Posted on 17 Dec, 2020
Over the weekend of December 5th, the Social Security Administration (SSA) sent a proposal to the Office of Management and Budget that will bar up to 500,00 Americans from receiving benefits. Whether the Social Security Administration can manage to get through the regulatory process will depend on respecting the formal process, as President-elect Biden has almost a month until inauguration.
The new proposal would make it much more difficult for older working adults to receive Social Security Disability Insurance (SSDI) benefits. The SSA is required, by law, to consider work experience, education, and age when they determine whether a person meets their definition of “disabled”.
The current rules acknowledge that age plays a much higher factor in who receives benefits. Older workers, typically those above the age of 50, currently face occupational challenges in this economy with an onset of a serious disability. The new proposed regulation will likely make this much more difficult for older workers to qualify.
The health problems of SSDI applicants results in very low economic participation. Around 73% of denied applicants make less than $100 a month, if anything. Labor market success, although uncommon, is still more likely for younger SSDI applicants. This is why the age of the applicants is taken into account for the current SSDI rules.
So why is the SSA pushing this proposal? The current system routinely denies benefits for older adults who have serious health complications and virtually no prospect in the modern economy. Amplifying this more is not going to rationalize this policy.
This new proposal will exacerbate racial inequality in the United States as well. More than a quarter of denied Social Security disability benefits are African American, which exceeds the overall percentage of working-age African Americans. Also, nearly 40% of denied applicants are impoverished. The proposal to further deny benefits shows that the agency is out of touch with the rampant racial inequality our country is continuing to face.
Last-minute reviews by the incoming Biden administration may result in the undoing of this proposal. And it may also help the SSA improve its management of programs. The agency needs to return to solving real problems, rather than implementing strict and unfair policy changes.