Transcripts For CSPAN3 Key Capitol Hill Hearings 20140731

Do what they need to do or whether or not it would push them away from the ne gauche yating table. At this point, we think it would push them away from the negotiating table. So although i have Great Respect for the chairman and for senator corker and all the members of the u. S. Senate, and i believe the intentions here are all absolutely right on, k4 is to keep the pressure on iran to do what is necessary here to give the give the International Security were looking for and to cut off all the path wayings. They believe quiet strongly at this moment in this negotiation, additional action would potentially derail the negotiation. And that iran is quiet clear that the congress will pass legislation at any moment that it is deemed absolutely necessary to do so. Can you quantify how much going from 20 to 5 delays, the break out time . Is that quantifiable . Does it make it six months, the breakout time . Does it add five months . Is it quantifiable . What id prefer, senator, if i could, is in terms of specific break out times brief that in a classified setting. Setting the delay, it obviously has to have a step in the right direction. Every element that we can deal with helps on break out. But until we get a comprehensive agreement, we will not have a durable agreement that will give us the kind of assurance were looking for. And its from oxides to fuel plate sns. It is an important step. The ability to turn it back into a rich material is that much more difficult, yes. Thank you. Thank you. Thank you. Mr. Chairman. Well, thank you both. Let me just conclude with summary thoughts. We all appreciate your service. No one here questions that. Its only because of the importance of the issue that everybody feels as they do. Let me just make a comment on there is a difference and i think weve gotten better at this, but, you know, notification is different than consul tagsz. Notification is when youre doing x, y and z. Consultation is we are doing x, y and z and what do you think . If and when you get to a final agreement, people will have a sense of confidence on that. So i just urge you to think not just about what youre doing, but con sulting in a way in which there is input taking place that when it can be agreed upon, can be incorporated. Secondly, and ill just say for the record, the problem, of course, iranian know. Its the lead time. Unforcue gnatly, that amount of time is greater than the break out. So thats the fundamental conflict i have about saying we can wait, but the consequences of the impact will be less so. There would be no greater thanks giving day gift than fsh all of you to be successful. But the concerns here, i think, are very legitimate. In oush nerks panel thats going to come up, which is an excellent panel, i look at the testimony iran continues to challenge the correctness and completeness of irans declaration. The legality of the iaea boards and regulations and prablg tiss and reporting its findings in its reports to the iaea board and security counsel silt. Now, that letter was just june 4, 2014. So you say to yourself, wow, theyre challenging everything the iaea is doing. But key stuff, were going to get there in four months when you dont start actually negotiate i negotiating secondly, i appreciate what treasure has been doing. Even despite what youre doing, the part of the challenge that we face is that, you know, yes, irans economy is bad. But its better than it was. And that is part of, you know, the positive sentiment that is created by virtue of the joint plan of action and its extension, which is helping, in my perspective, to create some modest growth. You know, gdp is expected to grow at 2 pbt. Thats modest. But is a huge improvement over irans Economic Performance in the 201213 fiscal year when gdp contracted by 6 . Inflation is expected to go down, so the rate of inflation dipped below 20 , but certainly less than half of the inflation that it was at 45 . The real has gone up in its value. The stock market has gone up in its value. So there are consequences. More positive consequences for iran. Negative for what we consider the continuing vice of pressure to do the right thing. Finally, i spent a fair amount of time reading, and i wont talk about which of my friends in the press with their editorials. But i went back and read years of editorials about north korea. And, my god, its amazing to me that the language that was used about the aspirations that we were seeking in north korea is the language i dont know whether its the same editors, but its the language that is being used now as it relates to iran. To be very honest with you, if there is an kpaexample that no l is a bad deal, its the division of the career. It limited inspections and we all learned that it was a success and then they put the deal in the First Nuclear explosion. We cant have that as it relates to iran. So, look. Im glad to hear you say that the iranians Pay Attention to congress. They should let go every american that they have hostage. That would send a hell of a message. And, secondly, only because the stakes are so high that the passions are so strong. And, so, we have a deep respect for what you both and those who work with you are doing, and we have a mutual goal. I believe we have a role to play to help you in that mutual goal. You may not always like it, but i think at the end of the day, it is possible. And with the thanks of the committee, this panel is excused. Let me call our next panel. We both we want to thank our witnesses who are leaving and those who are joining with them. Wed ask you to do so quietly. We want to tell our new panel that you your full statements will be included in the record without objection. And wed like you to summarize, more or less, in five minutes so we can have the type of give and take that we just had with our first panel. Id like to announce that dr. Gary simore whofgs listed on the hearing notice took ill today. So we do not have the benefit of his expertise today. But we anotherd like to do so some other time. The oa has proceeded well, but the negotiations have also seen head winds. They requested the letter in tune to the iaea and the rates that iran challenged the agencys right to complete this declarations of the iaea. This is the report of the findings. Due to the fact that iran has been running the Nuclear Program first without filling it, both with obligations and Security Council resolutions. I have recently publish ed five principles with senate negotiators. I highlight some of those basic principles. The first one, to minimize the opportunities for violations and delays in compliance. An exampleover creating an unstable situation lowering the amount of energy in iran by increasing to 10,000 or more. Keeping stocks exceedingly low would be in practice. Ambiguity leads to slippage. With regard to the practical leads, i place them here. Timely protection on the other state or states came and produced is a complex task. There are aspects that we dont know. The iaea must provide the correctness and completeness of declarations, establish the total number by iran and the size of its uranium stocks. People and materials. Sure that the iaea has legally binding authorities to conduct the additional verification work. The agreement with the end in the u. S. Security council. Possible military dimensions. Irans most senior verification remains with the unwillingness of its Nuclear Program. For the iaea to conclude that all Nuclear Material is used, this is not possible unless iran satisfies in this key area. Such additional long term monitoring took place until the iaea Nuclear Material was in peaceful use. The simple fix is for iran to move the current and replace with a smaller, not able to hold enough natural uranium to run the reactor. There will be no need to be used in this reactor and a heavy one out. That would exceed the cap on the number. If not removed and rendered harmless, iraq would constitute operations and create a sizable breakout capability. An agreement must provide specific time from their findings from means. Its the more difficult and time consuming portion. Material would vanish. It could be small in size without visible signatures as was the case in south africa. In summary, the actual verification process will be timeconsumed. Especially for a Nuclear Program that had been largely in nature. It took for the iaea in europe, European Countries with the comprehensive safe agreement and implementing about five years with all Nuclear Material in peaceful use. Forthcoming in iran for the country to have in place a limited Nuclear Program. A rubbage verification system by the u. S. Security council is needed to support iran. Ive been involved with the p5 plus 1 talks. Im concern that had we are not close to a true diplomatic resolution. In fact, if we have a deal, its likely to be one which, in fact, postpones a real diplomatic resolution and weakens our ability to achieve such resolution. If we have a deal in this next fourmonth period, im concerned its going to be one that falls short of our minimum requirements. Its not likely to require iran to dismantle, anyway. It would permit iran to engage in more activity. It wont deal with Ballistic Missiles which are a threat in stages weve seen in other reports. And what we get in exchange for this deal is to permit Nuclear Weapons. We would also get enhanced inspections. But i do think that were placing too much stock in what inspections can actually achieve because theyd be hampered by first just the sheer size of Irans Nuclear position. And by irans refusal to come clean on his past work. Frankly, the absence in the clear part of the willingness or the International Community to enforce those inspections rooirmts. And i think that the more Nuclear Program we leave in place, the less likely its going to be to punish those obligations. The uranium plays a major role in supporting terrorism. Frankly, the arms embargo