The Business of Government Hour

 

About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

James Lockhart, III interview

Friday, June 10th, 2005 - 20:00
Phrase: 
"We need to do something about Social Security soon. If we don’t, the changes will just get more and more drastic as we go forward with either higher tax increases or greater benefit cuts. And that’s what we’re trying to avoid by moving more quickly."
Radio show date: 
Sat, 06/11/2005
Intro text: 
James Lockhart III
Complete transcript: 

Wednesday, April 20, 2005

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I'm Paul Lawrence, partner-in-charge of The IBM Center for the Business of Government. We created this Center in 1998 to encourage discussion and research to new approaches to improving government effectiveness.

You can find out more about the Center by visiting us on the web at www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who's changing the way government does business. Our conversation this morning is with Jim Lockhart, deputy commissioner of the Social Security Administration.

Good morning Jim.

Mr. Lockhart: Good morning, Paul. How are you?

Mr. Lawrence: Great, thanks for joining us. And also on our conversation, also from IBM, is Tom Romeo. Good morning, Tom.

Mr. Romeo: Good morning, Paul.

Mr. Lawrence: Well, Jim, just as a context for our listeners, could you tell us about the history and the mission of the Social Security Administration?

Mr. Lockhart: Social Security was founded 70 years ago, and it was a law signed by Franklin Delano Roosevelt to protect people in old age. Since then it has been expanded many times. It now protects survivors, and in the mid-'50s, we had a disability.

Today, about 70 percent of our beneficiaries are retirees and it is split between survivors and disabled.

Mr. Lawrence: How do you think about the size of the Social Security Administration? Describe the programs and the budget, and also in terms of like the number of employees?

Mr. Lockhart: Well, it's a very, very large program, and in fact, dollars spent, it's the largest program in the U.S. government. We represent about a third of the tax collections and about a quarter of the money spent. We pay benefits to 48 million people. We collect taxes from 157 million people. We have 65,000 employees in 1500 offices around the country, and on top of that, we pay for another 15,000 state employees in our disability determination services. So by almost any scale, it's very, very large.

Mr. Lawrence: And how about the skill set of the employees?

Mr. Lockhart: Well, our employees are really a very dedicated bunch and it's really great to go visit the offices, because they are so dedicated to the service of the American people. They're really dealing day in and day out with the American people.

Generally, our average employee has a college degree; we've hired over 2000 this year, partially because of the new Medicare program. And I've seen people with MBAs, other master's degrees, but generally, they are college graduates.

Mr. Lawrence: If we had to narrow it down, what are the programs most people would recognize when we talk about Social Security Administration?

Mr. Lockhart: Despite our size, we really only have two major programs, Social Security itself, which has within it the Disabled, and the Survivor's New Retirees, and as I said, we're paying about 48 million on that program.

We also have a second program called Supplemental Security Income, which is the largest cash means testing program in the U.S. government, and that program really pays disabled and elderly poor, people with very low means, monthly benefits.

Mr. Romeo: Jim, what is your role and responsibilities as deputy commissioner?

Mr. Lockhart: Well, the deputy commissioner is the number 2 position there, so I'm the chief operating officer. I spend a lot of the issue -- time on management issues, some special areas like SSI; it was on the high-risk list when we arrived, so I've been very active, and we did get it off the GAO's high-risk list.

Another thing, I have been spending an awful lot of my time on this reform of Social Security, to achieving solvency. And that's taking up more and more of my time as things -- time goes by.

Mr. Romeo: What were your roles prior to being appointed deputy commissioner in January of 2002?

Mr. Lockhart: Well, Tom, I have had a pretty varied career, you might say. I have an MBA, worked as an assistant treasurer for Major Royal Company, treasurer of an insurance broker, was in investment banking and CFO of a reinsurance company. And in the Bush-41, I ran another government agency, the Pension Benefit Guarantee Corporation, which is the government agency that insures corporate pension plans. And during that period, there was a need for reform, and we pushed it forward all the four years I was there, and we finally got it.

