Obamanomics: Disability Program Grows Exponentially Since 2009

Tuesday, October 16th, 2012 and is filed under Blog, Economy, Issues

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One of the most ubiquitous factoids that exemplifies Obama’s presidency is the fact that Food Stamp usage has almost doubled since 2008.  Another lesser known symptom of the Obama [lack of] recovery is the sharp spike in people receiving disability subsidies from the Social Security Disability Insurance program.

The Mercatus Institute ran the numbers and found that nearly 5.9 million people were added to the disability rolls since Obama took office in January 2009.  The cost is now $119 billion – almost $30 billion more than the price tag for food stamps.

On the one hand, an increase in food stamp usage is a logical outcome of a recession in a robust welfare state.  However, why should more people suffer from disabilities during a time of recession?  Are people taking on risky jobs?  Of course not.  Veronique de Rugby of Mercatus explains it like this:

While SSDI is designed to provide a safety net to people who are physically restricted in their ability to find work and provide for themselves, a recent Senate committee investigation alarmingly calls into question the process of approving disability claims and rewarding benefits. The report found that a quarter of agency decisions in the claims approval process for federal disability benefits failed to properly address insufficient, contradictory, and incomplete evidence, thus increasing the chances of rewarding nondisabled persons. It also found vast misuse of medical listings, where the agency failed to demonstrate how a claimant met each of the required criteria in the Social Security Administration’s (SSA) medical “Listing of Impairments” to qualify for the disability program. For each person wrongly added to the disability rolls, taxpayers pay at least $300,000 (the average lifetime cost of a single disability award).

 

This is what happens when the government encourages dependency as a virtue instead of a vice.

What’s even more disconcerting is that only 10% of recipients are “recovering” and going back to work:

  • Of the 653,877 benefits that were terminated, 51.7 percent were owing to conversion to retirement benefits, and 36.1 percent were owing to the death. The remaining factors include 6.1 percent who returned to work and earned above the earnings limit and 3.6 percent of those terminated had a medical improvement.
  • This evidence lines up with research findings that shows that the SSDI program provides strong incentives for applicants and beneficiaries to remain permanently out of the labor force and hold off on terminating benefits until they’ve reached the federal retirement age or death.

The last time I checked there was no propensity to incur permanent disabilities during bad economic times.  It’s clear that the Obama economy – one which subsidizes failure and punishes success – is leading many Americans to adopt an ‘if you can’t beat ‘em, join ‘em’ attitude towards employment.