Mr. Chairman, this is our third hearing about conspiracies to steal from Social Security. In our first two hearings we heard what the Social Security Administration (SSA) did to stop the fraud. Their front-line employees noticed the suspicious pattern, their investigators followed up, and hundreds of people have been indicted.
Today, we need to talk about what Congress should be doing to support SSA and protect Social Security.
The Commissioner of Social Security is here today. I know she will tell us SSA is taking even more steps to tighten its defense against fraud. But I hope she’ll also be blunt with us about what we need to do - about the fraud and errors SSA just can’t prevent unless Congress steps up to the plate.
In New York, over 100 people have been indicted - some of them just yesterday -- partly because SSA Special Agent Peter Dowd had a creative idea. He thought of checking to see whether the retired police officers SSA suspected of fraudulently claiming mental impairments still had licenses to carry concealed weapons. Special Agent Dowd works for SSA’s Cooperative Disability Investigations Unit in New York. This is an elite unit that pools the expertise of the Inspector General’s office, front-line SSA staff, and local law enforcement to find fraudsters and bring them to justice.
Since the CDI program began, CDIs have successfully pursued over 30,000 fraud cases, saving taxpayers over 3 ½ billion dollars. But what if the New York scheme had unfolded in one of the 29 states that doesn’t have a Special Agent Dowd because SSA can’t afford a CDI unit?
In Puerto Rico, a fraud conspiracy was uncovered because of vigilant front-line staff. Medical consultant Dr. Vicente Sanchez was the first to report suspicious medical evidence to SSA, and program analysts Susan Palais and Maria Lora helped identify boilerplate language and spot trends that indicated potential fraud. Tips from front-line SSA workers account for nearly two-thirds of fraud investigations and most successful prosecutions. But what if that Puerto Rico scheme happened now, after Republican budget cuts significantly reduced the number of trained examiners like Susan Palais and Maria Lora?
Mr. Chairman, too many front-line SSA employees and investigators played key roles in exposing fraud in New York and Puerto Rico for me to name them all during my five minutes. The names of 24 other employees who were critical to these efforts are listed here, and I would like to insert them in the record.
SSA is required to periodically review whether beneficiaries are still too disabled to work. SSA uses a sophisticated computer model that allows them to focus on the cases that are the most likely to have a change, rather than have to review millions of cases. SSA is constantly refining this model so it can work more efficiently to identify beneficiaries who are no longer eligible. In fact, I asked Bill Zielinski, SSA’s Chief Information Officer, to be here today to talk about the many innovative ways SSA uses computer technology to pinpoint fraud and errors. In 2011, SSA reviewed about 350,000 targeted beneficiaries to see if they were still medically eligible for disability benefits and found that a small percentage were not.
Social Security’s Chief Actuary estimates that those reviews will eventually save taxpayers 5.4 billion dollars - an average return on our investment of 13 dollars for every one dollar spent. But what about the 1.3 million cases SSA couldn’t review? Since 2011, Republicans in Congress have prevented over a million case reviews by blocking program integrity funding authorized by the Budget Control Act.
Let me be clear. Those failures to protect Social Security aren’t the SSA’s fault. In 2012, Social Security paid 56 million Americans over 600 billion dollars in earned benefits. SSA had a 0.22 percent overpayment rate. That’s less than one-half of one percent.
This low error rate didn’t happen by accident. It happened because the SSA has conscientious, well-trained staff. And SSA has procedures both to routinely check for errors, and to identify applications that are more likely to have fraud and errors so they can be checked again.
But since 2011, Social Security has lost more than 6,000 highly trained employees to budget cuts. This is more than 10 percent of the front-line workers who are in the best position to spot fraud and errors before the checks go out.
Ultimately, Congress is responsible for protecting Social Security, and Congress needs to do its job.
American workers pay into Social Security with every paycheck, and they depend on it to protect themselves and their families. We have an obligation to safeguard their contributions and make sure that it’s there when they need it.
Over Social Security’s lifetime, American workers have contributed 14.6 trillion dollars to Social Security. The Social Security Trust Fund currently has a 2.7 trillion dollar surplus. In exchange for their contributions to Social Security, American workers get real economic security - they know they and their families will be protected when they can no longer work. For 77 years and through 13 recessions, Social Security has paid Americans their earned benefits on time and in full. 6 out of 10 seniors rely on Social Security’s modest benefits - which average less than $15,000 a year - for more than half of their income.
Because disabled recipients are usually too sick to work at all, the modest benefits are even more of a lifeline for these Americans. For nearly half of DI recipients, Social Security provides 90 percent or more of their total income. 1.7 million children were lifted out of poverty by their parents’ DI benefits.
By law, Social Security cannot deficit spend - it can only pay benefits out of the Social Security Trust funds. That means it’s vitally important that we prevent fraud, waste, and errors that could drain the trust funds and prevent us from paying Americans the benefits they earned and depend on to pay their bills.
Congress needs to give Social Security all the tools it needs to fight fraud, prevent errors, and protect the Social Security Trust Funds while still paying every American’s earned benefits on time and in full.
We all learned something at our recent hearings. It is imperative that Congress do more to help Social Security’s dedicated employees fight fraud. We need to do more to help them fight errors, because as Americans who depend on Social Security well know, every penny counts.
Today my colleagues and I are introducing legislation to help the SSA protect Social Security, while still paying every American’s earned benefits on time and in full.
My proposal provides SSA with new tools to fight fraud and prevent errors. As our recent experience demonstrates, there’s no getting around the hard fact that one of those tools has to be money.
It costs money to have enough trained staff to check and double-check for mistakes without delaying benefits for Americans who have earned them. It costs money to build the Cooperative Disability Investigations units that caught the fraud in New York and Puerto Rico and have saved taxpayers hundreds of millions of dollars in those and other cases. It costs money to develop innovative new computer programs which can search SSA’s millions of applications and benefit files to identify suspicious patterns and pinpoint the cases that are the most likely to need a second look. And then it takes money to investigate those leads. SSA also needs more tools to go after people who violate positions of trust and rob Social Security, whether they’re doctors, lawyers, translators, or even Social Security employees - and to make sure if any of those people do commit Social Security fraud, they never get a second chance.
As the Inspector General has recommended, my bill would increase the financial penalties we assess for Social Security fraud committed by people who know better. It would make sure prosecutors can throw the book at conspiracy ringleaders and their conspirators.
And we’d allow SSA to ban doctors who have committed fraud from participating in the disability determination process, just like SSA currently bans claimant representatives who engage in fraud. My bill would also require even more transparency and accountability about what SSA is doing to protect the trust fund.
We’re going to give SSA the resources they need to protect Social Security, but also hold SSA to a very high standard - we want results.
Since our last hearing, Chairman Johnson and I have been working hard to develop a bipartisan approach to fighting fraud, preventing errors, and supporting SSA, and I want to continue that process. We’ve worked on some tough issues in the past, and I believe we can solve this one, too.
But I also want to put my ideas on the table today, and let everyone know I’m willing to work with anyone who believes in Social Security and wants to protect it.
