Social Security Protection Act of 2003

SOCIAL SECURITY PROTECTION ACT OF 2003

Mr. GRASSLEY. Mr. President, I urge my colleagues to support H.R. 743, the Social Security Protection Act of 2003.

The Social Security Protection Act of 2003 provides the Social Security Administration with important new tools to fight waste, fraud, and abuse. This bill would eliminate benefits to fugitive felons. It would prohibit benefits to illegal workers. It would eliminate the "last day" loophole in the Government Pension Offset. It would provide additional oversight of representative payees. Finally, the bill would improve benefits for person with disabilities.

This bill passed the House of Representatives in April. The Senate Committee on Finance approved the bill in September with a number of important changes.

In order to expedite passage of this legislation, Senator BAUCUS and I have worked closely with the chairman and the ranking member of the Social Security Subcommittee of the House Ways and Means Committee over the past several weeks. The result of this work is reflected in the managers' amendment that has now been incorporated into this bill.

I have drafted an explanation of the amendment that has been agreed to by the chairman and the ranking member of the House Social Security Subcommittee, as well as by the chairman and ranking member of the Senate Finance Committee. I ask unanimous consent that the explanation be printed in the RECORD.

I strongly urge my colleagues to support this commonsense, bipartisan legislation.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

EXPLANATION OF THE MANAGER'S AMENDMENT TO H.R. 743, THE "SOCIAL SECURITY PROTECTION ACT OF 2003" AS REPORTED BY THE SENATE COMMITTEE ON FINANCE, REPORT 108-176

Section 107. Survey of use of payments by representative payees

The Manager's amendment would limit the scope and cost of the survey and change the organization designated to have the responsibility for conducting the survey.

As a result of the Manager's amendment, the Commissioner of Social Security, in consultation with the Inspector General of the Social Security Administration (SSA), the General Accounting Office, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate, shall conduct a one-time audit of a representative sample of representative payees who are not subject to triennial onsite review or other random review under SSA policy or law, as amended by this bill. That is, the sample shall include individual representative payees serving one or several beneficiaries; individual "high-volume" payees serving more than several but fewer than 15 beneficiaries; individual "high-volume" payees serving more than several but fewer than 15 beneficiaries; and non-fee-for-service organizational payees who are serving fewer than 50 beneficiaries. The cost of this audit will not be greater than $8.5 million. The results of the audit should be presented in a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.

The audit shall assess the extent to which representative payees are not performing their duties as payees in accordance with SSA standards for payee conduct. Such SSA standards include, but are not limited to, whether the funds are being used for the benefit of the beneficiary. To the extent possible, the report shall identify which types of payees have the highest risk of misuse of benefits, and suggest ways to reduce those risks and better protect beneficiaries.

In conducting the audit, the Commissioner shall take special care to avoid excessive intrusiveness into family affairs, including making appropriate adjustments to its audit methodology. if some or all of the audit is contracted out, such contractor shall be chosen with due regard for its experience in conducting reviews of individuals and families, as well as businesses and other organizations.

In the course of conducting the audit and preparing the report, the Commissioner, or a designated contractor, may make observations about the adequacy of payees' actions and recommendations for change or further review. However, determinations as to whether funds have been misused and/or whether a payee should be changed must be made only by the Commissioner. Further, those conducting the survey should not provide advice, guidance or other feedback to payees that are reviewed under this audit regarding their performance as payees.

This provision authorizes and appropriates up to $8.5 million under subsection 1110(a) of the Social Security Act to carry out this audit. However, these funds are appropriated in addition to any funds appropriated for this subsection under any other law. There is no intention of reducing the funds that would otherwise be available under this subsection to carry out any other projects.

It is expected that the Commissioner will carry out a survey that is statistically valid at reasonable levels of confidence and precision. However, if the Commissioner determines that such a survey can be prepared for less than the amount appropriated, then the full $8.5 million should not be used. The Commissioner has the authority to limit the amount expended under this provision to that lesser amount. The Committees expect the Commissioner to carefully assess the design of the audit to ensure that it is being performed as economically as possible, while still meeting the objective of obtaining information that is of sufficient statistical validity to assist in increasing the knowledge and understanding of the representative payee program and facilitating its possible improvement.

Effective Date

The report will be due to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate 18 months after the date of enactment of this Act.

Section 203. Denial of Title II benefits to persons fleeing prosecution, custody, or confinement, and to persons violating probation or parole

The Manager's amendment would substitute the following "good cause" exception for the original provision included in the Committee-reported bill.

Press accounts, hearing testimony and other information provided to the Committees have identified cases in which benefit continuation may be justified due to extenuating circumstances. In light of this, the provision gives the Commissioner authority to pay Title II or Title XVI benefits that were withheld, or would otherwise be withheld, if there is good cause in the following circumstances:

First, the Commissioner shall apply the good cause exception if a court of competent jurisdiction finds the person is not guilty, charges are dismissed, a warrant for arrest is vacated, or there are similar exonerating circumstances found by the court.

