Statement by Dr. Shirley Charter,
Commissioner of Social Security
before the House Appropriations Committee
Subcommittee on Labor, HHS, Education and Related Agencies

March 28, 1995

Mr. Chairman and members of the Committee:

I am pleased to join you today and to present the Social Security Administration's Fiscal Year 1996 appropriations request. I have full written testimony that discusses this request in detail. With your approval, I will submit that testimony for the record and summarize its key points for you this morning.

Mr. Chairman, this is a budget that I wholeheartedly support. I embodies a vision of the kind of high-quality service the Social ecurity Administration can and should provide during on extraordinarily challenging period in its history.

This budget supports our efforts to deal with escalating public service demands, today and tomorrow. It plans for the future and is guided by our Agency Strategic Plan, our General Business Plan and our Streamlining Plan. It invests in automation and in disability programs. It shapes on independent agency that will work better and cost less.

In fiscal year 1996, with this budget request, SSA will:

1. Pay benefits to approximately 48 million people;

2. Handle over six million new benefit claims;

3. Process 16 million requests for Social Security number cards; and

4. Post 235 million annual earnings items for covered workers.

Limitation on Administrative Expenses

1. I would like to focus on the $6.188 billion that is our limitation on administrative expenses request.

2. This account provides funding for employee salaries and benefits, for computer and telephone systems, for space and supplies, and for the important customer service improvement initiatives I'm going to discuss.

3. It will amount to 1.6 percent of benefit payments which total approximately $370 billion.

4. We are intent on administering these multi-billion dollar programs as efficiently as possible.

Our request supports our three agency goals:

1. Rebuilding public confidence in Social Security;

2. Providing world-class public service; and

3. Creating a nurturing environment for SSA employees.

It also supports the careful multi-year business planning approach we have set forth which relies on a combination of streamlining, reengineering and automation. This approach will permit us to maintain current service levels overall, while applying some of the resources we save to improve or expand activities.


Our LAE request includes funding for two critically-needed investments -- in automation and in our disability program. I would like to spend a moment discussing these investments.

Automation Investment

In terms of automation investment, our budget includes $357 million to continue our five-year, $1.1 billion investment in projects that include, most importantly, our Intelligent Workstation/local Area Network initiative.

Last year, this Committee provided us $130 million for automation investment funding. Our final enacted level for Fiscal Year 1995 was reduced to $88 million, so this year's request includes funding to help us "catch up" and stay on track with our five-year automation plan.

This investment is critical to the long-term improvements we will make in disability claims processing. It is also vital in making virtually all of our business processes more efficient, consistent with our business plan. This advanced technology is absolutely required if we expect to streamline administrative operations and enhance customer service.

Mr. Chairman, I cannot overemphasize the key value of this investment. It is as a result of our utilization of technology that we will be ahle to maintain and in some areas improve our performance. This investment is a key enabler to our entire business planning approach. Without access to this funding, and even with the other measures we are taking, we will simply not be able to meet public or Congressional expectations for service delivery.

Finally, I want to make it clear to you that the public will get a very good return on this investment. Field studies have shown us that we will gain at least two dollars in greater productivity and efficiency for every dollar we invest in technology.

Disability Investment Fund

Last year, you provided us with $320 million to improve disability case processing, and I am pleased to report that, as a result, with these funds we will process an additional 448,000 disability claims this year.

Our budget request includes $534 million for our disability investment fund. This is an investment that continues to show tangible results in dealing with the 56 percent increase in incoming disability claims over the past five years. With our investments in disability, and with strong cooperation from the States and our employee unions, we can turn negative trends into positive ones. We will reduce average processing times on initial claims by more than a third -- from 97 days in fiscal year 1994 to 62 days in fiscal year 1996.

The disability fund also will help us protect the integrity of the programs we administer by ensuring that benefits are only awarded to those who are eligible by law to receive them. We establish this assurance by doing Continuing Disability Reviews for those receiving benefits. We will increase --to over 400,000-- the number of continuing disability reviews. This is more than double last year's effort. For the first time in agency history, we are proposing to set a minimum funding level dedicated to continuing disability reviews. We need this to protect the integrity of the programs and also to help rebuild public confidence in these programs.

And we are investing wisely to ensure that these gains are not temporary. Based on the recommendations issued last year by our disability reengineering team, we are moving aggressively to implement the long-range redesign of our disability process. When completed, this reengineering initiative will ensure swift, efficient disability decisionmaking and processing on a continuing basis.

Other Initiatives

Other aspects of this budget, Mr. Chairman, demonstrate an agency that tokes the principles of cost efficiency and high quality customer service very seriously. For example:

1. We are streamlining the agency by reducing unnecessary layers of management and redirecting staff to direct customer service positions.

2. This year, we will provide approximately nine million Personal Earnings and Benefit Estimate Statements. By the year 2000, we will have sent more than 140 million statements over a six-year period. This is an important public education effort that helps people better understand Social Security. By providing them with an estimate of their Social Security benefits, they can plan for retirement.

3. We will improve our 800 number service by employing the latest telephone technology, including automated self service options in some locations and other customer-oriented features.


Mr. Chairman, I om pleased to support this budget. This budget supports high quality public service, and it does so very cost­ efficiently. I urge that this appropriations request be approved in its entirety so that the Social Security Administration can meet the needs of today's 48 million beneficiaries as well as make the critical investments needed to meet the service demands of our future generations of customers.

Thank you for the opportunity to testify on this budget; I am pleased to answer your questions.