Social Security Out of Money Three Years Sooner

We’re living longer and the baby boomers are retiring, but we’ve known these dynamics for years. So how can the Administration explain the sudden discovery that the Social Security trust fund will be exhausted by 2033, three years earlier than was predicted just a year ago.

The answer is something that a Democratic administration doesn’t want to bring up: the surge in disability claims. The fund within Social Security allotted to disability is slated to go broke by 2016.

Most Americans are probably only dimly aware that one can qualify for payments from the Social Security Administration (SSA) beginning at any age if able to prove an inability to earn an income over $1,000 a month. (And after two years under that plan, that person qualifies for Medicare as well, irrespective of age).

Manufacturing has declined and hazardous jobs along with it, there are no genetic defects suddenly manifest that account for increasing infirmities, the cure rate for crippling disease continues to improve, accidents on the highways have declined — what could be the cause?

First the obligatory acknowledgement that disability is real, that society has a moral responsibility to help those dealt the unfair hand of an illness or mishap that can cause a life of possibly unrelenting pain even, and — because the Social Security payments are no bonanza — the prospect of penury.

But those worthy beneficiaries under the social contract are not our subject and their cohort does not account for the Congressional Budget Office telling us that the number of Americans on disability had by 2009 doubled as compared to 1970, whereas the population rose only by half.

One in five dollars paid out by the SSA is now for disability; 8.56 million people and 2 million dependents will received $122 billion this year, and another $90 billion for those who have qualified for Medicare as well.

How has this gone out of control? The first reason is that in the last few decades, the threshold for claiming disability has been defined ever downward. Reasons that never would have qualified in the past — depression or “persistent anxiety” or “chronic fatigue”, for example — are now accepted as reasons for disability awards. None of these were ever acknowledged in times past as reasons not to work; people went to work anyway, and worked their way through them. (“60 Minutes”’ Mike Wallace acknowledged suffering from depression but didn’t quit working until age 90. Or think of Jack Kennedy, who Lyndon Johnson’s biographer Robert Caro describes as strapping “a canvas brace with metal stays tightly around him” to face the day.) These may be real syndromes, but the unscrupulous have caught on to how difficult they are to disprove and have learned to masquerade their way onto the Social Security rolls.

"Congress and, derivatively, the SSA have gradually expanded the availability of entitlements to greater and greater numbers of persons," write SSA administrative judges Jeffrey Wolfe and Dale Glendenning in the Cato Institute’s magazine. The judges further point out that, whereas in 1971, one in five applicants were accompanied by a lawyer, the ratio has since quadrupled, which should tell you that finding and shepherding clients through the process of getting on the dole has become a lucrative practice for the legal profession. The recession is certainly a major factor, as the unemployed feign disability in order to find an income.

Charles Murray would have us understand that it is more than economics. In his widely quoted recent book, “Coming Apart” ( see this related article), Murray marshalls copious data to show that there is now a sub-culture comprising 30% of white Americans who have disengaged from society and its responsibilities. They come from broken marriages, drop out of school, stay single, abandon religion, resort to petty crime, aspire to nothing and, having done little to equip themselves with the skills needed to win what jobs there are, have instead learned how to game the disability system. In this group, the percentage on Social Security disability has quintupled since 1960, rising from 2% to 10%.

On the one hand it speaks of a creeping moral rot that has eaten away at the social fabric, an attitude of taking whatever one can get without concern for the once bedrock principles of honesty and self-reliance. It brings to mind a New York Times investigative report in 2008 which found that virtually every employee of the Long Island Railroad applied to the federal Railroad Retirement Board for disability the moment they retired, and virtually all — 97% in one recent year — were routinely approved, each paid tens of thousands of taxpayer dollars a year in addition to their pensions. The paper “sometimes dozens of them” on the golf course. Somehow, every railroad worker was untroubled by cheating and thought him- or herself entitled to other people’s money.

The announcement by Treasury Secretary Timothy Geithner that the trust fund would run dry sooner simply acknowledged disability costs as a factor. There was no speculation as to evident fraud. To this, the government turns a blind eye, especially in an election year when votes reliably take precedent over any notion of expanding funding for investigative surveillance to root out disability cheats. So, like so much going wrong, we can expect the problem to grow progressively worth with the future of Social Security at risk for seniors who have paid into the fund all their lives.