We've written a lot about people who are able to work and yet manage to get on disability.
This risks breaking the system for those who are genuinely unable to work, and it is obviously corrupting to people who do this. I somehow missed Andrew Biggs' excellent September 8 Wall Street Journal article on how the disability is going broke but Democrats refuse to acknowledge a problem.
Biggs notedthat California Rep. Xavier Becerra, the ranking Democrat on the House Social Security Subcommittee, has proposed merging Social Security’s disability and retirement trust funds. It would hide the problems with the disability funds a little bit longer but threaten retirement funds.
The disability trust fund will be exhausted in late 2016. Benefits could then only be paid from current payroll-tax revenues—and that means a 19% across-the-board cut. Mr. Becerra’s bill would forestall insolvency by allowing disability benefits to be paid from the retirement plan. This would worsen the retirement plan’s long-term deficits. It would also hide the remarkable rise in the disability rolls and the nearly 50% decline in the employment rate of Americans with disabilities since 1981.
The requirements for disability have been expanded since the program was started and now people get on disability for an array of reasons, some of them not easily verifiable. What can be done? Biggs says that disability reform in the Netherlands (!) may point the way:
What should disability reform look like? Holland in the 1980s was referred to as the “sick country of Europe,” with a disability rate—the number of disability beneficiaries per 1,000 workers—triple the U.S. level. Starting in the late 1990s, Holland made two important changes. Before applicants could get benefits, they had to undergo a rehabilitation program to address their disabilities and identify work opportunities. And the government created incentives for employers to accommodate workers with disabilities so they might continue working.
The disability rate in the Netherlands today is slightly lower than in the U.S. and continues to fall—while the U.S. disability rate rises. Sweden and Great Britain passed reforms based on the Dutch example and disability rates have fallen in both countries.
U.S. experts from across the political spectrum have drawn on these lessons. MIT’s David Autor and Stanford’s Mark Duggan, in a plan published in 2010 by the liberal-leaning Center for American Progress and the Brookings Institution, proposed reforms that are very similar to a 2011 plan by Richard Burkhauser of Cornell University and Mary Daly of the San Francisco Fed, published by the conservative-leaning American Enterprise Institute.
It's a good article but I didn't notice it until a letter to the editor prompted me to search for it. The letter made an often-overlooked point. It is not just those who get disability payments who benefit from the program. In response to the article, University of California-San Fran Professor Steven Snyder, M.D., writes:
As a physician practicing for 40 years, I agree that the federal disability system is out of control, as are state-based programs. A substantial number of patients are receiving payments for chronic pain, depression, fatigue, fibromyalgia and other complaints that are poorly quantifiable and easily exaggerated.
An army of physicians in chronic pain and orthopedics, as well as chiropractors, acupuncturists and physical therapists, not to mention attorneys, are co-feeders at the disability trough. There is rarely anyone among the providers who says “no,” and there is little social stigma associated with living on disability payments for ill-defined problems. MRI “abnormalities” are often misapplied to document the reason for chronic back pain, even though it is known that similar findings are equally present in asymptomatic individuals. Primary-care physicians aren’t in a good position to control eligibility for disability benefits as they are expected to be their patients’ advocates.
I’ve known patients whose disability benefits were only able to be reversed by filming their activities. To paraphrase from the film “Field of Dreams”: If you build a program, they will come.
And if too many come, the system will be unsustainable.