And most recently, before I joined the government, I actually was involved and started up a small business, Risk Management, a software and advisory firm that really advised financial institutions on how to handle investment credit and operational risk.

Mr. Romeo: It's a very impressive experience. How has that helped you to prepare for your current role?

Mr. Lockhart: Oh, it's been invaluable, certainly, the management experience I've gotten over the years. Social Security is a giant operation. The good news is we really have great people, but still there's a lot of management that needs to be done. But also the financial and pension and investment expertise is really helping as we look at fixing Social Security for future generations.

Mr. Lawrence: When they -- when you talk to your friends and they ask you what's it like being in government, running an organization, how do you compare the public and private sector approaches to management issues?

Mr. Lockhart: Well, my experience in government is maybe a little colored, but I have really seen two very dedicated high-quality workforces, and I really don't see a lot of difference. Certainly, the private sector, you know, has the profit motive, if you will, but I'll tell you in the government sector that the motive of serving the American people is so strong that it's really inspiring.

Mr. Lawrence: How about in terms of speed of decision-making?

Mr. Lockhart: Well, I would say the government is slower in decision-making. Many times there is a need to build more of a consensus, there is more of a spotlight on you when you're in the government, there is Congressional Oversight, there is the inspector generals, there's the GAO, there is the press, and so -- rightfully so, decisions take longer.

Mr. Lawrence: Now, you mentioned you were in Bush-41 and now in 43. How about some comparisons in terms of the difference in styles and approaches to management issues across the two?

Mr. Lockhart: Well, I think management has really been cranked up under this President-43. President Bush has an MBA and he really believes in management, and his deputy for management Clay Johnson is really pushing the management agenda very strong throughout government. And it's really bearing results.

Mr. Lawrence: And what drove you back, what drove you back to government service?

Mr. Lockhart: Well, I think probably more than anything, the opportunity to help fix Social Security for future generations. Really the whole need to reform Social Security was the thing that I worked -- an ultimate challenge if you will.

Mr. Lawrence: I'm kind of curious, let me follow that up, sir. I would have -- I mean, as we think about fixing Social Security, it seems like a long term problem. Most people come to government; don't stay all that long. How have you sort of worked that paradox out?

Mr. Lockhart: Well, I know it's a long-term problem, pension problems are long term, and PBDC had a long-term problem. They actually made Social Security independent of HHS in the mid '90s, and at that point they gave the commissioner and me six year terms. And two more years left on that term and I'm very hopeful over that period that we can really actually achieve the reforms the system needs.

Mr. Lawrence: How about in terms of attracting the rest of your team? The issues are very complicated, it requires, you know, deep financial knowledge and actuarial skills that are hard to get anywhere. How about in terms of attracting them to your team?

Mr. Lockhart: Well, the good news about Social Security again is it really does have a very great career staff and really the way it's organized. We have very few political people there. You know, it is difficult to get people with the special expertise in the policy and some of the financial areas, but I've been very impressed with the people there. We're always looking for good people and if you have any listeners that have expertise in that area, give us a call.

Mr. Lawrence: We'll be sure to advertise it at the end of the show unless you get your website in. Social Security solvency is a subject many like to talk about, but what are the facts? We will ask SSA Deputy Commissioner Jim Lockhart, to explain this to us, when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence, in this morning's conversation with Jim Lockhart, deputy commissioner of Social Security Administration.

And joining us in our conversation is Tom Romeo.

Well, Jim, let's start by thinking about Social Security solvency, and starting from the broader context, what are the external factors shaping our nation that presents SSA with its great challenges and opportunities?

Mr. Lockhart: Well, America is aging and that's really our greatest challenge. The baby boomers are only three years away from early retirement age and that's going to put a lot of pressure on us administratively but it's also putting a lot of pressure on us financially.

On top of that people who are living a lot longer. The normal woman that reaches 65 today lives another 20 years, and by the end of the 75 forecast period, she should be -- forecast to live to be a 90.

