Monday, July 22, 2013

The War on Disabled Americans

Lies, damn, lies, and statistics --- the mainstream media and most bloggers refuse to (or are unable to) to get the numbers correct on Social Security disability. It's no wonder they are all saying different things, and why many of us (including myself) were so confused about the accuracy of SSDI statistics. There also appears to be a lot of ideological spin in everyone's reporting --- so I'd like to help clarify a few things.

--- The Basic Facts ---

* According to the Social Security Administration, as of June 2013, there were 8,892,515 disabled workers in the U.S. who received SSDI benefits and averaged $1,130.34 a month (Source: SSA - Go here and select "disabled worker"). Here and here SSA reports $1,129.44 a month (Close enough for government work).

* According to the Bureau of Labor Statistics, the unemployment rate for persons with a disability declined from 2011 to 2012. The unemployment rate for persons with a disability was 13.4 percent in 2012.

* According to the Social Security Administration, actual SSDI awards (not claims or applications) declined from 2011 to 2012, and SSDI terminations were up, for a net increase of 2.94% for people in current payment status for SSDI benefits.

That's all there is to it --- no spin and no conflicting data --- but if you need to know more, then read on.

I've noticed that many people, while writing on the subject of disability, inflate the numbers for "disabled workers" in the SSDI program by adding disabled children, blind adults and other dependents; or by also including those that are in the SSI program for the disabled, poor and/or elderly. I suppose they do this to either exaggerate the figures to make an argument, or because they don't know the difference.

SSDI (Social Security Disability Insurance) is an earned benefit that is funded by Social Security taxes paid for by workers with FICA taxes. Benefits are paid to people with physical and mental impairments that are severe enough to prevent them from working. These benefits are based on a person's work record, the same as regular retirement benefits. People in this program, because they were already part of the work force, tend to affect the labor-participation rate, more so than someone in the SSI program.

SSI (Supplemental Security Income) pays an unearned benefit to low-income people who are 65 or older and/or to adults who are disabled (based on the same definition used by SSDI). This program is only for people who have very limited income and assets. SSI is financed by general revenues that the Treasury Department collects to run the U.S. government. SSI benefits have never been tied to a person's work record. SSI pays an eligible individual an average of $527.22 a month. (The maximum amount is $710)

--- In the Media ---

In the media reports I refer to below, you might notice that some people will calculate an average for specific periods of time. They do this for no other reason than to make an exaggerated and/or sensational argument. But these numbers don't tell the whole story --- it's somewhat like the difference between a "median" hourly wage and an "average" annual salary. The numbers will be vastly different. Remember, anyone can go back to a certain period of time in history on any subject and then say "it doubled" or "it went up 100%". But even when the media or bloggers do this, they STILL exaggerate the number as you will see. And they don't just round off the integers to the nearest million (or the nearest percent), but by wide margins, and always higher, never lower.

I've listed some examples below. For instance, the NPR has consistently reported in several articles that the number of people on disability (SSDI) is 14 million. If I were to report an accurate and true number --- and round it off --- instead of saying 8,892,515 disabled workers, I would say 8.9 million.

I've also noticed that when counter-arguments are made supporting the disability program, they are buried deep in the article, or very little is mentioned, or it's excluded entirely (this is where ideological slants are infused into the reporting, beside just skewing the actual numbers).

On the Mercury's website there's an article by Eric Boehm for the PA Independent (which was reposted, edited, taken out of context, and paraphrased) on several other websites. The Mercury reported that "Tad DeHaven, a research associate with the Cato Institute, a libertarian think tank, examines government programs for a living, but he said he’s never seen one as ill-defined and exploited as the Social Security disability trust fund. Nationally, the number of disability beneficiaries rose by 39 percent between 2003 and 2011."

NOTE: First, consider the source: a libertarian think tank. Just as Fox News and other conservative news outlets will report on any government entitlement program. According to the Social Security Administration (select disabled worker for all years), by the end of 2003 there were 5,873,673 disabled workers receiving SSDI when the civilian labor force was146,729,000. By the end of 2011 there were 8,576,067 disabled Americans receiving SSDI when the civilian labor force was 153,945,000 --- a difference of 2,702,394 receiving SSDI benefits over those 11 years --- or a 31.5 percent increase...not a 39 percent increase. By comparison, when President Obama first took office there were 7,427,203 people on SSDI --- and as of June 2013, there were 8,892,515 people on SSDI --- for a difference of 1,465,312 over those 4 years --- or a 16.5 percent increase.

