America's most wanted welfare plan Congress risks a repeat of past mistakes on disability

January 25, 1995|By Jim Haner and John B. O'Donnell | Jim Haner and John B. O'Donnell,Sun Staff Writers

House Speaker Newt Gingrich calls it a "sick" federal welfare program that needs a strong dose of Republican medicine. And there can be little dispute that Social Security's $65 billion disability plan is out of control. Equally clear is that it won't respond to quick cures.

In a recent interview with The Sun, the leader of the new Republican majority said he saw the program as a classic example of government killing initiative and encouraging bad habits, destructive lifestyles and dishonesty -- at great cost to taxpayers.

As this series has shown, the program has turned many children and adults with mild disabilities into virtual wards of the government, and given drug addicts cash that they have used to kill themselves. It has undercut the work ethic of new immigrants and spawned a seedy industry of "middle men" who profit by getting people on the rolls.

But as a House of Representatives Ways and Means subcommittee convenes this week to examine the problem, its members would do well to abide by the words of the new Republican speaker. History, Mr. Gingrich says, is the best teacher -- and the history of the federal disability program shows that ill-considered reform can backfire.

The last man who tried to fix it was President Ronald Reagan. His effort to save taxpayers $3.4 billion by slashing the rolls did much to bring on the current crisis.

When Mr. Reagan took office in 1981, the program was already a shambles.

The General Accounting Office had just reported that almost 600,000 people were getting $2 billion a year in disability checks that they didn't deserve. Social Security had admitted making another $1 billion in overpayments because of computer problems.

"Everybody knew that Social Security was making disability errors like mad," said Bert Van Engel, a former agency official.

"The law of averages would indicate that we were probably giving out checks to a lot of people who didn't deserve them," added former Social Security Commissioner Robert M. Ball. "But that was the will of Congress."

What Congress had done was to order the agency to absorb 3 million people who were collecting state disability checks into a new federal program for the elderly and disabled poor called Supplemental Security Income -- whether or not they qualified under federal rules.

Congress went on to declare that whole classes of new `f applicants with certain handicaps could automatically qualify if they chose not to work. It also forbade Social Security from considering certain forms of income in determining whether they were poor enough to get aid.

In 1980, the nation's lawmakers did an about-face and ordered Social Security to check existing recipients to make sure they were qualified, then gave it 18 months to gear up for the job. That wasn't soon enough for Mr. Reagan.

He went after the program with a vengeance in 1981.

The president ordered Social Security to immediately review more than 1 million case files for signs of irregularities or fraud -- a job that would entail 1,400 worker years of extra labor, or a full month if the agency ceased all other operations. He then began cutting 20,000 employees.

Something had to give.

For starters, new applicants would have to wait while the agency investigated current recipients. The backlog of new claims grew to more than 500,000.

Some 1.4 million old case files were pulled into the agency's offices and evaluated to determine if the recipients suffered from disabilities that theoretically should have improved.

Without face-to-face interviews, medical exams or any attempt to contact the recipients' doctors, the purge began in the spring of 1981.

"Benefits for thousands of claimants were ceased ... without a hearing," wrote Judge Christine M. Moore in an American Bar Association report last summer. "In so doing, the agency chose to largely ignore" the law.

An eruption of lawsuits followed -- hundreds of thousands of appeals, dozens of class-action suits, box loads of reapplications. So furious was the legal assault that lawyers were copying the lawsuits of other lawyers, complete with the same typographical errors ` and advertising for clients on billboards and TV.

"The worst thing Reagan did to this country was trying to shut down these entitlements by doing it wrong," Judge Moore said in an interview. "The attorneys swooped in."

The poor, elderly and handicapped rallied around the disability program, coalescing into a powerful and sympathetic lobbying force. Stories broke out in the media as thousands of truly needy people were hit by the Reagan ax -- including a Vietnam veteran who had received a Medal of Honor from the president.

"What are we doing?" Mr. Reagan asked aides at one point.

Criticized by the governors of 18 states for bringing on a disability crisis, he finally called off the purge in 1984. But the backlash was just beginning.

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