Federal Fiscal Follies, Part III – Social Security Disability Insurance
Yesterday, I wrote about Social Security’s impact on wage earners. But as I said yesterday: that’s not all that’s problematic about Social Security. It gets even “better”. Fair warning: unless you’re a bleeding-heart libidiot who believes the primary function of government is to create a cradle-to-grave welfare state through income redistribution, what follows will probably piss you off.
Of those receiving Social Security benefits, a record number – nearly 8.8 million, around 15.6% of the total and approaching 1 in 6 Social Security recipients – are currently receiving Social Security disability benefit payments. Since there are about 142.1 million people in the US working, that’s one person receiving disability benefits for each 16.2 persons gainfully employed. In 1967, that ratio was about 65 to 1.
By law (42 USC 423) Social Security disability benefits may only be awarded to those who can hold no gainful employment of any type (and in some cases, to their dependents). I simply do not believe that nearly 9 million people of working age in the US – or the equivalent of about 1 out of every 17.5 persons in the US civilian labor force – are so medically or mentally “Bravo Delta” that they cannot perform any type of gainful work whatsoever under any circumstances. (You’ve really got to be in bad shape to be physically/mentally unable to sit at a reception desk or work as a janitor.) And information recently made public confirms that belief
What’s caused this? Well, there has recently been a huge expansion in the number of persons receiving Social Security disability benefits. And at the same time, the Social Security disability program also appears to have become “Easy Money Street” when it comes to awarding disability benefits. According to a recent Senate report, about 1/4 of recent Social Security disability benefits appear to have been awarded improperly.
Here are the specifics: since January 2009, roughly 5.7 million have been awarded Social Security disability benefits. I’ll let you do the math yourself to figure out how many of those were likely awarded improperly.
Now, for the bottom line: as of July 2012, the average Social Security disability check was a bit over $1100 a month – or around $13,300 a year. Multiply that by 8.8 million recipients, and that’s somewhere around $117 billion a year – or about 18% of Social Security costs today. And based on what’s been made public, it looks like around 1/4 of those disability benefits – or about $29.3 billion this year – were very likely awarded improperly and should not be paid.
“Not pretty”? Hell, that’s absolutely butt-ugly!
Like the rest of Social Security, I doubt this part of Social Security will shrink much any time soon – frankly, I personally doubt it will shrink at all. But it certainly looks like the DoD budget will. I guess continuing to pay improperly-awarded disability benefits is more important than defending the country.
That’s all for today. But yes – there’s more to come. In a future article, I’ll next discuss another problematic Federal income transfer program: the Supplemental Nutrition Assistance Program (SNAP), formerly known as “foodstamps”.
Oh, and if this article pissed you off – I think you’re gonna love the next one.
Category: Defense cuts, Economy, Politics
Let’s see if #8 from your last post shows up sober today! Come to think of it, after reading this, maybe I need to get drunk!
Hondo- I tried explaining these things to my best friend. She told me I was an extreme, greedy, and right wing. According to her, I am raising my kids wrong because I tell them to start their own retirement funds, or to match what the government takes from their paychecks because they will never see it. Not to mention that unless I never retire, they will have to help their aging parents, eventually because of her belief that we should pay it forward.
I’m just not down with that.
Defend…you’re going to be told that right up to the point the last dime is taken from your pocket in the name of “fairness”…after all, how is it fair for you to work, sacrifice, and save for your life if those who haven’t done the same don’t get to live off your back?
Stuck on the concept that if an agency does to me and you what an individual would go to jail for doing that it is somehow OK. Just because a bureaucrat does it makes it no more right than if a neighbor does it to us.
Count me in the camp of those who believe that it makes no sense for a committee, elected or otherwise, to conduct operations which if any of us attempted we would be incarcerated. RICO, anyone?
Without job creation in the private sector, the taxes paid into the Social Security fund are going wanting, especially with the government routinely borrowing from the fund, which has been going on for some time.