thats in place against iran, which would address, for example, its provision of rocketings and groups like hamas that come ins 1747, which could get lifted as part of a deal. It would give incentive to match Irans Nuclear capableties. It would encourage that technology to other places. And i think, frankly, would damage our own influence and prestige which are already pretty damaged. And this is the issue, i think, upon which those thing that is will be mostjudged in the middle east. How have we reached this juncture that were at right now . If you look at jpoa, in exchange for temporary reversible steps by iran, we made major concession that is the iranians have been seeking for a long time. It would be very difficult to take back these negotiations. We also, frankly, havent put forward a threatening alternative to an agreement. Which i think is later onto threaten sanctions and weve not responded to oil exports. Our military threat with the paralyzed situations in syria, iraq, ukraine and elsewhere. I think that it was an error for us to stray from our previous approach which was dismantling for dismantling. Ir iran, as stated before, has no need for those activities to forego. It does have a need a deep need for sanctions relief. I think we should be prepared. The only one is one in which we see evidence of a broader strategic shift. I think we needs to enhance our leverage. Yes, more sanctions will follow an agreement. I think we need to act more energetically in response to participation, as some of the members said. And i think we need to strepgtsen our military event. To kournter that perception that iran gets a free pass. So just to end this, i worry that we have become captive to this sort of false choice between a flaw deal and this prospect of a military conflict. I reject that false choice. I think a true choice is a deal which well set back our interest and a further approach to diplomacy which holds back those issues. Thank you both for your testimony. You bring up some very important points. Can you explain if two sets of principles youre referring to behind the p5 plus 1 and the yud rain yun positions and why those two sets of positions make it more difficult . Negotiations have been going eleven years. This is a story of now 4009. We include uranium enrichment and plutonium in a heavy reactor. And how he was able to rescue the uranium conversely. So then we looked at talks out today. So we want to have 190,000 uranium fuel for reactor. Its clear the bottom line has to survive. And then you look at the challenges that iran is facing, if they want to produce. So what good is it if youre able to do enrichment if youre not able to find soil . So when you look this one, look at the fuel manufacturing in which they dont yet have. This whole reason is they want to preserve the program. And then the other side of the gulf is that actually we dont want to have an Enrichment Program with iran. Now, its 190,000 its a great number. What is in your testimony by the uranium ambassador questioning all of the iaeas authorities in this regard . Is this buying time . Is this extending the period . What do you think is the intent from your experience at the iaea . I think that the agreement will be there, whatever will be. And we will end up at this itch leaptation. So youre saying even presume that can negotiators can reach an agreement in four months, that then there will be a whole nother set of negotiations with the iaea as to how how those agreement wills be enforced. Let me ask you, then, what lessons should we draw from the failure of the Framework Agreement with north korea as we deal with this one. Yes. I was part of the iasi in 1994. Challenge the authority of the iaea. You remember that north korea was about to leave the npt. And, therefore, they said thatter in not found in the process of the safeguards agreement. And therefore, the iaea didnt have any authority to do so. They challenged every step that the iaea did practice. And ill give you an example. We were not able to use the inspection. Recently, mr. Sour has challenged some of the statements by iaea with regard to the military dimension. Its a very different interpretation so whechb i hear secretary sherman say that will be based upon actions litigated for some time. In terms of the enforcement on all of the dimensions of the possible weaponization, elements while the sanctions release is suspended. I think this is a good remark. The only thing i would say is noncompliance has consequences. Is the South African model which you want matly, admitted in 1993 to possessing a Nuclear Program with military dimensions and then showed unpres dented cooperation by allowing anywhere, any time inspections. Whats your per semgss of that . Its a less of a program, its more of a program. They have much more declared before and there was a history of enrichment for 20 years. Why it was sexist, actually, the government had changed their view. They had given up their Nuclear Weapons program. They wanted to close that chapter, the history of south africa. In order to do that, they needed someone to certify that. And that organization was the iaea. So the goal operation was there. Once they did disclosure in 1993, it was easy to take over because the whole government was set up to help the iaea to complete its mission. But if that doesnt take place in iran, they want to come clean from their past, its going to be difficult. So even though, in this case, south africa had determined as a got that it wanted to end that chapter in its history, wanted to end its Nuclear Program, it took 17 years to get a clean bill of health with a government willing and wanting to end its Nuclear Program. I think thats pretty instrujtive as to when we say long term verification and enforcement agreements. Its very different than where iran is out and where south africa is at. Having this negotiation after the fact, i know thats the way it has to occur. I wondered. We keep stressing about the full transparency in the past. Relative to what iaea would be doing in the future, how important is that to understand fully what their program was in the past . You dont need to know every one from the program. You need to know how much you agree with the number of ser ten tangs. If you saw a break out support. So certain that enrich. Came up. Thats one reason. Therefor, you need to know what was done and how it was done. The iaea inspectors to confirm that those actions are not reconstitutes. I say thats a very important setting in the baseline. So that the proper rely monetary scheme can be established. How do you know when people were sharing with you what they do in the past, how do you know that that was, in reality, what they were doing in the past. Its actually a number of things. You normally call it multianalysis. You look what the people tell you. You look what they have been doing. Do they make sense. Do they fit the Nuclear Program at that point in time. You can indirectly confirm it by seeing the equipment that thef with all of that and some others that have taken place. So you have pieces all over and then we have some caps. But you can easily establish a relative picture of what has been taking place. And then theres out liars and no con sis sis ten sill. One question along those lines. I think with a country like iran that has multiple silos and arrangements with entities and sometimes that are a part of government and sometimes are not, how do you know that there isnt some clandestine program and iaea goes in, they inspect what we know of. How do you have assurances with some other activity taking place and what kind of abilities does the organization have to actually figure that out . Iaea has its own authorities and its own practices and skills. It heavily draws from the Member States. What they have seen, what they have been told wharks is where. So that the Member States can have their own means to find some of those or have fought their own picture about the Nuclear Program. Can see if this is consistent. And thats why distance made quite a lot in his letter. He doesnt like the way they put technical to the reports. This is one of the keys to success of the iaea. And only then can contest it. You know, the goal posts continue to move as we talk about where this deal is going. But i just want to give a hypothetical. Lets say that the administration ended up in a situation with 3 e 000 center fujs. No iraq. No and very exterrancive and intrusive inspections. How would that affect irans behavior in the region. How would it affect their ability in the future . On so much of those issues i got that. I recall appreciate your testimony candidly and feel very aligned with what you had to say. But lets just go back and say hypothetical hypothetically, thats where things ended up. Talk to me about the response. Some of our allies are not happy with the concessions weve made. But i think that if we had a firmer some of our allies are part of p5 . I think some of the do they view this as an expression of american weakness . I think if we have the right sort of policy context, what are we doing in syria . What are we doing in iraq . We can view how they hold the willingness of greechlt. In my view, the assessment to iran, that is not a good thing to have conceded that we shouldnt have done that. And i think thats a view thats widely shared in the region. But, again, i think the context is very important. To improve that situation, to improve how its perceived, we can take certain steps. You alluded to the fact that we started off in a not bright place. And i think people on both sides of the aisle here are concerned about where we began. But you said in your testimony that you felt like we could get to a good end, still. And so where where we began and where we are, how would you go about doing that . I think that the reality is we are where we are. The question for us here is how do we take the situation and make a good deal out of it. First, i think that congress