So we're going to have a lot of centenarians. And on top of that, the American people are not producing many babies, where birth rates are below replacement rates. So the combination of those demographic factors means that the system was built on having a lot of workers for every beneficiary is changing very dramatically.

Fifty years ago there was about 16 workers to every beneficiary, today it's about 3.3, and in 30 years it's going to be 2 to 1. And we really can't work the system with that set of economics with this tax rates and these benefit levels, so something has to give. And in 12 years in fact there won't be enough taxes to pay benefits, and at that point in 2017, we'll have to knock on Treasury's door and ask for money.

And we'll redeem those bonds in the trust fund, but that means, you know, Treasury is going to have to get that money by taxing the American people, borrowing it from somewhere else or cutting expenditures. So that's when the pressure really starts to build on the system.

Mr. Romeo: So Jim, there's certainly a lot of discussion in the public forum about reform for Social Security and you talked a little bit about the time frames. Is the urgency really now?

Mr. Lockhart: Well, I've been talking a lot on that topic, and in fact I've probably done 30 plus town halls with representatives and Senators over the last month and a half. The message I am giving out there and the message I'm really getting back at this point is, yes, we need to do something soon. That's what all the experts are saying and the reason really is if we don't, the changes will just get more and more drastic as we go forward. We'll just have to have even higher tax increases or greater benefit cuts. And that's what we're trying to avoid by moving more quickly.

Mr. Lawrence: It seems like an interesting problem. The gain is out into the future and the pain seems kind of present, as you sort of worked that through. How do you think about that management challenge?

Mr. Lockhart: It is a real challenge. You know, the way the government accounts doesn't help it with, you know, sort of our cash-flow accounting and without accrual accountings, so someone -- no one really looks at those long-term liabilities, or better put, unfunded obligations. And they are giant in this system.

If we want to continue to pay benefits the way they are scheduled today, over the 75-year period, we're looking at a $4 trillion number. That's hard to comprehend, but that's close to the public debt of the United States today. If you look at the, what we call the infinite rise in the very long-term, and if you want to fix the system permanently, that's the number you should be looking at, the number is $11 trillion. That's like a $100,000 per American family today. And every year we wait, it's going up by 6 percent.

So, again, we need to do something. It's hard to get people to pay attention. But with the President's leadership, you know, most of the polls are now saying that people look at that as the one or two biggest issue in the country today. And I think that is really helping, and certainly, when I've been out with Congressmen and Senators, they are very attuned to this. I mean, I used to do some events last year; it's hard to get a crowd. This year, it's hard to -- I mean, I get crowds and you have to turn them away, so --

Mr. Lawrence: Now, take us through the options again? We can, at some point raise taxes or cut expenditures, do I have that?

Mr. Lockhart: Well, there's really three options and President Clinton mentioned them when he was talking about saving Social Security first, probably six or seven years ago. The first is to increase revenues, increase taxes, increase the tax rate, increase the taxable maximum, which is 90,000 today.

Another way is to look at benefit reductions; they did that in '83, by increasing the retirement age from 65 to 67. People are now saying, well, maybe we should even go further, and other people are saying, you know, people wear out at some point. Other people say, the way the benefits are calculated, they're growing more rapidly than inflation. Maybe we should slow it down to just inflation.

And then the third one is really the -- increase the rate of return in one way or in another. Some people suggest that the -- I think, President Clinton, that we should invest some of the money, of the trust fund into equities. Other people are suggesting personal accounts either coming out of payroll taxes as President Bush is suggesting or -- as an additional contribution. And so, it's going to be a little bit of, you know, two or three or maybe four or five of those to really get to a solution.

Mr. Lawrence: And what's the time frame, at least in the short term to get to a solution?

Mr. Lockhart: Well, there is a lot of talk in Congress about trying to get bills this year. And certainly the President would like that, Senate finance is starting to work on a bill, and they're having hearings now and I assume the House Ways and Means will be working as well.

