Lapas attēli
PDF
ePub

Thank you for the opportunity to appear before you today to present AFGE's views on these important bills, and I would be happy to try to respond to any questions that you might have, Mr. Chairman.

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

Senator MOYNIHAN. Thank you, sir.

May I say that it is a very special thing to have you here. I am indeed getting in my anecdotage, and there is nothing to be done about that. But the first assignment I had as a young Assistant Secretary of Labor in President Kennedy's Administration was to be Secretary to the Committee on Employee Management Relations, which recommended in the course of his first year in office that at long last, after the postal employees had been organized for a century

Mr. STURDIVANT. Yes.

Senator MOYNIHAN. [continuing]. That there be union recognition in the Federal government, and the AFGE was a little group of about 40,000 people in those days, and you now have 700,000, and you have every right. You do your work well. Any points you want to make in your testimony about what you would like to see in this bill will be listened to with great attention by this person, this member of the Committee, and you are representing your employ

ees.

Mr. STURDIVANT. Thank you, Mr. Chairman.

One of the things that-in fact, I just came back from Chicago where-

Senator MOYNIHAN. You are representing your members, not employees.

Mr. STURDIVANT [continuing]. I had an opportunity to visit the Harold Washington Program Service Center in Chicago, and I just have to continue to point out the problems we are having with the understaffing in the Social Security Administration.

Senator MOYNIHAN. Let me ask Mrs. McSteen and Mr. Lehr

mann.

Do you get reports of this as a problem, Mr. Lehrmann?

Mr. LEHRMANN. Yes, periodically we do get reports from people who are trying to get information and who have to wait in long lines to get information. So there is, we think, a lack of direct response to people and something that is very important as far as older people are concerned.

Senator MOYNIHAN. Mrs. McSteen?

Mrs. McSTEEN. Yes, there is great concern and I receive not only letters from the members, but also anonymous calls from Social Security people who complain about what is going or not going on. Senator MOYNIHAN. Yes.

You know, it is not as if they were not a lean operation. I mean it costs 1 penny on the dollar to look after 39 million beneficiaries and 125 million contributors. It was Bob Ball, I think, who said it very nicely that when automation came along, yes, you are going to save some manpower, and that is good. But should you then have said, "Well, since we do not have a problem of overhead here, can we use this to provide better services where we are a little short?" instead of cutting 17,000 people out of a group of 80,000. If

they have done that at the Pentagon lately, I have not heard of it. Have you?

Listen it is a matter of great importance to this Committee that the AARP and your organization, Mrs. McSteen, should be here and that we have uniformity. We have agreement on the three major organizations, and you do not always agree, nor should you. But you do agree here, and you have all earned the right to speak. I mean, the organizational effort, the attention to detail, the commitment that you all have brought to this are very good. I want to say this could not be a more positive note on which to end this hearing.

I want to ask our very capable staff if they have any particular questions they would like to

I would like especially to thank Mr. Ed Lopez, who is the professional staff who has put the hearing together.

I thank our indefatigable recorder. We have given you a lot to work with today.

I think this promises a very important change in the confidence senior Americans, senior citizens, can have in a system that is absolutely essential to them, and they have paid into it and they have a right to receive benefits. But perhaps more importantly, the people who are now in the working years, their support of the system is absolutely essential, and they have to know that they are supporting something that will be there when they need it and also to know it is there when they might need it now in circumstances of personal difficulty.

I am very pleased. I am grateful to you all. I am grateful to our audience for its kind attention, and we will call the hearing closed. [Whereupon, at 12:07 p.m., the hearing was concluded.]

APPENDIX

ALPHABETICAL LISTING AND MATERIAL SUBMITTED

PREPARED STATEMENT OF ROBERT M. BALL

Mr. Chairmam and members of the committee: My name is Robert Ball. I was Commissioner of Social Security from 1962 to 1973. Prior to my appointment by President Kennedy I was a civil service employee of the Social Security Administration for some twenty years. Since leaving the government in 1973, I have continued to write and speak about Social Security and related programs. I was a member of the 1978-79 Advisory Council on Social Security and more recently was a member of the National Commission on Social Security Reform, the Greenspan Commission, whose recommendations were included in the 1983 Amendments.

I am testifying today as the Chair of the Independent Agency and Administration Committee of the Save Our Security (SOS) Coalition. SOS is a coalition of over 100 national, state, and local organizations with a combined membership of over 40 million people divided more or less equally between those currently contributing to the Social Security program and those currently receiving benefits. The coalition includes labor organizations, organizations of the elderly, organizations of the disabled and religious, and charitable and educational organizations. The coalition was founded some ten years ago by the late Wilbur J. Cohen, myself and many other individuals and organizations with a strong interest in preserving a sound Social Security system. Its present Chair is Arthur J. Flemming, former Secretary of Health, Education and Welfare. The views expressed here, of course, are not necessarily those of any other organization with which I am associated.

