Richard V. Burkhauser, the Sarah Gibson Blanding Professor of Policy Analysis and chair of the Department of Policy Analysis and Management at Cornell, told the U.S. House of Representatives' Subcommittee on Social Security on July 13 in Washington, D.C., that more young people than ever are receiving disability payments in this country and new national policies are needed to turn the trend around and integrate them into the labor force.
In the session, "Challenges Facing Social Security Disability Programs in the 21st Century," Burkhauser gave invited testimony on "Lessons from European Disability Policy Experience."
"The United States experienced the greatest growth in its disability rolls among the U.S., the Netherlands, Sweden and the western states of Germany in the 1990s. Most ominously, the fastest growth in the United States disability transfer rolls was among younger persons aged 15 to 44," said Burkhauser, a nationally prominent economist and policy scholar who specializes in social security, retirement, disability and minimum-wage policy. Disability transfer rolls are social security disability payments.
Burkhauser pointed to the Netherlands as a country that had rapid growth in disability recipients in the 1970s, but new national policies turned the trends around. Thus, the United States might use policy as a way to slow the rapidly increasing trends in the numbers of younger workers receiving disability benefits, he said.
The Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs provide cash benefits to individuals who are unable to work because of severe disabilities. In 1999, nearly 5 million disabled workers and their families received more than $50 billion from the SSDI program, and 4 million low-income disabled adults received $24 billion from SSI. Most of these beneficiaries also received health insurance through Medicare and Medicaid because they qualified for this cash assistance.
"The safety net provided by the Social Security disability program is critically important for individuals with disabilities and their families. Maintaining the safety net will be particularly challenging in coming decades, when, like Social Security, the disability program faces financial challenge. According to the 2000 Annual Report of the Board of Trustees, beginning in 2007, the Disability Insurance Trust Fund is projected to run cash deficits, and by 2023 the trust fund assets will be exhausted," according to information provided by the Subcommittee on Social Security.
Burkhauser noted that as eligibility standards have eased for disability benefits in recent years, employment rates of men and women with disabilities in the United States have been falling at the same time, and they continue to decline despite six consecutive years of economic growth. "But experience in Germany and Sweden suggests that these rolls can be kept within socially acceptable limits if a 'work first' strategy of rehabilitation and integration of people with disabilities into the labor market is implemented," he said.
The recently implemented federal Ticket to Work/Work Incentives Improvement Act of 1999 is certainly a step in the right direction, said Burkhauser, who sits on a panel mandated by that legislation to advise the president, Congress and the commissioner of Social Security on work incentive programs and planning and assistance for individuals with disabilities, including work incentive provisions. The legislation provides new opportunities for adults receiving public benefits to pursue work without fear of losing all benefits.
"But future legislation is likely to be needed to shift United States disability policy toward more work-orientated outcomes," Burkhauser concluded.
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