A recent episode of This American Life addressed the explosion of Social Security Disability claims over the last 20 years. We have 14 million people on this program and they don’t count in the unemployment numbers. So when you hear the pundits on TV talk about unemployment, picture 14 million people, many receiving checks for things like back pain, bipolar disorder, and other maladies that are common in the workforce. Realize that those 14 million people, collecting an average of $1000 per month plus free health care, are not part of the unemployment numbers you are hearing.
The episode is chock-full of interesting information and the whole hour is well worth your time, but I’ll try to summarize the points that jumped out at me. In 1984 Congress changed the definition of “disability” to include things like back pain and mental disorders, which are now the majority of disability claims. TAL visited a town where fully 25% of the inhabitants are on disability; yard sales are timed after the issuance of government checks because that’s when people can afford the items. In another town, a mill closed down in the town, and it sounds like pretty much everybody who had worked there checked out of the workforce.
Social Security disability claims have exploded, despite any corresponding decline in our health — and despite the passage of the Americans with Disabilities Act, which in theory ought to make it easier for people with disabilities to work. We even issue checks for children with learning disabilities, and their caregivers depend on the money . . . which keeps coming in, as long as they are still struggling in school. Do you think they continue to struggle in school? Many of these children quickly learn that even a part-time job as a teenager will cut the amount of their disability check, and they are thus discouraged from working, and learn to go on permanent disability when they reach adulthood. We are teaching generations of children to collect checks for a living. As the reporter says:
Kids should be encouraged to go to school. Kids should want to do well in school. Parents should want their kids to do well in school. Kids should be confident their parents can provide for them regardless of how they do in school. Kids should become more and more independent as they grow older and hopefully be able to support themselves at around age 18.
The disability program stands in opposition to every one of these aims.
But what about welfare reform? Didn’t we toss millions of people off the welfare rolls in the 1990s and beyond? Um, not exactly. We have, to a great extent, simply been moving them off the welfare rolls and onto the disability rolls. See, what we think of as “welfare” primarily comes out of state budgets — more so after the welfare reform law. So states save money when people get off the welfare rolls — even if they are simply moving onto federal disability rolls. With these incentives, it should not surprise you to learn that states contract with companies whose purpose is to comb the welfare rolls to find people who might qualify for federal disability. These companies have call centers, and small armies of people call these welfare recipients to ask: Can you think of any ailments you have that keep you from working? Does your back hurt? Do you have high blood pressure? Sleep apnea? Diabetes? Depression? Great! We’ll set you up with a doctor and we’ll help you apply for disability, and soon enough you’ll be collecting four times what you’re collecting now!
The head of one of these operations calls it “win/win.” The state wins because they get people off their welfare rolls. The individual wins because they collect a ton more money.
Somewhere in there it seems like there’s probably a loser, but he doesn’t mention those people. (Hi, federal taxpayers!)
And hey, if you are rejected for disability, don’t fret. The government pays lawyers who can successfully appeal a decision to deny disability. You read that correctly. If your lawyer wins an appeal of your denial of disability status, he collects a portion of your back pay, and that check is payable directly by the federal government to the lawyer. One lawyer interviewed had 30,000 clients and made $68 million last year appealing disability denials. Total payouts to lawyers exceed a billion dollars per year.
And what does one of these appeal hearings look like? Well, the lawyer goes into a court in front of an administrative law judge, makes his case, and then the government lawyer — oh wait! Silly me! There is no government lawyer! The lawyer stands to gain a lifetime payout of $300,000 or so, and the U.S. has absolutely nobody representing its interests. In theory, the ALJ is neutral, is an employee of Social Security, and doesn’t need the other side presented. But one of the judges interviewed said he often looks to the part of the courtroom where there ought to be a government lawyer, because he is at a loss as to what the other side of the story should be.
To Obama, of course, all of this is a feature, not a bug. It helps further his goal of redistributing money and making a majority of voters dependents on the welfare state, thus entrenching a permanent Democrat majority.
But to any sane person, a story like this makes you want to scream.
If you can’t devote an hour to listen to the story, go here for a summary of the story with a lot of well-presented graphs that show just how deep the problem runs. It’s really a great job by the folks at Planet Money and This American Life.
P.S. I probably would have posted about this anyway, as I’m a big fan of TAL, but I should note that elissa flagged the episode in comments, reminding me to do a post. Thanks, elissa.