Senator MOYNIHAN. And say there are three people up there and there are two parties. They watch each other and they do not have to be told what to do by someone in OMB and your money is going to be there. What worries me is that people do not believe it, and if, on your question-and I will not keep you any longer-but your question about should we mail out these statements on a regular basis. Ten years ago, sir, I would have listened to OMB with great attention on that and deference, which I still do. But do you know the mail you do get today from some groups about your Social Security condition? Have you ever seen those things?

Mr. DELFICO. Not unless I ask for it.

Senator MOYNIHAN. I mean about how they are going to take it away from you.

Mr. DELFICO. Oh, I see. Yes.

Senator MOYNIHAN. You know, "Attention: Post Master. Official Document. Your livelihood is about to be ripped apart," and people get scared. I am quite serious about this. I have 18.5 million people I represent, and I go around to a lot of town meetings.

Oh, you know the 67-year old business person gets this stuff and he or she has seen a lot of things and may not be concerned, but the 82-year old widow gets it and is terrified. You know, "Are they going to take my Social Security away from me?"

A new kind of problem has emerged in the 1980's. This is a new thing, and it affects the level of public acceptance and understanding. We have a problem of stability, of understanding and confidence.

And we thank you both very much. We asked for your advice and we are going to take it with great attention.

Mr. Shipp, I do not think this Committee has ever had a chance to thank you and Mr. Staats' Commission for its work. I would like to-the public never says its thanks very well, as you know very well.

Thank you both, gentlemen.

Mr. DELFICO. Thank you, Mr. Chairman.

Senator MOYNIHAN. And now we have a final and concluding panel. I am conscious of the time that our guests have had to wait here, and we are approaching the noon hour when we are supposed to conclude. So we are going to go right ahead. I am going to ask that if we could keep the statements to some reasonable length so we can conclude on time.

Our panel consists of Mr. Gene Lehrmann, who is Vice Chairman of the Board of Directors of the American Association of Retired Persons, the largest membership organization in the world, I guess-well, I suppose the Baptists would get mad if I said thatbut certainly the largest public association of its kind in our country today; Mrs. Martha McSteen, who is President of the National Committee to Preserve Social Security and Medicare, and formerly an Acting Director of Social Security; and Mr. John Sturdivant, who is National President of the American Federation of Government Employees.

And we welcome you all.

Mr. Lehrmann, this randomized list has you first, and we welcome you, sir.

STATEMENT OF GENE LEHRMANN, VICE CHAIRMAN, BOARD OF DIRECTORS, AMERICAN ASSOCIATION OF RETIRED PERSONS, MADISON, WI

Mr. LEHRMANN. Thank you very much. Good morning, Mr. Chairman.

I am Gene Lehrmann, a member of the Board of Directors of the American Association of Retired Persons. The Association appreciates the opportunity to testify

Senator MOYNIHAN. May I just say that the statement will be put in the record as if read, and you summarize or extemporize as you like.

Mr. LEHRMANN. Very good. Thank you.

The Association appreciates the opportunity to testify on improving confidence in Social Security. AARP believes that confidence in Social Security will be enhanced by establishing an independent agency to administer the program and by providing personal benefit statements to workers. We commend the Chairman for his leadership on these issues of importance to Social Security.

The AARP supports S. 216, introduced by the Chairman to create an independent agency to administer the Social Security and Supplementary Security Income programs. Adoption of this legislation would ensure that both programs are administered in a stable and professional manner.

Confidence in SSA has been eroded over the past several years, due in part to the agency's longstanding problems in management and service delivery. Strong, stable, and independent leadership at SSA could help correct some of these problems.

Throughout most of its history, SSA was hailed as a hallmark Federal agency, providing quality service to the public in a cost-effective way. However, since the late 1970s, SSA has endured successive and rapid turnover in its top leadership. As the General Accounting Office reported, the short tenure of many recent SSA commissioners has contributed to the agency's inability to establish clear management priorities or develop a consistent direction.

Likewise, its current status as part of the Department of Health and Human Services has made it more difficult for SSA to operate solely from a Social Security agenda.

Senator MoYNIHAN. Yes, yes.

Mr. LEHRMANN. Furthermore, the current status of SSA makes it vulnerable to the imposition of policies and practices which inhibit the agency from fulfilling its mission. The most conspicuous example of such policy making is the Office of Management and Budgeting ordered 5 years 17,000 persons staff reduction. That action was unwarranted since the programs administrative cost, financed out of the trust funds, already are extremely low. Decisions such as that one, made without consideration of what is best for Social Security, undermine the faith of current and future beneficiaries in the ability of the Social Security Administration to provide a competent, effective, and humane means of delivering services.

AARP believes that S. 1079, which requires that workers receive Social Security account statements, would bolster worker confidence by reassuring them of the program's ability to provide adequate financial benefits. Such statements also have additional ad

vantages. They remind workers of the comprehensive benefits provided by Social Security. These statements are also valuable retirement planning tools. In addition, they contain important information regarding a worker's earning record. In order for a worker to receive the proper benefit amount, these statements must be accurate.

AARP supports the principals behind both S. 216 and S.1079. They represent important means of bolstering worker confidence in Social Security. We look forward to working with the Chairman and the Committee towards enactment of both these pieces of important legislation.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Lehrmann appears in the appendix.]

Senator MOYNIHAN. We thank you.

Why is it that when the AARP comes before us, they always say everything they have to say in 42 minutes? It is a skill which we have never developed on this side.

We will wait until we have heard from everyone, and now we hear from Mrs. McSteen.

STATEMENT OF MARTHA MCSTEEN, PRESIDENT, NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE, WASHINGTON, DC

Mrs. McSTEEN. Mr. Chairman, I am Martha McSteen, President of the over 5 million-member National Committee to Preserve Social Security and Medicare.

