H.R. 4138, H.R. 4139, and H.R. 5093 are similar in their basic approach to SSI eligibility—or ineligibility--on the part of aliens. They would change the law so as to make all aliens ineligible for at least a minimum length of time after admission to the country; one bill (H.R. 4138) would ban aliens from the program no matter how long they have resided in the country. These bills would deny SSI support to all recently arrived aliens-refugees fleeing oppression as well as people who voluntarily left their homelands to come to the United States. The same SSI provisions for eligibility and payment amounts apply to aliens as to citizens-provided that the aliens are legally present in this country. The law does not permit eligibility of illegally present aliens. Proposals for restricting eligibility of aliens apparently arise because some aliens qualify for SSI benefits soon after they arrive in the country, in spite of assurances given by sponsors that the aliens will not become public charges. In our view, a solution to this problem must come from a carefully coordinated effort to revise policies affecting the conditions under which we permit aliens to remain in the country. At this time, we believe it is preferable to pursue such broadbased reforms rather than impose such restrictions in the SSI program. We would not rule out, however, the possible need, if other remedies cannot be found, to change the law to restrict SSI eligibility of aliens whose entry to the United States was gained through assurances of financial independence of public sources. Such a more refined and limited restriction would be aimed at those who would abuse SSI and would not treat all aliens as manipulators of the system. We do not propose such a legislation change at this time, however, because it would bring about new administrative complications in the SSI program which we would prefer to avert by measures enabling effective enforcement of the aliens' and sponsors' pledges. H.R. 6124 Mr. Chairman, we also have been asked to testify on H.R. 6124. A statement outlining our position is attached to my prepared testimony. The Commissioner of Social Security, Bruce Cardwell, is accompanying me and is prepared to respond to any questions you may have regarding our position on H.R. 6124. Mr. Chairman, this concludes my prepared remarks. My colleagues and I would be happy to answer questions from you and other Members of the Subcommittee. APPENDIX Certain of the provisions in the bill would improve administration of the SSI program and we are pleased to support them. They represent changes that can give administrative relief to the Social Security Administration and improve the effectiveness of the program without significantly increasing program costs. Exclusion of Certain Gifts and Inheritances from Income We support this provision because it does not seem equitable to reduce or terminate benefits which cannot be used for the support of the recipient. The cost of this provision would be negligible. Increased Payments for Presumptively Eligible Individuals We believe this is a reasonable provision for dealing with exceptional cases. In order to avoid substantial payments to ineligibles, we intend to retain current criteria for presumptive eligibility. The cost of this provision if rightly administered would be negligible. Termination of Mandatory Minimum State Supplementation in Certain Cases We support this provision because it will help to eliminate the inequities involved whenever special treatment is afforded one group of beneficiaries over others. There would be no increased Federal costs, but States might realize some small savings. Monthly Computation Period for Determination of Supplemental Security Income Benefits We support this proposal. In addition to simplifying the administrative operation of the program it would prevent the recipient, who receives a large, unexpected sum of money in the last month of a calendar quarter, from being found ineligible for some or all of the benefits he may have received in the prior months of the quarter. Although a definite cost estimate cannot be made, we believe it would not be excessive. Continuation of Benefits for Individuals Hospitalized Outside the United States in Certain Cases This is a provision which appears meritorious. We agree that it would be equitable. The cost is estimated to be negligible. Modification of Requirement for Third-Party Payee We support this proposal as far as it goes, but we would prefer to see the special representatives payee applicable to drug addicts and alcoholics repealed altogether, and the usual test applied to others-ability to manage funds-employed for drug addicts and alcoholics as well. This provision is not expected to have any cost. Section 13 of H.R. 6124 provides that no SSI benefits paid before October 1, 1977, would be considered overpayments because of receipt of housing assistance that was excludable from income on or after that date by provisions of the Housing Authoization Act of 1976. While the language of the provision suggests that prior findings of overpayments, including those that have been recovered, would be erroneous, the remarks made on the floor on August 30, 1976, when this amendment to H.R. 8911 was proposed, establish that your intent, Mr. Chairman, was not the reopening of claims in which there have been findings of overpayment, and recoupment made, but that no further findings of overpayments would be made. We favor retaining the current law so there is equitable treatment of all beneficiaries before October 1, 1977 and equitable treatment after the October change in law affecting housing