An election-year crackdown on addicts and alcoholics drawing checks from a Social Security aid program for the disabled could cost taxpayers three times more than Congress thought it would -- and may trigger a continuing drain on the trust fund that millions of American retirees rely on.
That's the conclusion that emerges from confidential Social Security Administration documents obtained by The Sun that say officials miscalculated the cost estimates that were used by Congress when it voted in August to hire contractors to supervise the addicts.
Social Security Commissioner Shirley S. Chater, who weathered a storm of criticism from Congress last summer over the agency's failure to keep addicts from squandering their $446 monthly checks, is scheduled to be briefed on the report this afternoon.
"There's a huge cover-up right now because nobody wants to be the one who has to go up to Capitol Hill and tell them we screwed up," said one source close to the controversy. "This was a big election-year bill for Congress, and now they're all out there telling their constituents about how they got tough on addicts.
"What they don't know is that it's going to cost a fortune to do it -- and that maybe it can't be done at all. It's entirely conceivable that Congress wouldn't have voted this way in the first place if they knew how much it was really going to cost."
The crackdown was prompted by a rash of news media accounts about addicts in the $1.4 billion program blowing their aid checks on dope and booze, some to the point of overdose and death. Congress reacted in August with a new law that orders Social Security to hire monitoring agencies to push the addicts into treatment, test them for drugs and suspend their checks if they abuse the money.
But Congress took that action based on Social Security budget office estimates that it would cost $354 million by 1996 to hire the monitoring firms.
Now, a highly critical internal draft report by the Social Security managers assigned to actually carry out the crackdown says that those numbers were grossly underestimated. Actual costs could approach $1 billion over the next two years and could go as high as $4 billion by the end of 1999.
Congress authorized the Social Security Administration to draw about a quarter of the money from the retirement trust fund, but it did not envision anywhere near the amount spelled out in the draft report, records show.
The total taken from the trust fund will likely reach $1 billion by the end of 1999, money that would otherwise go into the pension fund that is expected to go bankrupt sometime in the next 30 years unless Congress bails it out.
Agency spokesman Phil Gambino played down the report last night.
"There are different numbers floating around and different beliefs as to how this can be done," he said.
But the report paints a different picture. It suggests a growing conflict within the agency's Woodlawn headquarters outside Baltimore as officials have struggled to bring the actual costs into line with the suspect estimates provided to Congress.
Such a move carries grave risks, the report says, because it could leave the agency short on cash when it asks contractors for bids next September on all the tasks Congress wants performed. In effect, Social Security would be offering to buy services it can't pay for.
The dispute between Social Security budget officials who came up with the original estimates and the team of administrators who have to carry out the new law comes as Ms. Chater is seeking a new term as head of the troubled agency.
"At our last meeting on this issue, you made it quite clear that you were not going to ask Congress for more money," program manager Bob Cross says in the draft report to Ms. Chater. "You asked us to 'go back to the drawing board' to determine how we can implement the new legislation for less.
"The risk of 'low balling' this amount is that we would not be [in] any position to negotiate in good faith and may well wind up with no [contracts] next September."
The report goes on to say that the "absolute minimum" amount needed to pay for the monitoring services will be $279 million in the first year alone. "This estimate is as low as we can go and still expect to get contracts in place," says Mr. Cross.
Mr. Cross says that actual proposals from private monitoring firms will more probably be in the range of $500 million -- more than triple the first-year cost estimate of $148 million that the agency's budget office gave to Congress last summer.
And costs are expected to continue climbing along with surging applications from addicts seeking checks. The agency predicts that the current rolls will rise from 180,000 to 451,000 addicts by 1999 -- and Congress has ordered that all be treated, screened and monitored.
Ms. Chater will be told by her staff today that there are three ways to make up for the shortfall: ask Congress for enough money to carry out the plan; hire the contractors but only have them track some of the addicts; or hire them in only those states where the worst abuses have occurred.
None of the options is attractive.
The first one would require Ms. Chater to stand before Congress and admit that her staff made a mistake. The other two would require her to defy direct orders from Congress to set up monitoring agencies in all 50 states and put all addicts under supervision.
And that's not the only bad news the agency has yet to give to Congress, which was hoping to recoup some of the costs of the crackdown by cutting aid to addicts after three years.
The agency now estimates that the majority of addicts currently on the rolls will escape the cutoff.
As many as six out of 10 have physical or mental disabilities that may still qualify them for payments after the cutoff. Others may not be cut off because there is no treatment available for them. Still more will file legal challenges against the new law, and agency rules require that payments continue as long as their cases are pending.
The cost of defending against those challenges and handling the surge of paperwork triggered by the new law is expected to be
another $285 million, records show.