Social Security Disability Backlogs
Statement of Sylvester J. Schieber, Chairman
Social Security Advisory Board
To the
Subcommittee on Social Security of the
Committee on Ways and Means
U.S. House of Representatives
February 14, 2007
What the situation is....
As you pointed out in the press release announcing this hearing, Social Security disability claimants often face lengthy and sometimes unconscionable delays in the processing of their claims. I think that situation is well known. I am, if anything, a bit surprised that it does not get more attention than it has. The only thing I would add to your assessment of the current situation is that it may be even worse than some of the
numbers indicate.
Average processing times mask the fact that many claims lower the average because they are simple, obviously severe (or obviously not), and are well documented. Others may require more complex evaluation that can require processing time well in excess of the average. Moreover, a very large number of those who get disability benefits are required to pursue their claims beyond the initial stage. For example, a little more
than one million of those who applied for benefits in the year 2000 were ultimately found eligible. About 300 thousand of them got their benefit awards only after going through the reconsideration and/or hearing stages. So, while the average processing time for initial claims is about 3 months, it is not at all unusual to wait additional months in the reconsideration process, and much more in the hearings process where average
processing times have risen to about a year and a half and many appeals take much longer.
Moreover, the very existence of long average processing times and of huge backlogs in high visibility areas such as initial pending workloads creates pressures that distort the process. Trying to control those metrics can put too much emphasis on moving easier cases or those that contribute most to the backlog count at the expense of older cases and at the expense of cases in categories such as reconsideration which are not
widely reported. In fiscal year 2006, for example, the number of initial claims pending actually declined slightly from 560 thousand to 555 thousand. Given the tight budget, this 2 looks like a major achievement. But the number of initial claims pending longer than 4 months grew by over 7000 and there was a 38 percent increase in claims pending over half a year. The situation was even more pronounced for those waiting a decision at the
less visible reconsideration level. Even though the State Disability Determination Services received substantially fewer reconsideration requests in 2006, the size of the backlog grew by more than 30,000 claims and there was a more than 115% increase in the percentage of claims that had been waiting a decision at the reconsideration stage for more than 6 months.
The number of hearings pending at the end of fiscal year 2006 showed an increase over the prior year from 708 thousand to 716 thousand, but that was far smaller than the 756 thousand projected at the start of the year. However, this was not because the agency processed more claims than it had expected to but rather because there were fewer appeals than expected. That sounds like good news, but at least part of the reduction in the number of new hearings cases is a reflection of the growing number of cases remaining undecided at the earlier, reconsideration stage. And within the hearings stage,as within the earlier stages, such progress as was made seems to have come at the expense of those claimants who have been waiting longest for a decision. While overall pending levels rose by less than 10,000, hearings cases pending more than 9 months rose by 32,000 including an increase of 16% in cases pending over a year. In pointing out these distortions, I do not intend to be critical of the Social Security Administration’s employees or management, but rather to make sure that you are not confused by some seeming good news that really masks a very serious and worsening situation caused by inadequate resources.
The fact is that the Social Security programs, especially the disability programs, are complex, production operations that demand adequate resources. In the absence of those resources, program managers are faced with making decisions where both choices are bad. On the one hand, fairness would seem to dictate concentrating resources on those claims that have been waiting longest. On the other hand, failing to act quickly on easy claims will likely turn them into difficult ones that consume even more resources to update evidence and to evaluate the additional and worsening conditions that claimants experience during, and to some extent because of, the delays in processing their applications.
One of the bad choices that managers have to make when administrative funding is inadequate is whether or not they should divert funds from activities which have a long-run payoff in lower costs in order to meet the immediate pressures of rising claims backlogs. In that sort of competition, the needs of the disabled claimant obviously and correctly win out. But funding at a level that forces that choice is the ultimate in pennywise
and pound foolish behavior.
Careful actuarial studies show that stewardship activities return benefit savings that are many times their administrative costs – up to $10 saved for each $1 spent for some kinds of reviews. Yet, the agency has been largely abandoning these stewardship activities in order to move claims along. I realize that there is a budgetary distinction between administrative and benefit spending, but that distinction is an artificial 3 procedural construct. Failing to achieve easily attainable reductions in improper benefit payments is not only wasteful, but it will worsen the future year total deficits that are, in the last analysis, what constrains discretionary spending. It also makes a mockery of the legislative and regulatory rules that define eligibility for benefits in the first place. And no one should think that this is a problem that will just go away with the passage of time. Quite the contrary. Over the coming decade and a half, the projected rate of growth in the number on the benefit rolls will be roughly double what it was over the past quarter century. That is, the size of the Social Security programs will increase from about 50 million beneficiaries to over 70 million. At the same time, the agency faces a retirement wave of experienced staff, a tighter labor force that will make it more difficult and expensive to hire replacements, and a likely continuation of budgetary constraints.
How did we get here?
