NCPA - National Center for Policy Analysis

Social Security Disability Awards Reform Can Restore Dignity and Efficacy to the System

March 16, 2015

The Social Security disability appeals system was intended to serve society\'s vulnerable. Yet now, it has morphed into a benefit bonanza that costs taxpayers billions of dollars more than it should. As a result, the disability trust fund will become insolvent in 2016.

Over the past decade, judicial impartiality has declined significantly, as many administrative-law judges uncritically approve most claims.

  • In 2008, judges on average approved about 70 percent of claims before them.
  • Nine percent of judges approved more than 90 percent of benefit requests that landed on their desks.

If the judges with award rates topping 90 percent are not included in the data, the rate of denial increases by 2-3 percent annually. Assuming an average lifetime award of $250,000, taxpayers could have saved $23 billion over those six years had the most generous judges left the bench. Lowering the threshold to exclude judges with award rates north of 85 percent, these savings increase to $41 billion.

Former Social Security Commissioner Michael Astrue made much-needed changes. Judges were limited to hearing 1,000 cases each year (the figure has since been lowered to 700) and individuals are allowed only one disability application at a time. These reforms have produced good results. In 2011 judges with award rates exceeding 90 percent heard a mere 4 percent of all cases, a 63.6 percent decline from 2008. Mr. Astrue's term expired in 2013.

His program to increase accountability and judicial turnover should be permanent. Congress could also institute 15-year term limits for judges, and end their dual roles. Besides, Congress can limit claimants who file and then withdrawal appeals in hopes of drawing a generous judge by allowing only one application per claimant in a three-year period.

Source: Mark J. Warshawsky, Ross A. Marchand, "Disability Claim Denied? Find the Right Judge," The Wall Street Journal, March 9, 2015.


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