No, SSRI is not supposed to be your entire retirement income, but for those whose working income barely met their living expenses, it’s turned into exactly that. Ditto those whose retirement accounts went down a black hole in 2009 and did not recover, and lost their jobs at the same time. When you hit your late 50s now, unless you are in a critical job specialty (like Sparky), the odds of being rehired are slim and get slimmer every day.
However, unless the government decides to get in the way of free enteprise and entrepreneurship, there is nothing to stop that population group (middle aged) from starting up on their own. Since there were so many mom & pop businesses started during the 1930s depression, still in business today and handed down to childrend and grandchildren, it’s possible that this kind of thing can happen again as long as government stays out of the way.
Here’s a bit of news from CNBC on Friday: GM wants the government to sell its shares of GM. The government doesn’t want to. And if, somehow, that should happen, with the current loss of value (-$13/sh as of 9/21/12), those 500 million shares will constitute a rather large capital loss for the taxpaying public. GM’s highly-touted all-electric Chevy Volt costs twice as much to manufacture as the selling price, and so far it has sold fewer cars than the Toyota plug-in Prius (all electric version).
As a Volunteer Paramedic I respond to far too many calls involving people on Social Sedurity Disability and Medicaid and far too many of these are supposidly disabled due to their DRUG and/or Alcohol dependance and Some form of depression, you need 2 diagnosis from the DSM IV. Many of these people have never contributed to the system.The majority of these calls are Drug or Alcohol related and noaction is ever taken by their so-called Mental Health Providers. My personal feeling is if these people were pemoved from the dole they might be too buisy trying to earn a living to be “Depressed” and could not afford to Boose it up too much if they had to pay for it.
Hey Hondo, I’m not pissed off about what you are saying, I agree with almost all of it. I have been dxed with Multiple Sclerosis since 1985. I’m currently fighting to keep my ability to walk. I have burning pain, just like from a fire that some days the last resort to keep from going to the ER is to place ice bags below, between & on my ankles. I take a myriad of drugs to just keep me functioning, several that are for pain. There are days that no amount of painkillers dampen the pain & I just have to live with it. So I can’t sit at a receptionist or push a broom as a janitor in any efficient & dependable way. I wouldn’t really wouldn’t want to do that anyway, I was a telecomm engineer & loved it. I was smart enough way back when I began my career to take out disability insurance, thank God. It keeps my wife & I from living in a box because of a disease I wouldn’t wish on my worst enemy. Here’s the thing, by law I HAD to apply for Social Security Disability Insurance (SSDI). I’ve been receiving it since I was forced to retire due to full disability. I had & still have disability insurance payments from the when I worked. They just deduct what I make from SSDI out of what they pay me. I think that is ridiculous, why not wait to start paying me until legal retirement age? My disability insurance will end then & I will definitely be happy to receive Social Security benefits then. There some of us out here that can honestly not work a job. It is frustrating as hell to see people on SSDI for ridiculous reasons & not working. They are truly a drain on society.
Because of what is considered a “disability” by comrade banana’s definition, I’m not even considering there being anything left by the time I’m ready to retire. I admit I’m lucky working for government so I have a guaranteed pension, a government sponsored flexible 401 and because of my job I could afford my own personal portfolio. With no gov’t assistance, I’ll retire on a projected $3.5k+ a month.
My concern is, what about folks not as fortunate as me? Honest, hard working Americas working everyday doing what they can for their own retirement and trying to help their kids get through school. As I’ve said, I’m fortunate, others…not so much.
You make a good case to boost audits and enforcement, but not for dissolving SS.
JP76er: I’ve known a couple of folks with MS. You’re correct – that condition does indeed qualify as being really “messed up” physically. In my book it’s a legitimate reason for receiving disability insurance payments from any source.
As to why disability policies require you to apply for SSI also – well, that’s probably for two reasons. The first is to make certain you’re really disabled – that’s sad, but with as many people trying to scam government and insurance companies regarding disability payments, I can understand that. And second: the insurance companies are trying to save money. Making you apply for SSI first and reducing your benefit by the amount received in SSI is one way they can do so.