The Mercury also reported that DeHaven says it is because "Congress has expanded eligibility to the point that Social Security disability has been turned into a back-door welfare program." (He may have been able to make that argument for SSI, but not for SSDI. It's ideology, that's all.)

Only later in the article does the Mercury say that a disability attorney named W. Daniel Feehan (from the law firm of Lowenthal and Abrams) does not see the [SSDI] program as an open-ended welfare scheme like DeHaven does. “Under the social security disability program, people are getting money they are entitled to that has been taken out of their paychecks over the years,” he said. “It’s disingenuous to call it a hand-out.”

On another website (the Altoona Mirror), also using content from Eric Boehm's article, quoted the same attorney as saying, "On top of evidence of a disabling medical condition, qualification for benefits are also based on age, education level and work history. That means older workers with low levels of education and long careers in physically demanding jobs are more likely to qualify."

That is a very relevant point that wasn't mentioned on the Mercury's website. But the Altoona Mirror also reported that W. Daniel Feehan had also said that there has seen an "uptick" in the number of younger workers seeking benefits. Although, if not accident-related, or because other serious illnesses or injuries, most are older workers who have worked in labor intensive jobs for many years. The Bureau of Labor Statistics says, "workers with a disability were more likely than those with no disability to work in production, transportation, and materials moving occupations" and that "those with a disability were less likely than those with no disability to work in management, professional, and related occupations."

Just compare working at a desk job shuffling paperwork for 30 or 40 years to being on your feet all day long lifting heavy objects. Evidence suggests that the Great Pyramids of Egypt were not built by slaves, but by paid laborers, and skeletons of workers commonly showed signs of arthritis and other ailments.

The Altoona Mirror went on to say, "Other research also shows the aging population is not entirely -- or even primarily -- responsible for the growth in disability benefits. The aging of the U.S. population accounts for only 13 percent of the growth in disability payments to men, and only 4 percent of the growth in payments to women -- that, according to Mark Duggan and Scott Imberman in a 2010 study for the National Bureau for Economic Research."

NOTE: I'll leave this to someone more knowledgeable to examine this study and to draw their own conclusions...and maybe leave a comment. As an older worker who has worked labor intensive jobs all their life, my own personal experience and opinion might not be objective in relation to this study. But I certainly wouldn't trust the Altoona Mirror's evaluation of this study. Many people tend to cheery-pick the facts that best supports their own argument.)

In an earlier post I wrote for the Economic Populist, I contended that SSDI "awards" for disabled workers has only incrementally (and exponentially) increased over the years in relation to the rise in population, the number of people in the labor force, and the demographics (aging, etc) of the civilian population. A Congressional Budget Office study shows that during all recessions, there is always spikes in "claims", but the number of both actual awards and claims have decreased from 2011 to 2012 -- and terminations also increased during that same period of time....meaning, they no longer were receiving a SSDI check from the government (Links to all the Social Security sources are also included in my other post.)

The Altoona Mirror then goes on to say, "Of the 56 million people who receive Social Security benefits, about 70 percent are retired workers or their spouses and children, and another 11 percent are survivors of deceased workers. The remaining 19 percent of beneficiaries --- more than 10.6 million Americans in 2012 --- are disabled workers or their spouses and children."

NOTE: A total of 55,404,480 as of 2011 received some form of SS benefits: 44,790,082 were retired + 10,614,398 were disabled and/or dependents. Which means, 80.8 percent were retired workers, not 70 percent. Now it's higher. Here at SSA it shows that as of May 2013, there were 57,457,000 out of a total of 62,576,000 who received some form of Social Security benefits (which also includes those receiving Supplemental Security Income).

The website Daily Local News (also with the tagline by Eric Boehm) reports, "Nationally, the number of recipients getting disability payments through Social Security has more than tripled since 1970, according to the Congressional Budget Office. But the increases have been sharper in recent years."