Second, the Commissioner shall apply the good cause exception if the individual establishes to the satisfaction of the Commissioner that he or she was the victim of identity fraud and the warrant was erroneously issued on such basis.

Third, the Commissioner may apply the good cause exception if the criminal offense was non-violent and not drug-related, and in the case of probation or parole violators, both the violation and the underlying offense were non-violent and not drug-related. However, in such cases, the Commissioner may only establish good cause based on mitigating factors such as the nature and severity of the crime, the length of time that has passed since the warrant was issued, whether other crimes have been committed in the interim, and the beneficiary's mental capacity to resolve the issue.

This document (which is to accompany the Manager's amendment) also seeks to clarify two issues with respect to current law. First, section 1611(e)(5)(A)(ii) of the Social Security Act (42 USC 1382(e)(5)(A)(ii)) requires a law enforcement officer to notify the Commissioner that an SSI recipient has information necessary for the officer to conduct his official duties.

The Manager's amendment deletes this information requirement in (A)(ii) to clarify that a law enforcement officer only needs to notify the Commissioner of the recipient's fugitive status (or parole / probation status), and the officer's duty to locate or apprehend the recipient. This change is not intended to have any effect on the existing interpretation or application of section 1611 and is consistent with current practices and procedures.

Second, several recent decisions by Administrative Law Judges have noted that neither the current statute nor the current regulations define the phrase "fleeing to avoid prosecution." This report provides the following clarification. If it is reasonable to conclude that the individual knew or should have known that criminal charges were pending, or has been made aware of such charges by the SSA, then the individual should be considered "fleeing," whether or not law enforcement seeks arrest or extradition.

Section 206. Penalty for corrupt or forcible interference with administration of the Social Security Act

The Manager's amendment makes a technical correction to address a drafting error.

Section 209. Authority for judicial orders of restitution

The Manager's amendment makes technical corrections and eliminates the special restitution account created within the Treasury Department. Funds collected through restitution would instead be credited to the Social Security trust funds or the general fund of the U.S. Treasury, as appropriate.

Section 210. Information for administration of provisions related to non-covered employment

The Manager's amendment would strike this section.

Section 212. Prohibition of payment of Title II benefits to persons not authorized to work in the United States

The Manager's amendment would make a technical correction related to certain non-citizens and change the effective date.

B-1 visa holders are generally aliens visiting the United States temporarily for business on behalf of a foreign employer. According to State Department regulations, the B-1 visa holder conducts business as a continuation of his foreign employment. D visa holders are generally alien flight attendants who enter into an employment contract in the United States with a U.S. airline and who only fly into and out of the United States.

Although these categories of visa holders are not technically authorized to work in the United States, such persons are legally present in the United States while they are working. Thus, they should not be subject to the benefit prohibition.

The Manager's amendment would also change the effective date to limit the application of this provision to persons with Social Security numbers issued after January 1, 2004. This change would provide the Social Security Administration the opportunity to develop the recordkeeping system necessary to enforce the provision.

Section 302. Temporary extension of attorney fee payment system to Title XVI claims

The Manager's amendment re-designates Section 302 as Section 304 and adopts the House-passed provision to extend the current Title II attorney fee withholding process to Title XVI for a period of five years.

The amendment would also cap the 6.3 percent assessment on approved attorney representation fees at $75 (indexed for inflation), as provided for Title II claims under Section 301 of the bill.

With respect to the cap of $75 for Title II and Title XVI claims, it should be noted that the cap applies on a per case basis. (Concurrent cases shall be treated as a single case for this purpose.) In a case multiple representatives, the SAA should apply the assessment proportionately to each representative issued a check and in no case should the cumulative assessment exceed $75.

Finally, the amendment would amend the existing dedicated account and installment payment provisions in Title XVI. Under current law, dedicated accounts are required when an individual receives past-due benefits equal to 6 times the Federal Benefit Rate (FBR); installment payments are required when past due benefits are to be 12 times the FBR. The amendment clarifies that these triggering amounts would be based on the amount of past-due benefits that remain after attorney fees that the Social Security Administration paid directly to the attorney out of past-due benefits are deducted.

Effective Date

Applies with respect to fees for representation that are first required to be certified or paid on or after the date the Commissioner submits to Congress a notice that she has completed the actions necessary to fully implement the demonstration project under Section 303.

Section 303. Nationwide demonstration project providing for extension of fee withholding procedures to non-attorney representatives

The Manager's amendments adds the following new section.

