Statement of Jason Turner, Heritage Foundation, New York City, New York

SEVEN POINT TESTIMONY

1.   The increase in the SSI population among those of working age should be cause for alarm.    The growth in SSI applications of more than 30% is due in part to institutional incentives to increase the numbers qualified as disabled.    For every welfare recipient who moves from TANF to SSI (or SSDI), states save TANF block grant funds which are substituted by 100% federal disability funds.  Almost all states have financed SSI advocacy within their welfare system to facilitate this transfer.

2.   The number of working-age adults who are receiving SSI disability payments as a proportion of the population has increased threefold since 1970.   And yet there is no evidence that our population as a whole is getting sicker. 

3.   Recipients of SSI almost never return to work.  Nor does the current system incorporate any obligations that recipients take constructive vocational steps toward rehabilitation, where feasible.  In this sense, SSI is comparable to the old AFDC program, and it is having the same debilitating long-term effects on those it is assisting.  SSI is becoming the long term welfare successor to the AFDC program.

4.   Many of the lessons learned from national reform of the welfare system can be applied to disability reform.  There is a substantial overlap in the population of SSI applicants and current welfare recipients (One third of non-elderly women and children who began receiving SSI benefits were at the time of application receiving TANF).

The US Congress, through its proposed TANF reauthorization legislation, has appropriately asked states to engage larger proportions of recipients in constructive work-related activities, sometimes termed “universal engagement”.  As a result, states are increasingly looking for additional ways to engage the mildly disabled in work related activities, and the SSI system should do the same.  

5.   The following lessons from welfare reform can be applied, with certain modifications, to disability reform:

• Maximizing self-reliance should be the program goal.
• The longer a recipient remains inactive within the system, the more difficult it is to significantly alter life circumstances.
• Not everybody can become fully self-sufficient, but all should contribute to the best of their abilities consistent with their capabilities.
• Required constructive work and vocational activities are the only way to yield substantial results.  Voluntary program options are not effective and rarely taken advantage of by recipients.
• Tight connections between attendance in program activities and cash benefits result in participants taking their obligations seriously.
• Regular reviews of self-sufficiency progress assure that recipients are not languishing.
• Appeals by recipients should be handled forthrightly and expeditiously, and the role of administrative law judges in overturning decisions made by the welfare agency should be sharply circumscribed.

6.   Welfare reform lessons which can apply to disability reform, including the following:

• The notion that disability eligibility is a “zero – one” determination is outmoded.  Partial work is increasingly feasible for a majority of disability cases.  Improvements in medical technology and employer obligations to reasonable accommodation should result in higher, not lower, participation of the disabled in the workforce.  Functional assessments which show what disability applicants and recipients can do should replace the all-or-nothing determinations of an  inability to work.
• Even those currently unable to work in the private economy should make continuous efforts to improve their circumstances through vocational rehabilitation, except in unusual circumstances. 
• Participation in ongoing constructive activity while receiving benefits, known as  “activation”, is the best way to assure that those currently unable to work will be able to re-engage in the labor force if and when their underlying medical condition improves.
• As part of the law creating Ticket to Work, the Congress withdrew the right of the Social Security Administration to obligate  participation in vocational rehabilitation as a condition of receiving disability benefits.  This agency right should be restored.
• Regular and complete de novo periodic medical reviews of current recipients should be required.  At a minimum, a subset of profiled cases which are most likely to show improvement should be reviewed. 

7.   Recommendations to improve the Proposed Regulations for a New Disability Determination Process:

• Commissioner Barnhart has shown remarkable insight into the often impenetrable area of administrative processing.  Taken together these changes constitute a significant improvement over the status quo.   
• However, these regulations do not substantially alter the excessive role and latitude enjoyed by the Administrative Law Judges (ALJs).

The current system takes the careful medical and vocational review made by state disability determination bureaus and upon appeal places it in the hands of lawyers largely without medical credentials (ALJ’s) for a de novo review. 

There is no good reason to provide for a de novo review by non-specialists.    Any appeal should take into consideration all the evidence presented in making the original decision  (the NPRM requires reference to the previous determination but does not require its use in the ALJ decision itself).

There is wide variation in the reversal rates of individual ALJ’s.  Even more importantly, the high overall ALJ reversal rate means that many individuals obtaining eligibility for SSI are likely to be only mildly limited, and could have led a more satisfying, productive life engaged in vocational rehabilitation leading to part-time or full-time employment rather than full disability.

The establishment of a Decision Review Board made as part of these proposed rules will not significantly alter the dynamic described above.  Congressional action may be required. 

• The back-to-work demonstrations contemplated by SSA are constructive but they leave the decision to participate in the hands of disability applicants and recipients. 

Experience from welfare shows that despite experiments which created substantial financial incentives to go to work, most welfare recipients did not respond until they were required to do so as a result of the TANF reforms.   This sheds light on why there is such a low utilization rate of the voluntary Ticket to Work program.

SSA should experiment with back-to-work efforts which are obligatory, not just voluntary.   These are far more likely to yield results.

And new experiments should be initiated which alter the existing financial incentives for states to push the maximum number of welfare recipients into permanent disability status.