Statement of Senate Finance Committee Chairman Max Baucus Hearing
On the Nomination of Jo Anne Barnhart to be Commissioner of the Social Security Administration
October 4, 2001

This morning, we consider the nomination of Jo Anne Barnhart to be the Commissioner of the Social Security Administration.

Before I go any further, I want to say that given the tragic events of September 11th, the Social Security Administration (SSA) has risen to the occasion. By being extremely flexible, SSA has been able to get survivor and disability benefits to family members and injured workers as quickly as possible. I applaud their efforts.

Social Security is a critical program for seniors, disabled people, their families, and for the families of workers who have died. For example, if we did not have Social Security today, 48% of our seniors would be in poverty.

On a more sour note, however, although Social Security will continue to run yearly budget surpluses for quite a while, its long-run financial situation needs to be fixed. And the sooner it is fixed the better.

President Bush has a proposal to change the way Social Security is financed. He favors diverting part of the Social Security payroll tax into private savings accounts, and he has convened a Commission to flesh out the details of such a proposal.

I have very serious concerns about such a proposal, because it would lead to deep cuts in retirement income for our Seniors. A study done for The Century Foundation by four top economists shows that diverting 2 percentage points of payroll taxes into private accounts would result in a 20% drop in retirement income for all those under age 55 today, even after taking account of the income from the private accounts.

Moreover, private accounts are subject to all the risks of the stock market. The recent huge declines in stock prices should give us pause about using the value of shares in stocks in place of guaranteed Social Security benefits.

That said, the Social Security Administration has a number of other major challenges facing it over the next decade.

Now, Ms. Barnhart has been a member of the Social Security Advisory Board since 1997. During that time, this non-partisan board has produced many valuable reports that have catalogued the daunting challenges facing SSA now and in the years ahead, and made recommendations on how to meet these challenges. Fortunately, Ms. Barnhart's membership on the Board means she is already extremely familiar with the problems facing the Social Security Administration.

The Advisory Board's reports indicate that the disability programs of Social Security have many problems that need immediate attention. One of these problems is that it can take way too much time for applicants to get through all the layers of appeal in order to get their benefits.

In my home state of Montana, it is not uncommon for individuals to wait two to three years for a final decision on their disability benefits. Of course, during this time, these individuals have no earnings. This puts them and their families into true hardship. This is not happening just in Montana, but all over the country. This is totally unacceptable.

In Montana, we have found that part of the problem creating these long delays is that SSA just does not have enough workers. And the Advisory Board has found that the shortage of workers in the disability program has occurred all over the country. The reason is that SSA's budget is inadequate. So I would like Ms. Barnhart to tell us whether she agrees that the agency has insufficient staff and budget resources and whether she will try to fix this problem by seeking a bigger budget.

SSA has serious administrative problems in other ways. For example, last year, only 66% of the 800 number phone calls received by SSA were answered, once calls that had been abandoned were taken into account. I would like to hear Ms. Barnhart make a commitment to dramatically improve on that situation.

Finally, SSA faces a problem that will plague all federal agencies: the aging federal workforce. It is projected that almost 50% of the SSA work force will be leaving the agency over the next decade, mainly due to retirements, but also through normal attrition. Given that it generally takes 2 to 2 and 1/2 years to get new hires up to speed, this talent drain needs to be dealt with immediately. I would like our nominee to say how she will recruit a sufficient number . of people quickly enough to fill these vacancies.

So it is clear that SSA faces daunting challenges now and in the future. The next Commissioner will be sorely tested. Ms. Barnhart, SSA needs an outstanding individual like you to be at its helm. The country deserves no less. If you are confirmed, I would look forward to working with you to meet these challenges.


OCTOBER 4,2001

Mr. Chairman, members of the Committee, Senator Warner, and Chairman Ross, I am truly honored to be here today as the nominee of our president, George W. Bush, for Commissioner of Social Security. I welcome this opportunity to serve our nation, and I ask for your support.

