Fifth in a Hearing Series on Securing the Future of the Social Security Disability Insurance Program
SUBCOMMITTEE ON SOCIAL SECURITY
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
September 14, 2012
Printed for the use of the Committee on Ways and Means
COMMITTEE ON WAYS AND MEANS
WALLY HERGER, California
|SANDER M. LEVIN, Michigan
CHARLES B. RANGEL, New York
FORTNEY PETE STARK, California
JIM MCDERMOTT, Washington
JOHN LEWIS, Georgia
RICHARD E. NEAL, Massachusetts
XAVIER BECERRA, California
LLOYD DOGGETT, Texas
MIKE THOMPSON, California
JOHN B. LARSON, Connecticut
EARL BLUMENAUER, Oregon
RON KIND, Wisconsin
BILL PASCRELL, JR., New Jersey
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
JENNIFER M. SAFAVIAN, Staff Director and General Counsel
SUBCOMMITTEE ON SOCIAL SECURITY
KEVIN BRADY, Texas
|XAVIER BECERRA, California
LLOYD DOGGETT, Texas
SHELLEY BERKLEY, Nevada
FORTNEY PETE STARK, California
C O N T E N T S
Richard Burkhauser, Ph.D., Professor, Cornell University, Ithaca, New York, and Adjunct
Scholar, American Enterprise Institute
David C. Stapleton, Ph.D., Director, Center for Studying Disability Policy, Mathematica Policy Research
Marty Ford, Director of Public Policy, The Arc of the United States, on behalf of the Consortium for Citizens with Disabilities Social Security Task Force
Daniel Bertoni, Director, Education, Workforce, and Income Security, Government Accountability Office
Jill Houghton, Executive Director, US Business Leadership Network
Nadine Vogel, Founder and President, Springboard Consulting, Mendham, New Jersey, on behalf of the Society for Human Resource Management
Fifth in a Hearing Series on Securing the Future of the
Social Security Disability Insurance Program
U.S. House of Representatives,
Committee on Ways and Means,
The subcommittee met, pursuant to call, at 9:30 a.m., in Room B‑318, Rayburn House Office Building, Hon. Sam Johnson [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
Chairman Johnson. We have a short morning this morning, and a lot of good testimony to listen to, so we are going to go ahead and get started. Mr. Becerra is on his way, so the committee will come to order.
Welcome to the fifth and last hearing in our series on Securing the Future of the Social Security Disability Insurance Program. Over the course of the series we have heard about the program’s striking and continuing growth at a time when workers paying into the system have increased nearly 70 percent between 1970 and today. The number of people collecting disability checks has increased by over 300 percent, like from 2.6 to 10.8 million people. By 2021 the number of beneficiaries will exceed 12 million and total benefits paid will reach over $200 billion.
That is a 52 percent increase over the $132 billion paid in benefits last year. We have heard how some of that growth is caused by factors like the size of the overall workforce, more women in the workforce, and the aging of the baby boomers. And some of the growth has been caused by Congress’ decisions that expanded the ways in which people could qualify for benefits.
We have heard about the people who try to defraud the system by falsely claiming they are disabled and we have seen some of them. We have heard that Social Security’s efforts to conduct continuing eligibility reviews are a shifting priority, adding unnecessary costs and weakening public trust in the program. And we have heard how last century’s view of disability hasn’t kept up with this century’s advances in medicine, technology, and the workplace, resulting in a program that pays people not to work.
In fact, GAO has designated the program high risk because the medical criteria and occupational information relied on to make benefit decisions are out of date.
And we have heard that the World Health Organization and many distinguished medical experts look at disability today as the individual’s ability to function in different environments, especially with assistance of technology or workplace accommodations for the disabled.
In the hearing series, we have also heard how important it is to make the right decision as early in the process as possible. We have walked through the complicated lengthy and open‑ended initial determination and appeals process that enables claimant representatives to drag out appeals in hope of getting awards. And we have heard how outlier judges, many of whom award disability benefits in most of the cases they hear, in other words, rubber stamping, can’t be managed or questioned about their decisions and leaving the process virtually unmanaged and adding more costs.
And we have also heard how the courts have taken it upon themselves to reinterpret Congress’ will, creating inequities and inconsistencies. We have heard again and again that we must keep this program strong for those who truly cannot work. And we have heard the Disability Insurance Program is on an unsustainable path, and that unless Congress acts, in 2016 the program will be able to pay only 79 percent of the benefits, putting individuals with disabilities at risk.
The hearing series has been about how the Disability Insurance Program works, problems plaguing the program, and the need for sensible changes to make it work better. This series has raised important questions. Is the concept of disability that existed in 1956 still appropriate today in this 21st century economy? Are there better ways to support individuals with disabilities who can remain in the workplace instead of paying them to stop working? And are there ways to award benefits sooner and provide a fair, timely appeals process? And finally, what are the risks of doing nothing?
Today we will hear several views about where the existing system falls short and how it might be fixed as well as some new approaches that are already working. What each of our witnesses has in common is they believe we can fundamentally do better, and I thank you all for that.
We will also hear from the business community on the amazing success of employers who are hiring those with disabilities and the challenges they face keeping those with disabilities in a job.
I want to thank the members of this subcommittee for engaging in this much needed conversation, and I know we are all committed to continuing this dialogue. Together, including Mr. Becerra and I, we will find answers to securing the future of the Disability Insurance Program for generations to come.
I now recognize Mr. Becerra for any comments you may have, sir.
Mr. Becerra. Mr. Chairman, thank you very much and thank you to our witnesses for being here.
Severely disabled American workers have earned the right to receive disability benefits and they rely on them. One hundred sixty million Americans contribute to Social Security. They need protection for themselves and their families when they retire, or if they should die, they also get the benefits, or if they become disabled, severely disabled, they get the benefits.
It is not easy to qualify for Social Security disability benefits. DI is only for people who paid into the system, first; second, it is only available to Americans with the most severe impairments, Americans who are dying or who are generally at a point where they can’t even earn a poverty level wage at any job in the national economy because of a long‑term condition.
Fewer than half of Americans who apply for DI benefits are awarded such benefits, even after a lengthy appeals process. DI benefits aren’t especially generous. A typical worker receives about $13,000 a year which replaces about half the earnings that worker had while working. For nearly half of DI recipients, Social Security provides 90 percent or more of their total income.
The Social Security Disability Insurance Trust Fund’s challenge, which we are hearing more and more about, is modest and it is stable. Although the Social Security system overall can pay full benefits until 2033, the DI Trust Fund considered on its own is projected to be able to pay only about 80 percent of scheduled benefits starting in 2016. Fortunately, the DI shortfall is relatively modest. Over the next 75 years, the financing shortfall is equal to about 0.1 percent of GDP or, to put it in context, that is about one‑eighth of the cost of extending the Bush tax cuts for people who earn more than $250,000 a year.
The DI shortfall, by the way, is not a surprise. When Congress last rebalanced the allocation of payroll taxes going into the two Social Security trust funds, it did so knowing that the amount allocated to DI would result in a shortfall in 2016, the same date as projected in the most recent trustees report. The recent growth in DI is also not a surprise since it is due primarily to demographic changes and other predictable factors in combination with, of course, the recession. The biggest factor is demographic. The baby boom generation has reached its most disability‑prone years. More women have worked long enough to be protected in the event they become severely disabled and can no longer work. Finally, the economic downturn has also made it more difficult for people with disabilities to obtain work.
I do think it is very important that we operate DI in the most fiscally responsible way possible, and we have to here in Congress take responsibility for our own actions in how we provide the resources for the Social Security Administration to do its work, both as a program for those who are retired and those who are disabled. As we work to address the challenges that face us and to strengthen DI for the future, we must first do no harm.
