Unfit for Work

NPR's Planet Money and This American Life have teamed up again and this time they're looking at the various Social Security disability programs. The tl;dr version is that the welfare reforms in 1996 probably weren't as successful as we thought, unemployment is probably worse than we thought (and has been for at least 20 years) and Social Security will run out of money sooner than we thought.

I caught a bit of that on the drive in. Even in my warped world, where I mostly deal with people with infirmities or mental handicaps rendering them incapable of meaningful work, or doing so without pain, or other hardship; I know that the system is majorly borked and some aspects of the ADA need reform.

SSI is going to become need based, likely you need to be at poverty level (adjusted for certain costs) before anyone will qualify.
The same for Medicare. SSD should go need based as well.

The bitter pill that needs to be swallowed is that pushing this off onto the next generation exacerbates the problem. The money is being bled out because all of the elderly right now are taking out the money. Time lapsing the medicine as people continue to live longer is ding jack.

And hopefully when the problem gets bad enough on the need based system, we will get actual reform so that everyone can enjoy a modicum of comfort, spending money in their old age.

I'm watching this story with interest as my severely disabled son is likely to be enrolled in SSI in the near future.

Wow, that article was thoroughly depressing to me. Not because there may possibly be some fraud in the federal disability system, but because this paints disability as everything Austrian economist and conservative thinkers construe as bad about government assistance; it works as a method to keep poor people poor, discouraging upward mobility and ultimately creating a class system of Americans.

It makes me want to grab hold of my bootstraps and strangle the reporter.

Seth wrote:

Wow, that article was thoroughly depressing to me. Not because there may possibly be some fraud in the federal disability system, but because this paints disability as everything Austrian economist and conservative thinkers construe as bad about government assistance; it works as a method to keep poor people poor, discouraging upward mobility and ultimately creating a class system of Americans.

This is not far off from much of my experience with a caveat.

By and large people who qualify for full SSD with additional SSI, Medicaid, Medicare, you are doing better than everyone at, below, or just above the poverty line. We are talking full medical, prescription, 1,200 a month, food assistance, and a bunch of freebies for your kids, possibly additional housing assistance in most states. For the majority of the poor, uneducated people in the country, getting a job at minimum wage (even the few that provide health insurance) would be a serious pay cut.

What few education credits(say to get a 2 year degree, learn a trade, earn a CDL) from federal or state agencies require that you work, go to school, and have a longer term plan. Poor people do not have long term plans. Poor people rarely think a month in advance.

This is not high minded economic thought. But most people presented with the situation I presented above, or working minimum wage, likely several minimum wage jobs and paying a large amount out of pocket for healthcare, paying for food, paying for rent, and everything your kids need; who would not pick the easier route.

Now then some people have a take away from this that SSD needs to pay less, food stamps need to offer less, Medicaid needs co-pays, etc. I am of the mind that some sensible regulation, to get a working wage, to get reasonable non monetary compensation, could go a long way to getting people into the work force.

That 53% number is only going to jump in the next 5-10 years.

The story was a bit odd in that it took a single county's situation as somehow representative of the system as a whole. It was extremely light on expert analysis, which worries me. We didn't hear much about the demographics of the locality. If jobs are drying up, we'd expect young and fit workers to move elsewhere, leaving the infirm and elderly behind. That can skew statistics. I might have missed it, but did she mention whether the rate of disabled workers is higher today than it was 10 years ago? I heard only that costs have risen. Also, with an aging population, I'd expect to see a higher rate of disabled workers because I'd expect that middle-aged and elderly workers would suffer a higher rate of back injuries. We'd also expect more people on disability in 2013 than in 1970 just due to population growth - population in 1970 was 204 million- it's over 300 million now.

There is a certainly some fraud in the system, but the story went beyond the idea that fraud is driving up costs and said it was a broader issue of too many workers looking for disability instead of retraining for desk work. However, not every injured worker can be retrained for lighter work, since desk jobs are already taken by non-disabled workers with higher level skills. It's not like every time a manual laborer gets injured, they get retrained to desk work and we pull a worker off a desk and put him into the manual labor job to maintain a balance in the work force.

