Chained CPI And Disability Change Expected In Obama Budget

     From today's NY Times:

President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say. ...

Mr. Obama’s budget will propose a new inflation formula that would have the effect of reducing cost-of-living payments for Social Security benefits, though with financial protections for low-income and very old beneficiaries, administration officials said. The idea, known as chained C.P.I., has infuriated some Democrats and advocacy groups to Mr. Obama’s left, and they have already mobilized in opposition.  ...

Mr. Obama will propose ... repeal of a loophole that allows people to collect both disability and unemployment benefits.

DOMA Being Declared Unconstitutional May Only Be The Beginning

      From Liz Goodwin writing at Yahoo News:

If, as many legal experts predict, the Defense of Marriage Act is struck down by the Supreme Court, advocates behind the decadeslong movement for gay rights will have won a major victory. But the decision could also create a dense legal maze for gay and lesbian married couples, one that would surely lead to more lawsuits that could make their way back to the Supreme Court. ...

If DOMA is struck down, then same-sex couples residing in states that allow gay marriage will suddenly be included in the more than 1,100 federal laws that give benefits to married couples. ...

But what about a gay couple that gets married in New York and then moves back to North Carolina, or any other of the 38 states that have explicitly banned gay marriage?

At first glance, it appears they would have no access to these rights, and that their marriage would not be recognized either by their state or the federal government ...

  [A law professor] predicts same-sex couples would sue the government, arguing that this policy violates their constitutional right to travel. ...

That would leave broad discretion to the Obama administration to define the issue administratively ... The White House could direct federal agencies like the IRS [or Social Security] to accept marriages based on where a couple got married, not where they live. ...

Who Would Have Thought?

     From an Op Ed in the Baltimore Sun:

The government in Britain recently did something interesting.

It asked everyone receiving an "incapacity benefit" -- a disability program slowly being phased out under new reforms -- to submit to a medical test to confirm they were too disabled to work. A third of recipients (878,000 people) didn't even bother and dropped out of the program rather than be examined. Of those tested, more than half (55 percent) were found fit for work, and a quarter were found fit for some work. ...

In 1960, 134 Americans were working for every officially recognized disabled worker. Five decades later that ratio fell to roughly 16 to 1.

Some defenders of the status quo say these numbers can be explained by the entry of women into the U.S. workforce, the aging of baby boomers and the short-term spike in need that came with the recession.

No doubt those are significant factors. But not nearly so significant as to explain why the number of people on disability has been doubling every 15 years (while the average age of recipients has gone down) or why such a huge proportion of claim injuries can't be corroborated by a doctor. ...

There are those who are quick to argue that this is all bogus, there's nothing amiss with the disability system that greater funding and a better economy won't fix. Maybe they're right. One way to find out would be to ask every recipient to get a thorough examination, just as they did in Britain. Maybe the results here in the United States would be interesting too.

      Wow! Doing medical re-examinations of Social Security disability recipients! Who would ever have thought this would be a good idea? Actually, the Social Security Administration would like to do these on a regular basis and keeps asking for the money it needs to do the exams -- as well as enough money to answer its phones and prevent lines outside its offices and so forth. Yes, the medical exams save money but Congress still must appropriate enough money to do the exams themselves and Congress hasn't been willing to do that. So, there we are. Don't point fingers at the Left on this issue. Point fingers at the Right.

Not Going To Happen Soon But Are You Sure It Won't Happen In The Next Ten Years?

     From the Washington Post's Wonkblog:

...[A] big new report (pdf) from the New America Foundation suggests that the conventional wisdom is exactly backward. Congress should be looking at ways to expand Social Security, not shrink it — particularly at a time when traditional corporate pensions are disappearing, and 401(k)s have proved fairly risky.

The major proposal in the report is to add a brand new benefit to Social Security, called Part B, which would provide a flat $11,699 per year to all retired workers. This would come on top of regular Social Security, which would also be protected from any further cuts. ...

So how much would this cost in taxes? Quite a bit. At the moment, Social Security is expected to experience a funding shortfall by 2033. Congress will need to raise taxes by between 1 and 1.5 percent of GDP just to maintain current benefits. On top of that, the expanded benefits proposed by New America would cost an estimated 3.7 percent of GDP. The net cost: About 5 percent of GDP. ...

Defined-benefit employer plans are vanishing. Workers aren’t saving enough or dipping into their retirement funds too often. And private-savings plans like 401(k)s or IRAs are proving quite volatile — the financial crisis wiped out an estimated $2.8 trillion from retirement plans.

As a result, fewer Americans are well-positioned for retirement:

The Irony

     From the Atlantic Wire:

Conservative columnists are newly outraged by Social Security data showing a rise in disability applications. But this isn't Obama's fault. In fact, it's kind of theirs....

Notice when the big application spike happened — 2009 or 2010. Now, subtract 65 from that number. 2010 minus 65 years equals 1945. The year the Second World War ended. And the year that the baby boom began in earnest.  