I would like first to tell why we in SOS strongly favor the passage of S. 216 and then why we also strongly favor passage of S. 1079.

THE IMPORTANCE OF REESTABLISHING AN INDEPENDENT SOCIAL SECURITY BOARD

SOS believes it would add significantly to public understanding of the trustee character of Social Security as a retirement and group insurance plan if the program were administered by a Board directly under the President. Social Security with over 60,000 employees and some 1300 district offices across the country is one of the very largest direct line operations of the Federal government. It does not make sense administratively to have this huge program, which intimately touches the lives of just about every American family, operated as a subordinate part of another government agency. The management of Social Security could be made more responsive to the needs of its beneficiaries and contributors if it were free from the frequent changes in the levels of service to the public which grow out of short-term decisions about employment ceilings and the varying management value systems which follow the frequent changes of Health and Human Services Secretaries and their immediate staffs. But most important, an independent Board would be visible evidence that contributory social insurance was a trust responsibility with vast commitments for the future and therefore different from other government programs. Just about every American has a major stake in protecting the long-term commitments of the Social Security program from fluctuations in politics and policy. The administration of Social Security by a separate Board would strengthen public confidence in the security of the long-run commitments of the program and in the freedom of the administrative operations from short-run political influence. It would give emphasis to the fact that in this program the government is acting as trustee for those who have built up rights under the system. We are, therefore, very much in favor of the passage of S. 216.

(43)

It seems to us that setting up social Security as an independent agency under a bi-partisan Board is particularly important at this time. There has been an erosion of public confidence in the system due in part to financial problems in the late 1970's and early 1980's, and although the financing of the program is now on a sound basis, it is going to take some time to restore full public confidence. Making the program an independent agency under a Board form of organization with bipartisan membership would be a helpful step in bringing about this much needed restoration of confidence.

The issues here are not by any means entirely administrative. The argument for an independent agency is largely administrative, but the argument for the Board form of organization on a bi-partisan basis with the continuity arising from term appointments is desirable primarily to underline the long-range character and trustee nature of the government's responsibility. In addition, the fact that the Board is bi-partisan acts as a brake on major swings in policy, particularly those of doubtful validity. It seems unlikely that under a Board form of organization we would have had the major shifts in the administration of the disability program that has characterized the last several years. A Board with a minority member would have been unlikely to remove hundreds of thousands of people from the disability rolls and later restore benefits to a large percentage of them through the appeals process. Nor would a Board have adopted a policy stance that caused many Governors under contract with Social Security to refuse to carry out Social Security's directions. And a Board would have been unlikely to pursue a course overturned by the courts in literally hundreds of cases. I would have expected, rather, that at least the minority member of the Board would have raised public questions about the policy before it was adopted, and it is even more likely that a majority of the Board would have thought a long time before adopting such a damaging set of policies. Under the organizational set-up in effect in the 1980's, policy seems to have gone directly into action by agreement between OMB and the Commissioner of Social Security without much review, certainly without a bi-partisan review.

Even on smaller matters such as administrative reorganizations, I believe a Board would have been more conservative and advisedly so. For awhile Social Security seemed to be getting a new Commissioner every year or two and with each new one a sweeping reorganization. Such constant change is damaging to performance.

Another example of an administrative decision where the checks and balances of a bi-partisan board might have been useful is in the planned reduction of Social Security's staff over the six-year period from 1984 to 1990. The plan has been for a 20 percent reduction from the 1984 full-time equivalent level of approximately 80,000 people down to 63,000.

There is little doubt but that some reduction in staff has been desirable due to the further automation of Social Security procedures. But a question can be legitimately raised about the plan adopted. It may be true, as some studies have suggested, that Social Security is delivering a level of service that the public perceives as not greatly inferior to what it delivered in 1984, but I believe a bipartisan Board would have carefully examined whether service could and should have been improved from the 1984 level as automation was further introduced, rather than translating the technological advances entirely into reduced staffing. I believe, too, a bipartisan Board would have looked at some of the less visible operations of Social Security-the selection of representative payees and an accounting of their trusteeship, the reinvestigation of disability recipients diaried for possible recovery, post-entitlement work generally and the administration of the Supplementary Security Insurance program, including the vigor of the outreach program.

