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What most SSDI "reforms" won't do

 

With the impending exhaustion of the Social Security Disability Insurance (SSDI) program trust fund looming within the next year, we are likely to see many articles describing suggestions to "fix" the program. Many of those suggestions will include "reforms" that will be intended to help restructure the program to avoid a similar crisis from reoccurring.

In one such recent article, the author admits that given the dysfunction and disagreement in Congress over the subject of tax increases, a reallocation of funds from the retirement program to the SSD program is absolutely necessary.

 

This, at least, is honest. Let's face it, if Congress has been unable to agree to a new funding mechanism during the last 21 years, it is unlikely to come to a consensus in the next 12 months.

Unfortunately, the author then suggests that two fixes that need to be employed are helping more individuals on the program return to work and provide more funding to eliminate the backlog of cases waiting for hearings.

Neither of those suggestions is inherently bad, but they will both be very expensive to implement and are not likely to save much money. Hiring staff to conduct hearings will be expensive, as it is not a job that can be done by temporary contractors.

Allowing more people to earn greater amounts of income while still receiving benefits, is, in theory, a good idea, as it does provide an incentive for some who attempt to return to work.

But it also will be administratively very expensive to implement, and there will be increased opportunity for fraud. The Social Security Administration would have to maintain close supervision of each participant, and if it were to become successful, it's administrative costs would increase with additional participants.

Before any of this could happen, Congress would first have to allocate more resources to SSA to enable the expansion. Right now, Congress has little choice but to reallocate retirement funds, simply to avoid driving many on the program below the poverty line in the next year.

Source: marketwatch.com, "How to fix the Social Security Disability Insurance program," Jason J. Fichtner, September 30, 2015

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