[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
FIFTH IN A HEARING SERIES ON SECURING
THE FUTURE OF THE SOCIAL SECURITY
DISABILITY INSURANCE PROGRAM
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 14, 2012
__________
Serial No. 112-SS21
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
DAVE CAMP, Michigan, Chairman
WALLY HERGER, California SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas CHARLES B. RANGEL, New York
KEVIN BRADY, Texas FORTNEY PETE STARK, California
PAUL RYAN, Wisconsin JIM MCDERMOTT, Washington
DEVIN NUNES, California JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois MIKE THOMPSON, California
JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
TOM PRICE, Georgia EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida RON KIND, Wisconsin
ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois SHELLEY BERKLEY, Nevada
LYNN JENKINS, Kansas JOSEPH CROWLEY, New York
ERIK PAULSEN, Minnesota
KENNY MARCHANT, Texas
RICK BERG, North Dakota
DIANE BLACK, Tennessee
TOM REED, New York
Jennifer M. Safavian, Staff Director and General Counsel
Janice Mays, Minority Chief Counsel
______
Subcommittee on Social Security
SAM JOHNSON, Texas, Chairman
KEVIN BRADY, Texas XAVIER BECERRA, California
PATRICK J. TIBERI, Ohio LLOYD DOGGETT, Texas
AARON SCHOCK, Illinois SHELLEY BERKLEY, Nevada
RICK BERG, North Dakota FORTNEY PETE STARK, California
ADRIAN SMITH, Nebraska
KENNY MARCHANT, Texas
C O N T E N T S
__________
Page
Advisory of September 14, 2012 announcing the hearing............ 2
WITNESSES
Richard Burkhauser, Ph.D., Professor, Cornell University, Ithaca,
New York, and Adjunct Scholar, American Enterprise Institute... 7
David C. Stapleton, Ph.D., Director, Center for Studying
Disability Policy, Mathematica Policy Research................. 20
Marty Ford, Director of Public Policy, The Arc of the United
States, on behalf of the Consortium for Citizens with
Disabilities Social Security Task Force........................ 33
Daniel Bertoni, Director, Education, Workforce, and Income
Security, Government Accountability Office..................... 44
Jill Houghton, Executive Director, U.S. Business Leadership
Network........................................................ 55
Nadine Vogel, Founder and President, Springboard Consulting,
Mendham, New Jersey, on behalf of the Society for Human
Resource Management............................................ 66
SUBMISSIONS FOR THE RECORD
CFE, statement................................................... 150
SSSC, statement.................................................. 155
QUESTIONS FOR THE RECORD
Daniel Bertoni................................................... 122
David C. Stapleton............................................... 129
Jill Houghton.................................................... 140
Nadine Vogel..................................................... 143
Richard Burkhauser............................................... 145
FIFTH IN A HEARING SERIES ON SECURING
THE FUTURE OF THE SOCIAL SECURITY
DISABILITY INSURANCE PROGRAM
----------
FRIDAY, SEPTEMBER 14, 2012
U.S. House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to call, at 9:30 a.m., in
Room B-318, Rayburn House Office Building, the Honorable Sam
Johnson [chairman of the subcommittee] presiding.
[The advisory of the hearing follows:]
HEARING ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
Chairman Johnson Announces the Fifth in a
Hearing Series on Securing the Future of the
Social Security Disability Insurance Program
Friday, September 7, 2012
U.S. Congressman Sam Johnson (R-TX), Chairman of the House
Committee on Ways and Means Subcommittee on Social Security, today
announced the fifth hearing in the series entitled ``Securing the
Future of the Disability Insurance (DI) Program.'' This hearing will
focus on key challenges facing the DI program and options to address
those challenges. The hearing will take place on Friday, September 14,
2012, in room B-318 Rayburn House Office Building, beginning at 9:30
a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Subcommittee and
for inclusion in the printed record of the hearing.
BACKGROUND:
The Subcommittee's hearing series has explored the challenges
facing the Social Security Disability Insurance (DI) program, including
the findings of the 2012 Annual Report of the Board of Trustees that DI
revenues will cover only 79 percent of benefits beginning in 2016 due
to the aging of the baby boomer workforce into their most-disability
prone-years, the increased number of women in the workforce now
eligible for benefits should they become severely disabled, decisions
made by Congress regarding the financing of the DI Trust Fund and the
eligibility criteria for benefits, and the recent economic downturn.
The Congressional Budget Office projects that as a result of the recent
recession and slow recovery, the number of disabled workers will
continue to rise over the next few years.
The Social Security Subcommittee began its five-part series
examining the DI program in 2011. The series' first hearing provided an
overview of the program, its history, the importance of its benefits,
the growth of the program and the drivers of that growth along with the
program's current and future financing challenges. The second hearing
focused on the Social Security Administration's program integrity
efforts to minimize improper payments and protect taxpayer dollars from
waste, fraud, and abuse. The third hearing examined how disability
eligibility decisions are made, including the definition of disability
and the Federal-State relationship. The fourth hearing considered the
Social Security appeals process including its history, legal
requirements, and whether the current process provides fair, accurate,
and consistent outcomes while balancing the needs of claimants and
taxpayers.
In the hearing series, many questions have been raised about the
current DI program. These include: is the concept of disability that
prevailed at the start of the program in 1956 still appropriate today
given advances in medicine, rehabilitation, and the workplace? Are
there ways to better support individuals with disabilities to stay in
the workplace? Can the decision-making process be strengthened so that,
when appropriate, awards are made as early as possible and decisions on
applications and appeals are made with greater accuracy and
consistency?
Increasingly, experts are researching these questions and
developing proposed solutions. Employers are also finding new ways to
retain in the workforce those individuals with disabilities who want to
work. The imminent fiscal challenge facing the DI program has made
discussion of these issues both relevant and timely for the final
hearing of this series.
In announcing the hearing, Social Security Subcommittee Chairman
Sam Johnson (R-TX) said, ``We must and we will secure the future of
this essential program for the millions of Americans who count on
benefits. As we look at options to keep that promise, we must balance
the needs of those with disabilities with the needs of workers who
support the program. Striking that important balance will result in a
program that makes the right decision as soon as possible, supports
work, prevents fraud, and treats all workers fairly.''
FOCUS OF THE HEARING:
The hearing will focus on options to address the key structural and
fiscal challenges facing the disability program.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit
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Finally, please note that due to the change in House mail policy, the
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Note: All Committee advisories and news releases are available on
the World Wide Web at http://www.waysandmeans.house.gov/
Chairman JOHNSON. We have a short morning this morning, and
a lot of good testimony to listen to, so we are going to go
ahead and get started. Mr. Becerra is on his way, so the
committee will come to order.
Welcome to the fifth and last hearing in our series on
Securing the Future of the Social Security Disability Insurance
Program. Over the course of the series we have heard about the
program's striking and continuing growth at a time when workers
paying into the system have increased nearly 70 percent between
1970 and today. The number of people collecting disability
checks has increased by over 300 percent, like from 2.6 to 10.8
million people. By 2021 the number of beneficiaries will exceed
12 million and total benefits paid will reach over $200
billion.
That is a 52 percent increase over the $132 billion paid in
benefits last year. We have heard how some of that growth is
caused by factors like the size of the overall workforce, more
women in the workforce, and the aging of the baby boomers. And
some of the growth has been caused by Congress' decisions that
expanded the ways in which people could qualify for benefits.
We have heard about the people who try to defraud the
system by falsely claiming they are disabled and we have seen
some of them. We have heard that Social Security's efforts to
conduct continuing eligibility reviews are a shifting priority,
adding unnecessary costs and weakening public trust in the
program. And we have heard how last century's view of
disability hasn't kept up with this century's advances in
medicine, technology, and the workplace, resulting in a program
that pays people not to work.
In fact, GAO has designated the program high risk because
the medical criteria and occupational information relied on to
make benefit decisions are out of date.
And we have heard that the World Health Organization and
many distinguished medical experts look at disability today as
the individual's ability to function in different environments,
especially with assistance of technology or workplace
accommodations for the disabled.
In the hearing series, we have also heard how important it
is to make the right decision as early in the process as
possible. We have walked through the complicated lengthy and
open-ended initial determination and appeals process that
enables claimant representatives to drag out appeals in hope of
getting awards. And we have heard how outlier judges, many of
whom award disability benefits in most of the cases they hear,
in other words, rubber stamping, can't be managed or questioned
about their decisions and leaving the process virtually
unmanaged and adding more costs.