has a role to play in that. There has to be broad buyin politically. I think thats very important. Look, i do think that from where we are now, we shoumd be focused on those principles and making sure that whatever greemt comes out is responsible. Any final sanctions relief be dependent not just on these particular steps. Evidenced by iran. That iran is, in fact, going in a different direction. Its to agree to a deal and whats the alternative. We need to make steps look worse from irans perspective. I think that means strengsenning the credibility of the military threat. I think we do those things, then perhaps we can influence irans per semgs of what is a good deal. Thank you both. I know its a lot of trouble to pred pair testimony and be here. We all benefit greatly from it and i want to thaungd both from being here and typically about noon at these hearings, things kind of clear out to other meetings. I know people are paying attention and read your testimony. So thank you. Well, thank you, senator. Sometimes, our second panel, with all due respect to the first panel, is as important if not more insightful. Let me ask you one final set of questions. Basically, you said when the isle Iranian Ambassador was complaining about the way in which the iaea was issuing its reports to its Member States. That the reason that it is important for the iaea to issue its report to its Member States in the manner in which they are doing it, in this case, is that what im hearing you say . Yeah, this is one thing. Certainly, the other thing is that the Member States can do their own, independent judgment how well iran complies with the requirements. Soo it may be very insignificant in which there is a forthcoming iran in this respect. Yeah, this has been there about last five years. It started to arrive somewhere around 2007, 2006. Its been repeetsed. I personally thought with this new team there in iran, that this kind of language disappears. But, evidencely, its not the case. One final set of questions. You argued during the interim agreement that the United States made concessions to iran, including uranium enrichment. What other concessions do you feel were made . How do you judge what response versus what iran did. And you also, in response to senator corker, said we need to strengthen our sanctions regime. What are examples of what you would suck jest would do that . The point was to address these uranium allegations and put the burden on iran. And i do feel that now as narrative underlying framework has shifted to this question of providing irans practical needs orr in addition to effort the iea. When it comes to particulars, its something iran has been seeking since literally the inception of these talks. We considered any constraints will be temporary in nature and, perhaps, quite short in nature. We have grand and some implicit legitimacy to those facilities. It constructed in secret. That includes some other facilities which now will remain in place and not be dismantled, i think. I think all the of these things are significant. I do think its important that there be a clear message to iran about what are the consequences for not reach iing a decent agreement by the end of these talks. Heres an issue where i think theres strong, bipart san agreement in the United States. And i think the message should reflect that strong, bipartisan greemt. I think its very important that we continue to enforce vigorously the sanctions that are in place. Im concerned that theyve increased 28 . Im not sure why that should be important to a u. S. Policymaker. When it comes to military credibility, its harder. The idea that were a lot less inclined to address situations like those in syria, iraq and elsewhere, in a sort of forceful way. We didnt enforce the redline in syria. When it comes to ukraine, for example, i think our response has been relatively modest, compared to whats actually happening there. So part of the answer is addressing some of these sitwaxs around the world in a more purposeful and exciting way. I think we need to address the situation to this region. I think the message that we send out is were pivoting to a different region. We may not sort of have much of an interest in this region anymore because of energy irnd pen dense and things like that. I think its important to get that message straight. Again, especially since 2011, some things have suffered. We need to rebuild that Security Architecture which we once enjoyed in the region. I think theres a flum beryl of steps when it comes to enforcing that credible fill. I would note that the one thing thats very clear to me is that military assets that did not exist orr werent in pox in the region are placed in the region which should send the ewe rain yans a very clees message that if, in fact, we could not sanction a deal and if wrach etting up sessions, that thats what happens. That there is a real credible threat assets were not in the region prior to this process. They are in the region now. And i would hope that that would be some sense of a messaging to them. Well, with the thanks of the committee for your expertise, i hope we can continue to call upon you. This hearing will the record will remain open until the close of business tomorrow. With the thanks of the committee, this hearings adjourned. President obama spoke this afternoon to employees of the department of housing and urban development. His remarks are ten minutes. Now, let me start off by making two points. The first is, clearly hud has the rowdiest employees. I now realize that. The second point is that before i came out here, Shawn Donovan made a point of saying that this wasnt as exciting to people as michelle coming. Now, i know that. I hear that everywhere i go. Theres no reason to remind me, to rub it in. Thats why i married her. To improve the gene pool. I am here today because i stole one terrific secretary of hud from you, but ive delivered another terrific secretary of hud to you. I want to thank all of you for the great job that youre doing, day in and day out. And we appreciate the members of congress who are here, although i have to say that i really didnt have a choice. You know, the other two, obviously they care. You know, the brother, hes like, okay, i got to show up. But i appreciate them being here. Let me just say a few words about shawn. From his first day when he got here, shawn knew he had his work cut out for him. Youll recall that the Housing Market was the epicenter of the crisis that we went through in 200 20082009. There were millions of families whose homes were under water. Hundreds of thousands of construction workers were out of a job. Too many veterans lived out on the street. But we were very fortunate, because shawns just one of those people where he sees a problem, hes going to work to solve it. And if what he tries the first time doesnt work, hes going to try something else. Hes a geek. Hes a wonk. He studies the spread sheets, he recruited top talent, he promised that if everyone here at hud worked just a little bit harder, you could really turn things around for struggling families. And all of you accepted that challenge. Weve still got work to do. But think about the progress that weve made. Home prices, home sales, construction, all up. Veterans homelessness down by almost 25 . Millions of families are now seeing their home values above water. Which obviously is a huge relief for them. When natural disasters strike, like the colorado floods, or hurricane sandy, you are right in there helping families rebuild. And a lot of that is thanks to shawn. A lot of it is thanks to the fact that all of you under his leadership took up the challenge. And you remembered what it is that this agencys about. I love the way that your new secretary characterized it. This is this should be a department of opportunity. A and, you know, housing for so many people is symbolic of the american dream. It means that youve got something stable, something you can count on, something that you own. And to watch the transformation that has happened around the country, first and foremost because of the resiliency of the American People and their hard work, but because at every step of the way you were there trying to help them. That really makes a difference. I could not be prouder of the work that shawn did. But i can tell you that nobody is more passionate about these issues than julio. He knows the difference between smart policy, and investments that can make a difference, and just talk. Hes all about action, not just talk. Hes seen it firsthand in how he grew up. Hes seen it firsthand as a mayor. He revitalized parts of san antonio that have been neglected for a long time. He helped the east side promise zone to take root and grow. He channeled the kind of investments that keep communities strong over the long term, like Economic Development and expanded Early Childhood education. Most of all, he knows how to lead a team. And this is a big team. You guys have gotten some big things done. But weve got a lot more to do. Even bigger things need to get done. So, you know, in talking to julio and initially trying to persuade him to take this task, what i saw was that spirit of hard work thats reflected in how he was brought up, and the values that were instilled in him. And every single day he wants to make sure that those values live out in the work that he does. And i know everybody in this room you know, youve got a story to tell, too, about somebody who along the way gave you some opportunity. You know, about somebody who maybe you were like me raised by a single mom. Like that first apartment that really had your own bedroom, and it was clean, and it was in a decent neighborhood, and there was a Decent School district, and how happy everybody was. And the transformation that could take place in peoples lives. You know, thats a story i want you to tap into every day that you come to work. You know, sometimes work in washington can be discouraging. Sometimes it