Social Uncertainty

Lengthy Presidential radio addresses. Impassioned White House press briefings. Heated Wall Street Journal editorials. It’s been 70 years since Social Security was such a hot topic. And with President Bush placing the beleaguered agency at the top of his domestic agenda for his final term, the debate is only going to get hotter in the coming months.

And why not? Social Security is really about one thing that Americans hold close to their hearts: money. In 2005, an estimated 48 million Americans will receive about $509 billion in Social Security benefits. And more than ever, people are asking questions about what the future of their money will look like. Will I ever see my Social Security contribution again? Will this system even be in place when I retire? So far, the Bush Administration has succeeded in creating fear, uncertainty and doubt about the future of Social Security. But a detailed plan to fix it has yet to emerge.

In the face of all this confusion, the Social Security Administration, headquartered in Baltimore, is moving ahead with a massive IT modernization process that started more than 20 years ago. The effort includes no fewer than 100 different projects, all being worked on simultaneously, and an annual IT budget of about $1 billion. Last November, the SSA signed Lockheed Martin Corp. to a seven-year, $525 million, open-ended IT services contract to further the modernization effort. All of which begs the question: How does an organization plan for its information technology future when its overall future is so utterly in doubt?

“With the Social Security solvency issue up front and center on the President’s agenda, the feeling is something could hit soon . . . or eventually something will be done,” says Kay Kapoor, vice president of strategic programs at Lockheed Martin. “Our relationship with the Social Security Administration has been going on for 10 years now and we have never seen Social Security go through this much change in this short a time frame. They are under a lot of Congressional pressure. To their credit, they have done a phenomenal job readying themselves for the next thing and the next thing.”

Changing government mandates, coupled with administrators that typically turn over after every election cycle (not to mention other issues unique to the federal bureaucracy), have often led to the failure of multibillion-dollar government IT projects. The Federal Bureau of Investigation announced earlier this year that a custom-built, $170 million “virtual case file” project may be shelved because it is inadequate and outdated. The IRS is in the midst of a $1.7 billion “business system modernization” program, after Congress found that the tax agency had spent $3 billion in the 1990s on an attempt at modernizing IT that produced few results. Back in 1972, Congress added a major program to SSA’s roster, with the creation of the Supplemental Security Income, a welfare benefit for people with disabilities. The new program brought long lines, a backlog and a public relations nightmare to the SSA because the agency was used to dealing with retirees who could wait three months for their benefits, not needy people who needed assistance on the spot, according to “The Social Security Administration and Information Technology Special Report” by the Congressional Office of Technology Assessment in 1986.

So far, the Social Security Administration is keeping a close eye on the national debate but still continuing its IT modernization program. The agency has an Office of Legislation and Congressional Affairs that follows legislative developments and assesses their impact; in terms of Social Security reform, however, SSA officials maintain that it is too soon to tell which IT modernization projects or IT systems would be affected. “Right now, it’s early in the process. There’s nothing for people to react to. There’s just discussion,” says William Gray, SSA’s deputy commissioner for systems. “We don’t know what the proposal will be.”

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