As we talk about the possible changes to Social Security disability insurance, we should keep in mind that American workers have paid for their Social Security benefits. Over its lifetime, Social Security has taken in $15.5 trillion and only paid out $12.8 trillion, leaving an overall trust fund surplus of $2.7 trillion. Surplus.
I am concerned that experiments that some would like to perform on the DI program could be harmful to those with severe illnesses or disabilities. They could increase employment discrimination against the disabled, or they might deny or delay earned benefits for those who need them, increasing hardship for already struggling American families. There is little evidence to suggest that people who qualify for DI are, in fact, able to work at any kind of self‑supporting level.
Mr. Chairman, I hope we can work together on a bipartisan basis to strengthen DI, always applying the test that we should first do no harm. And with that, Mr. Chairman, I think we have an opportunity to hear from some very important witnesses and I hope that we are able to then move forward with that information in a way that lets us do right by this important program for so many millions of Americans.
With that I yield back the balance of my time.
Chairman Johnson. Thank you.
As is customary, any member is welcome to submit a statement for the hearing. Before we move on to our testimony today I want to remind our witnesses to please limit your oral statements to 5 minutes. However, without objection, all of the written testimony will be made part of the hearing record.
We have one witness panel today, and seated at the table are Richard Burkhauser, Ph.D., Professor, Cornell University, Ithaca, New York and Adjunct Scholar, American Enterprise Institute. Thank you for being here. David Stapleton, Ph.D., Director, Center for Studying Disability Policy, Mathematica Policy Research; Marty Ford, Director of Public Policy, The Arc of the United States on behalf of the Consortium for Citizens with Disabilities Social Security Task Force; Daniel Bertoni, Director, Education Workforce and Income Security, Government Accountability Office; Jill Houghton, Executive Director, US Business Leadership Network; Nadine Vogel, Founder and President, Springboard Consulting Mendham, New Jersey, on behalf of the Society for Human Resource Management. Welcome to all of you and thanks for being here.
Dr. Burkhauser, you are recognized. Please go ahead.
STATEMENT OF RICHARD BURKHAUSER, PH.D., PROFESSOR, CORNELL UNIVERSITY, ITHACA, NEW YORK, AND ADJUNCT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE
Mr. Burkhauser. Thank you for the opportunity to outline the main Social Security Disability Insurance policy reforms contained in my book with Mary Daly.
The DI program is growing at an unsustainable pace. Unless policy reforms are enacted, the Social Security trustees predict DI will be insolvent by 2016. Based on our reading of the evidence the dramatic growth in beneficiaries captured in Figure 1 is not primarily the result of factors outside the control of policymakers. Rather, it is the consequence of changing eligibility standards and their interpretation by DI gatekeepers, changes that have increasingly turned DI into a long‑term unemployment program, rather than a last resort income safety net for those unable to work that its founders envisioned.
As can be seen in Figure 1, between 1990 and 2009 Americans on the disability rolls more than doubled from 40 to 82 per thousand workers. This troubling statistic is now well‑known. What is less known is how over this period the Netherlands, once called the sick country of Europe for its runaway disability system, initiated fundamental reforms that reduced their disability rolls from 110 to 80 per thousand workers, a ratio that is now below the United States’ rate. The Dutch reforms focused on reducing the inflow of beneficiaries by making employers more directly bear program costs. All Dutch firms must now fund the first 2 years of their worker’s disability benefits and pay an experience rated disability tax based on the number of their workers who move on to the long‑term program. These reforms provide incentives for employers who are in the best position to offer accommodation rehabilitation to do so. Most importantly, these reforms led to the development of a market for private long‑term disability insurance, and more effective case management of impaired workers by private sector case managers. It is this early intervention that is credited with the significant decline in beneficiaries shown in Figure 1. Importantly, the reduction of new beneficiaries was the result of those with disabilities working rather than moving on to other welfare programs.
Currently about one‑third of U.S. workers are covered by private long‑term disability insurance. The question is, how do we get the private sector more involved in case management? Rather than mandate that all firms provide such coverage we proposed an alternative to better align the public and private costs of long‑term disability.
The United States should stop funding the DI system with a uniform payroll tax and replace it with a tax based on a firm’s experience rating. Doing so would raise the payroll tax of firms whose workers enrolled at below‑average rates and lower it for firms whose workers enroll at low‑average rates. Employers who bore the cost of both options would be more incentivized to make investments that clear a work path for their employees following the onset of a disability than to push them on to the DI rolls.
This is currently the system used to fund State Worker’s Compensation benefits. The best practice for these programs could also be considered for DI changes. Alternatively, employers who provide private disability insurance could be granted a reduction in DI tax rates, while firms that could not be charged higher tax rates either ‑‑ could be charged higher tax rates. Either of these reforms would bend the projected cost curve by reducing incentives for employers and employees who overuse the system.
Current DI policy built on the assumption that disability and employment are mutually exclusive is both archaic and fiscally unsustainable. Fundamental reform is needed to restore DI solvency and to support continued employment and greater self‑sufficiency among workers with disabilities. Experience rating is the key to doing so. It would bring private sector know‑how in case management to the front end for a more fully integrated disability system.
This is not pie in the sky reform. This is reform that the Dutch have already implemented. It is reform that is going on in Sweden, and it is reform that is going on in Great Britain. If you look at Figure 1, you can’t possibly believe that changes in the health of the Dutch and the United States are actually responsible for the dramatic changes in the number of people on their disability rolls. The Dutch in the 1980s proved that you could put as many people on the disability rolls as you are willing to accept by very open rules that allowed people to come on who had only 15 percent impairments. We are now having a higher rate than they are in our disability system, and we can do better.
Thank you, Mr. Chairman.
[The statement of Mr. Burkhauser follows:]
Chairman Johnson. Dr. Stapleton, you are recognized for 5 minutes. Thank you.
STATEMENT OF DAVID C. STAPLETON, PH.D., DIRECTOR, CENTER FOR STUDYING DISABILITY POLICY, MATHEMATICA POLICY RESEARCH
Mr. Stapleton. Thank you for the opportunity to testify today. I will briefly state and explain my views which have been formed over 20 years of conducting research on disability and employment issues. More support for my views can be found in my written testimony.
SSDI is just one component of our Nation’s disability support system, albeit a key one. Like many others I think the overall system is failing. There is no easy fix, but there are prospects for systemic reforms that would provide better opportunities for people with disabilities to live fulfilling lives, and at the same time reduce growth in Federal and State expenditures for their support. Congressional action, however, is required to jump start a process that over time could lead to successful restructuring.
Now, I characterized the disability system as failing because it is well documented that economically working age people with disabilities are falling further and further behind their peers without disabilities even though taxpayers are paying more and more for their support. For over two decades relative employment rate and household income of working‑age people with disabilities has been declining and Federal expenditures to support that population are very high and are growing much more rapidly than we would expect based on growth and the size of the workforce and the changes in its age and sex composition. In short, taxpayers are being asked to pay more and more for a support system that is less and less adequate.
I see two fundamental causes of systemic failure: The first is the use of long‑term inability to work because of a medically determinable condition as an eligibility criterion for SSDI and SSI. This criterion might have made sense in 1956, SSDI’s first year, but in today’s world many people with severe medically determinable impairments can, in fact, substantially support themselves through work. My guess is that you all know people with such significant impairments that they would be eligible for SSDI if they did not actually work. And I suspect there are some in this room. They likely have high levels of education. They have received excellent health care, they use technology and accommodations to greatly mitigate their functional limitations, and they have developed strong personal support networks, factors that SSA does not, of course, routinely consider in its disability determinations.