seems as if, you know, the agenda that youre trying to pursue helping working families, middle class families, sometimes it seems thats not the priorities up on capitol hill. But if you remember why you got into this work in the first place, if you remember that this is not just a job, but it should also be a passion, that it should also be part of giving back, that you shouldnt just be checking in and punching the clock. But every single day theres somebody out there who could use your help. And i know when they get that help, and they write letters to me and theyll tell me, you know what, you transform my life. Theres no better feeling on earth than the feeling that you somehow played a small part in a family succeeding. And that success then lasts generations. Because some child, or grandchild suddenly is feeling better. And they start doing better in school. And maybe, you know, they avoided getting into trouble and ending up in the criminal justice system, or dropping out of school and not being able to find a job. All because of what you did. What an incredible privilege that is. What an incredible honor. And thats the attitude i want you to have every single day that youre here. I tell folks, ive now been president for more than five and a half years, and ive got two and a half years left, and i want to squeeze every single day i want to squeeze as much out of every single day, this is not just a job, its a privilege that we have. And weve got to take advantage of it. Weve got to seize it. Because thats what makes it worthwhile. You know, its something that, when i travel around the country, i try to describe, because people are so inundated with cynicism and bad news, and i want to tell them a story of good news. There are people in agencies like hud every single day, they care about you. And they want to help you. And, you know, big organizations are never going to be perfect. And there are always going to be some bureaucracies, there are always going to be some red tape, and they dont always go as smoothly as youd want, your job is to fix that stuff or work around that stuff, and i want everybody here to when youre working with this new secretary whos got energy and drive, hes young, hes good looking, he talks good, you know, you cant let him down. You know, youve got to be open to try new things, and doing things in a different way, and doing them better. But more importantly, you cant let those families out there down. Because theyre counting on you. So im eager to work with him. But more importantly, im eager to work with you. And every single day when you come to work, i just want you to know that i cant do my job unless youre doing your job. Julio cant do his job unless youre doing your job. Whether you are, you know, managing a Financing Program to build low income or affordable housing, or you are helping with some of our initiatives like promise zones, or you are coordinating with regional offices, whatever your task, whether you are upper management, or youre the in you kid on the block whos coming in, you can really have an impact that lasts for generations. Dont squander that. Dont succumb to the sense that dont start thinking this is just a job. Remember the mission that youve got. And if you do that, i guarantee you, under julians leadership, years later youll be able to look back and see what you accomplished because there will be a whole lot of peoples lives who are a whole lot better. Thank you. Coming up here on cspan3, the confirmation hearing for the nominee to head the Social Security administration. Then the director of u. S. Citizenship and Immigration Services testifying before the house judiciary committee. After that, an update from the u. S. Nuclear negotiator on irans Nuclear Program. Sunlds, on book tvs indepth, former republican congressman from texas and president ial candidate ron paul. He has written more than a dozen books on history in the latest, School Revolution on americas education system. Join the conversation as he takes your calls, emails and tweets, live, three hours, sunday at noon eastern on cspan2. Watch more book tv next week while congress is in recess. Book tv in primetime, 8 30 p. M. Eastern and tuesday through friday at 8 00, featuring a wide range of topics, and covering book fairs and festivals from across the country. The Senate Finance committee today held a confirmation hearing for the president s nominee to head the Social Security administration. The nominee, Carolyn Colvin, outlined her priorities for the agency, if shes confirmed. Senator ron wyden of oregon chaired the hourlong hearing. The finance committee will come to order. The finance committee is here today to consider the nomination of Carolyn Watts colvin to fill a role of extraordinary importance to millions of americans. And that is, the position of commissioner of the Social Security administration. If confirmed, ms. Colvin will be managing the nuts and bolts of the Social Security program, a vital task given that more than 62 million americans depend on Social Security as an Economic Life line. And i thought, ms. Colvin, and chairman ma cull ski, ill hold off. When americans get this document, that demonstrates the amount that they have paid for their Social Security insurance, and what the benefits are that they have earned, this is a document people hang on to. And they hang on to it because its a testament to just how important this program is. And if confirmed, americans are going to depend on you to ensure that Social Security is operating efficiently, and providing the right amount to the right person at the right time. And we all know that this is not a new role for you. Because you have been the acting commissioner since february of 2013. Before that, you served as the Deputy Commissioner for more than two years, coming out of a welldeserved retirement to engage in this critical Public Service. And colleagues, as we begin consideration of the nominee, i would just like to note for the record, that the finance Committee Approved ms. Colvins nomination for that position by a vote of 230. And sometimes ill tell you, ms. Colvin, im not sure i could have gotten a 230 vote. So you have very strong support. Im not so sure either. Oh, yeah. I was leading with my chin on that one. I think so. Because of ms. Colvins years of experience, ms. Colvin is well versed with the challenges involved with running the Social Security administration. One of those challenges is working within a tight budget and fiscal constraints. The Social Security has felt the same fiscal squeeze that every federal agency has in recent years. And Social Security has worked hard to maintain critical services. Thats required making some tough decisions, including reducing field office hours and consolidating some offices to address budget and staffing challenges. Ms. Colvin has been actively working on ways that Social Security can effectively manage its Program Integrity work load. As acting commissioner of Social Security, ms. Colvin has made a strong push to make Social Security information more user friendly and accessible to a broader swath of americans. Shes made Social Security work more efficiently with other federal partners. And she has devoted significant time and significant resources to addressing the needs of the many disabled americans, the agency serves. And im very pleased that thats the case, ms. Colvin, because just a few weeks ago we had a hearing looking at chronic disease and those who are disabled, and right next to chair mukulski was ms. Dempsey from georgia who had done everything right in america, and had been pounded with one illness after another. And the table was almost overflowing with medications she had to take every day because she depends on that Disability Program that you have focused on. So i have no doubt that youre going to continue that important work. That advocacy work for disabled americans once confirmed. Todays hearing, of course, is an opportunity for the finance committee and miss colvin to discuss the guarantee of the Social Security promise for todays seniors and future generations. I hope to see this nomination to lead Social Security move through the committee and the full Senate Quickly so the Social Security will have a confirmed leader in place. Senator hatch will make his opening statement. Im very pleased to be working with my colleague on this in a bipartisan way. Then well have an introduction from chair makulski. Thank you, mr. Chairman. Welcome, ms. Colvin. I think its a little unfair for you to bring barbara here to talk for you have. Were all scared to death of her. We do whatever she tells us to do. We learned that a long time ago. Ive enjoyed meeting with you in the past. Today we have an opportunity to learn more about your past management performance. And how you would, if confirmed, face the challenges of the future. Over the past ten years the administrative budget has increased by 34 . Thats well above the 24 growth in the number of disabled, and retired beneficiaries, to a level of almost 11. 7 billion. Are the budget has grown at an average annual pace of more than 3. 