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Swamped by the recession: Agencies struck by wave of claims

Nov. 27, 2009 - 06:00AM   |  
By REBECCA NEAL and STEPHEN LOSEY   |   Comments
Brittney Nance fills out an application for food stamps March 6 at the Yolo County, Calif., Department of Employment & Social Services in West Sacramento, Calif. Federal assistance programs are experiencing marked increases in the number of persons applying for aid, straining resources and resulting in a claims backlog at many agencies.
Brittney Nance fills out an application for food stamps March 6 at the Yolo County, Calif., Department of Employment & Social Services in West Sacramento, Calif. Federal assistance programs are experiencing marked increases in the number of persons applying for aid, straining resources and resulting in a claims backlog at many agencies. (JUSTIN SULLIVAN / GETTY IMAGES)

The http://www.ssa.gov" target="_blank">Social Security Administration has been working for years to reduce its backlog of disability claims, which now stands at 780,000 claims. It even hired and trained 8,600 new employees last fiscal year.

But any progress it made has come to an abrupt halt. Largely because of the recession, Americans filed 400,000 more disability claims than predicted last year and the agency expects 700,000 more to be filed this year than in 2008.

SSA is not alone. Agencies across government that provide federal assistance are seeing their workloads explode as Americans seek unemployment insurance payments, health care insurance, school lunches, food stamps and college loans. Benefit claims and payouts have jumped in the last year at assistance programs run by the Labor, Veterans Affairs, Agriculture, Education, and Health and Human Services departments, among others.

"We were just not set up to handle an extra 1 million [claims]. We were struggling a bit with staffing as it was, and it's taken a while to hire and train new employees," Social Security Commissioner Michael Astrue told a House subcommittee this month.

In the case of SSA, the claims backlog is exacerbated by the fact that this year 10 state governments furloughed thousands of agency employees who are considered state employees, but whose salaries and benefits are paid by the federal government. Those employees work in SSA's disability determination services (DDS). The agency's inspector general, Patrick O'Carroll, estimates those furloughs have delayed the processing of 69,000 claims, denying citizens $126 million in benefits.

Rep. Bob Filner, D-Calif., said he will introduce a bill to federalize those DDS employees if the furloughs don't stop soon. Federalizing DDS employees may help solve SSA's recession woes, but it comes at a price. DDS employees receive state-level salaries and benefits, and converting them to the federal pay system and benefits will cost millions more than the current system, SSA has estimated. In fiscal 2008, SSA spent $1.8 billion on 14,000 DDS employees in the 50 states, the District of Columbia and Puerto Rico. Those employees processed about 3.6 million disability claims, and SSA plans to spend $2 billion on the program this year.

A silver lining

Claims have also spiked at the Agriculture Department's Women, Infants and Children (WIC) program, which provides food checks to low-income pregnant women, new mothers, infants and children. The number of benefit recipients increased from 8.5 million women, infants and children in August 2007 to 9.3 million in August 2009. The increase in demand has helped attract Congress' attention and helped the program get funds for a long-overdue modernization project.

A planned management information system will replace an outdated paper-based system used to store and track data on benefit recipients. The stimulus bill passed in February provided WIC $100 million for information technology upgrades, along with another $400 million to handle growing food costs and demand for assistance.

Spokeswoman Jean Daniel said WIC wants employees to be able to use computers to instantly access background and eligibility information on recipients, instead of having to root through file cabinets. She was not sure when the new system would be finished.

"We're in 2009," Daniel said. "Paper-and-pencil systems are being phased out pretty well across the board. [The new system will] save time. In the long run, it saves dollars and it allows you to transfer data. It's an important investment."

WIC is also working on a debit card system, similar to the electronic benefit system at Agriculture's food stamp program. Daniel said the food stamp debit card system has made it easier for Agriculture to catch people fraudulently reselling those benefits, and saves people the embarrassment of having to use easily identifiable coupons at grocery stores.

WIC has not experienced any backlogs or had to increase overtime to handle the participation growth, Daniel said.

Recession's impact

A wide variety of federal assistance payments have increased significantly in the last year. Spending in billions:

Unemployment

Agency: Labor.

2008 spending: $39.1 million.

2009 spending: $119.2 million.

Percentage increase: 205 percent.

Medicare Advantage Part C

Agency: Health and Human Services.

2008 spending: $64.6 billion.

2009 spending: $78.0 billion.

Percentage increase: 21 percent.

Civilian health and medical program

Agency: Veterans Affairs

2008 spending: $0.5 billion.

2009 spending: $0.6 billion.

Percentage increase: 20 percent.

Food stamps

Agency: Agriculture.

2008 spending: $30.3 billion.

2009 spending: $34.6 billion.

Percentage increase: 14 percent.

Women, Infants and Children nutrition program

Agency: Agriculture.

2008 spending: $4.0 billion.

2009 spending: $4.5 billion.

Percentage increase: 13 percent.

Pell Grants

Agency: Education.

2008 spending: $15.0 billion.

2009 spending: $16.3 billion.

Percentage increase: 9 percent.

Medicare Fee-For-Service

Agency: Health and Human Services.

2008 spending: $288.2 billion.

2009 spending: $308.4 billion.

Percentage increase: 7 percent.

Medicaid

Agency: Health and Human Services.

2008 spending: $177.5 billion.

2009 spending: $188.3 billion.

Percentage increase: 6 percent.

Supplemental Security Income

Agency: Social Security Administration.

2008 spending: $42.6 billion.

2009 spending: $45.0 billion.

Percentage increase: 6 percent.

Old Age, Survivors and Disability Insurance

Agency: Social Security Administration.

2008 spending: $576.8 billion.

2009 spending: $607.2 billion.

Percentage increase: 5 percent.

SOURCE: Office of Management and Budget.

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