Now the question: How long is that trajectory sustainable?
That's the fiscal situation confronting the Social Security Disability Insurance (SSDI) program and SSDI is projected to out of $$$s entirely in 2016.
Of course, Congress created SSDI with the very best of intentions: To provide a safety net for individuals unable to work. Here's how SSDI is currently structured: After exhausting unemployment benefits to individuals who are unable to work, SSDI provides financial assistance.
It's all about "caring" for one's fellow citizens who, due to circumstances beyond their control, are down and out. Who could possibly disagree with that?
But, here's how SSDI actually works because Congress larded the program with work disincentives. According a Cato Institute study:
- One study comparing identical SSDI applicants--some of whom were admitted to the program while the rest were rejected from the program--found that many of the rejected applicants did return to the work force. However, 25%+ of current SSDI beneficiaries possess the capacity to work and don't work.
So, there's a substantial number of SSDI enrollees who are entirely capable of working but aren't. Furthermore, SSDI isn't encouraging them to work. Why?
SSDI's benefit structure induces enrollees to remain in SSDI--outside of the labor force--for fear of losing benefits. The logic of those beneficiaries that they'd work if they could keep their SSDI benefits and earn a salary. Faced with having to earn a salary only, those 25% of SSDI beneficiaries are electing remain on the dole.
A second study found the likelihood of a rejected SSDI applicant returning to work to be 35%. That is, 65% do not return to work. So, where's their entitlement $$$s going to come from? Some magical "hopium and changeum" fund?
There are many ways to encourage rather than discourage SSDI beneficaries to return to the work force. However, the program is currrently structured to foster a whole new class of welfare queens who should be participating in the nation's work force rather than living off of the largese of the federal government.
When the nation's $17T deficit comes due and there won't be any largese, how's the federal government going to funnel $$$s to those people?
Let the discussion begin...
To read the Cato Institute study, click on the following link:
"SSDI Reform: Promoting Gainful Employment while Preserving Economic Security."