The Social Security Advisory Board has attempted over the years of its existence to point out the need for increased resources. Just last month, we wrote to the leadership of the Appropriations Committees that inadequate funding has prevented the Social Security Administration from providing the level of service to the public and program stewardship that American taxpayers have a right to expect. Last year, my predecessor as Chairman submitted testimony to the Finance Committee, noting that the agency has been provided resources that are inadequate to enable it to keep up with its workloads. The Advisory Board issued its first report on the disability programs in August of 1998. In that report, the Board made several references to the need for more adequate resources. Every year since then, the Board has issued one or more reports or other statements pointing out the need for more adequate resources. A quick count by our staff revealed that during my tenure on the Board since 1998 we have issued some 21 different Board reports and statements along those lines.
The Congress, in setting up the Social Security Administration as an independent agency, directed it to develop annual budgets based on comprehensive workforce plans. In each of the past several years, the official budget request for the agency’s administrative operations has been lower than the amount in these “workforce plan” budgets. As shown in the table below, the actual amounts enacted in each year of this 21st
Century have been below the SSA workforce budget and also below the Administration’s formal budget request. The shortfall relative to the official administration budget has totaled $1.4 billion over these seven years including a half billion just in the last 2 years. The difference between the enacted budgets and the agency workforce plan budgets over the period totals over $5 billion. So what we have are several consecutive years of providing resources well below the levels recommended by the professional program managers. During that same period, the demands on the program grew rapidly. In the Disability Insurance program for example, there were 1.3 million new benefit applications in the year 2000. By 2005, that
number had grown to 2.1 million—an increase of 60 percent over the period.
The Social Security Act requires this budget to be transmitted to Congress without change along with the President’s own budget. In developing his budget, the President obviously has to consider all National needs. It is neither surprising nor inappropriate that his judgment as to the appropriate administrative budget for the Social Security Administration may differ from that of the Commissioner. But the workforce-plan budget
required by statute can, as the words of the President’s budget indicate, provide a context for decision-making. Unfortunately, all that is included in the budget submission is the single, bottomline number from the Commissioner’s budget and none of the detail about how that number was derived. A single number does not provide a “context for decision-making”; it is simply a number. As far as I know, that number appears at the end of the Social Security section in the budget appendix and is used for nothing. The process of deriving it
may be helpful to decision makers within SSA, but it does not help the Advisory Board or the Congress understand the workforce needs of the agency. As far as I can tell, it is printed and ignored.
The justification materials presented to and considered by the Appropriations Committees are entirely based on the official budget numbers without benefit of the context that could be available if the background of the workforce-plan or servicedelivery budget were included. I believe this additional transparency in budgeting could help Congress better understand what is needed to fund the administrative costs adequately, but knowing and doing are different. In its past reports concerning the Social Security Administration’s resources, the Advisory Board has on a number of occasions urged that the agency’s administrative
funding should not be subject to discretionary caps in the budget process. Beyond this, I would point out that Congress has in the past employed special budgetary procedures aimed at meeting identified needs in the operation of the Social Security program. For example, over a period of years, there were special amounts of funding set aside to enable the agency to upgrade its technology and to carry out continuing disability reviews. There is, of course, always a concern about overly constraining the flexibility of the Commissioner to move resources around as circumstances change, but Congress has occasionally found funding mechanisms directed at certain high priority objectives to be useful and effective.
A third suggestion I would make is for a thoroughgoing evaluation of the Social Security programs with a view to finding policy improvements that might suggest ways to make the program easier to administer. In the Board’s library we have a copy of the original Social Security Act. It is somewhere between a sixteenth and an eighth of an inch thick. The current compilation of the Act is about 3 inches thick. I realize that much of that relates to Medicare, but the Social Security and SSI programs also have been 7 amended many times over, usually with the result of adding complexity. As we move into a future with larger workloads and continuing budgetary limits, it would be useful to evaluate existing procedures and rules to see if they can be made more objective and easier to administer.
In 1997, the very first report the Advisory Board issued called upon the agency to enhance its policy research and evaluation capacity. A year later, the Board again called for improved capacity to evaluate SSA programs: “It is critically important,” we said “for SSA to conduct, on a continuing basis, careful research and analysis of its administrative operations….The agency must be able to know what works and what does not and be looking continually for ways to improve its service to the public.” The agency collects
enormous amounts of data about its programs and operations, but it still is deficient in both tools and personnel to capture and use that data for program evaluation.
Mr. Chairman. I hope these comments are helpful to the Subcommittee as it examines the backlogs in the Social Security disability programs. Those programs have been one of the major concerns of the Social Security Advisory Board since it first began operations in 1996. The Board expects to continue its careful review of them. It would be happy to provide any additional assistance you may want, and I would be happy to answer any questions you may have.
References and Bibliography this Article:
www.google.com/#sclient=psy&hl=en&site=&source=hp&q=social+security&aq=f&aqi=g4g-s1g5&aql=&oq=&gs_rfai=&fp=1de331493393b8ab
en.wikipedia.org/wiki/Social_Security_(United_States)
www.socialsecurity.com/
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