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U.S. Disability Programs: Good Intentions, Bad Policy

One advantage that “people of the Book” have in assessing public policy is a scriptural endorsement of irony and paradox, built into the fabric of things. Truth is complex. We can see this, for example, in a pairing of two side-by-side proverbs:
Do not answer a fool according to his folly, or you will be just like him. Answer a fool according to his folly, or he will be wise in his own eyes. (Prov. 26:4-5)
How can both directives, simultaneously, be true? Well, instructs the preacher: there’s a time and a place for each. At times we should answer a fool “according to his folly,” and at times we must do the opposite. The answer is, both/and; it depends. Marvin Olasky published a wonderful cover story in World Magazine this week about the impact of the 1990 Americans with Disabilities Act (ADA). When the bill was signed into law, one Iowa senator said it was “an emancipation proclamation for people with handicaps” that would bring those who are disabled “into full participation in society.” Olasky makes a heartbreaking case for reform by describing the real life circumstances of David Cox. Despite facing neurological problems since birth due to a twisted umbilical cord and oxygen deprivation, Cox spent 10 years getting a bachelor’s degree. Today, though he could earn $16,000 in a job teaching incarcerated youth, he would lose benefits if he worked more hours than he currently does—something he wants to do. So he chooses not to work more.The goal of the pro-work legislation was to encourage the large majority of unemployed disabled Americans to go to work. Yet as Richard Burkhauser and Mary Daly report in “The Declining Work and Welfare of People with Disabilities,” the incentives created by the law played out in all the wrong ways: disability rolls have sharply risen, and employment rates for men and women with disabilities are at an all-time low. More than 95 percent of disability funds support dependency, rather than incentivizing work. As with welfare policy, prisoner re-entry and many other anti-poverty initiatives, disability assistance can do real good—when people need it and use it the right way. For those burdened by physical or mental disabilities, the benefits afforded by these initiatives, especially when a paycheck can be supplemented, can enable a fuller life. But the numbers are grim. Our top two federal disability programs now cost $190 billion per year, and last year alone, 3 million new Americans applied for SSI or SSDI. It seems too much mercy and not enough “tough love” is at work: even after some 2012 applicants were denied, the Wall Street Journal reports that last year a West Virginia judge gave benefits to 1,280 of 1,284 people who appealed their disability rejections. Moreover, the Office of the Inspector General recently reported on a wave of SSDI applicants who “purposely withhold or fabricate information to collect government benefits they are not entitled to receive.” As AEI’s Nick Eberstadt has recently documented, in the last two decades, the percentage of the labor force taking advantage of disability programs has sharply increased, despite the odds of dying during working years sharply declining:

Nation of Takers Figure 25

There is something wrong with this picture in Figure 25—and it shows a kind of folly at work in our policy. Every one of us has been tempted to take a free ride, of course: from health care choices that don’t cost us a dime, to recalibrating restaurant choices on a business trip. I know this dynamic and I bet you do, too. To combat our innate tendency to abuse guaranteed benefits, we need smart reforms like those recommended by Jason Turner, Burkhauser and a growing group of state-level Workforce Secretaries. Foremost is this principle: whenever possible, disability and SSI benefits should be tied to work—much like welfare reform in the mid-90s. We should show true compassion for those who need disability benefits by disallowing—and punishing—practices that take wrongful advantage of the public purse. If we’re serious about pro-people disability reforms, we could also borrow a page from the Dutch, who in 2002 overhauled their disability program so both employers and employees would bear some of the costs. Moreover, we could implement our disability initiatives at a local level, working in partnership with local employers, families and communities in delivering on common standards. Instead, far too often today’s disability policy dis-incentivizes human flourishing. When Mr. Cox, introduced above, says “I don’t like government assistance,” and yet, in order to keep his federal benefits, chooses not to work more hours for a cause he believes in, something is broken. My friend Karl is right to say that as believers we have a special obligation to show real compassion for those with disabilities by encouraging what they can contribute to society, not by embedding incentives that assist financially but simultaneously undermine their employment.