Mr. Lawrence: Now, I know this isn't the only thing you're worried about in Social Security Administration, let's take a step back. Could you describe the four strategic goals of the Social Security Administration?

Mr. Lockhart: Yes, we decided to make it easy to remember, so we have -- we're Social Security, so we have four Ss for our strategic goals. The first one is service and is really serving the American people and serving them in a timely and effective and efficient manner. That's a big challenge, there's millions of people wandering through our offices every year, tens of millions hitting our website and hitting our 800 number. So service is a big challenge.

The next one is stewardship, and really that's talking about making the payments in the right amounts. When we give a Social Security number, making sure the person deserves to have that number, that they're legally authorized to work in this country. Improper payments are a big issue there. We pay out over half a trillion dollars, so even one percent is a five billion dollar number. So we need to work on improper payments.

And the third S is the one we are just talking about, solvency. And the fourth one is really the sort of the base, the staffing in Social Security. Staff is not probably a -- the elegant term. Most people use human capital or something like that but we needed one with S. And that's extremely important as we go forward. We have a workforce that is -- has major hires in the early '70s as we put in the SSI program. So, we have a lot of people that are -- well over half that can retire within the next ten years. And so we're -- we have to do a lot of training, a lot of hiring and planning for the future.

Mr. Lawrence: What are the challenges related to that, not only the hiring, but I guess also the retaining as well?

Mr. Lockhart: It's a major challenge, although as I said, we've been able to hire 2,000 this year pretty easily. People like to come to work to Social Security. We have sort of a Social Security family, oftentimes it's relatives, you know, kids, our nieces and nephews come and it's really, really, really nice and we really are able to track the high-quality people. But it's a very -- the two programs are very complicated; the training program lasts one to two years.

So retention is important when you put in that kind of training into people and we've been pretty successful with that and we do a lot of job rotation, we do a lot of training, we -- you know, we award people. We have, you know, reward ceremonies, we use bonus systems and we really promote people that are doing well.

Mr. Lawrence: It was interesting when you mentioned the four S's and you talked about the example of stewardship in guarding who gets the Social Security number. Upon reflection, do you ever go back and think about, "Gee, what this number has become in our society, and all the care by which we give it" and the resulting implications of it?

Mr. Lockhart: I do and in fact sometimes there is a real debate in Social Security Administration themselves about, you know, this was only supposed to be your tax number, but obviously it's growing well, well beyond that and we have to respect it that way. And -- but it's a big issue, identity theft is a big issue. Certainly, making sure that only people authorized to have Social Security numbers get them is important.

We have really tightened up our procedures, we have a really good data interchange with the INS, well, the Homeland Security now, and we also have a whole series of databases for employers, driver's license, welfare agencies where they can verify Social Security numbers, names and birth dates. So that they can help verify whether that person is the person they're saying. And that's become a very important part of our business.

Actually, the Help America Vote Act, had Social Security build a database and now it's built on the last four digits of a Social Security number to verify voters. So, that -- it really has become the national identifier.

Mr. Lawrence: Well, it's interesting, especially the thing with the Help America Vote. On the President's management agenda scorecard, SSA rated green on four out of the five initiatives. How did they do this? We'll ask SSA Deputy Commissioner Jim Lockhart tell us how they got to green when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence, in this morning's conversation with Jim Lockhart, deputy commissioner of the Social Security Administration.

And joining us in our conversation is Tom Romeo.

Well, Jim could you tell us about SSA's initiatives related to the President's management agenda?

Mr. Lockhart: Well, Paul, Social Security takes the President's management agenda very personally and we work really hard on it. I'm actually a member of the President's Management Council and it's really integrated into all we do at Social Security. It's integrated into those four Ss, strategic planning we just talked about, and we talk about it almost every weekly staff meeting.

I go through with the key managers, quite often how they're going through in the President's management agenda. And we're really driving it throughout the organization. The good thing about Social Security is we just started out in really good shape. Our financial management is some of the best in government. We're putting in a new system that's been very well done. Our human resources have again been a leading group in the government, and so that's helped us a lot. And we've done things in the budget and performance integration and we really can tell now, OMB, how every dollar is being spent. And you know, when we go through our process with them every year on the budgeting, I think because we have that kind of system, they really respect us and really have treated us reasonably well.

