Page images
PDF
EPUB

time for processing those cases which do not require additional evidence is less than 1 month.

With the heavy influx of claims expected during the current quarter, which historically has been the quarter in which we have received our highest claims workloads, processing times will almost inevitably increase, since our budget and our staffing, and our capacity to handle claims, are related to the average workload level during the year and not to the very high level of claims receipts in the peak quarter.

We have, however, over the years, developed ways of maximizing our claims output during the seasonal peak periods-by the planned use of overtime, by deferring lower priority work, by careful advance scheduling of other work, by timing the recruitment and training of new staff so that by January of each year we have the maximum number of trained staff available. We look forward therefore to soon achieving a balance between receipts and completions, then cutting into our pending loads. We expect not only to make good progress in processing times but also to maintain the high quality of our service to the public and of our overall operations.

INTEGRATED DATA PROCESSING

The vast recordkeeping job of maintaining lifetime earnings records for all the Nation's workers covered under the program was made possible and was done efficiently, economically, and accurately, because the Bureau employed from the beginning the equipment and systems capable of doing the job best. In the thirties and the forties the Bureau pioneered in the use and the development of tabulating card equipment and systems and in the use of microfilm. In the midfifties the Bureau was among the first of the very large paper-processing operations to successfully convert its earnings records operations to electronic data processing. This important segment of the Bureau's total operations has benefited greatly from the use of advanced equipment. Today, that work, which has grown very much in size, is done more efficiently and economically with a staff only a little larger than we have needed over the years. We are now moving ahead to apply the latest equipment and systems design to the somewhat more difficult area of claims processing and benefit payments.

In fiscal year 1961, we initiated a long-range program which has as its goal a claims system in which all Bureau action centers will be linked by a wire transmission system, and electronic data processing equipment will be used for doing a large part of the paperwork involved in the recording of claimant and beneficiary data and for processing payments and beneficiary adjustment actions. Under this system, claims and benefit operations will be reengineered on the principle of recording information, judgment actions, and decisions in machine language at the earliest possible point in the process, so that they can be transmitted automatically from place to place and translated electronically into award notices, benefit checks, benefit roll adjustments, or whatever action is called for. This will accomplish a major reduction in manual paperwork and improve the accuracy of the process. It will also help us speed up our claims actions and improve our

service.

During fiscal year 1961, electronic computers were installed in our Philadelphia, Birmingham, Kansas City, and Chicago payment centers. The San Francisco and New York payment centers, which are serviced by the computers in the Kansas City and Philadelphia offices, respectively, received less costly supporting equipment. A high-speed data transmission system between San Francisco and Kansas City was also placed in operation, so that both payment centers can be served by the large computer in Kansas City. The primary effort during 1961 was the preparation of a basic record tape of beneficiary information, an essential first step to all later action.

By the end of fiscal year 1962, a wire communications network, linking all action centers of the Bureau, will be completed. As the district offices of the Bureau are hooked into this network, immediate use is being made of the wire to request earnings data from our earnings record center in Baltimore when a claim is filed. The records center now wires back some data to the district offices to assist in the early development of the claim. During fiscal year 1963, we expect to further develop our capability of sending data back to the district offices by wire, thereby reducing clerical work in the district offices and speeding up the adjudication of the claim.

In 1963, the computers in the payment centers and the wire communications network will be used for processing quickly and accurately the more simple changes to the beneficiary rolls such as changes of address, termination of bene

fits, and suspensions. Annual reports of earnings from beneficiaries will also be processed on the computers. The more rapid updating of beneficiary information in our records will materially improve our service to beneficiaries under the program.

NEW BUILDING

The annex to the Social Security Building in Baltimore County will be ready for occupancy this summer and we will be able to move to Woodlawn a large part of the central staff engaged in disability operations. We expect that the physical bringing together of the disability operation from several scattered points into one location will make it possible to handle central disability work somewhat faster.

With the added work and related staff needs resulting from the 1961 amendments together with the higher than budgeted disability workloads stemming from the 1960 amendments, it was apparent last summer than the Social Security Building, including this annex, would fall short of housing the entire Baltimore staff. We therefore requested a supplemental appropriation for construction of an addition to the annex. The Congress approved $4 million for this purpose, bringing the total construction appropriation to $36,290,000. The architects are now preparing specifications for the addition. The scheduled completion date is early in calendar year 1964.

The General Services Administration is negotiating for the purchase of the additional 27 acres of land adjacent to the Social Security Building site which Congress authorized in the "Salaries and expenses" appropriation for fiscal year We expect this purchase to be consummated before the close of the fiscal

1962. year.

