“Reform SSDI Now” Launches National Campaign to Overhaul Broken Social Security Disability Insurance Program

Washington, D.C.—Reform SSDI Now, a new project of Our Generation, is launching an aggressive national campaign to educate Americans about the rising costs of Social Security Disability Insurance (SSDI) and how waste, fraud, and abuse are harming taxpayers and jeopardizing this constantly expanding federal entitlement.  The campaign is providing citizens with information to understand this crisis and the tools to demand action and real reform from policy makers—including compelling reports on this crucial issue and an online action center to contact members of Congress and report fraud in the SSDI system.

“Despite its humble beginnings as an insurance plan for long-tenured workers with the misfortune of becoming disabled before retirement, SSDI has ballooned into a $135 billion behemoth threatening to collapse under its own weight, and to take a bite out of Medicare on the way down,” said MacMillin Slobodien, Executive Director of Our Generation, in a new report titled Drivers of SSDI Growth“Left unchecked, decades of loose standards and poor enforcement may soon culminate in thousands—if not millions—of deserving recipients being deprived their rightful benefits.”

When introduced in 1956, SSDI provided benefits only for permanently disabled workers over the age of 50 with a substantial work history.  Over time, this program has grown dramatically, and today the fastest-rising cost for Social Security is not the retiring Baby Boomers but skyrocketing Disability Insurance benefits.

As Our Generation has argued in its previous study, Social Security Disability Insurance: An Entitlement In Need of Reform. SSDI requires urgent action and meaningful reform:

In 1970, the Disability Insurance program could be financed with a payroll tax rate of only 0.8 percent of wages; today, the cost of SSDI has tripled relative to the 1970 level.  Disability benefits now make up 18 percent of all Social Security costs, up from only 10 percent in 1990.  In fact, the number of people on SSDI in 2012 exceeded the entire population of New York City at 8,733,461 participants.

The SSDI program is already running deficits—meaning it pays out more in benefits than it collects in payroll taxes—and its trust fund is projected to run out in 2017.  Recent research has shown that the rising cost of SSDI is not principally the result of an increase in disabling illnesses but policies that make qualifying for benefits easier.  These policies open benefits to the more marginally disabled, raising costs for taxpayers.

The principal drivers of SSDI growth are a loosening of eligibility requirements, increasingly attractive benefits, and an applications process that has become incapable of distinguishing between truly disabled workers and those who should be rejected.  As Drivers of SSDI Growth demonstrates, these three effects have combined to create a modern SSDI very different from the one envisioned by its architects.  Going forward, it is essential that Congress take significant steps to rein in SSDI’s growth.  To do nothing—to continue to prioritize the able bodied over the truly infirm—is far worse.

Part of the solution to rising SSDI costs is to tighten eligibility requirements to focus resources on the most disabled individuals, coupled with incentives to employers to keep disabled individuals working and therefore out of the program. Some proposed reforms have included the following:

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

Reform SSDI Now, a project of Our Generation, seeks to educate the American public about the rising costs of Social Security Disability Insurance (SSDI) and urge them to get engaged in order to persuade policy makers to reform the program.  To learn more about Reform SSDI Now, please visit www.reformssdinow.org.  To learn more about Our Generation, please visit www.OurGeneration.org.

Leave a reply