February 10, 2005

More Disability, Please

Hmmm, Kevin Drum tries to settle the Trust Fund issue once and for all. For sheer poetic joy, I much prefer my "Little Nell Goes To College" fable to explain the various fairness issues at work here, but I suppose Kevin's explanation is more concise. Blah blah blah. (I kid, I kid...)

But with that argument neatly dispatched, it's high time to move on to yet another important-yet-arcane Social Security issue: disability insurance. As we all know, Social Security provides disability insurance (SSDI) to those who cannot work due to injury, sickness, etc. Unfortunately, SSDI isn't nearly as generous as it could be. For starters, benefits are only available to those workers whose condition will either result in death or last at least twelve months. So if a heart condition knocked a worker out for a mere eight months, it's no disability for you, even though one can obviously lose a lot of salary in eight months—enough to earn you a date with the bankruptcy courts. Heck, most people with cancer aren't able to get disability insurance.

Furthermore, a worker can qualify for insurance only if he or she is completely unable to work. A carpenter, for instance, who develops arthritis but can still work as a (low-paying) cashier would not qualify. Some of these carpenter-types used to "accidentally" receive SSDI checks, but the Social Security Administration recently implemented a new computer system to eliminate these sorts of mistakes. But the larger point is that disability insurance ought to be, if anything, expanded. The benefits are considerable: Elizabeth Warren once estimated somewhere that better disability insurance could avert something like 150,000 bankruptcies per year. That aside, it seems intrinsically worthwhile to do even minor things that insulate workers against rapid swings in income due to bad luck.

Anyway, since we President Bush hasn't put forward an actual privatization plan, we don't know how disability will actually fare in this brave new ownership world we're fast approaching. Judging from the president's recent visit to Tampa, his phase-out plan will slash disability insurance (if I'm reading his unintelligible mumbling correctly). Meanwhile, an old GAO report looked at various privatization plans and concluded that disabled beneficiaries would receive much lower benefits than they would under current law. Presumably, under Bush's labyrinthine "clawback" proposal, everyone would have to pay premiums for their own private disability insurance, since there won't be any general revenues left to help the crippled, ill, and infirm. And since we all know how well the private insurance market works, well... too bad for us. Just try not to develop carpal tunnel or cancer or whatnot. And stay away from heavy machinery! That should do the trick.
-- Brad Plumer 1:31 AM || ||