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Guest Host: Frank Sesno
Social security disability insurance currently pays monthly benefits to 11 million Americans. But a financial shortfall in the program could slash those benefits by 19 percent next year. A battle is brewing between the White House and Republican lawmakers over replenishing the disability fund. We take a look at disability benefits, politics of the program and what changes might come.
- Jason Furman Chairman, the Council of Economic Advisers.
- Rebecca Vallas Director of policy for the Poverty to Prosperity Program at the Center for American Progress.
- William Hoagland Senior vice president, Bipartisan Policy Center; former vice president of Public Policy, CIGNA Corporation and former top aide to Senator Bill Frist.
- Mary Agnes Carey Senior correspondent, Kaiser Health News.
MR. FRANK SESNOThanks for joining us. I'm Frank Sesno sitting in for Diane Rehm today. She's on vacation. Social Security Disability Insurance, it's currently paying monthly benefits to some 11 million Americans, but a financial shortfall in the program could slash those benefits by 19 percent next year so a battle is brewing between the White House and Republican lawmakers over replenishing the disability fund.
MR. FRANK SESNOJoining me in the studio to talk about disability benefits and the politics of the program, Rebecca Vallas of the Center For American Progress, William Hoagland of the Bipartisan Policy Center and Mary Agnes Carey of Kaiser Health News. Welcome to all of you.
MS. MARY AGNES CAREYThank you.
MR. WILLIAM HOAGLANDGood morning.
SESNOAlso joining us, and we'll start her, by phone from Washington is Jason Furman. He's chairman of the Obama administration's Council of Economic Advisors. So Jason Furman, let's start with you and let's start with you explaining, if you would, the administration's proposal for warding off these cuts that we're hearing about that could be looming for disability benefits.
MR. JASON FURMANWell, thanks so much for talking about this really important issue. And let me start with an explanation.
FURMANReally brief, about how disability insurance works.
FURMANAnd then I think that can help motivate and understand our proposal, which is really very simple.
SESNORight. And it's part of the Social Security Administration.
FURMANExactly. And that is the key. There is an integrated Social Security program. Social Security provides benefits for you. You pay in over the course of your working years and then if you can no longer work by virtue of disability, if you reach an old age and are ready to retire, if you die and are survived, in all of those circumstances, Social Security pays out benefits.
FURMANThe Social Security system as a whole has enough money to continue paying full benefits for another nearly two decades through 2034 and the way it does this is you, as a worker, your half of the payroll taxes, you pay in 6.2 percent payroll tax on your earnings into the system and that's what's keeping it going, paying full benefits through 2034.
SESNOMatched by your employer.
FURMANExactly. Matched by your employer. You pay 6.2, your employer pays 6.2.
FURMANI mean, then the -- through a quirk in the system, the money you pay is almost as a matter of accounting divided up and part of it goes to the retirement and survivors portion and part of it goes to the disability portion. And sometimes those amounts don't exactly line up with what's needed and so our proposal is a really simple one. Just reallocate those two numbers, the amount that goes into those two trust funds.
FURMANIt'll keep the combined trust fund solvent through 2034, just as it is today, paying full benefits. It will extend the life of disability insurance. It's really easy to do and it's something, in fact, that Congress has done on a bipartisan basis under both parties in control of Congress, presidents of either party for decades now by, you know, one way of counting eleven times before. So it's a really simple thing. Reallocate the payroll tax, prevent this really deep benefit cut for 11 million people who are counting on those benefits and then we'll have time to address the Social Security program as a whole on an integrated basis.
SESNOWhat I love about what you've just said is it sounds so simple. I heard you use that word several times, but as we know, nothing is ever simple in Washington, least of all when it comes to the administration and the Congress and something like Social Security. So addressing some of the issues that Republicans and others have raised about this, they're two separate programs, many believe they need to be kept separate so that they can be administered separately and, of course, what the Republicans are talking about are these larger reforms that need to be addressed within the disability program itself.
SESNOSo why is the White House resistant to linking the SSDI fund, the disability fund, replenishing that with the structural changes that Republicans and others are asking for?
FURMANRight. I mean, first of all, I think it's right to think of them as the same program. Workers pay into them. Workers don't see the differences between these different payroll taxes. You pay your payroll taxes and then, based on that, you get this benefit and the benefit is a retirement benefit, a survivor's benefit and a disability benefit. The formulas that determine the benefit levels are the same for all of those you smoothing transfer over from one to the other so I think this really is one integrated program.
FURMANThe proposal I have, as I said, has been done numerous times before and it works. There is no other way to do it without reallocating the payroll tax, even if you took every...
SESNOSo what do you think -- what do you think are the biggest problems that need to be addressed in the disability program?
FURMANI think there are certainly issues to address there and we've put forward ones that, you know, really center on, you know, a program that already has quite low levels of fraud, but you can always make progress in terms of program integrity and we have proposals for additional funding for continuing disability reviews to make sure, you know, that when somebody is awarded benefits and maybe their condition changes over the years that you're going back and making sure they still should be getting their benefits.
