Federal Social Security Disability Insurance is Ripe for Reform

The bad news just keeps on coming.  Aside from anemic economic growth, high unemployment and record setting government debt, the number of those collecting federally funded disability is exploding.  According to cnsnew.com, “This is the 192nd straight month that the number of American workers collecting federal disability payments has increased. The last time the number of Americans collecting disability decreased was in January 1997. That month the number of workers taking disability dropped by 249 people—from 4,385,623 in December 1996 to 4,385,374 in January 1997.”

This figure should be troubling to taxpayers because it shows a trend in a county that relies more and more on public benefits with fewer and fewer people working to provide those benefits.  As the CNS article continued, “In December 1968, 1,295,428 Americans collected disability and 65,630,000 worked full-time. Thus, there were about 51 Americans working full-time for each person collecting disability at that time. In January 1997, the last time the number of disability beneficiaries declined, 4,385,374 Americans collected disability and 104,900,000 worked full-time. Thus, there were then about 24 Americans working full-time for each person collecting disability. In January 2013, with a record 8,830,026 Americans collecting disability and 115,918,000 working fulltime, there were only 13 Americans working full-time for each person collecting disability.”

Now is the right time for Congress to take action and find some commonsense ways to reform the SSDI program.  In a study that Our Generation released last year, moderate reforms to the way the SSDI program is administered could save roughly $50 billion annually by 2030, enough to erase around 11% of the total Social Security long-term total deficit.  Among the reforms the report advocated were as follows:

  1. Tighten eligibility requirements and conduct Continuing Disability Reviews of existing beneficiaries to reassess their disability status;
  2. Include greater oversight power for Social Security Administration by administrative law judges who make SSDI decisions; Add “experience rating” for disability payroll taxes so employers keep individuals with disabilities on the job and rewarded with lower taxes, while those who shift workers onto SSDI will pay more; and
  3. Require employers to carry private disability insurance to cover benefits for a short period until SSDI takes over.

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