Sen. Tom Coburn: Disabled Gaming the System

Today there is a Senate hearing scheduled on Social Security Disability, and Senator Tom Coburn is leading the charge. The Center for Economic Policy and Research criticized CBS and Senator Tom Coburn for falsely reporting on 60 minutes about there being widespread fraud in the Social Security program:

"The basic fact, which may be painful for CBS News and Sixty Minutes, is that it is not easy to get on Social Security disability. Close to three quarters of applicants are turned down initially and even after appeal, 60 percent of applicants are denied benefits."

And on the CBS website they claim, "The Social Security disability program has become a secret welfare system." And CBS (just like the NPR, who claims 14 million) falsely claims 12 million Americans use the program, when the number is really 8.9 million.

Tom Coburn: "If there's any job in the economy you can perform, you are not eligible for disability. That's pretty clear. So, where'd all those disabled people come from?"

NOTE: There are currently 3.7 million job openings for 11.3 million Americans counted as unemployed, so where are the jobs that "all those disabled people" can perform --- especially for older long-term unemployed Americans without any disability at all that employers have been consistently refusing to hire? There are those who are currently qualified to receive disability (who would rather not), but would prefer to work, if there were any jobs available (and if employers would hire them).

The 60 Minutes correspondent Steve Kroft said, "A lot of it is just people gaming the system. If you're 50 years old and you've got a bad back, what are you going to do? Are you going to try and take a minimum wage job with no health insurance? Or are you going to try and get on disability?"

The disability program was put in place for just such a scenario, so why does Steve Kroft even ask such a ridiculous question? And there are many current members of Congress, who as young men, avoided the Vietnam War draft, claiming they had a "bad back". So why shouldn't someone else over 50 have a bad back after working in a labor intensive occupation for the last 35 years?

The average disability check is about $1,100 per month --- or $13,200 a year (equivalent to $6.35 an hour for a full-time job). A minimum wage job pays $15,080 a year --- so at that income level, someone might also qualify for food stamps and Medicaid under Obamacare. It seems that in many cases, even a minimum wage job would be a better deal than disability (if someone would even hire a worker over 50).

And people over 50, who after working labor intensive jobs for 30 years or longer, tend to develop back problems such as arthritis. One need not "game the system" to qualify for SSDI, just work very hard for many years.

But Senator Tom Coburn of Oklahoma, who is leading a Senate investigation of the Social Security disability program, says millions of Americans are gaming the system.

Senator Tom Coburn: "Probably a third of everybody on disability, there's no way that they're disabled."
60 Minutes Steve Kroft: "They're scamming the system?"
Senator Tom Coburn: "Yes, it's nauseating."

Senator Tom Coburn is nauseating; but just like in his CBS interview, it's most likely he'll present some antidotal evidence at his witch hunt Senate hearing to support his claims of widespread fraud...just like Fox News used a beach bum named Jason in California on food stamps to make their case about food stamp fraud.

The 60 Minutes team reported that the surge in disability applicants can also be explained by the lingering effects of a bad economy. Many people who are unemployed and have exhausted their unemployment benefits appear to be using the disability program for a source of income until they're old enough to collect regular Social Security retirement benefits.

The Wall Street Journal also once made this same claim (as did others in the media) when they reported that many desperate Americans may be seeking refuge in the disability program as a last resort after their unemployment insurance and savings run out. But earlier this year, in a new study by Jesse Rothstein (University of California, Berkeley and NBER) found that there was "no indication that expiration of UI benefits causes DI applications."

Now, in another article in the Wall Street Journal, they are acknowledging Jesse Rothstein's study: "The sharp rise in federal disability rolls in recent years has sparked worry that able-bodied workers are using the system to hide from the weak job market. But new research suggests those fears may be overblown."

* The Wall Street Journal is owned by the same man who owns Fox News, so just like CBS, has also lost much of its credibility. It's a shame that the Fourth Estate, rather than reporting news, has become nothing more than ideological tools.

Last year the Congressional Budget Office also did study on this subject, and according to the Huffington Post, had found that "The rise in America's ranks of disabled stems from an aging population." Another study says, "As the U.S. population grows older, the number of years Americans can expect to live with disability from causes such as depression and low back and neck pain has increased."

Evidently, CBS (once a reliable news source) is behind the curve on these studies and statistics. 60 Minutes producer James Jacoby says a tough choice is facing the country. "When the trust fund runs out, the truly disabled will either see their benefits cut or every working American's will have to pay more in taxes."

But who should pay more in taxes? When James Jacoby says "working Americans", does he also include those who receive "unearned income" through investments, or just those whose have "earned income" through regular hourly wages and salaries?

Capital gains, the greatest driver of wealth inequality, are earned on such things as stocks, stock-options and SWAG investments --- and they are taxed at a lower rate than someone earning regular wages over $36,250 --- and capital gains are not taxed at all for Social Security.

People such as Senator Tom Coburn, who earns $174,000 a year from his congressional salary, has his Social Security taxes capped after the first $113,700 --- meaning, he only pays Social Security tax on 65.3% of his earnings, whereas someone earning $36,250 pays this tax on 100% of their earnings.

So if we need to raise Social Security taxes to make the program more solvent, shouldn't we raise them on those who are more able to pay them? (Read more: The CBO and Social Security: Hysteria and Honest Math and Washington Post Uses Euphemisms in News Story to Advance Its Agenda for Cutting Social Security)

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.

Disability is a large program, just like the Department of Defense, so there will always be some fraud --- but not necessarily the "wide spread" fraud as CBS News or Senator Tom Coburn would have you believe.

More from CBS:

Judge Marilyn D Zahm (Administrative Law Judge at the Office of Disability Adjudication and Review): "People run out of unemployment insurance. They are not going to die silently. They are going to look for another source of income. It is not unusual for people, especially people over 40, to have some sort of an ailment or impairment. So they will file for disability benefits based upon that. For many of these people, the plant closed. There are no jobs in their communities. What are people supposed to do?"

CBS 60 Minutes, Steve Kroft (to Tom Coburn): "Some of these people are desperate people."

Senator Tom Coburn: "Absolutely desperate. I agree. But what you're really describing is our economy and the consequences of it. And we're using a system [Social Security disability] that wasn't meant for that." (It's a good thing that even homeless people qualify for food stamps!)

Because of sequester and the government shutdown, furloughs are bound to delay an already slow decision-making process for people who are counting on their Social Security disability appeals and desperately need government assistance. Obama and a few Democrats have already considered using chained-CPI to reduce Social Security benefits, but if Senator Tom Coburn and the rest of the GOP had their way, there would be no Social Security program at all...no matter how disabled or old you become.