Senator HARKIN. Why are we doing that?

Mrs. KING. Statutorily, we are required to, Senator. The law requires that. Two carriers were selected for the entire Federal Government, and all of us have to go with one or the other. While I understand that the costs of the carrier assigned to us are comparable, some requirements that GSA has in switching us over are going to amount to an additional $10 to $12 million for this agency. Senator HARKIN. Now, I am told here that the Social Security Administration can obtain an exemption from GSA as permitted in existing law. Or from OMB on appeal if GSA denies it. Have you tried to get an exemption for this?

Mrs. KING. I have, Mr. Chairman. I have written my request for an exemption. In fact, I did that not so much because SSA had been assigned another carrier. That did not bother me. Really, I had no indication of the fact that it was going to mean additional costs. I assumed, as I am sure you did, that if we were going to do this thing, it was not going to cost us any more.

I did it based on my concern for the millions of people who call us and who are now getting more and more accustomed to calling our 800 number and the millions that we have already invested in publicizing the 800 number and the best times to call. The convenience of the public we are trying to serve would, in fact, justify our getting such an exemption. We have not been successful thus far.

Senator HARKIN. Well, how would a user call up using FTS 2000? How would that work?

Mrs. KING. Well, it would be a transparent distinction for users as long as they had the correct telephone number. Which brings me to another point.

As you know, in telephone directories around the country, the 800 number is already listed and we are going to be listing local telephone numbers. But the current 800 telephone number, 2345SSA, is listed in every telephone directory in the country.

Senator HARKIN. That will all have to change.

Mrs. KING. They will all have to change and as you know, those books are published cyclically, so all that is going to take time. Senator HARKIN. And will it be an 800 number though?

Mrs. KING. It will be an 800, toll-free number, yes. There will just be seven different numbers.

COSTS AND SAVINGS UNDER FTS 2000

Senator HARKIN. Will there be future cost savings to this? Mrs. KING. I have no way of answering that question, but I am ably assisted here by the Deputy Assistant Secretary for Budget at the Department, Dennis Williams.

Senator HARKIN. I guess I do not mind if there is a $10 million, one-time cost by which you are going to save millions on down the road. I would like to know that. But if we are not, then what is the use of doing it?

Mr. WILLIAMS. These questions are perhaps more properly directed to GSA. But, I think to look at the cost benefit of transferring to FTS 2000, you really have to look at systemwide costs. That is to say, total Government long distance calls, not just SSA.

Any single user may experience higher costs or lower costs. But systemwide, the cost to the Government will be lower. Precisely what those numbers are and what the statistics are, one would have to ask GSA. But, I do not think you can make an assessment about what a good idea FTS 2000 is just by looking at one user. You have to really look at Governmentwide usage, Governmentwide costs before and after.

I think, in this particular situation, SSA had an exceptionally good cost and by switching to FTS 2000, SSA will experience somewhat higher costs than it does now, plus the inconvenience of changing the number.

Senator HARKIN. I am sorry. What was your answer to my question when I asked you if you had filed for an exemption?

Mrs. KING. Yes; I did. I pursued the exemption process last year with HHS and GSA when I realized what problems the change could cause SSA.

Senator HARKIN. What did they say?

Mrs. KING. We did not get a favorable response from GSA. We have subsequently entered into a number of discussions, and John Dyer, the Deputy Commissioner for Finance, Assessment, and Management was privy to a couple of those.

Mr. DYER. Basically, Senator, they said that under the regulations and the rules they had, we had to come under FTS 2000. Even though the cost for the 800 number part of our system would go higher, they said that was not sufficient basis for an exception. Thus, they took the position that Dennis Williams just gave you, which is, that overall the cost to the Government will come down. In our case, they go up because of the way they are billing us for 800 under their levelization fees and what not.

Senator HARKIN. I believe this is the biggest user of long distance of any agency in the entire Government.

Mr. DYER. Yes; we will more than double the volume on FTS 2000 when we come on with our 800 number calls.

Senator HARKIN. Well, I do not know. I will have to take more of a look at this.

Mrs. KING. We will be happy to provide the chairman with any information we can that we have got.

Senator HARKIN. I would like to see any information you have.

PROCESSING ZEBLEY CASES

Let me just cover one more thing on the Zebley case. We have got $232 million in the supplemental budget you requested. But according to the budget justification, you only plan to spend about $94 million in fiscal year 1991, the balance not used until 1992 and 1993. Why should we not just give you the $94 million needed to get through fiscal year 1991, and consider the rest in connection with the regular 1992 appropriations bill?

Mrs. KING. Mr. Chairman, one of the things we are trying to do, very quickly, is to ensure that these youngsters with disabilities who have already waited too long, in my opinion, can be assured that we will begin to address their cases and continue that process. To do that we need to give some assurances, long term, to our State disability determination services partners who are going to be doing the bulk of this work. And we want to make sure that we

have got the resources to carry the work through, without interruption, so that next year there will not be a break while we have to seek additional funding. The full amount would enable a smooth

flowing process.

What is clear, and what I would assure the chairman of, is that this money, as requested, can only be used for that Zebley class, which is going to be determined, I understand, very shortly because we are now very close to having closed the agreement.

But it is only to be used for that Zebley class so that not all the money will be spent if, indeed, our projections for the number of people to be served are too high. It will only be used for that class. We have set up some accounting systems to make sure that we know that the funding that will come from the supplemental request will be used only for those cases. And we will certainly make sure that the money comes back to you if, indeed, we do not need to use it all.