We welcome the emphasis you are placing on improving public confidence in Social Security. Social Security is the foundation on which workers build to protect themselves against the loss of income due to retirement, disability, or death, yet confidence in the system has been shaken.

Seniors are concerned about a decline in service and in the future of the system. The young are concerned that Social Security will not be there for them when they retire despite the taxes that they now pay. All are concerned about "their" Social Security and that Social Security be fair, whether to workers or disabled widows, notch babies, or working spouses. No proposal would do so much to restore public confidence in the system as would the adoption of your legislation to make Social Security an independent agency.

The National Committee's legislative plan made your proposal a priority because it is our conviction that a return of Social Security to independent status would remove the agency a step from the political pressures that have lessened the effectiveness of the agency and undermined the public confidence in the integrity of the agency.

The hallmark of the Social Security Administration through the years has been service to the public. When the millions of Americans who worked hard and paid Social Security taxes came to file for benefits, they rightly expected to receive accurate information about their entitlement in a timely and courteous manner. Generally, Americans were well served. As time passed, however, the

leadership of the Social Security Administration became politically oriented.

Senator MOYNIHAN. Yes.

Mrs. McSTEEN. In the past I have spoken in opposition to the concept of an independent agency because I had faith that the Social Security Administration could be effectively managed to fulfill its commitment to the present and future generations. I have changed my point of view because I believe that faith has been broken.

Mr. Chairman, you have already demonstrated leadership in restoring that faith, as you did most recently as a member of the National Economic Commission. Seniors have been able to count on you. Your introduction of the Social Security Trust Fund Saving Act and your legislation to require SSA to periodically send a personal earnings and benefit estimate statement to every worker over 25 are both bills that strengthen Social Security and would help to restore confidence in the system.

Current fears and misconceptions will be overcome only when responsibility for Social Security and Supplemental Security Income is placed in the hands of a bipartisan board committed to the programs and given full authority to select and employ an executive to manage the agency. Social Security should be managed solely in the interest of American workers and retirees and not to satisfy political agendas.

Mr. Chairman, the National Committee supports the creation of the Office of Beneficiary Ombudsman, as called for in your legislation. We also urge you to adopt a beneficiary bill of rights.

Our country will continue to face a number of important Social Security issues in the future. Now is the time to reassure all Americans that Social Security is sound, reliable, and still has the flexibility to adjust to current and future needs. Never has there been a greater need for stability in the system and confidence in management. Your proposal for an independent agency is truly essential to restore public confidence in Social Security.

Mr. Chairman, thank you for this opportunity to comment. [The prepared statement of Mrs. McSteen appears in the appendix.]

Senator MOYNIHAN. Mrs. McSteen, I want you to know, I have had a plan for years-it has not come to anything-but if there was room for one more statue in Washington, it would be to a public official who changed his or her mind. [Laughter.]

There ought to be one. I mean you are a career civil servant, public servant, a very distinguished one, and now you are in an advocacy position. You have seen both sides of this issue and you have come around. It is really very impressive, and thank you for that.

And, of course, Mr. Sturdivant.

STATEMENT OF JOHN N. STURDIVANT, NATIONAL PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES, AFLCIO, WASHINGTON, DC

Mr. STURDIVANT. Thank you, Mr. Chairman.

I will just summarize my remarks. I have a prepared statement.

Senator MOYNIHAN. Yes, sir.

Mr. STURDIVANT. I am president of the American Federation of Government Employees, AFL-CIO. Our union represents more than 700,000 Federal employees throughout the government, including some 55,000 workers in the Social Security Administration. Thank you for this opportunity to testify on the establishment of Social Security as an independent agency and the issuing of annual account statements for prospective Social Security beneficiaries.

AFGE supports the establishment of Social Security as an independent agency, whose function would be to administer the OASDI and SSI programs. The bill being considered here today, S. 216, accomplishes this goal and specifies that the new independent SSA would be directed by a board consisting of three members with broad authority in setting policy directions, which would also include personnel management policy.

We believe that an independent Social Security board has the potential to provide an important foundation for positive change at SSA. Its authority could serve as an important first step in depoliticizing the agency and assuring that those who run the agency have as their greatest concern the integrity of the Social Security system and the interests of the public that it serves.

However, as it stands, the existing bill has some shortcomings with respect to its provisions for employee rights and protections, such as those which exist in the Civil Service system. In our written testimony, submitted for the record, we detail the amendments we feel are needed before we fully endorse the bill. These amendments are aimed at protecting the employees of SSA and assuring that the merit principals upon which the Civil Service system rests are honored in the new agency.

AFGE also supports S. 212, the bill which directs SSA to provide annual statements of personal earnings and potential benefits for all workers covered by Social Security. We support this bill because we feel it would enhance public confidence in the Social Security system, give workers a welcome opportunity to reconcile their private records with those of the SSA, and finally, because it would encourage the SSA to pay more careful attention to the posting of earnings.

Our only concerns relate to the implementation of the new law. As a new service, the issuing of these statements will cost money and additional resources. One of AFGE's greatest difficulties with the SSA has to do with understaffing, a problem which has arisen from reduced staffing levels at the same time that the workload has increased due to new functions and an increased number of beneficiaries. To accommodate the costs associated with the provisions of the new service, we ask that the Congress be certain to provide the additional resources necessary to meet the increased demands which will come from this new law.

Again, I wish to express my appreciation to the Committee for moving forward so quickly in this Congress with both pieces of this legislation. We want to see the SSA established as an independent agency, and we believe that it can be accomplished in a manner which also provides clear employee protections. We look forward to working with the Committee in order to address our concerns with the existing bill.