Secretary of Health, Education and Welfare Joseph A. Califano Jr. asserted yesterday that the Social Scurity disability program will double and reach $33 billion by 1990 unless President Carter's proposals to cut benefits and improve work incentives are approved.
Califano told the House Social Security subcommittee that benefits, which were only $1.6 billion in 1965, will total $15.6 billion for 5 million persons in fiscal 1980. Despite a slowdown of growth caused by the end of the recession and tighter administration to eliminate undeserved awards, Califano maintained the program will double again in a decade unless further brakes are applied.
Subcommittee Chairman J.J. Pickle (D-Tex/.) indicated general agreement with Carter's proposals and said he will proceed "with reasonable speed" to push a bill through.
Califano said that while the program has some of the toughest conditions of any disability program -- requiring the applicant to be unemployable "anywhere in the economy" -- it contains some structural inducements to malingering which have helped pump up the benefits and which must be eliminated.
Experience has shown, he said, that "high benefits encourage workers to apply for disability benefits" and that "under current law, a small proportion of beneficiaries receive benefits so high in relation to their predisability earnings that the benefits, in effect, serve as an incentive not to go back to work. Benefits in approximately 6 percent of cases actually exceed the disabled person's previous net earnings, and approximately 16 percent... receive benefits that are more than 80 percent of their average predisability net earnings."
Therefore, he said, President Carter is proposing that total family benefits for a worker with dependents be limited to 80 percent of predisability gross income. Califanio said he personally would have favored even tougher limits but the Office of Management and Budget disallowed it.
Pickle said he agreed with the family benefit ceiling concept but questioned whether the specific formula suggested by Califanio is equitable, since it cuts back the lowest-income workers most (such as a family with $4,000 predisability annual income).
Califano responded that many of the poorer workers might be better off seeking disability under welfare programs where there is no waiting period for either cash payments or medical reimbursement. But Abner Mikva (D-Ill.) retorted, "I'd like to see us come up with a formula that didn't reduce the lowest income levels."
Califano raised no strong objection when Pickle made clear the subcommittee will rewrite the formula to soften the impact on the poor.
Califano said Carter also wants to revise some harsh provisions that make a disabled person afraid to try leaving the rolls and seeking work. Carter would eliminate a two-year Medicare waiting period for someone whose rehabilitation effort fails; allow automatic program re-enrollment within a year if a work-attempt fails, and allow a disabled person to exclude work expenses from the $240-a-month limit on allowable earnings for a person on the rolls.