The inability to work criterion creates work disincentives for all those with qualifying medical conditions or conditions that nearly qualify, and fosters long‑term dependence on public support.
The second fundamental flaw with the current policy is program fragmentation, as has been amply documented by Dan Bertoni and his colleagues at the GAO. The patchwork of Federal and State disability support programs creates pervasive inefficiencies. Among these, and there are many, are multiple financial incentives for States and others to encourage and help people with disabilities apply for SSDI rather than to support work.
Structural reforms that address these two issues could potentially provide better economic opportunities for people with disabilities and reduce growth in Federal and State expenditures for their support. Such win/win policy reforms would be oriented towards helping people with disabilities take advantage, take better advantage of their productive potential rather than undermine their efforts to do so. They would also integrate or better coordinate programs, all in a manner that improves outcomes for people with disabilities and reduces total expenditures for their support.
Now, that is very fine in theory, but what is the evidence? Is this all pie in the sky? In my written remarks, I summarize a growing body of evidence that such win/win reforms do exist. Given the evidence, it is not hard to imagine that structural reforms could reduce the percentage of people with disabilities who primarily rely on the government for their support by 20 to 25 percent, perhaps more, improving their economic well‑being at the same time. Unfortunately, however, it is far too risky to institute structural reforms on a timetable that would address the pending exhaustion of the SSDI Trust Fund based on what we now know. There is a high chance that the reforms would make people with disabilities significantly worse off, something that I know nobody wants to do, or they might accelerate growth in public expenditures for their support rather than reduce it, or they might do both.
You know, Congress could pass legislation to put the country on a path towards successful restructuring. Structural change requires collaboration across agencies and across the corresponding congressional committees. I know that is difficult, but it is not unheard of. It has happened before. And it simply has to be done.
States must also play a significant role. My written testimony outlines the elements of legislation that would help move that process forward.
Today Congress faces very difficult choices with respect to SSDI and other programs that provide support to people with disabilities. The fundamental problems with the support system make it very likely that more difficult choices are in store for future Congresses if we don’t quickly start down a path that could lead to win/win policy reforms. Hence, I urge you maybe to initiate a process of long‑lasting fundamental reforms to American disability policies and programs.
Chairman Johnson. We just might do that. Thank you for your testimony.
[The statement of Mr. Stapleton follows:]
Chairman Johnson. Ms. Ford, you are recognized.
STATEMENT OF MARTY FORD, DIRECTOR OF PUBLIC POLICY, THE ARC OF THE UNITED STATES, ON BEHALF OF THE CONSORTIUM FOR CITIZENS WITH DISABILITIES SOCIAL SECURITY TASK FORCE
Ms. Ford. Thank you, Chairman Johnson, Ranking Member Becerra, and members of the subcommittee, for this opportunity to testify and for your attention to this very important disability program.
SSDI is vital to people who are disabled during their working years and to their dependents. Earned benefits targeted to people with the most severe disabilities benefits are modest, averaging about $1,060 per month. For most people, SSDI benefits are at least 75 percent of their income. Along with related Medicare benefits, SSDI provides economic security and plays a vital role in helping people secure housing, food, health care, and other basic necessities.
Beneficiaries are diverse. They can include a young person with severe visual or hearing impairment, or who has had a major head injury, or physical trauma, from an accident; a former daycare worker, teacher, accountant who has been diagnosed with advanced cancer or heart condition or MS; a former construction worker, machinist, salesperson, or nurse aide with a back injury and chronic debilitating pain or early onset of Alzheimer’s; a custodian, illustrator, or stock clerk with bipolar disorder, schizophrenia, or intellectual disability.
Many beneficiaries have had repeated attempts to work, often exacerbating their impairments before finally turning to the Social Security system. Most have a combination of adverse vocational characteristics such as age, low educational attainment, and declining health. Many beneficiaries are terminally ill; about one in five men, and one in seven women die within the first 5 years of receiving benefits. Furthermore, while recent technological advancements and stronger civil rights laws have helped many people with disabilities work, others face diminishing opportunities as the modern work environment actually becomes more demanding and less forgiving.
Given the challenges facing people with disabilities, their loss of income and often extreme poverty, Social Security is a vital part of the solution for them, not the problem. That is why it is so important that any measures to strengthen SSDI be carefully developed, tested, and evaluated to understand the effects on current and future beneficiaries.
The CCD Social Security Task Force has developed principles to help guide any reforms to the Social Security system, including SSDI. These are outlined in my testimony and we have numerous recommendations which I will highlight: Develop a better wage reporting and recording system, and promptly adjust wage ‑‑ adjust benefit payments to reduce overpayments; increase the substantial gainful activity level to that of people who are blind; establish an earnings offset in the SSDI program; provide a continued attachment to SSDI and Medicare so long as the person remains disabled. This is an element of the Work Incentive Simplification Program, or WISP. Improve the rules for impairment‑related work expensed; support and strengthen programs designed to allow flexibility for people who want to return to work, including programs authorized under the Ticket to Work Program. Improve opportunities for those who receive disabled adult child benefits; extend SSA’s Title II demonstration authority; extend the WIPA and the PABSS programs; and provide SSA with adequate resources to carry out all necessary program functions.
Finally, we must secure the long‑term financial future of SSDI. As chief actuary, Steve Goss testified that major demographic shifts, including the aging of the baby boomers and entry of women into the workforce in the 1970s and 1980s, explain most of the recent DI program growth and that expansion has been expected for decades. Fortunately, these trends are also expected to stabilize over the next few years.
To meet the DI trust fund shortfall in 2016, we urge Congress to act expeditiously, as has been done in the past, to reallocate payroll taxes between DI and the OASI programs. Congress has reallocated funds between the two trust funds six times, using a narrow definition of reallocation and 11 times using a broad definition. Reallocation is a sensible solution that will maintain the confidence of workers in SSDI.
Americans value Social Security and are willing to pay for it. Reallocation allows time to carefully develop, consider, and evaluate options for assuring the long‑term solvency of both the OASI and the DI trust funds for generations to come.
Thank you for this opportunity to testify. I look forward to answering any questions.
Chairman Johnson. Thank you, ma’am. I appreciate your testimony.
[The statement of Ms. Ford follows:]
Chairman Johnson. Mr. Bertoni, welcome aboard. Please go ahead.
STATEMENT OF DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE, AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Bertoni. Good morning. Chairman Johnson, Ranking Member Becerra, members of the subcommittee. Good morning. I am pleased to discuss the future of Social Security disability programs, which paid nearly $180 billion to over 14 million individuals and their families last year. Given the size and cost of its programs, SSA must have current and appropriate criteria to assess whether a claimant’s medical condition precludes work in a national economy.
In 2003, we designated SSA’s programs high risk in part because its programs did not reflect modern concepts of disability, where one’s medical condition and work capacity is assessed in conjunction with advances in medicine, technology, and current job demands.
My remarks today are based on our June 2012 report and focuses on steps SSA is taking to modernize its disability determination criteria, especially in regard to how claimant’s functional capacity and other factors, such as assistive devices and workplace accommodations are considered.
In summary, SSA has taken concrete steps to incorporate modern concepts into its disability criteria. First, in several areas the agency is now giving greater consideration to claimants’ functional capacity despite their medical condition to determine whether their impairment prevents work. For example, as part of SSA’s revision to its medical listings for the immune system the agency included several functional criteria, such as performing activities of daily living, maintaining social functioning and completing tasks in a timely manner.
In general, the SSA officials and experts we spoke with supported incorporating a functional criteria as appropriate to facilitate a more accurate assessment of work disability. However, some caution that such an approach could result in more subjective assessments and pose challenges for decisional consistency.
