COMMUNICATIONS

STATEMENT OF THE NATIONAL TREASURY EMPLOYEES UNION

Mr. Chairman and Members of the Subcommittee:

I am Robert M. Tobias, National president of the National Treasury Employees Union. NTEU is the exclusive representative of over 140,000 Federal workers including all Social Security Administration employees in HHS regional offices, and attorneys in the Office of Hearings and Appeals. I am pleased to have the opportunity to testify today on H.R. 791, which would create an independent Social Security Administration.

NTEU strongly supports the establishment of SSA as an independent agency. The Social Security Administration manages a program that is of vital importance to most Americans. Over the past eight years, public confidence in Social Security has greatly declined because of arbitrary and capricious budgetary and policy directives imposed on the agency.

The current Administrator of Social Security has been pushing forward with a foolhardy plan of reducing SSA employees by 17,000 positions over six years. This plan, which was recommended by the Grace Commission and imposed by OMB, is a calculated assault on the machinery that serves millions of senior citizens and needy Americans. The theme of "SSA can do more with less" makes a mockery of the dedicated service of thousands of SSA employees who are enduring increased workload pressures and face disruption of their careers.

Surveys taken both by GAO and by SSA itself have shown steadily declining staff morale. GAO surveyed SSA employees about the effects of staff reductions, and found that 56% believed the losses they had experienced had a negative effect on the ability of their units to produce quality work. The most frequently mentioned effects were larger workloads for remaining staff to process, lower morale and more stress, apathy, frustration, backlogs, untimely processing of workloads, and tasks inappropriate to grade level.

In August, 1987, SSA distributed a 39-item opinion poll to its 9,000 supervisors and managers to assist in "gauging the morale and communications needs of SSA's managerial workforce." The response rate to this mailout was 55%. Dissatisfaction with SSA's downsizing process was expressed by 67% of the respondents, with operations managers (70.8%) more dissatisfied than staff supervisors (58.2%). About one third (1/3) of respondents said they rarely leave the office with a sense of accomplishment and less than one-fourth recommended SSA as a good place to work. A majority of managers (76.9%) said SSA was not a better place to work than it was a year ago. Only one in ten believed that things would improve.

SSA's management of staff reductions has been particularly abysmal in the Program Service Centers (PSC's). These Centers have borne significant staff cuts, as well as upheaval in the critical Claims Authorizer (CA) positions, caused by shifting final claims authorization from PSC's to district offices. The most complex and error-prone cases, that were formerly handled by CA's, have been thrust upon District Offices which lack the experienced and trained people to handle this additional workload. In 1987, NTEU said that this policy-called DOFA, for District Office Final Authorization-would only lead to higher rates and overpayments. This and more has been borne out by the GAO.

GAO, in its report Payment Accuracy Rates Are Overstated, (NRD 88-10) documented the magnitude of the error rate problem. They found the error rate to be twice what SSA is reporting, with errors affecting one out of every eight beneficiaries for an average of five years, and costing the trust funds $1.1 billion a year, compared to SSA's $600 million estimate.

A main reason for the error rate difference between SSA and GAO is that SSA doesn't count underpayments. About 60% of all cases in error are underpayments,

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and those errors work hardships on retired workers. GAO found that over one million Social Security recipients are being shortchanged an average of $36.60 per month.

SSA staff reductions and mismanaged modernization efforts are costing over a million senior citizens on fixed incomes a bag of groceries a month. They are costing the Social Security trust funds $1.1 billion annually. And they are taking a priceless toll on the thousands of dedicated employees who sincerely want to serve this country's Social Security recipients effectively and efficiently, but are thwarted in their efforts by a meat cleaver approach to budget reduction. It seems to me that this is a senseless way to run one of the most important programs in the nation.

The passage of H.R. 791 cannot, by itself, resolve all of these very serious problems. The creation of an independent SSA, however, would be a vital first step in reversing the trend of the last eight years.

H.R. 791 would create a 3 member, bi-partisan board, serving for staggered six year terms to direct and oversee the functions of the Social Security Administration. The Board would appoint an Executive Director, who would serve as chief operating officer for the agency, for a four year term. Since 1973, SSA has had 10 Commissioners or Acting Commissioners, at least one of which was removed from office for attempting to defend the agency from the Administration's assault of staff reductions. The management structure provided in H.R. 791 would provide badly needed continuity in leadership at SSA, and help to prevent the removal of high level officials for attempting to do their jobs.

