I want to tell you what these requests mean in terms of this agency's ability to serve the millions of people whose lives are directly and strongly affected by Social Security.

Our fiscal year 1992 budget request is a conservative one, Mr. Chairman. One that reflects this Nation's need and this administration's desire for fiscal restraint.

We are requesting a 9-percent increase for fiscal year 1992. That appears to be a substantial raise under the new budget rules. But it is bare bones given the magnitude of our built-in mandatory cost increases and the amount of work to be done.

Administrative expenses will continue to make up less than 2 percent of the overall cost of the programs we manage, and 80 percent of the increase we are requesting will be devoted to mandatory increases in payroll and other costs, such as rent and utility charges for hundreds of offices throughout the country.

In addition to those unavoidable, built-in increases, this request is driven by the substantial increase in SSA's workloads, an increase requiring additional FTE's, increased funding for State disability determination services, and further investments in systems modernization.

In addition to the expected increases in the Nation's over 65 population, we are seeing dramatic jumps in the number of people applying for disability and supplemental security income benefits.

BUDGETARY OBJECTIVES

The $4.532 billion the administration is requesting will accomplish the following objectives. First, we will be able to increase employment to 63,730 FTE's, an increase of about 750 FTE's from the amount currently funded for 1991. This will partially compensate for an anticipated workload growth, and in general, help to maintain present levels of service.

Recognizing that this is a budget aimed at achieving both service quality and fiscal responsibility, we may see some areas, particularly disability, where increases in the number of cases pending and increases in processing times will result.

Second, we will provide a funding increase of nearly 9 percent to our partners in the State disability determination services whose workloads will continue to increase significantly.

And third, this budget will enable us to restore limited funding to critical areas that have been severely cut in recent years. It is simply not acceptable for the Social Security Administration to have offices in disrepair, offices devoid of necessary supplies, or offices with equipment that does not work properly.

And finally, Mr. Chairman, this budget will enable us to make necessary investments in our computer and telecommunications systems to help us deal with future workload growth and improve public service.

In short, this budget request is designed to enhance both our human and our technological potential-enhancements that must take place if we are going to meet current and future workload demands and provide quality service. And providing that service, Mr. Chairman, hinges to a very great degree on three separate actions.

First and foremost, Mr. Chairman, I cannot urge strongly enough the adoption, without alteration, of the President's request for

SSA's fiscal year 1992 administrative budget, $4.482 billion in direct obligational authority with $50 million in a contingency fund.

SSA is a production-driven agency and our production demands are steadily increasing. In order to meet those demands and to continue to serve the American public with efficiency, with courtesy, and with compassion, approval of this appropriation request is absolutely essential.

Second, we do need rapid congressional approval of the full, fiscal year 1991 supplemental appropriation of $232 million to process the anticipated workloads arising from the Supreme Court's Zebley decision.

The Zebley work, involving a probable 200,000 to 300,000 new childhood disability determinations was not covered in our regular fiscal year 1991 appropriation or our fiscal year 1992 request. Providing less than the full amount requested would impair our ability to deal fairly and efficiently with the children affected by the Zebley decision.

And finally, we need additional funds for our fiscal year_1991 "Limitation on administrative expenses" [LAE] account. These funds are made necessary by the workload increases which I spoke of earlier. More specifically, our pending disability claims in the State agencies are up 30 percent over last year. Pending claims, overall, are up over 20 percent. Pending appeals and receipt of new appeals are up, both of them, over 10 percent.

Right now, we have a window of opportunity to attack these caseloads and get them to manageable levels. To do so, however, requires immediate additional funding. Without it, these workloads will grow to an extent that will be much more difficult to get under control and the quality of our service will suffer.

As you know, Congress shifted nearly $100 million in fiscal year 1991 from direct obligational authority into our contingency fund so that this fund now contains $146 million. We have requested that OMB release $125 million from this fund.

The House Appropriations Committee has acknowledged SSA's needs by including a provision in the fiscal year 1991 supplemental bill that would transfer $100 million from the contingency fund and make it available for our operational needs.

PREPARED STATEMENT

These necessary actions, Mr. Chairman, for both this fiscal year and the next, will determine how well Social Security is able to serve the retirees, the families, the children, the people with disabilities, the financially needy and the millions of others who depend on the services we provide.