Despite these concerns, to better inform its efforts and incorporate functional information into it processes SSA is sponsoring research through the National Institutes of Health. Of note is an ongoing effort to develop a computer‑based tool to more rapidly and reliably assess claimant function. Agency officials anticipate several benefits from this assessment tool, such as providing more timely, accurate, and consistent information on the impact of impairments and one’s ability to work. However, the agency has yet to determine when or how this tool will be integrated into its disability determination processes.
Although these and other actions are promising, SSA has not fully incorporated other modern concepts into its disability criteria, such as the role of assistive devices and accommodations in mitigating barriers to work. In today’s work environment, assistive devices can help the visually impaired perform various tasks and accommodations such as increased wheelchair accessibility can enhance an individual’s ability to function in the workplace.
SSA does incorporate assistive devices such as prosthetics for walking into the medical listings once they become standard in the medical community, and examiner staff must evaluate a person’s ability to function with the devices in place. However, agency officials and other experts expressed concerned about more broadly incorporating such devices when they may not be widely available.
In regard to workplace accommodations, the agency’s policy is not to consider them due to the inability to ensure they are actually being provided by employers or that they are effective.
Officials were also concerned about the resources required to do such assessments, and that data on availability and use of accommodations was lacking. Although giving broader consideration to assistive devices and workplace accommodations is difficult, SSA may be missing opportunities to move further in this direction, especially for some populations such as young adults. Indeed, some have argued that there are common, inexpensive workplace supports to address work disability that can be reasonably incorporated into SSA’s disability criteria. And there may be opportunities for the agency to obtain this information directly from employers as it moves forward in developing its new occupational information system. SSA could also collect such information through its disability research consortium which will serve as a national resource for fostering studies on disability policy.
We recommended that SSA conduct limited, focused studies on the feasibility of more fully incorporating certain assistive devices and accommodations into its disability determinations. Absent studies to ascertain how these tools are playing a role in helping individuals with disability stay at work or return to work and their cost in comparison to many years of disability benefits, SSA may be missing an opportunity to help individuals reengage in the workforce and to best target finite program resources.
Mr. Chairman, this concludes my statement. I am happy to answer any questions you may have. Thank you.
Chairman Johnson. Thank you, Mr. Bertoni.
[The statement of Mr. Bertoni follows:]
Chairman Johnson. Miss Houghton, welcome. Please go ahead.
STATEMENT OF JILL HOUGHTON, EXECUTIVE DIRECTOR, US BUSINESS LEADERSHIP NETWORK
Ms. Houghton. Chairman Johnson, Ranking Member Becerra, and members of the committee, thank you for the opportunity to be here today. My name is Jill Houghton. I am the Executive Director of the US Business Leadership Network. We are a business network. We are nonprofit. We are nonpartisan, and we promote disability inclusion in the workplace, in the marketplace, and in the supply chain. Additionally, we run the Nation’s only certification for disability‑owned businesses, and we are working with corporate America to do business with people with disabilities who are entrepreneurs.
As Executive Director of the USBLN, I am here because our businesses, our members are deeply, deeply committed to recruiting, hiring, and retaining employees with disabilities. I should also share with you that my testimony is grounded in my personal experience. I ran the Ticket To Work and Work Incentives Advisory Panel from 2005 until 2008, when we sunset. I am also married to somebody with a spinal cord injury, who is on the Social Security Disability Insurance Program and successfully transitioned off the rolls.
While our members are not experts on the Social Security program, one of the things that they firmly believe in is that we as a Nation have to move from focusing on disability from a medical perspective to focusing on a social perspective, focusing on talent. When we go to our members and we ask them if they are interested in hiring people with disabilities, unequivocally the answer is yes, but they don’t hire people with disabilities because they can’t work, they hire people with disabilities because they have the prerequisite skills and the needed supports in order to come in and get the job done.
When we went to our members and we asked them about their challenges and their opportunities related to this issue, I will tell you that one of the number one issues, once they get over and they figure out that this is what they want to do, the question becomes where are ‑‑ where is the supply? We represent the demand side of the equation and where is the supply? How do I find people with disabilities? And specifically, how do I find college students with disabilities?
So we created a National Student Advisory Council and we became really personally connected to this because one of our student leaders, Jimmy Curran, graduated from Temple University with a degree in finance. This kid is ready to set the world on fire. This is who my members are looking for. And Jimmy got a job as a market research analyst in Pennsylvania with a Blue Cross affiliate, and he called me up and he said, hey, I am going to work but he needed personal care assistant services. So his private insurance wasn’t going to pay for that. So he didn’t know about 1619(b) and all of the complicated work incentives and we helped him get connected, and so the good news is, Jimmy is working, and that is the good news. The bad news is that unless he gets bumped up to a really high level within the company he is going to have to stay at this certain level and limit his earnings because he needs the personal care assistant services. And in a short amount of time he is going to become dually eligible. Now, from businesses’ perspective we have invested in Jimmy. We want Jimmy. We want to help Jimmy grow within the company, but it is going to be a challenge and he is going to have to come to making some tough decisions. So that is definitely a challenge that we face.
Other challenges that we face, is there is a myriad of government programs out there and nobody knows how to navigate, right? I mean, people knock on businesses’ door from, you know, every nook and cranny talking about what people can’t do. We don’t want to know what people can’t do. We want to know what people can do.
Certainly, there are challenges that our members hear about. They hear about employees that have issues with overpayments, that have issues with program eligibility, et cetera. The list goes on.
So where are we succeeding? I will tell you where we are succeeding. We are succeeding because business ‑‑ companies like Walgreens are standing up and making a corporate commitment to recruit, to hire, to retain people with disabilities, and they are teaching their peers. Countless companies, Lowe’s, Pepsi, Hershey, Merck. The list goes on and on and on of companies that are learning from each other that are committed to this. But it is not easy.
I would tell you that, in conclusion, hiring people with disabilities gives business a competitive advantage. It is an advantage that business needs. We represent the demand side of the equation. We need the talents, the dedication, and the creativity of people with disabilities in the workforce, but equally important is we need policies and programs and investments that support this paradigm shift from a medical model to one that focuses on talent.
Chairman Johnson. Thank you, ma’am. I have visited Walgreens where they work those people, and there must have been 10 of them in there stocking shelves. It is neat to see people who are in that situation accomplishing something with their lives. It really is.
[The statement of Ms. Houghton follows:]
Chairman Johnson. Ms. Vogel, welcome. Please proceed.
STATEMENT OF NADINE VOGEL, FOUNDER AND PRESIDENT, SPRINGBOARD CONSULTING, MENDHAM, NEW JERSEY, ON BEHALF OF THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT
Ms. Vogel. Thank you. Good morning, Chairman Johnson, Ranking Member Becerra, and distinguished members of the subcommittee. My name is Nadine Vogel and I appear before you today as a member of Society for Human Resource Management. SHRM’s members have a long history of promoting effective employment practices that advance equal opportunity for all people, including individuals with disabilities. I commend you for holding this hearing on the Disability Insurance Program and thank you for the opportunity to testify.
Mr. Chairman, I am the Founder and President of Springboard Consulting in Mendham, New Jersey. At Springboard it is my professional goal to collaborate with organizations that encourage the hiring and retention of individuals with disabilities. On a personal level, my husband and I are both parents of two children who have special needs. I understand firsthand the issues that individuals that have disabilities and their families face, but I also understand the challenges that employers face in today’s economy.