5 , above the average growth of even nominal gdp. Social securitys administrative funding continues to take up greater shares of the hhs appropriations bill. Inevitably crowding out other programs relating to health and education. We always hear from ssa that theres a need for more, and any problems in administering programs can be solved if only ssa receives more funds. Thats true of almost every agency today. In a hearing on this committee, last week, that was supposed to be a fresh look at the Disability Program. A representative of ssa devoted significant time to repeating what our in my view are becoming still talking points, demanding more funds for the agency. Ssa officials have been marching to the hill repeatedly to decry staffing reductions that ssa decided to make. Just as the agency decided to pay 244 million in bonuses between fiscal years 2008 and 2013. What id like to learn more about today, ms. Colvin, is what you have done in managing the administrative funding provided to ssa, which has accumulated to more than 104 billion over the last ten years, and what you would do moving forward. I think those are fair questions. And hopefully we can enjoy working together on these things. I hope that your answers will not simply be that ssa needs more funds. I hope to learn more today, and in followup questions about what you have done and what you would do if confirmed to increase efficiency in the ssa to reduce billions of dollars associated with the Social Security programs. Of course, the effort to fight fraud. There are many concerns to discuss. Let me briefly identify just a few items. The first fraud and overpayments. To give you an example, the disability has grown to more than 10 billion. Think about that. Overpayments in the Disability Program alone are almost equal to the Social Security administrations entire annual administrative budget. There are also unacceptably high overpayment raid in the ssi program. And there have been disturbing discoveries of fraud as in the puerto rico cases, the new york city cases and West Virginia cases. A bipartisan investigation led by senators mccain, coburn, harper and levin showed fraud in the di program in West Virginia. Even so, it is my understanding that an alleged rogue Disability Insurance attorney involved in the West Virginia case, still representing claimants in Social Securitys di program. As i understand it, alleged corrupt Administrative Law judges have retired with full Retirement Benefits from ssa. Its hard to see how that is an adequate response, how if this is indeed the case, we can effectively provide deterrence against future fraud. Ms. Colvin, i hope today well hear from you about your plans to address fraud, and overpayments in the Social Security program. The second item of concern is waste. There have been recent revelations that the Social Security Administration Spent nearly 3 million on a computer Processing System that has been identified by an outside evaluator that has delivered limited functionality. The chairman of the house ways and means subcommittee on Social Security has called for you to stop further spending on the system and called for an investigation into the failed implementation of the system. Thats just one example of waste that ssa that has been uncovered. There are a number of other examples i could message, indeed it is not hard to find enormous amounts of questionable and likely wasteful spending and payments when you read thoroughly the numerous reports by Social Securitys office of the Inspector General. Ms. Colvin, during todays hearing, i hope to get a better sense from you what your plans are to eliminate the obvious instances of wasteful spending weve been seeing at ssa. As you can see, mr. Chairman, we have a lot to discuss today, and im pleased that youre here today. And i honor you, and expect a great deal from you as we go into the future. But naturally, today we want to learn more about your stewardship of the staggeringly large administrative budget and what your plans would be to improve ssas management and stop the defraud and waste should you be confirmed. We welcome you to the committee. And these are matters that concern me greatly. Thanks, mr. Chairman. Thank you, senator hatch. Carolyn watts colvin has been nominated to be the administrator of the Social Security administration. Its our practice to give you the opportunity to introduce your family. Thank you, chairman wyden. I would like to introduce my sister. And if i may introduce a colleague from and earnest and his wife stacy. Thank you. Were glad that you all are here. And i would only say, as i reflect on chair makulski being with us, that we served together in the other body. [ applause ] colvin you are running with the right crowd as when your with chair makulski. Please proceed. Thank you very much, senator wyden. I want to thank you for expediting this hearing. On our last day in session before the august break, when there is much on you. Particularly in matters related to moving the highway trust fund. So we thank you for this courtesy. To both you and senator hatch, its an honor to be here in the finance committee. You know, your committee, the finance committee, my committee, the appropriations committee, are the only two committees in the constitution. It is the only two committees that the founders of the United States of america felt important enough to put into the constitution. Because it is the revenue committee, and the Spending Committee working hand in hand, where to provide the checks and balances to ensure the functioning of a democracy, not an elected monarchy. And i think when we look at this, your job is to be looking at really the significant issues of the solvency of the Social Security trust fund. What do we do to ensure the future of viability of medicare and medicaid. But theres also the administration of these agencies. Often overlooked in todays mediadriven congress, where the headlines are not in the nuts and bolts of management. But i know the leadership of you two, working with senator shelby and i, lets take a look at how Social Security is run. Does it have the right staff, the right technology, and the right way to do that, both at the Social Security administration, and also at cms. So hands across the aisle, hands across the committee, shoulder to shoulder. But no matter what we do, every agency needs a good leader. And this is why im so pleased to join with senator carden today in bringing Carolyn Colvin to you to be nominated for the permanent head of the as the Social Security commissioner. I first met Carolyn Colvin when she came into government under the legendary wmd Donald Shaffer, and worked handson with carolyn with mr. Shaffer as both the mayor, she in the health department, i in the city council, he as governor. I had moved to the senate. William Donald Shaffer was known for many things. One of which was his passion on making sure that government work, he was a legendary figure with his slogan, do it now, and do it right. So he recruited people that were intellectually brilliant, had enormous competency in terms of management skills, and a sense of urgency about solving problems of do it now and do it right. He also did something else. He reached out to people of color, to make sure that they were actually coming into government, and for all of their Previous Service were actually promoted in government. Carolyn colvin was over there at the health department. Bishop robinson was our police commissioner. It was a new day, a new profile, a new demographic and a new buzz in baltimore. Carolyn was part of that reform movement. That buzz, that do it now, and do it right, she has carried with her in the many positions that she had in government. After william Donald Shaffer moved on, she was the director of the Human Services in the district of columbia. Was the director of the Montgomery County health and Human Services department. A special assistant in the Maryland Department of transportation. And then became the Deputy Commissioner of Social Security, and in february, also then was appointed the acting commissioner. So you know her resume. And each way, it was the nuts and bolts of government, fix problems, do it now, do it right. She has inherited many significant issues at Social Security. Backlogs, techno boondoggles, some of the issues that senator hatch has enumerated. But i think shes up for the job. I think and im not the only one, the National Committee that preserves Social Security has supported her nomination, the aarp has submitted a letter. I ask unanimous consent without objection, so ordered. And so i bring this to your attention, and also, shes been recognized by many of the womens groups and Leadership Groups in maryland. Part of a group called leadership maryland, to actually train people in working together in bipartisan relationships. Also, shes part of the maryland 100. She and i joined, were now part of the maryland 1,000. People who have achieved prominence. But what i so admire about carolyn is shes ready to do the job. And im just going to close with one example. When i became the chair of the appropriations committee, one of the perplexing issues was the disability backlog at the Veterans Administration. And as we talked then with general shinseki, its because Social Security and irs were dragging their ability, their response to the information va needed from both of those agencies. Working with senators tim johnson and mark kirk, i convened an all hands on deck hearing with these agencies. Social security immediately responded under carolyns leadership to make sure that the va gets on a biweekly basis am i correct . For the information that it needs, so that the Veterans Administration can deal with its backlog. Shes got her own backlog with the disability benefits, this techno boondoggle, once again, before she took over, no one in charge. Everybody in charge. Everybody ditherring and moving their microchips around. You know that deal. And we saw it in the health exchange, we see it over here. But i think shes the person to fix it. So, mr. Chairman, and senator hatch, i really hope, as you can see my enthusiasm for her, and if you want william Donald Shaffer smiling on you today, the do it now and do it right, confirm Carolyn Colvin. That is some sort of sendoff. Thank you, chairman mikulski. Your commitment to these programs is renowned. And i especially appreciate your bringing up mr. Shaffer. Because i remember meeting him, and i saw how you could have a head and a heart, that you could focus on making sure you stretched resources and care for people. You said it very well. Now senator carden has the challenging job of trying to match that. Thank you, mr. Chairman. I agree with senator mikulski. Yeah. Youre not going to get away quite that easily, senator hatch. Let me first concur