–Sen. Rand Paul (R-Ky.), remarks in New Hampshire, Jan. 14, 2015
We’re a little late to the controversy over Sen. Rand Paul’s remarks on the Social Security disability insurance (DI) program — that “over half of the people on disability are either anxious or their back hurt” — but it’s an important issue that will have a central role in the political debates this year as the program faces a serious funding crunch. If Congress does not act soon to fix the program’s financing, then the disability insurance trust fund will be depleted by 2016 and benefits would be cut 19 percent.
As can be seen from Paul’s comments, he was being a bit jocular but he also framed his answer as a legitimate statistic that indicated there were many “malingerers” who are “taking money” from more deserving individuals. So what do the data show?
The Social Security Administration (SSA) runs the disability program, which is financed through a portion of the 12.4-percent Social Security payroll tax effectively deducted from the paychecks of nearly every worker. (Technically, half is deducted from paychecks but economists say the employer takes its share out of the employee’s pay.) As noted in The Fact Checker’s Guide to Social Security, disability insurance is an integral part of Social Security; about 18.5 percent of Social Security beneficiaries are disabled workers and dependents.
Between 1980 and 2010, the number of disabled worker beneficiaries rose 187 percent. The reasons for the sudden rise in costs are complex, but the Social Security Chief Actuary Stephen C. Goss says a key factor is that the baby boom generation is aging and suddenly passing through the period of life (45-64) when disability spikes. In other words, the main part of Social Security will face financial stress when the baby boomers retire — and the disability crisis is a harbinger.
Another factor is that women began working in greater numbers and thus began to qualify more often for disability insurance, though that trend was mitigated by the fact that the undocumented population also grew substantially in this period — and illegal immigrants don’t qualify for coverage. The Great Recession, like all economic downturns, also boosted the number of beneficiaries.
In testimony before Congress, Goss noted that the spike in disability costs as a result of baby boomers hitting this milestone has largely passed. “Restoring sustainable solvency for the DI program will not require continually greater benefit cuts or revenue increases,” he said, just a one-time fix. Here’s a chart from his testimony:
So a large part of the increase in beneficiaries stems from demographic factors, not more people scamming the system. The Government Accountability Office, in a 2013 report on the $128 billion program, documented $1.29 billion in potential overpayments to 36,000 people in 2011 – but these were people who were working and had earnings in excess of $1,000 a month. So it’s hard to call them “malingerers.” The number of people who received overpayments represented just 0.4 percent of beneficiaries, GAO said.
Indeed, it is not easy to qualify for disability. According to SSA, between 2003 and 2012, only 24 percent of disability applicants were initially granted benefits; an average of two and 11 percent were awarded benefits after either reconsideration or a hearing, respectively. Thus an average of 59 percent of applicants were denied benefits, even after appeals. This chart shows the trend over the ten-year period:
Now let’s turn to Paul’s specific statement — that “over half of the people on disability are either anxious or their back hurts.” Where does that come from?
Paul spokesman Brian Darling pointed to two data points — 27.7 percent of disabled beneficiaries are diagnosed as having ailments related to “Musculoskeletal system and connective tissue” and that 14 percent have “mood disorders.” That adds up to 42 percent, he noted. (There’s also nearly 4 percent who cite injuries, which presumably could cover back injuries.)
But William Jarrett, an SSA spokesman, says that anxiety disorders is covered in the “other” category, not under “mood disorders.” The “other” category is just 3.8 percent of beneficiaries; Jarrett said there was no further breakdown. Under the SSA’s definition, anxiety-related disorders is more than just being “anxious for work,” as Paul put it, but includes “recurrent and intrusive recollections of a traumatic experience” and “recurrent severe panic attacks.”
Darling countered that “Senator Paul was referring to mood problems when he used a phrase relating to being anxious.” He argued that any reasonable person would infer that being anxious would qualify under the category of “affective disorders: characterized by a disturbance of mood.”
Jarrett noted that the “mood disorders” category includes conditions like bipolar disorder, major depressive disorder, and dysthymia (persistent depressive disorder).
But there’s another problem—the SSA definition for musculoskeletal category covers far more than back pain, such amputations, all sorts of fractures, burns and spine disorders. So it’s a bit silly to assume that “back pain” is all of those cases. (A 2013 study by Mathematica Policy Research suggests 18.8 percent of DI-only recipients reported back disorders as a primary impairment; “anxiety disorders” represented 3.2 percent of claims. That adds up to 22 percent.)
“It should be factored into any analysis that this was a spontaneous response to a question from a New Hampshire resident at an event — not prepared remarks,” Darling said. “Senator Paul never said that people who had back problems and mood disorders are not deserving of help. He never indicated that 50 percent of claims were fraudulent.”
The Pinocchio Test
We understand that Paul was speaking off-the-cuff, but the clear implication was there were significant numbers of “able bodied people taking the money” through common ailments like back pain and being anxious about work.
But not only is the rate of fraud relatively low, but it mostly involves people who are working who should not be getting payments, rather than people who are getting paid and not working. Moreover, even a generous interpretation of the data does not generate a figure close to more than half of beneficiaries getting paid for simply back pain and anxiety.
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