Statement of The Honorable Jo Anne B. Barnhart, Commissioner, Social Security Administration Testimony Before the House Committee on Ways and Means July 26, 2006 Mr. Chairman and Members of
the Committee:
The President has proposed a
comprehensive approach to immigration reform that addresses the need to secure
our borders, enforce worksite employment practices, and address the economic
issues of immigration. This approach calls for the creation of a true
temporary worker program that allows individuals to achieve legal status by
paying their taxes, learning English and gaining employment in our society.
Within this context I
appreciate your invitation to appear before you to discuss how and when we
assign Social Security numbers and issue Social Security cards to non-citizens,
as well as issues relating to benefit eligibility for non-citizens. In my
testimony today, I will describe SSA’s current responsibilities and activities
to safeguard the integrity of the Social Security system, including our work with
Department of Homeland Security (DHS) and the Internal Revenue Service (IRS).
Currently, as required by
the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, we
provide DHS extensive information about every “nonwork SSN” where earnings were
reported. “Nonwork SSNs” are issued to individuals who are not authorized to
work in the U.S. but have a valid reason for obtaining an SSN. These cards
include the legend, “Not Valid for Employment”.
SSA is also an integral part
of the DHS Basic Pilot program which allows employers to verify both the Social
Security numbers and work authorization status of persons they hire. Of
course, SSA continues to provide SSN verification services to employers,
including our web-based Social Security Number Verification System (SSNVS)
SSA currently has the
authority to use information from Forms W-2 only for the purpose of determining
eligibility for and the amount of Social Security benefits. The Administration
supports allowing disclosure of this data in the interests of national security
and for law enforcement purposes.
At SSA, we have a proven
performance record and can and will do what we are called upon to do. But I
would be remiss if I did not mention that, as this Committee well knows, every
new responsibility we are given, without adequate funding, will affect our
ability to provide our core mission service to the American public.
This year alone, we will
process over 6.7 million claims for benefits; process almost 245,000 Medicare
Part D low income subsidy applications; make decisions on over 575,000
hearings; issue 18 million new and replacement Social Security cards; process
265 million earnings items for workers’ earnings records; handle approximately
59 million transactions through SSA’s 800-number; serve 42 million visitors to
our field offices; process millions of actions to keep beneficiary and
recipient records current and accurate; and conduct 1.6 million continuing
disability reviews (CDR’s) and over 1 million non-disability Supplemental
Security Income (SSI) re-determinations.
I have worked closely with
the Social Security and Human Resources subcommittees in our efforts to improve
service, most notably through the Disability Service Improvement initiative and
related improvements to the disability process. I know that this Committee is
well aware of the challenges we face.
From my perspective as
Commissioner of Social Security, I am concerned that reductions of $200-$400
million in the President’s budget request for SSA administrative costs that
have been proposed by the House and Senate appropriators would jeopardize our
ability to improve service and eliminate backlogs, even without new
responsibilities. I might note that the President’s budget for FY 2007, and
for the past few years, included modest increases in SSA’s administrative
budget.
ENUMERATION AND BENEFITS
FOR NON-CITIZENS
Enumeration of
Non-Citizens
Under current law, Social
Security numbers can be issued to non-citizens when they are lawfully admitted
to the United States for permanent residence, if they are otherwise authorized
to work in the United States, or, under limited circumstances, where an
individual is not authorized to work, but has a valid need for an SSN.
The vast majority of
original Social Security cards are issued to United States citizens, or to
permanent resident non-citizens. Since these individuals are authorized to
work without restriction in the United States, these cards show only the name
and SSN of the individual and can be used as evidence of authorization to work
in the U.S.
However, cards issued to
non-citizens who are not authorized to work (at the time of application for a
Social Security number) or who are only temporarily authorized to work bear one
of two legends describing work authorization status at the time the card was
issued: “Not Valid for Employment” or “Valid for Work only with DHS
Authorization”.
“Not Valid for
Employment”
Initially, SSA issued the
same type of Social Security card to everyone, whether or not the individuals
were authorized to work. In 1974, SSA began assigning SSNs for non-work
purposes, but the cards were not specifically annotated. Beginning in May
1982, SSA started issuing cards printed with the legend “Not Valid for
Employment” , often referred to as nonwork SSNs,” to non-citizens not
authorized to work. This was due to the increasing need for individuals to
have SSNs for nonwork purposes (e.g., to receive payment of a government benefit,
to open a bank account, or to get a drivers license) and concerns that such
individuals might use the SSN for unauthorized work. With this restrictive
legend appearing on a card, employers were able for the first time, to
determine whether the individual to whom the card was issued was authorized to
work. Of course then as now, an employer could not rely on the Social Security
card alone to establish that the person presenting the card was the person to
whom the SSN was assigned. The Social Security card is not, and never has
been, an identity document, which is why it must be presented in conjunction
with an identity document to prove work authorization under immigration law.
