Congressional Hearing On Overpayments

From a press release:

House Ways and Means Oversight Subcommittee Chairman Charles Boustany, Jr, MD (R-LA) and Social Security Subcommittee Chairman Sam Johnson (R-TX) today announced that the Subcommittees on Oversight and Social Security will hold a hearing on the accuracy of payments made by the Social Security Administration (SSA).  The hearing will take place on Tuesday, June 14, 2010, in 1100 Longworth House Office Building, beginning at 2:00 P.M. ...

According to the President’s fiscal year 2012 Budget request, next year the SSA is expected to distribute nearly $820 billion in benefits to over 60 million people. ...

[D]istribution of such significant sums of taxpayer dollars means that even a very low overpayment rate can result in a substantial loss to the taxpayer and the Social Security program.  According to the latest available data, in FY 2009 overpayments included $841 million in the OASI program, $1.7 billion in the DI program, and $4.0 billion in the means-tested SSI program. ...

For the five-year period ending fiscal year 2009, errors involving the determination of “substantial gainful activity,” essentially whether earnings are high enough to end eligibility for DI  benefits, account for the majority of overpayment errors, nearly $1 billion annually, or 36 percent of total retirement, survivors, and disability program error dollars.  Of these error dollars, 64 percent resulted from beneficiaries’ failure to report their work activity.  The other 36 percent were associated with the SSA’s failure to schedule a work continuing disability review (CDR) after the beneficiary notified the SSA that they returned to work.  Once a beneficiary notifies the SSA of their earnings, it may be months or years before the SSA sends an overpayment notice to the beneficiary, demanding repayment of sometimes tens of thousands of dollars of accrued overpayments. ...

Medical CDRs are periodic reviews conducted to ensure recipients are still disabled according to Agency rules.  In FY 2009, these reviews have generated $12.50 in savings for every dollar invested. Despite their substantial savings, the frequency of these reviews is declining.  The number of completed medical CDRs fell 65% between FY 2004 and FY 2008, with a backlog of more than 1.5 million medical CDRs at the end of FY 2010.  The SSA Office of Inspector General (OIG) estimates that this backlog may lead to as much as $1.1 billion in overpayments in 2011 alone.

SSI program integrity work has followed a similar pattern, with funding levels and redeterminations peaking in 2003, falling through 2007, and then beginning to rise again in 2008. ...

In announcing the hearing, Chairman Boustany said, “Whether through error or outright fraud, overpayments across the government are a substantial problem costing taxpayers tens of billions of dollars each year.  The Oversight Subcommittee is reviewing these overpayments in a series of hearings, taking a closer look to identify how overpayments occur and funding solutions to better protect taxpayer dollars and program beneficiaries.” 

In announcing the hearing, Chairman Johnson said, “We are facing a debt crisis because Washington spends too much and wastes too much.  Payments that are wrong due to fraud or poor management at Social Security are unacceptable. Americans whose hard earned wages support these programs want, need and deserve better.”

It is hard to follow the numbers being given in this press release but the overpayment rate in Title II appears to be about 0.4% in Title II and 8% in Title XVI, Supplemental Security Income. This is real money but this is not going to get better without more operating funds for the Social Security Administration but the Republicans in control of the House of Representatives are determined to give Social Security far lower operating funds. In general, the attitude of Republicans to programs they dislike but cannot completely eliminate -- with Social Security being the prime example -- is to decry their mistakes and inefficiencies which gives justification in their minds for decreasing funding for those agencies which leads to more mistakes and inefficiencies which justify even lower funding, etc. They cannot make the Social Security Administration disappear but they can hobble it and hold it up to ridicule in the forlorn hope that this will help the American people see Social Security they way they see it, as the original sin that has led to what they regard as a welfare state that sucks away the country's hard earned wealth and gives it to a bunch of free loaders, albeit it freeloaders who mostly worked hard all their lives and paid the taxes based upon the promise that they would be taken care of in their old age.