Social Security Disability Program – another promise that needs fixing

Here is an excerpt from a report prepared by the Congressional Budget Office (CBO).

The Number of DI Beneficiaries Has Increased Nearly Sixfold Since 1970

In 2011, the DI program provided benefits to 8.3 million disabled workers, nearly six times the 1.4 million disabled workers who received benefits in 1970. Including the dependent spouses and children of those workers further increases the number of people receiving support from the program in 2011 to 10.3 million. The growth in the program can be attributed to changes in multiple factors, including demographics, the labor force, federal policy, opportunities for work, and compensation (earnings and benefits) during employment.

DI Program Outlays Have Outpaced Dedicated Revenues and That Trend Will Continue in the Future, CBO Estimates

Over the past 40 years, outlays for benefits from the DI program (adjusted for inflation) have grown by more than nine times. During that period, the average benefit received by disabled workers rose from about $560 per month to about $1,050 per month in 2010 dollars. (Other programs also support workers with disabilities.)

Since 2009, the program has paid out more each year in benefits than it received in dedicated revenues. In 2011, total benefit outlays for DI were $128 billion, or 0.86 percent of gross domestic product (GDP); by contrast, the program’s revenues totaled about $94 billion, or 0.63 percent of GDP. In 2022, the program’s spending and revenues will be roughly the same shares of economic output as in 2011, according to CBO’s estimates. By 2037, revenues as a percentage of GDP will be little changed, but spending as a share of output will have fallen slightly, as the proportion of the working-age population that is age 50 or older (and thus more likely to receive DI benefits) declines.

Since the start of the recession there has been a dramatic increase in those receiving disability benefits and many of those began receiving benefits at the end of unemployment benefits. So we have hundreds of thousands of people claiming they are able and looking for work one day and unable to work and deserving of a life annuity the next. What’s wrong with this picture?

Frankly, given today’s environment where we promote more government doing just about everything, I don’t blame these people. If it meant no money coming in for my family versus giving disability a shot, why not? A good claim assistance firm or lawyer and your home free. Hey, it’s human nature and with television ads promoting disability claim assistance the affect is just as good as advertising to get you to buy a supersized soda.

Of course, the two problems that are always with us are here as well. How and who pays for this largesse and where is the motivation for any of these people to ever look for productive work again? Their benefit will rise with the annual COLA and after a period of time they receive Medicare. In other words, they become dependent on the system. Granted nobody is living in the lap of luxury while collecting this benefit and for many truly disabled Americans it is a lifesaver … but as with any government program that begins well intentioned it is out of control, abused, underfunded and inconsistently administered.

One comment

  1. So we agree government’s can/do waste alot of our money. Than do we agree that cutting waste and at the same time highering more people to find those who continue to rip-off the government/us makes for a sound economical and employment measure to help cure both problems? Help from big business with Trillions on hold waiting for more tax breaks, before they may higher, and the rich/saviors of the economic universe who need their money off shore to keep their taxes low isn’t happening! And small business is too small, over taxed and buried in regulation, to ever make a dent in the world of full employment or the economy. All polititions’ sould be removed from office because of their inability to do the job they were elected to do. Sorry for the digression.


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