Congress should put the bankrupt federal disability insurance program on the right path now

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  • 08/21/2022

The House of Representatives and the Senate are in the process of drafting up separate budgets for the next fiscal year. Senate Budget Committee Chairman Mike Enzi (R-WY) and House Chairman Tom Price (R-GA) are targeting mid-March to schedule a markup of the plans. A smart decision to reform federal disability insurance would help balance the budget and insure that disabled people continue to get the benefits they need.

Americans with disabilities and federal taxpayers will soon suffer needlessly unless Congress acts quickly ??? and responsibly ??? to fix issues plaguing the Social Security Disability Insurance program.

Social Security Disability Insurance (SSDI), the federal program that provides money to Americans who are prevented from working as a result of physical or mental disabilities, is bankrupt. This year marks the sixth consecutive year that SSDI has operated in the red ??? the shortfall will top $35 million this year alone. As a result, deficits have devoured almost all of the disability program???s reserves.

The SSDI program will run out of money completely late next year. When that happens, disability payments will be cut drastically.

Congress may try to raid the Social Security retirement account to cover some of the gap in funding. But that means the money promised to Americans when they retire won???t be there. Lawmakers may even try to pass dramatic increases to the Social Security payroll tax, which would harm workers and devastate the economy.   These two paths would be a mistake.

As Congress scrambles to patch the broken federal disability program, it is important to remember that SSDI???s insolvency isn???t because the payroll taxes that fund the program aren???t enough. The program???s problems are rooted in a culture of waste, fraud and abuse that must be corrected, as well as a dramatic growth in the program that must be curbed.

In just the last six years, the number of people receiving federal disability payments skyrocketed by more than 55 percent, according to a new report released by Our Generation, a free market public policy organization. During the same time, the population of the United States increased by just over 3 percent.

Americans aren???t becoming increasingly disabled. Instead, the weak economy and fewer job options drew more people to improperly apply for disability benefits, even though they were perfectly capable of working. These 3 million additional enrollees cost taxpayers billions of dollars a year and draw needed resources from Americans who are truly disabled.

By encouraging SSDI recipients with the ability to work to stop exploiting the system and re-enter the workforce, Our Generation discovered the disability program could save nearly $19 billion per year.

SSDI???s problems don???t end with the dramatic increase in enrollment by individuals who are capable of working. Taxpayers could save billions more if the Social Security Administration would take steps to clean up the fraud, erroneous payments and improper benefits that plague the disability program.

More than $7 billion are lost annually because the Social Security Administration refuses to adequately deal with the two issues.

If Congress takes three simple steps, they can use the budget process to start reforming the program.

First, Our Generation recommends requiring SSDI recipients whose condition is expected to improve to reapply annually for benefits. Currently, the Social Security Administration is supposed to regularly review enrollees to determine if they should continue receiving benefits. The agency, however, is about 3 years behind on its reviews ??? a problem that costs the SSDI about $4.8 billion a year in unnecessary payments.

Forcing beneficiaries to apply annually would naturally eliminate some enrollees from the program who have become healthy enough to return to work. It would also reduce the number of people who continue to receive benefits simply because the Administration is backlogged on its reviews.

Second, it is also time for the Social Security Administration to embrace modern technology and install an automated system to automatically remove enrollees from the SSDI program when they are physically capable of returning to the workforce. Blunders with the current system often allow people to receive disability checks long after they???ve been cleared to work.

Finally, Congress should expanding the Social Security Administration???s successful Cooperative Disability Investigations program, which saves taxpayers as much as $8 for every dollar spent rooting out fraud.

Fortunately it???s possible to provide disabled Americans with the support they deserve, while protecting taxpayers??? hard-earned dollars and securing Social Security retirement funds for years to come.

If Congress ignores this crisis and does nothing to address these systemic problems in the SSDI program, they are destined to continue unbalanced budgets and turning a blind eye to waste, fraud and abuse.

M. MacMillin Slobodien is executive director of Our Generation, a non-profit advocacy organization dedicated to promoting free-market public policy solutions.