Although my parents are unable to be here today, I would like to introduce my sister, Jan Nell Bryant, my husband, David, and my son, Niles who are joined by some of my closest friends and colleagues.

Mr. Chairman, I have a short statement which I would like to give. But first, I want to thank Senator Warner and Chairman Ross for their generous comments and for taking the time to be here today. I also want to thank Senator Roth. Although a previous commitment abroad , prevents him from being here today, I truly appreciate his support.

Throughout my life and career, I have had the great fortune to learn much from some ordinary and extraordinary people. My father served overseas in the Army in both World War II and the Korean War, and continues today to provide the finest example of patriotism I know. He also taught me that any job worth doing is worth doing right. My mother taught me to judge people for who they are, not what they are. Senator Roth and Senator Warner, who have served our nation so well through their work in the Senate, taught me that the best decisions are made by strong adherence to principle and thoughtful consideration of the facts. My sister's work with her students at the Alexandria adult learning center shows daily the difference we can make in ,the lives of others on an individual basis. My husband is truly the most honest person I have ever known. And my twelve year old son, Niles, every day provides me the opportunity to see, through his eyes, a world that is filled with the possibilities of what can be.

I take this opportunity to publicly thank them all.

Mr. Chairman, and members of the Committee, I tell you all of this because these are the values that will guide me as Commissioner of Social Security.

America is a diverse nation. I have had the opportunity to spend t h e in forty-seven of our fifty states. Through my work and travels across OUT nation, I have learned that each state is unique, different from the next. More importantly, America is many different people. People who go to work every day. People who are not able to work. People who choose to be homemakers. Young people, old people. People who are native Americans. People who are born Americans. People who are Americans by choice.

Whatever the individual circumstance, the vast majority of Americans will at some point in their lives be touched by our most important social program, Social Security. Providing survivor benefits to children and spouses, disability benefits, retirement benefits, and Supplemental Security Income, the Social Security Administration's programs reach into almost every home. For the millions of people currently receiving benefits, these programs play an important role -- be it a supplement to private retirement or a lifeline of critically needed income support.

Today, Social Security faces great challenges ensuring the program's financial solvency for future generations, providing good service to the public as the number of beneficiaries increases each year with the aging of the baby boomers, and improving program integrity through sound fiscal stewardship.

Mr. Chairman, one of the immediate challenges the agency now confronts is to assure the smooth and expeditious processing of applications for benefits filed by the families of the victims of the recent terrorist attacks. I understand that SSA expects to receive several thousand of these applications, and it is vitally important that each be treated with compassion. I assure you that,' if I am confirmed, I will make it my first priority to see that the necessary arrangements are made to process these applications as quickly as possible ahd in a manner that expresses to each family member the entire Nation's understanding and sympathy.

I look forward to confronting this and the many other challenges that will come our way in the weeks and years ahead. In doing so, I will work within the Administration, with the Congress, and with the dedicated and experienced employees of the Social Security Administration to find the best solutions. While doing so, I will strive to put a face on the work of the Social Security Administration. By this I mean, looking beyond and behind the numbers and recognizing that each number represents a person, someone whose life will be affected by the work that we do, and how well we do it.

Mr. Chairman, as I told you and other members when we met prior to this hearing, I do not seek this position to manage the status quo. Through my work on the Social Security Advisory Board, I have become convinced that we can and must do better. The people of America expect it, and they deserve it.

Whether they are just beginning their careers or retiring next month, the people of America expect and deserve to know that Social Security will be there when they need it. Whether they are applying for a Social Security number for a new baby or for disability benefits for themselves, the people of America expect and deserve timely service. And, the people of America, who find the Social Security program through their payroll tax contributions, and fund SSI through their income tax payments, expect and deserve well managed programs providing accurate payments that safeguard their trust.

As my father would say, the task that lies before me, if confirmed, is, indeed, a job worth doing. And you have the commitment of a daughter who takes her father's lessons to heart, that I will do my best to do it right.