No Social Security Benefits for Prisoners Act of 2009

Madam Speaker, I submit the following.

Health Care/Medicare

Congress spent the first part of this session enacting

landmark health reform legislation that substantially reforms

and strengthens the Medicare program. As a result of this

legislation, CBO estimates net deficit reduction of $143

billion from 2010 to 2019, and deficit reduction of more than

$1 trillion in the next decade. In addition, the Medicare

Actuary estimates that the Medicare changes enacted in health

reform will extend the life of the Part A Trust Fund by 12

years--the largest extension in history. Finally, as a result

of the new law, national health expenditures per insured

person will fall by $1,400 by 2019.

The health reform law also includes extensive provisions to

aggressively reduce fraud, waste, and abuse in government

health programs. The Affordable Care Act (ACA) establishes

new authorities to enhance fraud-fighting when providers

first enroll in the program and during the pre- and post-

payment periods.

During the Medicare provider enrollment period, ACA

strengthens provider screening and disclosure requirements

and allows the Secretary to impose a moratorium on new

providers in areas of significant risk. These tools will help

keep fraudulent providers out of government programs before

they have a chance to act. In the pre-payment period, ACA

directs the Secretary to establish a program of increased

oversight for new providers and allows for the suspension of

payment, if deemed appropriate, to a provider or supplier.

For the post-payment and enforcement period, ACA establishes

new penalties for the submission of false data or false

claims and increases funding for proven fraud-fighting

programs used by the Office of Inspector General (OIG) and

the Department of Justice.

Taken together, these provisions reduce fraud, waste, and

abuse by improving payment accuracy, promoting efficiency,

and controlling spending within Medicare and other government

programs.

The Committee's efforts to achieve deficit reduction,

prevent fraud, promote efficiency, and control spending

within government programs extend beyond the ACA. The

Preservation of Access to Care for Medicare Beneficiaries and

Pension Relief Act of 2010 (P.L. 111-192) included two

provisions that address these goals. First, this law

clarifies the 3-day payment window for inpatient admissions

to ensure that all services related to the hospital admission

are included in the bundled payment. Absent this provision,

hospitals would likely have unbundled hospital payments

driving up Medicare spending. Second,

the law established a CMS-IRS data match to identify

potentially fraudulent providers. This provision authorizes

the Centers for Medicare and Medicaid Services (CMS) to

collaborate with the IRS to determine whether providers

enrolling or re-enrolling in Medicare have failed to file

Federal tax returns or have delinquent tax debts. In doing

so, the law helps to identify potentially fraudulent

providers earlier in the application process and allows the

Secretary to use this information in determining whether to

deny such application or to apply enhanced oversight to the

provider.

Following passage of health reform legislation, the

Committee has held and will continue to hold oversight

hearing on a number of issues, including:

Fraud, Waste and Abuse

While many of the HHS OIG recommendations from their annual

compendium were adopted in the ACA, combating fraud remains a

top priority for the committee. On June 15th, the Health and

Oversight Subcommittees held a joint hearing on combating

fraud, waste, and abuse. At this hearing, a representative of

the HHS Office of Inspector General discussed two new tools

that would improve OIG's ability to prevent criminals from

becoming providers in the Medicare program. The first

recommendation was to provide OIG with broader permissive

authority to exclude permanently from Medicare corporate

executives who have been involved in Medicare fraud. Second,

it was suggested that the OIG permissive authority could also

be expanded to better enable the OIG to reach parent

companies that may be hiding behind corporate shells.

On September 14, 2010, in response to these

recommendations, Health Subcommittee Chairman Representative

Stark and Ranking Republican Wally Herger introduced the

Strengthening Medicare Anti-Fraud Measures Act. The bill

would provide the OIG with this expanded permissive

authority. We are awaiting a CBO score of the legislation.

