LOOKING AT THE enormous growth in public and private disability programs over the last 15 years, a person could conclude that some horribly disabling--though not quite fatal--plague had swept the country. Yet, the fact is that mortality rates and other measures of health status have actually improved substantially during the same period. What then explains a rise in disability payments from less than $10 billion in 1965 to more than four times that 12 years later?
The question is of more than academic interest to administration budgeteers since the federal government pays about two-thirds of the disability bill. One obvious explanation is that some fast growing federal programs invite abuse--the black lung program, for example, and compensation paid to federal employees for work-related injuries.
There are plenty of good studies and reams of congressional testimony attesting to the defects of these programs. Common sense alone, however, will tell you that once the word gets around that a program provides tax-free benefits at levels close to previous wages, no army of claims checkers can stop the influx of claimants with seemingly credible documentation of disability. That's too bad for the really disabled, but, given human nature, there is probably no way to stem the tide short of redesigning the programs to remove the temptation.
The administration needs much bigger savings than these programs can supply, however, and so it is likely to focus its saving efforts on the $18-billion- a-year Social Security disability program. Tightening disability rules was part of the administration's Social Security proposals last spring. And President Reagan suggested in his television address last week that some such reforms are likely to be revived in the near future. Since people receiving these payments represent a much smaller and less well-protected constituency than the retirees, Congress may be willing to agree to cuts here as, in fact, it did a few years ago.
There are, however, some limiting factors to be considered. Although many recipients also receive other forms of compensation, Social Security disability payments are not generally high relative to wages. Disability claim rates, moreover, have been falling since their peak in 1974, and a comprehensive review of current cases, begun in the Carter administration, is now in full swing. Periodic searches of the rolls to weed out malingerers are a sensible change. But the merits of some of the cases now being reviewed aren't so clear. Over the last decade, many people--usually in late middle age and with limited skills--qualified on the basis of a broader definition of total disability that allowed caseworkers to consider not only the severity of the impairment, but the likelihood of the applicant's being able to find a job in view of it.
If you want to be tough about it, you could insist that all these people get back in the job market and scrounge around for anything they can find. And if you were running a full employment economy, this might make some sense. Unemployment, however, is high and likely to remain so for some time. The structure of the economy is also changing rapidly leaving many older workers with the wrong kinds of skills and living in the wrong places. It is at least worth asking whether the costs of higher unemployment and heightened worker resistance to economic change are worth the savings that might come from a further tightening of Social Security disability rules.