FURMANThat's something, if we had more money, we could make sure we're doing a better job. But then, I think the bigger goal is making sure that people who can work get the services and support they need to stay on the job or get back to work.
SESNOAnd one of the issues that's raised is this whole business of getting people to work, getting them to work so those who should be working are working and those who want to work can get to work without being docked benefits along the way. That's one of the quirky things about this. So is that something that you think needs to be addressed and does the White House have a bipartisan approach to this or are you going to go it alone?
FURMANYeah. We'd love to work together on that issue. In fact, with funding provided Congress, we're developing a demonstration program to figure out better. I think, frankly, a lot of the getting people back to work, it sounds great, it sounds easy. We really don't have all the answers there so I think a lot of experimentation, a lot of willingness to scale up what works is going to be important in that area, but we shouldn't confuse that with this, you know, basically artificial insolvency issue at the end of 2016.
FURMANThat's an artificial issue, even if you did everything you wanted on fraud, everything you wanted on getting people back to work. You know, cut benefits, did whatever anyone has put out there, that would barely extend that 2016 date. There really is only one way to prevent that benefit cut for these 11 million beneficiaries and that's reallocating the payroll tax. So we're saying don't confuse that with these other issues. We can make progress on a lot of issues, but when it comes to the benefit cut, let's just make sure we're doing the simple thing to make sure it doesn't happen.
SESNOJason Furman, I want to close with one last question with you because I think we've got your prescription on this very well and we've got a great panel here and we'll discuss that and other things, but let's move off of policy for just one second here. It's not completely off of policy, but I want to humanize this. Something like 70 percent of working age people with disabilities want to work. They want a job. They want to be productive members of the economy.
SESNOAnd I know from personal experience because I have a disabled person in my family that those jobs are hard to get and to keep and to create, especially in an economy such as ours where things are sometimes as difficult as they are. What ideas do you have and does the administration have for putting these people who want to work to work and giving them something meaningful to do in our economy and society?
FURMANYeah. And I think that's exactly the right question and I don't think there's an awful lot of people who aren't working because they can get, you know, the princely sum of, you know, $10, $15,000 a year on disability insurance. I think these are people that want to work. You know, one is the overall economy, you know, more jobs, continuing to bring the unemployment rate down, that's the best way to bring, you know, new workers into the workforce, especially people who have a hard time.
FURMANSo those types of macro policies matter. The, you know, addressing the issues with workplaces and helping them understand that, you know, flexibility in the workplace -- and this isn't just true for people with disabilities, it's true across the board -- can lead to attracting a better workforce, a more motivated workforce and can increase your productivity and then just additional support with, you know, transportation and equipment, other technologies that people need to work is all going to be part of the solution here.
FURMANBut I think that's, you know, exactly the question we should be asking, not, you know, fretting about, you know, is disability too generous and causing this problem. That's not the main issue we have. The main issue we have is what can we do proactively to help people.
SESNOI think we'll do both of those questions. But Jason Furman, chairman of the Council on Economic Advisors, thanks so much for joining us. I appreciate your time.
SESNOLet's come to the studio now where we're talking with Rebecca Vallas. She's director of policy for the Poverty to Prosperity program at the Center For American Progress. William Hoagland, he's the senior vice president of the Bipartisan Policy Center and he's former vice president of public policy, Signa Corporation and a former top aide to Senator Bill Frist when he was in the U.S. Senate. And finally, Mary Agnes Carey, she's senior correspondent with Kaiser Health News.
SESNOThanks again to all of you. And to the audience, please join us with your comments or questions. 1-800-433-8850. Or drop a note to us at firstname.lastname@example.org. Bill Hoagland, your thoughts on what Jason Furman had to say in his simple prescription for solving this.
HOAGLANDThank you and good morning. I think Jason is absolutely correct. Nobody wants to have the trust fund exhaust next November, 2016, in the middle -- particularly in the middle of a congressional election going on. Nobody wants that. Republicans do not want that. Also, we agree with -- I think everybody agrees that we want to find ways to produce, as you've suggested, ways in which we can create work incentives back into this program with these -- these disabled individuals want to work.
HOAGLANDAgree that we need to have more resources within the program to be able to carry out work programs, review programs, make sure -- the difficulty here, why it's, as you say, it's not as simple as Jason has outlined, the problem is the United States Congress has passed a rule that says you cannot do what he had suggested.
SESNOWe will come back and look at that rule. We're going to take a quick break. You're listening to "The Diane Rehm Show."
SESNOAnd welcome back to the Diane Rehm Show. I'm Frank Sesno. We're talking about the Social Security Disability benefit today and the looming cuts that will happen if the Congress and the president of the United States don't agree on what to do about them. Bill Hoagland from the Bipartisan Policy Center, you were speaking just a moment ago, before the break, about a rule, and I said wait, we'll hear about that after the break. So as promised...
HOAGLANDAnd the rule is set up in the particulars passed in the House of Representatives when they set up the rules at the beginning of this Congress. And they adopted it also in what they call their budget resolution, which basically says what Jason had outlined, was a transfer, a re-allocation from the Social Security Fund to the Disability Insurance Fund.
