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Joint Hearing of the Subcommittee on Social Security and the Subcommittee on Income Security and Family Support

Statement of James F. Allsup, Belleville, Illinois
President, CEO and Founder of Allsup

Chairman Tanner, Chairman McDermott, and Members of the Subcommittees meeting in a joint hearing today, thank you for considering my written testimony regarding the Social Security Administration's massive disability claim backlog.

My name is James Allsup and I am the founder, president and CEO of Allsup, the country's largest non-attorney Social Security Disability Insurance (SSDI) representation company. We have helped more than 110,000 individuals obtain disability benefits since 1984.

The focus of today's hearing is the SSDI system's immense "official" backlog, which to date has been ably chronicled by members of Congress and the nationwide media. To get a true handle on the situation, however, much more attention needs to be paid to the even bigger problems that are looming.

A Growing Pre-Backlog Crisis

One way to think of the SSDI backlog is as a backed-up highway tollbooth plaza. Even if you add more lanes or find technological ways-like E-Z Pass-to speed cars through the tolls, you won't break the blockage if too many other drivers are flooding the highway to take their place.

This is the situation now facing the Social Security Administration. Almost three-quarters of a million people with severe disabilities and without jobs are waiting for the hearings generally required to receive benefits. Unfortunately, behind that group, another half million applicants were already moving into the system's "pre-backlog" of claims last year. The irony is that after a very, very long wait with at least one rejection, most eventually will be awarded the benefits they deserve.

Social Security employees are working as hard as they can to help people who deserve care, but there is simply no way for them to keep up when so many individuals with disabilities are ready to take the place of those who get through the system.

Recession Increases the Challenge

The recession is making things even worse. Allsup recently reviewed data from recessionary periods during the past 40 years and found that Social Security Disability Insurance claims typically increase when times get tough.

The 40-year analysis includes the current recession, which began in December 2007, according to National Bureau of Economic Research data. Applications have increased during six of the seven recessions in that timeframe (January 1980 to July 1980 being the lone exception). Overall, the number of disabled workers applying for Social Security Disability Insurance grew to 2.3 million from 725,200 in 1969.

The current period is following that pattern. Commissioner Michael Astrue stated earlier this year that his agency is facing an unanticipated 10 percent increase in its disability claims caseload. That's 250,000 additional cases the SSA needs to review, further bogging down the system.

At this point, there are those who would write those increases off as simply a problem of fraud. They ask, fairly, why someone who was truly disabled did not apply for benefits before the job market slowed down and it became much harder to find work.

Unqualified applicants certainly can place a burden on the system, although there is a difference between individuals with disabilities who do not understand the technical requirements for eligibility, and out-and-out fraud. This is one way companies like Allsup help the SSA. Our system pre-screens applicants to ensure likely eligibility before they submit their claims.

However, it is not true that the recent application increase is simply an issue of fraud. As tough as the disability application process is, it's no surprise so many people try to avoid it at all costs. A process that involves years of tests, hearings and mountains of complicated paperwork-all for an uncertain promise of help that could be years away-is not something most people will cheerfully take on.

But when the economy takes a sharp downturn, new financial strains can force some people to realize they can no longer afford to live without the disability benefits they are owed. They may have been struggling to keep working with a progressive health problem and now lost their job. Perhaps the spouse who had been supporting the family suddenly loses his or her job.

The sad truth is that the current economic downturn will affect the system for years to come. Today's new applicants are tomorrow's backlog.

Searching For Solutions

Over the long run, additional resources for the SSA are needed to meet the backlog challenge. Unfortunately, the "long run" won't help many of today's applicants. The good news is that a simple, cost-free step could make an immediate difference in the problem.

Because applicants often don't know help is available, too many initial claims are denied for simple mistakes that have nothing to do with the applicant's disability status. In other cases, applicants who don't meet the standards for disability-but might if their conditions worsen over time-bog down the system when a simple pre-screening qualification process would let them know they aren't ready yet.

Congress and the President should therefore immediately direct the Social Security Administration to notify applicants that they have options for getting help in pursuing their claims. This includes "outside help" from organizations like Allsup or attorneys.

This really isn't an unusual concept as expert disability representatives work very much like professional tax preparers to help guide applicants through a government approval process, comply with the rules and laws, and get the benefits they deserve. By the time applicants reach the hearing level, about 90 percent are receiving assistance. Disability representatives can help solve the SSA's growing pre-backlog problem by working to ensure more applicants have help from the beginning. The Internal Revenue Service has for many years supported the concept that outside assistance is valuable to both the individual and the agency. The same approach could work well for the SSA.

In addition, the SSA could attack the backlog directly by increasing the use of on-the-record hearing decisions for qualified claimants, which eliminate the need for oral hearings in two-thirds of our cases. Allsup pioneered the use of on-the-record hearing decisions for qualified claimants. When an on-the-record hearing decision is warranted, we prepare all the evidence, write the legal brief and submit a well-developed and accurate claim to a judge for a decision.

This process has been effective for moving qualified claimants through the process. Approximately 70 percent of Allsup claims that reach the hearing level are approved on the record. Judges are able to make sound, informed decisions and cut off months in the processing time of an application. Not only does the individual avoid the hearing backlog, the decision is made quickly.

Collaboration, Not Privatization

I emphasize that this proposal is not a step toward privatization. It is a way for government to leverage the existing capabilities of expert disability representatives to immediately and positively affect the disability backlog.

Literally hundreds of thousands of government worker-hours could be saved if every application processed by the Social Security Administration was professionally documented before it was submitted.

Chairman Tanner, Chairman McDermott, and Members of the Subcommittees, I commend you for holding this hearing to raise awareness of these issues. Thank you again for the opportunity to provide testimony. I look forward to working with you to address this growing crisis.