Experts: No Appetite for Social Security Disability Reform

Lawmakers unlikely to push reforms with 11M Americans on disability

Wikimedia Commons
August 20, 2013

Though nearly 11 million Americans are collecting disability benefits from the Social Security Administration (SSA), and its trust fund is expected to be exhausted by 2016, there is little desire to reform the programs on Capitol Hill.

"I haven’t heard of any member on the Hill sort of championing disability insurance reform," said Chris Edwards, director of tax policy studies for the Cato Institute, during a briefing Tuesday on the rising costs of Social Security disability, which will total over $200 billion this year.

"I agree with that statement," said Jagadeesh Gokhale, a senior fellow at Cato. "I think the intensity of the discussion should be much greater, given how close the system’s trust fund is to expire."

Federal Social Security Disability Insurance (SSDI) will cost an estimated $144 billion in 2013, and its trust fund will be depleted in just three years. The program is financed by a 1.8 percent payroll tax.

Additionally, Supplemental Security Income (SSI), a means-tested program for working disabled adults and children, will cost $57 billion in 2013. SSI is not part of the Social Security trust fund but is administered by the SSA.

There are over 19 million claims distributed through the disability programs, as of July 2013.  The number of Americans collecting SSDI is at a near record high of 10,914,232 and 8,352,764 individuals are enrolled in SSI.  Some people qualify for concurrent benefits, or both programs at the same time, though the data does not reflect how much the programs overlap.

The experts at Cato, a libertarian think tank, said enrollment in Social Security disability has skyrocketed in recent decades as eligibility requirements have lessened over the years.

"The system is broken," said Tad DeHaven, a budget analyst.

"One day I’m at Walmart and I overhear a conversation between two women," he said. "And the one woman says to the other, very matter-of-factly, ‘I either take the pay cut or just go on disability.’"

"And it really struck me that she saw it as just being an obvious choice, take the pay cut or go on disability," DeHaven said.

"It’s don’t go on disability, or so I thought."

A primary reason for the increase in the disability rolls is the benefits for mental conditions and "nonexertional restrictions," which have increased by 323 percent since 1984, when the category was added.

SSA explains that a person could have a "nonexertional limitation or restriction" that causes difficulty in functioning because they are "nervous, anxious, or depressed," or "have difficulty understanding or remembering detailed instructions."

"The inherent problem here is disability is almost impossible to define," DeHaven said. "They knew that from the beginning, the planners were told from day one by the private sector, ‘we can’t do this.’"

"And that was always the fundamental problem from the get-go, is how do we give to the truly disabled without letting this blow out of proportion," he said.

DeHaven said the share of children enrolled in disability has also risen, from 4 percent in 1980 to 16 percent today.

"You have a lot of kids developing this identity of being disabled, whether they are or they aren’t," he said. "A lot of these kids are able to work, but they don’t because they don’t want to jeopardize the check that’s coming home."

"There’s this big object, huge gravitational force pulling people off the work force and getting them into the system," Gokhale said. "Everybody seems to be focusing on not how to change this object, how to put fences around it to prevent this migration from the labor force onto disability."

The speakers called for a comprehensive overhaul, with reforms to delay and prevent workers from entering the system, and more incentives to return people to the workforce once they are enrolled.

Getting members of Congress on board may be problematic

"Do you want to be the member that has the quote, unquote, ‘disabled’ activists outside of your office protesting?" DeHaven said. "It’s like any other program, you’ve got to be willing to stick your neck out and you’ve got to be willing to find people to go along."

"And having worked in the Senate, I don’t see it," he said.