NCPA - National Center for Policy Analysis

More than 5 Million Join Disability Rolls under Obama Administration

April 24, 2012

A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program, says Investor's Business Daily.

  • Since the recession ended in June 2009, the number of new enrollees to Social Security's disability insurance program is twice the job growth figure.
  • In just the first four months of this year, 539,000 joined the disability rolls and more than 725,000 put in applications.
  • As a result, by April there were a total of 10.8 million people on disability, according to Social Security Administration data released last week.
  • Even after accounting for all those who have left the program -- about 700,000 drop out each year, mainly because they hit retirement age or died -- that's up 53 percent from a decade ago.

To be sure, disability rolls have grown steadily as a share of the workforce since the 1990s. 

  • The main causes of this broader trend, according to economists David Autor and Mark Duggan, are the loosening of eligibility rules by Congress in 1984, the rise in disability benefits relative to wages, and the fact that more women have entered the workforce, making them eligible for disability.
  • But the big factor in the recent surge is the slow pace of the economic recovery after the severe recession.
  • That has kept the unemployment rate above 8 percent and created an enormous pool of long-term unemployed and discouraged workers.

Few people who get on disability will ever participate in the labor force again.  What's more, the explosive growth in enrollment is not only increasing the financial strain on the Social Security Disability Insurance trust fund -- which is scheduled to go bankrupt in 2018 -- it's boosting costs for Medicare as well, since enrollees can qualify for Medicare after two years.

Reform ideas so far have spurred little action.  But with the program's bankruptcy looming just a few years off, and with the economy showing no signs of producing a surge in jobs, that indifference to reform may soon have to change.

Source: John Merline, "5.4 Million Join Disability Rolls under Obama," Investor's Business Daily, April 20, 2012.

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