And we have also heard how the courts have taken it upon
themselves to reinterpret Congress' will, creating inequities
and inconsistencies. We have heard again and again that we must
keep this program strong for those who truly cannot work. And
we have heard the Disability Insurance Program is on an
unsustainable path, and that unless Congress acts, in 2016 the
program will be able to pay only 79 percent of the benefits,
putting individuals with disabilities at risk.
The hearing series has been about how the Disability
Insurance Program works, problems plaguing the program, and the
need for sensible changes to make it work better. This series
has raised important questions. Is the concept of disability
that existed in 1956 still appropriate today in this 21st
century economy? Are there better ways to support individuals
with disabilities who can remain in the workplace instead of
paying them to stop working? And are there ways to award
benefits sooner and provide a fair, timely appeals process? And
finally, what are the risks of doing nothing?
Today we will hear several views about where the existing
system falls short and how it might be fixed as well as some
new approaches that are already working. What each of our
witnesses has in common is they believe we can fundamentally do
better, and I thank you all for that.
We will also hear from the business community on the
amazing success of employers who are hiring those with
disabilities and the challenges they face keeping those with
disabilities in a job.
I want to thank the members of this subcommittee for
engaging in this much needed conversation, and I know we are
all committed to continuing this dialogue. Together, including
Mr. Becerra and I, we will find answers to securing the future
of the Disability Insurance Program for generations to come.
I now recognize Mr. Becerra for any comments you may have,
sir.
Mr. BECERRA. Mr. Chairman, thank you very much and thank
you to our witnesses for being here.
Severely disabled American workers have earned the right to
receive disability benefits and they rely on them. One hundred
sixty million Americans contribute to Social Security. They
need protection for themselves and their families when they
retire, or if they should die, they also get the benefits, or
if they become disabled, severely disabled, they get the
benefits.
It is not easy to qualify for Social Security disability
benefits. DI is only for people who paid into the system,
first; second, it is only available to Americans with the most
severe impairments, Americans who are dying or who are
generally at a point where they can't even earn a poverty level
wage at any job in the national economy because of a long-term
condition.
Fewer than half of Americans who apply for DI benefits are
awarded such benefits, even after a lengthy appeals process. DI
benefits aren't especially generous. A typical worker receives
about $13,000 a year which replaces about half the earnings
that worker had while working. For nearly half of DI
recipients, Social Security provides 90 percent or more of
their total income.
The Social Security Disability Insurance Trust Fund's
challenge, which we are hearing more and more about, is modest
and it is stable. Although the Social Security system overall
can pay full benefits until 2033, the DI Trust Fund considered
on its own is projected to be able to pay only about 80 percent
of scheduled benefits starting in 2016. Fortunately, the DI
shortfall is relatively modest. Over the next 75 years, the
financing shortfall is equal to about 0.1 percent of GDP or, to
put it in context, that is about one-eighth of the cost of
extending the Bush tax cuts for people who earn more than
$250,000 a year.
The DI shortfall, by the way, is not a surprise. When
Congress last rebalanced the allocation of payroll taxes going
into the two Social Security trust funds, it did so knowing
that the amount allocated to DI would result in a shortfall in
2016, the same date as projected in the most recent trustees
report. The recent growth in DI is also not a surprise since it
is due primarily to demographic changes and other predictable
factors in combination with, of course, the recession. The
biggest factor is demographic. The baby boom generation has
reached its most disability-prone years. More women have worked
long enough to be protected in the event they become severely
disabled and can no longer work. Finally, the economic downturn
has also made it more difficult for people with disabilities to
obtain work.
I do think it is very important that we operate DI in the
most fiscally responsible way possible, and we have to here in
Congress take responsibility for our own actions in how we
provide the resources for the Social Security Administration to
do its work, both as a program for those who are retired and
those who are disabled. As we work to address the challenges
that face us and to strengthen DI for the future, we must first
do no harm.
As we talk about the possible changes to Social Security
disability insurance, we should keep in mind that American
workers have paid for their Social Security benefits. Over its
lifetime, Social Security has taken in $15.5 trillion and only
paid out $12.8 trillion, leaving an overall trust fund surplus
of $2.7 trillion. Surplus.
I am concerned that experiments that some would like to
perform on the DI program could be harmful to those with severe
illnesses or disabilities. They could increase employment
discrimination against the disabled, or they might deny or
delay earned benefits for those who need them, increasing
hardship for already struggling American families. There is
little evidence to suggest that people who qualify for DI are,
in fact, able to work at any kind of self-supporting level.
Mr. Chairman, I hope we can work together on a bipartisan
basis to strengthen DI, always applying the test that we should
first do no harm. And with that, Mr. Chairman, I think we have
an opportunity to hear from some very important witnesses and I
hope that we are able to then move forward with that
information in a way that lets us do right by this important
program for so many millions of Americans.
With that I yield back the balance of my time.
Chairman JOHNSON. Thank you.
As is customary, any member is welcome to submit a
statement for the hearing. Before we move on to our testimony
today I want to remind our witnesses to please limit your oral
statements to 5 minutes. However, without objection, all of the
written testimony will be made part of the hearing record.
We have one witness panel today, and seated at the table
are Richard Burkhauser, Ph.D., Professor, Cornell University,
Ithaca, New York and Adjunct Scholar, American Enterprise
Institute. Thank you for being here. David Stapleton, Ph.D.,
Director, Center for Studying Disability Policy, Mathematica
Policy Research; Marty Ford, Director of Public Policy, The Arc
of the United States on behalf of the Consortium for Citizens
with Disabilities Social Security Task Force; Daniel Bertoni,
Director, Education Workforce and Income Security, Government
Accountability Office; Jill Houghton, Executive Director, U.S.
Business Leadership Network; Nadine Vogel, Founder and
President, Springboard Consulting, Mendham, New Jersey, on
behalf of the Society for Human Resource Management. Welcome to
all of you and thanks for being here.
Dr. Burkhauser, you are recognized. Please go ahead.
STATEMENT OF RICHARD BURKHAUSER, PH.D., PROFESSOR, CORNELL
UNIVERSITY, ITHACA, NEW YORK, AND ADJUNCT SCHOLAR, AMERICAN
ENTERPRISE INSTITUTE
Mr. BURKHAUSER. Thank you for the opportunity to outline
the main Social Security Disability Insurance policy reforms
contained in my book with Mary Daly.
The DI program is growing at an unsustainable pace. Unless
policy reforms are enacted, the Social Security trustees
predict DI will be insolvent by 2016. Based on our reading of
the evidence the dramatic growth in beneficiaries captured in
Figure 1 is not primarily the result of factors outside the
control of policymakers. Rather, it is the consequence of
changing eligibility standards and their interpretation by DI
gatekeepers, changes that have increasingly turned DI into a
long-term unemployment program, rather than a last resort
income safety net for those unable to work that its founders
envisioned.
As can be seen in Figure 1, between 1990 and 2009 Americans
on the disability rolls more than doubled from 40 to 82 per
thousand workers. This troubling statistic is now well-known.
What is less known is how over this period the Netherlands,
once called the sick country of Europe for its runaway
disability system, initiated fundamental reforms that reduced
their disability rolls from 110 to 80 per thousand workers, a
ratio that is now below the United States' rate. The Dutch
reforms focused on reducing the inflow of beneficiaries by
making employers more directly bear program costs. All Dutch
firms must now fund the first 2 years of their worker's
disability benefits and pay an experience rated disability tax
based on the number of their workers who move on to the long-
term program. These reforms provide incentives for employers
who are in the best position to offer accommodation and
rehabilitation to do so. Most importantly, these reforms led to
the development of a market for private long-term disability
insurance, and more effective case management of impaired
workers by private sector case managers. It is this early
intervention that is credited with the significant decline in
beneficiaries shown in Figure 1. Importantly, the reduction of
new beneficiaries was the result of those with disabilities
working rather than moving on to other welfare programs.
Currently about one-third of U.S. workers are covered by
private long-term disability insurance. The question is, how do
we get the private sector more involved in case management?
Rather than mandate that all firms provide such coverage we
proposed an alternative to better align the public and private
costs of long-term disability.
The United States should stop funding the DI system with a
uniform payroll tax and replace it with a tax based on a firm's
experience rating. Doing so would raise the payroll tax of
firms whose workers enrolled at below-average rates and lower
it for firms whose workers enroll at low-average rates.
Employers who bore the cost of both options would be more
incentivized to make investments that clear a work path for
their employees following the onset of a disability than to
push them onto the DI rolls.