completely in senator mikulskis comments about Carolyn Colvin. Shes an extraordinary person. We only have 15 permanent commissioners of the Social Security administration. Franklin Delano Roosevelt announced he wanted to send to congress the law creating the Social Security administration. He announced that in june of 1934, 80 years ago. He then by executive order set up a commission that reported back to him. By the end of the year, he introduced legislation. Congress took it up. And by august, it was signed into law. 1935. Thats a model for us, i think, in taking up issues and resolving issues. Of course, its a critically Important Program to millions of americans ars the only inflationproof Lifetime Income source for millions of americans. The permanent commissioner is an extremely important position, as chairman wyden has said it. Not only millions of americans depending on its services, it ministers 68,000 employees. We are very proud, senator mikulski and i, that the headquarters of the Social Security administration is wooden woodlong, baltimore county, maryland. The dedicated work force that is dedicated to the mission, and to Public Service. And onefifth of americans depend upon its services directly. Carolyn colvin ive known for 30 years, mr. Chairman. And i concur completely in senator mikulskis evaluations. When i think of Carolyn Colvin, i think of a person whos dedicated, has commitment, and integrity. Carolyn is dedicated to Public Service and improving the lives of others. And throughout her career she has carried with her an unmatched level of commitment. To her current position of acting commissioner, she has brought the integrity needed to ensure the beneficiaries, applicants and ssa work force are treated fairly, and that the benefits are administered according to the law. Mr. Chairman, senator mikulski brought out many of the parts of Carolyn Colvins career. But its interesting, she began in ssa in august of 1963, when she was hired as a clerk stenographer. And now shes acting commissioner. This really is the american story of a person whos worked hard, is dedicated to Public Service for the right reasons and accomplished so very much. She has experience working for municipalities, for counties, for a state and for the federal government. Shes also worked in the private sector. So she brings all of that to this commitment, to our to the to this position. I might also say she was the director of Field Operations for my predecessor, so she brings a great deal of experience. She knows us. And she also knows how to deal with challenges, whether its a budget challenge facing Social Security, modernizing the disability claim system or restoring the positive relationship between labor and management at ssa. There is one thing i know, Carolyn Colvin has never shied away from a challenge. I know that she will give her best. I know she has the talent. I know shes there for the right reasons, and i strongly support her nomination and hope we will confirm it shortly. Thank you, senator cardin. Ms. Colvin, with the ringing endorsement of 100 of marylands senators, you will now have the opportunity to make a prepared to make a statement, your prepared statement is automatically going to be made part of the record. If you could perhaps take five minutes or so to summarize, wed like you to proceed. Chairman mikulski, youre welcome to stay. I know youve got a very hectic day, so we appreciate your coming. Chairman wyden, Ranking Member hatch, and members of the ghit tee you might want to speak right into the microphone. Thank you, ms. Colvin. Chairman wyden, Ranking Member hatch, members of the committee, my name is Carolyn Colvin, and im the acting commissioner of the Social Security administration. I am honored and grateful to appear before you today as president obamas nominee as commissioner of Social Security. I want to thank senator mikulski and senator wyden for their very, very kind introduction. I would like to thank the senators and their staff for taking time out of their busy schedules to meet with me during this confirmation process. It is a privilege to have the opportunity to lead the Social Security administration as the commissioner. The scope of what we do is truly enormous. And it is both humbling and a rewarding experience to go to work every day knowing what my colleagues and i do for families helps our fellow citizens. We serve the same spirit of compassionate Public Service that president roosevelt envisioned. I am very fortunate to have spent so much of my life in Public Service. Most of it leading federal, state and local Health Organizations that provide critical Safety Net Services to those most in need. Quite often i have led these organizations through periods of change and uncertainty. My career has included several executive positions in policy and operations at ssa. I was confirmed as Deputy Commissioner on december 22nd, 2010, and since february 14th, 2013, i have acted as acting commissioner. One of my Top Priorities since becoming the acting commissioner has been to position ssa to provide Excellent Service for future generations. At ssa, we have not always engaged in truly longrange strategic planning. This is why i created the position of chief strategic officer who reports directly to me and is responsible for developing strategy and promoting innovation across ssa. We are well on our way toward developing a longrange plan. I am committed to protecting ssas programs from waste, fraud and abuse. And im proud to serve as the Agency Official for improper payments. I have promoted new and innovative ways to prevent and recover improper payments. I am pleased with the progress we have made in expanding our Electronic Services. Weve created secure and convenient Electronic Services for individuals who want to do business with us online. As of june 2014, over 12. 5 million users had registered for my Social Security online accounts. With the success of our online services, we are able to conserve field Office Resources for those who prefer to visit the offices. We are fully committed now and in the future to sustaining a field Office Structure that provides facetoface service, and is responsive to members of the public who need or prefer to come into the local office. Ive appreciated the opportunity to collaborate with hi kmy colleagues at improving the overall efficiency and effectiveness of the ssa. Ssa has many challenges ahead of it. If confirmed, i look forward to addressing them. First, we must complete a longrange plan that will help us adapt a rapidly changing world, and continue to provide Excellent Service for generations to come. Second, we must make Wise Investments in technology. If confirmed, i will continue aggressively to increase the agencys use of modern technology that maximizes a return on the taxpayers investment. Third, i am committed to ensuring that we balance highquality service with our Program Integrity responsibilities. Fourth, we must do more to help individuals with significant disabilities succeed in the work force. Accordingly, the president s fy 2015 budget contains a proposal requesting resources and Demonstration Authority for us to collaborate with other agencies to test Early Intervention strategies, to help people with disabilities remain in the work force. And finally, if confirmed, i will continue to work to provide the best service possible for the American People. In the few years before fy 2014, limited funding and sequestration constrained our ability to meet our mission. We lost employees, and we had to cut back on services. Our employees are our best asset. Despite tight budgets and growing work loads, i have witnessed our employees make often heroic efforts to serve our customers quickly and compassionately. However, without adequate resources, they can do only so much to serve the public. The fy 2014 funding level positioned us to begin to restore services to the public and increase our Program Integrity efforts. I ask you to support the president s fy 2015 request to keep us on this path. In conclusion i believe my policy making experience, management expertise, and passion for the work make me well suited to be commissioner of this wonderful agency. Thank you for the opportunity to appear before you today. I would be happy to answer any questions you have. Ms. Colvin, thank you. Now, i think youve been advised by the staff that we have a number of standard nominee questions that we simply have to go through with all of our nominees. The first is, is there anything youre aware of in your background that would create a conflict of interest . No. Do you know of any reason that would prevent you from discharging your responsibilities to the office of which youve been nominated . No. Do you agree with our reservation to respond to appear and testify before any dully constituted committee of the congress if youre confirmed . Yes. Very good. Let me start by reflecting on your plans after confirmation. Iming itly struck by how at agency has changed over the years. You were there between 1994, and 2001. You joined the agency as Deputy Commissioner in 2010. So obviously youve seen a lot and learned a lot. And particularly, in terms of your plans for the next two years, i have been struck by the comments that youve made about new technologies. And how you would apply new technologie technologies, and i note that the recent report from the National Academy of Public Administration addresses that as well. So lets start with that. What are your thoughts about how, given the report, you can use new technologies, again, to better serve people, and make better use of scarce resources . Thank you, mr. Chairman. Social security is a wonderful organization, and we have known for some time that our roles would increase. Right now we have about 10,000 individuals per day per week who are turning 65. So its not surprising that our roles are increasing as a result of the demographics. In order to be able to keep up with those increasing