ragged edge magazine online



Issue 1


Two meaningful reforms


U.S. monetary policy and disabled people


Never ending benefits?

photo of man Rethinking the Social Security policy wasteland

By Marta Russell.

Marta Russell is author of Beyond Ramps: Disability at the End of the Social Contract (Common Courage Press).

My friend David just went through a noxious and unproductive bout with the Social Security Administration. David, one of the autistic individuals Dustin Hoffman spent time with while developing his "Rainman" character, works for a large chain electronics retail corporation. He remains qualified for Supplemental Security Income (SSI) even though he has a job, both because he is disabled and because he earns so little money. When David wanted a computer he saved for six long years before he was able to have the funds to buy one.

The story is a simple one. After the Los Angeles earthquake, David and his mother had to move out of their apartment for earthquake repairs. David went to stay in board-and-care facility while his mother made other arrangements for herself for the months it took to do the repairs. Prior to this move, David had been sending the Social Security Administration the required reports of his earnings so SSA could calculate deductions. But due to the disruption of the earthquake, David's routine was upset and he did not send the required copies of his paychecks to SSA during the months he was not living at home. So SSA put a stop on David's SSI check.

What it does,
what it should do

About the new Ticket to Work law

David and his mother got a hearing before an administrative law judge; David's mother presented the judge with proof of his earnings. As caretaker of his SSA account, she pled that although she is ultimately responsible for sending in the copies of his paychecks, she has given David any and every possible means of being self-sufficient and independent in keeping with independent living philosophy -- and has allowed him to make and send his reports himself. David was very capable of doing this, and had done it without failure prior to moving into the group home. As it turned out, David thought that he did not have to send the paycheck copies, because he was living at the group home, not at his home. "David is not capable of lying, he doesn't know what that is," his mother told the judge.

David's mother told the judge she had explained to each of the three workers at the board-and-care facility that David needed to send SSA the copies of his paychecks each month, but that they had failed to see that he did it.

The judge made no allowances for any of this, and ruled that not sending the reports was enough reason to discontinue David's SSI payments for the period in question.

Later, SSA reinstated David's SSI payments -- but made no back payments for those months during which David had failed to send his paycheck copies.

David had his mother to fall back on for financial support in the interim -- but what about others who do not have such support, who innocently make mistakes and get penalized? A loss of a few hundred dollars to some may mean losing one's apartment and winding up on the streets. It may create conditions where one can no longer hold a job.

It can even end in death. Some may recall Lynn Thomson's story. She tried to earn some extra money by stuffing envelopes at home.

Unbeknownst to Thomson, the work she did was in violation of SSA regulations. When she reported her income to SSA, they responded with a letter stating that she had received an overpayment and that her benefits would be terminated until it was paid back. SSA claimed that her Medi-Cal and attendant benefits would also be cut off. Losing one's attendant is a ticket for a nursing home, but loss of Medi-Cal is a death sentence to a quadriplegic.

SSA was wrong about this part; she would not have lost her Medi-Cal. But she was never told this, and after a protracted and demeaning contest with SSA, Thomson killed herself, leaving a recorded message saying that the reason for her suicide was that SSA had put her through hell and she could no longer live with the anxiety.

Laura Hershey, who often writes about SSA and the pitfalls of work, quotes a colleague: "A co-worker of my sister killed himself last week. He had been working part-time while receiving disability benefits due to his visual impairment. He had gotten a letter from Social Security saying he should never have gotten disability benefits, and that he would need to pay back all that he had received."

Sporadic or parttime work has many pitfalls.

In order to comply with the rules, individuals who rely on sporadic work need to have their personal assistance services, SSI/SSDI and Medicaid share of cost recalculated every month that they earn income, something these systems are not efficient enough to do without delays and shortfalls for the recipient. It would be "highly inadvisable for any disabled individual to work at part-time or sporadic employment, "warns Los Angeles disability activist Nancy Becker Kennedy; it risks "throwing these very sluggish benefit systems into confusion."

Experience shows that this often results in losing one's healthcare, living allowance, and money to pay the personal assistant -- for months or even years -- while SSA and other agencies sort it out (and hopefully get it right when they do).

