The Congressional Budget Office (CBO) recently released a report that projects Social Security Disability (SSD) Insurance benefits to rise as much as 70 percent over the course of the next ten years. This projected increase is based on the larger number of SSD applications being submitted to and approved by the Social Security Administration (SSA).
This announcement comes amidst an already crisis-driven evaluation of the entire Social Security system, including Old Age (retirement), Supplemental Security Income (SSI) and SSD benefits. All Social Security programs are funded through tax dollars that are then invested in trusts. The funds from those trusts are used to provide benefits to recipients in each of the SSA’s programs.
The trusts for each of these programs were believed to be solvent – or capable of providing the necessary funding – for another decade or more; however, given the increase in SSD applications and in the award of benefits to a higher number of disabled workers, the CBO is now projecting the SSD fund will be bankrupt in just four years time.
The latest figures available from the SSA show 8.3 million workers received SSD benefits in the 2011 fiscal year. More than $119 billion dollars in benefits were paid to those recipients, which was about 18 percent of the overall spending of the SSA for 2011.
According to the CBO, if the number of applicants and SSD recipients continues to follow the current trend, spending for SSD will hit around $204 billion by 2022. Additionally, because SSD and SSI recipients are also commonly eligible for Medicare and Medicaid benefits as well, other funding issues arise with these programs if the current SSD trend continues. For example, in 2011 alone, the SSD program resulted in an additional $80 billion in expenses for the Medicare program.
The CBO is not recommending the SSD program be done away with; however, something must be done if the program is to survive and continue to provide support to disabled workers. The CBO’s report pinpoints the need to focus on particular aspects of the SSD program, including:
- The evaluation process and criteria for initial and continuing eligibility
- The programs, services and other features of the SSA’s program that assist disabled workers in finding and maintaining gainful employment
- The administrative procedures of the current SSA programs
- The funding methods for supporting all SSA programs
Republicans on the CBO also point out in the recent report that the decline in the creation of new jobs is a driving force for the rise in SSD applications and subsequent spending. The creation of new jobs has lagged significantly behind, with new SSD applications out numbering new jobs created in the last three months. As more and more workers become disabled – unable to continue working in their current careers – new employment situations must be sought. If no suitable alternative employment is available, disabled workers are left with no other option but to pursue disability benefits in order to survive.
Currently, only about one percent of all SSD recipients ever return to work. The creation of new jobs and the promotion of the employability of the disabled is essential to curtail spending. Additional efforts must also be made for vocational rehabilitation (through the PASS program), which is a process through which disabled workers learn new skills and acquire new knowledge and abilities in order to find work in a different job sector in which their disabling condition does not prevent employment.
Of course, the creation of new jobs in which those with disabilities are capable of contributing is also crucial, and employers must work diligently to make use of the skills and abilities of the disabled workforce. Getting more people back to work is perhaps the most effective means of reducing the cost associated with the SSD and other programs. The failure to make accessibility of employment a priority could result in a nationwide crisis in as little as four years when the SSD fund runs out and more than 10 million Americans are left without essential financial and other resources.
