Social Security disability insolvency?

Social Security disability on verge of insolvency

Published - Aug 21 2011 04:28PM EST

By STEPHEN OHLEMACHER - Associated Press

WASHINGTON — Laid-off workers and aging baby boomers are flooding Social Security's disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.

Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs.

The stampede for benefits is adding to a growing backlog of applicants -- many wait two years or more before their cases are resolved -- and worsening the financial problems of a program that's been running in the red for years.

New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security's much larger retirement fund is projected to run dry as well.

Much of the focus in Washington has been on fixing Social Security's retirement system. Proposals range from raising the retirement age to means-testing benefits for wealthy retirees. But the disability system is in much worse shape and its problems defy easy solutions.

The trustees who oversee Social Security are urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994. That would provide only short-term relief at the expense of weakening the retirement program.

Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can't find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That's 700,000 more than in 2008 and 1 million more than a decade ago.

"It's primarily economic desperation," Social Security Commissioner Michael Astrue said in an interview. "People on the margins who get bad news in terms of a layoff and have no other place to go and they take a shot at disability,"

The disability program is also being hit by an aging population -- disability rates rise as people get older -- as well as a system that encourages people to apply for more generous disability benefits rather than waiting until they qualify for retirement.

Retirees can get full Social Security benefits at age 66, a threshold gradually rising to 67. Early retirees can get reduced benefits at 62. However, if you qualify for disability, you can get full benefits, based on your work history, even before 62.

Also, people who qualify for Social Security disability automatically get Medicare after two years, even if they are younger than 65, the age when other retirees qualify for the government-run health insurance program.

Congress tried to rein in the disability program in the late 1970s by making it tougher to qualify. The number of people receiving benefits declined for a few years, even during a recession in the early 1980s. Congress, however, reversed course and loosened the criteria, and the rolls were growing again by 1984.

The disability program "got into trouble first because of liberalization of eligibility standards in the 1980s," said Charles Blahous, one of the public trustees who oversee Social Security. "Then it got another shove into bigger trouble during the recent recession."

Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Social Security is for people with substantial work histories, and monthly disability payments average $927. Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.

As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don't deserve.

Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.

Congress is targeting overpayments.

The deficit reduction package enacted this month would allow Congress to boost Social Security's budget by about $4 billion over the next decade to invest in programs that identify people who no longer qualify for disability benefits. The Congressional Budget Office estimates that increased enforcement would save nearly $12 billion over the next decade.

At the same time, the application process can be a nightmare for legitimate applicants. About two-thirds of initial applications are rejected. Most of these people drop their claims, but for those willing go through an appeals process that can take two years or more, chances are good they eventually will get benefits.

Astrue has pledged to reduce processing times for applicants' appeals, and he has had some success, even as the number of claims skyrockets. The number of people waiting for decisions has increased, but their wait times are going down.

"It's ludicrous to say that the backlog problem is getting worse," Astrue said. "The backlog problem has gotten dramatically better."

Patricia L. Foster said she was working as a nurse in a hospital in Columbia, S.C., in 2005 when she was attacked by a patient who was suffering from a mental illness. Foster, 64, said she injured her neck so bad she had a plate inserted. She said she also suffers from post-traumatic stress disorder.

Foster was turned down twice for Social Security disability benefits before finally getting them in 2009, after hiring an Illinois-based company, Allsup, to represent her. She said she was awarded retroactive benefits, though the process was demeaning.

"I have to tell you, when you're told you cannot return to nursing because of your disability, you don't know how long I cried about that," Foster said. "And then Social Security says, `Oh no, you don't qualify.' You don't know what that does to you emotionally. You have no idea."

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Steinhauer said:

Georgia just got $720 million additional unemployment (yes, unemplyment has been extended).

People are getting rewarded to not work.

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Foxrac said:

That's not true and many people have hard time to find a job due to condition of economy.

That's not fucking reward, you silly.

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"No one out there should anticipate that if they've exhausted their 99 weeks of benefits, that there'll be any new benefit coming," said Assistant Secretary of Labor Jane Oates.
Perhaps more sobering was the advice she gave to the thousands standing in line in Atlanta.
"Anytime you can get any job, you should take it," Oates said. "There are so many employers who look at dead space on resume. Even if it's not your dream job, go back to work."

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Steinhauer said:

So, what else do you call getting money for not working?

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Steinhauer said:

Georgia Gets $720M For Unemployment Checks - News Story - WSB Atlanta

The only thing the Obama stimulus bail out package proved, was that it RAISED unemployment and RAISED our national debt.

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Foxrac said:

It wasn't from influence of Obama and the market has gone worsen so nothing could you blame on Obama than just let elephant to stomp on ants.

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Foxrac said:

Unemployment checks aren't reward and they are not enjoyable to maintain the normal life. Many unemployed people are facing struggle life, even with unemployment checks too and they need jobs really bad but bad economy prevented them from happening.

I'm unemployed college student with multi-disabilities so your post does insult me for label as reward due unable to work and can't a job to meet my accommodation.

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Steinhauer said:

Ok then, your answer is to blame it on ant stomping elephants.

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Steinhauer said:

I have multi disabilities and I am employed - your answer offends me because you are attempting to put limits on what I can and cannot do.

If I were to tell you that a close friend of mine, that has CP, is deaf and was born with his knees facing each other, has endured 17 surgeries is also employed, would that offend you?

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Foxrac said:

Go blame on Obama whatever you want and it make looks stupid because bad economy was caused by many things.

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Steinhauer said:

Yes, the housing market, fannie mae and freddie mac, stimulus spending spree, wall street.

What was the national debt when Bush left office? What is it now?

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Foxrac said:

Wow, time for you to re-read the history from 2007 and 2008 when Obama wasn't president at this time.

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Steinhauer said:

So, what else do you call getting money for not working?

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Steinhauer said:

Who is the "current" President? Is it Bush? Still trying to blame the actions of the current administration on Bush?

When Obama took office in 2008, the national debt was $10.626 trillion. It is currently $14.071 trillion. That means that our national debt increased on average of $5 billion a day since Obama has been in office.

In 2009, Obama signed a $409 billion pork laden omnibus spending bill.

In other words, during the "current" administration - which would be the Obama administration - for the very first time in our nations's 236 year history, our credit rating has been downgraded. So, don't try to blame this on the Tea Party, or the Republicans. The Democrats controlled the house and the senate for two years, and look what happened.

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