SESNOThat's been done before?
HOAGLANDIt's been done before, 11 times. There's no question it's been done before, no question that's a simple solution.
SESNOSo Rebecca Vallas, why is that a problem now?
MS. REBECCA VALLASSo I think just to call a spade a spade, and as Jason alluded to, what we're really seeing here is effectively a manufactured crisis. We have conservatives who would love to use this action-forcing event, which 2016 is, right, Congress does need to act to reallocate or rebalance the trust funds, as its sometimes called. And because of that action-forcing event, we've got conservatives who would love to use this as an opportunity to sort of backdoor in to the overall Social Security Program and pave a path towards cuts. And they see this as the moment to set the table to do that.
SESNOMary Agnes Carey from Kaiser Health News, you've written about his. I loved your little frequently asked questions.
SESNOI learned all sorts of things from that.
SESNOExplain how these shortfalls have been addressed, and is this a manufactured crisis?
CAREYWell, in the past, as Bill and Rebecca have said, this money has been transferred from both funds back and forth. And so to the sense that they're not doing it as they've done it before, Republicans are using this as calling -- a way for them to try to call what they feel are problems that need to be corrected, right. But also to what Bill was talking about, I think that they'll definitely want to try to work on it this year rather than next year because of the elections, but Democrats may want this to drag out a little bit longer.
SESNOLet's do a frequently asked questions with you here just for a couple minutes to lay the...
SESNOI have an email here from a listener. What's the average disability benefit?
CAREYIt is about, beg your pardon, $1,165 per month. It's about $13,980 a year.
SESNOSo just shy of $14,000.
CAREYJust shy of $14,000. It's...
SESNOThat's not a fortune.
CAREY...not a fortune.
SESNOBut for those who are receiving it, most of them are using that as a primary or principal form of financial support for themselves, right?
CAREYRight, and you're allowed to make just over about -- just under $1,100 a month, you know, in additional income, but the problem is if you exceed that income, then you lose your benefits. That's kind of a cliff problem that's out there.
SESNOWhat's the total amount that we're spending on SSDI in this country?
FURMAN$148, $150, about $150 billion.
SESNOIs that a lot?
FURMANThat's a lot of money. That's grown very fast. The population growth has grown six -- in six-fold over the last few decades. So no, it is a major program that's grown. And reasons for it, there are reasons for it, but yeah, definitely a major funding program.
SESNORebecca, what are the reasons for the growth in the disability program?
VALLASSo it's important to really break them down because I think to say that the growth in the program is a surprise would be to say that it was a surprise that the sun rose in the east today and that Wednesday came after Tuesday, right. We knew this growth was coming. We knew as long...
SESNOIt just didn't cost of billions of dollars then.
VALLASWell, but it's billions of dollars that we as taxpayers and workers have invested in this program.
SESNONo, I mean the sunrise didn't cost...
VALLASOh no, sunrise, I hope, didn't cost us. Well, I'm not the expert. I can't opine on that. But what I will say it's largely a story of demographics. We actually have some really helpful new research from Harvard economist Jeffrey Liebman decomposing the reasons for the growth, and it is almost entirely, if you look back at the last three decades, a story about the baby boomers aging into their high disability years, women entering the workforce in greater numbers in the 1970s and 1980s, population growth, as well, and also, you know, Jason Furman alluded to this, that the Social Security system is very much integrated. The fact that we've raised the retirement age in Social Security means we actually have more people staying on disability insurance longer before converting over to retirement.
VALLASSo a lot of reasons why the program has grown, but it's not a surprise, and it doesn't mean there's anything wrong.
HOAGLANDI agree with Rebecca that demographics have been a major factor. I also agree with Jason that the economy has been a major factor. But there's a third factor that the Congressional Budget Office and other researchers have looked at, and that is there were some major changes in the eligibility criteria established in a 1980 law that really moved it away from some more of a specific kind of criteria for qualification to a more of a subjective.
HOAGLANDAnd I'm not suggesting in any way, shape or form that this isn't important, but that subjectivity of it made it possible for many more people to apply and create some of the backlog and some of the work that's developed in this program and created the administrative problems.
SESNOWhat are the major reforms that people are calling for?
HOAGLANDThe major reforms, I think, that people are calling for is -- first of all, let me back up and say that I think that everybody agrees that you cannot reform this program quickly enough to avoid the crisis that we're facing now. We have to...
SESNOSo we need a short-term fix.
HOAGLANDWe need to do something, whether it's borrowing -- there are other ways besides reallocation. You can borrow and pay back the fund. There are different ways of doing this. But basically what I think the Republicans and the Congress are trying to say is that if we're going to move forward with this program, this is a microcosm of a bigger problem we have with entitlement programs, that this program has a $41 trillion unfunded liability. We have to think -- find ways to fund this program into the future, to pay those benefits in the future, and that requires looking specifically at work incentives, making sure that the people that are on the program are on there for reasons that they really do -- that these are people that need to be on there.
HOAGLANDBut there are -- there is issues there as it relates to fraud that have been -- I'm not suggesting in any way, shape or form that that's the major issue, but Republicans are not going to agree to moving this program forward unless there are some of these issues addressed.
