Dismantling The safety Net, One Program At A Time
by digby
Peter Orszag really has it in for the social security program. We already know that he's selling the ridiculous idea that if the Democrats agree to cut social security they will be rewarded for doing it. Now he's introducing the new image of the "disability queen" to weaken the program even more.
Evidently, there are a lot of people who qualify for SSI but have, until now, avoided applying for the problem because they were able to find some work. A lot of them have lost their jobs in this recession and are now applying. And Orszag is worried that this is bad for their character. You see, once in they lose all desire to work and will just hang around in the wheel chairs enjoying their leisure time instead of being the productive citizens they should be.
After granting that niggling little details like fixing the bad economy, creating millions of jobs and extending Unemployment Insurance need to done, he lets fly with this:
The disability insurance program itself must be reformed. Program administrators understand the need to encourage beneficiaries to return to work, and they have experimented with various incentives. Such initiatives have generally been ineffective, though, because they reach beneficiaries too late, after they have already become dependent on the program and lost their attachment to the work force.
A better approach has been suggested by David Autor of M.I.T. and Mark Duggan of the University of Maryland. In a paper released last week from the Center for American Progress and the Hamilton Project, these economists argue that employers should be required to offer their workers private disability insurance. Such coverage would provide people who have a work-limiting disability with vocational assistance, workplace accommodation and limited wage replacement. All of these benefits would kick in within 90 days of the onset of disability, to avoid the problems with delayed assistance that have plagued efforts to reform public disability insurance. Private employers would have an incentive to prevent their workers from having to file disability applications, because their insurance premiums would rise in response to higher disability rates.
Disabled workers could remain on this privately financed insurance for two years, and then be eligible for the existing public program. The goal would be to minimize long-term dependency, and re-orient the federal disability insurance program toward assisting those who are truly unable to work.
One concern is that this approach would burden firms with additional human resource costs when we need to encourage hiring. But the costs are projected to be modest — roughly $250 per worker per year. And if they help to reduce the future payroll tax increases that would be needed to finance rapid growth in disability benefits, the pressure on overall labor costs would be even smaller.
Another concern is that private insurance firms would need to be given substantially expanded responsibility for evaluating workers’ disabilities. Mr. Autor and Mr. Duggan propose to mitigate this potential problem by suggesting that workers be allowed to appeal any such evaluations to state government agencies.
The Netherlands has adopted a program like this, and the results so far are promising. In 1994, the Dutch government required all firms to finance the first six weeks of disability benefits. That period was later extended to one year and then to two years. In 2002, the program was broadened to require back-to-work plans, developed cooperatively by the disabled worker, his employer and a consulting doctor. The number of disability recipients in the Netherlands has since declined significantly.
None of these policy changes would be easy. But failing to act would result in millions of Americans needlessly dropping out of the work force. In our precarious economy, neither progressives nor conservatives should be willing to watch passively as the disability insurance rolls grow, and beneficiaries are locked out of the labor market.
So, people would have to buy even more insurance (employers would pass on the cost to their employees either directly or through reduced wages) and then rely on those private insurers to determine whether or not they are truly disabled when they have an accident or illness. But they'd get to appeal to a state agency if the insurer denies their claim. Any sense of how that might go? I think I have an idea. And I also have an idea what Orsazg means when he says "re-orient the federal disability insurance program toward assisting those who are truly unable to work."
(And this isn't the Netherlands. Our system is designed to deny citizens as many benefits as private businesses -- and now government --- can get away with. That's just how we roll.)
Why Orsazg thinks it's necessary to bring disability insurance reform into this argument at the moment is anybody's guess. Right now, it's hard enough for able bodied people to get work. And while I can see how concerned he is that the work ethics of the disabled will erode over time if they are given this easy ride, it's hard for me to see why it should be of immediate concern considering that there are no fucking jobs. Are these people supposed to sell pencils on the street corner?
I haven't even heard Republicans make this argument for cutting social security but you can be sure that you'll be hearing more of it. The idea that the unemployed (who are already seen as hardly better than "illegal aliens" in the minds of a good number of Americans) are gaming the Social Security system will give impetus for more cuts and making it harder for legitimate claimants. But it will be a nice new market for the poor insurance companies won't it? This new mandatory "private disability insurance" will be quite the bonanza, I'm sure.
Orszag has taken that job at Citibank. At this point it's probably wise to assume he's just doing what they're paying him to do --- taking advantage of his knowledge of the political thinking of the White House and the economic crisis to destroy the social safety net. But damn, putting the screws to the disabled who clearly qualify for SSI but would work if there were any jobs by making it harder for them to get SSI is just plain cruel.
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