The Rising Cost of Social Security Disability Insurance

Excerpted from “Policy Analysis” Newsletter from the CATO Institute. Written by Tad DeHaven – Originally Published August 6, 2013

Social Security Disability Insurance (SSDI) is one of the largest federal programs, and it is one of the most troubled. The program’s expenditures have doubled over the last decade, reaching an estimated $144 billion this year. Spending has risen so rapidly that SSDI’s trust fund is projected to be depleted just three years from now.

SSDI was originally created as a modest safety net aimed at severely disabled workers who were close to retirement age. But Congress has expanded benefit levels over the decades, and eligibility standards have been greatly liberalized. The result is that people capable of working are instead opting for the disability rolls when confronted with employment challenges. Once on the disability rolls, experience shows that individuals are likely to remain there, which is bad for the individuals, taxpayers, and the economy.

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