(g) hearings be conducted in accordance with the provisions of the Administrative Procedures Act and administrative law judges be classified as GS-16's.

DISCUSSION

I am aware that the procedural changes proposed in my bill have, for the most part, been under consideration by members of your subcommittee staff and the full Ways and Means Committee staff for quite some time, as indicated in the Ways and Means Committee Staff Report on the Disability Insurance Program of July 1974. I will, therefore, limit my remarks to a general discussion of the merits of H.R. 8018.

(a) The bill requires that the law specifically set forth the claimant's right to request reconsideration of an adverse initial decision. The reconsideration procedure, while currently practiced, is not formally written into the law. This provision is simply one of codifying existing practice.

(b) The claimant is currently allowed a period of 6 months from the time of the initial adverse decision in which to request reconsideration of the claim. H.R. 8018 would limit that time period to 30 days from the date of notice of initial adverse decision. The 30-day limit should work no hardship on any claimant, as it would seem that any individual who is in fact totally disabled and whose claim has been denied would waste no time in registering his disagreement with the denial and stating his desire for further consideration of the claim. My bill would require only that the claimant file a formal request for reconsideration within the 30-day period. If circumstances are such that a new medical examination is needed for the gathering of additional evidence, the claimant would be allowed time in which to submit such evidence.

(c) The bill provides for the scheduling of an informal conference for any claimant who requests reconsideration of an initial denial of his claim. Such conference would be in a Social Security district office or State agency office, although the Secretary may designate another place if good cause is shown. The site shall be within 75 miles of the claimant's home unless special circumstances require that it be a greater distance. As discussed in the Ways and Means Committee Staff Report of July 1974, the State agency reconsideration interview study-SARIS-carried out in 1971 showed that the earlier personal interview process did result in better development of claims proceeding to the hearing level and it showed a :

Significant increase in the allowances rate for the cases with a personal interview and lower reversal rate on appeal for this type of case. (P. 34, Committee Staff Report.)

In its July 30, 1974 report of the Committee on the Study of the Utilization of Administrative Law Judges, the Civil Service Commission observed that "A large number of SSA ALJ's have reported they receive incomplete files—a claim that appears to be supported by the high rate of reversals by ALJ's of reconsidered decisions and the results of a test program (SARIS). The reversal rate by ALJ's of reconsidered decisions was 28 percent in 1965; by 1973, the reversal rate has reached 46 percent. The remand authority recommended by SSA ALJ's should, in the light of the foregoing, warrant serious consideration. However, programs tested by the SSA in 1971 (SARIS and SARTIS) appear to hold even greater promise in terms of effective utilization of ALJ's than does remand authority." (P. 59, Report.)

(d) My bill would require the Social Security Administration to issue a reconsideration determination on a claim within 90 days from the date the claimant files the request for reconsideration. Three months should allow sufficient time for the development and review of any evidence the claimant may wish to submit for consideration or which the Social Security Administration may request developed.

(e) H.R. 8018 would require that in cases where the reconsideration determination again results in the denial of a claim, the Social Security Administration shall issue to the claimant a detailed written statement setting forth a summary of the evidence pertinent to the issues under consideration, a citation and discussion of the laws and regulations which apply to the claim, and an explanation of the determination made on the issues and the specific reasons for the determination. Presently, the claimant receives only a form-type letter stating that he or she "does not meet the disability requirements of the law” or that "it was determined that the evidence did not show him [or her] to meet all the requirements of the law." This brief and general statement does nothing to assist the claimant in understanding specifically why his or her claim has been denied and many individuals feeling that the denial has been a cursory or arbitrary one, will further appeal their claim without understanding whether their claim has merit, whether all evidence they submitted was actually considered, or whether medical reports actually stated their condition to be different or less severe than they believe it to be.

(ƒ) In addition to placing upon the Social Security Administration this new responsibility to explain a denial to the claimant, H.R. 8018 would place new responsibility upon the claimant who wishes to further appeal his claim. The bill requires that the claimant file a formal hearing request within 30 days after the statement of the case is furnished to him or her. Again, this is a substantial cut from the present 6-month period allowed for claimants to file hearing requests; however the 30-day period should allow sufficient time for the claimant to decide whether he wishes to pursue the claim further. The claimant in filing his or her formal hearing request, would be required, however, to set forth specific allegations of error of fact or law related to specific items in the statement of the case. The claimant's failure to specifically set forth points with which he or she disagrees would be grounds for dismissal of the claim. The claimant would be presumed to be in agreement with any statement of fact contained in the statement of the case with which the claimant does not express disagreement.