What we do want is a continual opportunity to serve people. The estimates that we have given you for what we will use in fiscal year 1991 and fiscal year 1992 are only estimates. If we are more successful than that, and we are able to readjudicate those cases more quickly, we want to be able to do that.

We know already, we are going to bring on additional administrative law judges. We know the State DDS's will be hiring people. We have already begun the training in all of our regions to make sure that people know what it is they need to do. And we are going to try and find those youngsters as quickly as possible.

My hope is that we can do it all before fiscal year 1992. But we broke it out in estimates like that and we would like very much to have use of those dollars through fiscal year 1993-just_on_the outside chance that it takes us longer to find some of the children in the class.

Senator HARKIN. OK. That is really all I have. Thank you very much, Mrs. King.

Mrs. KING. Thank you, Mr. Chairman.

QUESTIONS SUBMITTED BY THE SUBCOMMITTEE

Senator HARKIN. There will be some additional questions from various Senators which we will submit to you for your response. [The following questions were not asked at the hearing, but were submitted to the administration for response subsequent to the hearing:]

QUESTIONS SUBMITTED BY THE SUBCOMMITTEE

ZEBLEY SUPPLEMENTAL APPROPRIATION

Question. The administration is requesting $232 million in a supplemental to implement the Sullivan v. Zebley Supreme Court decision. According to your budget justifications, you only plan to spend about $94 million of this amount in fiscal 1991; the balance will not actually be utilized until fiscal 1992 and 1993 to process an estimated 237,000 retroactive childhood disability claims.

Why shouldn't Congress just give you the $94 million needed to get through fiscal 1991, and consider the rest in connection with the regular fiscal 1992 appropriations bill?

Answer. These youngsters with disabilities have already waited too long and we need to assure them that we will begin to address their cases and continue that process to completion in the next 2 to 3 years.

Question. I understand that the courts still have not decided how far back you must go to review previously denied cases. Based on this delay do you have a more current estimate of what is needed in 1991 and 1992 to process the Zebley case?

Answer. The court order was signed on March 14th. Settlement is based on a class starting date of January 1980, and the current estimate of $232 million is based on the assumption that the class starting date would be January 1980.

Question. What actions have you taken so far in anticipation of this supplemental being enacted?

Answer. Last year when the Supreme Court issued its decision, I immediately established an intercomponent task force to plan implementation of this important decision. SSA has worked closely with the Department of Justice and plaintiffs' counsel regarding the implementation plan.

We have revised our childhood disability regulation to bring it into conformance with the Court's decision. A final regulation with request for comments was published February 11, 1991. We will now make an individualized assessment of the child's ability to function, as well as determining whether or not the child meets the medical disability listings. With the court settlement now final and Congressional action complete on our supplemental appropriation, SSA is ready to begin implementation of the decision. As stated in our Congressional justification, start-up and planning activities, incurred prior to enactment, will be charged back to the supplemental.

Question. What will the consequences be if the supplemental appropriation is delayed?

Answer. If the supplemental request is not approved, SSA would be unable to absorb the additional work related to the Supreme Court decision within the funds currently available without

significantly hindering our ability to keep pace with the projected increases in regular disability workloads.

SSA is under a court order so we must process these cases. If we process Zebley cases along with regular disability cases, it would cause processing times for all disability workloads to increase to unacceptable levels. Our regular cases are backing up due to funding shortages and increasing workloads.

If we use contingency funds, it will cause problems in other areas where these funds are needed, i.e., to process regular disability workloads, "800" number service, and implementation of key sections of the Omnibus Budget Reconciliation Act of 1990.

UNUSED CONTINGENCY FUNDS

Question. Congress provided your agency with a $146 million contingency reserve, to be used for unexpected workloads. I understand you requested OMB to release these funds, but OMB has refused.

What did you request these funds for, and how do you intend to manage without them?

Answer. Our latest formal request for release of contingency funds was sent to OMB by HHS Friday, February 15, 1991. SSA requested $125 million of the $146.4 million contingency reserve. OMB approved use of $100 million of the contingency reserve on March 14th. The contingency funds will be used primarily to process higher than budgeted disability workloads, as well as to address the "800" number where the unanticipated degree of success leading to the high number of calls has driven busy rates to unacceptable levels, and to begin taking on new requirements mandated by the Omnibus Budget Reconciliation Act of 1990.

Question. How do you explain your request for a $232 million supplemental, when you've still got an unused reserve of $146 million?

Answer. Using contingency funds to process the Zebley workload will cause problems in other areas where these funds are needed, i.e., to process regular disability workloads, "800" number service, and implementation of key sections of the Omnibus Budget Reconciliation Act of 1990.

PENDING DISABILITY CLAIMS

By

Question. Information taken from your own budget shows a continually growing backlog in claims for disability benefits. the end of fiscal 1992, it will take more than 5 months, on average, to get a determination of disability benefits, that now takes 3 months, and used to take just 2 months a year ago. In sending Congress a budget that admits to a growing backlog, are you saying these delays are acceptable?

Answer. No. Taking an average of 5 months to process an initial disability claim is not acceptable to SSA. Within the resources requested for FY 1992, we have provided additional resources to the Disability Determination Services (DDSs) to keep