Social Security chief: Program 'fraying' due to inattention to its problems

A: I think there's some historical inevitability that we will move in that direction. How far, I don't think is historically inevitable. Part of this we need to remember is not that the system is flawed or that there are evil people around here. I mean, we should celebrate a little bit of good news. Most of the pressure on the system comes from the fact that we've had great medical advances and people are living a lot longer than before.

Q: Social Security payroll taxes only apply to the first $113,700 of a worker's wages. There have been proposals to increase this threshold or even eliminate it, applying the tax to all wages. What do you think of those ideas?

A: I think there's some historic inevitability on at least some lifting of the (payroll tax) cap. I think that most politicians and I think most economists I've talked to generally think that that would have less of a negative impact on the economy than raising the rate itself.

Q: Applications for disability benefits increased dramatically when the economy went bad. Why did that happen?

A: I think a lot of people applied out of economic desperation. Very few of those people actually ended up getting benefits. If you look at the numbers, it's one of the reasons why our approval rates have dropped dramatically in the last few years.

Q: Aren't most disability claims initially denied?

A: Yes.

Q: Why?

A: Because the statutory standard is so stringent. In terms of the percentage who get on, both in the beginning and at the end of the process, it's somewhere usually in most years in the 35 to 40 percent range. Sometimes people talk like nobody gets approved initially, and that's not true. Some people say, Oh, everybody gets on, and that's not true, either. But the statutory standard is you have to be unable to do work that exists in the national economy for 12 months or more.

Q: If your claim is denied, you can appeal to an administrative law judge, but the process can take a year or more. Tell me about your efforts to reduce these backlogs.

A: We've done, I think, some yeoman's work in reducing the backlogs. ... If you look at time to a hearing, what we call average processing time, it peaked very shortly after I started at 542 days and it got down to about 340 (days) and then drifted up a little bit with all the budget cuts in the last couple of years. But it's still about a year on average, and that's a big improvement.

Q: Are you getting enough resources from Congress to address these backlogs?

A: No.

Q: The Association of Administrative Law Judges says that in order to reduce backlogs some judges are deciding more than 500 cases a year. Is that too many cases to do a thorough job on each one?

A: No, not at all. We set for the first time productivity standards in 2007. It was actually done by the chief judge, and it was done looking at best demonstrated practices of existing judges. At that point in time about 40 percent of the judges were doing 500 to 700 cases a year. And so that's what we set as our goal, and that's what it is, it's a goal to shoot for. ... Now, about 80 percent of the judges hit that goal.

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