NOTE: Sharper than "tripled"? I have no idea how they came up with "tripled". And why did they use the year 1970? Why not 1960, when SSDI was first initiated? According to the Social Security Administration (select disabled worker for all years), by the end of 1970 (almost 43 years ago) there were 1,493,316 SSDI beneficiaries. As of last month (June 2013) there were 8,892,515 --- a net gain of 7,399,199 --- for an average of 172,074 a year over 43 years. But...

As of July 1970 the U.S. population was 205,052,174 and the civilian labor force was 82,901,000. Now the current population is 316,297,761 (up 35.2 percent in 43 years) and the current labor force is now 155,835,000 --- up 46.8 percent over the last 43 years (but who's counting?) Also --- today I am 61.1 percent older than I was in 1970. So what is the relevance in reporting that last statistic? There is no relevance.

I'll have to give credit to CBS, who appeared to be far more forthright and more detailed in their reporting. They just recently reported, "Claims for benefits have increased by 25 percent since 2007, pushing the fund that supports the disability program to the brink of insolvency, which could mean reduced benefits. Social Security officials say the primary driver of the increase is demographic, mainly a surge in baby boomers who are more prone to disability as they age, but are not quite old enough to qualify for retirement benefits."

NOTE: According to the Social Security Administration, prior to the Great Recession there were 2,190,196 claims (not awards) for SSDI in 2007. Last year there were 2,820,812 claims (applications) --- a difference of 630,616 --- or an increase of 22.4 percent. So CBS was a little high on this number, but notice how they rounded the number up to 25 percent, instead of down to 20 percent?

Then CBS also says, "The disability program has been swamped by benefit claims since the recession hit a few years ago. Last year, 3.2 million people applied for Social Security Disability or Supplemental Security Income."

NOTE: There were 2.8 million applicants for SSDI last year, so CBS must saying that there were also an addititional 400,000 applicants last year for SSI (Supplemental Security Income). By the end of 2008 there were 7,520,501 receiving SSI and by the end of 2012 there were 8,262,877 --- for a net increase over those 4 years of 742,376 (or almost a 9 percent increase in actual beneficiaries, not the number of people who just applied.) The average monthly benefit for SSI was $527.22 a month.

ALSO NOTE: When CBS said "applied for", they refer to claims or applications, and don't mention that the actual SSDI awards went down from 1,025,003 in 2011 to 979,973 in 2012 (down 4.39%) and SSDI terminations were up from 656,902 in 2011 to 726,432 in 2012 (up 10.58%) for a net increase of 2.94% for people in current payment status for SSDI benefits. (This would be called "and exclusion of all the facts" by CBS.)

CBS also reported that in a March 11 letter, three senior Republicans on the House committee (including Rep. Darrell Issa of California) wrote, "Federal disability claims are often paid to individuals who are not legally entitled to receive them." So, should anyone be surprised that the GOP is attacking a New Deal program for the poor, the elderly or disabled? (I wasn't.)

Social Security spokesman Mark Hinkle said the agency follows the strict legal definition of disability when awarding benefits. In order to qualify, a person is supposed to have a disability that prevents him from working and is expected to last at least a year or result in death. Hinkle said, "Even with this very strict standard, there has been growth in the disability program, and the primary reason for this growth is demographics." (I will assume it meant an aging population.)

He also noted that approval rates (awards) have declined as applications (claims) for benefits have increased." But, as I showed earlier in my post (using SS data), claims also decreased last year from the year before --- so I'm not sure if Mark Hinkle was quoted incorrectly by CBS on this particular point, or if Hinkle had misspoken, or if he had been referring to the previous year. But I'm not going to split hairs here ;)

CBS also reports that "nearly 11 million disabled workers, spouses and children get Social Security disability benefits." That is correct, but remember, the CBS report is also including spouses and children, and not JUST disabled workers --- and many of those people would not normally be expected to be a part of the labor force, and so, wouldn't affect the unemployment rate --- even though they are still referred to as "not being in the labor force" if they are 16 years or older.