All in all, I would have liked to have seen more analysis from someone who has studied the program before making any judgements.

From the report Funken, the rate is down a bit. The measured decline is a bit odd though. Rather than an isolated population, the measurement/comparison I saw was that in the 90's, 20 percent of the disabled population also worked. At present that is down to about 15 percent.

Lets start the cutting with NPR. They are such toadies.

So what is different now that justifies a news story? We know that workers in a modern economy are going to get injured, just like we know workers are going to get old and not be able to work after a certain point. We've recognized the efficiency of using government to provide support for injured or elderly workers instead of traditional familial, religious, or trade organizations since the early 1900s. We match tax revenues to outlays and we don't have a problem. And if there is fraud in the system driving costs up, then we should be trying to attack fraud.

I can't help but feel there is a subconscious acceptance of right-wing dogma behind all these "unaffordable benefits" stories that doesn't fit with reality. It reminds me of when journalists repeat that the claims that we're approaching a tipping point in government debt and need to slash benefits in response, after 30 years of tax cuts that made these programs unaffordable by design.

Well Funken, it is part cuts, part mere scale, part inflation. Many of these programs-Social Security, Medicare, VA benefits envisioned benefits were to be for all-based on a much shorter life expectancy, in a much less expensive market.

Cost of living(housing, food, fuel, etc) has been steadily increasing ahead of GDP, cost of healthcare is increasing exponentially relative to GDP.

The American System was designed just like the all inclusive cable package-pay a premium price, get everything. Then we spring the other way to a "need based" system, you damn well better be starving and on the street before there is help.

That is incredibly expensive and wasteful. There is a middle ground, need based system. I rather like the French healthcare system as an example. The government sets prices, negotiates rates like any insurer in the world, and pays for treatment. Healthy people do not require treatment, cost the system nothing. If you retire with a 500,000 IRA, a paid off house, you do not need Social Security barring extensive medical costs.

This will probably never work in America, because the focus is on the exceptions-the gall of tax dollars to pay for contraception unless the DOH can get spun off as to an independent regulatory agency.

KingGorilla wrote:

Well Funken, it is part cuts, part mere scale, part inflation. Many of these programs-Social Security, Medicare, VA benefits envisioned benefits were to be for all-based on a much shorter life expectancy, in a much less expensive market.

What I've read is that the social security projections accounted for life extensions. (maybe Robear or OG Slinger can help me out with numbers here, because they usually know where to find that kind of info). Medicare is a separate issue. Just an entirely different animal at this point.

If you want to suggest a needs-based system for disability, you should have some estimate of the money that would be saved. How many disabled workers do you think there are that can replace income lost by not working with some other income? I haven't seen anything that indicates that the overwhelming majority of workers rely on their labor to earn money.

I pay for private disability insurance, so I would be covered. But I don't know how many other workers do in the modern economy.

It is not about savings, it is about treading water. Even as the VA, or Social Security expanded it became more and more difficult to maintain existing coverage. IE the program needs to wriggle in to fit a budget.

Savings is immaterial. No public insurance program can be treated in that manner. This insanity over savings and budget balance is poisoning the country. It is government's job to spend money on losing propositions-infrastructure, utilities, education, defense, etc. When it stops is when private industry stops-the bridges collapse, the power grid over-loads, the work force is no longer qualified, etc.

Social Security, and Medicare will at some point reach more or less an equilibrium as birth rates are steadying off to more or less maintained rates. And live expectancy's increase is relatively predictable. In this instance, the program needs to be more or less divested from congressional control. Alexander Hamilton, the State of California can tell you what harm comes of democratically controlled public services/utilities. sh*t never gets done.

KingGorilla wrote:

It is not about savings, it is about treading water.

I disagree, but put that aside for a moment. What percentage of disabled workers will be able to replace lost income with another source of income?

The budget for the program can be anything we say it needs to be. If we need to raise it by 10, 20, or 50 percent we adjust the revenue stream to match. There may be some upper limit on taxation where tax rates hurt growth, but I don't think we're anywhere near that.