HITECH Implementation

Enactment of the American Recovery and Reinvestment Act of

2009 included the Health Information Technology for Economic

and Clinical Health (HITECH) Act, which created incentive

payments for providers that adopt and meaningfully use

electronic medical records. Increased adoption and meaningful

use of health information technology will arm providers with

information that is usually held only in paper records, lower

duplication rates of procedures, promote efficiency and

quality, and reduce waste as providers coordinate care

through improved exchange of clinical information. The Health

Subcommittee held an oversight hearing on implementation of

HITECH Act earlier this year and will continue to monitor the

program to ensure that the advance of health information

technology improves quality and efficiency of the delivery of

health care in the Medicare program.

Durable Medical Equipment competitive bidding process

The Medicare Modernization Act directed CMS to establish a

competitive bidding process for payment of durable medical

equipment, prosthetics, orthotics, and supplies (DMEPOS)

under Medicare. The first round of competitive bidding for

DME was delayed in 2008 because of implementation problems.

Later this year, CMS will award contracts under the first

round of the revised program. The Health Subcommittee will

examine whether CMS has adequately addressed problems with

the competitive bidding program and explore its potential

effect on beneficiaries' access to the program and supplier

participation.

Tax Provisions to Prevent Tax Avoidance and Fraud

Closing Foreign Tax Credit Loopholes

On August 10, 2010, the House passed H.R. 1586, the

Education Jobs and Medicaid Assistance Act by a vote of 247

to 161. The bill, signed into law the same day (P.L. 111-

226), included changes developed jointly by the Treasury

Department, the Committee on Ways and Means, and the Senate

Committee on Finance to curtail abuses of the U.S. foreign

tax credit system and other targeted abuses. Foreign tax

credits are intended to ensure that U.S.-based multinational

companies are not subject to double taxation. However, multi-

national corporate taxpayers have taken advantage of the U.S.

foreign tax credit system to reduce the U.S. tax due on

completely unrelated foreign income in a manner that has

nothing to do with eliminating double taxation. The bill

eliminated $9.6 billion of foreign tax credit loopholes.

Transfer Pricing

On July 22, 2010, the Committee on Ways and Means held a

hearing to begin initial discussions of the complex areas of

tax law that govern transfer pricing practices among related

parties (multinational corporations). Pursuant to a request

by the Committee in December 2009, the Joint Committee on

Taxation (JCT) undertook a study of transfer pricing issues.

Part of that study involved meetings with tax practitioners

and the IRS to gain a better understanding of how companies

can structure overseas operations to minimize U.S. taxes. The

JCT released a report summarizing its work, beginning with a

study of the issues and specific case studies to illuminate

the potential for income shifting through transfer pricing.

The Committee continues to investigate opportunities for

reducing tax avoidance by multinational corporations through

transfer pricing structures.

First-Time Homebuyer Program

The Housing and Economic Recovery Act of 2008 established

the First-Time Homebuyer Credit, which generally provided an

$8,000 tax credit to certain taxpayers for the purchase of a

home. The credit was extended and expanded by the American

Recovery and Reinvestment Act of 2009 and the Worker,

Homeownership, and Business Assistance Act of 2009

(Assistance Act). On October 22, 2009, the Subcommittee on

Oversight of the Ways and Means Committee held a hearing on

administration of the credit by the Internal Revenue Service

(IRS). At the hearing, the Treasury Inspector General for Tax

Administration (TIGTA) released a report finding instances of

fraud and abuse in the program. In response to the report,

TIGTA and the U.S. Government Accountability Office made

several legislative recommendations to improve administration

of the credit. On October 22, 2009, Oversight Subcommittee

Chairman John Lewis (D-GA) introduced H.R. 3901, the

Homebuyer Tax Credit Improvement Act of 2009, which provided

the IRS with additional authority to prevent fraudulent

claims and claims by minor children. On November 6, 2009,

H.R. 3901 was enacted into law as part of the Assistance Act

(P.L. 111-92).

