Issue: Supplemental Security Income Assistance — SSI-D

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Issue Summary

Supplemental Security Income for the Disabled (SSI-D) is a means-tested income assistance program (PL 96-603) that began in 1974 to provide monthly cash benefits to eligible low-income individuals with disabilities, including children under age 18 with profound physical impairments such as cerebral palsy and Down's Syndrome, as well as qualifying individuals who are aged or blind. It is funded through general revenues and is administered by the Social Security Administration (SSA). It should not be confused with the Social Security Disability Insurance program that provides benefits to qualified workers who have become disabled and unable to work. While initially well intended, over time, SSI-D has become the welfare program of choice for far too many.

In 1984, Congress mandated the development of new disability standards for individuals with mental disorders. Then, in 1990, two important changes were made that exploded SSI-D eligibility for children: the SSA added impairments such as Attention Deficit Hyperactivity Disorder (ADHD) to the list of conditions it considers disabling; and, as a result of the U.S. Supreme Court decision in Sullivan v. Zebley, established "functional equivalence" on par with "medical diagnosis" as a basis for determining SSI-D eligibility for children.

These policy changes opened the door for severe abuse of the SSI-D program and the automatic eligibility it grants its participants for separate Medicaid and other welfare benefits. The number of children qualifying for benefits more than tripled from 265,000 in 1990 to almost 955,000 in 1996.1 From 2000 to 2011, the total number of children with mental impairments on the SSI-D disability rolls grew by an astounding 60%, from 543,000 to almost 861,000.2

The SSI-D program is now often referred to as the "New Welfare" since many states have redirected much of their TANF cash welfare caseload to this 100 percent federally funded — and higher benefit — program once dependent children reach the five-year eligibility limit of the TANF program.3

In October 2011, the GAO conducted a critical review of children's benefits under SSI-D and reported that the use of "functional equivalence" as a basis for determining eligibility has steadily increased — with 71 percent of recipient children with ADHD qualifying under it in 2011 compared with only 23 percent in 2000. Similarly, 81 percent of children who qualify due to speech and language delays were admitted using "functional equivalence" in 2011 — up from just 59 percent in 2000.4

SSA is generally required by law to perform Continuing Disability Reviews (CDRs) at least every three years on child recipients under age 18 if their impairments are likely to improve. However, GAO found that between FY 2000 and 2010, the number of CDRs actually performed by SSA declined significantly, resulting in fewer children being removed from the program before reaching age 18. During that 10-year period, all childhood CDRs conducted by SSA fell 70 percent (from more than 150,000 to just 45,000) while CDRs specifically for children with mental impairments fell by almost 80 percent (from 84,000 to 16,000.) In addition, the GAO found more than 400,000 CDRs are overdue for children with mental impairments — with some of the CDRs having been pending for 13 years or more.5

In 2011, SSA paid almost $50 billion in SSI-D benefits to about 8 million recipients, of which about $9.4 billion was paid to 1.3 million children.6 According to the GAO, "SSA's process for issuing waivers from the CDR's legal requirement lacks transparency, and without these reviews, SSA could continue to forgo significant program savings."7

It is readily apparent that SSA is not capable of adequately administering the SSI-D program and that it needs to be reformed along with other low-income assistance programs to target aid to those truly in need and prevent it from serving as an end run around either the current limits on assistance under the TANF program or future welfare block grant programs.

What Would Reagan Do?

Before President Reagan took the oath of office in 1981, he gave his "RR OK" approval to pursue several welfare block grants. The Supplemental Security Income program was not one of the programs presented to the President Elect, but given the local nature of the recipients, the income transfer portions of the program, and the high level of possible fraud and abuse in the system, it is very likely that if President Reagan were presented with an opportunity to pursue block grants again that the SSI program would be at the top of his list.

Issue History

President Richard Nixon signed the Social Security Amendments of 1972 on October 30, 1972 which created the SSI Program. Payments under SSI began in January 1974. SSI replaced the former federal-state adult assistance programs in the 50 states and the District of Columbia. Under SSI, each eligible person is provided a monthly cash payment based on a statutory federal benefit rate. Since 1975, these rates have been increased by the same percentage as the cost-of-living increases for Social Security benefits. If an individual or couple is living in another person's household and is receiving both food and shelter from the person in whose household they are living, the federal benefit rate is reduced by one-third. This is done instead of determining the actual dollar value of the in-kind support and maintenance.8

PROPOSED SUPPLEMENTAL SECURITY INCOME FOR THE DISABLED (SSI-D) BLOCK GRANT

The Welfare Reform Action Fund's (WRAF) sister organization — the 501(c)(3) Carleson Center for Welfare Reform (CCWR) — issued a report that recommends funding for the disability portion of SSI be provided to the states as a stand-alone block grant.9 This one program cost over $52 billion at the federal level in FY2011 — not counting the federal government's administrative costs for the program.10

An informed government policy to protect the nation's safety net should begin by reining in the welfare state through a time-tested approach — cutting spending on those who are NOT really in need. Thirty years ago, Ronald Reagan approved a blueprint to end welfare dependency not just for the benefit of federal and state taxpayers, but for the long-term benefit of welfare recipients themselves. The time was not right then. The time must be right now.

The CCWR report proposes an achievable, common-sense plan — and model legislation to enact it — to end the hopeless bureaucratic overlap and fiscal abuse plaguing our nation's welfare spending; assure that limited taxpayer funding is directed to benefit the truly needy; and permanently reduce the size and influence of the federal welfare bureaucracy. The WRAF is working to urge Congress to approve this and the CCWR report's recommendations to block grant 6 other categories of welfare programs to the states as well.

TABLE SUPPLEMENTAL SECURITY INCOME FOR THE DISABLED BLOCK GRANT

CFDA#

Program Name

2008

2011

Change from 2008-2011

96.006

Supplemental Security Income

$41,225,000,000

$52,700,000,000

$11,475,000,000

Total

$41,225,000,000

$52,700,000,000

$11,475,000,000

  1. GAO-12-497, Supplemental Security Income: Better Management Oversight Needed for Children’s Benefits (Washington, DC: Government Accountability Office, June 2012), p. 1. http://gao.gov/assets/600/591872.pdf
  2. Ibid, p. 12.
  3. David Autor, MIT Economics Professor, as quoted in Patricia Wen, "A Legacy of Unintended Side Effects," part 1 of a 3 part series The Other Welfare (The Boston Globe, December 12, 2010). http://www.boston.com/news/local/massachusetts/articles/2010/12/12/with_ssi_program_a_legacy_of_unintended_side_effects/?page=full http://www.boston.com/news/health/specials/New_Welfare/
  4. GAO-12-497, p. 18.
  5. Ibid, p. 28.
  6. Ibid, p. 1.
  7. Ibid, Summary.
  8. Supplemental Security System Description and Legislative History; Program Overview; Annual Statistical Supplement, 2011, Office of Retirement and Disability Policy. http://www.ssa.gov/policy/docs/statcomps/supplement/2011/ssi.html
  9. "Securing the Safety Net," a report by The Carleson Center for Welfare Reform (January, 2013). http://theccwr.org/
  10. Catalog of Federal Domestic Assistance.