CAREYThere's also thought about when the disability application starts. Could you get in at that point and try to find an accommodation for that worker, making it more attractive for the worker to stay, making it more attractive for the employer to have that person stay. Before the show, Bill and I were talking about how much the economy has changed, how much the Internet has changed everything. Is this a way to accommodate people, to give them the opportunities you talked about at the top of the show, to work.
CAREYOne other idea that had been out there, I haven't necessarily heard it on Capitol Hill, was kind of experience rating for the employers for this -- for the division.
CAREYYou pay 6.2 percent now. For example, it's done in unemployment insurance. It's done in workmen's compensation. If you as an employer have a high number of those cases, your -- the amount of tax you pay into the program might increase. That's another thought because the feeling is that maybe employers could look at how their -- the jobs are set up, how the workplaces are set up, and are they creating, perhaps inadvertently, conditions that lead to disability. How much of a role do they have?
SESNOYou know, I want to talk about the fraud issue a little bit because this is something that always comes up. Bill, you said it wasn't a huge problem, but it is an issue for people nonetheless. And I want to refer to an email that we've got here by way of asking this question. This is from Salada (PH), who writes from McLean, Virginia. Citing an NPR program, in one Alabama county, nearly one in four working-age adults is on disability. And Salada asks, are there standards for someone to be designated eligible for disability? How did the doctor in Hope, Alabama, manage to put a quarter of the people there on disability? I'm not familiar with that program, by the way, I'm just passing along the question here. And why have the number of those on disability tripled in the last six years?
HOAGLANDAgain, I think there are specific -- there is specific provisions for qualifications for the disability program. To be qualified for the disability program is not only have you been -- worked in the workforce, and have you been paying in your Social Security disability taxes, but also you're unable to work because of a medical condition. And what I was referring to earlier was the medical condition. The somewhat subjective determination of what that medical condition is may have allowed less scrupulous doctors, lawyers, to qualify individuals, to try to qualify individuals, for this benefit.
HOAGLANDI do not know. This may be a particular situation in, where is it, Alabama, that maybe there are, but there is a qualification process it goes through, and there are a number of people involved who make money, by the way, of qualifying their individuals for this particular program.
SESNOOne of the statistics I saw was that, you know, only four in 10 who apply get the disability to begin with.
SESNOSo it's not, it's not -- fewer than that, Rebecca Vallas?
VALLASIt's actually fewer than four in 10. I think it's important to be clear about what the definition of disability is here as we talk about this important program. For starters, it's not just that you have a medical impairment, right, that meets certain criteria. It's that that serious medical impairment or combination of impairments keeps you from not only being able to do your current job, not only being able to do your past jobs but being able to do any job that exists in the entire national economy in significant numbers at a level where you would earn even $270 a week. That is what the definition of disability is.
VALLASAnd don't take it from me how strict it is, right, don't just take my opinion for it. The OECD, the Organization for Economic Cooperation and Development considers the United States disability standard to be the strictest in the entire developed world.
SESNOFor full -- for full disability.
VALLASFor disability benefits, and in fact if we wanted to make our definition stricter, we would probably have to look to Korea for creative ideas on how to do that. And I just wanted to make a quick point about the 1984 changes, which have been referenced a couple of times. There are a lot of misconceptions about what happened in 1984. 1984 was effectively cleanup from really grotesque and over -- overly harsh cutoffs that happened under the Reagan administration in the early 1980s. Hundreds of thousands of people on this program, on disability insurance, were cut off because they were told that their conditions had improved.
VALLASWe're talking about people with Down's syndrome, who had been told your conditions had improved. And as a result, Congress on a bipartisan and, in fact, unanimous basis in both chambers of Congress decided we need to set clear criteria that are up to date with current medical understandings and diagnosis and treatment, and that's what they did in 1984, and Reagan himself signed the law, signed the bill into law because he realized he'd made a mistake.
SESNOMary Agnes, let me call on you to just weight in on this and your perception of the fraud issue here, to be really clear about that, and then we have a lot of callers, and we're going to go to the phones.
CAREYIt gets a lot of attention, and it should. For example, you know, a fraud case down in -- in Puerto Rico in 2013, where a Social Security worker was helping people fraudulently get benefits. That got a lot of attention. There was a case in New York about a year ago with firefighters and police faking some -- a small group, 50 or so, faking benefit, faking symptoms rather, to get benefits.
CAREYBut the thing to also understand is when you look at the overall picture, fraud is a tiny amount. The Government Accountability Office, for example, estimated in fiscal year 2011 that of all the claims paid in Social Security, 36,000 people receiving improper payments, it only represented 0.4 percent of all beneficiaries. So overall, fraud is very small.
SESNOOkay, let's go to the phones here. I want to bring Don in from Jacksonville, Florida. John, you've been waiting -- Don, you've been waiting patiently. Go ahead, quickly please.
DONHi, I'm 65 years old, I'm on disability at the moment. I had reached a point where I couldn't walk. I'm a carpenter by trade. It had really gotten bad, and I didn't know what else to do. I've been -- whatever little retirement I had, I ate up, especially the two years that you have to wait after you go on disability.
