[Disability Insurance Benefits under the Social Security Act] spending has tripled since 1970, relative to the economy’s size, and it now approaches a full percentage point of gross domestic product. ...
An aging labor force explains some of the program’s growth; older workers are more likely to become disabled. But a growing body of economic and journalistic evidence suggests that SSDI reduces work incentives, because of its permissive eligibility criteria and relatively high benefits, as compared to low-wage workers’ potential earnings.
Once a backup plan for dying or incapacitated workers near retirement age, SSDI now serves as ersatz unemployment insurance or welfare — particularly attractive, and particularly hard to give up, in a sluggish economy. ...
The longer we wait to reform SSDI, the more it will drain the Treasury and erode the workforce.Here are some ideas that might be pursued:
- Make it crystal clear in the law that the mere inability to obtain a job is irrelevant. You have to be unable to perform a job whether it's there or not.
- Make the standards tough so that two-thirds of claims get turned down. Maybe a few more should get on benefits on appeal but make them wait a couple of years.
- Make benefits low. They shouldn't be anywhere near what a person was earning before becoming disabled.
- Give huge incentives for the disabled to return to work. Let a person on benefits keep their full benefits for a full year after they return to work. Let them get back on benefits very easily for many years thereafter if they have to stop work.
- Give people drawing benefits access to rehabilitation. We can call this Ticket to Work.