Prisoner Tax Fraud

On September 27, 2008, the House passed H.R. 7082, the

Inmate Tax Fraud Prevention Act of 2008. This law allows the

IRS to exchange with officers and employees of the Federal

Bureau of Prisons certain tax return information with respect

to prisoners whom the Secretary has determined may have filed

false or fraudulent tax returns. This provision was enacted

into law on October 15, 2008. In June 2010, TIGTA released a

report estimating that about 1,300 prison inmates (more than

90 percent of whom were state prison inmates) claimed and

received more than $9 million in fraudulent first-time

homebuyer tax credits. On June 29, 2010, a provision to allow

the IRS to disclose tax return information to officers and

employees of State agencies charged with the administration

of prisons passed the House in H.R. 5623, the Homebuyer

Assistance and Improvement Act of 2010. On July 2, 2010, this

provision was enacted into law as part of the Homebuyer

Assistance and Improvement Act of 2010 (P.L. 111-198).

Tax Provisions to Promote Government Efficiency and Reform

Increase electronic filing of tax returns

The Internal Revenue Service Restructuring and Reform Act

of 1998 (RRA) established a goal for the IRS to receive at

least 80 percent of tax and information returns

electronically. For 2010, the overall electronic filing (e-

filing) rate is projected to reach approximately 59 percent.

To achieve the 80 percent goal, an estimated 40 million

additional returns need to be e-filed. On October 22, 2009,

Oversight Subcommittee Chairman John Lewis (D-GA) introduced

H.R. 3901, the Homebuyer Tax Credit Improvement Act of 2009,

which authorized the IRS to require tax return preparers to

file returns electronically in order to achieve additional

cost reduction and savings. On November 6, 2009, H.R. 3901

was enacted into law as part of the Worker, Homeownership,

and Business Assistance Act (P.L. 111-92). The Electronic Tax

Administration Advisory Committee, established by the RRA,

believes that this is the single most important initiative

that will enable the IRS to reach its 80 percent electronic

filing goal.

Removal of cell phones from listed property

In 1989, Congress passed a law requiring taxpayers to

substantiate the business use of cell phones. At that time,

cell phones were an expensive perk for executives. Cell

phones and similar equipment are now ingrained in daily

business practices at all levels. The Administration has

recognized that cell phone service in this country has

changed dramatically over the past decade and recommended

that the law be modernized to remove the special

documentation requirements for cell phones and reduce the

cost of administering and complying with the provision. On

April 15, 2010, a provision to eliminate the strict

substantiation rules on cell phones passed the House in H.R.

4994, the Taxpayer Assistance Act of 2010.

Repeal of the partial payment requirement on submissions of

offers-in-compromise. Offer-in-compromise (OIC) agreements

are an important collection alternative for the IRS and

taxpayers. Under current law, due to legislation passed in

2006, a taxpayer offering to settle a tax liability must make

a partial payment with submission of an OIC application. The

need to increase the usage of OIC agreements in situations of

economic hardship was raised at a February 2009 hearing of

the Subcommittee on Oversight of the Committee on Ways and

Means. On May 12, 2009, Oversight Subcommittee Chairman John

Lewis (D-GA) introduced H.R. 2343, a bipartisan bill that

would increase the likelihood that some amount of tax is

collected and promote continued tax compliance by repealing

the partial payment requirement. On April 15, 2010, a

provision to repeal the partial payment requirement passed

the House in H.R. 4994, the Taxpayer Assistance Act of 2010.

Study on delivery of tax refunds

The National Taxpayer Advocate (NTA) has stated that the

quickest and cheapest way to distribute tax refunds is

electronically rather than by paper checks in the

mail. However, a large number of taxpayers do not have bank

accounts. These taxpayers are not able to fully

participate in electronic filing because the IRS cannot

transmit their refunds to them electronically. The NTA

recommended that the Department of Treasury develop a

program to enable taxpayers to receive refunds on stored

value cards. On April 15, 2010, a provision to require the

Secretary of Treasury, in consultation with the National

Taxpayer Advocate, to conduct a study on the feasibility

of delivering federal tax refunds on debit cards, prepaid

cards, or other electronic means passed the House in H.R.