You know, we can tell them where the dollars are going, how much that every dollar buys for them, how many disability applications, how many retirement applications, how many improper payment actions, how much we can collect from improper payments and that's really been very, very helpful. And certainly competitive sourcing is always a challenge but I think we're making good progress there.

Social Security -- really only about five or six percent of our work force is not inherently governmental. And then I guess the last one is e-government, and that's so important to Social Security, because as I mentioned, the baby boomers are about ready to retire. They're already in their disability-prone years and we're just going to see a very rapid growth and people enrolling in Social Security.

Mr. Romeo: What are some of the strategies for improving electronic service through technology?

Mr. Lockhart: We're in the process of building a nationwide, what we call electronic -- the e-dib, Electronic Disability System, and that's really critical. We have had historically large, large paper files, disability applications, you know, they can be five inches tall. I have seen some three feet long, with all the medical evidence and we have caves in Kansas City storing them, and we have two or three other storage places throughout the country.

Files get lost, take a time to mail, we -- the commissioner issued a challenge to our assistance group when she arrived, you know, can we get this done quickly. They had a seven-year plan, they cut it down to a 26-month plan and it's really being rolled out very, very effectively, or about two-thirds of the states now have a new disability termination services. All our offices have the electronic system and already paper files are disappearing and that's really great because it's going to help us serve the disabled more quickly.

Another electronic thing we do W-2s, your wage information. Actually the IRS doesn't process that, Social Security does. And we are -- five, six years ago, maybe 10 percent was coming in electronically, today it's 60 percent. We have a ways to go, but that's really good.

And another important thing is more and more, we are putting applications online. You can retire online, you can apply for disability online. We have applications for the disabled and we also have an application for people helping the disabled, because some of them can't actually fill out the forms themselves.

And we are seeing dramatic growth in that in orders of, you know, 100 percent a year. So we are making a really great start, but we have a long way to go.

Mr. Lawrence: You mentioned disabled as a key constituency that you serve and electronic government would seem to be a real good avenue to involve them. I am curious, you mentioned a couple of programs. Any particular management challenges or --

Mr. Lockhart: Well, there is a whole series of management challenges. We actually -- probably and between our two programs, SSA and Social Security, pay around 11 million disabled benefits every month.

Many of them are not able to use electronics but more and more -- you know, we are -- we are doing things, you know, we can get big print on the computers, sound and again, we are helping their advocates, the people that help them, to do things electronically.

The -- we also, not surprisingly, at Social Security, have a large bunch of employees that have disabilities, and we have set up computers -- I think we have 40-50 different set-ups for different kinds of disabilities in the administration. Everybody has their own computer, in fact we have a lot more computers than we do people in Social Security.

And -- and so, we have for blind, hearing impaired and I think we have being very, very effective and a leader in the government in hiring people with disabilities and also making them effective.

Mr. Romeo: Well, you talked some about the President's management agenda and the progress you have made and as of December, 2004, Social Security was rated green in four out of five of the PMA government-wide initiatives, so I congratulate you on that.

Mr. Lockhart: Well, thank you.

Mr. Romeo: How do you plan to stay green on the scorecard, on the initiatives?

Mr. Lockhart: Well, that's a good question, Tom. I think we -- we really take it as a real serious challenge every time we got in the green, we had Clay Johnson's team up to our Baltimore headquarters and done -- getting the green event. It may sound a little corny but just about everything in the room was green.

And -- and we really have a spirit around it and you know, now the theme is getting beyond green. And we really do continue to do planning, we do -- on each one of these five areas, we continue to develop plans, even if we are green and we -- you know, we want to go beyond green and we have those plans and we are making real progress.

