Republicans Demonize Disabled Social Security Recipients in Latest Budget
Having failed in numerous frontal assaults on Social Security, the Republican congressional leadership several years ago adopted a new strategy for dismantling the program: attack and demonize Disability Insurance, which they consider to be its soft underbelly. With last week’s passage of the Bipartisan Budget Act of 2015, they drew blood.
We’ve been hearing it for years now: Disability Insurance is overgenerous, fraud-ridden, a well-intentioned program that’s mutated into a form of middle-class welfare. Criteria for awarding benefits need to be tightened, or the $150 billion DI trust fund will go bankrupt. The traditional solution for imbalances in Social Security’s trust funds—shifting money between the DI and the Old Age and Survivors’ (OASI) fund—shouldn’t be used unless “substantive reforms” are implemented.
How wonderful, then, that according to the Wall Street Journal, “Social Security will get its first upgrade since the 1980s to fix Disability Insurance,” thanks to a kumbaya moment between the White House and congressional Republican and Democratic leaders. The two-year Bipartisan Budget Act of 2015, which just passed the House and the Senate, shifts money into the DI trust fund to keep it from running out of money in 2016.
In exchange, however, it launches a veritable national jihad against those dreaded disability fraudsters.
According to a summary of the House bill, it “prevents evidence submitted by unlicensed or sanctioned physicians and health care providers from being considered when determining disability.” It expands a pilot project to investigate fraud, in which “Cooperative Disability Investigations (CDI) units, jointly run by the Social Security Administration (SSA) and the Office of the Inspector General (OIG), and consisting of staff from local SSA offices, the OIG, State Disability Determination Services (DDS), and local law enforcement, into a nationwide program.”
In an eerie parallel to the Republican crusade against “voter fraud,” the bill:
"Creates a new specific felony for conspiracy to commit Social Security fraud, punishable by up to five years in prison, fines generally up to $250,000, or both. [It] increases the maximum felony penalty from five years to 10 years for individuals in positions of trust (including claimant representatives, doctors and other health care providers, translators, and current or former SSA employees) who use their specialized knowledge to defraud the SSA, in addition to fines (generally up to $250,000). [And it] increases the maximum Civil Monetary Penalty (CMP) that the SSA can levy against individuals in a position of trust from $5,000 to $7,500 for each false statement, representation, conversion, or omission the individual makes or causes to be made."
Nobody wants fraudulent claimants grabbing benefits not intended for them. And according to news reports bruited by conservative lawmakers and policy entrepreneurs as well as the mainstream press, the problem is quite bad. “A small group of Social Security judges have improperly approved disability claims for nearly 25,000 people who didn’t qualify, costing taxpayers $2 billion over the past seven years,” AP screamed last November, based on a report by the SSA’s inspector general. A few years ago, Puerto Ricans on disability became the latest reincarnation of Ronald Reagan’s “welfare queens” when an unheard-of 63% of applicants from the island were found to have been awarded benefits to in 2010.
Big problem, right? Actually, no. That $2 billion in improper payments over seven years came to less than 0.3% of the $900 billion in disability payments the SSA made during that period. Indeed, it’s almost ridiculously hard to qualify for disability benefits under the present system—hardly the “conveyor-belt approval process” the Wall Street Journal editors describe. According to the Center on Budget and Policy Priorities, only 37% of applicants were awarded benefits between 2009 and 2011, and 14% of those approvals came on reapplication or appeal. Not only that, but thanks to a chronically underfunded SSA with too few administrative law judges to do the job, the process can take years, leaving many qualified applicants ruined or even dead before they receive a check.
(In April, the Washington Post further shocked readers with the news that “some Puerto Ricans” had qualified for disability benefits “because they lacked fluency in English.” The number who had thus obtained benefits turned out to be exactly 218, over a period of two years.)
Disability is hardly the fiscal disaster it’s made out to be, either. The trust fund depleted as a result of such familiar factors as population aging, the integration of women into the workforce, and the (legislated) rise in the retirement age for claiming full Social Security benefits. As these changes work their way through the system, the Social Security trustees report that DI costs peaked at nearly 0.9% of GDP in 2010-13 and will stabilize at a bit less than 0.8% going forward—hardly a crippling burden on society.
So what’s the point of the budget bill’s new holy war against disability fraud? Partly, politics: Departing House speaker John Boehner had been promising for months to exact meaningful “entitlement reform” as the Republicans’ price for expanding the national debt limit and saving the DI trust fund, and an unnecessary and probably costly crusade against fraud is a bone he could throw to the House Freedom Caucus. But the DI portion of the deal is also a critical part of the Republicans’ long game to dismantle Social Security.
Republican and center-right Democratic leaders have had no luck over the past three-plus decades making frontal assaults on the program. The budget deal gave them the opportunity to attack DI, which they consider to be its soft underbelly. Given the complex rules and standards governing who gets benefits and who doesn’t, DI is more like a “welfare” program than OASI, which is based primarily on earnings history. It’s therefore much easier to demonize disability recipients and build a case for throwing them under the train.
Under the (more) stringent new regime, applicants will have a harder time qualifying, many more will abandon the effort to do so, and the program may save a few measly bucks—although implementing and enforcing the new rules, if done properly (a big if), won’t be cheap either. But the GOP will be able to claim a victory at “reforming” a portion of Social Security—as Boehner is already doing. For the public, this clamps even more firmly in place the spurious notion of DI—and, by extension, Social Security as a whole—as “troubled” programs and opens the door a bit wider to future Republican efforts to redesign the whole system.
DI is the perfect subject for this experiment, because what Democratic politician is going to object to stamping out fraud? Certainly not the Obama White House, which like every Democratic administration since Jimmy Carter, is more concerned with the overall balance of federal spending than with the disposition of specific programs like Social Security. Progressive Democrats, both within Congress and without, bear much of the blame as well: The Republican effort to demonize disability has been out in the open for a long time; knowing Boehner and his crew were planning to go after DI this year, they should have mounted a far louder effort to defend the program and denounce the witch-hunt against fraudsters.
Instead, they largely stood by while the Republicans drew blood this week.
The budget bill contains other Social Security-and disability-related provisions as well. On the plus side, it makes it easier for disability recipients to work and earn money while receiving benefits, potentially encouraging those who can to return to full employment. More problematically, the bill closes off the “file-and-suspend” gambit that’s allowed one married partner to file for Social Security and then suspend benefits while the other partner collects. The deferred credits amount to a bigger benefit over time. The change is being billed as ending a loophole that allowed many well-to-do couples to fatten their benefits take when they could just as well do without—although many lower income couples have learned to use the ploy in recent years, providing themselves with some much-needed extra income.
Whether ending file-and-suspend is the right move or not is a tough call, but context is what’s really important here. Such gambits would be less important to lower-income households if Social Security benefits were closer to the level needed to support a reasonable standard of living in old age. At a time when many large corporations pay little or even negative taxes, while private-sector pension are disappearing, why is Congress bothering about file-and-suspend—or Puerto Ricans’ disability benefits, for that matter? Instead, it should be discussing how to modernize our broken retirement system by expanding Social Security.
Yet this is where bipartisan Washington has left us after months of backroom wheeling and dealing. The disabled will pay the price—and the vilification of the Social Security system has proceeded another step ahead.