The reduction of 17,000 full-time equivalent positions was a number negotiated with the Office of Management and Budget primarily with the object of reducing administrative costs. But in OASDI the more relevant question may be how to maintain good public service and how to improve service, not how to get by with fewer people. A bi-partisan Board might well have taken the view that, since administrative costs are only about I cent out of each Social Security dollar and are paid for out of dedicated deductions from workers' earnings and matching contributions from employers, savings from automation should go first to improved servicemaking sure that district offices are efficient and pleasant places for the public to carry on its business with Social Security, making sure there is adequate outreach service from the district offices to people who have difficulty getting to the office, making sure there is adequate public information activity, making sure handicapped people have sufficient help with their Social Security business, making sure the telephone service is adequate so that people do not have to wait on the phone for long periods of time in order to reach an office, and, in general, making sure the administrative values are those of the highest level of a public service agency.

What has actually happened is a negotiated arrangement between Social Security and OMB, with the emphasis on the reduction of staff and lower administrative cost and without the kind of emphasis on service levels that is important in this kind of program. It may even be that saving administrative money has cost more in benefit payments because of an inability to pay proper attention to the integrity of the payment rolls. I believe a bi-partisan Board very likely would have done better, or the minority member would have made an issue of it, just as I believe he or she would have protested the policy decisions that led to the disability disaster.

So there is in the bi-partisan Board organization, I believe, a check on unwise action as well as an institutional arrangement which will give people confidence in the handling of the finances of the program and confidence in the objectivity of administration. By and large, these are the advantages of a Board form of organization rather than day-today administrative efficiency.

The case for an independent agency can be made on administrative grounds alone. As pointed out by the Grace Commission, making a huge operation like Social Security a subordinate part of a Department creates duplicating staff services and repetitive levels of decision-making. Duplication is almost unavoidable. Social Security is big enough to have its own personnel services, budgeting, comptroller activities and everything it takes to make a big organization work. At the same time, a Secretary's staff feels the need to understand and control the activities of the subordinate unit so that the relationship between the agency and the outside world tends to be filtered through a second level of staff activity.

Now it is true that, in practice, during the initial period the Social Security Administration was part of a Department, it enjoyed a very substantial degree of independence. This was certainly true when I was there, but I have a strong impression that the independence has eroded. It is very likely that one reason there was such a contrast in the implementation of the Medicare program, which went extremely smoothly, and the implementation of the Supplemental Security Income program, which was pretty bumpy, was the degree of delegation which the Secretary and his staff were willing to make to the Social Security Administration. In the implementation of Medicare there was a very strong delegation to Social Security, and it was the only way that the program could have been put into effect successfully in the time available. The tasks were enormous, and if decisions had been held up at the Secretary's level, there would have been an impossible situation. In that setting, Social Security operated almost as if it had been an independent agency, making its own arrangements with the rest of the government and receiving great help and support from the rest of the government.

În the case of the implementation of the Supplemental Security Income program, policies had to be cleared in the Secretary's Office whether they were fundamental questions of direction or not, whether they were solely administrative issues, procurement issues, or whatever, and the result was inevitable delay, duplication, and lack of clarity in instructions out to the field where the work was being done.

So it is possible to administer the Social Security program well within a Department, providing there is more or less complete delegation to the organization. On the other hand, there is almost no contribution, if any, to the smooth functioning of Social Security from being a subordinate part of a Department, and in recent years there have been very strong disadvantages in the layers of clearances required.

Mr. Chairman, I believe S. 216 also greatly improves both the appearance and reality of the trustee function. Under present law, the managing trustee of the Social Security trust funds is the Secretary of the Treasury. He is very much in charge. The other trustees do not have much authority under the Act although they do have responsibility in connection with the trustees' annual report to Congress. Investment is just about completely in the hands of the Secretary of the Treasury, with the Board as a whole charged only with reviewing the general policies followed in managing the trust funds and recommending changes in such policies. Ordinarily this does not create difficulty because the statute itself carefully determines the coupon rate on new investments in securities issued solely to the trust funds, which in recent years have been the only investment instruments used. The areas in which the statute grants discretion to the Treasury are: (1) the extent to which the funds might buy and sell United States' securities on the open market; (2) the extent to which the funds might buy and sell securities guaranteed as to principal and interest by the United States; and (3) what the maturity dates should be on the obligations issued exclusively to the trust funds. The trustees for a long time have adopted a policy on maturity dates designed to come as close as possible to having the whole portfolio evenly distributed over a 15-year period. Nevertheless, the managing trustee has considerable statutory discretion on all three of these matters.

« iepriekšējāTurpināt »