This is currently the system used to fund State Worker's
Compensation benefits. The best practice for these programs
could also be considered for DI changes. Alternatively,
employers who provide private disability insurance could be
granted a reduction in DI tax rates, while firms that could not
be charged higher tax rates either--could be charged higher tax
rates. Either of these reforms would bend the projected cost
curve by reducing incentives for employers and employees who
overuse the system.
Current DI policy built on the assumption that disability
and employment are mutually exclusive is both archaic and
fiscally unsustainable. Fundamental reform is needed to restore
DI solvency and to support continued employment and greater
self-sufficiency among workers with disabilities. Experience
rating is the key to doing so. It would bring private sector
know-how in case management to the front end for a more fully
integrated disability system.
This is not pie in the sky reform. This is reform that the
Dutch have already implemented. It is reform that is going on
in Sweden, and it is reform that is going on in Great Britain.
If you look at Figure 1, you can't possibly believe that
changes in the health of the Dutch and the United States are
actually responsible for the dramatic changes in the number of
people on their disability rolls. The Dutch in the 1980s proved
that you could put as many people on the disability rolls as
you are willing to accept by very open rules that allowed
people to come on who had only 15 percent impairments. We are
now having a higher rate than they are in our disability
system, and we can do better.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Burkhauser follows:]
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Chairman JOHNSON. Dr. Stapleton, you are recognized for 5
minutes. Thank you.
STATEMENT OF DAVID C. STAPLETON, PH.D., DIRECTOR, CENTER FOR
STUDYING DISABILITY POLICY, MATHEMATICA POLICY RESEARCH
Mr. STAPLETON. Thank you for the opportunity to testify
today. I will briefly state and explain my views which have
been formed over 20 years of conducting research on disability
and employment issues. More support for my views can be found
in my written testimony.
SSDI is just one component of our Nation's disability
support system, albeit a key one. Like many others I think the
overall system is failing. There is no easy fix, but there are
prospects for systemic reforms that would provide better
opportunities for people with disabilities to live fulfilling
lives, and at the same time reduce growth in Federal and State
expenditures for their support. Congressional action, however,
is required to jump start a process that over time could lead
to successful restructuring.
Now, I characterized the disability system as failing
because it is well documented that economically working age
people with disabilities are falling further and further behind
their peers without disabilities even though taxpayers are
paying more and more for their support. For over two decades
relative employment rate and household income of working-age
people with disabilities has been declining and Federal
expenditures to support that population are very high and are
growing much more rapidly than we would expect based on growth
and the size of the workforce and the changes in its age and
sex composition. In short, taxpayers are being asked to pay
more and more for a support system that is less and less
adequate.
I see two fundamental causes of systemic failure: The first
is the use of long-term inability to work because of a
medically determinable condition as an eligibility criterion
for SSDI and SSI. This criterion might have made sense in 1956,
SSDI's first year, but in today's world many people with severe
medically determinable impairments can, in fact, substantially
support themselves through work. My guess is that you all know
people with such significant impairments that they would be
eligible for SSDI if they did not actually work. And I suspect
there are some in this room. They likely have high levels of
education. They have received excellent health care, they use
technology and accommodations to greatly mitigate their
functional limitations, and they have developed strong personal
support networks, factors that SSA does not, of course,
routinely consider in its disability determinations.
The inability to work criterion creates work disincentives
for all those with qualifying medical conditions or conditions
that nearly qualify, and fosters long-term dependence on public
support.
The second fundamental flaw with the current policy is
program fragmentation, as has been amply documented by Dan
Bertoni and his colleagues at the GAO. The patchwork of Federal
and State disability support programs creates pervasive
inefficiencies. Among these, and there are many, are multiple
financial incentives for States and others to encourage and
help people with disabilities apply for SSDI rather than to
support work.
Structural reforms that address these two issues could
potentially provide better economic opportunities for people
with disabilities and reduce growth in Federal and State
expenditures for their support. Such win/win policy reforms
would be oriented towards helping people with disabilities take
advantage, take better advantage of their productive potential
rather than undermine their efforts to do so. They would also
integrate or better coordinate programs, all in a manner that
improves outcomes for people with disabilities and reduces
total expenditures for their support.
Now, that is very fine in theory, but what is the evidence?
Is this all pie in the sky? In my written remarks, I summarize
a growing body of evidence that such win/win reforms do exist.
Given the evidence, it is not hard to imagine that structural
reforms could reduce the percentage of people with disabilities
who primarily rely on the government for their support by 20 to
25 percent, perhaps more, improving their economic well-being
at the same time. Unfortunately, however, it is far too risky
to institute structural reforms on a timetable that would
address the pending exhaustion of the SSDI Trust Fund based on
what we now know. There is a high chance that the reforms would
make people with disabilities significantly worse off,
something that I know nobody wants to do, or they might
accelerate growth in public expenditures for their support
rather than reduce it, or they might do both.
You know, Congress could pass legislation to put the
country on a path towards successful restructuring. Structural
change requires collaboration across agencies and across the
corresponding congressional committees. I know that is
difficult, but it is not unheard of. It has happened before.
And it simply has to be done.
States must also play a significant role. My written
testimony outlines the elements of legislation that would help
move that process forward.
Today Congress faces very difficult choices with respect to
SSDI and other programs that provide support to people with
disabilities. The fundamental problems with the support system
make it very likely that more difficult choices are in store
for future Congresses if we don't quickly start down a path
that could lead to win/win policy reforms. Hence, I urge you
maybe to initiate a process of long-lasting fundamental reforms
to American disability policies and programs.
Thank you.
Chairman JOHNSON. We just might do that. Thank you for your
testimony.
[The prepared statement of Mr. Stapleton follows:]
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Chairman JOHNSON. Ms. Ford, you are recognized.
STATEMENT OF MARTY FORD, DIRECTOR OF PUBLIC POLICY, THE ARC OF
THE UNITED STATES, ON BEHALF OF THE CONSORTIUM FOR CITIZENS
WITH DISABILITIES SOCIAL SECURITY TASK FORCE
Ms. FORD. Thank you, Chairman Johnson, Ranking Member
Becerra, and Members of the Subcommittee, for this opportunity
to testify and for your attention to this very important
disability program.
SSDI is vital to people who are disabled during their
working years and to their dependents. Earned benefits targeted
to people with the most severe disabilities benefits are
modest, averaging about $1,060 per month. For most people, SSDI
benefits are at least 75 percent of their income. Along with
related Medicare benefits, SSDI provides economic security and
plays a vital role in helping people secure housing, food,
health care, and other basic necessities.
Beneficiaries are diverse. They can include a young person
with severe visual or hearing impairment, or who has had a
major head injury, or physical trauma, from an accident; a
former daycare worker, teacher, accountant who has been
diagnosed with advanced cancer or heart condition or MS; a
former construction worker, machinist, salesperson, or nurse
aide with a back injury and chronic debilitating pain or early
onset of Alzheimer's; a custodian, illustrator, or stock clerk
with bipolar disorder, schizophrenia, or intellectual
disability.
Many beneficiaries have had repeated attempts to work,
often exacerbating their impairments before finally turning to
the Social Security system. Most have a combination of adverse
vocational characteristics such as age, low educational
attainment, and declining health. Many beneficiaries are
terminally ill; about one in five men, and one in seven women
die within the first 5 years of receiving benefits.
Furthermore, while recent technological advancements and
stronger civil rights laws have helped many people with
disabilities work, others face diminishing opportunities as the
modern work environment actually becomes more demanding and
less forgiving.
Given the challenges facing people with disabilities, their
loss of income and often extreme poverty, Social Security is a
vital part of the solution for them, not the problem. That is
why it is so important that any measures to strengthen SSDI be
carefully developed, tested, and evaluated to understand the
effects on current and future beneficiaries.
The CCD Social Security Task Force has developed principles
to help guide any reforms to the Social Security system,
including SSDI. These are outlined in my testimony and we have
numerous recommendations which I will highlight: Develop a
better wage reporting and recording system, and promptly adjust
wage--adjust benefit payments to reduce overpayments; increase
the substantial gainful activity level to that of people who
are blind; establish an earnings offset in the SSDI program;
provide a continued attachment to SSDI and Medicare so long as
the person remains disabled. This is an element of the Work
Incentive Simplification Program, or WISP. Improve the rules
for impairment-related work expensed; support and strengthen
programs designed to allow flexibility for people who want to
return to work, including programs authorized under the Ticket
to Work Program. Improve opportunities for those who receive
disabled adult child benefits; extend SSA's Title II
demonstration authority; extend the WIPA and the PABSS
programs; and provide SSA with adequate resources to carry out
all necessary program functions.