The -- they have -- I added erroneous payments as another major one recently and we are only yellow on status there, but we are already green in progress. And that's because again, we have these plans and we are starting to follow them. We have a major challenge as many government agencies pay out money, but I think we are really on top of it.

Mr. Lawrence: Jim, can you tell us about the Medicare Prescription Drug Improvement and Modernization Act of 2003 and how SSA is implementing this act?

Mr. Lockhart: Well, Social Security is not a part of HHS and it's not part of the Medicare, but we are charged because of our field structure and our system expertise and our expertise from our supplemental security income program, to be the one -- agency that qualifies people for the subsidy in the -- in the medical -- for their drugs.

And people up to a 150 percent of poverty are eligible for a subsidy. We have built systems, we have an atypical character read form and that's being piloted now. We expect close to five million applications from people, that we are going to have -- well, more than five million, we expect five million to actually qualify and, so we are -- where you have -- yes I said, hire 2,000 people, we are going to try to do it as electronically as we can.

We are going to do something like 10,000 outreaches events this year, throughout the country to try to reach these people, because it is such a good event, a good benefit and unfortunately, people don't know enough about it. But it's -- it's really going to be an important service we can provide to the American people.

There is -- there is going to be a one-time outreach starting at June that's going to be very massive because we are going to have to reach all today's retirees. After that, we will -- it will just be the annual people coming into the system.

Mr. Romeo: As you thought about it -- actually going and implementing this, how did -- how did it sort of sit in through the core competencies of SSA, as you -- you prefaced your answer by saying, we are not part of HHS, I am sort of curious how people thought about it, was it just a logical task for you to perform or was it?

Mr. Lockhart: Well, it was somewhat logical because we -- we now take applications from retirees for their Medicare and -- and so that's part of what we do. We have field officers; Medicare really doesn't, so we are really the face to the -- to retirees in this country.

So, there was logical, also because we had great systems expertise, it was logical and we took it as a challenge. And when they were considering the legislation, they were talking about -- you know, maybe Medicare should do it, maybe it should be done in all 50 states.

But, Congress decided really Social Security had the expertise and -- and we do and we have really taken it up. We put together a team led by our regional commissioner from New York, and she is doing just a really great job, put together a team throughout the agency working on this and is working with Medicare and other groups to get the information that's needed.

Mr. Lawrence: That's interesting. How might technology shape SSA in the future? We will ask its deputy commissioner, Jim Lockhart for his perspective when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I am Paul Lawrence. This morning's conversation is with Jim Lockhart, deputy commissioner of the Social Security Administration and joining us on our conversation is Tom Romeo.

Mr. Romeo: Jim, we have talked quite a bit about the current challenges for SSA, but how do you envision SSA in the next five to ten years?

Mr. Lockhart: Well, Social Security, I think is well along getting ready for the next five to ten years and it's going to be a really major challenge because of all the baby boomers. It's not just the solvency challenge, but it's an administration problem. We are obviously going to have to do things a lot more electronically than even what we are doing today.

Disability is going to have to be fully electronic, and certainly solvency reform, if it does happen and if it does encompass some form of personal account, that will be a major system challenge for Social Security and whatever agency ends up administering them.

Mr. Lawrence: We have talked a lot this morning about retirement and how people are -- would be prepared to deal with it. What do you think Americans need to do today, to ensure they have planned effectively for retirement?

Mr. Lockhart: Well, I mean that's one of the major problems in the U.S. today, is people just are not saving enough for retirement. There is you know, a government-wide effort to promote financial literacy and savings. We need to do a lot more of -- of that. One of the things we'd like to promote to people is look when they get the annual Social Security statement.

Look at their benefits that are projected there and then look at the needs they might have and there is calculators on our website, socialsecurity.gov and that leads to other calculators, where people can actually think about how much they really need to save, and that is important.

There is really today, over-reliance on Social Security. About a third of the American people rely on Social Security for almost all their income -- 90 percent of their income and two-thirds for over 50 percent of their income, for retirees. And that's too much and we need to get inculcated, a savings culture in this country and I think that's one of the reasons some people talk about personal accounts as a way to get people more attuned to saving.