Every day in this country employer disability management strategies are helping employees stay on the job and off our strained Disability Insurance Program. Employers and HR professionals continue, however, to confront persistent gaps between the skills of unemployed workers and the skills sought by employers to fill specific positions.
Recent SHRM research reveals that more than one‑half of employers report difficulty recruiting for specific jobs today. Individuals with disabilities can fill these gaps. The challenge for employers is to develop an approach that recruits and retains these talented employees while successfully navigating Federal law and programs.
In my experience both employers and employees want individuals with disabilities to remain at work or return to work as quickly as possible. The GAO has shown that the longer employees are out of work, the less likely they are to ever return. But there are many challenges for employers. While numerous Federal statutes and programs attempt to provide a transition from disability to work for these individuals, taken as a whole, they are very complicated to navigate.
First, the Social Security Disability Insurance Program has great merits, but it was not originally created to handle all of the age‑related disabilities that come as a result of people living longer and staying in the workplace longer. In addition, the definition of disability for eligibility for SSDI is outdated. It reflects the medical model rather than a functional model. Contrary to SSDI definition, other Federal statutes use a different definition. At SHRM we prefer the Americans with Disabilities Act, or ADA, definition. It relies on the essential functions of the job, what someone can do rather than a more general job description or perhaps what they can’t do.
Then our members report mixed experiences in utilizing the Work Opportunity Tax Credit and VOW to Hire Heroes Act Tax Credit as well as vocational rehabilitation protection and advocacy for beneficiaries of Social Security and the Ticket To Work programs. Because of the complexity and the paperwork required to take advantage of these tax credits and programs, they are more geared towards benefiting large employers with HR departments, and even then can be extremely overwhelming. Despite the economic and statutory hurdles employers, have found many strategies successful in keeping employees with disabilities at work.
First, when employers engage an employee early on in the return to work process it allows the organization to simultaneously meet business needs and reduce the financial impact of a prolonged absence to the employee and their family.
Second, employers clearly define policies and jobs. Employers must ensure that the transition back to work programs have specific written guidelines, light duty, and regular duty job descriptions.
Third, reasonable accommodations committees, or RACs, are becoming a very effective practice towards ensuring the fair and equitable end‑to‑end process of someone requesting an accommodation.
And fourth, employers are providing creative accommodations and other simple solutions for these employees such as a keyboard tray to reduce carpal tunnel syndrome. Such accommodations can include workplace flexibility benefits such as defined flexible work schedules and even telecommuting.
In closing, Mr. Chairman, I want to be clear that while some of these suggestions for disability management tactics may work for different employers, you know, you have to keep in mind that the suggestions here are circumstantial. So there is not one simple one‑size‑fits‑all solution for every employer of every size or, for that matter, in every industry.
Mr. Chairman, again, I thank you, I thank you the subcommittee for listening to my perspective, and I am happy to answer any questions.
Chairman Johnson. Thank you, ma’am.
[The statement of Ms. Vogel follows:]
Chairman Johnson. You know, I have always thought the United States was a leader, but some of the testimony we have heard makes me feel like we are not doing enough. And I guess the question is, how does a program need to change to catch up with the world views on disability today?
Dr. Stapleton, you say the fact that the Disability Insurance Trust Fund will be exhausted in 2016 and the erosion of the economic status of people with disabilities are signs of a failing public support system for working‑age people with disabilities, despite the increasing Federal tax dollars that go into it, and you also say that the system is failing the taxpayers who pay for it, could you explain why you call it that, and tell me why they exist, if you can?
Mr. Stapleton. Sure, I would be happy to do that. This really goes back, I think, to things that you said in your opening comments. In 1956, when we established SSDI, it was intended to be a medical retirement program for people who were over the ‑‑ it is on. Is that better now?
Chairman Johnson. Yes.
Mr. Stapleton. Okay. Sorry.
Chairman Johnson. I could hear you. We will get the cotton out of his ears.
Mr. Becerra. He needs an assistive device.
Mr. Stark. You have new batteries.
Mr. Stapleton. I am not sure he qualifies.
Mr. Becerra. I can guarantee you he doesn’t.
Mr. Stapleton. So it was established as a medical retirement program for workers over the age of 50. And you know, at that time, it was probably pretty reasonable to determine whether somebody could continue to work based on their medical conditions. A lot has changed since then, and some of those changes are external to the program, advances in medicine and technology and the way that we work that are just mind‑boggling from the perspective of 1956. And that, to my mind, has really made SSA’s task of trying to divide people into people who can work and people who can’t work based on medical conditions alone, a fool’s errand. You know, it is just if you want to know why that process doesn’t work very well, that is the core reason.
Chairman Johnson. Well, dividing it is one thing but some of them tried to play the system, too. You know that.
Mr. Stapleton. Well, that may well be true. So at the same time those trends were occurring, you know, we expanded the availability of disability benefits, and the American people are very generous. They want to help people with disabilities. And the way that we did it, though, was to really expand on what we did with SSDI. So first we made it easier for young people to get SSDI benefits either by working a little bit or by becoming eligible as dependents of their parents and the same for disabled widows. And we also, you know, we eventually added Medicare benefits to the mix, made the benefits more valuable.
The SSI program started in 1974. We used the same criterion, and again, expanded benefits, made Medicaid available to those who were on SSI in most States, for almost all people.
So my colleagues and I in the past have called what we have created a poverty trap. And what we do is when people with significant medical conditions do have challenges, they face difficult challenges in their lives, so we have set up a system which serves to funnel them into dependence on Federal programs as opposed to helping them take advantage of the productive capacity that they actually have.
And so I think, you know, the root of the problem goes back to just following along and expanding on what we did in 1956 without taking a good look at the structure and thinking about how to change it. And as time has passed various things have happened that have affected the ability of some people with significant impairments to work. We have had a more competitive economy. We have had many recessions and as you know, every time we have a recession, a new batch of people comes on to SSDI. And once they get on, almost all of them stay there for the rest of their lives or until they are earning retirement benefits. So we just keep following people into the programs more and more, and we end up having to spend more and more for them.
So I think, you know, I think in short, we are getting less for our money, and not really helping people with disabilities the way that we could help them with the same amount of money or even less.
Chairman Johnson. Dr. Burkhauser, could you tell me what you think the primary policy goal of the national disability insurance ought to be and what should the taxpayers be paying for with their taxpayer dollars?
Mr. Burkhauser. Well, I think the taxpayer should be paying for what was originally envisioned by the founders. The DI program should be a last resort income safety net for those unable to work.
Now, in Europe, the way that works is that the government integrates government jobs programs with government transfer programs and they have gatekeepers that try work programs first. That is not the way we do business in the United States. We have much more faith in the private sector. But we have a DI program which basically hands out checks. And we have this very weird system. Think about this. You have to spend 2 years demonstrating that you can’t possibly work at any substantial gainful activity before someone in the government tries to help you to work. That doesn’t work. That is crazy. You don’t provide help for work after someone has proven they can’t work for 2 years. You need that to happen beforehand. The people who do that are the private‑sector employers but they are getting the wrong signals because of the way we tax them to provide less training and accommodation than they can do.
The Dutch had the same problem and what they did was to experience rate payroll taxes and require firms to provide the first 2 years of benefits. That got the attention of the private sector. It is nice to say that the private sector takes care of a few people. That is good, but it is amazing the private sector how they respond to incentives. If you tell them you have got to pay for it if they go onto the long‑term disability rolls, all of a sudden they will be taking care of a lot more people. Only 33 percent of employers now have long‑term disability programs. I am not saying that we should mandate that. That is what some very good economists Autor and Duggan out of the Hamilton Group urged. I am suggesting let’s just change the price signals so that people have to pay. When their workers go onto the disability rolls they have to pay more if more of their workers go on relative to firms that are doing the right thing and providing accommodation for them.
