Program grew, changed, and problems multiplied

September 23, 1990|By Suzanne Wooton

When people think of Social Security, they immediately think of retirement benefits.

What they don't think about is a complicated bureaucracy within the Social Security Administration that pays people of all ages and income levels who cannot work because of serious illness or disabilities.

Established in 1956, the Social Security Disability Insurance (SSDI) program initially provided modest benefits to workers over 50 who could not perform significant work because of a physical or mental impairment that was "long, continued and indefinite."

During the 1960s, the program grew rapidly as Congress liberalized the benefits, extending them to dependents and spouses. It eliminated the age requirement and sharply increased cash benefits. Applications rose dramatically.

Like the Social Security retirement program, SSDI wasn't a government handout. Beneficiaries were paid from a trust fund they and their employers had paid into.

But in late 1972, Congress created the Supplemental Security Insurance (SSI) program to bolster the income of needy blind, disabled and aged people who weren't covered under SSDI.

The program replaced similar state welfare programs and saddled the Social Security Administration with an entirely new kind of program funded by taxpayer dollars. And an agency far better equipped to deal with black-and-white calculations of retirement benefits than social welfare questions failed dramatically.

The agency's computer system was inadequate. Hundreds of thousands of claims were not processed. There were millions of dollars in overpayments and underpayments. District offices were overwhelmed as they tried to deal with the new issues of financial need; other Social Security programs suffered.

It was the first real blemish on the agency, until then a sort of golden boy of the federal bureaucracy.

The second real scar on its reputation would come almost a decade later when nearly a half-million disability benefit recipients were kicked off the rolls.

The Social Security Administration has a delicate balancing act. To protect the trust fund and taxpayers' money, it must ferret out those not truly disabled. To protect the disabled, it must quickly and efficiently approve benefits for those who qualify.

Historically, the disability program has been sharply criticized for doing neither very well.

In the 1970s, the program grew phenomenally, alarming a Congress that believed Social Security was erring too far on the side of claimants. Between 1969 and 1979, the cost of the program jumped from $2.5 billion to $13.7 billion as the number of beneficiaries increased dramatically.

The growth was a significant factor in the fiscal strain on all of Social Security. In 1977, Congress bolstered the SSDI trust fund by enacting payroll tax increases and lower

ing future costs by changing the index formula.

But the program continued to grow.

In 1980, after years of work, Congress passed the Social Security Disability Amendments, requiring, among other things, that the agency review at least once every three years the cases of all recipients who were not permanently disabled.

In 1981, the General Accounting Office issued a report suggesting that as many as 584,000 of the program's 2.9 million beneficiaries might be ineligible, costing the government $2 billion a year. Vowing to weed out all ineligible recipients, the Reagan administration ordered a stepped-up review of all cases.

What resulted was the second debacle in less than a decade in the disability program.

In an overzealous review of more than 1.2 million cases in three years, 495,000 people were kicked off the rolls. Congressional hearings and newspapers were filled with horror stories. Thousands appealed. In nearly two-thirds of the cases, the courts ordered that the benefits be reinstated.

In 1984, Congress enacted the Social Security Disability Benefits Reform Act in an attempt to restore fairness and uniformity to the program. The measure clarified guidelines for whole categories of people like the mentally ill and made it much more difficult to terminate benefits.

To offset criticism that too many remained on disability when they could work, lawmakers further enhanced incentives to return to work and made sure disability payments did not exceed a recipient's prior salary.

While most agree the program is vastly improved since the so-called dark days of the early 1980s, it is still bogged down by complex regulations and a multi-layered appeals process that pits disability examiners against Social Security administrative law judges.

Amid mammoth staffing cutbacks nationwide -- and the specter of further budget cuts -- the agency also faces increased responsibilities, such as outreach activities for the homeless and AIDS victims.

In addition, it must handle the impact of a U.S. Supreme Court ruling this year that agency regulations may have used a harsher disability test for children than adults under SSI. As a result, up to 250,000 children rejected for benefits since 1983 will be entitled to have their cases reopened.

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