Rise In Disability Claims Could Collapse SSDI


social security

Thanks to the Obama economy many Americans are dropping out of the work force and going on Social Security Disability. It’s so bad the system could collapse, and it’s going to happen soon, according to The Washington Examiner. Naturally, the reason so many people are now eligible for SSDI is that the Democrats loosened eligibility requirements.

What happens to the workers who drop out of the labor force? Some retire, some become full-time parents, some go on welfare. But here’s an important answer that is often overlooked: In 2011, on average, one net person has been added to Social Security’s Disability Insurance rolls (and 3.3 to its retirement program) for every five net new jobs created. Since 1970, the number receiving DI has grown sixfold (from 1.4 million to 8.8 million), and the program expenses have grown tenfold, which is unsustainable. The federal government now spends more on disability than food stamps and welfare combined. In 2009, DI began paying out more in benefits than it took in from payroll taxes. By 2016, it is set to run out of money.

Two factors are driving the program’s explosive growth: first, newly liberalized eligibility standards. When President Reagan instituted a program of “continuing disability reviews” at the height of the 1981 recession, about 400,000 people lost benefits. Democrats in Congress responded by passing new standards that made it easier to qualify for DI initially and next to impossible to lose benefits. As NPR’s Chana Joffe-Walt pointed out in an excellent recent piece on the topic, heart disease was the top cause of DI awards in 1961. Today, with the new eligibility standards, back pain and mental illness top the list. As a result, the share of all adults receiving DI benefits doubled from 2.3 percent in 1989 to 4.6 percent in 2009. (Read More)

The worst thing is that once it all comes crashing down it won’t be there for those who really do need it. Sad.