work loads, and to get the efficiencies we need, technology is the solution. We have already begun to make Great Strides in online services. We have the my Social Security accounts, signing up for an account, and they can go online and transact much of their business. Weve had Great Success there. Well over 12 million individuals have already signed up in the short time weve had that. We also have other applications such as our disability and retirement applications, and about 50 of all people who apply for those benefits now apply online. We realize we have to continue to expand in that area. The reason is because our population is not homogeneous. There are people who must in fact have the availability of coming into the office to be personally served. Their situation may be complex, or they may just simply not be comfortable with the internet or they may prefer facetoface services. So we will always have a field presence. On the other hand, my goal is to develop systems that will be easy to use, convenient, so that those people who prefer to handle their business in the privacy of their home can. What that does, mr. Chairman, is it allows us then to free up people in the office to handle those people who have those special needs. We have been very successful in developing applications. For instance, we know that ssi do the peoples inability, or unwillingness to report their wages. We now have both a telephone process, where they can call in their wages, but we also have a mobile application where they can report their wages. This is already seeing well over 80,000 people in a very short time weve had them sign up. My goal would be to get most of those people who are in need of reporting their wages, using those systems. We want to also have a process where individuals would be able to go online, and be able to get the service that they need online in realtime, and chat service where they would be able to complete their business and not have to come back another time. For us, technology is extremely important. And it is what we need. Let me thats helpful, ms. Colvin. Let me ask you about one other aspect of this whole i. T. Issue, and its no surprise that were focusing on that. And this has been a special priority of mine since coming to the senate. You know, my state was always about Wood Products and forestry, and it always will be. But weve also put a major focus on information technology. Thats what i wanted to ask you about in regard to Social Security. Now, ive been informed that the agency has nearly 3,000 Data Exchange agreements, with federal, state and private entities, and processes, an average daily volume of 150 million individual transactions. Yes. We compared that to amazon. And amazon has only 27 million transactions. That was the case back on cyber monday in 2012. Now, we understand that much of this i. T. Is at its core cobalt based. The computer language developed in 1959 essentially before color television. And many of the i. T. Managers acknowledged that a cobalt based system works, but they also have indicated that its less efficient, and agile, than more modern computer languages. So what can the agency do to update the technology that it has to have to manage this eyepopping amount of data that youre dealing with every day . Well, i think one of the underlying challenges you just mentioned, theres a tremendous volume of data that we process. We recognize that we have to move away from cobalt to some extent, but not fully, because in some instances its the best language. There is a transition to modernize our systems. One of the challenges will be how quickly we can do that. Because there are still other types of i. T. Projects that we must also develop at the same time to make our system useful and efficient, both for our employees and for the public. But there is an i. T. Plan that will gradually move some of that cobalt language, and replace it with other types of language. But not fully replace it. My time is expired. Senator hatch . Thank you, mr. Chairman. Ms. Colvin, Social Security has long been criticized for not formulating longterm plans. Last year, the Nonpartisan Government Accountability Office identified that ssa faces four key areas of management challenge over the next decade. Ssas lack of updated succession plan, even though the agency faces a retirement wave. Disability program issues, including a need to incorporate what gao says is, quote, a more modern concept of disability, end quote. Information technology, including internal weaknesses in Information Security and physical infrastructure. I would note that the lack of funding was not identified as a key area of management challenge. Gao wrote that, quote, ssa has ongoing planning efforts, but they do not address the longterm nature of these management challenges, unquote. Now, ms. Colvin, if you are confirmed, how would you handle the modernization, information technology, and physical infrastructure . Senator hatch, we have recognized that the agency does need to have a longterm vision. We are in the process of doing that right now. We have the National Association of public administrators that were commissioned by congress to help in this process. They have submitted their report. We will use some of that report to inform decisions as finish our own planning process. We expect to have a longterm vision plan around the first of the year. We need to make sure that weve got extensive engagement with our stakeholders, with congress and advocates, and our customers, et cetera, so were looking at making sure that all of that has been done. But we do expect to have a longterm vision document completed by the beginning of the new fiscal year. The last vision document was in fact done in 2000 when i was here, which was for the years up to 2010. So we recognize the need there. We are in the process of also developing a Human Capital plan that will look at the gaps that we have to fill. We have probably half of our employees eligible for retirement. The fact that our program is very complex means that this will be a major problem for us. So we are in fact doing a skill gap training. We are modernizing our system. Those three areas identified were currently addressing. Well, thank you. In our hearing last week about the Disability Program, it was expressed that the d. I. Ex hawks has been foreseen for 20 years. And the increase in the disability roles have been expected for some time. It means ssa has had ample time to update the program to adapt the changes. However, as i understand it, Decision Makers in the d. I. Program utilize tens of thousands of pages of instructions to decide who should get benefits, including 37yearold medical criteria, 35yearold vocational criteria, and 23yearold guidelines to determine what jobs exist for individuals with disabilities. Now, according to the gaos highrisk list in 2013, Disability Programs, quote, rely on outofdate criteria to a great extent in making disability decisions, unquote. So i have two questions about this. The first is whether 2013 was the first time the gao identified high risks in ssas Disability Programs, and the second is why it has taken so long for ssa to update its criteria and guidelines, especially since youve had so much time and foresight about troubles with disability finances . If you could address those, id appreciate it. Senator hatch, it is my understanding that there have been other earlier recommendations relative to the need to update some of the medical or the vehicles, the tools that we use to determine disability. This program is a very complex program, as you know. Any change is going to have significant discussion, both here, in congress, and in the community. So any change that is made has to be evidence based, has to be based on research. And medical advancements. We are in the process right now of working with the department of labor to update the occupational list that we use. And that has been happening for some time. Its not something that in fact, the occupational standards that we currently use are not going to be updated, but we are working with the department of labor to develop a tool that will be helpful for us in determining our disability decisions, and we are in the process of that. We dont have a time line for that, but weve been working aggressively on that. Medical listings, we are updated on an ongoing basis. These are the criteria used in making the disability determination. Most of those have been updated and on a cycle to be reviewed every three years. With ssa, we dont really make medical decisions, we follow the medicine. And so if in fact there are new developments in science that make disability decisions different, then we use that information. But this is something thats ongoing, and is always going to be in need of review. But there is tremendous progress going on within the agency. So i dont want to leave the impression were not making advances there. The changes that were making, though, will not have a Significant Impact on the trust funds. It is our hope that congress will find a bipartisan way to address the need to have additional funding there. You are aware that Congress Many times in the past has reallocated between the two trust funds. The president has indicated, though, that he hopes they will do this again, so we will have adequate time to make longterm decisions. And whatever is decided will have to be a bipartisan decision. So we know that that will take a lot of discussion. Thank you, mr. Chairman. Thank you, senator hatch. Senator brown . Thank you, mr. Chairman. Good to see you, ms. Colvin. Thank you for joining us. And first, i just wanted to exhort you to work hard in terms of improving and expanding ssas communication with the general public. I do, as many of us do, ive done literally hundreds of roundtables and calls with senior groups, and various kinds of town halls, and i hear so many of the same myths about Social Security, about disability, about that, you know, its