This is, what I see as exception hunting. What social security has an issue with is all people over a certain age cash out the same check, that is the big portion. The big problem is SSI is just a blank check to all persons over a certain age, every month, until they die, and then still paying to a widow/widower after death.

The issue with disability as it stands now is that it is a physical standard based on a 1950's concept of work, for a job world that is becoming less and less physical. A wheelchair, deafness, blindness is not a serious impediment to working data entry for example. Stephen Hawking is disabled, still gets books written and lectures done. For the majority of skilled workers or professionals on SSD, they want to get off as soon as they can because they are not making enough money. For the impoverished, the solution is to make it easier to make a living without government assistance-living wage, affordable low income healthcare that is not based on being at poverty level.

Now my perspective is a bit warped. The I think Social Security is behind the curve relative to the VA-and the VA is a f*cked up place (but it is always the first system to get f*cked up, as a warning to civilian programs). The VA is to civil programs in the US, what Mercedes is to car safety and convenience features (first to offer ABS, airbags, cruise control, GPS, etc.).

The VA offers much the same services- VA Pension (like SSI), Disability (Like SSD), but there is another tier-VA Total Disability, Individual Unemployability. That means your mental condition, any disability or combination of disabilities makes it nearly impossible for you to work-unable to sit or stand for extended periods, necessity of medical equipment making gainful employment impossible, etc.

Social Security has no analog to TDIU. There are some scales, but it is far easier to be determined fully disabled in the SS system.

KingGorilla wrote:

The issue with disability as it stands now is that it is a physical standard based on a 1950's concept of work, for a job world that is becoming less and less physical. A wheelchair, deafness, blindness is not a serious impediment to working data entry for example. Stephen Hawking is disabled, still gets books written and lectures done.

We know that a certain number of workers will get injured badly enough to be out of work in any given year. My private disability insurer is surely aware of what they need to take in to pay out claims. Certain claims will be false, and other cases will be on the margins. But overall the system hasn't changed in any fundamental way.

Regarding mitigating the costs by re-employing injured workers, what percentage of jobs involve no manual labor? Are there enough open non-manual labor jobs to absorb all the injured manual laborers in any given year? I don't know the answer, but if you're going to argue for a change in the current approach, it would be useful to have some kind of estimates for the job creation potential.

Again, it is not about job creation. Regardless of the rhetoric, the private sector needs to create jobs before we start talking about the middle age line worker with a sciatic lumbar getting work at the AT&T call center-or going to school to become a paralegal. This is not Reagan stating the mentally ill are physically capable of working and should be cut off. This is about a large system; taken as a slice (SSD) is not the problem. SSI is the problem. But the system in total needs to shift away from everyone partakes given the current structure. If you say the elderly with monthly income more than 1,000 from work or pension, or with assets in excess of 250k are ineligible for SSI, that saves the system money. If you adjust the age for SSI based on average life expectancy, the same with Medicare that saves the system money. The average life span is going up, working age is going up, the age to receive Medicare went down, the age to receive SSI stayed the same. SSD is not, repeat not, an entitlement-you need to qualify for that. SSI is an entitlement and the real problem.

SSD is ripe to criticize because it is a pretty neutral area. It is a great place to talk about cuts. But just like talking about how all people under 50 will not receive entitlement Medicare; we are not focused on the issue. There damn well is room to improve SSD, but the 800lb gorilla is SSI.

I want all elderly people to get a state pension, I want all veterans to get a free house and a Harvard diploma. But if we insist on these fixed budgets set by congress, that is impossible. If we want retired Americans to not have to worry about paying rent, eating, getting prescriptions, then we need to acknowledge that is very expensive.

There are a bunch of other tweaks you can do to SSI that create solvency. And, yes, you can turn it into a welfare program. It was specifically designed to not be a welfare program for political reasons. That's at least arguably why it never gets cut. Means testing for social security has often been raised, and there's probably a basket of research out there on the benefits and problems created by that approach. If you want to talk SSI's problems, I'm not the one you should be arguing with. I commented on a story about SSDI.

