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How About a Bold Plan for Reforming Social Security’s Disability Program
The Social Security disability insurance program (SSDI) is an absolute disaster. As Politico’s David Rogers reported in December: “In the past 20 years, the number of workers getting disability payments has more than doubled to 8.95 million last month [November]. About $140 billion went out the door in fiscal 2013, double what the costs were just 10 years before.” Indeed, the problem has gotten so bad that the Social Security Administration is robbing from Social Security’s old age trust fund—which is nothing but government IOUs anyway—in order to pay disability benefits. That fiscal crisis has inspired a number of conservatives to propose solutions, most of which only tweak the edges or attempt to get fewer disability claims approved.
How about a bolder plan?
In 1981-2, three Texas counties opted out of Social Security and created an alternative, personally owned retirement program that mirrored all of Social Security’s benefits—only better. One aspect of what’s called the Alternate Plan (AP) is a private sector alternative to the disability program. A portion of county employees’ payroll tax—which is essentially the same as they would be paying if they were part of the Social Security program—goes toward a private disability insurance policy. So how do the two plans compare? Read More…