Chairman Johnson. Thank you, sir.
Mr. Becerra, you are recognized for 5 minutes.
Mr. Becerra. Thank you, Mr. Chairman. Thank you all for your testimony and food for thought. I thank you very much. Is it Houghton?
Ms. Houghton. Houghton.
Mr. Becerra. Ms. Houghton, I liked your testimony because more than anything else I think you show that there is a lot of energy and enthusiasm to try to make a difference. And I think that goes a long way. Much of this is believing in some of these folks that they can go back to work and helping inspire them to have the confidence to go back to work, and so I hope that you stay in touch with us as we try to figure out how to improve the DI system. Anything that you think will work, you know, the best ideas that can come from the business community, our business leaders who are trying, making the effort to try to get folks into the workforce, the collaborative efforts that can take place between the business community and the Federal Government, please share that. And Ms. Vogel, you as well, also expressed some of that. I hope that what you will do is push us, push the envelope because what we do have to do is figure out a way to partner on this.
We are entering the stage where that baby boom generation is hitting that point where they are most prone to be disabled. And that is why I think the chart, Dr. Burkhauser, that you used was a bit deceptive. We have twice as many women in the workforce today than we had back in 1975 when you start to show an increase in the size of the disability workforce. We have all of those baby boomers who in 1975 were babies, young kids, who are now at that point where they are either retiring or not able to work because they may have become disabled. And so I think we have to look closely because I don’t think anyone here would say that the folks that are receiving disability benefits don’t have a disability. It is whether they have a disability that would keep them from working, and what we have to try to do is help those who should be able to work, who with a little bit of incentive, with a little bit of confidence, people who say, I trust that you can get back to work, I am going to show you that I am committed to you as your employer to help you get back to work, can probably inspire some of these folks who are probably a little depressed on occasion when they can’t get to work to say, you know what, you believe in me, I am going to believe in me again. And I think that is where we crack this nut which has led to this concern for the Disability Insurance Program. But I hope no one would make the claim that it is time to get rid of the Disability Insurance Program because for the most part, we need some help for some of these folks.
So, Ms. Houghton, I wanted to just make sure I am clear, because you pointed out the case of a young man who has got some real opportunities, but most of the folks who apply for disability insurance benefits don’t even have a high school diploma. Right, my understanding is–statistics I am looking at her–is two‑thirds of DI beneficiaries have only a high school diploma or less. So they are not as fortunate. They haven’t been to the point where they have that college degree.
Nearly 70 percent of disability beneficiaries are 50 years or older, so they are not at the very beginning of their work career. These are folks who are in the sunset of their work career and, as we know, even Americans who are not disabled who are over 50 are having a hard time today getting a job because the market is very tough. And so I think we have to remember that this is a population that has a disability severe enough that in many cases, as I think Miss Ford mentioned, many of them die within a few years of applying for the benefit. These are not folks who would just need to have a computer, you know, typing tray so they can avoid carpal tunnel syndrome. These are folks who in a few years may not even be on this Earth. And so what we are trying to do is pick out the ones that while they have a severe disability we think with a little bit of accommodation, and I think Mr. Bertoni, your testimony was essential here because you pointed out how modern science, technology has made things possible today that 30 years ago we couldn’t have done. And the only proof you need to see is our wounded warriors who are coming back and doing remarkable things having been maimed and injured in so many different and grievous ways.
Mr. Bertoni, let me make sure. GAO we rely on to give us the scoop on this stuff, the facts. We are talking about folks who are disabled, right. There is no question these are folks who are disabled in some capacity.
Mr. Bertoni. Correct, for the most part. Obviously, there are folks who get in under certain means that aren’t, but that is on the margins.
Mr. Becerra. And so it is now an issue of how do we make the Social Security Administration, working with this Disability Insurance Program, be as effective as possible partnering with the business community to try to make sure that we can transition those who still have the capacity to work to get them back to a job. Part of it is the training and education that might be necessary to get some of these folks who are disabled, a spinal problem, but yet still able to do a number of things, back into the workforce. So part of this will involve more than just Social Security. It is going to involve the workforce training aspect of what government working with the private sector can do. And so I hope what you will do is continue to give us information about how there are opportunities where we can partner with the business sector to make sure that technology and training will get some of these folks back to work.
Mr. Bertoni. Sure, this must be a partnership. It is not all about the Social Security Administration. There are many entities in government, State and local, that can help in this effort, as well as the business community. What I just heard is that the focus on capacity versus incapacity, and a cultural shift that return to work and stay at work is not only socially, but economically beneficial to individuals as well as employers. That is something that we need to sort of move further in that direction.
Mr. Becerra. Thank you, Mr. Chairman. I yield back.
Chairman Johnson. Thank you. Mr. Berg, you are recognized for 5 minutes.
Mr. Berg. Thank you, Mr. Chairman. I thank the panelists for being here. I mean, obviously, I look at this chart and, you know, we need to look at how we do things different. You know, if you say 1956 was when the system was set up, that was 56 years ago. I mean, clearly things have changed dramatically. In our own State we looked through WSI, or Worker’s Compensation, and we actually found one of the huge successes is when there was an injury empowering the employer to identify it immediately, getting proper care, and then keeping that person in that workforce. I mean, here is their peers, their friends, and rather than going home or some other environment for 30, 60, 90 days or 6 months, we found that when you are in that other environment you got used to that and that was your normal. And so the idea is to keep them in that workplace.
And so I guess I have a couple of questions, and it is kind of two different groups here. There is a group that of course is not in the workforce and has disabilities, and we need to, you know, really need to look at those, but I am thinking about the ones that are in the workforce and, you know, if you could, Dr. Burkhauser, just kind of talk and you did touch on that, the incentives. My question is, how do we go from here to there without creating an environment where employers are going to say, you know what, I don’t want to have to pay an extra tax or penalty here, so I am not going to hire someone with a potential disability. So maybe just talk briefly about that transition, and then I would like to talk about other incentives for people that are new to the workforce with disabilities and how we can create some incentives there.
Mr. Burkhauser. So if you go to an experience rating system, which is in fact what you talked about with Worker’s Compensation, you are really encouraging the kinds of things you would like to see. You would like to see a safer workplace. You would like to see employers that are more likely to provide accommodation or rehabilitation. In my work we have shown, for instance, that workers who experience the onset of disability on the job are more likely to get an accommodation than workers who experience an accommodation off the job. Why is that, because Worker’s Compensation has an experience rating system. The DI system doesn’t. So that is the important point.
But you are absolutely right that this will make employers more cognizant of the risks of employing someone with a disability, and if they perceive that if you already have a disability you are more likely to move on to the disability rolls there could be a problem there. So what you can do is you can simply either give employers a tax credit for hiring such workers or not have those workers in your pool so that it is not included and use those for general revenues.
So there is a way to get around that problem and I certainly agree it is an issue and we should worry about it. But I think the important point here is that, I am not talking about pie in the sky when I am talking about getting the disability rolls changed.
In 1981, only 33 percent of people who said they had a work limitation in the data that the current population survey were on the DI rolls; 33 percent. Today, there is no real change in the underlying conditions of these folks, but 52 percent are on the DI rolls. And it is not the case that this chart is deceptive, because actually, Autor and Duggan, who are at MIT and Princeton, have done work looking ‑‑ and showed that the three points that were made about demographics only account for about 25 percent of the rise in DI; 75 percent is due to the programs changes both in the rules and in their interpretation. That is not me. That is the Brookings Institution folks who are saying exactly the same thing.
