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Tuesday, September 29, 2015

Social Security's Technical Panel, Disability Fund Crisis Is Over

Disability recipients long have been the punching bags for a particularly ill-informed and uncompassionate wing of the anti-Social Security crowd. (Misinformed journalists haven't helped matters.)

article by Michael Hiltzik | LA Times | Sept 25, 2015
A just-released report by Social Security's Technical Panel, a blue-ribbon group that periodically analyzes program data and makes recommendations to the Social Security trustees, validates what many advocates of the disabled have been saying: the recent sharp increase in disability rolls, which has fueled congressional conservatives' attacks on the program, is over. In fact, disability rolls are expected to show their first year-over-year decline "in more than 30 years."

Moreover, the panel says, the previous increase in disability rolls had nothing to do with malingerers and layabouts, as conservatives loved to claim; its sources were well understood, and had everything to do with America's demographics, the economy and changes in the disability program rules approved by Congress in the 1980s.

The findings should help Congress deal properly with the real crisis facing the disability program, which is that its trust fund is likely to run out next year. That would force a cut in disability benefits of roughly 20% -- no trivial matter to its 10.8 million recipients, including dependents, who receive an average of $1,165 a month and thus would be cut back to about $930.

The proper way to address the shortfall is via a small reallocation of the Social Security payroll tax to shore up the fund, which would move the exhaustion date back to about 2033 without significantly impairing the Social Security retirement program. That would leave ample time to make carefully considered changes in the program, if necessary, but Republicans have blocked that so they can natter on about undeserving recipients and force hasty changes in Social Security now.

The new report should set them straight, but they haven't been listening to experts who have been telling them the truth about disability thus far, so it's not certain they'll start listening now.

They should. The 10-member technical panel comprised some of the nation's most distinguished retirement experts. It was chaired by Alicia Munnell of Boston College, the doyenne of the field, and included MIT's David Autor and Peter Diamond, the latter a Nobel economics laureate.

The panel's full panel report is here, and the disability section is here.

As has been found by other analysts, including Social Security's own actuaries, the technical panel reports that the increase in disability recipients since the late 1980s was no mystery. The largest single influence, the panel finds, was Congress' expansion of the definition of disability at that time to include psychological and neurological impairments rather than merely musculoskeletal conditions. Applicants and their doctors also were granted more opportunity to make their cases to examiners.

It's fashionable to denigrate these impairments as "subjective" or unserious -- "over half the people on disability are either anxious or their back hurts; join the club," sneered Kentucky Republican Sen. Rand Paul (a doctor) in January -- but the definitions suited the transformation of work in America from manual labor to service and professional jobs.

The second biggest factor, the panel says, was the aging of the population, which became a major influence "when the Baby Boom began aging into their peak disability years in the mid-1990s." The third factor was the increased entry of women into the workforce; as more women became eligible for disability, the overall incidence and prevalence rates inevitably rose. As Jeffrey B. Leibman of Harvard observed earlier this year, the proportion of women aged 50 to 64 covered by disability rose from 46% to 72% between 1980 and 2007.

All these factors have essentially run out their strings and "are not likely to recur," the panel says. Accordingly, "the years ahead are unlikely to closely resemble the preceding decades. The data ... all point to substantially slower program growth."

In other words, the demographic crisis is over for disability. What's left is a fiscal crisis fomented by congressional inaction. The lawmakers will have to do their duty without resorting to fantasy, fabrication and slandering 11 million Americans. Can they manage?



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