Right On: Social Security gravy train is better than food stamps

September 19, 2018 Utah Channel 3

OPINION — Tired of working but embarrassed to show up at the grocery store with food stamps? Fake a medical condition like back pain or a mental health problem that a doctor can’t diagnose objectively and jump on the Social Security gravy train.

According to a New York Times analysis, a million or more of our fellow citizens have taken this suggestion. Read on.

The federal Social Security Disability Insurance program provides benefits for those with long-term conditions that prevent them from returning to the work they performed previously. So far, so good: Most of us are willing to help those who’ve suffered a life-altering setback.

Sadly, as eligibility requirements have been loosened over the last several decades, the number of SSDI recipients has jumped from 1.5 million in 1970 to 8.2 million in 2010. Program costs have jumped in tandem.

SSDI defenders point to factors that might explain this rise: an aging workforce and increasing numbers of working women. Controlling for these factors, Professor Richard Burkhauser of Cornell University concludes that these factors account for no more than 25 percent of the increase.

Today, over half of all SSDI beneficiaries claim pain or mental health prevent them from working. And, mysteriously, these conditions appear much more frequently during business downturns.

The New York Times recognized the correlation between disability claims and economic conditions. The Times noted: “A seemingly inexorable economic trend has changed direction in the past few years, as people who cited health reasons for not working are returning to the labor force.”

The article went on: “In 1994, the Bureau of Labor Statistics determined that four percent of Americans ages 25 to 54 were not seeking work because of health reasons. By mid-2014, the number had risen to almost 6 percent of that age group.”

The paper continues: “Around 10 percent of prime-age workers who described themselves as disabled in 2016 had found a job by 2017. Two-thirds of these jobs are full time and disproportionately are coming in manufacturing and construction.”

The data are hard to refute: For those who lost jobs and ran out of unemployment benefits, SSDI beckoned. And once those benefits began to flow, these folks could be picky about the kind of job it would take to get them back in the workforce.

The Republican one-two punch of rolling back over-the-top Obama regulations along with dramatic and effective tax reform has the economy firing on all cylinders. The economy grew at a 4.2 percent rate in this year’s second quarter.

Job growth has been over the top with the unemployment rate dropping to as low as 3.8 percent. Summer unemployment rates were back up a tick at 3.9 percent despite job growth continuing to exceed expectations.

Why isn’t the unemployment rate continuing to drop? Obama made it painless (pun intended) to drop out of the job market; those who did are no longer counted as unemployed. Now significant numbers of those on SSDI are coming back.

SSDI plays a compassionate and needed role in our society. But its current formulation makes it far too easy to abuse. Is there an answer?

Burkhauser pointed to Dutch disability insurance as a model in his Congressional testimony:

“The Dutch reforms focused on reducing inflows onto long-term disability benefits by making employers more directly bear program costs. The reforms required all Dutch firms to fund the first two years of disability benefits to their workers and to pay an experience-rated disability tax based on the number of workers they subsequently moved onto the long-term Dutch disability insurance program.”

“These reforms provided incentives for employers, who are in the best position to offer accommodation and rehabilitation, to do so in lieu of moving workers with disabilities onto cash transfers.”

Even liberal critics of any welfare program change should find the Dutch program to be one they could endorse. To me, it has three major positives.

First, it puts responsibility and costs directly in the hands of those who are incentivized to take the best long term actions: employers. This is analogous to state-mandated workers compensation insurance for workers injured on the job.

Second, with the recent business tax reductions, putting this responsibility on corporate shoulders has a nice political ring to it.

Third, any step to rein in another runaway federal entitlement program is an important step toward fiscal responsibility.

I’ll resurrect my mantra: no new entitlement programs. SSDI and other programs are routinely expanded to include increasingly less-deserving recipients; their costs always balloon far beyond original projections; and any attempt to scale them back is characterized as heartless and cruel.

Howard Sierer is an opinion columnist for St. George News. The opinions stated in this article are his own and may not be representative of St. George News.

Email: hsierer@stgeorgeutah.com

Twitter: @STGnews