not always going to be there, and all the things that people say. I urge you to do what you can to help answer those myths. We talked about that. You agree with that. But let me talk about a couple more serious things. A couple other more administrative things, if i could. My office got a copy of a memo from an Administrative Law judge in the office of disability adjudication review in new york. I ask unanimous consent that be entered into the record. Without objection, its so ordered. And from the chief Administrative Law judge that mandates the quota. So ordered. It contains fairly mundane details, but it also says two important assertions. Administrative law judge will be issuing 500 to 700 legally sufficient timely decisions a year. If you fail to efficiently manage your work load, the agency may initiate disciplinary action against you. Can you, commissioner colvin, please elaborate the ssa policy on the quota for ssa law judges . The agency has targets, or goals toward which they want to see the aljs work. Those targets were developed by chief judges who in fact have held cases. They have the agency has about seven Years Experience now. The majority of our alj courts do in fact reach that target. Somewhere between 500 and 700. The reason i say its not a quota, no one gets disciplined because of their failure to reach that number. Its just a goal we work toward. We are a production agency. Our First Priority is accuracy, quality, to make sure that the decision is policy compliant and legally defensible. We know its a high volume business when we train aljs, we mention that to them. We have as in any other organization some who meet that, and some who go above it, and some who dont meet it. It is not a quota. Thank you for that. It seems, talking to them, that it feels to them, to many of them it feels like a quota. I just hope you will sit down and find a way to open up communications with them. And again, reinforce what you said to this committee right now that its not a quota, that its a recommendation and theres no discipline. I think they just need to hear that, as much of those conversations directly with you. Let me shift briefly to the labor and management relations. Even with the president ial executive order calling for Labor Management partnerships throughout the federal government, it seems from our reports that its only gotten worse, to the point some labor organizations tell us its as bad as it gets in the entire federal government. What explains this . Why is this . And can i have a commitment from you to provide my office and this committee with a detailed update on progress youre making towards fully implementing your office plans to improve Labor Relations in executive order 13522 . Senator brown, i share your concern about the Labor Management relationships in the agency. In every organization ive worked in, weve had very strong and effective relationshipsstff relationships with the union, i think its important when they work together. I believe that the unions have the same goals we have, which is to do the best we can for our employees and the american public. Theres always a very acrimonious agency. We have what we call a partnership, i was the one that signed that contract at the time. I feel that relationships had improved. I was amazed to see the deterioration. I meet with him on a regular basis, i have lunch with them without management staff. So we can begin to get to know one another, ive had relationship training to have managers and the union come together to look at how we can build trusts, how we can communicate better, et cetera, you will have my commitment that i will continue to do that. When you have a huge organization with 62,000 employees, it takes a long time to change the culture and the relationships. You have my commitment to try to move that gap a little bit closer so that we can work better together. And also a commitment to report to my office and to recommend this committee thank you very much. First, let me say how pleased i was to meet with you earlier this month. Thank you for your service and leadership for these many months as our acting lead er. I was invited back there from time to time. Back last year, had an opportunity to speak to him. Some young men from ohio state, some from other states in the midwest, i talked to them about leadership, values, i talked to them about some of the challenges we face. Among the questions that they asked me were questions related to our future as a country, the economy, their ability to get jobs and so forth. I asked them a question too. I asked them a couple questions. How many of you think that some day youll receive a Social Security check . Raise your hand. Not one person. Out of 500 guys, not one. And they said, how many of you think youll ever benefit from Social Security rather from medicare . Not one. Not one. And i said, our job here is to make sure if you ever need a Social Security check when youre 65 or 75, it will be there, and if you need health care, that will be there for you as well. I chair a committee, we have a subcommittee led by carl levin until a year or so ago, they did an indepth analysis as you know, Disability Insurance fraud in one place, in huntington, West Virginia, what they found was and i mentioned this to you in our meeting, one judge was thinking about all these cases from one attorney, one law firm, and approving about 99 of them. Almost magically a cash payment was deposited into the account of the judge year after year after year. Weve got to be smart enough to do something about it. In the private sector, they have the ability to use a technique called Predictive Analytics. And this is just an area thats right for this. I think the average approval rate for Disability Insurance application. Its about 40 . When somebody 99 people should pick this stuff up. We should be able to pick this stuff up. And to do it in a private sector all the time. I want you to talk to us about how we use the same tools and techniques, for in order to defend a fund that i think is going to run out of money in 2016 or so the Disability Insurance fund, i believe so, i think the Social Security fund will have to chop down the benefits in the early mid30s, talk to us, how are we going to use it. How are we using Predictive Analytics to get at this problem . Thank you, senator. We are all enhancing our antifraud activities. We are in fact using data anna littics, we are working internally, we are also going to be using external groups so we can maximize this. Weve become much more sophisticated, were seeing third party fraud, that is why the Data Analytics is going to be so important. Because it will show us the trends that are happening and well be able to identify thinks we would not be able to identify without that. We are working on that, let me just mention that we have a zero tolerance for fraud in the agency even though we have less than 1 , we have a case, we look at what we learned so we can learn from that. They tend to be the best defense against fraud. We also have dont know if youre familiar with our investigative units. These are the units that are partnered with the local Inspector General and local law enforcement. I initiated the first one in 1998 when i was here, we now have 25. As a result of the increased funding, im opening up another seven, what these units do is identify fraud before we pay out the first check. And this is important, because its so much easier to then get the money than it is get it once weve made the benefit. We are aggressive in that area. Out front we probably referred 27, 28,000 referrals a year to the office of Inspector General. We have been working with the department of justice to try to get them to be more aggressive in prosecuting the cases, and in some instances, we have to defer any administrative action we take until such time the criminal action is taken. If criminal action is taken, we can get restitution. Where if we do administrative action, we dont know how much of the money well get back. Thank you. I want to thank you and your staff staffs. Some of the payments can be fixed. We have a situation where Social Security has pretty much keeping track of whos alive and whos dead, so we dont pay benefits to people that have passed. Senator widen, mr. Chairman and to senator hatch, thank you very much for working in concert with dr. Coburn and me to make sure we can address this issue. 106 in improper payments. This bill will help us. So thank you. Thank you, senator coburn. And excuse me, senator carper. Ive been called worse, even this week. Thank you. I want you to know as ive indicated, because we had a hearing on Disability Insurance, where there is fraud we are going to find it and fight it. This program is so important for people. She did everything right, she just got clobbered by one disease after another. And she was sitting there at the end of the table where chairman mccull ski was with medications piled one box after another that she takes every day. We owe it to her, to taxpayers, i also have this document about service about improper payments. It would indicate in in the overwhelming number of instances, the agency gets it right. Your point is, when they dont and when theres particularly fraud, we have to find it, we have to fight it, we have to root it out in a bipartisan way. Let me recognize senator hatch. I think would you like to say anything else . Just welcome and happy to have you testify here today and enjoyed our meeting in our office together, look forward to working with you. The only thing i would say in closing. You could see this from the remarks of the senators, that sometimes government is kind of an distraction. Theres some agency and the office of acoustics and ventilation and the citizen tries to figure out what is that exactly have to do with me. I know there have been changes in the policy as well. People hold on to, because it talks about what theyve earned, what theyve paid in, what theyve got