CPBB has a page on the issue of SSDI here that I'm going to sit down and read, because I don't think the NPR story was giving me the full picture.

As far as going from SSD to another job. Some states offer some services like this, even education credits. When it comes to blood pressure, weight, treatable mental illness that lands someone on SSD-mandating treatment is a good step. Ostensibly, a person who is disabled due to obesity, would no longer be disabled if required to attend physical fitness, and possibly gastric bypass surgery. Now that you are 5'9" and weigh 200 pounds, go forth and sew upon the fields. For Physical injuries, offering opportunity for new training, education even requiring that would go a long way.

I see this as expanding the services offered by Social Security. Sell it to the Republicans as Social Security teaching a man to fish. The bible belt will eat it up. This is one of those nutty liberal solutions that is a net gain for the system, because each person off off of SSD and paying payroll taxes is more money.

I just wanted to be clear, above, that while I know fraud or fringe cases exist (two of them as my clients, SIGH!) that by and large the Social Security and Medicare systems are in fact operating the way they were designed. They problem is that they were designed based on insufficient data, and are not flexible enough to cope with that. It is a lot like the cable package point I made that locks you into a 5 year agreement. You are held hostage. The VA system was operating under a design from the 40's, and then was broken by the Cold War and Vietnam War. It was completely restructured under Bush Sr. Entitlements went away, to the detriment of our Veterans today. It it is buckling again in need of more reforms. We never reformed SS or Medicare, we just kept tossing money into the sinkhole.

Neither do I see turning Medicare, SS into welfare like the VA has become as the best solution. But I see it as the only viable solution given present conditions and prejudices. In instances such as these, the more direct democratic process is poison.

The simplest thing would be to nationalize healthcare. We don't need the VA system, plus medicare, plus medicaid, plus federal worker healthcare insurance, plus state health exchanges. But that is never going to happen. We spend far more on healthcare in this country as a percentage of GDP than any other industrialized nation. That has nothing to do with having too many old people. It's just because our system is so inefficient.

SSI is a bit easier. We're facing an eventual 25% funding shortfall, if I read the SSA's report correctly, which could be solved by a combination of a payroll tax increases, benefit freezes, and eliminating the payroll tax cap. There are probably other ideas out there. But we don't have a government capable of compromising. If it was up to me I'd abolish the senate and let the House Republicans and Obama work it out, but this too is not going to happen.

Get a room you two!

But we don't have a government capable of compromising.

This will pass.

KingGorilla wrote:

What few education credits(say to get a 2 year degree, learn a trade, earn a CDL) from federal or state agencies require that you work, go to school, and have a longer term plan. Poor people do not have long term plans. Poor people rarely think a month in advance.

And those who do eventually think long term often lack the resources to get a useful degree or certification. Especially once kids enter the picture. A family that's already struggling usually can't bear the additional costs that come with furthering one's education. Unfortunately the ones that make it the easiest are the for-profit schools whose main concern is getting enrollments, not getting better jobs for their students.

Um, guys, Funkenpants and I were having a private conversation.

Robear wrote:

This will pass.

Everything passes eventually, but I don't see how the logjam breaks as long as the senate requires a super-majority to pass legislation and blocks all but the most inoffensive judges to the court of appeals. I wasn't joking when I said we should eliminate the senate. That's not going to happen, but Harry Reid and crew could have least rid us of the filibuster when they had the chance.

KingGorilla wrote:

Um, guys, Funkenpants and I were having a private conversation.

I'm wondering what we'll do about the swelling cohort of autistic children who will soon be of working age.

I don't know. When I see a democratic president offering to cut $10 billion a year from our $600 billion per year defense budget while cutting $73.5 billion a year from entitlements (averaged over the next decade), I'm not expecting much to happen to benefit disabled people in the future.

Maybe we can weaponize these kids. That's the only way to guarantee funding.

Well the buck is being passed to the states and the citizens, much the same as the cuts on Perkins and Stafford loans.