Woe in Woodlawn: How Social Security fell from grace

January 22, 1995|By John B. O'Donnell and Jim Haner | John B. O'Donnell and Jim Haner,Sun Staff Writers

Once likened to the Marine Corps for its can-do efficiency, the Social Security Administration stumbled in January 1974 and never regained its footing.

That was the month the agency launched Supplemental Security Income, a welfare program created by Congress for the elderly and disabled poor.

The SSI program "marked the agency's fall from grace," wrote Martha Derthick of the University of Virginia in her 1990 book, "Agency Under Stress."

A Depression-era creation of President Franklin D. Roosevelt, the Social Security Administration earned a sterling reputation over 39 years by managing what was essentially an insurance company. The agency, headquartered outside Baltimore, collected "premiums," oversaw a trust fund, and dispensed benefits to its "customers" when they retired.

That mission changed abruptly in 1972 when Congress and the Nixon administration saddled it with the new program, which replaced 1,000 state and local aid plans.

It was like asking an insurance broker to do the job of a doctor, a social worker and a private detective. The agency simply had no experience running a welfare plan.

It was given 14 months to develop thousands of new policies, hire 15,000 employees, break in a new computer system, write more than 100 programs and install a multimillion-dollar communications network to handle the expected load.

Then-Social Security Commissioner Robert M. Ball pleaded with congressional leaders for more time, predicting a disaster. But they ignored him -- then ordered the agency to absorb everyone in the old state disability programs, whether or not they qualified under new federal rules.

In his doctoral thesis at the University of Maryland a decade later, Renato DiPentima -- now a deputy Social Security commissioner -- described the bedlam that ensued.

Agency bureaucrats ignored orders from Congress, and disgruntled managers struggled to draft welfare rules. Computer programs were written before agency officials had time to craft policies governing them.

"Approved policies, computer programs and field office written instructions were frequently in conflict," Mr. DiPentima wrote. And the new network that would connect the agency's 1,400 outposts to the main computer at Woodlawn "was still not operational or even tested and debugged."

Errors were rampant. Thousands of people whose checks didn't show up descended on Social Security offices nationwide, beginning on Day One: Jan. 2, 1974.

Packed field offices were locked by midmorning. Crowds were herded into rented buses, empty storefronts and movie theaters.

The mentally ill, drug addicted, handicapped, blind and elderly were thrown together. Fights broke out.

"It was hell," recalled Nelson David, a claims representative in Brooklyn, N.Y.

Within a week, the computer at Woodlawn was limping badly and inaccessible to field offices.

By 1980, Social Security had made at least $3 billion in overpayments and had acknowledged that 20 percent of disability aid recipients shouldn't be on the rolls.

A Reagan administration purge to get rid of undeserving beneficiaries cut off checks to 600,000 people, many of them genuinely disabled.

An explosion of appeals restored half of them.

Congress blamed Social Security for the crisis.

"I began to feel like a terrible person," said a former Social Security official, recalling how the agency's self-confidence drained away.

"My personal view is that Social Security never recovered."

By 1990, the Reagan and Bush administrations had cut 20,000 Social Security employees -- nearly one-quarter of the agency's work force -- in an effort to automate.

Today, the agency is still struggling to computerize a vast bureaucracy that moves tons of paper at a snail's pace.

Beset by leadership turmoil that has seen a dozen commissioners in 20 years, its staff demoralized, the once respected agency increasingly finds itself the object of public scorn.

Ann Strizak, a Baltimore caseworker, retired in disgust last year after 40 years handling claims. She recalls Day One and everything after with bitterness.

"In the past few years, they were making it impossible to do the job," she said. "There weren't enough hands for all the work. The equipment was old and kept breaking down. They kept changing the rules and policies.

"Social Security was my whole life. Now, I just want to forget about it as fast as I can."

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