WORKLOAD AND STAFFING, FISCAL YEAR 1963

In the aggregate, the Bureau's workload and manpower requirements in 1963 are expected to be practically the same as in 1962, six-tenths of a percent higher in workload and three-tenths of a percent higher in man-years. There will be some decline in the OASI claims load from the peak caused by the 1961 amendments, but this will be more than offset by increase in other workloads connected with earnings records, disability claims, and the maintenance of the growing beneficiary rolls. Operationally, the big difference from 1962 will be the change from working under parctically energency conditions, with heavy reliance on overtime, to handling our work in a normal manner, almost entirely on regular time, with overtime only for seasonal peakloads and for some few special situations. This is reflected in our estimates by the replacement of more than 1,600 man-years of 1962 overtime by regular staff in 1963. There is an increase of 1,720 in average employment, with an overall increase in man-years, including overtime equivalent, of only 112.

An important aspect of the budget that should be noted is that although our full-time staff is increasing over the last several years, workloads have increased much more. This means that each person on the staff is expected to handle more work. This is reflected in the budget by the fact that the output of work per man-year budgeted for 1963 is 7.9 percent higher than our most recent actual experience in fiscal year 1961.

APPROPRIATION REQUEST, FISCAL YEAR 1963

The basic authorization of $270,400,000 requested for fiscal year 1963 represents an increase of $4,230,000 over estimated obligations for 1962.

The estimated expenses for the Bureau proper increase by somewhat less than $4 million. This is the net of numerous plus and minus factors, of which the most significant increases are: (1) Mandatory payroll increases, which account for $3,242,000; these salary increases include statutory within-grade promotions and promotion of the large number of new claims personnel we put on in 1962 to handle the peak claims loads, in accordance with training agreements with the Civil Service Commission which provide for hiring of personnel at entrance grades with promotion upon satisfactory completion of training periods; (2) an increase in Bureau workload, which accounts for $725,000; (3) Nonrecurring work, $1,783,000 more than in 1962. The estimates provide for an important new program to improve compliance with earnings reporting requirements in areas where studies have indicated substantial delinquency, at a cost of $849,000; also the unbalanced workload and staffing situation in 1962 forced the deferment of a number of projects to 1963. Savings of $1,060,000 as compared to 1962 resulting from the application of IDP techniques to claims operations are an important minus item. Other savings result principally from the return to a normal operation as compared to the heavy overtime and recruitment in 1962.

Funds to be advanced to the States in 1963 will be $259,200 more than budgeted for 1962. This results from increases in average salaries of State agency personnel, procurement of medical examinations in a slightly higher proportion of disability cases which are being reconsidered upon the request of the claimant, and an estimated increase of $1 in the average cost of examinations purchased, offset by a slightly lower State workload.

CONTINGENCY RESERVE

The 1963 appropriation request consists of $270,400,000 for "Salaries and expenses" and a contingency reserve of $15 million. When a contingency fund was first approved in the amount of $10 million for fiscal year 1960, it represented 5.5 percent of the basic appropriation. Relative to our basic request of $270,400,000 for fiscal year 1963, a contingency fund of $10 million would amount to only 3.7 percent. Experience has indicated that increased needs resulting from unbudgeted additional claims workloads can easily exceed the $10 million limitation. Your approval to increase this fund to $15 million will restore it to its original relationship (5.5 percent) to the basic authorization and maintain its effectiveness in serving its purpose.

CONCLUSION

In spite of growth in complexity of administration that necessarily accompanied extension of the protection of the program to those who were initially omitted because they were thought to be too difficult to cover, the inclusion of the risk of disability, and many other improvements which made the program a very much better instrument for insuring the economic security of the Nation's workers and their families, the program is administered at very low cost. In fiscal year 1963 all administrative costs for this Department and the Treasury Department will amount to only 2.19 percent of benefit payments. This includes all costs of tax collections and wage record maintenance as well as the expenses connected with processing claims and paying monthly benefits.

We will be glad to answer any questions the committee members wish to ask.

APPENDIX TO OPENING STATEMENT

Program administered by Bureau of Old-Age and Survivors Insurance

The old-age, survivors, and disability insurance program was established by title II of the Social Security Act of 1935 and revised by major amendments in 1939, 1950, 1952, 1954, 1956, 1958, 1960, and 1961. Through this series of amendments to the act, the program now provides protection to about 90 percent of the total labor force and their families against the loss of earnings because of oldage, disability, and death. Tax contributions from employers, employees, and self-employed and members of the Armed Forces are deposited in the Federal old-age and survivors insurance and Federal disability insurance trust funds, out of which benefit payments and administrative costs are paid, so that the budget for administrative expenses does not enter into the determination of the balance of the general fund budget.

