Economics, Entitlements

SSI exemplifies America’s flawed approach to social welfare policy

Image credit: Shutterstock

Image credit: Shutterstock

As Nick Kristof wrote in his Sunday New York Times column and as Arthur Brooks noted in his blog post yesterday, some social welfare programs exhibit serious flaws. While budget concerns drive program criticism—particularly in the context of the looming fiscal cliff—the most effective calls for reform grow out of these programs’ ultimate failure to assist their targeted populations in achieving economic independence.

The Supplemental Security Income-disabled children program (SSI), which pays benefits to low income families with a disabled child, exemplifies this failure. The burden borne by families negotiating both financial instability and the disability of a child is undoubtedly heavy. Yet as my colleague Mary Daly and I discuss in our recent book, The Declining Work and Welfare of People With Disabilities: What Went Wrong and a Strategy for Change (AEI Press, 2011), this program ultimately hinders the long-term ability of these children to do what we want for all our children—to enter the work force as adults and lead independent lives.

SSI program growth suggests a fundamentally flawed policy. In 1974, its first year of operation, this program provided benefits to about 10 per 1,000 poor children. By 2007, however, enrollment had grown eightfold to 80 per 1,000. This growth is the consequence of policy decisions and their implementation—not a health epidemic among poor children. National Center for Health Statistics data, for instance, show little change in the activity limitations of poor children since these statistics began being gathered in the late 1990′s.

Increasingly, this program is turning into a more general welfare program. And the interaction between Temporary Assistance for Needy Families (TANF) and SSI is partially responsible for the program’s growth. Because SSI benefits are larger than TANF benefits, longer lasting, and have no work requirement, it is in the interest of single mothers to apply—and they do. Furthermore, it is in the interest of states to push TANF families onto the SSI-disabled children program. This shifts payment costs to the federal government—and is more likely the looser of the eligibility standards for SSI benefits.

The increasing subjectivity of eligibility determination has also contributed to SSI growth. In 1983, 37% of new beneficiaries qualified based on mental retardation (medically measurable) and only 5% had other mental conditions (more difficult to medically measure). By 2009, over 55% of new beneficiaries listed other mental conditions as their qualifying diagnosis. This growth is costly: In 2010, the Social Security Administration (SSA) paid over $9 billion in SSI benefits to more than 1.2 million children.

Yet the most shocking aspect of this program’s growth is its failure to transition this growing share of poor children, who with appropriate education and training could work as adults, into the work force after they age off of the SSI program. Nearly two-thirds go directly onto the SSI adult disability rolls. Of those who do not move directly onto these rolls, only 60% are employed at age nineteen.

By making its benefits contingent on the continuing failure of these children to succeed in age-appropriate activities, the SSI program activity discourages these children from taking the first steps to economic independence—educational success. In doing so, it parallels the counter-intuitive approach of US disability policy as a whole, in which adult benefits are awarded based on an inability to perform any substantial gainful activities before these new beneficiaries are provided with the accommodation and rehabilitation that could allow them to continue to work.

By encouraging work before benefits, policy reform can address these issues. The ultimate test of our concern for poor children with or without disabilities is how successful we are in providing them with the education and training they need to enter the work force as adults. SSI fails that test.

4 thoughts on “SSI exemplifies America’s flawed approach to social welfare policy

  1. re: ” The ultimate test of our concern for poor children with or without disabilities is how successful we are in providing them with the education and training they need to enter the work force as adults. SSI fails that test.”

    SSI is supposed to educate kids? Who knew?

  2. I thought the purpose of SSI was to supplement the income of parents with a disabled child because their work ability could be limited. But it seems school have to take almost every child and receive a lot of extra funds for education of “special needs” children. So if the kids are in school – why do we need to pay Mom or Dad to stay home?

  3. “In 1974, its first year of operation, this program provided benefits to about 10 per 1,000 poor children. By 2007, however, enrollment had grown eightfold to 80 per 1,000.”

    Comparing child participation rates in a mature program with ones from the very first year of implementation of a new one (especially one that a period where very different attitudes about the appropriateness of institutionalization of the disabled still prevailed) seems quite unwise to me. Why not look at recent participation trends–which haven’t changed much–especially since you also note that disability trends haven’t changed much since the late 1990s?

    Also, why are “poor children” (i.e., under 100% of FPL) the denominator here. SSI child eligibility is means-tested but does not end at the poverty line, which is a very good think if we care about work and marriage penalties.

    “Increasingly, this program is turning into a more general welfare program. And the interaction between Temporary Assistance for Needy Families (TANF) and SSI is partially responsible for the program’s growth.”

    What is the real-world (non-anecdotal) evidence for this claim? Looking at the actual data for SSI and TANF, it appears to me that parents of SSI children are more likely to be working than parents receiving TANF (despite the extensive bureaucratic machinery TANF requires states to dedicate toward employment). And there is little support in the data on participation trends in the two programs to support the idea that the decline in receipt of TANF over the last decade—one that happened despite increasing child poverty—has had anything more than an extremely modest impact on children’s SSI enrollments. Personally, I was surprised that by the lack of evidence of any impact when I looked at the data—but that initial surprise hasn’t stood in the way of my adjusting my initial uninformed view.

    Finally, why does this commentary not mention the important published research by Melissa Kearney and Mark Duggan finding that children’s SSI reduces poverty and reduces reliance on food stamps and other means-tested benefits without adverse impacts on parental employment? This seems a stunning oversight, especially since I distinctly recall attending an AEI event in the mid-2000s where the Kearney/Duggan research was featured positively. Is it no longer consistent with the “makers vs. takers” line that AEI sadly now seems wedded to?

    • ” What is the real-world (non-anecdotal) evidence for this claim? Looking at the actual data for SSI and TANF, it appears to me that parents of SSI children are more likely to be working than parents receiving ”

      there is none.. this is just more drum-beating by the AEI “scholars”.

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