Vaya con Dios, amigo. Best of luck.
Joe: dissolve? No. Make major changes, probably by making future benefits less generous? Certainly.
We’re going to have to do that in about 20 years when the money starts running out, or we’ll go broke as a nation. Best to figure out what we need to do, and start the painful process of fixing a structurally broken system now – before the crash.
Hondo, the best remedy is to get people back to work and keep them there.
And to be completely clear, I meant back to work in the private sector.
No argument with either of those statements, Ex-PH2.
Still: even if we had full employment for the next two decades, we’d still have a problem with Social Security at the end of that time. Demographics – specifically, a rapidly aging population due to lower population growth – and the pyramid scheme structure of Social Security guarantees that even under the best of circumstances.
Best to start the fix now, before we’re staring an economic crash in the face.
Winston Churchill said that ‘You can always count on Americans to do the right thing – after they’ve tried everything else!’
@8 Yat Yas said banana…hahaha! 😉
Here is one suggestion for Medicare, as it relates to veterans who are seniors:
Let vets who are seniors and Medicare-eligible substitute VA health care for all parts of Medicare. We can already do that with Part D-Prescription coverage, which has a modest co-payment. And allow the VA to bill Medicare for treating vets. It eliminates at least some of the cost overruns and fraud that exist now in Medicare, and there is no need to find funding because it already exists in Medicare. It’s just transferring funds from one government agency to another.
Problem, Joe–once on SSDI, it nearly (literally) takes an act of Congress to get someone tossed off of it.
So even if we “reform” it, we’ve still got to deal with the fact that we’ve got several MILLION people who are at best questionable in their qualifications for SSDI who are almost certain to never come off it.
My wife works as a Special Education teacher at a Title I school. The amount of Social Security fraud, waste and abuse she sees at one school would piss off the Pope. Times that by tens of thousands and it boggles the mind.
One example – a parent learned that if her child was rated as oppositionally defiant, the family would earn an extra $700 per child. The child that my wife had to deal with was a terror, but Medicare paid for medication like Ritalin and Adderal in order to balance his moods out…which would have kept him off of the rating as oppositionally defiant. Did the parent balance the child’s behavior using the proper medication so the child would not be disruptive? Yeah, right. The parent would SELL the child’s medication in order to make more, sometimes an extra $200-300 per month.
And this same family has FOUR children that SSDI rates as oppositionally defiant. Ridiculous…and like I said this is just one case. Moreover, how is my wife supposed to be responsible for educating this kid when the parents don’t care…they see the kid as a paycheck.
Tie teacher pay and merit raises to parents and kids like this? No wonder my wife is looking to get out of teaching. She’s been doing it five years but she’s had enough.
1SG DB:
If you suspect SS fraud, see here: http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/48/~/reporting-social-security-fraud
The same goes for anyone who has Reagenesque “welfare queen” stories.
Your math is messed up. 1/4 of 8.8 is 2.2 million people allegedly receiving welfare by fraud. If you multiply that number by 1100 the amount of each recipient you get 2.42 billion. A lot of money and if there is fraud I want it stopped, especially since it hurts legitimately disabled people. But still nowhere near the budget buster you’re alleging it to be.
I should of said SSDI by fraud above.
Never mind post number 20 above. Your math is fine. I shouldn’t post tired.
De nada, Sippy. I’ve made that same error myself (forgetting to multiply by one or more factors) plenty of times. It’s an easy one to make. That’s why I generally double-check my math or use a spreadsheet these days. Makes it easier to avoid errors like that and/or find them when they occur.
I work for 37 years an accounting my job ended and I could not find a job I started working for the state for 5 years I had lupus and bipolar I got turned down for disability the first Tom and I’m 60 years old I am NOT pretending when I say I can’t work anymore. but I wo I’m 1 of the few that deserved it so I’m appealing the decision I hope you understand that some of the South there don’t just I get bentn’t lie and act crazy just to get it
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