Nicholas Eberstadt of the American Enterprise Institute and the Harvard School of Public Health notes in his recent book "A Nation of Takers: America's Entitlement Epidemic" that 29% of the 8.6 million Americans who received Social Security disability benefits at the end of 2011 cited injuries involving the "musculoskeletal system and the connective tissue."

That's called arthritis. The greatest irony here is that those older arthritics fall into another group besides "most likely to file for disability". That group is "the Republican party". ...

In fact, this is the [Republican] party's main challenge right now: It's weighted heavily toward older, whiter voters. And while those older voters may enjoy taking umbrage with the freeloaders exploiting the "productive" people, the critique hits much closer to home than they seem to realize. Lots of stones being thrown in increasingly creaky glass houses.

"The Real-World Workplace Is Still Tougher Than It Looks From The Faculty Lounge"

     From Michael Hiltzik writing in the Los Angeles Times:

...Social Security disability, has a bull's-eye on its back — and not for the first time. ...
[T]here's almost no doubt that the disability program's trust fund will run out in 2016, three years from now. At that point, absent congressional action, disability payments will have to be cut by about 20%. 

"The insolvency of DI could not come at a worse time politically," says Kathy Ruffing, a budget expert at the Washington-based Center on Budget and Policy Priorities. This impending disaster could affect 8.8 million disabled Americans and their 2 million spouses and dependents. But a paralyzed Congress seems disinclined to even debate the necessary near-term fixes, which could include reallocating more of the Social Security payroll tax to the disability fund or raising the tax to shore up the program. Instead, Washington wrings its hands over the supposedly explosive growth of the program from 3 million beneficiaries in 1980. Expect to hear more about how disability is supposedly "out of control."

Perhaps because it covers a relatively small number of Social Security recipients, the disability program has always been a prime victim of mythmakers. Its beneficiaries are portrayed as slackers gaming the system ... "This American Life" described the program as "a deal 14 million Americans have chosen for themselves," as though the typical recipient has chosen to suffer the debilitating medical conditions or mental syndromes that reduce him or her to subsistence on an average monthly check of $1,130. ...

NPR was merely the latest in a long line of news sources to get disability wrong. Last year, New York Times columnist Nicholas Kristof claimed that rural families were pulling their children out of school so their illiteracy would keep them qualified for disability. He didn't actually identify anyone doing this, and in any case illiteracy and poor educational attainment aren't considered disabling conditions in and of themselves. The year before that, the Boston Globe reported that parents were placing their kids on hyperactivity drugs so they'd qualify for disability; government investigators found the opposite — kids on those medications were "more likely to be denied" benefits. In the 1990s, the media frenzy was over parents supposedly "coaching" their children to act crazy, which added the term "crazy checks" to the political lexicon. Again, no substantiation. ...

As for the increased caseload, "the story is a fairly simple one of economics and demographics," Ruffing says. To begin with, the U.S. population is growing older: The ratio of those ages 50 to 64 increased by a third from 1980 to 2010, according to the Census Bureau, rising from less than 15% of the population to 20%. As Ruffing told a House subcommittee last month, people are twice as likely to become disabled at age 50 as at age 40, and twice again more likely at 60 as at 50.

Economic and workplace conditions have a big effect. It's easy to assert, as do some academic researchers, that disability rolls should be shrinking because work is no longer as toilsome as it used to be. When the Social Security disability program was created in 1956, assert David Autor of MIT and Mark Duggan of the University of Maryland, "a substantial fraction of jobs involved strenuous physical activity [and] assistive technologies were limited and crude."

Yet the real-world workplace is still tougher than it looks from the faculty lounge. A 2010 study by the Center for Economic and Policy Research found that 45% of workers 58 and older held jobs that were physically demanding or involved difficult working conditions.

Responses To NPR Disability Reporting

     The Consortium for Citizens with Disabilities (CCD), the major umbrella organization protecting the rights and promoting the interests of the disabled, has issued a response to last week's series of pieces on National Public Radio on Social Security disability benefits. I'd like to post some excerpts from the CCD response but for some technical reason I can't cut and paste from the CCD document. You ought to read it.
     There's also a piece in the U.S. News & World Report criticizing the NPR series.

Wonkblog Keeps On Wonking

    The Washington Post's Wonkblog has discovered to its surprise that, contrary to what some people have been telling them, demographics is by far the most important factor in explaining the increase in the number of Social Security disability claims. Wonkblog concedes that this simple, straightforward explanation might have some merit but they can't believe that's all there is to it. I would suggest that Wonkblog take a look at Steve Goss' recent testimony before a Congressional committee. He's Social Security's Chief Actuary. The whole subject of disability incidence rate is extremely complicated but the bottom line is that a lot of what passes for increases in disability incidence is actually comparisons of peaks and valleys. Look at the long term and it becomes obvious that the only real problem is a long anticipated need for additional funding for the Disability Trust Fund caused by the aging of the baby boom population.