April 12, 1995

As part of the Clinton Administration's continuing efforts to reinvent the federal government, Vice President Al Gore today announced a set of reinvention initiatives for the Social Security Administration.

While the President was in Warm Springs, Ga., commemorating the 50th anniversary of the death of President Franklin D. Roosevelt, Vice President Gore said: "Social Security is one of FDR's most important legacies to the nation."

In unveiling reinvention proposals to improve social security operations while preserving FDR's legacy, the Vice President said: "We'll have a system ready for the next century providing world class service to its customers."

The Clinton-Gore reinvention recommendations for Social Security include:

-- Payment day cycling for new beneficiaries: Monthly payments are currently paid on the third of each month. This results in peak workloads for SSA and the banking and business communities. With approximately 3.5 million beneficiaries coming on the rolls annually, there is real concern that SSA could not cope with the workloads.
Therefore, new beneficiaries will have their payments staggered over a number of payment dates throughout the month to eliminate workload spikes and allow SSA to provide better customer service without adding staff.

In developing this proposal the Social Security Administration followed the practice of the Administration's National Performance Review by using customer input to improve SSA operations. Interviews with the public conducted in "focus groups" showed that many retirees have already built their monthly activities around the day their payment arrives. Social Security Commissioner Shirley Chater said: "To change that practice would be disruptive to them, so the payment day for those already on SSA's roles will remain the same unless they ask to participate in our new cycling of payments." That is why payment cycling will apply only to new Social Security beneficiaries. One day of every week in the month would, in fact, become "payment day" for a certain
number of new Social Security beneficiaries.

-- Improve 1-800 telephone service: SSA spent the last six months meeting with some of America's top-rated customer telephone service companies to determine the best ways SSA can provide world class telephone service. SSA learned that these companies rely on modern computer systems to give them the capacity and capability to provide
quick and accurate service. SSA is striving to develop the same capability. Commissioner Chater said, "We need to create a technological infrastructure that will allow us to do more and do it better without asking for more resources. Nothing is more important to our agency than getting this infrastructure up and running and serving our customers."

-- Direct deposit/electronic benefits transfer services: SSA will increase the number of recipients who are paid by direct deposit in three phases over four years. The first, already underway, is directed to all new beneficiaries who have bank accounts. The second phase will focus on those with bank accounts and who do not use direct deposit services. The final phase will require that all beneficiaries without bank accounts
must select one of the electronic benefits transfer services that will be available to receive their monthly benefit payments.

More than forty percent of Social Security's 43 million beneficiaries are still paid by check. Direct deposit would save 35 cents per check, or $70 million per year. In addition, more than 35,000 checks are reported lost each month, and the overwhelming majority of these problems would be eliminated by going to direct deposit.

-- One stop benefit application: The Administration wants to give people who are applying for retirement or Medicare benefits more options. Many people may find it more convenient and more comfortable to file for benefits through their own personnel office at work. Today, about one percent of people filing for benefits use this option -- and where they are able to do so they use the old paper application process.

The Social Security Administration wants to create a controlled, confidential, electronic process through which employees at large companies can quickly file for retirement and/or Medicare through the company personnel office. This option would allow workers to apply for a company pension, Social Security and health benefits all at one time and in one place.

-- Regional office consolidation: SSA will be moving hundreds of front-office administrative employees into direct service positions by consolidating 10 regional offices into five. "In an age of instantaneous electronic communication, we will be able to function just as efficiently with five fewer administrative sites," Commissioner Chater said.

-- Stop collecting attorneys' fees: SSA will no longer be a collection agency for attorneys who have clients who appeal Social Security judgments. SSA now approves the fee an attorney (or non-attorney representative) may charge and withholds a part of past due benefits for the attorney. "We are getting out of that business," Commissioner Chater said. "The agency will no longer approve fees or withhold benefits to pay attorneys." Social Security workers now involved in paying attorneys would now be able to provide direct service to beneficiaries. She noted, however, that there will be statutory limits on what attorneys may charge.

-- Employers' electronic wage reporting: All employers, except thosewho employ only household workers, will be required to file W-2 wage reports with SSA on magnetic media or by electronic transmission. Time and effort now spent in processing and checking paper will be eliminated to allow Social Security to focus more on the important needs of customers.

-- Improve the disability adjudication process: State agencies currently have the authority to make disability determinations, fully financed by SSA and following SSA rules. Average claim processing times vary greatly by state, ranging from as low as 42 days to as high as 115 days. SSA will work with the states to jointly establish minimum
performance standards and a period of time during which states will be required to meet these standards. In addition "performance enhancement teams" from the highest performing states will be made available on an as-needed basis to provide on-site assistance. SSA will also encourage the formation of labor/management partnerships in order to find ways of increasing performance. This initiative is intended to raise the level
of the lowest performing states and to narrow the gap between the highest and lowest performing states.

-- Immigration and Naturalization Service (INS) will process applications for Social Security cards: Aliens will apply for Social Security cards at the time they complete INS immigration paperwork. Currently, the alien applicant is required to furnish almost the same information to SSA as to INS. This will provide "one stop" service, will
reduce the potential for issuing cards based on fraudulent INS documents and will result in efficiencies for the government.

-- End duplicative SSA-IRS filing: Beneficiaries who work and earn over the exempt amount are required to report their earnings to SSA by April 15th each year. Beneficiaries are also required to report their wages for the prior year. To reduce the paperwork burden on the public and provide "one stop" service, beneficiaries will only report to IRS and include on their income tax return the amount that would otherwise be
reported to SSA. IRS will issue any payment due to SSA beneficiaries. In addition, SSA and IRS will work together to determine how IRS can offset overpayment against tax refunds.

These proposals will result in $850 million in savings from FY 1997 to FY 2000.

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