4994, the Taxpayer Assistance Act of 2010.

Study on timely processing and use of information returns

Under current law, the IRS processes tax returns before it

processes related information returns, such as Forms W-2 and

Forms 1099. The IRS does not match information on income tax

returns to information returns until after the filing season

has ended. There are two reasons for the delay: (1) the

deadline for filing information returns generally is March 31

and (2) the tax filing season begins in mid-January. A

provision to require the Secretary of Treasury to study, and

make recommendations on, the administrative and legislative

steps required to allow the IRS to receive information

returns before it processes income tax returns passed the

House in H.R. 4994, the Taxpayer Assistance Act of 2010.

Clarify that the bad check penalty applies to electronic payments

Taxpayers are subject to a penalty if their check or money

order in payment of their tax liabilities is not honored. On

April 15, 2010, a provision to ensure fair application of the

penalty by clarifying that the penalty applies to all

commercially acceptable instruments of payment (i.e.,

electronic payments) passed the House in H.R. 4994, the

Taxpayer Assistance Act of 2010. On July 2, 2010, this

provision was enacted into law as part of the Homebuyer

Assistance and Improvement Act of 2010 (P.L. 111-198).

Trade

The Trade Subcommittee is developing Customs and Border

Protection (CBP) reauthorization legislation addressing two

important oversight issues explored at a May 2010 hearing:

(1) correcting the agency's failure to collect antidumping

and countervailing duties; and (2) addressing cost overruns

and delayed implementation of the agency's new, modernized

computer system, the Automated Commercial Environment (ACE).

Combating the Evasion of Antidumping and Countervailing Duty Orders

The U.S. government loses hundreds of millions of dollars

every year when foreign companies employ fraudulent tactics

to evade U.S. antidumping and countervailing duty orders.

Such tactics include misrepresenting the country of origin of

imported products or mislabeling the types of products being

imported on Customs import documentation. The resulting

impact in the United States is two-fold. Not only is there

lost revenue to the government, but also American businesses

and workers are denied relief from the illegal trade

practices that the antidumping and countervailing duties are

designed to neutralize. The Trade Subcommittee is preparing

legislation to counter these kinds of practices and aims to

move that legislation shortly. This legislation: (1)

establishes clear, expeditious timeframes for CBP to

investigate and determine whether evasion is occurring; (2)

requires maximum cooperation between CBP and the Department

of Commerce in making and enforcing such determinations; and

(3) provides authority for CBP to collect unpaid duties and

assess penalties. This legislation will diminish

substantially the duties lost to evasion as well as the

corresponding harm to the U.S. industry.

Ensuring Efficient Use of Taxpayer Dollars in Further ACE Deployment

The Trade Subcommittee is preparing legislation that will

support the positive steps taken by CBP since its May 20th

hearing to get ACE deployment back on track and moving in the

right direction. ACE development to date has cost over $3

billion, and the system continues to have limited

functionality to attract a critical mass of users. Completion

of ACE promises significant benefits to CBP, businesses, and

workers alike, increasing U.S. competitiveness and saving

taxpayer dollars. The Trade Subcommittee is developing

legislation to ensure that: (1) ACE is completed

expeditiously and with strong functionality; and (2) the

funds invested in this project, going forward, are used

efficiently and effectively.

Social Security

In December of 2009, Congress enacted H.R. 4218, the No

Social Security Benefits for Prisoners Act of 2009 (P.L. 111-

115) to prevent retroactive Social Security and Supplemental

Security Income benefit payments from being issued to

individuals while they are in prison, along with

beneficiaries in violation of conditions of parole or

probation, or who are fleeing to avoid prosecution for a

felony or a crime punishable by sentence of more than one

year. The Social Security Act already barred payment of

monthly benefits to such individuals. This new law ensures

the prohibition applies to retroactive benefit payments as

well, and allows payments to be paid once the beneficiary is

no longer prohibited from receiving payments under the

provisions of this bill.