subsidies. Providing relief for only one group of overpaid beneficiaries who did not accurately report their income would be inequitable to all those beneficiaries who did accurately report. We also oppose at this time the provision which concerns the eligibility of individuals in certain medical institutions. Under this provision, institutionalization for less than four calendar months in a medical facility would not in itself cause any change in the benefit standard applicable to the institutionalized individual or his eligible spouse. Rather, the payment standard in effect just prior to hospitalization would continue to apply until the fourth consecutive full month of hospitalization, at which time any required adjustment in the SSI benefit would go into effect. As proposed this provision would cost $13 million annually. Mr. Chairman, there are two other provisions of H.R. 6124 which we urge the Committee not to consider. This is not because we oppose the objectives of the provisions, but because we want to find a better way of replacing lost SSI checks than through complicated involvements with the States. We also believe that the provision of the bill dealing with outreach is not appropriate for inclusion in the statute. Emergency Replacements of Benefit Payments This provision would authorize the Secretary, with the approval of the SSI recipient, to withhold benefits due him and pay them to a State which, under an agreement with the Secretary, has provided emergency assistance to the recipient because his SSI check was lost, stolen, undelivered, or issued in less than the correct amount. We are in sympathy with the objective of this proposal, but we believe the detailed involvement with States would probably increase the likelihood of errors in SSI payments. Recognizing that rapid check replacement is a "must" in a program designed to insure a minimum basic income, we have been exploring other means of replacing checks which would not involve State or local involvement, and thereby the resulting complications. The Social Security Administration and the Department of Treasury have just implemented a new system of check replacement which has reduced the optimum replacement time from seven to three days. Nevertheless, we are 91-668-77—3 still considering how we might further expedite check replacement by direct issuance of checks by the Social Security Administration for this purpose. This provision is not expected to have any additional costs. Outreach Program We do not favor the provision specifying that the Secretary carry out an outreach program designed to assure that all persons eligible for SSI benefits are aware of the availability of these benefits and the procedures which must be followed to obtain them. This provision appears to be an attempt to legislate responsibilities which are implicit in current law and which have been are being carried out. In order to assure awareness among the eligible population, the Social Security Administration has engaged in several special outreach efforts extending far beyond the general public information program. For example, low benefit recipients on the Social Security rolls have been contacted regarding possible SSI eligibility. We have also engaged the help of other Federal agenciesHUD, the VA, and Agriculture, in finding and notifying low income people about the SSI program. SSA and the Office of Education are initiating a joint outreach project to find handicapped children who could be eligible for SSI. We believe the provision is prompted by the view that the difference between the number of current participants in the SSI program and the estimated potential number of participants has resulted from lack of effort by the Department in informing people about the program. Actually, several problems with the early estimates of potential SSI recipients have come to light and it is no longer a clearly accepted fact that there is a significant number of potential SSI recipients who are not aware of the program. The cost to implement this provision is unknown because there are no data upon which to base an estimate. Mr. CORMAN. Thank you very much, Mr. Secretary. Mr. Rangel? Mr. RANGEL. No questions at this time. Mr. CORMAN. Mr. Bafalis? Mr. BAFALIS. No questions, Mr. Chairman. Mr. BURKE. No questions. Mr. CORMAN. Mr. Ketchum ? Mr. KETCHUM. Thank you, Mr. Chairman. Mr. Secretary, I was interested in your comments on work-related expenses. What you would like to see done is to abandon the disregard we presently have and go to a percentage of income and make that the same everywhere? Mr. CHAMPION. We would like to get rid of the categorization of each expense that relates to working-attempt to keep track of each item of disregarded expenses. The current program is administratively unwieldy and difficult to enforce. So we would like to get on a more standardized basis, except for the child care item, which would continue to be a categorical item. The disregard of the first $30 of earnings and one-third of the rest of earned income would be retained as a work incentive. Mr. KETCHUM. Speaking of inequities, speaking of the AFDC mother, both of them being in the same job, how would you address that problem? One individual has never been on AFDC and takes a job at $600 a month, and the AFDC recipient is moved into a job next to her making $600 a month. With her disregards, it seems to me there is a great inequity, and I think it would induce the non-AFDC mother to go in AFDC. Mr. CHAMPION. I think welfare reform is going to help the prob lem. We are trying here to make it administratively more feasible and get rid of some of the