H.R. 791 would also provide the new Social Security Administration with demonstration project authority to perform certain management functions currently controlled by the Office of Personnel Management (OPM) and the General Services Administration. (GSA) The Board would have authority to test the new agency's capacity to recruit, compensate, and mange personnel, and to acquire and maintain facilities and automated data processing equipment. We believe that language should be added to the bill to make these demonstration projects subject to collective bargaining. With that addition, we wholeheartedly support these provisions.

NTEU believes that the Federal Government should decentralize its personnel practices, and give the individual agencies much of the authority for recruitment, pay, and management that is currently in the hands of OPM. The personnel demonstration projects contained in H.R. 791 would both move SSA in that direction, and if successful, serve as a government-wide example of the feasibility of decentralization.

Earlier in this testimony, we cited GAO and SSA surveys that showed low morale and frustration on the part of SSA managers and rank-and-file employees. NTEU believes that the demonstration authority provided in this legislation provides a unique opportunity for resolving these problems. Labor and management, working together toward a shared goal of service to the public, will be able to realistically address the needs of the agency and its workers and take steps to meet those needs, even within the climate of budget restraint that will continue to be a factor for years to come. NTEU would welcome the opportunity to work with the leaders of an independent SSA to address the problems of the agency in an effective, and fiscally prudent manner.

The personnel provision of H.R. 791 would also allow the SSA Board to implement innovative policies that would also improve both the agency's ability to serve its clients and employee morale and advancement. For example, for several years, NTEU has been working with SSA to revise the criteria for appointment to Administrative Law Judge (ALJ) positions, so that SSA staff attorneys in the Office of Hearings and Appeals could be promoted to these positions.

In October 1984 Congress endorsed the idea that SSA attorneys serve as ALJs, and directed the Secretary of Health and Human Services to submit a report to two Congressional committees on actions the secretary had taken to achieve this goal (P.L. 98-460, Section 13). The original version of the legislation, which was approved by this subcommittee in the 98th Congress, would have forced OPM to appoint SSA attorneys with seven years experience in the area as ALJs. Congress chose not to force this action on OPM after OPM represented to SSA and Congress that changes in the selection criteria were made which would enable SSA attorneys to attain ALJ positions.

In the summer of 1987, for the first time since 1983, OPM solicited applications from attorneys interested in becoming ALJs. Many staff attorneys applied for the position at that time. When OPM's basic ratings of all candidates were released in March 1988, SSA attorneys and agency officials were surprised to find that OPM had not effectively revised its criteria as promised. OPM gave SSA staff attorneys, as a class, such low ratings that few will be selected as judges, despite the extensive

experience in social security law many of them hold. Many other applicants with no experience in SSA law received much higher ratings by OPM. In October 1988, the current Social Security Administrator wrote to the Director of OPM urging that the ALJ selection criteria be revised. The OPM Director refused this request.

NTEU feels strongly that Social Security claimants should have their cases reviewed by the most qualified people possible. We believe that many OHA staff attorneys have the qualifications necessary to be effective ALJ's, and that it violates both common sense and the will of Congress for OPM to unilaterally deny these attorneys the ability to advance to ALJ positions. The Board could utilize its demonstration project authority to experiment with promoting staff attorneys, and the Comptroller General, with the authority provided in H.R. 791, could review the experiment and insure that claimants receive fair treatment from these new ALJs. The demonstration project authority allowing the SSA Board to contract for automated data processing equipment will also help to resolve some of SSA's current problems. Much of the reduction of personnel that has taken place at SSA has ostensibly been linked to office automation and systems modernization. This is in spite of the fact that those efforts have fallen greatly behind schedule, and new computer systems are being brought into severely understaffed offices with workers who can barely meet the existing workload. Little or no training has been provided to staff on the new computer systems. When new equipment is introduced it generally follows that productivity temporarily declines while training is taking place. No accommodation has been made for this, or for the fact that there is not enough time for the overworked staff to complete routine work and learn the new systems. If one entity, the Board, has authority over both personnel and systems management, we are likely to see more coordination between modernization and staffing needs. This can only improve services to the public.

NTEU believes that Section 105(b) of H.R. 791 should be amended to insure that existing collective bargaining agreements be carried over to the new agency, and not be subject to change or modification by the board during the remainder of their current terms. In both the law creating the Department of Education (PL 96-88, 20 USC 3505(a)) and the law creating the Department of Veteran's Affairs (PL 100-527, Section II), language is included allowing changes in pre-existing agreements only in accordance with current law. This simple change will insure that the Board cannot arbitrarily alter existing agreements.

In conclusion, we believe that the passage of H.R. 791 would go a long way toward remedying the major deficiencies in SSA's ability to render responsive caring service to the public. It would also greatly enhance employee morale and pride in service. NTEU is willing to work with you in any way necessary to help insure enactment of this important legislation.

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