Disability Explosion Dragging Down Economic Growth

The rapid rise in the number of Americans applying for and entering the Social Security Administration disability program has cost an estimated 0.6% of national output since the start of the recession, representing roughly $95 billion annually in lost economic growth.

Each month, 14 million Americans receive some form of disability check, costing taxpayers an estimated $260 billion (including healthcare costs). That is over three times as much as the $82 billion taxpayers are projected to spend in 2013 on the 47 million individuals receiving food stamps.  

“It kind of reminds me of welfare,” said disabled former truck driver James Ottesen. Ottesen told the Wall Street Journal he would “like to get re-educated to do something” because “my body is broke but my mind is not.” Still, says Ottesen, he’s reluctant to leave the disability program because it is like “a blanket covering you, and to walk out from it… at my age, it’s a little intimidating.”

Disability enrollments have exploded under President Barack Obama. Since 2009, 5.9 million people have been added to the Social Security Disability Insurance (SSDI) program, a 23% jump over the last five years. During that same period, just 2.5 million new jobs were created.

A six-month National Public Radio (NPR) investigation into the disability program suggested that the Welfare to Work reforms of the 1990s that appeared to successfully move people off the public dole might have been illusory. Instead, states simply realized that shifting their citizens off welfare and onto disability saved state budgets big money; states pay the costs of welfare, whereas the federal government picks up the tab for disability.