Did you hear the one about the federal entitlement program that’s going broke? Not Social Security, the other one. No, not Medicare, the other one.
If you’re one of the 11 million people receiving a federal disability check, then you know the program we’re talking about.
The program, officially known as Social Security Disability Insurance, is expected to exhaust its trust fund in 2016, nearly a decade earlier than the exhaustion of Medicare’s hospital fund and two decades before the Social Security retirement trust fund goes broke.
When that happens, incoming revenue would only be enough to cover 80 percent of the payments to those deemed too disabled to work. According to conventional Washington wisdom, that means either benefits will have to be cut or taxes will have to be raised to make up the difference.
We advocate a different option: wholesale reform. Like food stamps and other government handouts, SSDI is rife with fraud and abuse. With $137 billion worth of checks going out the door, it’s no wonder.
One need only look at the recent case in New York in which 106 people – 80 percent of whom were 9/11 first responders – have been criminally charged for allegedly faking disability claims. Prosecutors say the ringleaders coached the other 102 defendants on how to lie about depression, anxiety or post-traumatic stress disorder to qualify for benefits, which ranged from $30,000 to $50,000 per year.
Indeed, the program that once focused on people who suffered from strokes, cancer and heart attacks is increasingly supporting those with depression, back pain, chronic fatigue syndrome and other subjective conditions that don’t necessarily constitute a complete inability to work.
SSDI’s liberal eligibility rules are tilted in favor of providing benefits to new applicants, and its multilevel appeals process enables people with questionable claims to succeed in winning benefits if they are persistent. And because those who receive the checks are rarely re-evaluated, once people enter the program, they stay there. Statistics show less than 1 percent rejoin the work force.
The last time Congress attempted to reform the program, in 1984, it actually made the program worse by relaxing eligibility requirements.
Today, this out-of-control program, which costs more than the combined annual budgets of the departments of Agriculture, Homeland Security, Commerce, Labor, Interior and Justice, has ballooned under the Obama administration while the revenue that supports it continues to decline. The trust fund has run a deficit in each of the five fiscal years under President Obama (compared to the 14-year run of surpluses that preceded his inauguration) as receipts from disability insurance taxes (paid by people who work) exceeded the benefits paid to those claiming disability.
Politicians have kicked the can down the road for decades when it comes to entitlements. The end of the road is fast approaching for the federal disability program. We fear lawmakers will raise taxes to boost the trust fund, a short-term fix for a structurally flawed program.
Instead we hope Congress will have the courage to institute real reforms, such as stricter eligibility standards and continuous reviews of those receiving benefits. We also support amending the administrative law process to include a taxpayer advocate to challenge dubious claims of applicants and attorneys, and reducing the number of appeals granted to those who are denied benefits.
Ultimately, we would like to see long-term disability coverage transitioned to the private sector.
When the Social Security Administration re-examined large numbers of SSDI recipients in the early 1980s, it found that 40 percent were not sufficiently disabled to justify their benefits. Is there any reason to think that percentage would be lower if that same study was conducted today?