On Wednesday, former Social Security Commissioner Michael Astrue left the position he has held for six years. On Thursday, he was interviewed by the Associated Press. While many of his criticisms of Congress were right on track and are worth reading -- particularly how Washington’s politicians and special interests have not done what is right and moral with regards to making Social Security solvent -- Astrue left much to be desired in his optimistic assessment of the Social Security disability court.
To start, Astrue praises the Social Security Administration’s (SSA) efforts to make getting on Social Security Disability rolls difficult. Yet the Government Accountability Office (GAO) found in August 2012 that poor communication between the Labor Department and SSA allowed for over 100,000 people to “double-dip” each year with the SSA Disability payments and unemployment benefits.
Astrue also says few people who don’t deserve benefits received them: "Very few of those people actually ended up getting benefits. If you look at the numbers, it's one of the reasons why our approval rates have dropped dramatically in the last few years."
This statement ignores how between 2006 and 2010, according to an investigation led by Sen. Tom Coburn (R-Okla.), 25 percent of disability claims were awarded improperly. (One caveat: The Senate report was limited to examining 300 cases in three states.)
How is this kind of abuse so widespread? Senator Coburn says it is because the SSA pushes judges to approve too many cases too quickly (Astrue says 500 per year is the goal for each judge, and he does not consider that too many). However, Forbes contributor Richard Finger points out what perhaps is the biggest problem: the complexity of the system.
For instance, he lists too many “disabilities” to count (the piece is worth reading for that reason alone), but here are a couple of results:
The numbers substantiate a shift to these hard to (dis)prove afflictions. Over the past three decade’s [sic] awards for mental illness climbed from 16% of total claims to one third by 2010. During the same period “back pain” increased its market share from 13 to 28%. It is a system begging for abuse. A study by the NBER (National Bureau of Economic Research) found that for workers with low paying jobs, SSDI including Medicare replaced, on average, 90% of working income. (SSDI recipients get free Medicare after two years of receiving benefits.)
Unfortunately, even honesty doesn’t always solve the problem, and many people work while they receive disability payments:
Much of the ongoing program cheating comes from those who continue to collect disability payments but are stealthily employed on the side. Not surprisingly, some of the SSDI wounds are self-inflicted. The SSA loses hundreds of millions continuing to pay those who were honest and notified that they were returning to work. The agency is supposed to conduct CDR’s or Continuing Disability Reviews to check in and determine the status of the disabled. I know it surprises everyone that there is a huge backlog and SSA is severely understaffed in this area.
According to Finger, over three-quarters of recipients leave the program upon reaching retirement age or death:
Of the 653,877 souls that departed the program in 2011, 36% departed by being gracious enough to die, while 52% reached retirement age and seamlessly switched to other benefits. Only 6% returned to work and 3.6% exited the program due to medical improvement. According to Congressional Research Services this program cost taxpayers $128.9 billion in 2011 and was in deficit to the tune of $25.3 billion. Funded by the 1.8% payroll tax and comprising nearly 18% of all social security spending, at current pace the trust fund may be exhausted by as early as 2015.
None of this is small change, though SSA as a whole only had a 0.39% rate of improper payments in 2010, much lower than that of Medicare and Medicaid. For good or ill, however, disability fraud in Social Security may decrease significantly in 2016, which is when the SSA Trustees estimate the Disability Trust Fund will run out, and will require fiscal changes of $30 billion annually to stay solvent.