Good afternoon. In today's hearing, we will review how technology is being used to improve the administration of the Supplemental Security Income, or SSI, program.
As the nation's largest Federal means-tested cash assistance program, SSI is sometimes called "the other welfare." Last month, SSI provided checks to more than 8.1 million disabled and aged individuals. That's almost twice as many people as collect welfare checks under the TANF program, for example. Unlike other Social Security programs, which require prior work and payroll tax payments, SSI pays monthly checks to disabled and elderly individuals with limited income and assets, regardless of whether they have worked in the past.
Since SSI was created in 1972, it has had complex eligibility rules designed to ensure that recipients do not have significant income or assets on which they should depend before turning to SSI for support. How these financial eligibility requirements are working, and how their administration can be improved, are the subjects of today's hearing.
It's worth noting that, in contrast to other means-tested programs like food stamps, SSI has continued to enforce these financial eligibility standards in recent years, which has helped to keep SSI growth in check.
The administration of SSI's financial eligibility requirements can be difficult, prone to error, and extremely time consuming, draining administrative resources especially if done manually and using recipient-reported data. In 2011, SSI had annual payments totaling almost $50 billion, not including the cost of Medicaid benefits typically provided to SSI recipients. It also had a 9.1 percent error rate, representing a staggering $4.6 billion in improper payments.
As I have described in previous hearings, we can and should expect more from government. We should expect it to administer benefits using 21st century technology, not from the era before the personal computer existed. We have made significant progress in the past year and a half enacting into law our data standards provision to jumpstart a process for defining standards. I believe SSA can and should significantly contribute to this process. What's more, I believe SSA will also greatly benefit from this effort, and it will improve how they administer all their workloads, including SSI.
This is all part of a larger goal of leveraging technology to prevent improper payments of all kinds.
Today we will hear about how SSA has expanded nationwide the Access to Financial Institutions (AFI) project, along with other efforts to better use technology. These efforts have shown that, while difficult, income and asset tests can be administered in a timely and cost-effective manner, improving program efficiency and reducing costs to taxpayers.
That's an important lesson not just for SSI, but also across all means-tested programs.
For example, other programs like food stamps have recently waived these same sorts of complex eligibility rules, especially asset tests, to speed eligibility determination and expand benefit payouts. As a result, today one in seven Americans is eligible for food stamps at a cost of over $70 billion in 2011. That's triple the level of food stamp spending in 2002 when the asset test was consistently applied.
In a time of failed stimulus, out of control spending, and a struggling economy, we cannot continue on the current fiscal path. Efficient enforcement of income and asset tests across means-tested programs will make it possible for limited taxpayer resources to be targeted to those with the greatest financial need. In this, we hope the SSI program can actually show the way.
We look forward to all of the testimony today, and to working to improve how this program serves disabled and elderly individuals who depend on it, as well as ensuring all means-tested programs efficiently and effectively use taxpayer dollars.