kinds of rulings that vary from State to State, or place to place. I don't think we solve the whole problem with this one income disregard item. Mr. KETCHUM. The final question, of course, is of some parochial interest to me. That is the SSI alien bills. What you say in your statement, apparently, is that you are going to try to crack down on the "abusers" of that system. I don't know that there have been any terrible abuses of that particular part of the system. The point is that those individuals becoming eligible in 30 days will have no participation in anything in the United States, becoming eligible, is repugnant to me, and I think to a rather substantial percentage of people in this country. Mr. CHAMPION. Well, we pose two problems there. We pose a problem for the States if we in no way assist the people who are there and need some level of income support. The questions I have seen posed, and perhaps Mr. Cardwell would like to answer that, are basically the concern that people fradulently-which has happened -indicate that they will provide employment or support and then withdraw from that employment or support as soon as the alien is in the country. Mr. KETCHUM. Except that the courts have ruled that those letters don't really mean anything. Mr. CHAMPION. That is what we are proposing to do, to try to find some way to make sure that those letters do mean something. Mr. KETCHUM. That would seem if that were made statutory, to prohibit the entry of an individual who does not have positive assurances of support, that is one thing; but in the meanwhile, that doesn't solve this particular problem. Why should an alien in 30 days-why should an alien become eligible for SSI? Now, with the possible exception of a rather substantial increase in our population when we willingly accept the Vietnamese refugees, other than that I can see no real reason for it. Mr. CHAMPION. The only people who are under this program are legally accepted aliens who entered the country under the laws of the country, and I assume that we need to find some way to support those people if they are unable to find employment or other means of support. The alternative is to throw them in the general welfare categories in the States. Mr. KETCHUM. I think we can stay away from that, too. I think that is another problem that can be addressed so that it does not evolve on the States and counties to pick up what we refuse to pick up. But you get into an awfully broad field when you say SSI. To some people that means aged folks, or everybody who wants to take care of them, or the blind. But I think we have problems in taking care of drunks and narcotic addicts. I think there is a serious problem there, and I think it has to be addressed. Thank you. Mr. CHAMPION. Thank you. Mr. CORMAN. Mr. Burke, did you have questions? Mr. BURKE. No, no questions. Mr. CORMAN. Mr. Tucker? Mr. TUCKER. Thank you, Mr. Chairman. Thank you for giving us our first idea of what the administration will be presenting, Mr. Champion. We look forward to hearing the Secretary's testimony on Wednesday. I am a complete novice at trying to understand these welfare programs, and the chairman is going to be bearing with me, I am sure, as I try to find my way through them. Let me ask you a naive question, if I may. To what extent do you think fraud is a real problem in these multitude of programs that we have, whether food stamps, or AFDC or SSI? Mr. CHAMPION. Let me say, first, that I will issue a disclaimer. I have been out of the Government until the last 100 days for something like 8 years, which was my experience in California, to which the chairman kindly referred. So I am not speaking from any great personal knowledge or experience. I have been trying to look at the documents. I think we have several programs in which fraud is a real problem. We have other programs in which error is a real problem, that is, the administrative difficulty of dealing with detailed categories. Everywhere there is an excessive paperwork burden there is also an excessive error rate, and that is true whether you are producing a payroll or a welfare program, and we do take seriously the fact that there is undoubtedly some fraud in the program, and that not all of our methods, not all of our systems of delivery, have been well designed to prevent that fraud. Mr. TUCKER. Are errors frequently defined as fraud? Mr. TUCKER. Do errors that occur in the administrative process frequently end up being defined as fraud? Mr. CHAMPION. No, although I think there is a lot of confusion in the public mind about which is which. They are not so defined by us, but they sometimes come to be understood publicly as fraud. Mr. TUCKER. On the one hand, there is the actual dollar amount attributable to these errors that occur, or fraud, and I gather that is something of a problem. Then you also have the problem of the public perception of fraud in our welfare system, and thus the loss of public confidence in the system, and a rather continuing threat of changes or disruption in the welfare program in response. to that public perception. Do we have any idea whatsoever of how many people who are on food stamps or other welfare programs also end up being taxpayers at the end of the year? Mr. CHAMPION. I don't, Mr. Tucker. Perhaps Mr. Cardwell might have some figures on that. Commissioner CARDWELL. I don't have a figure. We can put one in the record. [The information follows:] No available data can isolate the groups of persons receiving payments under specific programs such as food stamps, SSI, AFDC, etc., in order to indicate what portion of recipients actually paid Federal income taxes. A |