(q) Finally, H.R. 8018 calls for the codifying of existing practice by formally bringing Social Security administrative law judges under the provisions of the Administrative Procedure Act; the bill would upgrade the civil service classification of such judges from their current grade of GS-15 to that of GS-16. The Civil Service Commission, in its July 30, 1974, Report of the Committee on the Study of the Utilization of Administrative Law Judges, observed that:

In most agencies the ALJ's are GS-16's, with the CALJ at GS-17 if his office has 10 or more ALJ's. Otherwise he, too, is a GS-16. The conspicuous exception in the grading system is the Social Security Administration, whose 431 ALJ's are GS-15's. (P. 27, Report.)

Many social security administrative law judges are loaned to other departments of HEW and to other Federal agencies where they decide

cases which are normally decided by judges graded as GS-16's. Not only does the lower grade of the social security judges often result in morale problems for the judges, but it also creates the problem of social security judges being recruited away by other agencies where they obtain GS-16 positions. In effect, it would appear that other agencies might be profiting from the training efforts and expense of the Social Security Administration which loses its most experienced judges to the higher graded positions when openings are available in the other agencies.

Administrative law judges of the Social Security Administration have the same status as other Federal administrative law judges, hear the same types of cases, and have a tremendous caseload; it is my feeling that their status should be acknowledged through the equalization of their grade and pay level to place them on a par with administrative law judges in other Federal agencies.

It is my hope that the members of the subcommittee will agree that the changes proposed in H.R. 8018 are needed and will recommend these proposals to the full committee. Again, may I express my appreciation and that of my 56 colleagues who have cosponsored this legislation for your attention to our concerns.

Mr. BURKE. Thank you, Congressman Sisk.

We welcome Congressman Pepper from the State of Florida. You may proceed with your testimony.

STATEMENT OF HON. CLAUDE PEPPER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. PEPPER. Thank you very much, Mr. Chairman.

I am grateful for the opportunity to appear before the subcommittee to speak in support of H.R. 8848 of which I am a cosponsor.

We have all read the dismal statistics on the lengthy delays in the appeals process and heard from disheartened individuals who have gone through the protracted process of appealing a determination on their applications for social security disability benefits.

The statistics show and the evidence is clear that there exists a substantial backlog of pending cases at the hearings and appeals level within the Social Security Administration. At the present time, according to the Commissioner of the SSA, there are about 107,000 hearing requests pending before the Bureau of Hearings and Appeals with a median processing time of 7 months for a disability hearing. In my opinion these delays in the appeals process are so serious as to raise due process questions.

H.R. 8848 will, in part, streamline the appeals process and, consequently, help in reducing the backlog of pending cases and the time consumed in the appeals process. Before I briefly sketch the merits of H.R. 8848 and also offer some suggestions to improve the proposed bill, I would like, however, to discuss why the appeals process within SSA, as an essential component of the overall process of getting benefits to those entitled to them, deserves close scrutiny to make it consistent with the due process requirements under our Constitution.

There is significant legal authority that constitutional restraints and procedural safeguards are applicable to the deprivation of many forms of statutory entitlements. The Supreme Court's decision in Goldberg

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v. Kelly, 397 U.S. 254 (1970), holding that due process requires an evidentiary hearing before welfare benefits may be discontinued or suspended, recognized the increasingly important role that statutory entitlements and welfare benefits in particular play in contemporary society:

It may be realistic today to regard welfare entitlements as more like "property" than a gratuity. Much of the existing wealth in this country takes the form of rights which do not fall within the traditional common-law concepts of property. It has been aptly noted that "society today is built around entitlement * Many of the most important of these entitlements now flow from the government * * *." Id. at 262 n.8.

The Court in Goldberg sets forth a general balancing test under which:

The extent to which procedural due process must be afforded the recipient is influenced by the extent to which he may be "condemned to suffer grievous loss," ,” *** and depends upon whether the recipient's interest in avoiding that loss outweighs the governmental interest in summary adjudication. Id. at 262–263.