Mr. Lawrence: And then also in terms of retirement, should they be thinking differently about other things we have talked about, life expectancy being longer or health issues, how are all those factored in?

Mr. Lockhart: They -- they all have to factor in. The cost in medical healthcare is going up very dramatically in this country. The Medicare is there for them, but it's going to get more and more expensive. And I think it's very, very important to think about things like long -- long-term care and all of that really means planning more for the future than we do today.

It really means that we have to start thinking at a much earlier age about savings. I am trying to teach that to my 20-year-old children and I do have them in their 401Ks and they had IRS when they were young. But, you know, we really need to get that throughout the country.

Mr. Romeo: You have talked a lot about the important of electronics and the e-gov initiatives. What other IT goals would you like to see SSA accomplish in the next few years and, how do you think technology will further shape SSA in the future?

Mr. Lockhart: Well, certainly we have to continue to move to a paperless system. We can't keep filling those caves in Kansas City up, and we are going -- we are going to stop that and we -- we are really moving to all electronic systems.

We are there pretty much in retirement, but we need things like we need electronic birth records in this country. We have been working on that, we need electronic death record. That would help.

Electronic medical records, the President has a big push there for medical records becoming electronic. That would help us dramatically. Today, we have to scan them into our electronic system -- not very efficient. If we could get it electronically, that would help a lot.

We have a whole set of initiatives, instead of requiring wet signatures on applications, we are going to signature proxies. And we have move -- have to move that to -- throughout our applications and with the idea that we can move more and more people to the -- to the Internet, to make applications.

We have these 1,500 offices throughout the country and you know, if -- if we don't move to electronics, we are going to have to fill them up with more and more people, and we just can't afford that. So, we are going to have to increase our productivity. Social Security has a goal of increasing productivity two percent a year, which we have agreed to, with OMB.

We may have to crank that up as we go forward, just to service the American people. We have a tremendous challenge in the disability side. Our workload takes much too long. The appeals process can sometimes take three years to get through our process. We need to speed that up. The electronics will help a lot, but we need to think smarter about how to do it.

So we have very large challenges, which is only expected because you know, we are the largest and in many ways, the most successful government agency.

Mr. Lawrence: Jim, as I think about your answer to Tom's question on the first segment about your career, I am reflecting on the fact that while you have moved across public and private sector, government service has been an important part of your career, and so I am just curious from the perspective of having been in both sectors, what advice would you give to someone interested in public service?

Mr. Lockhart: Well, I would certainly encourage them. I think public service is -- is very useful, it's a high calling and also, I think it's really a good career move. Government is gotten much, much better as managers, there is a lot of experience you can get in -- in the government sector and the public sector, is really -- has some very good people to learn from and it also has -- agencies like Social Security are really serving the American people. So, I definitely encourage them to do that.

We, at Social Security are actively hiring people. Go to our website, socialsecurity.gov and I think it's -- again at SSA, I would encourage younger people to think about a career in government.

Mr. Lawrence: Thank you, Jim. I know you are in hot demand to be on shows like this, so Tom and I want to thank you for squeezing us into your very busy schedule and joining us this morning.

Mr. Lockhart: Well, thank you, Paul and thank you, Tom.

Mr. Lawrence: Thank you, Jim. This has been The Business of Government Hour featuring a conversation with Jim Lockhart, deputy commissioner of the Social Security Administration.

Be sure and visit us on the web at businessofgovernment.org. There you can learn more about our programs and researches and new approaches to improving government effectiveness. And you can also get a transcript of today's fascinating conversation. Once again, that's businessofgovernment.org.

For The Business of Government Radio Hour, I'm Paul Lawrence.

Thank you for listening.

James Lockhart, III interview
06/11/2005
"We need to do something about Social Security soon. If we don’t, the changes will just get more and more drastic as we go forward with either higher tax increases or greater benefit cuts. And that’s what we’re trying to avoid by moving more quickly."

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