Social Security Disability Insurance Costs Increasing – Pushing Insolvency Date to 2016

Spending on monthly Social Security Disability Insurance (SSDI) payments is exploding as the number of recipients has skyrocketed in the last 30 years, even though medical advances during the same period allow many more people to remain on the job longer than ever before. Discrimination against the disabled in the workplace has also been banned by new laws in recent years, but the dramatic rise in SSDI claims has pushed the program’s insolvency date to 2016, says Veronique de Rugy, a senior research fellow of the Mercatus Center at George Mason University [reported in the Washington Examiner].

Cash payments for disabled former workers currently exceed the amount the federal government spends on food stamps and all other welfare programs combined. Spending on the SSDI program has more than doubled in the past decade, and disability payments now account for almost 20 percent of Social Security’s budget.

There are other troubling components to this trend:

– As the number of disability claimants increases, the number of workers supporting them decreases. In 2012, there were 6.6 people on disability for every 100 people actively working.

– That’s double the ratio from 20 years ago and almost three times what it was in 1972. The amount of time individuals receive disability benefits is also increasing.

How did we get here? As MIT economist David Autor and University of Maryland economist Mark Duggan characterized it, the purpose of SSDI was to provide early retirement benefits for those who were “totally and permanently disabled.” But eligibility standards have long since changed.

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