And speaking of the labor force: Macroeconomic Advisors posted an article "Where’s Labor Force Participation Heading?" (It's very top-heavy with economic jargon and numbers). In another article that very same day Binyamin Appelbaum at the New York Times wrote a piece titled; "Labor Force Participation Is Not Coming Back". In it he writes, "It [the Macroeconomic Advisors report] points to the growing popularity of federal disability benefits, a program many researchers say is functioning as a safety net for people who can’t find jobs – except that it tends to remove them from the workforce on a permanent basis."

In his article Appelbaum linked to another one of his articles (not to an objective outside source) titled: "The Rise of Disability" --- to reinforce his own argument where in it he says, "Independent experts, however, see substantial evidence that disability insurance increasingly serves as a safety net for people who cannot find jobs – people, that is, who might still have the ability to perform at least some kinds of work." Appelbaum doesn't say who these "independent experts" are, but earlier this year, in a new study by Jesse Rothstein (University of California, Berkeley and NBER) he found that there was "no indication that expiration of UI benefits causes DI applications." It should also be noted that some of these same people (the experts) were also saying the same thing about extended unemployment insurance benefits, that it caused unemployed, until another study shot down that theory as well.

As an aside: according to yet another study, just by being unemployed (especially in this economy) causes unemployment. "Results strongly suggest that long-term unemployment is at least partly self-fulfilling. Imagine a newly unemployed worker who narrowly misses out on the first job he applies for. That initial failure reduces his odds of landing the second job he applies for, and so on, until he ends up as one of the long-term unemployed. Someone who has been unemployed for several years has a 4% chance of a call-back."

And here is where some people get confused: CBS reported that "an additional 8.3 million people get Supplemental Security Income, a separately funded disability program for low-income people." This is also correct (Source: SSA). But most of those people on SSI haven't been regularly working and paying Social Security payroll taxes, and were also either children, already poor, and/or elderly --- which shouldn't be affecting the labor force participation rate (and driving up the unemployment rate).

The Huffington Post wrote in August 2011, "Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs...and..."claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can't find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That's 700,000 more than in 2008 and 1 million more than a decade ago.

NOTE: According to SSA, in August 2011 (when the Huffington Post article was written) there were 8,467,348 people on SSDI. In August of 2001 there were 5,173,654. So in that "decade" they mentioned, there was a net increase of 3,293,694 --- or up by 38.9 percent, not 50 percent. (See what I mean about rounding off numbers, and rounding them up? It's a shame when we can't rely on the media to report clear and concise numbers, without interjecting a hidden agenda. And from the Huffington Post no less!)

ALSO NOTE: According to the Center on Budget and Policy Priorities, 8.7 million jobs were already lost between the start of the recession in December of 2007 and June of 2009. Also, according to the Bureau of Labor Statistics, as of 2011, 8.1 million American workers were "job losers". But the Huffington Post said the economy had shed nearly 7 million jobs ("Nearly" the Huffington Post reported --- as not even 7 million. Here it seems that rounding down that number better fit into the author's agenda.)

AND ALSO NOTE: The Huffington Post said in 2011 that 3.3 million people were expected to apply for SSDI. That year 2.9 million had applied, but less than half (1.02 million) were actually awarded SSDI benefits.

Fox News has also continued to wage their war on disabled Americans by posting a video on their website titled "Social Security Disability Insurance: A Ticking Time Bomb?" --- Cato Institute's Michael Tanner talks about the rising number of people on Social Security Disability Insurance (SSDI). Again, consider the source. Remember, as I noted before: Cato is a libertarian think tank. They have an agenda. But I wanted to include this tid-bit in my post to be "fair and balanced". (The Republicans also want to repeal Obamacare because it adds a 3.8 percent surtax to the capital gains tax on unearned investment income for all the multi-billionaires on the Forbes Fortune 400 List.)

WatchDog.Org also carried the story by Eric Boehm, but added, "According to the Bureau of Labor Statistics, in 1968 there were about 51 full-time workers for each worker collecting disability. By April 2013, there were only 13 Americans working full time for each worker on disability" --- referring to an article in TheNewAmerican.

