Restoring Social Security Disability's Purpose: Does the Decisionmaking Process Serve the Purposes of the Program?
Wolfe, Jeffrey S., Engel, David W., Regulation
In the May 31, 2012 issue Bloomberg BusinessWeek, congressional reporter Brian Faler declared that "the pot of money the Social Security Administration is using to cover disability insurance is projected to run dry in 2016." In a prepared statement during hearings before the Permanent Subcommittee on Investigations last September 13th, Sen. Tom Coburn (R, Okla.) reminded the subcommittee--and the American people-that the purpose of the Social Security disability program is "to make sure that all Americans have a safety net if they become disabled and can no longer work." His remarks highlight a critical concern for the future of the program. "It should be remembered, though," said Coburn, "that, by law, being disabled means 'being unable to work any job in the national economy'. This is a high bar to meet." He continued: "The agency must make sure it is not awarding benefits to people who are not entitled to them. If something doesn't change and the programs continue to operate this way, there won't be a safety net left for those who have no other choice but to rely on it."
In making this cautionary observation, Senator Coburn draws us back to the roots of the disability program. Does today's program mirror the purposes originally contemplated by the framers of the Social Security Act? Does the process by which disability is determined, and particularly the jurisprudence underlying the decisionmaking process by administrative law judges, serve the purposes of the program?
Disability Compensation Programs: A Brief History
As early as 1939 the idea of a monetary benefit paid early to disabled workers was raised in a formal report to President Franklin D. Roosevelt. As described in an SSA history of the program, the 1939 Report to the President on National Health by the Interdepartmental Committee to Coordinate Health and Welfare Activities recommended "the development of social insurance to replace, in-part, wages lost during temporary or permanent disability. It suggested that insurance against permanent disability should be effected through a liberalization of the old-age insurance system, paying benefits at any time prior to age 65 to qualified workers who become permanently and totally disabled." However, what was proposed was, even then, a misnomer. It was not "insurance" as that product is traditionally known, but instead an early payout to beneficiaries who had paid into the Social Security Trust Fund.
The 1938 Annual Report of the Social Security Board to the President reflects consideration by the board to expand the fledgling program "to include provisions for benefits to workers who become permanently and totally disabled before reaching age 65, and to their dependents." Those entrusted with the successful implementation of the Social Security Act understood that such a system was potentially fraught with financial peril. Departure from the conceptual framework outlined above--such that a worker and his or her dependents could receive early monetary benefits (before attaining age 65)--depended for financial security on a number of variables. The board declined to make any such recommendation to Congress or the president. As recounted in the legislative history, the board stated:
[T]he extent of the increase in costs would depend upon the definition of disability, and that a strict definition at the beginning would keep costs within reasonable limits. Later, with experience, the definition could be made more liberal if this was considered socially desirable.
The Social Security Board in 1938 explicitly recognized the direct relationship between program costs and the definition of disability. The board understood that a narrow definition of disability sets a higher threshold than a definition that is, in the board's words, "more liberal."
While the original conception of "disability" required proof of a permanent disabling condition of "indefinite" duration, there is little question that the current disability standard for Social Security disability benefits has become "more liberal"--some would say dramatically so--over time. …