There obviously aren’t so many wasteful or unnecessary programs in the federal budget that cutting them alone would make a big dent in the deficit, but insofar as there are debt-cutting deals to be made, we might as well grab some low-hanging fruit in the process.
Defense cuts of the type endorsed by the Sustainable Defense Task Force — a panel of experts that identified (PDF) almost $1 trillion in potential savings over the course of a decade — fit the bill, especially as the new Defense secretary, Leon Panetta, looks like he’s gearing up for major cutbacks. So do cuts to farm subsidies, which are looking pretty vulnerable for the first time in a long while.
But Social Security’s disability program is area of obvious dysfunction that doesn’t get a whole lot of attention. Damian Paletta has a great Wall Street Journal piece this morning that highlights just how out of control the program has gotten by focusing on one judge, David Daugherty:
In the fiscal year that ended in September, the administrative law judge, who sits in the impoverished intersection of West Virginia, Kentucky and Ohio, decided 1,284 cases and awarded benefits in all but four. For the first six months of fiscal 2011, Mr. Daugherty approved payments in every one of his 729 decisions, according to the Social Security Administration. …This breakdown is one reason why Social Security Disability Insurance — one of the federal government’s two disability programs — is under severe financial strain. It paid a record $124 billion in benefits in 2010 and is on track to become the first major entitlement program to go bust. Government officials said last week it is expected to run out of money in 2018.
Of course, the program’s deficit is hardly just the fault of Daugherty or other lenient judges. It’s symptomatic of the bigger problem, namely that who gets on varies wildly between states. Of the applicants in Arizona, 35 percent get benefits; in Puerto Rico, it’s over 63 percent. Puerto Rico also is home to nine of the top 10 zip codes for disability beneficiaries. I suppose it’s possible it just has way more disabled people than the rest of the country, but the system getting a little too lenient seems like a more plausible explanation.
This is particularly problematic if it keeps people who could be working on disability benefits and out of the workforce. That’s not good for them, for the program or for the economy generally. So David Autor and Mark Duggan at the Center for American Progress and the Hamilton Project have proposed (PDF) mandating employer-provided disability insurance. If people acquire a disability on the job, they can use this insurance until they can return to the workforce. If that isn’t possible within 21 months, they can apply for Social Security disability insurance. That way, fewer people will drop out of the workforce, the Social Security program’s rolls will shrink, and program costs will fall, without failing to provide support to disabled workers. Deficit reduction has few win-wins, but this is one of them.
Dylan Matthews is a student at Harvard and a researcher at The Washington Post.