Mr. Berg. Ms. Houghton, thanks for your enthusiasm and passion, but also how can we inspire, promote employers to seek out workers and incorporate them? Is there some specific thing in addition to what you have already outlined?
Ms. Houghton. The best thing that we know, the best thing that we are finding is that business learns from each other. I mean, I think if we look at the tax credits that exist that are already in existence, business isn’t taking advantage of them because it is too much government red tape. And so in large part, they are going unutilized. So it is definitely something that we need to look at. Can we tell you specifically what it needs to be?
Mr. Berg. Thank you all. I yield back, Mr. Chairman.
Chairman Johnson. Thank you.
Mr. Stark, do you care to make comments.
Mr. Stark. Thank you, Mr. Chairman. I thank the panel for their interesting observations. I would first of all like to try to make it the protocol in this committee ‑‑ I am not succeeding too well ‑‑ that we strike from our lexicon the word “disability.” There are very few people in this world who are breathing and among the quick who are disabled. Many of them have disadvantages, and I like that so much better. I have a son with a disadvantage, and he can explain it to you. And he can explain what he has to do to compensate for it, but under no circumstances would he be considered disabled. And I think that is true for almost all except those people who are really just in a vegetative state and unable to speak or function for themselves. And that isn’t many. I think if we look at the disadvantages that they can be overcome, and that, as many of you have suggested, employers will find work for them. I think Dr. Stapleton mentioned that with the increase in technology we are not talking about as many people having to work with their backs and their hands, which often is a case where a disadvantage can end it, but where people can work with their minds, some people who are mute, some people with sight disadvantages, some people with ‑‑ all can be put to work using other skills in this day and age.
We have job shortages, and one of the things that we hope is that the economy coming back will encourage this. But where we come from in California with the tremendous growth there of technical work, I worked for many years with Steve Jobs and worked on computer programs that Apple did that actually could help people with autism function in a community. We were just beginning when Steve died to deal with dyslexia, and finding ways for people there, many of whom we find now we have a Dyslexia Caucus, Members of Congress who are dyslexic, and didn’t know it may be until they got out of college, or have children, but we have learned to deal with that. And my son with dyslexia can tell you about the other brilliant people in the world, Whoopi Goldberg, Charles Schwab, the thoracic ‑‑ head of the thoracic surgeons, these are all people with several years ago we thought was a quote “disability.” It is not. It is a disadvantage. But as someone, the chairman and I, the chairman will catch up with me one of these days, but as you learn, after ‑‑ 20 or 30 years after you are past the retirement age, you hope that people don’t catch on to what your disadvantages are and you can keep functioning. We like our jobs, and so far we have fooled the public, and the chairman has done a better job of that than I have. So we are still here, and limping or getting along with our disadvantage. And I hope, I just hope that all of you will encourage people. Employers will find, and they are not in the business of running charities. They are not going to go out and just search for someone just because they happen to be in a wheelchair or because they happen to need certain assistance. They want people who can perform and we can provide them. We may have to provide some extra education but that saves us all money and it gives us real social benefits.
So I appreciate all of your interest in this and, Chairman, I am pleased that you have brought this to our attention because I think it is something that deserves much attention both from the government and private industry. Thank you very much.
Chairman Johnson. Thank you, sir.
Mr. Brady, you are recognized.
Mr. Brady. Thank you, Mr. Chairman, thank you for holding these series of hearings. The disability program is so important, but I don’t think it is just fine. You know, I don’t think just modest changes will save this program. I think it is financially flawed. I think it is structurally flawed. I think it is operationally flawed, and at the heart of it is that we are addressing a 21st century challenge looking at it through a 1950s lens. So much has changed and we have to, if we are serious about saving this program, make some bold moves, Republicans, Democrats together, to put it on sound footing again.
You know, I think to illustrate the change all of us watched the Olympics, watched Oscar Pistorius from South Africa compete probably in a way that many disability judges would have said you have no chance for significant gainful employment. Here he is competing at the highest level. Not that all of those on disability can do that, but it exemplifies what a sea change has occurred.
You know, I was reading through some of the information we had in the report from CBO that makes the point over the last 20 years, despite the Americans with Disabilities Act, despite equal access to employment, all of the reasonable accommodations that businesses are making, the strides in medical treatments and surgeries and prosthetics, the fact that we have moved to a service economy, seventy percent of the jobs in most of our congressional districts are service jobs that pay an average of about $60,000, the financial job, Ms. Houghton, you are describing, so these are jobs you can raise a family on. Yet, while we have made all of that progress and the environment is changing, the employment rate among people with disabilities has declined by almost half. So as the environment has gotten better at the workplace, the number of those with disabilities who actually find jobs has actually been cut in half over 20 years; not just recent periods, 20 years. And many of those increasing disability claims are from younger workers with either mental or musculoskeletal disorders, which evidence shows have the best chance of staying in the workplace.
So having said all of that, the question is, how do we solve it? And with the time I have remaining, Ms. Houghton, you in your testimony, you talked about changing the lens of how we look at those with disabilities from what you term a deficit‑based or medical model to a talent or social model. I don’t understand what that means. Can you explain better what it is and how you would apply that to a solution on disability?
Ms. Houghton. Thank you, Mr. Brady. The medical model looks at an individual and what they can’t do, so we see that. We see that in the media portrayals of people with disabilities, and we see it when a person with a disability ‑‑ when we talk about business hiring people with disabilities and we say that they are doing it because it is a nice thing to do. Okay. The social model focuses on the talent perspective, and says that the individual is ‑‑ when provided accommodations, when viewed for what they can do, that it is about what the person can do and the talent that they bring to the job.
Mr. Brady. Do you think the system we use today in disability reflects that view?
Ms. Houghton. No, I do not.
Mr. Brady. Anywhere close?
Ms. Houghton. I think we have been talking that the system was created in 1956, and that it was a different era; the medicine, science, technology was different.
Mr. Brady. I think Mr. Bertoni’s point, there has been some movement in that direction, but fairly small, so the question I would ask, and we are almost out of time, unfortunately, is what is the most significant change we could make to actually bring that about?
Ms. Vogel. I think that there are three changes in particular that we want to consider. So from a SHRM perspective, we need a harmonization of the various definitions of disability. If you look across the ADA, FMLA, everybody has different definitions. I think if we can harmonize those definitions and make it simpler, I think that is number one.
Number two, we should look at the interplay of ADA, FMLA, Worker’s Comp, allowing ADA to really trump. And the reason, to your point, is because that is more about what people can do. How do we provide an accommodation so that you can be successful. Looking at it from the standpoint of workplace solutions, productivity tools, that is really what an accommodation is. And that is that social model.
And I think the third piece is that we need to find a way to have much more aggressive collaboration between the employers and vocational rehabilitation. Voc rehab does not understand employers and what their perspectives are on providing services. We need to educate both sides, but do it in a way that is collaborative and that they are talking to each other on a very regular basis.
Mr. Brady. Can I ask this, Mr. Chairman, I am out of time, but can I ask these folks, you know, in your testimony you lay out much of that, but if there are some other thoughts we need to have as a committee, could you all submit that to us, to Chairman Johnson and Ranking Member Becerra? Would that be okay, Mr. Chairman?
Chairman Johnson. That is a good point, thank you. Mr. Marchant, you are recognized.
