                 and          the         various          sections

requiring                 the     Comptroller                General              to       help           implement                 the      bill’s

demonstration                     projects           are      documented                      in         our      June         2,    1989,

testimony.



SOCIAL           SECURITY            CARDS



In   our         testimony                before       this            Committee                   on April               18 of           this        year,

we stated                 that      focusing           on-strengthening                                  the      social            security             card

alone,           without            assessing              the         Immigration                       Reform          Control             Act        (IRCA)
            Y
system           as a whole,                 could         have         marginal                   effects             on the             reliability

                                                                             9
APPENDIX             I                                                                                                                              APPENDIX          I


of     the    verification                          system           because                 the      card’s            reliability                 may      not

be critical                    to      the         whole        process.                     In     our      view        the          Attorney           General

in     conjunction                    with          the       Secretary                 of         Health          and Human                Services,

should        review                 and      report            on the             verification                      system            as    a whole

while        changes                 to      the     social               security                card       are        being          studied          as

required           by          S.      2453.                  This         report              should,            among          other         things,

include         an assessment                           of      options                involving               the       incorporation                    of

validated                social              security             numbers               on state               driver’s                licenses.
Because         of            the     urgency              to     affect               reductions                  in    discrimination                      under
IRCA,        reports                 on both            the       IRCA system                       and     the         social          security             card
should        be         issued            within             1 year          of        S.        2453’s        effective                   date.



SOCIAL        SECURITY                    ACCOUNT STATEMENTS



In     two    previous                    testimonies                     (July         1988         and       June        1989),            we have

stated        that             there          is     merit           in     providing                     covered          workers             with

better        information                        about          their         social                security             earnings              and

benefits.                 Last            year       the        Committee                 enacted              requirements                    to     issue

such       statements                     automatically                      in        three         phases.               S.     2453         greatly

accelerates                    the        previous              schedule                in        phases          2 and          3.         We are        not

convinced                of     the        need        for       an annual                    statement                 as opposed               to    one

every        2 years                as previously                       required.                    It     would          be costly,                 and       the

benefits           of          annual            earnings               statements                   relative              to     these          costs
should        be considered.



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