To the welfare recipients in Goldberg, the interest in the continued receipt of benefits was enormous, since welfare normally provides the only means by which recipients subsist. The Court noted that: "By hypothesis, a welfare recipient is destitute, without funds or assets," and that, therefore, "to cut off a welfare recipient in the face of *** 'brutal need' without a prior hearing of some sort is unconscionable unless overwhelming considerations justify it." Id. at 261.

This "brutal need" resulting from the withdrawal of public assistance made procedures to minimize the possibility of erroneous terminations essential. "Thus, the interest of the eligible recipient in uninterrupted receipt of public assistance, coupled with the State's interest that his payments not be erroneously terminated, clearly outweighs the State's competing concern to prevent any increase in its fiscal and administrative burdens." Id. at 266.

Although Goldberg applied to recipients under the federally assisted aid to families with dependent children's program, the Supreme Court during the October term in the Eldridge case will determine the appli cability of Goldberg v. Kelly to social security disability cases and conceivably require a hearing before any termination of social security benefits.

In Goldberg, the Court recognized that: "Termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits. Since he lacks independent resources, his situation becomes immediately desperate." These same considerations that the Goldberg Court deemed so important in requiring the Government to continue making uninterrupted payments until an evidentiary hearing had been held, are equally compelling in the case of disability applicants and should require that the Government provide an appeals process designed to resolve the claims of the applicants with reasonable promptness.

Where the eligibility of a disability applicant is in dispute and subject to the Social Security Administration's appeals process, a failure to make a prompt determination on appeal may be depriving an eligible applicant from what is his or her right under statute-a right closely connected to life itself. That deprival is a violation of due process, which this subcommittee should remedy.

Several proposals of H.R. 8848 are particularly noteworthy. One such proposal, for example, is the requirement of mandatory reconsideration of a case within 90 days of a claimant's filing a request for reconsideration. Statistics show that roughly a third of the reconsidered cases result in an allowance of benefits, and therefore, implementation of this requirement can result in granting benefits to an eligible claimant at an earlier stage in the appeals process.

As part of the reconsideration requirement, there is a provision for an informal conference or face-to-face contact between the claimant and an individual participating in the decisionmaking process. During this meeting, the claimant will be told of the reasons for his or her initial denial. Studies have shown a significant increase in allowance rates for the cases with personal interviews. This informal conference should be strongly encouraged because it also aids the claimant in coming to grips with an otherwise incomprehensible and impersonal system.

Another proposal which will help the claimant and will clarify the issues on appeal is the requirement that a statement of the case be prepared and given to the claimant following an adverse decision at the reconsideration level. The claimant would then have 30 days during which to appeal to the last administrative level—a hearing before a GS-16 administrative law judge.

Although the idea of the statement of the case is excellent, the requirement of section 205 (b) (6) of the bill should be reevaluated by the subcommittee. Section 205 (b) (6) requires that the request for a hearing before an administrative law judge shall set forth specific allegations of error of fact or law related to specific items in the statement of the case, and failure to do so shall be grounds for dismissal of the appeal. Considering that most administrative law judges are likely to continue the present practice of looking at the case de novo, this provision is unduly harsh to a claimant who is not represented by counsel.

Two additional suggestions that I believe would make the appeals process more efficient and equitable, and which the subcommittee should consider in evaluating H.R. 8848, are: (1) That the initial letter notifying an applicant that benefits have been denied contain a simple explanation of the reasons for the denial, and (2) that the time for appeal following the initial decision denying benefits to be somewhat longer than the 30 days provided in the bill.

Under the bill, as proposed, the claimant would first find out the reasons for his or her denial at the informal conference following his or her filing a request for reconsideration. Using this procedure, the claimant is, in effect, required to appeal without knowing why he was denied benefits. If the Social Security Administration has made an initial decision to deny benefits, a simple checklist-type notification in the letter of denial as to the grounds for denial could not be so burdensome to the Government. Such notification would be informative to the applicant and could enhance the possibilities of a speedy resolution to the dispute.

H.R. 8848 proposes to reduce the claimant's time for appeal at the various levels of administrative appeal from the present 6 months to 30 days. The present 6-month time limit could reasonably be shortened without prejudicing the claimant's rights, and a shorter time period