In response to a Social Security Administration Inspector

General report that as many as eight states use prison

industries to perform work that allows inmates access to

individual Social Security numbers, Chairman Pomeroy

introduced H.R. 5854, the No Prisoner Access to Social

Security Numbers Act of 2010. The bill would protect the

accuracy of Social Security records and help shield

individuals from identity theft and other potential crimes by

prohibiting federal, state, and local governments from

employing prisoners in any capacity that would allow inmates

access to full or partial SSNs of other individuals. The

Federal Bureau of Prisons already proscribes such work by

federal inmates by regulation. This bill would extend this

policy to all of the states.

In recent years, we have substantially increased funding

for program integrity at the Social Security Administration,

which will save billions of dollars in overpayments and

payments to people who have become ineligible for benefits.

Because the Social Security Administration uses innovative

predictive modeling techniques to identify cases with the

highest risk of an overpayment and targets those cases for

careful review, they are able to generate savings of as much

as $12 for every dollar invested in program integrity,

despite Social Security's already very low error rate. For

example, in 2008 their computer models allowed them to target

the beneficiaries most likely to have medically improved for

full eligibility reviews, saving $3.8 billion in Social

Security, Medicare, Medicaid, and SSI benefits. If SSA had

randomly selected cases for intensive review, they would only

have saved $900 million.

Because the return on investment is so significant, we plan

to work on legislation that will increase our investment in

Social Security's fight against fraud, waste, and abuse.

I thank my good friend from Texas.

I rise today to discuss an issue I have been involved with for many years.

The landmark 1996 welfare reform included legislation I drafted that denies fugitive felons, along with probation and parole violators, Supplemental Security Income checks. GAO long recognized those SSI disability payments were at a high risk for fraud and abuse and encouraged Congress to act. Subsequent legislation expanded that 1996 ban to include certain Social Security checks. These provisions have been successful in saving millions of taxpayer dollars and have assisted law enforcement in making over 86,000 arrests and getting felons off the street, including a man wanted in Texas for 20 counts of child molestation.

Due to a recent court action, however, the Social Security Administration now is required to ban payments only to fugitive felons issued a warrant for trying to escape arrest rather than the broader group of fugitives with an outstanding felony arrest warrant. That action also compels SSA to restore benefits denied earlier, which will result in large retroactive payments of as much as $30,000 per individual. Not only will this cost taxpayers millions of dollars, but I'm deeply concerned that the effectiveness of the program we set up in 1996 could be greatly reduced.

The bill before us would immediately prevent checks for past-due Social Security and SSI benefits from being sent to currently incarcerated individuals, including checks that, without this action, could pay inmates tens of thousands of dollars while they are behind bars. Thus, the bill before us is a step in the right direction of addressing issues created by the court decision.

But there are more steps to take.

Following release of an October 2009 report from the SSA Inspector General that brought to light concerns with SSA's fugitive felon policy, I joined other Ways and Means members in requesting additional information on how SSA has used the good cause exemptions it is already allowed to make in certain cases. I believe the Social Security Administration should continue to suspend payments for those fugitives wanted based on the most heinous crimes while using the authority it already has to make good cause exemptions as appropriate.

As the legislation before us suggests, many of those made eligible for disability payments under the recent court action continue to break the law and can and do wind up in jail, costing taxpayers thousands of dollars.

I look forward to the Inspector General's response to our inquiry so that Congress can determine the best way forward to improve this important program and prevent the misuse of taxpayer dollars while protecting those who truly merit relief.

Let's stop these payments from going to prisoners today, and then keep working to ensure the right people are getting the right benefits and that taxpayer dollars are spent wisely to help only those truly in need.

Mr. Speaker, the point of this bill is simple. Social Security and supplemental security income benefits should not be paid to prisoners, probation, or parole violators or fugitive felons. That is why I joined the Ways and Means Social Security Subcommittee with John Tanner, who is great about looking into these things, and we cosponsored this bill. And I ask all of my colleagues to support it.