Finally, we must secure the long-term financial future of
SSDI. As chief actuary, Steve Goss testified that major
demographic shifts, including the aging of the baby boomers and
entry of women into the workforce in the 1970s and 1980s,
explain most of the recent DI program growth and that expansion
has been expected for decades. Fortunately, these trends are
also expected to stabilize over the next few years.
To meet the DI trust fund shortfall in 2016, we urge
Congress to act expeditiously, as has been done in the past, to
reallocate payroll taxes between DI and the OASI programs.
Congress has reallocated funds between the two trust funds six
times, using a narrow definition of reallocation and 11 times
using a broad definition. Reallocation is a sensible solution
that will maintain the confidence of workers in SSDI.
Americans value Social Security and are willing to pay for
it. Reallocation allows time to carefully develop, consider,
and evaluate options for assuring the long-term solvency of
both the OASI and the DI trust funds for generations to come.
Thank you for this opportunity to testify. I look forward
to answering any questions.
Chairman JOHNSON. Thank you, ma'am. I appreciate your
testimony.
[The prepared statement of Ms. Ford follows:]
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Chairman JOHNSON. Mr. Bertoni, welcome aboard. Please go
ahead.
STATEMENT OF DANIEL BERTONI, DIRECTOR, EDUCATION, WORKFORCE,
AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. BERTONI. Good morning. Chairman Johnson, Ranking Member
Becerra, Members of the Subcommittee. Good morning. I am
pleased to discuss the future of Social Security disability
programs, which paid nearly $180 billion to over 14 million
individuals and their families last year. Given the size and
cost of its programs, SSA must have current and appropriate
criteria to assess whether a claimant's medical condition
precludes work in a national economy.
In 2003, we designated SSA's programs high risk in part
because its programs did not reflect modern concepts of
disability, where one's medical condition and work capacity is
assessed in conjunction with advances in medicine, technology,
and current job demands.
My remarks today are based on our June 2012 report and
focuses on steps SSA is taking to modernize its disability
determination criteria, especially in regard to how claimant's
functional capacity and other factors, such as assistive
devices and workplace accommodations are considered.
In summary, SSA has taken concrete steps to incorporate
modern concepts into its disability criteria. First, in several
areas the agency is now giving greater consideration to
claimants' functional capacity despite their medical condition
to determine whether their impairment prevents work. For
example, as part of SSA's revision to its medical listings for
the immune system the agency included several functional
criteria, such as performing activities of daily living,
maintaining social functioning and completing tasks in a timely
manner.
In general, the SSA officials and experts we spoke with
supported incorporating a functional criteria as appropriate to
facilitate a more accurate assessment of work disability.
However, some caution that such an approach could result in
more subjective assessments and pose challenges for decisional
consistency.
Despite these concerns, to better inform its efforts and
incorporate functional information into it processes SSA is
sponsoring research through the National Institutes of Health.
Of note is an ongoing effort to develop a computer-based tool
to more rapidly and reliably assess claimant function. Agency
officials anticipate several benefits from this assessment
tool, such as providing more timely, accurate, and consistent
information on the impact of impairments and one's ability to
work. However, the agency has yet to determine when or how this
tool will be integrated into its disability determination
processes.
Although these and other actions are promising, SSA has not
fully incorporated other modern concepts into its disability
criteria, such as the role of assistive devices and
accommodations in mitigating barriers to work. In today's work
environment, assistive devices can help the visually impaired
perform various tasks and accommodations such as increased
wheelchair accessibility can enhance an individual's ability to
function in the workplace.
SSA does incorporate assistive devices such as prosthetics
for walking into the medical listings once they become standard
in the medical community, and examiner staff must evaluate a
person's ability to function with the devices in place.
However, agency officials and other experts expressed concerned
about more broadly incorporating such devices when they may not
be widely available.
In regard to workplace accommodations, the agency's policy
is not to consider them due to the inability to ensure they are
actually being provided by employers or that they are
effective.
Officials were also concerned about the resources required
to do such assessments, and that data on availability and use
of accommodations was lacking. Although giving broader
consideration to assistive devices and workplace accommodations
is difficult, SSA may be missing opportunities to move further
in this direction, especially for some populations such as
young adults. Indeed, some have argued that there are common,
inexpensive workplace supports to address work disability that
can be reasonably incorporated into SSA's disability criteria.
And there may be opportunities for the agency to obtain this
information directly from employers as it moves forward in
developing its new occupational information system. SSA could
also collect such information through its disability research
consortium which will serve as a national resource for
fostering studies on disability policy.
We recommended that SSA conduct limited, focused studies on
the feasibility of more fully incorporating certain assistive
devices and accommodations into its disability determinations.
Absent studies to ascertain how these tools are playing a role
in helping individuals with disability stay at work or return
to work and their cost in comparison to many years of
disability benefits, SSA may be missing an opportunity to help
individuals reengage in the workforce and to best target finite
program resources.
Mr. Chairman, this concludes my statement. I am happy to
answer any questions you may have. Thank you.
Chairman JOHNSON. Thank you, Mr. Bertoni.
[The prepared statement of Mr. Bertoni follows:]
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Chairman JOHNSON. Ms. Houghton, welcome. Please go ahead.
STATEMENT OF JILL HOUGHTON, EXECUTIVE DIRECTOR, U.S. BUSINESS
LEADERSHIP NETWORK
Ms. HOUGHTON. Chairman Johnson, Ranking Member Becerra, and
Members of the Committee, thank you for the opportunity to be
here today. My name is Jill Houghton. I am the Executive
Director of the U.S. Business Leadership Network. We are a
business network. We are nonprofit. We are nonpartisan, and we
promote disability inclusion in the workplace, in the
marketplace, and in the supply chain. Additionally, we run the
Nation's only certification for disability-owned businesses,
and we are working with corporate America to do business with
people with disabilities who are entrepreneurs.
As Executive Director of the USBLN, I am here because our
businesses, our members are deeply, deeply committed to
recruiting, hiring, and retaining employees with disabilities.
I should also share with you that my testimony is grounded in
my personal experience. I ran the Ticket To Work and Work
Incentives Advisory Panel from 2005 until 2008, when we sunset.
I am also married to somebody with a spinal cord injury, who is
on the Social Security Disability Insurance Program and
successfully transitioned off the rolls.
While our members are not experts on the Social Security
program, one of the things that they firmly believe in is that
we as a Nation have to move from focusing on disability from a
medical perspective to focusing on a social perspective,
focusing on talent. When we go to our members and we ask them
if they are interested in hiring people with disabilities,
unequivocally the answer is yes, but they don't hire people
with disabilities because they can't work, they hire people
with disabilities because they have the prerequisite skills and
the needed supports in order to come in and get the job done.
When we went to our members and we asked them about their
challenges and their opportunities related to this issue, I
will tell you that one of the number one issues, once they get
over and they figure out that this is what they want to do, the
question becomes where are--where is the supply? We represent
the demand side of the equation and where is the supply? How do
I find people with disabilities? And specifically, how do I
find college students with disabilities?
So we created a National Student Advisory Council and we
became really personally connected to this because one of our
student leaders, Jimmy Curran, graduated from Temple University
with a degree in finance. This kid is ready to set the world on
fire. This is who my members are looking for. And Jimmy got a
job as a market research analyst in Pennsylvania with a Blue
Cross affiliate, and he called me up and he said, hey, I am
going to work but he needed personal care assistant services.
So his private insurance wasn't going to pay for that. So he
didn't know about 1619(b) and all of the complicated work
incentives and we helped him get connected, and so the good
news is, Jimmy is working, and that is the good news. The bad
news is that unless he gets bumped up to a really high level
within the company he is going to have to stay at this certain
level and limit his earnings because he needs the personal care
assistant services. And in a short amount of time he is going
to become dually eligible. Now, from businesses' perspective we
have invested in Jimmy. We want Jimmy. We want to help Jimmy
grow within the company, but it is going to be a challenge and
he is going to have to come to making some tough decisions. So
that is definitely a challenge that we face.
Other challenges that we face, is there is a myriad of
government programs out there and nobody knows how to navigate,
right? I mean, people knock on businesses' door from, you know,
every nook and cranny talking about what people can't do. We
don't want to know what people can't do. We want to know what
people can do.
Certainly, there are challenges that our members hear
about. They hear about employees that have issues with
overpayments, that have issues with program eligibility, et
cetera. The list goes on.