Disability organizations have been working to incrementally reform Social Security's work rules for these very reasons. The Ticket to Work and Work Incentives Improvement Act of 1999 is one such reform; SSI Plan 1619, which allowed more deductions, was an earlier one. The Social Security Administration has now proposed to make automatic adjustments each year to the current "Substantial Gainful Activity" (or SGA) level, which is currently at $700 a month for individuals with impairments other than blindness; this figure would now increase along with increases in the average wage index.

Even tied to the wage index, a SGA amount of $700 per month "is still out of step with today's marketplace," says Bryon MacDonald, Social Security analyst for the World Institute on Disability.

Who can support themselves on $700 a month? The $700 SGA cut-off is an at-poverty level subsistence. The Federal poverty guideline sets the poverty level for an individual at $8,350/year; a SGA of $700 a month works out to $8,400 a year -- assuming one would be consistently working for a full year, which is often unlikely.

What is "poverty" -- and who defines it? The current system of measuring poverty dates back to the 1960s; there has been no recognition of changes that have occurred over the last 30 years. At that time, Department of Agriculture research showed the average family spent a third of its income on food; therefore a "poverty income" was determined to be three times what experts thought the minimum food budget should be. Even so, that economy food plan was "for temporary or emergency use when funds are low" and was only 75 to 80 percent of a Department of Agriculture "low cost food plan" (which, "if strictly followed," could "provide an acceptable and adequate diet," wrote Mollie Orshansky in 1965).

Nonetheless, the government has never adjusted the equation to take into account the sharp rise in housing, medical care, and child care costs of the following four decades which have altered the average household's economic picture. A 1990 study by Patricia Ruggles of the Urban Institute concluded that, in order to be comparable to the original threshold, the poverty level would have to be at least 50 percent higher than the current official standard. If basic needs were re-figured to the modern market, almost a quarter of the American people would be deemed to be living in poverty.

Cutting disabled persons off from disability benefits when they earn just $700 a month does not lift one out of poverty, much less give one a chance to achieve a decent standard of living before shoving one off what the National Council on Independent Living calls "the earnings cliff." The proposed raising of the SGA level will make no real difference to SSI recipients.

However, two meaningful reforms would be to end earnings limitations entirely and to raise the SSI resource limit from $2,000 -- and raise it substantially.

Others have made suggestions for SSA reform. Pointing out that the disability rolls have grown since passage of the ADA and employment expectations have not been met, leaving too many dependent on government benefits, Andy Imparato, head of the American Association of People with Disabilities, locates part of the problem in how "disability" is defined by SSA. To be disabled under Social Security regulations, one must pledge that one can't do any work at all.

Imparato calls for a redefinition of disability. "We need to reform disability benefits laws and systems so that people get the supports and services they need, have maximum choices and opportunities regarding employment, place to live, transportation, health care, long-term services and supports -- and never, ever, have to swear to the government that they cannot work in order to establish eligibility for long-term supports and services," says Imparato.

Yet even if we change the view of Congress "from 'disability means dependent and unemployable' to the view that 'all people with disabilities can and should work,' it will not change the view of society," says scholar David Pfeiffer of the University of Hawaii. "People with disabilities will still be seen as dependent and unemployable."

In large part, unemployment and poverty are the by-products of our economic system. Unemployment is not an aberration of capitalism; rather, it is a built-in component of a market economy that requires many people be unemployed and impoverished.

U. S. monetary policy as carried out by the Federal Reserve illustrates how U. S. capitalism preserves unemployment. The Federal Reserve is a system of quasi-independent banks overseen by a Board of Governors appointed by the President which sets interest rates. For many years now, it has essentially been running the economy of the nation.

Last April, the Bureau of Labor Statistics put the official unemployment figure in the U.S. at 5.5 million. But the real numbers are much larger: Another 3.1 million people work part-time although they would rather have a full-time job; still another 4.4 million who need jobs do not appear in this unemployment figure because they gave up looking for work, and thus are not counted anymore as part of "the labor force." The real jobless rate is closer to 13 million -- or 8.9 percent of the population -- more than twice the official rate.