The effect of the series of legislative changes coupled with the normal growth in the number of persons attaining insured status under the act is reflected in the increase in the number of beneficiaries and amount of benefit payments in the table below:

[blocks in formation]

1 Assuming that earnings will continue to rise in the future as they have during the past century, OASI benefit payments assuming no change in benefit provision would in calendar year 1980 be $24,673 million and disability benefit payments in calendar year 1980 $1,692 million. If, on the other hand, it is assumed that average annual earnings in the future will continue at about the levels prevailing in 1959, OASI benefit payments in 1980 are estimated at $22,688 million and disability payments at $1,550 million.

Beginning in fiscal year 1958 disability insurance benefits were payable to disabled workers age 50 and over; in fiscal year 1959 dependents of these workers were made eligible to receive benefits; and in fiscal year 1961 the age-50 requirement for disabled workers was removed. The growth in the amount of disability benefits paid and the number of beneficiaries is shown below:

[blocks in formation]

1 Assuming that earnings will continue to rise in the future as they have during the past century, OASI benefit payments assuming no change in benefit provision would in calendar year 1980 be $24,673 million and disability benefit payments in calendar year 1980 $1,692 million. If, on the other hand, it is assumed that average annual earnings in the future will continue at about the levels prevailing in 1959, OASI benefit payments in 1980 are estimated at $22,688 million and disability payments at $1,550 million.

At the end of November 1961 the average monthly benefit was $76 for all retired workers who were receiving benefits. The average monthly benefit payable to disabled workers at the end of November 1961 was $90. Estimated average family benefits in current payment status, Nov. 30, 1961

[blocks in formation]

Disabled worker only..

All families

$71

126

65

193

88

Disabled worker, young wife, and 1 or more children..

193

In

Organization and staffing of Bureau of Old-Age and Survivors Insurance The Bureau provides direct account number and claims service to the public through the facilities of 591 district offices (as of January 1962) located in the principal cities in each State and Puerto Rico and by means of regularly scheduled visits to over 3,600 resident and contact stations in smaller communities. addition to its district offices the Bureau has seven payment centers located in different sections of the country. The Baltimore center services disability claims for the entire Nation. These payment centers certify monthly the benefits paid under the program. The Bureau's administrative offices and records center are located in the Social Security Building, Baltimore County. In addition, the Bureau contracts for the services of 56 States and territorial agencies in making disability determinations.

Workloads

The volume of work received by the Bureau in any year is not subject to its control, but is dictated by provisions of the law and by demographic, economic and other related factors. Indicated below are estimates of some major workloads that will be received by the various organizational units of the Bureau in fiscal year 1963.

[blocks in formation]

GENERAL STATEMENT

Mr. CHRISTGAU. Mr. Chairman, and members of the committee, the basic authorization of $270,400,000 we are requesting for fiscal year 1963 represents an increase of $4,230,000 over estimated obligations for 1962.

The estimated expenses for the Bureau proper increase by somewhat less than $4 million. This is the net of numerous plus-and-minus factors, of which the most significant increases are:

(1) Mandatory payroll increases, which account for $3,242,000. These salary increases include statutory within-grade promotions and promotion of the large number of new claims personnel we put on in 1962 to handle the peak claims loads, in accordance with training agreements with the Civil Service Commission which provide for hiring of personnel at entrance grades with promotion upon satisfactory completion of training periods.

(2) An increase in Bureau workload, which accounts for $725,000. (3) Nonrecurring work, $1,783,000 more than in 1962.

Senator HILL. The increase in the workload, is that related to the increased number of personnel you had to put on?

Mr. CHRISTGAU. Yes, sir; it includes items such as increased earning items and that sort of thing.

COMPLIANCE WITH EARNINGS REPORTING REQUIREMENTS

The estimates provide for an important new program to improve compliance with earnings reporting requirements in areas where studies have indicated substantial delinquency exists, at a cost of $849,000; also the unbalanced workload and staffing situation in 1962 forced the deferment of a number of projects to 1963.

Savings of $1,060,000, as compared to 1962, resulting from the application of IDP techniques to claims operations are an important minus item. Other savings result principally from the return to a normal operation as compared to the heavy overtime and recruitment

in 1962.

Funds to be advanced to the States in 1963 will be $259,200 more than budgeted for 1962. This results from increases in average salaries of State agency personnel, procurement of medical examinations in a slightly higher proportion of disability cases which are being reconsidered upon the request of the claimant, and an estimated increase of $1 in the average cost of examinations purchased, offset by a slightly lower State workload.

CONTINGENCY RESERVE

The proposed contingency reserve of $15 million will restore the percentage relationship of the reserve to the basic authorization represented by the $10 million reserve when it was first established in the 1960 appropriation.

Experience has shown that the need for a contingency reserve can easily exceed $10 million.

Senator HILL. You are speaking of experience showing that the need can exceed $10 million. The budget for 1963 allowed you the $15 million.

81716-62-pt. 1- -52

« PreviousContinue »