Mr. Chairman, Thank you for allowing me to testify today before the House Ways and Means Subcommittee on Social Security. I appreciate the opportunity to tell the Subcommittee Members about how state furloughs are impacting my home state of California. I am also interested in letting you know about legislation that I will soon introduce to address this issue.
I understand that the Subcommittee has held hearings on this important issue already. In March, you heard from many distinguished witnesses, including the Social Security Administrator, Michael Astrue, and Inspector General, Patrick O'Carroll.
As you know, Mr. O'Carroll has written several reports about the impact of state furloughs and hiring freezes on disability claims processing. On March 24th, he testified before the Subcommittee that: "Since January 1, 2009, California's initial claims pending have increased by 9.7 percent and its reconsideration claims pending by 16.1 percent as a result of increased applications and the State furloughs." Unfortunately, since the March 24th Subcommittee hearing, the situation in California has only gotten worse.
While some states have exempted Disability Determination Service (DDS) employees from the furloughs at the urging of the Social Security Administration, the State of California has not exempted DDS employees. This is despite the fact that DDS employee salaries are fully funded by the Federal Government.
The unnecessary furloughs for California DDS employees are pushing back the decisions on individuals' benefits by months and harming thousands of disabled residents who are needlessly waiting for their claims to be processed. A new report issued by the Inspector General estimates that 53,136 cases will be delayed in 2009 as a result of the State of California's furloughs!
The furloughs are also impacting state DDS employees by reducing their salaries, making it harder for families to make ends meet. Since July 10th, State of California employees have been furloughed 3 days per month for a total of at least 36 days in 2009. These 3 furlough days translate to an approximate 13.8% reduction in monthly pay.
Finally, furloughing DDS employees is actually making the State of California's budget crisis worse because the state has to pay benefits until the federal claim is approved and the state if forgoing income tax revenue from furloughed employees.
Governor Schwarzenegger's insistence on furloughing DDS employees is not helping the people of California, not helping the State of California solve its budget crisis, and is simply an indefensible and illogical policy!
Earlier this year, the Social Security Inspector General released a report outlining several options for addressing the crisis, including working with States to stop DDS furloughs, transferring work to other disability examiners and/or hiring private contractors, and federalizing the DDS.
To date, Vice President Biden and others have succeeded in working with many states to ensure that DDS employees are exempted from furloughs. Unfortunately, the State of California and other states have ignored the facts and continue to furlough DDS employees.
That is why I think it is time for Congress to consider other options to stop the state furloughs.
Current federal law allows the Social Security Administrator to federalize DDS employees if a state "substantially fails" to live up to its responsibilities to process claims. I will soon introduce The Don't Delay Services Act, which is intended to prevent state furloughs of DDS employees.
My bill would deem furloughs of DDS employees a "substantial failure", triggering the provision of existing federal law that allows SSA to federalize DDS. As drafted, the Don't Delay Services Act would not change any provisions of federal law concerning the rights and protections of these workers.
I understand that federalizing DDS employees is not a perfect solution. However, in passing the legislation, Congress would be sending a wake-up call to Governor Schwarzenegger. As the Subcommittee continues to work to eliminate the disability claims processing backlog, I hope the Subcommittee will consider my bill.
Thank you again for allowing me to testify before the Subcommittee.