Eleven million on disability and rising

11 Million On Disability: Why Are Rolls Rising So Fast?

By John Merline, INVESTOR'S BUSINESS DAILY

The total number of Americans now on the Social Security Disability Insurance program topped 11 million in May, a record high and an increase of 18% since January 2009, according to new data from the Social Security administration, furthering a trend that will have severe economic and budget consequences.

More than 5.2 million workers have enrolled in the program since President Obama took office, and enrollment is climbing faster under Obama than at any time in the program's history. An average 81,000 workers joined the Social Security Disability Program each month during Obama's years. Under President Bush, by contrast, monthly enrollment averaged 66,000, and the overall average since 1975 is 52,000.

While there is debate about the exact causes of the swelling ranks of workers on disability, it's clear that the sluggish economic recovery under Obama played an important role.

The annual number of new SSDI enrollees skyrocketed in the years following the recession, topping one million in both 2010 and 2011. While it has trended down since then as the recovery slowly took hold, last year's 884,894 enrollment figure is higher than almost every year prior to the recession.

"When jobs are plentiful, some people who could qualify for the DI program may choose instead to work," the Congressional Budget Office noted in a report on the program. "But when jobs are scarce, many who could work "will instead choose to apply for DI benefits."

The overall labor force participation rate has fallen to a 36-year low of 62.8%, as millions of people stop looking for work.

In addition, the disability enrollment surge comes at a time when the number of people with actual disabilities has risen only modestly.

According to the Census Bureau, the number of working-age disabled Americans climbed 15% between 2002 and 2010. But during those same years, the number of workers collecting disability checks shot up 48%.

Census data also show that the share of the disabled who are working dropped from 56% in 2002 to 41% by 2010.

While some blame the rise in SSDI enrollment on an aging population, the fact is that the average age of those signing up was lower in 2012 than it was in 1980, according to the program's latest annual report.

Experts note that other changes contributed to the increase in SSDI enrollment, not least of which is the fact that eligibility standards were significantly loosened back in the mid-1980s, which led to a surge in the number of workers getting disability for ailments that are harder to independently verify, such as back pain and mood disorders.

Today, more than half of disability awards are for mental disorders — including mood disorders — or musculoskeletal disorders — which can include things like back pain. That's up from 27% in 1981.

Loose eligibility rules and other SSDI flaws "have increasingly made it a long term unemployment program rather than the last resort transfer program for those unable to work due to their health-based impairments that Congress intended it to be," noted Richard Burkhauser, an adjunct scholar at the conservative American Enterprise Institute.

Whatever the cause of the growth in SSDI, is will have serious long-term economic and budgetary consequences for years to come.

Workers who go on disability almost never return to the workforce, and that loss of available labor results "in a loss to society of the economic contribution those workers could have made," according to a White House report.

The explosive growth in SSDI is also creating a budget crisis all on its own. According to the Congressional Budget office, the program will exhaust its Trust Fund by 2016, which would mean an immediate benefit cut for enrollees without congressional action. Annual losses will total $319 billion over the next decade.

And because SSDI enrollees are eligible for Medicare benefits after two years, the growth in the disability program is adding tens of billions in costs each year to that government health program.

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