NOTE: This same argument has also used for the number of workers for each person receiving regular Social Security retirement benefits. That's why in my other post I made the case that we should lift the $113,500 cap on Social Security taxes and support Senator Tom Harkin's bill The Strengthening Social Security Act of 2013 so that payroll taxes apply fairly to every dollar of wages. For example: Warren Buffett and Bill Gates don't pay any Social Security taxes on their capital gains, the vast majority of their income. But the Republicans and many Democrats don't think they should pay this tax on their unearned "investment income" --- as though, we are supposed to be in awe of their "investment income" as opposed to our regular earned income (such as hourly wages, of which many middle-class workers pay a higher tax rate than the wealthiest individuals in this country.)

The most compelling argument against SSDI is from TheNewAmerican (cited below) who seem to believe that if people get arthritis in their back (or are mentally ill) and can no longer work, they shouldn't be entitled to SSDI benefits. Before1984, when Congress unanimously passed the Social Security Disability Benefits Reform Act [SSDBRA], all those people were once SOL. Should we rescind SNAP and TANF for the poor as well? Should we rescind Medicare and Social Security retirement for the elderly too? What about unemployment benefits for those who get laid off? What about oil and farm subsidies, and all the other corporate welfare (such as no-bid government contractors in the defense industry) that taxpayers have pay for?

From TheNewAmerican:

CNS News writes that the last time the number of Americans collecting disability decreased was in January 1997. But in 1997, that decrease was a miniscule one of just 249 people. CNS explains that in December 1968, 1,295,428 American workers collected disability and, according to the Bureau of Labor Statistics, 65,630,000 worked full-time. Thus, there were about 51 full-time workers for each worker collecting disability.

In April 2013, with a record 8,865,586 American workers collecting disability and 116,053,000 working full-time, there were only 13 Americans working full-time for each worker on disability.

Data collected by Mark Duggan and Scott Imberman of the National Bureau of Economic Research support the fact that the loosening of the definition of "disability" has been the cause of the increase in the number of "disabled," not more Baby Boomers retiring. The two men published a 43-page paper revealing that just 13 percent of the growth in the receipt of disability benefits in men was a result of aging, and just four percent in women.

Figures from the Center for American Progress and the Brookings Institution show that while the SSDI awards for traditional causes of disability, such as cancer, strokes, and heart attacks, have remained constant from 1981 to 2009, Social Security benefits have exploded dramatically for those with musculoskeletal and mental disorders between those same years.

An investigative report by National Public Radio revealed that many more recipients today are collecting disability for subjective conditions than were 50 years ago:

"As far as the federal government is concerned, you’re disabled if you have a medical condition that makes it impossible to work. In practice, it’s a judgment call made in doctors’ offices and courtrooms around the country. The health problems where there is more latitude for judgment — back pain, mental illness — are among the fastest growing causes of disability."

NOTE: TheNewAmerican called the National Public Radio (NPR) bias an "investigative report". Someone may call this post a "comprehensive study". I mentioned the NPR in my other post about SSDI. At the Daily Kos Jennifer Kates wrote a couple of in-depth articles about the NPR's war on the disabled --- about Social Security disability and the politics behind it.

ALSO NOTE: The Bureau of Labor Statistics reports that the employment-population ratio for persons with a disability was unchanged from 2011 to 2012, while the ratio for persons without a disability increased.

TheNewAmerican also said that the number of number of Americans collecting disability payments is at "an all-time high" (10,962,532) and that it equaled the total number of people living in Greece. But if TheNewAmerican were counting JUST "disabled workers" (and not sick children or blind adults) it would be 8,892,515 --- about the population of New York City --- or the number of people who lost jobs during the Great Recession.

Besides, what would all these people propose we do, just stop compensating disabled American workers and push them all into the street?

And when I say "The Last Word on Social Security Disability", I meant that it's the last time that I'll ever try to explain SSDI to the major news media. If they continue to misreport on this subject, then it only reinforces my belief that they have their own corporate agenda.

Data on SSDI receipts and expenditures

Disabled worker beneficiary statistics (SSDI Application, awards, terminations, etc.)

Number of Primary Beneficiaries By Age and Sex

SSI Monthly Statistics, May 2013 (Supplemental Security Income)

Population in the Social Security Area

This PDF is a selection from a published volume from the National Bureau of Economic Research

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