SESNOTo get Medicare.
DONTo get Medicare. And so I ate up my benefits, borrowed money from my children to pay for pain management. When I was qualified, I was sent to a doctor who just read my report, didn't look at me, didn't take X-rays, didn't do anything. And I called the disability people, and I said look, this guy qualified me, and he did nothing. And so they sent me back to another doctor, who did X-rays all over the place, and within a month I was on disability. Even my lawyer didn't charge me because they work on a basis of, you know, if it takes six months to get disability, they get the first six months' payment or something.
DONAnyway, I was a month in, and they disqualified me, but...
SESNOSo Don, it sounds like, you know, a sort of fairly typical, sadly, bureaucratic nightmare that you went through. Do you have a question for the panel?
DONWell yeah, I do. I'm a little concerned because I'm right there in the mid-range, you know, $11,000. If I was to lose any portion of that, I would probably lose my house because I'm still on a mortgage. How certain are we that Congress is going to screw this up? Thank you.
SESNOThank you for your question and your confidence in the United States Congress. Bill, Mary Agnes?
HOAGLANDI think, Don, that you should not worry. I think that the United States Congress is not going to reduce benefits 20 percent, 19 percent, for this population. There will be -- they will not do it.
SESNOMary Agnes, does the political campaign complicate this or maybe facilitate some solution?
CAREYIt might facilitate a solution a little faster, if Republicans want that to happen. I don't think they want this, they don't want any discussion of a cut in the 2016 campaign. They'll want to push it to happen now. But Democrats may like to make this a campaign issue.
SESNOI'm Frank Sesno, and you're listening to "The Diane Rehm Show." And if you'd like to join this conversation, talking about Social Security Disability Program and payments, please do so. Call us at 800-433-8850 or send an email to email@example.com. I'm going to go back to the phones in just a moment, but I do want to ask you about the Democratic proposal to merge the retirement and disability funds and just ask what kind of reception is that getting. Rebecca Vallas?
VALLASSo merging the trust funds is a really interesting idea that's starting to gain further attention because Representative Becerra actually just introduced legislation with I think up to now close to 40 co-sponsors in the House just last week. And the idea behind merging the trust funds is that, as Jason Furman noted at the top of the program, it's one Social Security system, you pay in your whole working life. It's there for you whether you need it for retirement, for disability or for survivor's insurance for your loved ones, and you don't really distinguish as you're paying in those payroll taxes. So why should we have two separate trust funds and require Congress to act every time it needs to take this routine step?
VALLASMerging the trust funds would basically prevent Congress from being able to hold beneficiaries like Don hostage and prevent Congress from being able to play politics with people's lives on this.
SESNOSo Bill, you're our policy guy here, from a place called the Bipartisan Policy Center. What's the chances of that?
HOAGLANDI think the chances of merging the two funds, particularly in this Congress, are very unlikely. Maintaining the separation between the Social Security and the disability funds is something that's historic, and I think it will continue. I think it's a proposal that needs to be considered, but I don't think it's going anyplace in this particular Congress.
SESNOOkay, back to the phones. I want to draw in Kimberly here from St. Louis, Missouri. Hi, Kimberly.
KIMBERLYHi, thank you for having me.
SESNOThank you so much for joining us.
KIMBERLYI do have a question. Actually, it's a two-part question I would like to pose. And I have listened to NPR for a long time, and I've heard several discussions about states, individual states, using Social Security Disability Income as a way to get people off of welfare. So I've heard from NPR that states have been making that push, to get people off welfare by introducing them to SSDI.
SESNOSo they can push them off of welfare and onto the disability payment to support them.
KIMBERLYExactly, because they're having trouble funding their own welfare programs, and SSDI seemed like an easy route to get them money and to get them off of their welfare programs. Plus, I'm just curious, I know you guys keep saying wealth -- or that fraud's not a big deal, but I'm one person, and I personally know two non-connected people who engage in Social Security Disability fraud.
SESNOWow, okay, well, let me ask Mary Agnes to weigh in on that.
CAREYWell, her point is correct about if you -- you know, SSDI is a federal expenditure. So if someone was moved, if the state is involved in welfare payments, that kind of gets it off their books and onto the federal books. And so again, I go back to, you know, you look at the government auditors, who point to a very small percentage of fraud, and I would encourage the caller to do what the previous caller did, where he reported fraudulent, what he believed to be fraudulent activity to the Social Security Administration or to the inspector general's office and get their attention.
SESNOTurn them in.
CAREYTurn them in.
SESNOTurn them in. All right, you're listening to the Diane Rehm Show. Coming up, more of your calls and questions for our panel on the subject of Social Security Disability payments and prospects. I'm Frank Sesno. We'll be right back.