So where are we succeeding? I will tell you where we are
succeeding. We are succeeding because business--companies like
Walgreens are standing up and making a corporate commitment to
recruit, to hire, to retain people with disabilities, and they
are teaching their peers. Countless companies, Lowe's, Pepsi,
Hershey, Merck. The list goes on and on and on of companies
that are learning from each other that are committed to this.
But it is not easy.
I would tell you that, in conclusion, hiring people with
disabilities gives business a competitive advantage. It is an
advantage that business needs. We represent the demand side of
the equation. We need the talents, the dedication, and the
creativity of people with disabilities in the workforce, but
equally important is we need policies and programs and
investments that support this paradigm shift from a medical
model to one that focuses on talent.
Thank you.
Chairman JOHNSON. Thank you, ma'am. I have visited
Walgreens where they work those people, and there must have
been 10 of them in there stocking shelves. It is neat to see
people who are in that situation accomplishing something with
their lives. It really is.
[The prepared statement of Ms. Houghton follows:]
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Chairman JOHNSON. Ms. Vogel, welcome. Please proceed.
STATEMENT OF NADINE VOGEL, FOUNDER AND PRESIDENT, SPRINGBOARD
CONSULTING, MENDHAM, NEW JERSEY, ON BEHALF OF THE SOCIETY FOR
HUMAN RESOURCE MANAGEMENT
Ms. VOGEL. Thank you. Good morning, Chairman Johnson,
Ranking Member Becerra, and distinguished Members of the
Subcommittee. My name is Nadine Vogel and I appear before you
today as a member of Society for Human Resource Management.
SHRM's members have a long history of promoting effective
employment practices that advance equal opportunity for all
people, including individuals with disabilities. I commend you
for holding this hearing on the Disability Insurance Program
and thank you for the opportunity to testify.
Mr. Chairman, I am the Founder and President of Springboard
Consulting in Mendham, New Jersey. At Springboard it is my
professional goal to collaborate with organizations that
encourage the hiring and retention of individuals with
disabilities. On a personal level, my husband and I are both
parents of two children who have special needs. I understand
firsthand the issues that individuals that have disabilities
and their families face, but I also understand the challenges
that employers face in today's economy.
Every day in this country employer disability management
strategies are helping employees stay on the job and off our
strained Disability Insurance Program. Employers and HR
professionals continue, however, to confront persistent gaps
between the skills of unemployed workers and the skills sought
by employers to fill specific positions.
Recent SHRM research reveals that more than one-half of
employers report difficulty recruiting for specific jobs today.
Individuals with disabilities can fill these gaps. The
challenge for employers is to develop an approach that recruits
and retains these talented employees while successfully
navigating Federal law and programs.
In my experience both employers and employees want
individuals with disabilities to remain at work or return to
work as quickly as possible. The GAO has shown that the longer
employees are out of work, the less likely they are to ever
return. But there are many challenges for employers. While
numerous Federal statutes and programs attempt to provide a
transition from disability to work for these individuals, taken
as a whole, they are very complicated to navigate.
First, the Social Security Disability Insurance Program has
great merits, but it was not originally created to handle all
of the age-related disabilities that come as a result of people
living longer and staying in the workplace longer. In addition,
the definition of disability for eligibility for SSDI is
outdated. It reflects the medical model rather than a
functional model. Contrary to SSDI definition, other Federal
statutes use a different definition. At SHRM we prefer the
Americans with Disabilities Act, or ADA, definition. It relies
on the essential functions of the job, what someone can do
rather than a more general job description or perhaps what they
can't do.
Then our members report mixed experiences in utilizing the
Work Opportunity Tax Credit and VOW to Hire Heroes Act Tax
Credit as well as vocational rehabilitation protection and
advocacy for beneficiaries of Social Security and the Ticket To
Work programs. Because of the complexity and the paperwork
required to take advantage of these tax credits and programs,
they are more geared towards benefiting large employers with HR
departments, and even then can be extremely overwhelming.
Despite the economic and statutory hurdles, employers have
found many strategies successful in keeping employees with
disabilities at work.
First, when employers engage an employee early on in the
return to work process it allows the organization to
simultaneously meet business needs and reduce the financial
impact of a prolonged absence to the employee and their family.
Second, employers clearly define policies and jobs.
Employers must ensure that the transition back to work programs
have specific written guidelines, light duty, and regular duty
job descriptions.
Third, reasonable accommodations committees, or RACs, are
becoming a very effective practice towards ensuring the fair
and equitable end-to-end process of someone requesting an
accommodation.
And fourth, employers are providing creative accommodations
and other simple solutions for these employees such as a
keyboard tray to reduce carpal tunnel syndrome. Such
accommodations can include workplace flexibility benefits such
as defined flexible work schedules and even telecommuting.
In closing, Mr. Chairman, I want to be clear that while
some of these suggestions for disability management tactics may
work for different employers, you know, you have to keep in
mind that the suggestions here are circumstantial. So there is
not one simple one-size-fits-all solution for every employer of
every size or, for that matter, in every industry.
Mr. Chairman, again, I thank you, I thank you the
subcommittee for listening to my perspective, and I am happy to
answer any questions.
Chairman JOHNSON. Thank you, ma'am.
[The prepared statement of Ms. Vogel follows:]
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Chairman JOHNSON. You know, I have always thought the
United States was a leader, but some of the testimony we have
heard makes me feel like we are not doing enough. And I guess
the question is, how does a program need to change to catch up
with the world views on disability today?
Dr. Stapleton, you say the fact that the Disability
Insurance Trust Fund will be exhausted in 2016 and the erosion
of the economic status of people with disabilities are signs of
a failing public support system for working-age people with
disabilities, despite the increasing Federal tax dollars that
go into it, and you also say that the system is failing the
taxpayers who pay for it, could you explain why you call it
that, and tell me why they exist, if you can?
Mr. STAPLETON. Sure, I would be happy to do that. This
really goes back, I think, to things that you said in your
opening comments. In 1956, when we established SSDI, it was
intended to be a medical retirement program for people who were
over the--it is on. Is that better now?
Chairman JOHNSON. Yes.
Mr. STAPLETON. Okay. Sorry.
Chairman JOHNSON. I could hear you. We will get the cotton
out of his ears.
Mr. BECERRA. He needs an assistive device.
Mr. STARK. You have new batteries.
Mr. STAPLETON. I am not sure he qualifies.
Mr. BECERRA. I can guarantee you he doesn't.
Mr. STAPLETON. So it was established as a medical
retirement program for workers over the age of 50. And you
know, at that time, it was probably pretty reasonable to
determine whether somebody could continue to work based on
their medical conditions. A lot has changed since then, and
some of those changes are external to the program, advances in
medicine and technology and the way that we work that are just
mind-boggling from the perspective of 1956. And that, to my
mind, has really made SSA's task of trying to divide people
into people who can work and people who can't work based on
medical conditions alone, a fool's errand. You know, it is just
if you want to know why that process doesn't work very well,
that is the core reason.
Chairman JOHNSON. Well, dividing it is one thing but some
of them tried to play the system, too. You know that.
Mr. STAPLETON. Well, that may well be true. So at the same
time those trends were occurring, you know, we expanded the
availability of disability benefits, and the American people
are very generous. They want to help people with disabilities.
And the way that we did it, though, was to really expand on
what we did with SSDI. So first we made it easier for young
people to get SSDI benefits either by working a little bit or
by becoming eligible as dependents of their parents and the
same for disabled widows. And we also, you know, we eventually
added Medicare benefits to the mix, made the benefits more
valuable.
The SSI program started in 1974. We used the same
criterion, and again, expanded benefits, made Medicaid
available to those who were on SSI in most States, for almost
all people.
So my colleagues and I in the past have called what we have
created a poverty trap. And what we do is when people with
significant medical conditions do have challenges, they face
difficult challenges in their lives, so we have set up a system
which serves to funnel them into dependence on Federal programs
as opposed to helping them take advantage of the productive
capacity that they actually have.
And so I think, you know, the root of the problem goes back
to just following along and expanding on what we did in 1956
without taking a good look at the structure and thinking about
how to change it. And as time has passed various things have
happened that have affected the ability of some people with
significant impairments to work. We have had a more competitive
economy. We have had many recessions and as you know, every
time we have a recession, a new batch of people comes on to
SSDI. And once they get on, almost all of them stay there for
the rest of their lives or until they are earning retirement
benefits. So we just keep following people into the programs
more and more, and we end up having to spend more and more for
them.
So I think, you know, I think in short, we are getting less
for our money, and not really helping people with disabilities
the way that we could help them with the same amount of money
or even less.