I would be happy to answer any questions now. [The statement follows:]

STATEMENT OF GWENDOLYN S. KING

Mr. Chairman and members of the Committee, I am pleased to be here today to
present the fiscal year 1992 appropriation requests of the Social Security
Administration (SSA). These requests total $22.9 billion in budget authority, and reflect
SSA's commitment to fulfill its unique role in assuring the well-being of millions of
Americans. First, I would like to summarize the SSA appropriation requests before the
Committee:

Fiscal Year 1992 Appropriation Requests

$41.0 million for Payments to Social Security Trust Funds. Through this
account the trust funds are reimbursed for the costs of certain benefits and
administrative expenses chargeable to Federal funds.

$820.3 million for Special Benefits for Disabled Coal Miners. These funds
cover benefit payments and administrative expenses for that portion of the
black lung program administered by SSA.

$17.5 billion for the Supplemental Security Income (SSI) Program. This
request includes SSI benefits and reimbursement to the Social Security trust
funds for the administrative costs of the SSI program.

$4.5 billion for the Limitation on Administrative Expenses (LAE). This request
provides resources for administering the old-age and survivors and disability
insurance programs and for performing certain administrative functions for the
Medicare program. It also includes resources to administer the SSI program
and for combined annual wage reporting for Social Security and Internal
Revenue Service purposes. The trust funds subsequently are reimbursed from
the general fund for the administrative costs of the SSI program and for the
nontrust fund share of annual wage reporting. The LAE request includes
about $3.4 billion for regular salaries and expenses, $868 million for State

Disability Determination Services which make disability determinations on
behalf of the Secretary of Health and Human Services, $260 million for
automated data processing and telecommunications expenses, and a
contingency reserve of $50 million.

In addition, SSA is requesting a fiscal year 1991 supplemental of $232.0 million for the LAE account, with funds to remain available through fiscal year 1993, to finance the one-time costs of implementing the Supreme Court decision in the case of Sullivan v. Zebley. A like amount also is requested for the SSI appropriation, to reimburse the trust funds from general revenues, as provided by law, for the cost of this work.

Social Security is vested with an enormous public trust. SSA has a direct and important effect on the lives and well-being of millions of Americans. People look to SSA to provide financial support in their retirement years and to protect against the financial hardship that can accompany a disability or the premature death of a household breadwinner. Also, economically-disadvantaged elderly, blind, and disabled people look to SSA for basic, minimum financial assistance. The people we serve can go nowhere else to meet these needs. Because of SSA's unique role, we must ensure that all Americans get the service from this Agency that they deserve.

SSA Goals and Objectives

To this end, SSA's budget request supports, within available funding, the three primary goals I have established for the Social Security Administration:

To serve the public with compassion, courtesy, consideration, efficiency and

accuracy;

To protect and maintain the American people's investment in the Social
Security trust funds and to instill public confidence in SSA programs; and

To create an environment that ensures a highly skilled, motivated workforce
dedicated to meeting the challenges of SSA's public service mission.

Human Resources

SSA's business is serving people. Over the last decade this Agency has made
considerable changes and improvements in the way it provides service and interacts
with beneficiaries and the public in general. For example, we have modernized our
title II Social Security claims-taking system and automated many previously manual
activities. In addition, we now conduct a much larger portion of our work over the
telephone, and we have implemented nationwide toll-free "800" number telephone
service for handling all general, incoming calls to SSA. Although the telephone is
preferred by a majority of the people we serve, we also have maintained the options of
visiting one of our 1,297 local offices or contacting Social Security by mail.

Nevertheless, our ability to continue to provide high quality public service depends on funding that is sufficient to pay for the staff and related expenses needed to process expected workloads and carry out SSA's mission. Only through the loyalty and dedication of it's staff, supported by automation and management improvements, has SSA been able to meet demands of growing beneficiary and worker populations while maintaining its service delivery levels.

SSA's fiscal year 1992 administrative budget request would increase employment to the level needed to support about 63,700 full-time equivalents (FTEs) -- an increase of about 750 FTEs from the amount currently funded for 1991 - and represents an increase of about 9 percent from the fiscal year 1991 funding level (excluding the supplemental funds requested for one-time work for implementation of the Supreme Court decision in Sullivan v. Zebley). Although the 9 percent increase requested for fiscal year 1992 may appear to be substantial under the new budget rules, it is a conservative request given the magnitude of SSA's built-in mandatory cost increases and the amount of work to be done.