Present Law

An individual applying for Title II or Title XVI benefits may seek the assistance of another person. The person assisting the applicant may not charge or receive a fee unless the Social Security Administration (SSA) approves it. If the person assisting the individual is an attorney and the individual is awarded past-due benefits under Title II, the SSA may deduct the attorney's fee from the individual's benefits and pay the attorney directly-minus a fee to cover the SSA's administrative costs.

Explanation of Provision

This provision would authorize a nationwide demonstration project to allow non-attorneys the option of fee withholding under both Title II and Title XVI for a period of five years. The SSA would charge a 6.3 percent assessment on approved fees, subject to a $75 cap (indexed for inflation), as applies to attorneys under section 206 and section 1631(d)(2) of the Act.

Non-attorney representatives seeking direct payment of fees under the demonstration project would need to meet at least the following prerequisites: hold a bachelor's degree or equivalent experience, pass an examination written and administered by the Commissioner, secure professional liability insurance or the equivalent, undergo a criminal background check, and complete continuing education courses. The provision would require the Commissioner to implement and carry out the demonstration project no later than one year after the date of enactment. The demonstration project would terminate 5 years after being fully implemented.

The Commissioner may charge a reasonable fee to individuals seeking approval for direct payments. Such fees should be comparable to the fees charged to other professionals subject to similar regulation.

The Commissioner should consult with relevant experts in the area of disability policy and professional ethics (including, but not limited to, experienced non-attorney and attorney disability claimant representatives, disability advocates, and organizations that develop and administer examinations for the regulation of professionals) in developing the exam and in determining whether other prerequisites should be required.

The Commissioner would be required to submit interim reports on the progress of the demonstration and a final report after the conclusion of the demonstration.

Reason for Change

The demonstration project authorized by this section would allow the SSA to pay all qualified representatives directly out of past-due benefits for Title II and Title XVI claims and would enable Congress (in conjunction with the GAO study required under Section 304) to assess whether such an extension of fee withholding would increase access to qualified professional representation.

Effective Date

Applies with respect to fees for representation that are first required to be certified or paid after the date the Commissioner submits to Congress a notice that she has completed the actions necessary to fully implement this demonstration project. The interim reports would be due annually, and the final report would be due 90 days after the termination of the demonstration.

Section 304. GAO study of fee payment process for claimant representatives

The Manager's amendment re-designates Section 302 as Section 304 and modifies the GAO study.

The Committee-reported bill called for a study based upon the potential results of extending fee withholding to Title XVI and to non-attorneys. As modified by the Manager's amendment, the study will now be based on the actual results of such an extension as provided in Section 302 and Section 303 of the bill.

The GAO report would provide a comprehensive overview of the appointment and payment of claimant representatives. It would include a survey of all categories of representatives-both attorneys and non-attorneys, as well as those who do and do not elect fee withholding. It would compare claimant outcomes by type of representatives. It would also compare the costs and benefits of fee withholding from the perspective of the Social Security Administration, claimants, and representatives.

GAO would evaluate the interactions between fee withholding, the windfall offset, and interim assistance reimbursement. This evaluation would consider the effects of such interactions on claimant outcomes, access to representatives, and reimbursements to the Federal and State governments.

Finally, GAO would make recommendations for any legislative or administrative changes deemed appropriate. The report would be due no later than 3 years after the implementation date of Section 303.

Section 401. Application of demonstration authority sunset date to new projects

The Manager's amendment would extend the demonstration authority through December 18, 2005, rather than making it permanent, and allow projects initiated by December 17, 2005 to be completed thereafter.

Section 407. Reauthorization of appropriations for certain work incentives programs

The Manager's amendment adds the following new section.

Present Law

The Ticket to Work Act directs SSA to establish a community-based program to provide benefit planning and assistance to disabled beneficiaries. To establish this program, SSA is required to award cooperative agreements (or grants or contracts) to State or private entities. Services include disseminating accurate information on work incentive programs (the Ticket to Work, section 1619 programs, etc.) and related issues to all disabled beneficiaries. In fulfillment of this requirement, SSA has established the Benefits Planning, Assistance, and Outreach (BPAO) program. The Act also authorizes SSA to award grants to State protection and advocacy (P&A) systems so that they can provide protection and advocacy services to disabled beneficiaries. Services include information and advice about obtaining vocational rehabilitation and employment services and advocacy or other services that a disabled beneficiary may need to secure, maintain, or regain employment. SSA has established the Protection and Advocacy to Beneficiaries of Social Security (PABSS) Program pursuant to this authorization.

The Ticket to Work Act authorizes certain funding amounts to be appropriated for these BPAO and PABSS programs for the fiscal years 2000 through 2004.

Explanation of Provision

This provision extends the authorization to appropriate funding for these programs for another five fiscal years.
Reason for Change

SSA cannot continue to fund the BPAO and PABSS programs beyond fiscal year 2004 without an extension of authorization. These programs provide essential vocational rehabilitation and employment services for disabled beneficiaries to secure, maintain, and regain employment and reduce their dependency on cash benefit programs.