In October 2003, I
significantly tightened the rules for issuing nonwork SSNs. No longer do we
issue SSNs to non-citizens just so they can obtain a driver’s license. Instead,
SSA only issues such an SSN when 1)a Federal statute or regulation requires an SSN to
receive a particular benefit or service to which an alien has otherwise
established entitlement; or 2) a State or local law requires an SSN to get
public assistance benefits to which the legal alien without work authorization
has otherwise established entitlement and for which all other requirements have
been met. This action reduced the number of “nonwork SSNs” we issue each year
from 72,000 to 15,000.
“Valid for Work Only with
DHS Authorization”
Beginning in September 1992,
SSA began issuing cards with the legend “Valid for Work Only with INS
Authorization” to non-citizens lawfully in the United States with temporary authorization
to work. This legend has been changed to “Valid for Work Only with DHS
Authorization” to reflect the change from “INS” (the Immigration and
Naturalization Service) to “DHS”. In these cases, employers must examine other
acceptable documentation for the employment eligibility verification process
(Form I-9), normally the non-citizen’s DHS documentation.
In Fiscal Year (FY) 2005,
SSA issued approximately 5.4 million original cards. Of these, 4.3 million
were issued to U. S. citizens. Approximately 1.1 million cards were issued to
non-citizens with temporary or permanent work authorization and fewer than
15,000 cards were issued to aliens not allowed to work.
Social Security Benefits
for Non-Citizens
As you know, current law
explicitly prohibits the payment of benefits to individuals in the United States who are not lawfully present here. A non-citizen who is outside the United States can be paid benefits only if he or she meets the applicable statutory
requirements.
Impact of the Social Security
Protection Act of 2004 (SSPA)
Under SSPA, Social Security benefits
are not payable on the record of a non-citizen worker unless the worker was
authorized to work in the United States when the worker was issued a Social
Security number, or any time thereafter. (This change became effective with
regard to workers who were issued an SSN on or after January 1, 2004.)
Consequently, a non-citizen worker must meet this requirement to become
eligible for benefits, or for the worker’s family members to become eligible
for benefits as dependents or survivors of the worker.
Nonpayment Provisions
The alien nonpayment
provision (section 202(t) of the Act) provides for nonpayment of benefits to
aliens who are absent from the United States for more than 6 consecutive
calendar months, unless they meet one of several exceptions in the law that
permit payment to continue. The primary exception is that the alien
beneficiary is a citizen of a country which has a social insurance system of
general application and which pays benefits to eligible United States citizens while they are outside that country.
Benefits that have been
stopped because the beneficiary is outside the United States will resume when
the beneficiary has returned to the United States and has remained here in
lawful presence status for one full calendar month and will continue until the
beneficiary is absent from the United States for longer than six consecutive
calendar months.
In addition, in many cases,
aliens entitled to dependents’ or survivors’ benefits must also meet a U.S. residence requirement to be paid outside the United States. The dependent or survivor
beneficiary must have resided in the United States for five years, during which
time the family relationship on which benefits are based must have existed.
This five year residence requirement can be removed for dependents or survivors
who are citizens or residents of a country with whom the United States has a totalization agreement.
Other Events That Result
in Nonpayment of Benefits to Non-citizens
The Social Security Act
prohibits the payment of Social Security benefits to alien workers (and their
dependents or survivors, in certain cases) who are removed from the United States under specific provisions of the Immigration and Nationality Act.
Crediting Unauthorized
Work Towards Social Security Benefits
There have been a number of
proposals to eliminate Social Security credit for earnings that are posted to a
noncitizen’s record during periods when the person is not authorized to work.
You may recall that when the SSPA was enacted, consideration was given to a
similar proposal, which ultimately was not included in the law.
We understand the rationale
behind this proposal. However, to administer such a change, we would have to
know exactly which periods in the past a person was authorized to work and not
authorized to work. We defer to DHS on the specifics of availability of data,
but we understand that DHS does not have the data readily available at this
time to reconcile earnings and work status.
“HARDENING” THE SOCIAL
SECURITY CARD
As you are aware, the
expertise of counterfeiters and the wide availability of state-of-the-art
technology make it increasingly difficult to develop and maintain a Social
Security card that cannot be counterfeited, despite best efforts to guard
against such incidents. Therefore, SSA will continue to evaluate new technology
as it becomes available to determine if additional features should be included.