SESNOWelcome back to "The Diane Rehm Show." I'm Frank Sesno sitting in for Diane today. Our subject right now, Social Security Disability, and the prospects for the trust fund, which if something isn't done, will run out of money, requiring cuts. Our panel Rebecca Vallas, she's director of policy for the Poverty to Prosperity Program at the Center for American Progress. William Hoagland, senior vice president, Bipartisan Policy Center, and a former top aide to Senator Bill Frist when he served in the United States Senate. And Mary Agnes Carey, she's senior correspondent with Kaiser Health News.
SESNOAnd we'll go back to the phones. We'll start a call from Lucy who joins us from Pennsylvania. Hi, Lucy.
LUCYHi. I'll ask my question first, and then I'll just give you a brief scenario what I'm going through. I need to know why it takes so long for the process to go through. I am in the system four and a half years. I have a chronic illness. I am borrowing money. It started out with a 12 month wait, then a 12 month wait for my hearing. And then after that was denied, it only took one month for denial, and now I'm in my 18th month waiting for my second hearing. Now, I am...
SESNOAnd when did you start the process, Lucy? How long has it been?
LUCYI worked 34 years, and then I had to retire because of my health getting bad, so I put in -- into the system. And I'm just wondering how they say that they don't look at this, but I'm actually taking from my IRA until I can get on this disability, plus I'm borrowing money from friends to pay my mortgage. And I don't understand why this has to take so long.
SESNOAll right. Well, let's take that question and your situation into consideration. Lucy, thanks very much. Rebecca?
VALLASLucy, I'm so sorry to hear about what you've been going through. It is really awful for me to have to say this, but unfortunately your story is incredibly common. We actually have -- we see a backlog right now of people waiting for hearings. It's a million people long. And we've got people waiting literally years for the benefits that they worked...
VALLAS...hard like you did and paid into earn.
SESNOWhy is this happening?
VALLASAnd the problem is simple. It is that Congress has for years now underfunded the Social Security Administration's administrative budget. They've deprived them of the resources they need to employ enough staff, to have enough judges. The fact is, as a result, we've got people, thousands of people dying each year waiting for benefits. We didn't tolerate this with the V.A. I don't know why we tolerate it with Social Security.
SESNOMary Agnes, is it that bad?
CAREYIt is that bad. And it's interesting because when Republicans talk about overhauling the system, they sort of talk in generalities. One of their goals is to speed this process. But ironically it's been slowed because they haven't funded it.
SESNOBill Hoagland, you work for a Republican who also happened to be a doctor...
SESNO...so speak for the Republicans.
HOAGLANDNo, I think -- first of all, to Lucy's issue, I agree with Rebecca. It's a very sad situation that it's taken that long for you to qualify. And that's just unfair.
SESNODo you have any advice for her, by the way? What should she do? Is there anything you can think of to expedite this?
HOAGLANDFirst of all -- the first thing I would do is I would -- particularly I would go straight to your congressman or your senator, go right now to them and raise this issue with them and take it to them and show them the background on what you just outlined.
SESNOCan they really help?
HOAGLANDI think it does help to bring these kind of issues straight to them, and quite frankly, if she wants to contact me, I'd be happy to take them myself. But the bottom line here is that I think there is an issue here. I don't disagree that we have a situation where the funding on these particular programs has been limited, a backlog that's been created by the underfunding. There has been adjustments to funding that's specific in the appropriation process. We do not -- we do make an adjustment for additional funding. I question whether or not the funding is going directly through the bureaucracy to carry out the hiring of the individuals that are necessary to expedite this process. It is a resource issues.
SESNOWell, to that point, we have somebody on the line who is a disability judge. Bill is now joining us. Bill, thank you for being so patient and waiting. And it seems like the perfect time invite you into the conversation.
BILLOh, thank you. How are you?
SESNOI'm fine. How are you?
BILLOkay. I heard that this was coming up, and I thought, oh, I'm going get on and maybe give some ideas, because we do this every day, and there are some things that I know could save money and...
SESNOLet me stop you before you...
SESNOLet's make sure the audience and we all know. So you're a disability judge, you work for the Social Security Administration?
BILLFor 11 years.
SESNOFor 11 years. And go ahead. We're waiting for your answers.
BILLWell, and the people will understand, and I'll make it hopefully understandable. There's a rule, when I see cases, if a person is age 50 or above, and depending on their age, education and work experience, there's what they call the grid rules. And if that person meets a grid rule, I have no option but to pay that person, especially if they're over 50. And I may believe this person can do a sedentary work job, but because of those rules, the decision is taken out of my hands. I have no choice.
SESNOWhat are the sorts of things on the grid?
BILLWell, a person, let's say that they're ninth grade, they only got to the ninth grade, or their past, relevant work might have been something like unskilled work, or maybe that they've -- oh, let's see. Age, education. Maybe they were less than high school graduate. And, like I say, it's basically those three things. I may look at that person, the person's saying, well, I've got a bad back, I may have diabetes, but I may believe, you know, this person could do a table worker job where they sit most of the day. And it may be something that's not that easy to determine.
SESNOSo you're saying -- so you're saying you have less discretion than you want in this process?