Chairman JOHNSON. Dr. Burkhauser, could you tell me what
you think the primary policy goal of the national disability
insurance ought to be and what should the taxpayers be paying
for with their taxpayer dollars?
Mr. BURKHAUSER. Well, I think the taxpayer should be paying
for what was originally envisioned by the founders. The DI
program should be a last resort income safety net for those
unable to work.
Now, in Europe, the way that works is that the government
integrates government jobs programs with government transfer
programs and they have gatekeepers that try work programs
first. That is not the way we do business in the United States.
We have much more faith in the private sector. But we have a DI
program which basically hands out checks. And we have this very
weird system. Think about this. You have to spend 2 years
demonstrating that you can't possibly work at any substantial
gainful activity before someone in the government tries to help
you to work. That doesn't work. That is crazy. You don't
provide help for work after someone has proven they can't work
for 2 years. You need that to happen beforehand. The people who
do that are the private-sector employers but they are getting
the wrong signals because of the way we tax them to provide
less training and accommodation than they can do.
The Dutch had the same problem and what they did was to
experience rate payroll taxes and require firms to provide the
first 2 years of benefits. That got the attention of the
private sector. It is nice to say that the private sector takes
care of a few people. That is good, but it is amazing the
private sector how they respond to incentives. If you tell them
you have got to pay for it if they go onto the long-term
disability rolls, all of a sudden they will be taking care of a
lot more people. Only 33 percent of employers now have long-
term disability programs. I am not saying that we should
mandate that. That is what some very good economists Autor and
Duggan out of the Hamilton Group urged. I am suggesting let's
just change the price signals so that people have to pay. When
their workers go onto the disability rolls they have to pay
more if more of their workers go on relative to firms that are
doing the right thing and providing accommodation for them.
Chairman JOHNSON. Thank you, sir.
Mr. Becerra, you are recognized for 5 minutes.
Mr. BECERRA. Thank you, Mr. Chairman. Thank you all for
your testimony and food for thought. I thank you very much. Is
it Houghton?
Ms. HOUGHTON. Houghton.
Mr. BECERRA. Ms. Houghton, I liked your testimony because
more than anything else I think you show that there is a lot of
energy and enthusiasm to try to make a difference. And I think
that goes a long way. Much of this is believing in some of
these folks that they can go back to work and helping inspire
them to have the confidence to go back to work, and so I hope
that you stay in touch with us as we try to figure out how to
improve the DI system. Anything that you think will work, you
know, the best ideas that can come from the business community,
our business leaders who are trying, making the effort to try
to get folks into the workforce, the collaborative efforts that
can take place between the business community and the Federal
Government, please share that. And Ms. Vogel, you as well, also
expressed some of that. I hope that what you will do is push
us, push the envelope because what we do have to do is figure
out a way to partner on this.
We are entering the stage where that baby boom generation
is hitting that point where they are most prone to be disabled.
And that is why I think the chart, Dr. Burkhauser, that you
used was a bit deceptive. We have twice as many women in the
workforce today than we had back in 1975 when you start to show
an increase in the size of the disability workforce. We have
all of those baby boomers who in 1975 were babies, young kids,
who are now at that point where they are either retiring or not
able to work because they may have become disabled. And so I
think we have to look closely because I don't think anyone here
would say that the folks that are receiving disability benefits
don't have a disability. It is whether they have a disability
that would keep them from working, and what we have to try to
do is help those who should be able to work, who with a little
bit of incentive, with a little bit of confidence, people who
say, I trust that you can get back to work, I am going to show
you that I am committed to you as your employer to help you get
back to work, can probably inspire some of these folks who are
probably a little depressed on occasion when they can't get to
work to say, you know what, you believe in me, I am going to
believe in me again. And I think that is where we crack this
nut which has led to this concern for the Disability Insurance
Program. But I hope no one would make the claim that it is time
to get rid of the Disability Insurance Program because for the
most part, we need some help for some of these folks.
So, Ms. Houghton, I wanted to just make sure I am clear,
because you pointed out the case of a young man who has got
some real opportunities, but most of the folks who apply for
disability insurance benefits don't even have a high school
diploma. Right, my understanding is--statistics I am looking at
her--is two-thirds of DI beneficiaries have only a high school
diploma or less. So they are not as fortunate. They haven't
been to the point where they have that college degree.
Nearly 70 percent of disability beneficiaries are 50 years
or older, so they are not at the very beginning of their work
career. These are folks who are in the sunset of their work
career and, as we know, even Americans who are not disabled who
are over 50 are having a hard time today getting a job because
the market is very tough. And so I think we have to remember
that this is a population that has a disability severe enough
that in many cases, as I think Miss Ford mentioned, many of
them die within a few years of applying for the benefit. These
are not folks who would just need to have a computer, you know,
typing tray so they can avoid carpal tunnel syndrome. These are
folks who in a few years may not even be on this Earth. And so
what we are trying to do is pick out the ones that while they
have a severe disability we think with a little bit of
accommodation, and I think Mr. Bertoni, your testimony was
essential here because you pointed out how modern science,
technology has made things possible today that 30 years ago we
couldn't have done. And the only proof you need to see is our
wounded warriors who are coming back and doing remarkable
things having been maimed and injured in so many different and
grievous ways.
Mr. Bertoni, let me make sure. GAO we rely on to give us
the scoop on this stuff, the facts. We are talking about folks
who are disabled, right. There is no question these are folks
who are disabled in some capacity.
Mr. BERTONI. Correct, for the most part. Obviously, there
are folks who get in under certain means that aren't, but that
is on the margins.
Mr. BECERRA. And so it is now an issue of how do we make
the Social Security Administration, working with this
Disability Insurance Program, be as effective as possible
partnering with the business community to try to make sure that
we can transition those who still have the capacity to work to
get them back to a job. Part of it is the training and
education that might be necessary to get some of these folks
who are disabled, a spinal problem, but yet still able to do a
number of things, back into the workforce. So part of this will
involve more than just Social Security. It is going to involve
the workforce training aspect of what government working with
the private sector can do. And so I hope what you will do is
continue to give us information about how there are
opportunities where we can partner with the business sector to
make sure that technology and training will get some of these
folks back to work.
Mr. BERTONI. Sure, this must be a partnership. It is not
all about the Social Security Administration. There are many
entities in government, State and local, that can help in this
effort, as well as the business community. What I just heard is
that the focus on capacity versus incapacity, and a cultural
shift that return to work and stay at work is not only
socially, but economically beneficial to individuals as well as
employers. That is something that we need to sort of move
further in that direction.
Mr. BECERRA. Thank you, Mr. Chairman. I yield back.
Chairman JOHNSON. Thank you. Mr. Berg, you are recognized
for 5 minutes.
Mr. BERG. Thank you, Mr. Chairman. I thank the panelists
for being here. I mean, obviously, I look at this chart and,
you know, we need to look at how we do things different. You
know, if you say 1956 was when the system was set up, that was
56 years ago. I mean, clearly things have changed dramatically.
In our own State we looked through WSI, or Worker's
Compensation, and we actually found one of the huge successes
is when there was an injury empowering the employer to identify
it immediately, getting proper care, and then keeping that
person in that workforce. I mean, here is their peers, their
friends, and rather than going home or some other environment
for 30, 60, 90 days or 6 months, we found that when you are in
that other environment you got used to that and that was your
normal. And so the idea is to keep them in that workplace.
And so I guess I have a couple of questions, and it is kind
of two different groups here. There is a group that of course
is not in the workforce and has disabilities, and we need to,
you know, really need to look at those, but I am thinking about
the ones that are in the workforce and, you know, if you could,
Dr. Burkhauser, just kind of talk and you did touch on that,
the incentives. My question is, how do we go from here to there
without creating an environment where employers are going to
say, you know what, I don't want to have to pay an extra tax or
penalty here, so I am not going to hire someone with a
potential disability. So maybe just talk briefly about that
transition, and then I would like to talk about other
incentives for people that are new to the workforce with
disabilities and how we can create some incentives there.
Mr. BURKHAUSER. So if you go to an experience rating
system, which is in fact what you talked about with Worker's
Compensation, you are really encouraging the kinds of things
you would like to see. You would like to see a safer workplace.
You would like to see employers that are more likely to provide
accommodation or rehabilitation. In my work we have shown, for
instance, that workers who experience the onset of disability
on the job are more likely to get an accommodation than workers
who experience an accommodation off the job. Why is that,
because Worker's Compensation has an experience rating system.
The DI system doesn't. So that is the important point.
