Washington Post, July 30, 2012
Social Security Disability Insurance’s incentive not to work
by Charles Lane
The Americans With Disabilities Act, passed with
bipartisan support in 1990 at the urging of then-President George H.W.
Bush, enshrines the notion that every American can and should hold a job
regardless of physical or mental limitations. ...
Social Security Disability Insurance, however, pays people who can show
that they are too mentally or physically impaired to remain in the labor
force. In short, for many workers, SSDI creates a quasi-right not to
work. This paradox is getting expensive. SSDI spending has doubled as a
percentage of gross domestic product in the last 25 years, according to
the Congressional Budget Office. The program paid $128.9 billion to
8.3 million beneficiaries in fiscal 2011, about one-fifth of all Social
Security spending. The average monthly benefit is $1,100, slightly less
than the average Social Security retirement check, but after two years
on SSDI, beneficiaries also get Medicare. Indeed, SSDI added
$80 billion to the cost of Medicare in fiscal 2011.
...
Congress actually liberalized the rules in 1984. In 2010, mental and
musculoskeletal conditions accounted for 54 percent of all new SSDI
cases, according to the CBO. ... the longer one stays out of work, the
rustier one’s skills get. The program has no training or rehabilitation
component.
... More than 6 percent of the U.S. working-age
population is on SSDI. ... SSDI’s growth will continue to erode
productivity, swallow up scarce tax dollars, and make it that much
harder to afford a sufficient safety net for everyone who needs it.
2-4-8 Response
Public Service Internships
A better approach to social security disability and to
most government safety net programs is to provide a part time job or
internship at a little below minimum wage. Imagine local governments and
not-for-profit organizations being able to get just about all the labor they
could want for free with the understanding that they are to provide
training, supervision and accommodate the disabilities of the workers. The
positions would not be limited to be entry level and would encompass the
full gambit of professional, technical or managerial activity. You might
think there would be a high turnover as good workers left to take better
paying positions in the private sector and indeed that would be an important
goal of the program.
Another important goal would be to employ hard to
employ persons (inner city teens, those leaving prison, etc.) and those now
receiving disability benefits. I believe that at least 90% of these 6
million people could contribute in some way if we created jobs to meet their
abilities and overcome their disabilities. At one extreme for example there
are persons with serious physical limitations who might excel at computer
based work even if it were performed in their own home. This might range
from remote security station monitors to customer service, or web site
management. Perhaps the biggest potential for service would be under the
general theme of the poor helping the poor. Day care, senior centers, job
skill training, community organizers, probation support, sports programs,
educational tutors, library and hospital support, etc.
As the federal government is cutting back on work
requirements for welfare and easing the requirements for other handouts the
federal expenditures are rising by hundreds of billions of dollars. Some
misguided fiscal conservatives believe that the problem might be solved by
trying to “starve the beast†- a derogatory expression which equates with
not raising taxes under any circumstances. The political appeal of this
approach is waning as the government incurs record levels of debt to offset
the reduced revenue. The economic reality is that consumer spending is
necessary and sufficient private sector jobs do not exist. The government
must continue to give people money to live on and the only issue is whether
they will be invited to work helping the community in return. At least the
total cost can be expected to be well under the annual $1.1 trillion in
annual tax expenditures – most of which is welfare for the high earners.
Lastly, congress should consider funding the program by
eliminating charitable deductions in tax returns. I have faith that people
will give to important charities even if the government does not give a tax
break. I also believe that worthwhile charities will be able to accomplish
their mission with the boost of free labor to compensate for any reduction
in contributions. The not-for-profit sector has become extremely political
and charities not willing to help people on a one to one basis don’t need
government support.
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