BILLAbsolutely. Yes, sir, in that particular way. Another one real quick is, in any other kind of a court case, any kind of lawsuit, both sides introduce evidence. There's evidence coming in from this place and that place. And then you have the trial and all the evidence comes in. Under this system, the claimant can introduce evidence before the hearing, during the hearing, after the hearing, up to the appeals council, and I get to almost decide this case two or three times because there's never a stop date for evidence introduction.
BILLAnd the last one I would say is, why can't the Social Security Administration have a representative in the hearing room? As a judge, I have to be the judge, the cross examiner of the claimant, the protector of Social Security Fund.
SESNOAnd there's nobody from SSI in the room? There's nobody with expertise in the room during these processes?
BILLNo, sir. And I think also that if that person -- it could be one of the writers. The writers could do this. Why can't they -- why can't the Social Security Administration negotiate the terms of the disability? Why is it that someone has to be put on disability forever?
SESNOOkay. Before I let you go and turn your questions and comments over to our panel, very quickly I want to ask you a question about what we heard from Lucy, who's been waiting for years. And we just heard from Rebecca about a million people backlog. You have that problem too...
BILLWe do. It's not as...
SESNO...where people you feel are deserving and worthy are stuck in this mess of a bureaucracy?
BILLThere's no doubt about it. It could be helped if we had this negotiation process where these people could be looked at before the hearing and given some disability.
SESNOOkay, all right. Let's...
BILLThere's not enough people. Not enough judges. We just got six new staff members.
SESNOOkay, let me...
BILLWe haven't had staff members all year.
SESNOBill, I'm glad you got staff members, and I wish you a lot of luck as a judge, and I hope you can clear that backlog. And I want to turn it over to Bill Hoagland here for a comment on some of what we've heard, especially this business about the judge's discretion.
HOAGLANDAnd the bottom line here is to the judges' situation, number one, we've had a working group at the Bipartisan Policy Center over this last year who's been looking specifically at all this. And one of their major recommendations was to evaluate that vocational grid that the judge mentioned, that we want to provide Social Security Administration with an opportunity to revise and look at that grid, because that grid is definitely out of date.
HOAGLANDAnd the other issue he raises, another area of where I think reform could go forward, as the judge mentioned, and that is partial disability. You don't have to be 100 percent. 30 percent, 40 percent. There are ways in which we can find ways in modifying that to provide for partial disability payments. So the two things the judge has raised I think we're looking at very specifically as reform items.
SESNORebecca, I want to ask you this, I have Tweet here. "My mom is a baby boomer. She rants about politicians who dipped into Social Security's money to pay for other programs. Is that true?"
VALLASSo I think her sentiment is probably widely shared. Americans care deeply about Social Security. They value it tremendously. We see consistently poll after poll finds Americans love Social Security and don't want to see it cut, and that's across party lines, across income levels, across generations. In fact, what we've actually seen is recent polling finding that not only do Americans not want to see Social Security cut, they want to see it strengthened.
VALLASAnd we've seen actually polling from the National Academy of Social Insurance, finding that more than 70 percent of Americans, as I said, across party lines, and across income levels and generations, they want to see -- they not only want to see benefits strengthened, but they're willing to pay more to do that. And they're particularly interested in either raising or eliminating the payroll tax cap, which currently means that millionaires and billionaires stop paying into the Social Security system in February or even soon while the rest of us pay all year long.
SESNOHere are some of the reform ideas that are out there that Republicans and others have raised. It’s not just Republicans, but largely, who believe that the system needs additional structure and accountability. One, reductions in some disability benefits in some particular areas. Restrictions on eligibility, and perhaps that's addressing some of what the judge spoke about just a minute ago. New measures to combat fraud, and additional strategies to help people get back to work. Mary Agnes Carey, what's wrong with any of those things? Why shouldn't those be top drawer priorities?
CAREYWell, the benefits are fairly small to begin with, so if you reduce them, you might be hurting more people who are barely upon the poverty line getting this kind of money, so...
SESNOA full benefit is, again, just to remind, about $14,000 a year.
CAREYRight, right. And then you are allowed to earn just under 1100 per month, but the...
SESNOAnd then you start losing all...
CAREYThen you start -- basically you go a dollar over that, you start losing your benefit. And so there's been some talk about kind of an indexing, a phase out, if you will, but ironically, that requires Congress to spend more money on the program rather than save money, so that becomes kind of an issues. Reductions in eligibility, again, you could look at the list of conditions, and so on, and look at the procedures, what's happening, but, again, I go back to Lucy, for every person who calls and talks about fraud, or the judge's frustration there are so many people in that category that are waiting for so long.
CAREYNo, again, going back, Bill talked about this at the top of the show, going back and looking at people, at their own disability, evaluating whether or not they still need to be there, that could get some traction.
SESNOI'm Frank Sesno, and you're listening to "The Diane Rehm Show." Rebecca Vallas, let me ask you this question. There is a sort of catch 22, sort of twilight zone, no man's land, whatever you want to call it, where if somebody takes a job, leaves their benefits with a disability, because they're disability may not go away, but this is a job that accommodates their disability, many are fearful that if they lose that job, they're going to get back into a situation where it takes them years again to get these benefits. And people argue who are critical of the system that that undermines both taking the job and weeding people out who could be working elsewhere.