But you are absolutely right that this will make employers
more cognizant of the risks of employing someone with a
disability, and if they perceive that if you already have a
disability you are more likely to move on to the disability
rolls there could be a problem there. So what you can do is you
can simply either give employers a tax credit for hiring such
workers or not have those workers in your pool so that it is
not included and use those for general revenues.
So there is a way to get around that problem and I
certainly agree it is an issue and we should worry about it.
But I think the important point here is that, I am not talking
about pie in the sky when I am talking about getting the
disability rolls changed.
In 1981, only 33 percent of people who said they had a work
limitation in the data that the current population survey were
on the DI rolls; 33 percent. Today, there is no real change in
the underlying conditions of these folks, but 52 percent are on
the DI rolls. And it is not the case that this chart is
deceptive, because actually, Autor and Duggan, who are at MIT
and Princeton, have done work looking--and showed that the
three points that were made about demographics only account for
about 25 percent of the rise in DI; 75 percent is due to the
programs changes both in the rules and in their interpretation.
That is not me. That is the Brookings Institution folks who are
saying exactly the same thing.
Mr. BERG. Ms. Houghton, thanks for your enthusiasm and
passion, but also how can we inspire, promote employers to seek
out workers and incorporate them? Is there some specific thing
in addition to what you have already outlined?
Ms. HOUGHTON. The best thing that we know, the best thing
that we are finding is that business learns from each other. I
mean, I think if we look at the tax credits that exist that are
already in existence, business isn't taking advantage of them
because it is too much government red tape. And so in large
part, they are going unutilized. So it is definitely something
that we need to look at. Can we tell you specifically what it
needs to be?
Mr. BERG. Thank you all. I yield back, Mr. Chairman.
Chairman JOHNSON. Thank you.
Mr. Stark, do you care to make comments.
Mr. STARK. Thank you, Mr. Chairman. I thank the panel for
their interesting observations. I would first of all like to
try to make it the protocol in this committee--I am not
succeeding too well--that we strike from our lexicon the word
``disability.'' There are very few people in this world who are
breathing and among the quick who are disabled. Many of them
have disadvantages, and I like that so much better. I have a
son with a disadvantage, and he can explain it to you. And he
can explain what he has to do to compensate for it, but under
no circumstances would he be considered disabled. And I think
that is true for almost all except those people who are really
just in a vegetative state and unable to speak or function for
themselves. And that isn't many. I think if we look at the
disadvantages that they can be overcome, and that, as many of
you have suggested, employers will find work for them. I think
Dr. Stapleton mentioned that with the increase in technology we
are not talking about as many people having to work with their
backs and their hands, which often is a case where a
disadvantage can end it, but where people can work with their
minds, some people who are mute, some people with sight
disadvantages, some people with--all can be put to work using
other skills in this day and age.
We have job shortages, and one of the things that we hope
is that the economy coming back will encourage this. But where
we come from in California with the tremendous growth there of
technical work, I worked for many years with Steve Jobs and
worked on computer programs that Apple did that actually could
help people with autism function in a community. We were just
beginning when Steve died to deal with dyslexia, and finding
ways for people there, many of whom we find now we have a
Dyslexia Caucus, Members of Congress who are dyslexic, and
didn't know it may be until they got out of college, or have
children, but we have learned to deal with that. And my son
with dyslexia can tell you about the other brilliant people in
the world, Whoopi Goldberg, Charles Schwab, the thoracic--head
of the thoracic surgeons, these are all people with several
years ago we thought was a quote ``disability.'' It is not. It
is a disadvantage. But as someone, the chairman and I, the
chairman will catch up with me one of these days, but as you
learn, after--20 or 30 years after you are past the retirement
age, you hope that people don't catch on to what your
disadvantages are and you can keep functioning. We like our
jobs, and so far we have fooled the public, and the chairman
has done a better job of that than I have. So we are still
here, and limping or getting along with our disadvantage. And I
hope, I just hope that all of you will encourage people.
Employers will find, and they are not in the business of
running charities. They are not going to go out and just search
for someone just because they happen to be in a wheelchair or
because they happen to need certain assistance. They want
people who can perform and we can provide them. We may have to
provide some extra education but that saves us all money and it
gives us real social benefits.
So I appreciate all of your interest in this and, Chairman,
I am pleased that you have brought this to our attention
because I think it is something that deserves much attention
both from the government and private industry. Thank you very
much.
Chairman JOHNSON. Thank you, sir.
Mr. Brady, you are recognized.
Mr. BRADY. Thank you, Mr. Chairman, thank you for holding
these series of hearings. The disability program is so
important, but I don't think it is just fine. You know, I don't
think just modest changes will save this program. I think it is
financially flawed. I think it is structurally flawed. I think
it is operationally flawed, and at the heart of it is that we
are addressing a 21st century challenge looking at it through a
1950s lens. So much has changed and we have to, if we are
serious about saving this program, make some bold moves,
Republicans, Democrats together, to put it on sound footing
again.
You know, I think to illustrate the change all of us
watched the Olympics, watched Oscar Pistorius from South Africa
compete probably in a way that many disability judges would
have said you have no chance for significant gainful
employment. Here he is competing at the highest level. Not that
all of those on disability can do that, but it exemplifies what
a sea change has occurred.
You know, I was reading through some of the information we
had in the report from CBO that makes the point over the last
20 years, despite the Americans with Disabilities Act, despite
equal access to employment, all of the reasonable
accommodations that businesses are making, the strides in
medical treatments and surgeries and prosthetics, the fact that
we have moved to a service economy, seventy percent of the jobs
in most of our congressional districts are service jobs that
pay an average of about $60,000, the financial job, Ms.
Houghton, you are describing, so these are jobs you can raise a
family on. Yet, while we have made all of that progress and the
environment is changing, the employment rate among people with
disabilities has declined by almost half. So as the environment
has gotten better at the workplace, the number of those with
disabilities who actually find jobs has actually been cut in
half over 20 years; not just recent periods, 20 years. And many
of those increasing disability claims are from younger workers
with either mental or musculoskeletal disorders, which evidence
shows have the best chance of staying in the workplace.
So having said all of that, the question is, how do we
solve it? And with the time I have remaining, Ms. Houghton, you
in your testimony, you talked about changing the lens of how we
look at those with disabilities from what you term a deficit-
based or medical model to a talent or social model. I don't
understand what that means. Can you explain better what it is
and how you would apply that to a solution on disability?
Ms. HOUGHTON. Thank you, Mr. Brady. The medical model looks
at an individual and what they can't do, so we see that. We see
that in the media portrayals of people with disabilities, and
we see it when a person with a disability--when we talk about
business hiring people with disabilities and we say that they
are doing it because it is a nice thing to do. Okay. The social
model focuses on the talent perspective, and says that the
individual is--when provided accommodations, when viewed for
what they can do, that it is about what the person can do and
the talent that they bring to the job.
Mr. BRADY. Do you think the system we use today in
disability reflects that view?
Ms. HOUGHTON. No, I do not.
Mr. BRADY. Anywhere close?
Ms. HOUGHTON. I think we have been talking that the system
was created in 1956, and that it was a different era; the
medicine, science, technology was different.
Mr. BRADY. I think Mr. Bertoni's point, there has been some
movement in that direction, but fairly small, so the question I
would ask, and we are almost out of time, unfortunately, is
what is the most significant change we could make to actually
bring that about?
Ms. VOGEL. I think that there are three changes in
particular that we want to consider. So from a SHRM
perspective, we need a harmonization of the various definitions
of disability. If you look across the ADA, FMLA, everybody has
different definitions. I think if we can harmonize those
definitions and make it simpler, I think that is number one.
Number two, we should look at the interplay of ADA, FMLA,
Worker's Comp, allowing ADA to really trump. And the reason, to
your point, is because that is more about what people can do.
How do we provide an accommodation so that you can be
successful. Looking at it from the standpoint of workplace
solutions, productivity tools, that is really what an
accommodation is. And that is that social model.
And I think the third piece is that we need to find a way
to have much more aggressive collaboration between the
employers and vocational rehabilitation. Voc rehab does not
understand employers and what their perspectives are on
providing services. We need to educate both sides, but do it in
a way that is collaborative and that they are talking to each
other on a very regular basis.
Mr. BRADY. Can I ask this, Mr. Chairman, I am out of time,
but can I ask these folks, you know, in your testimony you lay
out much of that, but if there are some other thoughts we need
to have as a committee, could you all submit that to us, to
Chairman Johnson and Ranking Member Becerra? Would that be
okay, Mr. Chairman?