Effective Date

Upon enactment.

Section 416. Coverage under divided retirement system for public employees in Kentucky and Louisiana

The Manager's amendment would incorporate the House-passed provision in place of the Committee's provision, and add the State of Louisiana, as requested by its State Treasurer.

Section 418. 60-month period of employment requirement for application of government pension offset exemption

The Manager's amendment would adopt the House-passed provision with a revised effective date and transition rule. This provision is effective with respect to individuals whose last day of State or local government service occurs on or after July 1, 2004. The Manager's amendment would adopt the House-passed provision with a revised effective date and transition rule. This provision is effective with respect to individuals whose last day of State or local government service occurs on or after July 1, 2004. The transition rule allows State or local employees, who retire from government employment within five years of enactment, to count previous work within the same retirement system towards the 60-month requirement. Such previous work must meet both of the following criteria: (a) the work was covered under both Social Security and the government pension system, and (b) the work was performed prior to the date of enactment.

The Manager's amendment also consolidated existing provisions of the Social Security Act in order to co-locate the government pension offset provision with the provision on which it is modeled, the dual entitlement rule for covered workers.

Section 419. Disclosure to workers of effect of windfall elimination provision and government pension offset provision

The Manager's amendment re-designates Section 419 as Section 420 and adds the following new section.
Present Law

There are approximately 7.5 million workers who do not pay taxes into the Social Security system. The majority of these workers are State and local government employees. Many of these government workers may eventually qualify for Social Security as the result of other employment, or as the spouse or survivor of a worker covered by Social Security. The Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) were enacted-in 1977 and 1983, respectively-to provide more equitable treatment of covered and non-covered workers.

Explanation of Provision

This provision requires the Social Security Administration to send a modified Social Security Statement to non-covered employees that describes the potential maximum benefit reductions that may result from the receipt of a Federal, State, or local government pension based on employment that is not subject to Social Security payroll taxes.

It also requires government employers to notify newly hired non-covered employees of the potential maximum effect of non-covered work on their Social Security benefits. The employer shall obtain signed documentation of such notification from the employee and transmit a copy to the pension paying entity.

Reason for Change

Organizations representing State and local employees report their members are often unaware of the GPO and WEP provisions until they apply for retirement benefits. The Committee believes the Social Security Administration should utilize the annual earnings statement mailed to every employee age 25 and over to more explicitly inform State and local employees about the GPO and WEP. It is important that these employees also be informed about their options to become exempt from these provisions by electing coverage under the Social Security program.

Efective Date

Government employers must provide notification of the potential effect of non-covered work beginning with employees hired on or after January 1, 2005. The Social Security Administration must provide the modified Social Security Statements beginning January 1, 2007.

Section 420A. Elimination of disincentives to return to work for childhood disability beneficiaries

The Manager's amendment adds the following new section.

Current Law

A Childhood Disability Beneficiary (CDB)-sometimes also referred to as a Disabled Adult Child (DAC)-whose benefits terminate because disability ceased can become re-entitled on the parent's record only if he or she is disabled within the 7-year period following the month benefits terminate and is not entitled to higher benefits on his or her own record.

Explanation of Provision

The provisions would allow re-entitlement to childhood disability benefits after the 7-year period if the beneficiary's previous entitlement had terminated because disability ceased due to the performance of Substantial Gainful Activity (SGA) and the beneficiary is not entitled to higher benefits on his or her own record. This provision would not apply to beneficiaries whose previous entitlement terminated based on medical improvement.

Reason for Change

Prohibiting re-entitlement to childhood disability benefits after the expiration of the 7-year period is a significant disincentive to return-to-work for a CDB. Many CDBs find that the benefits for which they qualify on their own work record are less-often significantly less-than the benefits they received as a CDB based on a parent's work history. The permanent loss of benefits on the parent's record remains a major disincentive for a CDB to attempt to return to work, one not addressed by the Ticket to Work and Work Incentives Improvement Act of 1999. Although this provision is expected to affect very few individuals, the change will make a significant difference for those individuals in their efforts to work to the fullest extent possible.

Effective Date

The provision is effective on the first day of the seventh month that begins after the date of enactment of this Act.

Section 426. Technical amendments to the Railroad Retirement and Survivors' Improvement Act of 2001

The Manager's amendment strikes subsections (e)(1) and (e)(3).

Section 432. Modification of the dedicated account requirements

The Manager's amendment strikes this section.

Section 434. Exclusion of Americorps and other volunteer benefits for purposes of determining supplemental security income eligibility and benefit amounts and social Security disability insurance entitlement

The Manager's amendment strikes this section.

Section 439. Update of resource limit

The Manager's amendment strikes this section.

Section 440. Review of state agency blindness and disability determinations

The Manager's amendment strikes this section.