Large numbers of people are left jobless because mainstream economists believe that a threshold of unemployment is necessary to avoid inflation and maintain the health of the American economy. The theory of a natural rate of unemployment (or "nonaccelerating inflation rate of unemployment" -- "NAIRU") has dominated macroeconomics for about 25 years. The Full Employment and Balanced Growth Act of 1978 (the Humphrey-Hawkins Act) mandates that the Federal Reserve promote full employment. But the Federal Reserve connects low unemployment with inflation, and has virtually disregarded the Humphrey-Hawkins Act, fighting inflation by raising interest rates, slowing economic growth, and keeping employment in check. When the unemployment rate drops, the Fed adjusts interest rates upward to discourage more growth -- employment -- believing this prevents inflation.

There are central bankers who reject the NAIRU theory, and these have adopted the "Taylor Rule," making their anchor of economic policy the "sustainable rate of growth." Under this theory, growth becomes "unsustainable" when unemployment drops below three percent. Under either theory, mainstream economic policymakers assume that at least three to six percent of the population must be unemployed at any given time to maintain a sound economy. And among those unemployed, perpetually, are "the disabled."

Disabled persons routinely get conceptualized as non-productive "dependent" freeloader members of society. Some disability policymakers, conceding that this is the prevailing view and that not much can be done to change it, have bought the line that, in order to be seen as having any value in this society, disabled people must be gotten off the benefits rolls.

A reality-based understanding, however, would acknowledge that, short of a revolution, unemployment is simply going to be the condition for millions in our market economy -- and that disabled people will continue to be disproportionately affected by monetary policy. This view challenges the notion that the problem is one of economic "dependency," and the solution "independence."

The political Right uses "dependency" as a way to pathologize and degrade populations which rely on government supports. Should we follow their lead? Most Americans benefit from government supports, whether they are CEOs of corporations or homeowners. Some of the wealthiest people in this country are "dependent" upon corporate subsidies. Middle-class homeowners are "dependent" upon mortgage interest rates being tax-deductible. Why not view disability supports as part of the same largess, rather than framing them negatively as leading to dependency, paternalism or "welfare"?

Labor market discrimination is a steady reality for most significantly disabled persons. A 1998 Survey by the National Organization on Disability/ Louis Harris found that among working age adults with disabilities, three out of ten work full- or part-time, compared to eight of ten of those without disabilities, a gap of fifty percentage points. The unemployment rate for disabled people, at 65 percent to 71 percent, depending on what source one uses, remains much higher than for the population as a whole. A recent Rutgers University study shows that most working disabled persons are twice as likely to be self-employed or in part-time or temp jobs. That means that income may be sporadic.

The Census Bureau shows a negative association between earnings and disability: in 1995, workers with disabilities holding part-time jobs earned on average only 72.4 percent of what nondisabled part-time workers earned annually; such wage differentials were observed for those working full time as well.

Median monthly income for people with work disabilities averaged about $1,511 for women and $1,880 for men -- as much as 20 percent less than the $1,737 to $2,356 earned by their counterparts without disabilities.

To achieve a decent quality of life, significantly disabled persons who face labor market discrimination will need ongoing support from government, regardless of how SSA defines disability.

MacDonald says, "I would argue that all persons with disabilities should be able to move in and out of public disability programs the way mainstream America goes to an ATM machine."

There is a case to be made for never ending disability benefits, once one qualifies for them. Last year President Clinton signed The Social Security Earnings Test Elimination Act which permits seniors to earn as much as they want -- seniors can earn $100,000 or more a year and continue to receive their Social Security retirement benefits in full, without any deductions.

The same should be done for disabled people. Disabled persons are nearly three times as likely to live below the current poverty line -- 29 percent of disabled people live in poverty compared to 10 percent of nondisabled persons, according to a recent National Organization on Disability/Harris poll. During 1999, nearly 600,000 households filed for bankruptcy in the aftermath of a serious accident or illness. Those who manage to successfully become employed will not likely make up for the financial losses suffered during years of lost employment.

Historically those groups of persons who experience high labor market discrimination and cannot as readily get jobs in the market remain compulsorily unemployed and require more support from government. Framing the issue as one of "independence" versus "dependency" seems to miss the mark. Until we address the matter of full employment and the right to a job or a guaranteed livable income in its place for all citizens, disabled or nondisabled, disability policy will remain in SSA's "incremental-reform" policy wasteland. People like David, Lynn Thomson, and those battling SSA who too often go unknown and unnamed, will continue to pay a terribly high price.

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