This stopgap measure addresses a glitch in the current law discovered when Social Security began to implement a nationwide class-action settlement agreement reached in September in the case of Martinez v. Astrue. That agreement reduced the number and type of felony arrest warrants used to prohibit benefit payments, resulting in retroactive payments to certain recipients.

In the first phase of settlement implementation, notices will be issued beginning this week to 28,000 individuals. Of these, Social Security recently identified 150 as prisoners.

Current law already prohibits prisoners, fugitive felons, and probation/parole violators from receiving benefits. The same law should apply to retroactive benefits as well but right now

it doesn't. That is why we need to pass this bill. If we don't, prisoners eligible for payments from before they were in jail may soon receive a lump sum retroactive check, some covering back benefits over 3 or 4 years.

Thanks in large part to the work of my Ways and Means colleague, Wally Herger, those with outstanding felony arrest warrants, known as fugitive felons, have not been able to receive supplemental security income, Social Security, or Social Security disability benefits.

According to the Office of the Inspector General, their data-sharing efforts with local, State, and Federal law enforcement agencies contributed to over 83,000 arrests since the program's inception in 1996. While well-intentioned, the Martinez settlement nevertheless requires Social Security to pay benefits that had been suspended. And as a result, taxpayers are now on the hook for millions of dollars. We can and we must do better.

I look forward to working with Chairman Tanner to right this wrong and draft legislation to suspend payments for those fugitives wanted for the most heinous crimes while permitting lenience in cases where good cause exemptions make sense.

I reserve the balance of my time.

At this time, I'd like to recognize and yield to the gentleman from California (Mr. Herger), a member of the Ways and Means Committee and one of our staunch allies, as much time as he may consume.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4218) to amend titles II and XVI of the Social Security Act to prohibit retroactive payments to individuals during periods for which such individuals are prisoners, fugitive felons, or probation or parole violators.

Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks on H.R. 4218.

Mr. Speaker, I yield myself such time as I might consume.

Mr. Johnson and I bring this bill to the floor today. It's a stopgap measure, Mr. Speaker.

The Social Security Act already prohibits payment of Social Security and SSI benefits to individuals in prison and to those who are fleeing to avoid prosecution, custody, or confinement for a felony. The law also prohibits payments to individuals violating a condition of parole or probation. However, payments of retroactive benefits owed to such individuals are not currently barred by law, and this ensures that retroactive payments are treated the same as monthly benefits.

The need for this law to be done quickly is because of a recent court determination that the Social Security Administration's implementation of this prohibition for those fleeing prosecution or imprisonment was applied too broadly. Without this legislation, the Social Security Administration will be obligated under court order to make payments to some of these individuals as early as next week.

What Mr. Johnson and I wanted to do was to bring this bill today and pass it so we can get it to the Senate and give some guidance to the Social Security Administration in this regard.

Mr. Speaker, with that, I reserve the balance of my time.

Mr. Speaker, I want to thank Mr. Johnson for working with us on this.

I yield back the balance of my time.

Mr. President, I urge the Senate to pass by unanimous consent the ``No Social Security Benefits for Prisoners Act of 2009,'' which was recently passed by the House of Representatives.

This bill would prevent retroactive Social Security and Supplemental Security Income benefit payments from being issued to individuals while they are in prison, or in violation of conditions of parole or probation, or are fleeing to avoid prosecution for a felony or a crime punishable by sentence of more than one year.

Under current law, the Social Security Act already prohibits payment of current monthly benefits to such individuals. This bill ensures this prohibition applies to retroactive benefit payments as well. The bill allows any payments that are withheld to be paid once the person is no longer in prison, or in violation of conditions of parole or probation, or are fleeing to avoid prosecution.

This bill makes a common sense reform to the Social Security Act and I urge my colleagues to support the bill.

I thank my colleagues for their support.