The Washington Post recently published a long article on Social Security Disability Insurance benefits in small rural communities. It set off a well-deserved backlash. But it made me wonder whether anyone had ideas for improving the program. Hence this post.
Aspersions on SSDI and Beneficiaries
The Post article focused on a former roofer who was suffering chronic pain because he’d fallen to the ground. He couldn’t find a different sort of job. So he was weighing whether to apply for SSDI.
The thrust of the article was that SSDI, is sort of ongoing unemployment insurance benefit — and how both the number of beneficiaries and costs have soared. “Filled with tropes, gimmicks and dogwhistles frequently promoted by right-wing opponents of SSDI,” said Media Matters.
I was going to take a pass — partly because I dealt with these allegations when an NPR reporter patched together factoids and personal opinions to argue that SSDI has become “a de facto welfare program” and partly because expert advocates swiftly pounced, as they had before.
The Post followed up with an editorial calling for reforms, while suggesting, as did the NPR reporter, that many SSDI recipients aren’t all that disabled. Further fodder for Congressional Republicans eager to “reform” so-called entitlements.
And not only they. Trump’s Office of Management and Budget Director made the same point. SSDI has “effectively become a long-term, permanent unemployment program.” He looks forward to talking with his boss about “ways to fix it.”
Then we got a rebuttal of the Post’s rural county analysis from two policy experts at the Center for American Progress. The Post published a correction, based on a different data set. Still wrong said the rebuttal team — essentially cherry-picking, since it finds only one out of more than 5,100 that backs up its still-broad claims.
Surely SSDI deserves a strong defense, Bad enough you can’t earn money for at least a year at any job whatever because your disability is so severe or because you’ll probably be dead.
Bad too in many cases because disabilities can be painful, hard to adjust to and costly, even with Medicare — a benefit paired with SSDI, if you live long enough.
And bad because you’re tarred with accusations of fraud The program isn’t fraud-free, but two former Social Security Administration officials put the rate at less than 1%.
So should we insist that policymakers leave the program untouched? Experts — and not only those leaning left — say emphatically not.
The Cato Institute, for example, tackles a problem that other more moderate experts have also addressed. Under current law, SSDI recipients may try to reenter the workforce for a year, if they earn no more than $1,170 a month or a bit more than that if they’re blind.
A dollar more and they’re over a cliff because that supposedly shows they’re capable of substantial gainful activity — a hard-and-fast disqualifier for SSDI.
Needless to say, I hope, this hardly encourages recipients who can’t earn a whole lot more from trying to earn what they can, even if they might earn more over time.
So Cato proposes a benefits offset for wages earned, but also a subsidy from another funding source that would that would increase up to a higher level than the SGA. And those who opt for this dual support wouldn’t lose their SSDI eligibility.
This isn’t the only problem, however. The overly-complex, often prolonged process of gaining approval for SSDI benefits necessarily means that applicants mustn’t work for quite a long time. If they’re rejected, as many are they have a hard time finding a job they can perform.
One proposal that two former chairs of the House Ways and Means Subcommittee on Social Security chose for a book would have a new screening system that would identify applicants who could continue to work if they received swift supports, e.g., vocational rehabilitation, assistive technologies like a computer speaks what’s on the monitor.
Employers would, of course, have to retain them — or if they were too disabled for a work support solution hire those who weren’t. Another of the published papers would give them an incentive for the former by requiring them to cover the first two years of disability claims — some skin in the game, so to speak..
The screening system proposal would instead effectively insulate them from liabilities for noncompliance with the Americans with Disabilities Act if they kept their disabled workers who’d received supports on the payroll. (Feel a little queasy about this.)
Still another proposal looks instead to transitional, i.e., short-term, subsidized jobs in the private sector– rather like the highly successful use many states made of the Recovery Act’s TANF Emergency Contingency Fund.
This, however, would be for potentially work-capable beneficiaries, new applicants and those whose applications SSA rejected.
Federal funds would subsidize their pay up to $10 an hour. That would boost their income by roughly $428 more than the average benefit.
But most beneficiaries surveyed had jobs requiring few specialized skills, and only a third had any education beyond high school. So one could assume their benefits were below the average.
Employers would get not only workers they wouldn’t have pay. The program would cover their responsibilities for payroll taxes, unemployment insurance taxes and premiums for workers compensation insurance. In short, good hiring incentives here.
Employers could, at any time, hire their transitional workers, but they couldn’t keep them on as transitional for more than six months.
During that time, transitional workers would have a job counselor, presumably to resolve problems. When the time limit came, the counselor would help those who’d done well to find a regular job. If none panned out within a month, the seeker could become transitional again.
In this respect, it’s somewhat like the trial period the current SSDI program allows in that in eliminates a disincentive to trying to reenter the workforce, but it’s obviously much more supportive than merely allowing a beneficiary to find a job that pays more than the SGA.
The last piece of this proposal tackles problems with the Earned Income Tax Credit that disadvantage all workers who don’t have children living with them and those with children whose spouse also works.
These have been issues on progressive policy agendas for a long time — and the former for the hardly progressive House Speaker Ryan.
The return-to-work proposals could and should raise concerns among progressives, especially that triaging. But one can imagine building in safeguards against denying SSDI to applicants unable to work.
The proposals would appeal to conservative policymakers, I think. They like safety net programs that involve work and/or preparation for work — in other words, programs that aim to get beneficiaries out of them.
Conversely, they don’t like programs that provide ongoing cash assistance without some sort of work component when beneficiaries aren’t demonstrably incapable of doing anything for pay.
Doubtful that we’ll see any of these proposals taken up by this Congress. But the SSDI Trust Fund will probably run out of money toward the end of 2023.
Rather than again redirecting payroll taxes money from the retirement trust account, thus accelerating its shortfall, we might see one or more of them or some combination on the legislative agenda. And one devoutly hopes someone else in the White House.