Tags: Ohlemacher | Social Security | disability | program

Administration Plays With Disability Fund

By    |   Tuesday, 17 Feb 2015 07:50 AM

On Feb. 19, an admittedly slow news day except for weathermen, Stephen Ohlemacher, a reporter for The Associated Press, appeared on C-SPAN's Washington Journal to discuss the move by the Obama administration to transfer $330 billion for the Social Security trust fund to cover a shortfall in the Social Security disability insurance program.

In this feature of the Your Money series, Ohlemacher was interviewed by C-SPAN's Pedro Echevarria, who began by asking Ohlemacher to explain the scope and role of the disability program.

Ohlemacher responded that whereas most people think of Social Security in terms of the retirement program and its 48 million recipients, there is also a disability insurance program, created in 1956, that has 11 million recipients. He characterized the requirements to qualify as "very strict," meaning that the applicant has to show an inability to work for an entire year anywhere in the economy, or a disability that results in death. The cost last year for the disability insurance program was $140 billion, compared with $672 billion for the retirement program.

The average recipient in the disability program gets approximately $1,000 per month. Spouses and surviving children of the disabled can also qualify for benefits. From time to time the Social Security Administration (SSA) is supposed to review the cases to make sure the recipient is actual disabled; if they recover and can go to work, they are supposed to go off the program.

Echevarria referred to a controversial charge by Sen. Rand Paul, R-Ky., that more than half the people on disability are either anxious or their back hurts, and who doesn't experience this from time to time? Ohlemacher responded that over time the number of recipients claiming benefits based on mental health issues has grown, as well as another category called "muscular/skeletal," which would include back pain and joint pain. SSA figures show the average age of recipients is 53, roughly evenly divided between men and women, and a third are for mental illness.

Asked whether there is fraud in the program, Ohlemacher cited a review by SSA's Inspector General released last November. He said that SSA receives 2.5 million applications per year, and the vast majority, roughly two-thirds, are declined. He explained that after people who have been declined twice they can appeal to an administrative law judge. (This writer would say that by this time they've probably called their congressman and the lawyer who advertises on late-night TV.)

The average time for resolution of appeals is longer than 400 days, but some judges have a reputation for being easy, and a House committee last year found there were 191 judges who approved more than 85 percent of applications, and the very size of the program makes it difficult to control fraud. Ohlemacher explained that funds have repeatedly been shifted from the retirement program to the disability program in order to forestall a cut in disability benefits. Unless this shift is made, the disability program could go broke in 2016, and benefits could be cut by 19 percent. This would also result in the retirement program going broke in 2033 instead of 2034, but history shows this would just be a temporary fix to a chronic problem with the design of Social Security that leads to steady tax increases and periodic crises.

(Archived video can be found here.)

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Robert-Feinberg
On Feb. 19, an admittedly slow news day except for weathermen, Stephen Ohlemacher, a reporter for The Associated Press, appeared on C-SPAN's Washington Journal to discuss the move by the Obama administration to transfer $330 billion for the Social Security trust fund.
Ohlemacher, Social Security, disability, program
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2015-50-17
Tuesday, 17 Feb 2015 07:50 AM
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