As provided in the IRTPA,
we, in consultation with the Secretary of Homeland Security formed an
interagency task force to establish requirements for improving the security of
Social Security cards and numbers. Because current law requires the card to
be printed on banknote paper, the taskforce was limited to consideration of
improvements to this type of card. In addition to representatives from SSA and
DHS, the task force included representation from the Federal Bureau of
Investigation, the Department of State and the Government Printing Office. I
share Congress’ concern abut the security of the Social Security card and am
committed to doing what I can to make improvements in this regard. The
taskforce has completed its work and I provided this Committee with a report a
few days ago on how its recommendations can be implemented. We have decided to
delay moving forward with the production of the improved Social Security card
pending resolution of the immigration reform debate because the final law may
include provisions that affect the Social Security card.
Although not proposed by the
Administration, creating a different kind of Social Security card has been
suggested by some members of Congress. The immigration and welfare reform
legislation passed in 1996 required us both to conduct a study and to develop a
report on different methods for improving the Social Security card process,
including prototypes of several kinds of new cards. This report, “Options for
Enhancing the Social Security Card,” was issued in 1997.
We know from the 1997 effort
that should SSA be required by Congress to replace all SSN cards the main costs
associated with replacing the current SSN card are those associated with
reinterviewing individuals and reverifying documents, while the additional
costs of the card itself—even with additional security features—are minimal.
Thus, the feasibility of a “hard” card depends on who would receive it over
what period of time.
The most important factor
affecting the total cost is the requirement to verify the identity of the person
applying for the card and, in the case of non-citizens, determining the
immigration status and work authorization. Other factors must be taken into
account as
well. For example, the cost
of equipment that might be needed in SSA field offices to work with the new
cards and the cost to SSA to notify number holders who might need to obtain a
new SSN card would have an impact on total outlays.
Currently, most original
SSNs (and cards) for United States born individuals are issued through the Enumeration
at Birth (EAB) process in which parents apply for their child’s SSN at the
hospital as part of the birth registration. The vast majority of replacement
SSN cards, and a relatively small number of original SSN cards for U.S. born individuals, are issued by SSA field offices where evidence is reviewed and
verified. The majority of original SSN cards issued through SSA field offices
are for individuals who recently arrived in the United States and whose
immigration status permits assignment of an SSN.
Last year, we estimated that
a card with enhanced security features would cost approximately $25.00 per
card, not including the start-up investments associated with the purchase of
equipment needed to produce and issue this type of card. According to estimates
made last year, reissuance of all new cards for the 240 million cardholders
over age 14 would cost approximately $9.5 billion. We know that, since we made
that estimate, the cost of issuing SSN cards has increased by approximately
$3.00 per card due to new requirements for additional verification of evidence,
so we anticipate an increase in the total cost estimate when we update our
figures to reflect current dollar costs. I hasten to add that the
Administration is not seeking to replace all cards. The number of workers who
would have to obtain a new card varies from proposal to proposal.
Currently, each year staff
of the agency devotes approximately 3,300 work years of effort to the SSN card
issuance process. Because of the need to interview everyone receiving a new
card, and examine original documents, last year’s estimate indicates that we
would need an additional 67,000 work years to issue everyone a new card. This
would require hiring approximately 34,000 new employees if we were required to
complete the work within two years and 14,000 new employees to complete the
work in five years. As noted, this estimate assumes replacing cards for 240
million individuals, which the Administration has not proposed. An approach
that would mandate new tamper resistant cards to be issued only during the
normal course of initial issuance and reissuance would involve significantly
less additional costs. For a phased approach that limited new cards to only
the approximately 30 million people who change jobs at least once during a year
and the additional five million young people reaching age 14, the cost would
be approximately $1.5 billion per year, using last years cost numbers.
SSA HELPS IDENTIFY
UNAUTHORIZED WORKERS
SSN Verification Services
Over the years, we have
worked to offer employers alternative methods to verify SSNs. One of those
methods is the Employee Verification Service (EVS). EVS is a free, convenient
way for employers to verify employee SSNs. It provides employers with several
options depending on the number of SSNs to be verified. For up to five SSNs,
employers can call SSA’s toll-free number for employers (1-800-772-6270)
weekdays from 7:00 a.m. to 7:00 p.m. Eastern Standard Time. Employers may also
use this number to get answers to any questions they may have about EVS or to
request assistance. In FY 2005, SSA responded to nearly 1.5 million calls.
Employers also have the
option to submit a paper listing to the local Social Security office to verify
up to 50 names and SSNs. In addition, employers may use a simple registration
process to verify requests of more than 50 names and SSNs or for any number of
requests submitted on magnetic media. Currently, almost 17,000 employers are
registered for this verification service.
To further increase the ease
and convenience of verifying employee SSNs, we developed the Social Security
Number Verification Service (SSNVS). After obtaining a PIN and password in a
simple registration process, employers can use the internet to get immediate
verification of the accuracy of employees’ names and SSNs. This service was
expanded to all employers in June 2005.
I announced the nationwide
rollout last year at the SSA sponsored National Payroll Reporting Forum, and we
continue to promote SSNVS. For example, an article on SSNVS appeared in the
SSA/IRS Reporter that is sent to over 6.6 million employers. It was also
featured in the SSA wage reporting email newsletter, W2News. We have also
highlighted SSNVS in our many speaking engagements before the employer community.
There is a special section on SSA’s website for employers that highlights and
explains the use of SSNVS. This site recently ranked third in the American
Customer Satisfaction Index survey, which asks users to rate the content,
usefulness and functionality of applications on both public and private sector
sites. Through SSNVS, we processed over 17 million verifications for 21,000
employers in the first six months of 2006.
Basic Pilot
As I mentioned earlier,
employers in all 50 states may participate in the Basic Pilot program, an
ongoing voluntary program in which SSA supports the Department of Homeland
Security (DHS) in assisting employers confirming employment eligibility for
newly hired employees. Participating employers register with DHS to use the
DHS’ automated system to verify an employee’s SSN and work authorization
status. The information the employer submits to DHS is sent to SSA to verify
that the Social Security number, name, and date of birth submitted match
information in SSA records. SSA will also confirm US citizenship, thereby
confirming work authorization; DHS confirms current work authorization for
non-citizens. DHS will notify the employer of the employee’s current work
authorization status. In December 2004, the Basic Pilot was expanded to all 50
states. As of July 17, 2006, DHS and SSA had signed agreements with over 10,000
employers, representing about 36,000 employer sites. For FY 2005, SSA received
approximately 100,000 Basic Pilot queries each month. So far, for FY 2006, SSA
is receiving an average of 150,000 Basic Pilot requests a month. In June 2006,
we received over 182,000 queries.
In 2005, through the EVS,
SSNVS, and Basic Pilot programs, we estimate we provided a total of 67 million
employer verifications, up from 62 million in 2004.
Earnings Suspense File
(ESF)
The Earning Suspense File is
an electronic holding file for W-2s (wage items) that cannot be matched to the
earnings records of individual workers. It does not represent nonpayment of
Social Security payroll taxes, nor is it a repository for actual wages.
There are approximately 255
million wage items in the ESF through Tax Year (TY) 2003, the last year for
which data is available. This represents about $519.6 billion in wages. That
sounds like a large number, but during that period, we have successfully
recorded $73.8 trillion in wages, or more than 99 percent of the total.
SSA does not have data on
the number of wage items in the ESF that are attributable to unauthorized work
by non-citizens. SSA’s source of information about earnings is the Form W-2,
and there is no citizenship or immigration status information on that
document. While some percentage of name and SSN mismatches are attributable to
fraud by unauthorized workers, such mismatches also can occur for a variety of
other reasons, including typographical errors, unreported name changes and
incomplete or blank SSNs.
No-Match Letters
As you know, SSA processes
wages reported by employers on Forms W-2. We pass this information on to the
Internal Revenue Service for income tax purposes, and we record the earnings to
each worker’s account so that they are considered in determining eligibility
for benefits and the level of benefits to be paid.
We send “no match” letters
to employers who submit more than 10 wage items when more than 0.5 percent of
the items in a wage report consist of an SSN and name combination that does not
match our records. The employer ‘no match’ letters include a list of up to 500
SSNs submitted by the employer in wage items that SSA could not post to a
worker’s record. In 2005, we sent approximately 127,000 employer ‘no match’
letters, which covered 7.3 million mismatched records. For privacy reasons,
the letter lists only the SSNs, not the name/SSN combination.
The only source of
information that SSA receives about a taxpayer’s employer and earnings is tax
return information on the Form W-2. We receive and process this information as
an agent for the Internal Revenue Service. Use of and disclosure of tax return
information is governed by section 6103 of the Internal Revenue Code. SSA
currently has the authority to use this information only for the purpose of
determining eligibility for and the amount of social security benefits. The
Administration supports allowing disclosure of this data in the interest of
national security and law enforcement purposes.
CONCLUSION
Before I close, let me say
again, that SSA strongly supports the President’s comprehensive immigration
reform approach and is ready, willing, and able to do its part to provide
support for DHS in its immigration enforcement activities. The men and women
of Social Security are dedicated, hardworking, and productive public servants
who will do everything they can to carry out SSA’s responsibilities, whatever
they may be.
I want to publicly thank
this Committee for your support for SSA and its programs over the years. I
look forward to continuing to work with you as we serve the American people.
Thank you again for the
opportunity to appear before you today. I look forward to working with you,
and will be happy to answer any questions you may have. |