VALLASSo if you take a look at the work incentives and supports that exist in the Social Security Disability Insurance Program, what you will see is that they're actually incredibly strong and they've been built up over the course of many bipartisan congresses over the years to help people test their capacity to work, see if they can return to work.
VALLASAnd actually there's a specific provision in Social Security's policies that allows you, if you at any point, if you've taken that job, the scenario you laid out, and your condition worsens and you need to go back on benefits, you can get back on through something called expedited reinstatement. And what that means is you don't have to go back through that whole process. You actually get right back on upon proving that your condition has worsened. And that is hugely...
SESNOIs it in proving that your condition's worsened? What if your job goes away and your condition hasn't worsened?
VALLASIt's proving that you're no longer earning at the substantial gainful activity level, 1,090 a month. And that procession is hugely helpful because it gives people peace of mind that they can try to return to work.
SESNOAll right, back to the phones. Marcellis joins us from Louisville, Ky. Hi, Marcellis.
MARCELLISHow you doing?
SESNOGreat, thank you for calling.
MARCELLISI thought this was an interesting topic. I know myself, I'm blind. And there are many blind Americans across the nation that depend on disability, not necessarily because they have a desire to work or not to work. It's that many of us do. And I went to college, and we totally depend on Social Security Disability benefits. I think the important thing, like you said earlier, people that are receiving Social Security Disability Insurance is based on their earnings. These are not people that have not worked before, as opposed to SSI which is a financial assistance program.
MARCELLISMany of us want to work despite passing the Rehabilitation Act of 1973, and the American with Disabilities Act. Still in the 90 percentile of people that are unemployed that are blind. And so I want to know especially for the people that are blind and visually impaired, if you take them off Social Security or reduce their benefits, you're going to have a lot more people impoverished. You know, they already have what they call blind ghettos already. What are we supposed to do without that? And they definitely don't want to pass a job's act or anything to create more jobs for a person with disability as they do not do as a society as a whole.
SESNOMarcellis, thanks so much for your question. Let me Bill Hoagland to take a shot at that.
HOAGLANDMarcellis, again, I will repeat myself from earlier on. There will not be a reduction in benefits. We will go up to the wall maybe, but there will be reforms in this program that will come out of this Republican controlled Congress hopefully the president will sign. But there will not be a reduction in your benefit going into next fall.
SESNOOkay. Chris joins us from Tulsa, Okla. Hi, Chris.
CHRISHello. How are you doing?
SESNOVery well. Thanks so much for calling in. Go ahead.
CHRISI have been a representative of applying for disability benefits for about 30 years. And, you know, we've talked about the issue of fraud, and I see far more people that are deserving of benefits who are denied benefits, than people who slip through somehow. The requirement to get disability requires that not only your testimony, but paperwork, medical documentation that exceed thousands of pages of medical documents. And the issue of fraud, I see far more people being denied benefits than are fraudulently obtaining benefits.
SESNOAll right, Chris. Well, let me ask the panel to weigh in on that in the little bit of time that we have remaining. And Rebecca Vallas, you want to lead us off?
VALLASSo I think that that's borne out by the date as well, because the rate of fraud, as Mary Agnes mentioned earlier, is less than 1 percent. I think it's important -- we've had a lot of calls about work and people want to work. I think it's really important particularly given that we're celebrating the 25th anniversary of the American with Disabilities Act, the ADA, actually this week. It was just last Sunday.
VALLASWe should absolutely be having a bipartisan conversation about how we can support workers with disabilities in having a fair shot at employment. But I think that conversation doesn't need to involve blaming the lifeboat for the floods. It needs to be about raising the minimum wage, expanding the earned income tax credit for workers without dependent children, making sure people have paid leave, paid sick days and more. That's what a serious conversation about work would look like, not cutting Social Security.
CAREYI think to boost Chris' point, you know, it's a statistic we've talked about earlier, fewer than four in ten applicants are approved even after all their levels of appeal. Some of these folks have multiple impairments, many are terminally ill. Nearly one in five die within five years if they receive their benefits. So this is a critical population in this country. How will we care for them? What is the future of this program? All the things Rebecca and Bill are talking about. This is probably a much longer conversation that can be accomplished before when those benefits start dropping in 2016.
SESNOWell, Bill Hoagland, let me turn to you in what is probably the last word here, are we having the right conversation?
HOAGLANDYes, yes, we are having the right conversation. It's important to have this conversation because this is a microcosm of a bigger problem, as Rebecca's already mentioned, and others, and Mary Agnes has mentioned. This has to do with the broad issue of our safety net in this country, and how to make it work more effectively and efficiently for those people who deserve these benefits out there who paid into these benefits. So this is an important debate. It needs to go forward because we do have an issues that's cropping up in the Social Security program and that has to do with it running out of its money also in 2033.
SESNOWe certainly do, and there will be more conversations. Rebecca Vallas, William Hoagland, Mary Agnes Carey, thank you all very much. And to Jason Furman earlier in the program. SSDI and its future. I'm Frank Sesno. This is "The Diane Rehm Show."
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