Chairman JOHNSON. That is a good point, thank you. Mr.
Marchant, you are recognized.
Mr. MARCHANT. Thank you, Mr. Chairman. My observation after
these five hearings, Mr. Chairman, is that SSDI has become a
destination for many of the workers and they spend 2 years
proving through the court system that they are, in fact,
disabled and cannot work, and then when they get that
designation, then it opens the door to not a job, not training,
but it opens the door to qualifying for food stamps. It opens
the door for qualifying for assistance with their utilities. It
opens the door for subsidized housing, and so all of the doors
that seem to get opened once you achieve this destination, all
of that ends up disincentivizing the person to go to work. And
then when the person--and I have a 30-year old son that is a T-
6 paraplegic, has a college education, as many training
programs as a parent can get their child training programs,
isn't designated as SSDI, but goes to a job application and
finds out that the health care--that the company looks at a
particular disability and sees, how am I going to put this
person on my health care? How am I going to accommodate this?
And so the SSDI designation ends up being that is where you go,
that is where you stay until you can either go off of it at age
62, or go to 65, or get to Medicare. And it is just basically,
instead of a way station where you go and stay because you need
the support system there while you are trying to do better and
you are trying to get a new career, or just start a career, it
seems to me that all of the disincentives that business would
never put into its system exist here. And so it is not really a
safety net anymore. And the thing that is there, and this is
for the panel, is there a specific designation that when you
qualify for disability, SSDI, there is a specific written
designation that you get and do you possess that until it is
taken away from you? Do you have to have that? I know for food
stamps and utility assistance and stuff like that if you will
just present that document, I mean, there is no other
documentation needed.
Ms. Ford.
Ms. FORD. Well, as has been stated for the different
programs, there are different definitions of disability. So,
you know, certain eligibility will open doors, as you
mentioned, for other programs but you wouldn't necessarily have
to have SSDI for the other programs. I would mention that when
the health exchanges are available in 2014 that may relieve
some of the pressure for people to go into the SSDI program. We
are all sort of waiting to see whether that happens, whether
people might be able to have their need for health insurance or
Medicare covered by using the health exchanges in 2014 rather
than having to go into the SSDI program to get in that doorway
after 29 months into Medicare. So that may actually be a way to
take some of the pressure off the DI program in the future.
Mr. MARCHANT. What is the amount of money that can be
earned by someone that qualifies for SSDI outside of that
stipend per month? Does it fluctuate with the person, or the
State, or----
Ms. FORD. This is actually one of the proposals that we
have. We think there should be a way that a person is always
better off earning money when they are a beneficiary rather
than not earning money. And that is what happens in the SSI
program, but not in the DI program and that has been one of our
proposals for a couple of decades now. But right now, it is the
SGA level, the--what is it, $1,000, approximately $1,000 a
month, and after a trial work period your benefits will end.
You will have a certain grace period of about 36 months, and
those benefits can be reinstated if you stop work. It is very
complex, and that is the problem. And there are lots of people
who go into the DI program who need it when they need it, but
find later that once they have stabilized, once they have come
to grips with the change in their life, whatever has brought
them to the DI program, whether it is an illness, an accident,
whatever, they come to grips with the changes. They are ready
to go back to work. They have got the enthusiasm that Jill has
expressed, and they want to go back to work. But the barriers
are in their way for, as you are describing, and we need to
find a way to remove those barriers so that these kinds of
technical and very complex problems can be done away with.
Now, Social Security has put forward a proposal that would
actually help do that. It is called the Work Incentive
Simplification Program, or WISP, that we are encouraging that
we should pilot to make these work incentives very, very simple
so that people don't get caught up in all the worrisome details
and they are not afraid to go to work and potentially lose a
critical support if they fail. So that there aren't
complications going back and forth, and that they will be
better off if they do try to go to work and find out whether
they can make it. So we think that would be an important work
simplification and work incentive.
Mr. MARCHANT. Thank you, Mr. Chairman.
Chairman JOHNSON. Thank you. Mr. Smith, you are recognized.
Mr. SMITH. Thank you, Mr. Chairman. Dr. Burkhauser, it
appeared you disagreed when Ms. Ford was advocating for the
reallocation of funds to the DI trust fund. Would you like to
address those concerns?
Mr. BURKHAUSER. I think that simply papering over the
problems with DI by borrowing money from the retirement trust
fund to the DI trust fund really misses the point; that there
are real things going on that need to be adjusted. So while it
is true that compared to the problems of the retirement system
as a whole, and compared to the healthcare system, perhaps a
disability system would only cost us $120 billion a year isn't
such a big thing. But I think it is a big thing and it is a big
thing because what we are doing is we are actually as Stapleton
talked about, we are making people with disabilities worse off
by the current system that we have. We are luring them into a
disability program, either SSI or DI, that once in the system,
as we just heard, it is very difficult to come out, very
difficult to earn enough money to get around that.
What we need to do is stop putting people on the disability
rolls who in fact could work. Stop making them demonstrate that
they can't work before we do a Ticket To Work where we are
trying to provide them with work. What we need to do is figure
out how to get those people, the early interventions, well
before they move on to the DI rolls. These are sort of basic
points that have to be taken care of and they can't be papered
over by a financial trick of moving one trust fund money from
one side to the other.
Mr. SMITH. Thank you.
Mr. Bertoni, Dr. Stapleton suggests that we do not yet have
sufficient evidence to support the detailed structural changes
to the DI program. Among other things, he proposes pilot
projects to get better data and practice as part of a strategy
of disability reform.
What would you say if you could reflect a bit on your
perspective of Social Security's track record with conducting
demonstration projects?
Mr. BERTONI. I would agree that there needs to be more
study and analysis of some of these proposals to ensure that we
are examining the best of the proposals, what they intend to
do, but also be cognizant of the potential unintended
consequences that can occur and get in front of those before we
roll out any new system, or process. But in terms of SSA's
demonstration authority and their track record, we have issued
at least a couple of reports on this, most recently in 2008,
looked at 14 demonstrations that they conducted over a period
of a decade, and five of those were terminated due to real
limitations. Four were completed, and of those nine, none of
those yielded any policy data that could be useful to Congress.
The remaining five were ongoing and we certainly had some
concerns with those. That was at a cost of about $155 million
with another projected cost of $220 million going forward for
the remaining five. The key there was that they just didn't
have sufficient protocols and guidance to design, implement,
and evaluate these initiatives. And as a result, they went by
the boards for the most part.
We have recommended that they put some more structure
around that, especially to protect against sort of changes in
the administration, where folks in a new administration might
come in, terminate perhaps some projects that could have
promise, and sometimes we found that those terminations were
not data driven. We really didn't see a clear rationale. And
that is just not good. That is just taxpayer money that is not
well spent.
So in terms of track record, not very good. They have
instituted some recommendations that we have asked them to do.
We haven't revisited it. But in our most recent effort to look
at their efforts to update their medical listings and develop
our occupational information system we reported in that report
that from a technical standpoint they are pretty thin in terms
of expertise and resources to do some of these pretty
aggressive projects.
Mr. SMITH. So if we did move forward with a pilot program,
should Social Security be tasked with such an effort?
Mr. BERTONI. I think that would depend on what model you
chose to pursue. It doesn't necessarily have to be the entity
that would run these projects. This could be done in other
agencies, other, you know, other levels of government, States,
private sector. So I think it is really you have to think about
what you want to do, what the elements of that reform system
might look like and then decide who would be, you know,
responsible for the pilot. But clearly, if you stay within the
confines of the current mouse trap and try some things within
the current system, SSA would likely have a role there. I think
they would probably leverage the outside research community.
Mr. SMITH. Thank you, my time is expired. I yield back.
Chairman JOHNSON. Thank you for your comments. Without
objection, I would like to insert into the hearing record the
recent report from the Congressional Budget Office entitled:
Policy Options for the Social Security Disability Insurance
Program.
Without objection, so ordered.
[The prepared report follows:]
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Chairman JOHNSON. Thank you all for being here today. We
are going to conclude the testimony because we are on a short
fuse on the floor, and I want to thank all of you for
insightful comments. Thank you so much, and thank our members
for participating today.
I think you are all committed, as I am, to securing the
future of our disability program. We have got to fix it. That
is just one more program we have to fix in this government.
With that, the subcommittee stands adjourned. Thank you all
for being here.
[Whereupon, at 11:00 a.m., the subcommittee was adjourned.]
[Questions for the Record follow:]
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[Submissions for the Record follow:]
CFE, Statement
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SSSC, Statement
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