Heed Facts on Reform of Disability System

Originally published on The Post and Courier on Oct 17, 2013:

“The Oct. 5 editorial “A disabling fiscal trend” decries the steep rise in the number of Americans receiving Social Security disability as a product of government mismanagement requiring substantial reform. The Post and Courier is right to call attention to solvency issues facing the nation’s largest and most important domestic program, but it’s important to consider all of the facts before crying foul.

The claim that disability rolls have exploded as a result of unemployment from the Great Recession is a popular but inaccurate assumption.

According to the chief actuary of Social Security, the economic downturn was responsible for only 5 percent of the disability program’s growth. The recent growth in the disability program was actually anticipated by Social Security trustees as far back as 1994.

Actuarial data show the increase in disability beneficiaries is mostly due to demographic factors: increases in U.S. population; baby boomers reaching their disability-prone years; large numbers of women who entered the workforce in the 1970s and 1980s are now insured if they become disabled; and the increase in full retirement age passed under President Reagan.

The data also show that demographic trends for the disability program are leveling off and are expected to decline as more baby boomers reach full retirement age.

The implication that legal standards for Social Security disability are not strict enough is another common misperception.

According to the Organisation for Economic Co-operation and Development (OECD), the U.S. has the most restrictive and least generous disability benefits system of all OECD member countries, except Korea. Most applicants for Social Security disability are denied.

Fewer than four in ten applications are approved, even after all stages of appeal. Even more telling is the significant decline in award rates during the recent economic recession from 39 percent in 2007 to just 33 percent in 2011.

The projected depletion of the disability trust fund in 2016 is not a new development and is not unprecedented.

Since Social Security was enacted, Congress has reallocated payroll tax revenues between the retirement and disability trust funds some 11 times to account for demographic shifts.

In 1994, the last time such reallocation occurred, SSA actuaries accurately projected that the next similar action would be required in 2016.

As it has in the past, Congress could enact a modest reallocation of the 6.2 percent tax rate between the retirement and disability programs. Under one such plan, both funds would be fully solvent until 2033.

Rather than make it tougher for deserving applicants to be approved, we should focus on proven measures to curb fraud and abuse.

For example, Social Security is required by law to conduct continuing disability reviews (CDRs) to ensure that disability benefits are terminated for beneficiaries who have returned to substantial work after a permissible trial work period or are no longer disabled. Social Security estimates that every dollar spent on a CDR saves the federal government $9, but there is a current backlog of 1.3 million CDRs due to recurring budget cuts, including the recent sequestration.

Congress should recognize that this is one budget cut that makes no sense.

As the editors aptly noted, Social Security serves an important purpose for millions of disabled workers and their dependents.

However, criticism of the disability program or recommendation for significant “reform” should be soundly based on facts and experience.

We owe nothing less to our most vulnerable fellow citizens.”

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