Extra funds for disability used for raises

March 11, 1994|By John B. O'Donnell | John B. O'Donnell,Washington Bureau of The Sun

WASHINGTON -- Given an extra $200 million last year by Congress to cope with growing problems in its disability programs, the Social Security Administration instead used much the money to finance employee pay raises, an agency official told Congress yesterday.

The alternative would have been layoffs, said Lawrence H. Thompson, the agency's principal deputy commissioner, who was criticized sharply for the decision at a congressional hearing.

He blamed Congress, saying it required federal agencies to grant the raises but did not provide the money to pay for them.

Mr. Thompson also came under fire for the agency's admittedly limited effort to resume reviews of beneficiaries to determine whether they still qualify for disability payments. Those reviews depend in part on recipients' answering a questionnaire. Skeptics wondered whether recipients would give truthful answers if the answers could lead to a loss of benefits.

Rep. J. J. "Jake" Pickle, a Texas Democrat, accused the Woodlawn-based agency of being more interested in putting new people on the disability rolls than on checking up on recipients to see if they still are eligible.

"They get on the rolls, and they ride into the sunset until their Maker calls them to their final rest," Mr. Pickle said, citing statistics showing that only a small fraction of recipients are knocked off the rolls each year.

"The figures are stunning," he told Mr. Thompson. "We've got to do something about them. It seems to me you people are just doing business as usual."

At another point, Mr. Pickle said: "You are just putting your priorities on increasing your pay rather than conducting" reviews of recipients to see if they should be taken off the rolls.

Social Security operates two disability programs -- one for people who have paid Social Security payroll taxes and a welfare program for those who have not.

It pays $50 billion a year to 7 million recipients.

Federal law requires that the nearly 4 million people who receive money from the non-welfare disability program be checked every three years to see if they still qualify; more than one in four are overdue for a review.

Within the past few years, the agency has virtually abandoned these reviews, deciding to focus on the explosion in applications for new disability benefits.

The backlog of applicants awaiting an initial decision is expected to reach 720,000 by Oct. 1, according to an agency spokesman, Phil Gambino.

Claimants who are appealing a denial of benefits push that total close to 1 million, he said.

Faced with the growing backlog, the Clinton administration last year asked Congress for an extra $120 million. Congress approved the $120 million and added an additional $200 million.

But, rejecting President Clinton's recommendation to freeze the pay of federal workers, Congress pressured the administration into accepting the first of nine annual "locality pay" increases.

It did not provide the money for the raises, however, instead telling each agency to absorb the cost. Varying from region to region, these raises are intended to make federal workers' salaries more competitive with private-industry pay. In Maryland, most federal workers got a 4.23 percent raise.

Mr. Thompson indicated yesterday that the pay raise cost Social Security as much as three-quarters of the extra $200 million Congress provided.

Mr. Gambino, the agency spokesman, said later that the figure was much less. Locality pay cost the Social Security Administration $67 million, he said.

Mr. Thompson disputed Mr. Pickle's assertion that reviews of beneficiaries already on the rolls were sacrificed for pay raises, saying that money initially had been earmarked for processing initial claims, "and perhaps that was a bad decision."

Mr. Gambino said later that the agency had not reduced the number of reviews as a result of the locality-pay decision.

"When you come to Congress for the money next time . . . and you use it for other purposes, you will find a pretty deaf ear," Rep. Jim Bunning, a Kentucky Republican, told Mr. Thompson.

Last summer, the General Accounting Office estimated that in the next few years, the failure to do the reviews will cost the agency $1.4 billion in payments to people who should be removed from the rolls.

"Big dollars are slipping away," Rep. Amory Houghton, a New York Republican, said yesterday.

Struggling to resume the reviews, the Social Security Administration began last year to send beneficiaries a questionnaire to help it weed out those who are ineligible.

It mailed 92,000 of the forms and is using the responses to choose 45,000 recipients for full reviews that cost about $1,000, Mr. Thompson said.

This is about one-tenth of the number who should be reviewed.

The mailer was viewed with skepticism by some members of the House Social Security subcommittee, which held yesterday's hearing.

"I have no confidence in a mailer that is being sent to somebody that says . . . 'If you give us this information, we are going to terminate your benefits,' " Mr. Bunning said.

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