Today is Tax Day. Federal tax returns are due to the Internal Revenue Service with a postmark before midnight. The Congressional Budget Office (CBO) projects that the federal government will collect $3.2 trillion in revenue this year.
Social Security Disability Insurance (SSDI) provides benefits to 11 million individuals, costing $140 billion annually. Its trust fund will become insolvent by 2016, so policymakers have little time to reform the system.
A tax reform is spurring a savings revolution in Canada. Amity Shlaes and I wrote about Canada’s Tax-Free Savings Accounts (TFSAs) in the Wall Street Journal in August. We think that such accounts would be a fantastic policy reform for America. They would simplify the taxation of savings, encourage families to save more, and spur stronger economic growth.
The New York Times today described a vast Social Security Disability fraud scheme among retired New York City police officers and firefighters. The retirees were collecting tens of thousands of dollars per year in fraudulent SSDI payments by faking various illnesses. Many of the claims stemmed from false allegations of disabilities caused by the 9/11 terrorist attacks.
CNN.com has an article today on disability overpayments made by the Social Security Administration ($1.3 billion over two years according to a recent Government Accountability Office report). Although people often associate government overpayments with fraud, often times it’s just bureaucratic bungling.
On Sunday, CBS’s 60 Minutes profiled Sen. Tom Coburn’s (R-OK) on-going investigation of fraud and abuse in the federal government’s two main disability programs: Social Security Disability Insurance and Supplemental Security Income (see Chris Edwards’ discussion here). Yesterday, the Senate Committee on Homeland Security & Governmental Affairs (Coburn is the ranking member) held a hearing on a particularly egregious example centered on the Social Security Administration’s Huntington, WV office.
The abuse and overspending in government disability programs is so bad that even National Public Radio and 60 Minutes have taken notice. On the heels of this excellent NPR examination of the “disability industrial complex,” the venerable CBS news show last night profiled Senator Tom Coburn’s efforts to uncover fraud in the two big federal disability programs.
My recent paper on the rising cost of Social Security Disability Insurance is proving to be timely.
Combined outlays on Social Security Disability Insurance and Supplemental Security Income have roughly doubled over the last decade and will cost taxpayers almost $200 billion this year. The complex and often subjective disability determination process, which is essentially the same for both programs, has created an opportunity for specialty law firms to grab a piece of the action.
This morning, I discussed Social Security Disability Insurance on C-SPAN's Washington Journal: