Senate Hearing on Future of Social Security

... $2 trillion in taxes every 10 years. That is enough to keep Social Security whole till the end of this century. Those are facts. We have proposals to offer to colleagues on both sides of the aisle to carry that out. (00:20) Second, you contrast this again with the facts on the ground. Chairman Whitehouse just talked about the House already laying out various proposals that would end up cutting benefits. These reimbursement rate proposals are always configuring the system in a way that cuts benefits for seniors. That's what the COLA changes are all about. That's what the age proposals are all about. (00:48) So at the end of the day, the question for the Congress and for the Senate is do we want to take the steps that the chairman outlined, that I've said on the finance committee we will work in a bipartisan way to carry out, and protect the Social Security guarantee, or do we want to start down the path, as the House already did with those proposals that Senator Whitehouse talked about, and basically toss the guarantee in the trash? (01:19) The American people do not want to see that happen to the Social Security guarantee. I'm here as chairman of the Senate Finance Committee to work with my colleagues on both sides of the aisle specifically to get started on the fact that the ultra wealthy are avoiding those $2 trillion in taxes every 10 years. That's where we ought to go to start making progress, and I'm interested in doing that in a bipartisan way. Thank you, Mr. Chairman.

Thank you, Chairman Wyden. As the old advertisement used to say, when the chairman of the Senate Finance Committee talks, people listen. Thank you for talking. (01:54) Commissioner O'Malley, thank you for being here. The commissioner was Senate confirmed in a bipartisan vote, including the support of both myself and ranking member Grassley. He has done terrific work, as I outlined in my remarks already, with more to do. He previously served as governor of Maryland from 2007 to 2015 and before that as mayor of Baltimore. And we're delighted, Governor, that you are here, and I'm sure that your colleagues, the senators from Maryland who are here, Senators Cardin and Van Hollen, will be taking the chance to greet you as you visit us here in the Senate. They're big fans of yours, as you know. We're sorry to be losing Van at the end of this term.

Mr. Chairman, thank you, and thank you to all of the members of the committee. I've had the honor to speak with each of you and to receive your advice during that confirmation process and it's been invaluable to me in these last 270 some days in leading this agency. I want to thank you so much for holding this critically important hearing to consider the staffing levels and customer service at the United States Social Security Administration. (03:15) We do so on September 11th, and Chairman Grassley, ranking member Grassley, I join you in solidarity with every American in remembering that day. I don't think I can ever experience a clear sky in September without thinking of that day. And on that fateful day, Social Security was also present, not sorting through the physical rubble, but we were there to make sure survivor benefits were paid to all of the kids that lost parents in those attacks. (03:46) Perhaps after sustaining this republic through the pandemic, the challenge we face today at Social Security is perhaps the most daunting in its 89 year history. And that's saying a lot. This is the very first budget or appropriations committee hearing Social Security has been granted in 10 years of steady declines in customer service provided to the American people. And the fundamental reason for this precipitous decline is not the pandemic and it's not telework, it is this. Social Security today is struggling to serve more customers than ever with staffing that Congress has reduced to a 50 year low. (04:29) Allow me to repeat this hard but essential truth. Social Security today, not 10 years from now but today, is struggling to serve more customers than ever with staffing levels reduced to 50 year lows. And I do not believe for a moment that this was the intention of Congress. But the cold result is customer service for which Americans have already paid by working their whole lives has now been reduced to crisis levels. (04:57) What does that crisis level look like? You've heard the calls and you've heard the cries. Hour long waits, sometimes an hour and a half on the 800 number. Financial hardships inflicted oftentimes on our elderly and most vulnerable citizens through no fault of their own because of overpayments and the injustice of underpayments that it takes us too long to catch up to. And in far too many states, almost a year long wait now, a year long wait just for the initial disability determination, with a record backlog of 1.2 million cases. (05:33) Members of the committee, this is what happens when an agency is forced to serve more and more and more people with fewer and fewer and fewer staff. And the American people deserve better. In fact, they've already paid for better. I know your offices have received their calls. We see their faces every day in 1,211 now understaffed field offices all across America. (05:59) So you might be heartened to learn that in recent months, with your advice, consent, and support, not withstanding the enormity of the challenge, we have taken bold steps to achieve real and measurable progress on some of our toughest problems. We have now reduced the wait times on the 800 number by 50%. We have eliminated the claw back cruelty by changing policy so that we no longer intercept a hundred percent of a retiree's check in order to recoup the overpayment. We have cleared now, for the first time in recent memory, we have cleared more cases every week for 12 weeks in a row in the initial disability determinations than have been filed on the front end of that process. And we have reduced the ALJ, the appellate level hearing backlog, to a 30 year low. But make no mistake about it, these recent gains will be short-lived without your immediate attention and support. (06:58) True story. In 2018, you allowed this agency to operate on 1.2% overhead compared to annual benefits paid out. If you were to compare that to a private insurance company, Allstate operates on 19% overhead. Liberty Mutual, Liberty Biberty, on 23% overhead. When Congress allowed Social Security to serve our customers and to serve them well, we operate under just 1.2% overhead compared to benefits paid. But over the last 10 years, that has been reduced to less than one percent and that's why we are now at a 50 year low in staffing and crisis level in terms of customer service. (07:46) So what can be done? The good news is, like the solvency challenge in 235, the good news is this customer service crisis is also solvable. This is a solvable problem. Allowing Social Security to provide the customer service for which people have already paid is not a new idea. The money for the most part is already there. This is merely return to normalcy, common sense, tradition, and a restoration of the customer service for which people have already paid. (08:21) Now, the President's budget for Social Security would be a big step in the right direction. It would allow us to improve customer service and reduce those unacceptably long wait times and backlogs across the range of services. With your support, the $15.4 billion proposed by the president would allow us to greatly restore staffing at our field offices and at our teleservice centers, where by the way, attrition has run at 22 and 24% for the last several years. It would allow us to greatly restore staffing of disability examiners in our 52 state disability offices, including District of Columbia and Puerto Rico. And finally, it would allow us to make some meaningful headway in modernizing the technology that it takes to speed up processing times for millions of claims while expanding online services options for our citizens. (09:21) So in conclusion, I continue to be inspired every single day by the commitment, the grit, and the heart of the men and women of the Social Security Administration. They have soldiered on in the face of this daunting mismatch between staffing and customers, and I'm especially grateful to them for the hard-won progress of these recent months. But we need your urgent attention now. As the number of our customers continues to climb, there is no act of Congress that will change those demographics, but your action now to give us the support to allow us to use the dollars people have already paid is critically important. I thank you so much for holding this hearing. Look forward to answering your questions.

Well, we're delighted that you're here, Commissioner, and I guess I'll ask three questions and the first is give us some examples of things that would improve if we were able to give you the funding levels that OMB has requested.

Mr. Chairman, thank you. A few of the things that we would be able to improve, the main, about eight million people call our 800 number every month, not every year, every month. Another eight million go into the 1,211 field offices. I think we still have 1,211. Every now and again, one of them implodes without warning, given the shortness of staff. But the two things that it would primarily allow us to do is to start to staff up in those critically important customer facing places, namely the 800 number. (11:16) My father-in-law, who is 93 years old, says to me, in other contexts, but it applies in this one, he says, "Martin, when I call an 800 number, I just want to get a person. I just need to talk to a person." So being able to restore those teleservice numbers to keep pace with the rising volume. (11:38) And secondly, the field offices, the 1,211 field offices are also suffering from that short staffing. When Congress passed the budget for the year, we came out of seven months of a hiring freeze and with those dollars we were able to start to replace in the teleservice centers and the disability determination offices some staff. In the field offices, we were only back filling some places, one for every 10 that we had lost in the course of that year. (12:13) And the final one, I just mentioned it there, was the disability determination offices, which have suffered a lot of loss over the last year. And undergirding all of that, of course, is IT platform and a modernization that's desperately needed on what is a very old [inaudible 00:12:30] based system with green screens.

Ranking member Grassley mentioned the last major Social Security legislation 40, 4-0 years ago, and one of the things that I noticed has changed since then has been dramatically worsened income inequality in the United States. What has that change in income inequality meant for Social Security and its revenues?

It's a question that I ask myself. Well, actually I didn't ask it that way, but I learned the answer, which goes to the call of your question. I had asked our public actuary, chief actuary, Steve Goss, given the history and what happened in the 75 year, what Congress had hoped in the days of President Reagan and Speaker O'Neill would be a 75 year fix. I said, " What did you all get wrong?" (13:32) And he said the main thing, 90% of the reason why what some call the solvency event, what others call the cliff, what others call a 17% shortfall, the reason that that was moved forward was because actions taken after that compromise took more and more income out of the band that, as you mentioned, to which Social Security applies. In other words, changes in our economy, changes in our tax policies, other things meant that in the ensuing years, while a majority, vast majority of Americans saw no real increase in their wages, the top six percent did. But that entire six percent, the lopsided nature of those income gains, was all outside that band, that as you pointed out, the people who guard these buildings, the people who keep these buildings clean and safe, pay all year. Someone like Warren Buffett pays for like 30 seconds of a new year. (14:41) And so it was the taking of that applicable, those earned dollars out of that narrow bracket that caused the shortfall to be advanced from 2050 to 2034. Excuse me, it was now pushed off to 2035 due to better job and wage growth.

My last question is a very simple one. There are places in the Social Security rules where very significant consequences follow from very small changes. So you hit your income cap, you go one dollar over, and suddenly there are very dramatic changes that happen. These cliffs I think are really hard for people that get caught by surprise by them, and there also seems to be pretty terrible just public policy. (15:37) And I would just like to ask you if you'd be willing to work with me, and I know Senator Wyden is interested in this on the finance committee as well, in a general look at how to do cliff smoothing so that these dramatic consequences for earning one dollar more are mitigated for American families?

Yes, sir. Mr. Chairman, would love to work with you on that. There's a lot of really important work that's already ongoing, advocates like Nader and Oscar and other talking about how we get people back to work and remove that fear that they're going to in a split second lose medical coverage for their family. National Federation for the Blind was talking to me recently about some of the cliffs in that program. (16:21) There's been a bipartisan effort by Senators Cassidy and Brown to raise the asset limit where Social Security or Supplemental Social Security Income Program is concerned. So on many of these fronts-

I look forward to working with you on the cliff smoothing issue.

Thank you.

And I turn to ranking member Grassley.

Yeah, you co-signed the recent Social Security Trustees Report, recommending that lawmakers take, in your words, timely legislative action to protect Social Security for future generations. Of course, saving Social Security and preventing a 25 year cut in senior benefits will require presidential leadership. You're here to testify on the administration's budget request for your department. Have you encouraged the administration to include any legislative proposals in their budget to extend the solvency of the Social Security?

Senator, I'm very mindful that the prerogative of policy and timing is that of your [inaudible 00:17:31] Article One, along with President of the United States. I have expressed to the administration that just as I promised you in our meetings and all of you that served on the confirmation hearing, that we have an actuary who is top-notch, has served under Democratic and Republican presidents alike. And I stand ready, willing, and able to provide any data, any information that would inform this debate and make sure that it is grounded in the truth. And the sooner we get to the truth, I think the better for the American people.

Not only does the Biden-Harris budget fail to extend Social Security solvency, their budget project projects that the policies it contains would reduce Social Security payroll tax revenues by $17 billion. As a result, their budget would worsen the program's finances. Which policies in the Biden-Harris budget are responsible for this reduction in Social Security revenues?

Senator, I'm sorry, I was not following the call of your question. Can you come at me again with that?

Yeah. Which policies in the Biden-Harris budget are responsible for this $17 billion reduction in Social Security payroll taxes that comes to support Social Security?

Senator, I'm not aware of anything in their budget being responsible for that. However, I am aware that the dynamics, the demographics are always constantly changing. Ratios of workers to beneficiaries' birth rates, which has really taken a hit, and what had been the strengthening of our country's finances by the arrival of immigrants has been greatly slowed in some cases.

Since you aren't prepared to answer that or able to answer it today, I'd like to have an answer in writing.

Yes, sir. If I find one, well, I will get back to you in writing whether I find anything in their budget or not on that.

Well, let my staff help you find something in the budget.

Yes, sir. Chris is very diligent.

As I mentioned during my opening statement, I regularly hear from Iowans who struggle to get in contact with anyone from Social Security. Despite increased staffing needs, the administration Social Security continues to allow for flexible telework for frontline employees such as field office workers. In fact, I said earlier a field office manager told me in June that only five of her 40 employees come to the office five days per week. What steps are you taking to as commissioner to ensure more employees do show up to the office?

Yes, sir. Mr. Chairman, thank you. One of the issues I had to deal with immediately upon your sending me to the Social Security Administration was a change in our telework posture. I don't believe that anybody in public or private sector got this right the first try, and neither did we. But the second try was on February 2nd, about 30 days after I had walked into that headquarters. And we changed our telework balance. (21:10) Now in truth, the field offices have been open five days a week ever since vaccines were available and in a sense never closed because managers went in anyway and opened the mail all through COVID to make sure that we didn't stop doing what we needed to do. But our posture at the headquarters and in the regions, in the field offices, by the way, sir, it is, they're open five days a week. Three of those days are in person in the office because you have to be able to see people, and two of those are telework where things get processed, interviews happen on the phone, interviews happen by video. (21:51) As I traveled around, I indeed, as you did, found some people that choose to come in all five days out of the week. With regard to the regional headquarters and the headquarters in Baltimore and Washington, the office in Washington here, the change was to go to three days a week in person, two for telework. The latest report that came out from the OMB report to Congress on telework showed that we had more on-site presence than Department of Education, HUD, Labor, Treasury, Environmental Protection, GSA, National Science Foundation, and an article, I believe it was GOVX, said that we may have struck the balance that will be an example to other federal agencies. So we're open to other ways to improve, but right now the balance is a lot better than it was.

Thank you. Chairman Murray is now recognized. If Senator Scott returns, he will be next.

Thank you. Thank you very much, Chair Whitehouse. Governor, good to see you. Thank you for the job you're doing. Social Security is more than a lifeline. It really is a promise we make to the American people. If you work hard, the benefits you earn will be there for you when you retire. And if you have a disability, you will not be left out on your own. (23:12) We have an enormous responsibility to do everything we can to protect this program for the future and make sure that right now, today, it is working for folks back home. Now when it comes to the future, there are straightforward ways to strengthen Social Security by making it a little fairer. Right now, someone making a billion dollars a year pays the exact same amount into Social Security as someone who makes 170,000. We could fix that, so the wealthiest people no longer have the smallest Social Security tax rate. Sounds simple and sounds fair. (23:46) But instead, the Republicans' 2025 plans, like the Republican study committee budget called for raising the retirement age and cutting benefits for some people. Democrats have been very clear, we're not going to let anyone weaken benefits or break our promise, not for seniors today and certainly not for seniors tomorrow. I want to see us do more to live up to our promise for people who are getting benefits right now, like repealing the Windfall Elimination Provision and government pension offset that actually unfairly reduces pensions for hardworking public servants. That would help 40,000 people in my home state and millions more nationwide, including many of our current retirees. (24:29) And as chair of appropriations, I have to underscore keeping our promise isn't just about how Social Security is structured. It is about adequately funding the office charged with prosecuting and executing on that promise. I fight hard every year to make sure we secure necessary funding for the Social Security Administration and I'm always pushing for more because I hear personally from so many constituents who are fighting their own long uphill battles trying to get help. (25:01) I had one constituent who was trying to sign up for Medicare. First she was told she couldn't sign up online. Then she was told she would receive an appointment email in 30 days. She waited 45 days, no update. Called, and was told to call again 10 days. 14 more days, no update. She calls and is directed to the local office. Now, I want to be clear, we have very hard dedicated public servants at the local SSA office. They work very hard to help our constituents, but the problem is here we do not have enough of them because for her, there was no opening through October and no guarantee she'll get an appointment after that, given how many others are waiting in line. Mind you, she first reached out in July. (25:45) She's not alone, not in Washington where I know other constituents have been trying to get an appointment since May, and not across the country, where I have no doubt other families are facing similar challenges. So we have to remember that promises like Social Security aren't magic words. They don't keep themselves, they don't run themselves, they don't fund themselves. Keeping our promises requires the hard work of public servants at the Social Security Administration and that requires federal funding. (26:15) Every time House Republicans propose blanket across the board cuts to domestic spending or an extended CR that would leave SSA at its lowest staffing levels in more than 50 years, they're in effect proposing that more seniors waiting longer and longer for benefits they were promised and getting less help. That is just not acceptable to me. It's not what we promised our families. And I'm really glad that we have the opportunity today to talk about what is required to deliver this promise to our constituents. (26:45) So Commissioner O'Malley, you have to have the resources to provide the staffing, to be able to help our constituents, and to hire and train the personnel in all of the work that they do, which is why the Senate Appropriations Committee recently advanced a bill to increase SSA funding by 509 million over 24 levels. I wish we could have provided more, but the FRA spending limits not only constrain and threaten our defense and national security, but they also threaten us to be able to adequately administer Social Security and Medicare. So I'm glad you're here because I want to ask you, how would that increase included in the Senate Labor HS bill for FY '25 help you improve your personnel and customer service?

Senator, thank you. Thank you for the question and thank you for your past help a couple years back that allowed us to keep our nose above water coming out of the pandemic. The Senate mark is certainly far preferable to what the House proposed to do to us. The swing there is almost a billion dollar swing between what the House proposed, which would entail 20 furlough days, the net losses of 3,400 staff, and that's just in the SSA staffing. The DSSs would be cut by 1500. The IT funding would be barely lights on. (28:14) By contrast, the Senate mark would be better. It would allow us not only to keep the lights on in IT funding, but an additional 50 million to do some needed modernization on customer facing aspect. It would still have a thousand net losses in overall staff at SSA, not as bad as the 3,400, what I would say would be, I don't want to call it catastrophic. It would be devastating if the House mark were to go through. On the DDS staffing, instead of losing 1,500 initial disability examiners as the House proposes, we would only lose 500

... and the overtime would be level. As you will know from understanding our budget, we use overtime to put down spikes and other things in the backlogs. That's the summation, that's the compare and contrast. The Senate mark is much better. The only option before you that actually guarantees that we will restore customer services is really the President's budget or the anomaly in the CR, but the Senate mark is much better and I thank you for that.

Yeah, so for my colleagues, it is critical that we look at what the Finance Committee's doing, which Chair Wyden and Chair Whitehouse talked about. But we also have to make sure we have people to process these claims, and that is through the appropriations process. And these dramatic across-the-board cut CRs for six months are not going to be able to make sure that we provide our constituents with the promise we have given them.

May I also thank you for the bipartisan nature of that because it meant a lot to our workers to see such a strong bipartisan rebuke to further cuts of customer service as were proposed in the House.

Absolutely. Thank you.

Senator Scott, followed by Chairman Wyden. Senator Scott.

Thank you, chairman. Thank you Commissioner O'Malley for being here. When we spoke back, when you came before the agent committee, we talked about how unsustainable Social Security is and it's not something you can fix. It's something that Congress has to fix with the support of the White House. I stress the disturbing fact that the Biden-Harris Administration has not taken a single action to actually improve the solvency of Social security. President Biden and Vice President Harris have pretended throughout their administration that somehow massive tax hikes can solve their problems with Social Security's insolvency. But as we all know, that's a lie. Biden-Harris proposed budget admits that we won't work. I mean, it's not going to work and that's under their plan. The federal government will continue to run trillion-dollar deficits. According to the Biden-Harris budget proposal, even if they get all the tax hikes they want, our federal debt's going to continue to grow by $6.4 trillion in the next four years and we already have over $35 trillion worth of the debt and we'll going to hit 36 trillion by the end of this year. (31:28) To add insult to injury, the Biden-Harris Administration's plan to fix our economy is to borrow more money, spend more money and tax more while we give illegals more free stuff. So I think it sums up in one phrase, illegals get more free stuff and citizens pay more. I think we all know that Social Security's got to get fixed. It's at risk because the billions that we're spending on some of it, it's because the billions we're spending for housing and safeguarding illegals. I think we all know it's unsustainable. So, I wish the administration was doing something about this. Unfortunately, there's nothing that this administration's doing. Of course, it's not something that in sitting in your job you can make happen like that. I'm also very concerned with the levels of customer service that Floridians are receiving from the agency, and I think we talked about that. (32:18) You announced a new telework policy for some SSA employees but not others. It didn't change telework policies for frontline workers such as field office employees who have two days of optional telework per week. So in my state, I don't know if it's true around the country, but in my state a lot of people are complaining and I think we talked about that. So there's serious customer service issues at the agency, which I think you admitted you were going to work really hard on when you got started. So, can you explain your concept as to telework when COVID's passed, most of the working world is back to work?

Sure. Thank you. Senator, thank you. There was a lot packed in your question, but I'll also focus on the customer-facing stuff and the balance between on-site presence and telework. I want to show you, I know it's kind of far away, but it's also in the written testimony. This is a graph that shows the rising number of customers which are just going to continue to rise. I know you're much younger than me, but people like baby boomers my age are continuing to enter the beneficiary pool. So the customers continue to go up, but Congress has reduced our staffing to ten-year lows. Let me talk about the telework, the effectiveness and the productivity. Our productivity has actually increased over the last year by 5.7% and we're not done with the fiscal year, but as of the end of June or July, our productivity was up 5.7%. (33:57) We are not only an entity that receives customers when they walk in or answers their calls when they call on the 800 number. The same people in those field offices are also the ones that process the insurance claims that need time away from the windows and away from the conversations to actually make real and effectuate the things for which people are applying. Whether it's a waiver on the overpayments that you and I talked about, that grave injustice, which we've done a lot of good to stop, or whether it's applying for their retirement or their Medicare. (34:34) Time is required to process and put those things through. So yes, in the field offices, which has been open since the close of COVID, we do have a posture of three days on site to telework. Senator Grassley saw in one of his offices that five of the people in that office said they come in five days a week. And I've noticed in visiting field offices in Florida and South Florida, I ran into people like that as well. But what they do when they're doing teleservice are things we can measure and things we can see because it is the production. Similarly, with the teleservice people on the 1-800 number, almost all modern teleservice centers operate on voiceover internet with an amazing amount of management and intelligence coming in real time feedback.

The people who work in your offices are good people by the way.

What's that?

The people who work in your offices are good people.

Well, thank you for saying that. What I hear, generally, once I caught this nomination as I run into my own neighbors and friends, they say, "I found that once I got to a person it was actually pretty good, but I had a heck of the time getting to somebody." That again, is a reflection of 50 years loads in staffing and all time high and customers. In the regional headquarters of the regions and national headquarters, we did make a big change in the onsite work and we're now pretty much in the mid range of federal agencies and ahead of about 10 of them.

I know I'm out time. Will you just call when you get a chance to explain the overpayment stuff again and how you're doing?

Sure. Yes sir. We did some action very-

I know we're out of time. I don't don't know if you want to do that now or you can just give me a call.

But it's such a good story.

And I want my colleague to know I'll work with him on it because that was going to be my question.

Okay.

Does that mean I get to answer the question?

Senator Scott-

It's Chairman Wyden's time now.

I mean, I hope-

Yes sir.

... it's a good story.

Yeah, it's a great story. So this is what we did.

It's impacted all of our states, right?

Yeah, and we were on 60 Minutes and Anderson Cooper backed up and ran over us two more times in reruns. So, here's what we did on overpayments. We had a policy in Title XVI SSI that if someone didn't call us when we notified them of an overpayment, we would intercept 10% of every check moving forward until we recouped it. The default setting and Title II, namely the retirees, was a hundred percent of the check. So in my first day on the job, I asked our outgoing head of the law department, "Where is it written that we have to intercept a hundred percent of the check?" He said very quickly, "It's in statute." And I said, "It's in statute? You said that very quickly. Are you sure? Can you show it to me?" And he couldn't find it that day, but the next morning he came back and I asked him, he said, "Well, it turns out it's not in statute." To which I said, "Is it in the constitution or is it one of the 10 Commandments?" (37:35) He said, "No, it's not in those either. It is actually sub-regulatory." I said, "Ah." I said, "That means we can change it." And so we have, and now we have gotten to a point where this is a smaller graph, but because of that policy change, you have seen us pretty much reduced to almost zero the numbers of people that ever have a hundred percent of their benefits Intercepted. Now we still execute on your intent to have us recoup Over payments but no longer with the sort of cruelty that would put elderly people under a bridge for not being able to get back to us.

Have you gotten ahead of it to-

At this point, I think I need to let Chairman Wyden have his time.

Yes, sir. I'll follow up with you on those things.

Yes sir. We've done a lot of unpacking of that.

Thanks Senator Scott. Chairman Wyden.

Thank you, Chairman Whitehouse. Let me just say to my colleague and others, the number one issue in the confirmation hearings for the commissioner was this overpayment question. Number one, I think Senator Johnson, Senator Grassley, all the members here understand that back in the day when I was Director of the Grey Panthers, the problem was modest but growing. Now it has mushroomed out of sight, and here's the question I have. Because we've all been talking about that house Republican budget proposal and as my staff has examined it with the kind of across-the-board cuts, it would make it harder to do the bipartisan work on overpayments that we talked about in the finance committee because here's what is going to happen. (39:21) I say to my colleague, Senator Scott, just real quickly, what will happen in Florida, Oregon, anywhere else, people who bump up against this bureaucratic water torture of overpayments want to get on the phone, they want to talk to the agency and the like. If the House Republican proposal goes through, it's my understanding across the board it could make it harder for you to continue to keep that bipartisan promise you made to Senator Johnson, Senator Grassley, Whitehouse, all of us in the finance committee. Is that correct? I mean, it'd make it harder for us to do this priority that was the number one concern in your confirmation hearing.

Mr. Chairman, do we call you Mr. Chairman here? I guess we'll call you Chairman.

Call me Ron.

Everything that you said is absolutely true. What we noticed, and Senator Scott asked me about the causes of the overpayments, part of it was a bit of a backlog from the pandemic nobody wanted to tell people they had. We had other nations that have similar program as ours also experience that. But the other part of it was the short staffing meant that not only was it harder for people to get through to us to work out a repayment, it took us longer to catch up with it. Therefore, the overpayment amount as months ticked by before we caught up with it, went up and up and up. (40:41) So, our inability to catch up to the inadvertent mistakes, it's not as if we were making, and we did look at this in excruciating detail. It wasn't as if we were making more mistakes, but because it took us longer to catch up to them, it was a bigger burden for the beneficiaries to suddenly have to repay. So, the house cutting us by half a billion dollars would undo much of that progress that we have made to put on the flags and alerts because you still need people to work out the repayments.

Very good. I want to wrap up my remarks as chairman of the Finance Committee to repeat what I said earlier and it touches on what Chairman Whitehouse was talking about. We want to work in a bipartisan way on both of the big issues of our time. The Commissioner is talking about the major problem today, which is these overpayments. We want to derail this ill-advised House proposal to not make things worse. But on the question of revenue, I want my colleagues to pick up on what the chairman and I have both been saying is that we know that ultra-wealthy Americans are avoiding nearly $2 trillion in taxes every 10 years and this would help us make it to the end of this century. And we can work on this in a bipartisan way. We can deal with both of these issues in a bipartisan way. I just want to make it clear that my door is open. (42:11) We've got finance Republicans here, but members of both sides of the aisle who aren't on the Finance Committee are invited to work with us on both of these kinds of issues. Because what Chairman Whitehouse has been able to do today is allow us to cover what is important within the budget frame. But we've got the good fortune and the fact we got Finance Committee folks who are here to talk about the future, which involves this question of revenue and we'll hear our guests from the second panel doing that. So, this is an opportunity today to make real bipartisan progress in both of these areas, service and revenue for the future. I want to secure that kind of work around here. Thank you Mr. Chairman.

Much appreciated. As most viewers will understand, the budget committee has very specific responsibilities related to the actual budget process here in the Senate under the Budget Control Act, and we can put the spotlight on a lot of issues that will help with future budgets. But the actual legislative authority in this area is over at the Finance Committee under Chairman Wyden. So his offer to all of us to get working on this is truly significant and I'm grateful to him for making it. Next to Senator Johnson, followed by Senator Kaine.

Thank you Mr. Chairman. I'd like to take my opportunity to just go back and take a look at the historical conception of Social Security. It was never intended as a welfare program, correct? I mean, people weren't planning for retirement, so this was a paternalistic move on part of the government to say we're going to force you to save. We're going to apparently create this trust fund but not invest in real assets, just we spent that money, it's gone and we invested in US government bonds, which are relatively lower return instruments and by the way have no value to federal government agency. When the trustees turn that over, we just have to float another bond. Correct? But anyway, when we first initiate... By the way, isn't that the basic concept of Social Security? You're going to pay in, we're going to save this money for you and then you're going to pay it out in retirement. Isn't that the basic concept?

That concept is true. The notion that it was paternalistic, I think Francis Perkins would disagree with you.

Okay, we're going to set that aside. But again-

It's supposed to be yes sir. A pay-as-you-go.

... you pay it in, you earn money, investment and then you get the money out, right?

Kind of, yeah. So, pay-as-you-go.

Back then, it was a pay-as-you-go system?

Yes sir.

Back then, it's kind of hard to get the exact number of workers versus beneficiaries. I've heard as high as 150 to 130, whatever. It was a high number of workers-

2.8 to one right now.

Right now. But it started out as 30, 40. A lot of workers [inaudible 00:45:01] beneficiary with a life expectancy of 61.3, correct?

Yeah, I guess sir.

And the retirement age that was said is something like 62?

Yes sir.

So you've got a lot of workers paying into beneficiaries with a license expectancy, not even ever hitting that retirement age. So that's a pay-as-you-go system. That's going to work. Okay, you just got a lot of people paying in very, very few people coming, getting the benefits. Now of course that's flipped. We have far fewer workers, 2.8 to one, and the life expectancy is now 77.5. So it's increased 16 years-

Except for Native Americans for whom it's still 42 years.

But again, so-

And for people that work hard-

So it's increased 16 years, and how much have we adjusted the retirement age over that time period? A couple of years, right?

From 62 to 70.

So again, we haven't kept up with reality. And now the solution here is to really kind break with the original concept of this being a you pay into the system and you get what you pull out. I'd like to end this in a record without objection from I guess our people serving as chairman right now. This is an actuarially... You're getting a doughnut. This is an actuarially note by the Social Security system. Money's worth ratios under the OASDI program. But this is interesting because it shows that if you're a low income worker, you get more than you ever put in.

Correct.

Okay. But if you're a higher-income worker, you're going to get a lot less. So we've-

Correct.

Correct. Right?

Yes, it's intended to keep people out of poverty.

I mean it's a big long table and it's very complex. But one example would be a single person that has been paying in the maximum rate all his life will get about 70% of what he put in. I mean, is that roughly accurate?

I don't have the benefit of the table that I trust that you're reading off it.

It literally goes to low 54% for 54 cents on every dollar invested. So, the reason-

For the very highest earner.

The reason I bring that out is the chairman's solution to this is tax the wealthy. Well, again, anybody who's just hit a hundred thousand dollars, what is the maximum amount of earnings right now subject to the tax?

168,800 I do believe.

So if you've been paying all that in, you're only going to get 54 to 70% of the benefits. And now the chairman, what he wants to do is increase people's taxes to basically about 57% when the Tax Cuts and Jobs Act expires. That would be the top marginal rates under the chairman's proposal. 57%. That's federal tax. Tacked on top of that state, I think I'll ask the next panel. I mean, isn't that a disincentive to work? Is that going to work? Again, my point is just laying out the historical perspective. The concept was you pay in, we invest, they didn't invest, that money is spent, it's gone. And then people, particularly at the higher end, they're not even going to get close to what they put in. And the chairman's solution is raise taxes. I think you're not going to get even closer revenue you think you're going to get because you're going to create a huge disincentive for work and you've completely busted the concept of the fact that this is a forced retirement savings plan as opposed to kind of just a general welfare program. That's my point. Thank you Mr. Chairman.

Point taken. (48:52) May I just offer to please-

Senator, I enjoyed our talk and I really appreciate you giving me the time to meet with you and talk about these things. I'd love to come back around. There are some things that you said in there that I would not agree are historically accurate, including whether the money that's in the surplus money in the trust fund that's been paying benefits is worthless. I mean, if it's worthless than the $20 in my wallet's worthless because it's backed up by the full faith and credit of the United States of America. But I'd love to come back-

I said no it has no value to the federal government because the federal government when they take that bond, it just has to issue another bond. Well, it's literally more like you have a piece of paper that says $20 and you're saying, "I got 20 bucks." No, you don't. You just have a piece of paper that says $20.

Well, I bet I can go to the cafeteria with it after this. I think you would distinguish what you're distinguishing in as dollars that are owed to the trust fund versus dollars that have to be borrowed in public debt. Having said all that, Social Security does not contribute to the debt. Social Security is a pay-as-you-go system. In point of fact, Warren Buffett stops paying into Social Security 30 seconds into the new year and the people that clean these buildings pay in all through their paychecks. And I don't think Warren Buffett is going to miss the fact that he's not getting as much back on what he's put in because frankly not as important to him.

Senator Kaine.

Governor, good to see you again. You and I had the wonderful opportunity to serve as mayors of two great cities at the same time and governors of two great states at the same time. And I really cherish the earlier chapters in our working relationship. You're so well suited for this position. I'm going to probably ask you questions about something nobody else will talk to you about. I want to talk to you a little bit about Social Security Disability and I know that that's not the main reason for the hearing, but I'm not sure I'm going to see you at a-

Well, it's a big part of what we do.

Right. And I'm not sure I'm going to see you at another hearing. Two of us in the Senate have been pretty public about dealing with long COVID symptoms. Senator Young and I. Thankfully mine are annoying but not debilitating. But because Senator Young and I talk about our experiences, our offices become kind of a repository for others who are seeking help. They like the fact that they have senators who acknowledge that they're dealing with a real condition. One of the issues that a lot of folks with serious long COVID deal with is Social Security disability challenges. Seven colleagues and I wrote a letter to y'all last month just asking about a number of questions that we are hearing from folks attempting to maneuver the system. My wife and I have a friend in Richmond who's a single mom with three special needs kids that she's adopted. We have helped her negotiate because of her serious long COVID symptoms, the Social Security Disability process, and it has been very, very difficult even for two lawyers who know a lot about this stuff to help our friend go through the process. (52:03) We asked you some questions about Social Security administration tracking and publishing data on SSDI applications relating to long COVID on expanding disability policy rules to include criteria for evaluating claims regarding long COVID. There was a report that was issued earlier this summer by the... I believe it was the National Science Foundation, the National Academies of Science Engineering and Medicine convened a panel that met frequently and then issued a 200-page document outlining long COVID's reach and the Social Security Administration is looking at that report. It only came out in June. And the agency I understand is in the process of updating its long COVID guidance. Could you just share a little bit about what the agency is doing with respect to long COVID claims?

Yes, sir. Senator, thank you. I saw your letter when it came in and I told everybody, "He used to be a mayor, so he will follow up." And we have been following up as well. Social Security I talked about the dynamism of our country, our history, our demographics, but also the dynamism of the disability program as well. Because of your good work in Congress, the things you've done on the Americans with Disabilities Act, the accommodations that have been made for people has made us entirely have to rethink a lot of the aspects about what functions are required for new jobs that are created in this world. We saw a slight dip in the numbers of people actually applying for disability, I think because of those accommodations. So, back to the call of your question and the point of the long-term COVID, long-term COVID effects as you pointed out yourself... I mean you've experienced some of those symptoms, they're obviously not debilitating and they have an affected your ability to function and to earn SGA as the United States Senator and fulfill your duties. (54:07) For other people like your friend, it's a lot more severe. There's a five-point process in our statute, which sometimes is confusing to the general public and I have had to learn it myself as a generalist. One of the steps in that process is do you have a recognized medical listing that has been recognized to have certain debilitating effects? But even if you don't, if we get to the next step in the process, the fourth step--I think it's the fourth step--about your ability to function and that your physical you're increasingly, your mental agility acumen, you can still be adjudged to be worthy and be given an allowance on a disability. What we see within the long-term COVID is a pretty wide spectrum of people who don't have it affect them much at all in their functioning and those who do. So we are in fact taking a look at our policies and we will be responding to your letter and the particularities of the letter by its due date. I want to assure you that we have heard you, that we do want to work with you and to anyone who is suffering from long- term COVID, the biggest impediment to your getting a decision is not the fact that it's long-term COVID, it's the fact that we are struggling to serve people with staffing reduced to fifty-year lows.

Thank you. I yield back Mr. Chair. I appreciate your answer,

Senator Merkley.

Thank you Mr. Chairman and thank you Governor O'Malley. So, my colleague from Wisconsin pointed out that folks who are at the lower end of the income receive more than they put in and at the higher end, receive less. And Social Security always kind of has this combined part savings, part insurance design. So is that basic structure that he accurately described, is that a flaw or is that a feature?

I think it was more a practice of how our economy worked for those 40 years after Social Security. 50 years after Social Security was put in place, we always talked about the three-legged stool. You'd have Social Security that's America's guaranteed to one another, that we're not going to let anybody live in poverty in their golden years. The second leg of the stool was oftentimes we used to say your own private pension from your private employer, and then the third one being your own personal savings. Increasingly what we have seen in our economy where the vast majority of Americans saw no real increase in their earnings for the last 30 years was that income was really earned at the top spectrum and the private sector started doing away with private pensions leaving people with only the one leg left in the stool.

Well, I would describe it as a feature to answer my own question, and as you've described it. I know back when I was working for Habitat for Humanity and had no retirement plan, I would've been on the lower end of that world quite possibly. But as life evolved and I'm serving here, I'm probably on the other end where I probably receive less than I put into it. That seems to me like America working together to have partly an insurance element to this plan to make sure the lowest income Americans aren't out on the street.

Yes, sir. I misunderstood your question. That is a feature

... Future of the program.

Thank you. I wanted to turn to the description of when the trust fund reaches zero. We depend on incoming revenues to pay out benefits, and I think now the estimate, if I read the brief right, was about 2035 that that happens.

Yes, sir.

So we're 11 years out from that, and that we'd have about 80% of the current benefit levels could be sustained with incoming revenue. That's unacceptable that we would be in that position. Is it smarter for us to fix that now and have 11 years in which we boost the trust fund, or wait to the last desperate second in 2035 when we're on the verge of a 20% cut in Social Security benefits across America?

The answer to that is, better sooner than later. If in your own family or your own family owned business you were told in 11 years you're going to face a 17% shortfall in revenues, you'd want to start acting now in order to head that off before you come up to it.

Makes a lot of sense to me, and I encourage all of us to actually act now rather than waiting. Now, we hear sometimes a fair amount of whining from rich Americans saying, "Hey, we got less in Social Security than we put into it." And yet we have these other programs, including IRAs, where affluent people put into a tax shelter enormous sums, and we have for example, the CEO of Walmart. He has in his Roth IRA or some version of IRA $170 million. We've got Peter Thiel with $5 billion in his IRA, $5 billion. Because there are these tricks that have been allowed, these loopholes that allow you to do things like put in stock options, value them as basically worthless, and yet they have enormous value. And then suddenly your IRA ... What social value do we have in tax sheltering hundreds of millions of dollars for the richest Americans for retirement? They're already rich, so they already have retirement all set. I don't see much value in that. Why are we enabling them to dodge taxes to the tunes of hundreds of millions of dollars in these accounts? And if we fix that so that we protect IRAs so that people can have a decent retirement, not have it be a tax dodge for mega millionaires, couldn't we fund a good share of the Social Security shortfall?

Senator, you're trying to drag me into the policy arena, which I realize is your prerogative and not mine.

And I invite you to join me in that.

I will say this. I think Social Security is the greatest act of compassion and caring for one another that any freedom loving people have ever put into place for one another. And half of our seniors living alone live only on Social Security right now.

Well, thank you, and I'll just close with that point, that Social Security is only part of the structure in which we help with retirement. And more affluent Americans benefit enormously from tax-sheltered retirement, sometimes being able to stash hundreds of millions of dollars away that do not experience taxes, and that that is a benefit way beyond what ordinary people get from Social Security.

And now for the hearing's Marylander on Marylander moment, Senator Van Hollen.

Thank you, Mr. Chairman, and welcome, Commissioner.

Thank you.

I do want to take this opportunity to thank you for your great service, first as Mayor of Baltimore, then Governor of our great state of Maryland, and now as Commissioner of the Social Security Administration. And as you know, our state is proud to be home to the Social Security Administration and all the good people who work there. You have the headquarters in Baltimore. You've got field offices around the country with a critical customer service role, averaging around 500 million interactions annually to ensure that Americans get the benefits that they've earned and have the disability claims processed as quickly and as fairly as possible. You and I have talked about the chronic underfunding of the Social Security Administration for many years. Despite that, you have made the best of limited resources and an expanding set of requirements, more Americans on Social Security even with limited budgets. (01:02:56) I also serve on the appropriations committee. We reviewed your request. I was sorry we couldn't meet the full request, but we tried to get close. Since we're in the budget season and since we have a risk of a government shutdown at the end of the year and we have to resolve at the end of this month and we have to resolve other issues, could you just describe the impact of the House Republican budget cuts on your operations if they were ever to go into effect? I saw a letter that you wrote to the chairman of the House appropriations committee, to Chairman Kohl, but if you could just take a couple minutes to distill what the harmful consequences of those cuts would be on the Social Security Administration's ability to serve the American public.

Yes, sir. Thank you, and thank you for your service, Senator. The House cut of half a billion dollars would be devastating to customer service at Social Security. And the sad thing is, it's just at a time when notwithstanding the daunting mismatch between ever-rising customers and reducing our staffing to 50-year lows, we're actually making some good progress. We've cut in half the wait times on the 800 number. That would be undermined. We have been able to reduce the backlog at the ALJ level to a lower rate than we've seen in modern memory. I talked earlier about the overpayments that we've made some great strides in addressing. But at the DDS level, and nothing underscores it more than this, our public actuary estimates that more Americans die today awaiting their initial disability determination than ever before in the history of that program that Dwight Eisenhower signed into law. So I don't think anything can more underscore just how damaging the customer service reductions have been for people that are truly in need. (01:05:12) If the House cut of a half a billion dollars to Social Security's customer service were to go through, it would mean 20 furlough days throughout the agency. It would mean that our IT funding, which is already ... It's not as if we've been increasing IT funding while Congress has been reducing staffing. It is a very old legacy system, with systems built on top of the legacy systems. We would only have a budget to really keep the lights on, not to do anything that would improve it or improve its resiliency, let alone customer service. It would mean a further reduction of 3,400 staff from what we already see is the mismatch between rising customers and declining staff at the Social Security level. It would be 1,500 fewer of those initial DDS examiners, the ones that people are waiting so long to make their initial determination. (01:06:13) In our own state of Maryland, the wait time for an initial disability determination is 361 days. And if you appeal, if you're denied, you have to go back to the same office and wait another 361 days. So the House mark would be devastating to us. I hesitate to use the word catastrophic because I've seen this agency somehow continue to keep its nose above water, but it would definitely be a huge hurt to people throughout the country for the customer service they've already paid for.

Well, thank you for painting that picture. I am pleased to say that in the Senate appropriations committee we worked on a bipartisan basis to put forward the budget that we did, which again, doesn't fully meet the mark, but is certainly a lot better than what would happen if the House budget-

And people, SSA employees, Social Security employees, Senator, saw that bipartisan action you took. And the bipartisan rebuke to cutting Social Security's customer service I think was heard throughout the country and was a great encouragement to our workers. So I thank you on their behalf for what you did in both parties in the Senate.

Thank you. We had not only Senator Van Hollen, but Senator Merkley and Chairman Murray, very significant folks on the appropriations committee here in the Senate. I'm particularly grateful to them for their work. With that, Commissioner O'Malley, thank you for being here.

Thank you, Mr. Chairman.

You are excused. I will ask the team to allow you to clear your materials and then call up our next panel of witnesses. And while that task at the table is being performed, I will make my introductions of the next four witnesses on the second panel. We will have Rebecca Vallas, the CEO of the National Academy of Social Insurance, a nonprofit that works to improve public understanding of how social insurance contributes to economic security. Previously she was the managing director of the Poverty to Prosperity program at the Center for American Progress and served as a senior fellow at the Century Foundation, and we are delighted that she is here as a witness. Next we will have a personal favorite of mine on the panel, Mr. Roger Boudreau. Mr. Boudreau is President of the Rhode Island American Federation of Teachers, Retirees Local 8037R and a member of the American Federation of Teachers' standing committee on retiree issues. (01:09:23) Mr. Boudreau has also served as a board trustee representing retirees on the employee's retirement system of Rhode Island and as Chairman of the Rhode Island public employee's retiree coalition. All of this after serving for 28 years as a public school teacher in Lincoln, Rhode Island. Roger, welcome. Delighted that you are here. (01:09:48) Then we will hear from Dr. Molly Dahl, the chief of the long-term analysis Unit at the Congressional Budget Office, a position she's held since 2020, where she oversees CBO's annual long-term budget outlook report and, crucially, the agency's projections for the long-term health of Social Security. She holds a PhD in economics from the University of Wisconsin. Dr. Dahl, we're glad you are here. Our final witness is Shai Akabas, executive director of the Bipartisan Policy Center's economic policy program. In that capacity, Mr. Akabas oversees work on a variety of economic issues, including fiscal policy, retirement and financial security, labor market policy, and the financing of higher education. Mr. Akabas, welcome. And Dr. Vallas, each of you will have five minutes for your testimony. Your full statements will be made a matter of record, and then we'll have a chance to ask you some questions. So if you'd please proceed.

Thank you so much, Mr. Chairman. Chairman Whitehouse, Ranking Member Grassley, and members of the committee, thank you for the opportunity to testify today. My name is Rebecca Vallas, and I have the privilege of serving as the Chief Executive Officer of the nonpartisan National Academy of Social Insurance. My testimony today reflects my own views and may not reflect the views of the Academy's members. As the Chairman has noted, Republicans and Democrats alike agree it is essential that we keep Social Security's promises to the American people. And leaders of both parties are well aware that benefit cuts are toxic on both sides of the aisle. So one of the questions I am most frequently asked about Social Security is, can we secure the program's future without cutting already modest benefits? And as Chairman Whitehouse's legislation demonstrates, the answer is yes. (01:11:52) It is against this backdrop that I will offer three main points today. First, Social Security is key to the economic security of American workers and families, and policy makers should center the wellbeing of the program's current and future beneficiaries as they consider policy options to secure the program's future. Benefits are already incredibly modest, as we've heard today. The average retirement benefit is just over $1,800 per month. Yet for most retirees they are the backbone of retirement income. What would the picture be without Social Security? Well, according to new census data released just this week, as we've already heard, more than 28 million more American adults and children would live below the poverty line. Nearly four in 10 older adults would be officially poor today if not for Social Security, compared with one in 10. When we talk about Social Security, it's easy to get lost in facts and figures, and most of the hearing today has been in that terrain. But all too often that is where ivory tower debates around Social Security stay. But Social Security is not just a government program and it isn't just a math problem to be solved. It's a reflection of our shared values as Americans and a commitment that we make to each other. The reason there's so much bipartisan support and love for this program is that we feel this not just at a financial level, but at a human and a spiritual level too. When you ask people receiving Social Security what it means for them and what they would do if it were cut, you hear that they wouldn't be able to pay their bills, they wouldn't be able to live independently, that they'd have to work until they die. These are the people that we must keep front of mind as we think about the future of this vital program. They are our grandmothers and our grandfathers, our parents, our sisters and brothers, our friends and neighbors. And someday, if not already, they will be us. (01:13:54) Which brings me to my second point, and that is that keeping Social Security's promises to current and future generations will require that policy makers strengthen the program's revenues to ensure that we aren't asking low and moderate income workers to shoulder the costs. While the trust funds currently have $2.8 trillion in reserves, as we've heard today, they are projected to be depleted by 2035 if policy makers do not act. In that event, we would see an across-the-board benefit cut that I know none of you want to see jeopardize the financial well-being of millions of your constituents. So what are policy makers' options? Address the program's revenues or cut already modest benefits. That's what it comes down to. Now, my time is short, so I'll refer you to my written testimony for an overview of some of the most frequently discussed proposals in both categories and their relative trade-offs for the program's financing and beneficiaries. (01:14:50) But the top line is this. The program's financing gap can be more than fully addressed without cutting benefits. And a key economic trend worth considering as we evaluate policy options is that due to rising income inequality, a growing share of high earners' wages now fall outside that cap on contributions that the Commissioner spoke about. It slipped from 90% to 82% of covered wages, a 50-year low. Had the cap remained fixed at 90%, the trust funds would have more than $1.4 trillion in additional reserves today. That would close more than a quarter of the current shortfall. Now, reforming Social Security's payroll tax cap and treating investment income and income from pass-through businesses like wages for Social Security purposes, as proposed in Chairman Whitehouse's Fair Share Act, could close more than 100% of the long-term financing gap. (01:15:50) By contrast, policymakers should consider with great caution proposals to further raise the retirement age. The Academy's task force on older workers' retirement security found last year that those types of proposals would cause serious hardship for low income workers who have not seen the gains in life expectancy that people at higher incomes have. (01:16:12) And that brings me to my third and final point, which is that delivering on Social Security's to the American people, as you've heard on the first panel, requires ensuring that SSA has the resources it needs to deliver high quality customer service. Commissioner O'Malley deserves significant credit for making improving Social Security's customer service top priority, but Congress must do its part too to ensure that your constituents are all able to access SSA's critical programs when they need them most. The human consequences of inadequate funding to this agency are as preventable as they are shameful. Thousands of people die every single year waiting for disability benefits. It doesn't have to be this way, and you have the power to change it. Thank you for inviting me to be part of this important conversation, and I look forward to answering any questions that you have.

Thank you so much. Mr. Boudreau, welcome.

Thank you, Mr. Chairman, Chairman Whitehouse, Ranking Member Grassley, members of the committee. It's an honor to participate in this important meeting. Mr. Chairman, I would especially like to thank you for the opportunity to speak on behalf of my fellow Rhode Islanders who rely on Social Security to make ends meet in retirement. In my capacity as President of the Rhode Island AFT retirees chapter and Vice President of our state's chapter of Alliance Retired Americans, I've worked and advocated for and with Rhode Island seniors from of across our great state since retiring from the teaching profession. My activism is driven by the belief that older Americans deserve to retire with dignity after years spent in the workforce and caring for their families. Before retiring, I worked for 28 years versus a middle school and then high school English teacher in the town of Lincoln Public Schools in Rhode Island. (01:17:56) Social security plays a significant role in the lives of so many older citizens in Rhode Island and around the country. Since its enactment in 1935 by President Franklin Roosevelt, Social Security has been transformative. When it became law, an estimated 50% of American seniors lived in poverty. Nearly nine decades later, elder poverty hovers around 10%. The Social Security Administration estimates that 97% of older adults ages 60 to 89 either receive or will receive benefits. That universality provides some level of retirement security at all income levels, but it is especially important for lower income earners, for whom in many cases it is the sole source of income. Without Social Security benefits, four in 10 seniors, as you've heard, would have incomes that fall below the poverty level. (01:18:46) In Rhode Island, over 230,000 people, more than 20% of our state's population, receive Social Security benefits. Nearly half of Americans age 55 and older have no retirement accounts. When I speak with retired and older Rhode Islanders and other seniors around the country, the future of Social Security and Medicare is always paramount. It does not matter if they have worked in factories, offices, hospitals, or classrooms. The health of these programs is a top priority. When we talk about Social Security, it's often cast as an issue only impacting older Americans, but we should not forget that it is also the largest anti-poverty program for children in the United States. As someone who spent my career teaching young people, I would be remiss not to remind the committee that the benefits Social Security provides for children when they have a parent die or become severely disabled can make all the difference in the world. (01:19:42) Ask any teacher and they will tell you that problem solving, no matter what subject they teach, is one of the key skills you work to instill in your students. The challenge of protecting and strengthening Social Security is a problem with a clear solution. Finally ensure that the wealthy pay their fair share in taxes. To this end, it is time for Congress to enact the Medicare and Social Security Fair Share Act, which would ensure solvency for the Social Security trust fund for the next 75 years by taxing all income over $400,000. This would provide enough revenue to preserve the program with room to strengthen and expand Social Security in the following ways. (01:20:20) We could raise benefits for the poor Social Security recipients and the oldest recipients. We could finally do away with the windfall elimination provision on the government pension offset, which hurts so many retired public servants across Rhode Island and the country, by passing Senate Bill 597, the Social Security Fairness Act, legislation co-sponsored by more than 60 senators that recognizes the unfairness and importance of repeal. And I want to thank Senator Murray for referencing her 40,000 constituents, who are among almost 3 million public servants who are affected by this, and I want to thank the chairman of this committee for co-sponsoring that bill. We could restore the student benefits up to age 22 for children of disabled or deceased workers, and we could strengthen benefits for people with disabilities. The wealthy finally paying their fair share is long past due, and now is the time to act. If federal lawmakers do nothing, millions of Americans will see a cut in their earned Social Security benefits. (01:21:19) The impending threat of Social Security benefit cuts, especially to those most financially vulnerable, should be totally unacceptable when multiple options to address Social Security funding are available. While Congress often awaits until the 11th hour to address critical issues like preserving the stability of the Social Security trust funds, Mr. Chairman, you understand that many of the people I represent are facing real challenges in making ends meet in retirement. Many of us have been public servants dedicated to doing our part in building and improving our communities. Rhode Island retirees and seniors deserve dignity and respect, not uncertainty about whether they will be financially secure in their retirement years. Thank you again for the opportunity to be heard on this most critical issue for senior Americans.

Thank you very much, Roger, Mr. Boudreau, thanks for coming down from Rhode Island for this. Dr. Dahl?

Chairman Whitehouse, Ranking Member Grassley, and members of the committee, thank you for inviting me to testify about the Social Security program. Social Security faces a significant financial challenge. CBO projects that in 10 years the resources available to the system under current law will not be sufficient to cover scheduled benefits. In CBO's projections, the balance of the old age and survivors insurance trust fund declines to zero in fiscal year 2033, and the balance of the disability insurance trust fund declines to zero in 2064. If the two trust funds were combined, they would be exhausted in fiscal year 2034, 10 years from now. In the first year after the trust funds are exhausted, the resources to pay benefits would be 23% less than the amount of scheduled benefits, CBO projects. The shortfall would increase over time. About 82 million people, roughly 1/5 of the population, will receive Social Security benefits in 2035. (01:23:03) If all benefits were reduced by the same percentage, lower income households would reduce their spending by more and increase the amount they work by more measured in percentage terms than households with higher lifetime incomes. Legislative action would be needed to avoid this scenario. Looking over a longer time horizon, the actuarial deficit over the next 75 years would equal 1.5% of GDP, or 4.3% of taxable payroll, the total payroll subject to the Social Security tax. That is, scheduled benefits could be paid through 2098 if payroll tax rates were increased from 12.4% to 16.7%, a relative rise of 35%, CBO projects. Alternatively, a reduction in scheduled benefits of 24% would permit full payment of those smaller benefits through 2098. A combination of changes to taxes and benefits or relying on resources from the Treasury's general fund could also suffice. Policy makers can have different changes apply to people of different income and ages. Additional changes would be needed to ensure solvency beyond 2098. (01:24:05) The aging of the population is a key factor affecting the finances of Social Security. The number of people age 65 or older who are less likely to work and pay payroll taxes and who are generally eligible for Social Security benefits is projected to grow faster than the number of people ages 25 to 54 who are more likely to work and to pay payroll taxes. Population growth is determined by births, deaths, and net immigration. Fertility in our projections remains lower than replacement. We project that life expectancy will continue to increase, and immigration is an increasingly important part of growth of the population and the labor force. All of these changes affect the financial status of Social Security. A feature of CBO's work is that the demographic and economic projections used in our Social Security analysis are consistent with those used in the agency's baseline projections, cost estimates, and other analyses. In closing, let me note that any projection over a horizon of seven decades is uncertain, but it is clear that action is needed to make Social Security financially sustainable. I'm happy to answer questions.

Thank you very much, Dr. Dahl. And Mr. Akabas, please proceed.

Thank you, Mr. Chairman, Ranking Member Grassley, and distinguished members of the committee. I appreciate you inviting me to testify here today about the sustainability and efficacy of Social Security. I commend the committee for focusing on this critical issue. My name is Shai Akabas, and I'm the executive director of the economic policy program at the Bipartisan Policy Center, a mission-focused organization helping policy makers work across party lines to craft bipartisan solutions. Social Security is the foundation upon which most Americans sustain their lives in retirement. For generations it has paid out benefits to people with disabilities, older people, and their family members, lifting millions of households out of poverty and providing essential financial support. But today the program faces a serious challenge, and it's one that we have known about for many years. For several decades, Social Security took in more income, mainly through payroll taxes, than it paid out in benefits, building up a large surplus in its primary trust fund, the one for old age and survivor's insurance. (01:26:09) That dynamic has now flipped. Benefit payments are outpacing payroll tax revenues, depleting the trust fund balance. Each year that gap grows wider, and here's the bottom line. Unless Congress acts, the OASI trust fund is heading for depletion in less than a decade, in 2033, according to the latest projections. At that point, approximately 70 million beneficiaries would have their benefits cut by 21%. Let me repeat, we are only nine years away from every single Social Security OASI recipient facing an indiscriminate benefit cut. For the median beneficiary it would reduce their annual income by about $4,500. The American people are rightly concerned about that possibility. As much as any of us can sit here and tell them that that cut won't actually happen, it's what the law says. Given this looming crisis, it's astonishing that we barely hear

... hear Social Security discussed at all in the 2024 campaign. When the issue is raised, it's usually either in the context of proposals that would worsen the financial shortfall or pledges to change nothing. These pronouncements from both sides of the aisle that we must protect Social Security from any reforms obscure a hard truth. A vote for the status quo is a vote to cut benefits for every single beneficiary starting in less than 10 years. (01:27:25) With all that said, my goal today is to inject optimism into this committee's work because we at the Bipartisan Policy Center know that Social Security's financial challenge can be overcome. Before quickly outlining possible solutions, there are two principles that should guide any reforms to the program. First, acting as soon as possible is paramount. The longer Congress waits to strengthen Social Security's finances, the more drastic the changes will have to be and the more burden will fall upon those who play little or no role in generating the imbalance facing the program today. (01:27:56) The lack of action by policymakers is unfair to the millions of Americans who are trying to plan for their retirement. Second, any legislative action must garner significant bipartisan support. As you all know well, changes to Social Security require a supermajority in the US Senate. Lawmakers should abstain from pronouncements like no tax increases and no benefit cuts. These red lines only add obstacles to action. (01:28:21) Social Security's financial challenge affects nearly our entire society, and the solutions will require a broad-based approach. In 2016, BPC convened a Bipartisan Commission on Retirement Security and Personal Savings co-chaired by Kent Conrad, a former chair of this committee, and Jim Lockhart, a former deputy commissioner of the Social Security Administration. (01:28:41) The commission spent two years studying the state of American retirement security and issued a report with recommendations in six key areas, including Social Security. The package of Social Security reforms was projected by the chief actuary to make the program solvent for 75 years and beyond, avoiding the deep benefit cuts that are set to take effect. It would also enhance benefits for vulnerable populations and give Americans certainty about what to expect from the program as they prepare for retirement. (01:29:08) The package tackles Social Security's financial gap through a balanced mix of new revenue and benefit adjustments. I'd encourage you to review their 13 specific recommendations outlined in my written testimony and would be glad to discuss them further during the Q&A. Critically, the commission recommended this plan eight years ago. Since then, Social Security's financial challenge has grown while the time to address it has shrunk. To restore long-term solvency now, policymakers will have to phase in larger changes at a faster pace or, more realistically, include some type of temporary borrowing as part of the solution. The alternative would be an unprecedented departure from the pay-as-you-go structure of Social security, instead allowing the program to begin permanently drawing from general government revenue. Not only would this sacrifice Social Security's special status and make the program compete for resources with other federal priorities, it would significantly worsen America's fiscal woes. This would be irresponsible policymaking. (01:30:03) I want to conclude by thanking the committee once again for convening this important hearing and continuing this essential work. Social Security's financial and demographic challenges are daunting, but they are not insurmountable if policymakers put aside their red lines and work across the aisle. With continued leadership from the members on this committee and others, progress is possible. Together, we can solve this challenge. I look forward to your questions.

Thank you very much. I have been pretty candid about my views about our tax code. I assert that our tax code has been corrupted by special interests, that powerful interests rich enough to pay for lobbyists and fund super PACs have looted our tax system to make themselves even richer, and that we have both a moral and a financial obligation to de-corrupt the tax code. (01:31:06) So, in my view, I see de-corrupting the tax code in order to shore up Social Security and Medicare for future generations as a twofer win. Very often in Congress you have to balance one thing off against another. This strikes me as a win-win. Ms. Vallas your comments on that question.

Thank you for the question, Mr. Chairman, and-

Your mic.

It's like the modern-day, "Sorry, I was on mute," when you're in your Zoom meeting. Thank you for the question, Mr. Chairman, and thank you for holding this hearing because it is incredibly important that people consider the recent economic trends, as I highlighted and as I'd spoke about in much more detail in my written testimony, in which your bill also seeks to address as we think about the future of this program. (01:31:58) The two key recent economic trends that, in my opinion, warrant most significant consideration as we explore what are the relative trade-offs for Social Security's future and the policy levers available to this committee and others are both part of what I spoke to briefly before and which I'll speak to a little bit more in-depth now, the massive revenue leak that Social Security now experiences because of growing income inequality and the large and growing share-

That was to be my next question. So let's focus for now on what the downside is of having people basically have to pay what they should and claw back from big special interests all the exemptions that they've garnered for themselves in the tax code.

Well, I personally don't see a downside, Mr. Chairman.

Well, you and I agree on that then. So let's move on to income inequality. We have basically three tranches of income. You got from zero to 168,000 on which you pay Social Security. You've got from 168 to 400,000, which is the band that President Biden has promised not to raise taxes in. And then you have 400,000 to income infinity and beyond. (01:33:24) What we have seen is a larger and larger proportion of the total personal income of Americans move out of zero to 168 and into 168 up to infinity and beyond. And as that has happened, the share of total American personal income that supports Social Security has diminished as more and more and more of the wealth and income of America has been diverted to wealthier and wealthier individuals and corporations. Is that a pretty fair summary of the problem here?

It's a terrific summary, Mr. Chairman, and it's a subject that has been a topic of some of my research over the years because it has concerned me as well. And don't just take my word for it. If you were to ask the chief actuary of Social Security, Steve Goss, he, if he were sitting here, would tell you that that is the number one reason, as we heard from Commissioner O'Malley earlier, that we are now seeing reserve depletion projected to take place much earlier than was anticipated in 1983, the last time that Congress took significant action to change Social Security. (01:34:35) They thought they were adding 75 years at the time, and one of the core reasons, in addition to declining fertility rates and others, but one of the core reasons that that has not happened and that now we're having a conversation about 2035 instead is because, frankly, we have more and more high earners who are seeing less and less of their earnings captured by that payroll tax cap as it slips. So I refer to this as a revenue leak, and it's something that warrants serious consideration by this committee.

Mr. Boudreau, we often think of Social Security as a program for seniors, and obviously, it's an important lifeline for a great many seniors, particularly a great many seniors in Rhode Island. At the same time, young families who are planning their future have a question in their minds today about whether Social Security and Medicare will actually be there for them. (01:35:35) I'd love to hear your personal experience, what it would mean to young members of unions, for instance, and the people who you talk with about retirement issues, if young families could just cross right off their worries list, Social Security, Medicare might not be there for me. What is the benefit to a young family of knowing that Social Security and Medicare will be there for them, secure and sound?

Thank you for the question. Mr. Chairman. I have a granddaughter who just graduated from college last June. My daughter and her husband are in their 50s. They're a little ways from retirement, but I know that Social Security is a significant part of their expectations for their future, as well as for the future of their daughter and my granddaughter. (01:36:33) It's a tremendous burden and worry, particularly for young people like my granddaughter who, with her friends and colleagues, are concerned about that very question, whether Social Security will be there for them when they get to retirement age. Many of them don't believe that it will, and there's a reason for that. It's been expressed here today extensively. But that reason has an answer, and the answer is the bill that we're talking about. (01:37:14) They should not have to worry about whether or not Social Security will be there for them when they reach retirement age. This country made a promise to its citizens, and it needs to keep it to all of them.

Senator Johnson and then Senator Braun, and then we will conclude because we have a vote coming up.

So what I attempted to do in my first line of questioning was just lay out the basic design and concept to Social Security, which was, again, a forced retirement savings plan to provide for that individual's retirement, where the federal government was going to take the money, wisely invest it so that money was available. I completely disagree in terms of the reason for the problem now. (01:38:03) The reason Social Security is in trouble is, first of all, the age expectancy since its inception has increased 16 years, and we've bumped up retirement eligibility age, too. The other reason is that when originally designed, it was more than 30 workers to one beneficiary. Now we're down to 2.68. Okay? The other problem is we didn't save that money. That money was spent. It's gone. It wasn't invested in assets that had value to the federal government. (01:38:40) It was invested in government bonds, which, again, has value to somebody outside the government. To the federal government, it has no value. I mean trustees give that bond to the federal government, and the federal government has to go issue another bond. So those are the three main reasons. And again, what I find galling about the solution is make the wealthy pay their fair share. The downside of that is you harm economic growth, which is literally the number one component of a solution. (01:39:07) We need to grow our economy so we can pay for all of this. We're $35 trillion in debt. The solution needs to be look at all of this in total. I completely agree. I think our tax code is a mess. It's complex. It's not rational. I would love to simplify and rationalize our tax code and start acknowledging the fact that Social Security was grotesquely mismanaged over the decades. Again, this was obvious. (01:39:39) Again, it's a program that works when there are 30 workers to one, when the retirement age is set three to four years higher than life expectancy. Again, that's a pay-as-you-go system that's going to work. And then unfortunately, the government deceived the American public thinking, oh, just get to 65 and you're going to be taken care by Social Security. It was never enough to retire on. So again, we kind of deluded the public here. (01:40:05) So now we're set in this time and place, and trust me, Social Security benefits is not enough to retire on. We've got a real problem here. But we're not looking realistically at what caused the problem, so we're not going to be looking at realistic solutions. So again, just raising taxes on a federal level up to 57%, tack on state, tack on property taxes, you are going to create such a huge disincentive to work. That will harm economic growth. That's my whole point here again. (01:40:39) Did you want to comment on this? I'm going to mispronounce your name, so ...

Sure, Senator. Thank you. As you point out, I believe there are a variety of factors that have led us to the place where we're today, which is a very difficult financial situation, and for that reason, I think we need to look at a comprehensive solution. We can't point to any one piece. (01:40:59) I certainly think that we need to bring more revenue into the system because we're not going to be able to solve it based on benefit adjustments alone. But at the same time, we have broader fiscal challenges, as you talked about, as we all know as a country, and we're going to need a lot of revenue to fix those broader financial challenges. So we cannot just rely on revenue to fix the Social Security challenge that we're facing today.

Again, the problem out of the other side, it's always make the wealthy pay their fair share. Well, the top 1% of taxpayers pays more than 40% of the total income tax burden. I mean at what point is that fair share standard being met, and also at what point do you raise marginal tax rates up to the point where you literally harm economic growth? (01:41:45) I don't have my contacts in, so I can't see the names. But do you want to comment on that? I mean I've asked this question frequently. What is the top marginal tax rate? What percent of American dollars' worth of income should the federal government extract?

I can't speak to that because the academy does not have a recommendation. We don't make recommendations like that. We do analyze policy options. But what I can say is that Social Security is not a marginal tax rate program. That's not how it operates. I think you know that, Senator. It actually is, as we've talked about today, it's a percentage, 6.2% on your wages up to a certain cap on contributions.

I know, because it was really designed to be kind of individualistic, and what you invest, you're going to get back. I mean that's not what this design move would be. This would literally turn at least a good chunk of Social Security into more of a general welfare program as opposed to you pay in and then you're going to get out your savings plus some kind of investment amount. Again, what they invested in, US government bonds, don't have value to the US government. It's a pretty low return investment as well. (01:42:59) By the way, I did a spreadsheet a number of years ago, had we actually taken that surplus, put it into ... I know Dow Jones index funds didn't exist at the time. Back then analysis showed 7 to $8 trillion in hard assets the federal government could actually tap into to pay benefits, but they didn't do that. They spent the money. Again, so many people won't admit that. They won't admit the mismanagement over the decades, but that's why we're in this pickle. (01:43:25) We didn't have to be in this pickle if you would have managed this just halfway effectively. But I think I made my point.

Well, Senator, I appreciate the question, and if I could, I think one other thing that is worth naming is that you've mentioned several times now that life expectancy has increased, and that is not true across the board. It is true for people of higher incomes, but for people of lower incomes and particularly people of color and others-

I'm quoting national averages. It's indisputable, 61 up to 78 almost. Okay, 16 years. Yeah, I realize every individual's different. But on average, life expectancy has grown dramatically. The number of workers per beneficiary has declined dramatically. That's the main problem. And policymakers, members of Congress ignored it for decades because it's a tough issue.

It is incredibly valuable to look at averages for certain things. But I just, again, urge this committee and policymakers generally to be aware of the disparities in who has actually seen gains from those life expectancy increases and who has not, given the significant hardship that would be experienced by lower-income workers if we fail to raise them in time-

And I would warn you, trying to raise marginal tax rates to the extent you want to is going to really harm economic growth, which is really going to blow the program up.

Senator Braun?

I've been here five and a half years, and this is called the Budget Committee. I'd like to point out that we have not done a budget in two and a half decades that we've adhered to. That's the last time we actually balanced a budget. You'd have to go into the 1990s. The other thing I'd like to point out is that when it comes to whatever we do to save Social Security, we've known it actuarially for decades, and my bet is that with the decade that we've got yet to actually do something about it, I'm not sure where I'd go on the over and under in terms of being done in time. (01:45:29) We've never raised more than 18% of our GDP in federal revenues, other than one or two years back then. That's when the federal government was about 20% of our GDP, which it's never been more than that, other than in a time of war. We're now so bloated, it's roughly 25% of our GDP. What that means in the real world, you can't get by with it anywhere else. You go to a line of credit. This is the only place where it gets renewed regardless of your results. (01:46:07) In the five-and-a-half years, that's gone from borrowing a trillion dollars once a year to now every six months. It's called the modern monetary theory, which is borrow it from your kids and grandkids. That is a bad business plan. And until we get back on track, a program like Social Security that's got strong bipartisan support, the ultimate is to take it out of a general fund. I wonder what the heck that's going to look like in 10 years, and I wonder if it'll be available. (01:46:41) I want to focus on an inequity within the system. It's called the WEP-GPO penalty. This hearing is about Social Security's fiscal health and fairness. I support a bill out there called the Social Security Fairness Act to fix the penalty under the Windfall Elimination Provision, WEP, and Government Pension Offset, GPO, because they overlook non-covered work. (01:47:16) Mr. Akabas, I'd like to ask you this. Can you explain this over-adjustment made back in the '80s? How can a Hoosier law enforcement officer who spent some of his career or her career paying Social Security taxes end up with lower benefits than someone with the same lifetime earnings? And give us a little history on why that occurred in the first place.

Sure. Thank you, Senator, for the question. I would argue that the Windfall elimination provision, the WEP, is one of the most understood portions of the Social Security program, and it has not-

Understood or misunderstood?

Most misunderstood. Least well-understood, yes. It was conceived of back in the 1980s as part of that reform that was alluded to earlier in the hearing, and the purpose was to ensure that individuals who work outside of the covered earning system, which is primarily in state and local governments, are receiving Social Security benefits that are equitable to their peers that are working their entire careers in covered earnings. (01:48:20) By equitable, I mean Social Security has a progressive benefit formula where it replaces higher percentages of earnings for lower-income individuals, and because of the way uncovered earnings and covered earnings work, some of that progressivity is undone by the standard benefit formula. So the WEP tries to correct for that. The problem is that it's an inexact correction, and most importantly, nobody understands how it works. (01:48:43) We have much better data today than we did back in the 1980s, and so there are better ways that we can do this. We at the Bipartisan Policy Center are supportive of a replacement for the Windfall Elimination Provision that would be much more equitable to people who serve in both covered and uncovered employment. It would basically take a proportion of their benefits that is equal to the amount that they served in covered employment as opposed to the way it works today.

As we're discussing the overall fairness and soundness of the system, it'd be your opinion that this inequity needs to be fixed?

Yes, I believe we need a reform to the WEP.

Okay. I got one other question for Mr. Boudreau. Regardless of what the solution is that we come up with for WEP GPO, we can recognize that it is a crude formula that doesn't really work, kind of misconstructed when it was put in place. Can you explain what do you hear from workers, regardless of the arena, about the fairness of this crude formula? And is it time to fix this now that we're looking at the overall health of the system primarily? What about this?

Thank you for your question, Senator. Clearly, this is an unfairness. I can tell you from a number of my conversations with members of a national task force to repeal the WEP GPO, of which I was a founding member in May of 2020. We've been working on legislation to repeal both in the last Congress and in the current congress session. I'm going to give you one example of how crudely unfair this is. We have members of the task force, one in particular who happens to be a retiree living in Connecticut whose husband passed away, and his Social Security, because she receives a state public pension, disappeared, unlike a woman who was a homemaker and raised a family and was married to a husband who was the primary breadwinner and who received his Social Security benefits after he passed away, after never contributing to the system. (01:51:08) This individual, because she worked in non-covered employment as a schoolteacher, lost her husband's Social Security after he passed as a partial income that sustained their life together. She has a colleague who is 75 years old who's still teaching because her husband predeceased her, and she can't afford to retire on her teacher's pension because much of her earlier adulthood was spent raising a family. (01:51:43) So her teacher's pension, should she retire now at the age of 75, would not sustain her because she would lose her husband's Social Security. As long as she continues to work, she will receive it. So she is basically a slave to her job as a result of the government pension offset.

Well, thank you. That is a sad story, and I'm a Republican co-sponsor of this bill. Anyone watching this out there, get ahold of your representative or your senator to get on it because this is part of a broken system. It's an inequity that needs to be fixed. Thank you, Mr. Chairman.

Thank you, Senator Braun, for raising this. I'm a co-sponsor of the bill. I appreciate your advocacy for it and your call for further support for it. Very well done, I may say. Let me thank the witnesses for appearing before the committee today. Your full written statements will be made a matter of record. I will also submit into the record written statements received from AFSCME and the National Committee to Preserve Social Security and Medicare without objection. (01:52:48) Questions for the record from senators are due by noon tomorrow, either by signed hard copy or email to the committee clerk. And if we get those questions, we're going to refer them to the appropriate witness, and we would ask you to turn around your reply within seven days. With no further business to come before the committee, this hearing is adjourned.