Here we go again

Best Disability insurance

First of all, George Mason is a wingnut school whose economic programs are funded by the usual suspects. The other point (one which Michael Hiltzik hints at but doesn’t address directly) is that the Social Security disability system is not meant to deny eligible claims simply to fit the budgetary wishes of Congress. Either you’re eligible, or you’re not. And playing with the definitions to bring down the approval rate (as Republican push us to do) is the worst kind of moral sophistry. Why aren’t liberals fighting back on moral grounds?

At first glance, an op-ed in Monday’s Wall Street Journal makes a devastating case against Social Security’s disability system. On closer inspection, the case isn’t so clear.

“A system designed to serve society’s vulnerable has morphed into a benefit bonanza that costs taxpayers billions of dollars more than it should,” write the authors, Mark J. Warshawsky, a visiting scholar at the Mercatus Center of Virginia’s George Mason University and former member of the Social Security Advisory Board, and Ross A. Marchand, a George Mason grad student.

Their focus is on appeals granted by the program’s administrative law judges, who have the power to reverse denials of disability benefits. Their chief concern is that too many judges are approving too many appeals.

“In 2008 judges on average approved about 70% of claims before them, according to the Social Security Administration,” they write. “Nine percent of judges approved more than 90% of benefit requests that landed on their desks.” If all the judges who approved 90% or more of appeals before them were removed, they calculate, the taxpayers would be relieved of paying 98,000 disability cases costing an average $250,000 each. The authors say that’s a savings of $23 billion. (The math actually works out to $24.5 billion.)

Followers of disability politics will see this op-ed as the latest in a lengthening stream of attacks on Social Security disability, which is facing a near-term funding crisis that Congress is loath to address. Warshawsky and Marchand mention the disability program’s looming fiscal shortfall, which could force cuts in disability payments of about 20% as early as 2016. “Congress would be wise to begin much needed reform,” they say, and they suggest starting with these overgenerous judges.

So it’s proper to give their data and conclusions a close look. Warshawsky declined to answer my questions about the piece on the record, but referred me to a lengthier treatment he published in Bloomberg’s Pension & Benefits Daily in 2012.

First question: Why did Warshawsky and Marchand use case figures from 2008? It can’t be because those are the latest figures available–decision data for individual judges is available at least through the end of 2014. Social Security’s own inspector general’s office compiled the data through fiscal 2013 for a report issued last July. What the office found is that the average approval rate has been coming down for years–reaching 56% in fiscal 2013.

Warshawsky and Marchand even allude to this trend in their piece; they observe that reforms implemented by former Social Security Commissioner Michael Astrue have reduced the number of cases heard by supposedly overly generous judges. Their concerns about whether the trend will continue are entirely conjectural: “These changes can easily be undone, either intentionally by future administrators, or unintentionally as bad habits slip back into the system.” So far, that hasn’t happened, and there’s no evidence that it’s likely to.

2 thoughts on “Here we go again

  1. Could a surge in disability claims be attributable to an aging population that has deferred medical treatment due to unaffordability, a problem also created or worsened by conservative policies?

  2. Sure. It also reflects that many people in pain would still rather work, but once there are no jobs, they have no choice.

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