Mr. Marchant. Thank you, Mr. Chairman. My observation after these five hearings, Mr. Chairman, is that SSDI has become a destination for many of the workers and they spend 2 years proving through the court system that they are, in fact, disabled and cannot work, and then when they get that designation, then it opens the door to not a job, not training, but it opens the door to qualifying for food stamps. It opens the door for qualifying for assistance with their utilities. It opens the door for subsidized housing, and so all of the doors that seem to get opened once you achieve this destination, all of that ends up disincentivizing the person to go to work. And then when the person ‑‑ and I have a 30‑year old son that is a T‑6 paraplegic, has a college education, as many training programs as a parent can get their child training programs, isn’t designated as SSDI, but goes to a job application and finds out that the health care ‑‑ that the company looks at a particular disability and sees, how am I going to put this person on my health care? How am I going to accommodate this? And so the SSDI designation ends up being that is where you go, that is where you stay until you can either go off of it at age 62, or go to 65, or get to Medicare. And it is just basically, instead of a way station where you go and stay because you need the support system there while you are trying to do better and you are trying to get a new career, or just start a career, it seems to me that all of the disincentives that business would never put into its system exist here. And so it is not really a safety net anymore. And the thing that is there, and this is for the panel, is there a specific designation that when you qualify for disability, SSDI, there is a specific written designation that you get and do you possess that until it is taken away from you? Do you have to have that? I know for food stamps and utility assistance and stuff like that if you will just present that document, I mean, there is no other documentation needed.
Ms. Ford. Well, as has been stated for the different programs, there are different definitions of disability. So, you know, certain eligibility will open doors, as you mentioned, for other programs but you wouldn’t necessarily have to have SSDI for the other programs. I would mention that when the health exchanges are available in 2014 that may relieve some of the pressure for people to go into the SSDI program. We are all sort of waiting to see whether that happens, whether people might be able to have their need for health insurance or Medicare covered by using the health exchanges in 2014 rather than having to go into the SSDI program to get in that doorway after 29 months into Medicare. So that may actually be a way to take some of the pressure off the DI program in the future.
Mr. Marchant. What is the amount of money that can be earned by someone that qualifies for SSDI outside of that stipend per month? Does it fluctuate with the person, or the State, or ‑‑
Ms. Ford. This is actually one of the proposals that we have. We think there should be a way that a person is always better off earning money when they are a beneficiary rather than not earning money. And that is what happens in the SSI program, but not in the DI program and that has been one of our proposals for a couple of decades now. But right now, it is the SGA level, the ‑‑ what is it, $1,000, approximately $1,000 a month, and after a trial work period your benefits will end. You will have a certain grace period of about 36 months, and those benefits can be reinstated if you stop work. It is very complex, and that is the problem. And there are lots of people who go into the DI program who need it when they need it, but find later that once they have stabilized, once they have come to grips with the change in their life, whatever has brought them to the DI program, whether it is an illness, an accident, whatever, they come to grips with the changes. They are ready to go back to work. They have got the enthusiasm that Jill has expressed, and they want to go back to work. But the barriers are in their way for, as you are describing, and we need to find a way to remove those barriers so that these kinds of technical and very complex problems can be done away with.
Now, Social Security has put forward a proposal that would actually help do that. It is called the Work Incentive Simplification Program, or WISP, that we are encouraging that we should pilot to make these work incentives very, very simple so that people don’t get caught up in all the worrisome details and they are not afraid to go to work and potentially lose a critical support if they fail. So that there aren’t complications going back and forth, and that they will be better off if they do try to go to work and find out whether they can make it. So we think that would be an important work simplification and work incentive.
Mr. Marchant. Thank you, Mr. Chairman.
Chairman Johnson. Thank you. Mr. Smith, you are recognized.
Mr. Smith. Thank you, Mr. Chairman. Dr. Burkhauser, it appeared you disagreed when Ms. Ford was advocating for the reallocation of funds to the DI trust fund. Would you like to address those concerns?
Mr. Burkhauser. I think that simply papering over the problems with DI by borrowing money from the retirement trust fund to the DI trust fund really misses the point; that there are real things going on that need to be adjusted. So while it is true that compared to the problems of the retirement system as a whole, and compared to the healthcare system, perhaps a disability system would only cost us $120 billion a year isn’t such a big thing. But I think it is a big thing and it is a big thing because what we are doing is we are actually as Stapleton talked about, we are making people with disabilities worse off by the current system that we have. We are luring them into a disability program, either SSI or DI, that once in the system, as we just heard, it is very difficult to come out, very difficult to earn enough money to get around that.
What we need to do is stop putting people on the disability rolls who in fact could work. Stop making them demonstrate that they can’t work before we do a Ticket To Work where we are trying to provide them with work. What we need to do is figure out how to get those people, the early interventions, well before they move on to the DI rolls. These are sort of basic points that have to be taken care of and they can’t be papered over by a financial trick of moving one trust fund money from one side to the other.
Mr. Smith. Thank you.
Mr. Bertoni, Dr. Stapleton suggests that we do not yet have sufficient evidence to support the detailed structural changes to the DI program. Among other things, he proposes pilot projects to get better data and practice as part of a strategy of disability reform.
What would you say if you could reflect a bit on your perspective of Social Security’s track record with conducting demonstration projects?
Mr. Bertoni. I would agree that there needs to be more study and analysis of some of these proposals to ensure that we are examining the best of the proposals, what they intend to do, but also be cognizant of the potential unintended consequences that can occur and get in front of those before we roll out any new system, or process. But in terms of SSA’s demonstration authority and their track record, we have issued at least a couple of reports on this, most recently in 2008, looked at 14 demonstrations that they conducted over a period of a decade, and five of those were terminated due to real limitations. Four were completed, and of those nine, none of those yielded any policy data that could be useful to Congress. The remaining five were ongoing and we certainly had some concerns with those. That was at a cost of about $155 million with another projected cost of $220 million going forward for the remaining five. The key there was that they just didn’t have sufficient protocols and guidance to design, implement, and evaluate these initiatives. And as a result, they went by the boards for the most part.
We have recommended that they put some more structure around that, especially to protect against sort of changes in the administration, where folks in a new administration might come in, terminate perhaps some projects that could have promise, and sometimes we found that those terminations were not data driven. We really didn’t see a clear rationale. And that is just not good. That is just taxpayer money that is not well spent.
So in terms of track record, not very good. They have instituted some recommendations that we have asked them to do. We haven’t revisited it. But in our most recent effort to look at their efforts to update their medical listings and develop our occupational information system we reported in that report that from a technical standpoint they are pretty thin in terms of expertise and resources to do some of these pretty aggressive projects.
Mr. Smith. So if we did move forward with a pilot program, should Social Security be tasked with such an effort?
Mr. Bertoni. I think that would depend on what model you chose to pursue. It doesn’t necessarily have to be the entity that would run these projects. This could be done in other agencies, other, you know, other levels of government, States, private sector. So I think it is really you have to think about what you want to do, what the elements of that reform system might look like and then decide who would be, you know, responsible for the pilot. But clearly, if you stay within the confines of the current mouse trap and try some things within the current system, SSA would likely have a role there. I think they would probably leverage the outside research community.
Mr. Smith. Thank you, my time is expired. I yield back.
Chairman Johnson. Thank you for your comments. Without objection, I would like to insert into the hearing record the recent report from the Congressional Budget Office entitled: Policy Options for the Social Security Disability Insurance Program.
Without objection, so ordered.
[The report follows: The Honorable Sam Johnson]
Chairman Johnson. Thank you all for being here today. We are going to conclude the testimony because we are on a short fuse on the floor, and I want to thank all of you for insightful comments. Thank you so much, and thank our members for participating today.
I think you are all committed, as I am, to securing the future of our disability program. We have got to fix it. That is just one more program we have to fix in this government.
With that, the subcommittee stands adjourned. Thank you all for being here.
[Whereupon, at 11:00 a.m., the subcommittee was adjourned.]
Member Questions For The Record
Public Submissions For The Record