The History of Social Security Disability Law

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Although Social Security Disability Insurance did not become law until July, 1956, there was an extended period of discussion both in the executive agencies and in Congress preceded its passage. Planners in the Social Security Administration began their consideration of this measure in 1936.

The original planners of this program sought to create a program that they felt could withstand the pressures of the most profound occurrences of the time, The Great Depression. In particular, they wrote a strict definition of disability into their proposals, in hopes to distinguish sharply between unemployment and disability.

Instead of adopting a definition similar to the ones in the existing workers’ compensation and veterans pension laws, they chose to define disability as “an impairment of mind or body which continuously renders it impossible for the disabled person to follow any substantial gainful occupation,” and was likely to last for “the rest of a person’s life.”

Even this tough was a tough definition, which is very similar to the one in the present law, many doubted the ability of federal officials to administer a disability program. Some argues that “You will have workers like those in the dust bowl area, people who have migrated to California and elsewhere, who perhaps have not worked in a year or two, who will consider themselves or imagine themselves to be disabled.” They argued that unless a highly qualified medical staff examined each applicant, the cost of the program had the potential to be higher than “anything that could be reasonably forecasted”.

The Social Security officials sought a strict definition of disabled, they knew, if the program were administered in too severe a manner, the courts and the Congress would act to make federal officials admit more people to the disability rolls.

One of the principal Social Security researchers thought of disability as an elastic concept. “Too strict a system invites pressure to swing in the opposite direction. Some perceptions foreshadowed the volatility that would accompanied disability insurance after 1956 and in particular the sequence of rapidly expanding rolls in the 1970′s, attempts to stop the growth of the rolls in the early 1980′s, and the rise in the rolls in the later 1980′s and early 1990′s.

Much of the conceptual work that underpinned Social Security Disability Insurance took place in the 1930′s and early 1940′s. Passage of the measure did not occur until the 1950′s.

This delay reflected the understandable lack of attention to domestic policy during the years of World War II and the reality that public assistance paid higher benefits and reached more people than did Social Security between 1935 and 1950. Members of Congress who represented constituents in areas that contained few industrial and commercial workers had no reason to expand Social Security, much less to acquiesce to the passage of Social Security Disability Insurance.

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Social Security Disability Insurance did not receive serious attention from Congress until the Committee on Ways and Means held hearings on this topic, and other topics related to Social Security, in 1949. By this time the depression was over, and wartime conditions had helped to bring rehabilitation medicine to maturity.

As a consequence of these developments, the opponents of Social Security Disability Insurance argued that people with disabilities should receive rehabilitation, rather than a pension that allowed them to retire from the labor force for life.

Social Security officials agreed to the importance of rehabilitation and even gave serious consideration to recommending that applicants to the disability rolls should thereby receive rehabilitation services and interim payments before they entered disability rolls on a permanent basis. They managed to persuade the Committee, however, that, important as rehabilitation was, it did not supersede the need for cash benefits. As a consequence, the Committee included a disability insurance program in the bill that the House of Representatives passed in 1949.

The Senate however chose to emphasize rehabilitation, rather than cash benefits, and did not include disability insurance in its version of the Social Security bill that was passed in 1950. The House receded in conference, and as a compromise measure Congress adopted a new public assistance category, Aid to the Permanently and Totally Disabled. Until 1950, Aid to the Blind had stood alone as a federally assisted public assistance program that reached people with disabilities.

After 1950 Social Security became a popular program that received bipartisan support, both within the Committee on Ways and Means and in Congress itself. Social Security Disability Insurance, by way of contrast, remained a controversial measure, and the Senate Finance Committee, in particular, refused to recommend it to Congress. A series of incremental, compromise laws in 1952 and 1954 paved the way for the final passage of SSDI in 1956.

The 1952 legislation introduced the idea of a disability freeze, in which a person could receive Social Security benefits at the normal retirement age, even if he or she dropped out of the labor force for a substantial period of time because of a disability. This measure passed Congress only after the conferees considering the legislation agreed to the unusual step of letting the disability freeze expire before it could take effect.

More importantly, the conferees came up with the idea of letting the states, rather than the federal government, make the initial determinations of disability–a feature of the program that survives to the present day and which can be explained only by understanding the historical context in which it is rooted.

In 1954, as part of the Eisenhower administration’s plan to expand the vocational rehabilitation program and to use the Social Security program as a means of identifying candidates for rehabilitation, Congress passed a disability freeze measure. At this time, Secretary Oveta Culp Hobby, the second female cabinet officer in the nation’s history, recommended that Social Security trust fund money be used to provide rehabilitation services, but not cash benefits, to insured people who became disabled. She argued that the investment of OASI funds would be small but “no accountant can estimate the physical rewards, the sense of independence, pride and usefulness and the relief from family strains which accrue to one of the disabled when he returns to his old job or to a newly learned job suited to his limitations.” Her sentiments reflected the feelings of many within the Eisenhower administration such as those of

Assistant Secretary of Health, Education, and Welfare Roswell Perkins who said that the administration’s philosophy was that “the first line of attack on disability should be rehabilitation, in order that people be restored to useful and productive lives.”

In 1955 the House once again passed a disability insurance measure and in 1956 the Senate Finance Committee once again opposed it. That set up a dramatic fight on the floor of the Senate that resulted in the passage, by the barest of margins, of Social Security Disability Insurance. As a means of gathering support, the proponents of the legislation limited benefits to those fifty or older and did not include benefits for the dependents of disabled workers.

In its formative years between 1956 and 1960, therefore, SSDI paid benefits only to workers who were fifty years of age or older. That meant that the linkage between applicants for disability benefits and vocational rehabilitation never took hold, since everyone agreed that older individuals made the worst candidates for rehabilitation and the state vocational rehabilitation agencies were simply unable to cope with the large numbers of people who applied for disability benefits.

It also meant that the caseload contained a disproportionate number of people with impairments that affected older individuals, such as heart disease and arthritis, rather than people with impairments or conditions that affected younger individuals, such as mental disorders.

In effect, despite the eventual use of trust fund money to pay for the rehabilitation of people on the SSDI rolls, the SSDI program became, like the Social Security itself, a retirement program.

At the time, policymakers took the position that caring for people with mental illness, who occupied the majority of the beds in the nation’s hospitals, was a state responsibility. There was little desire to use Social Security money to subsidize state mental health hospitals. In the earliest drafts of the disability insurance legislation, prepared in the 1930′s and 1940′s, the planners specified that no benefits were to be paid to those with mental disabilities.

In defense of this position, they argued that most people with mental disabilities were already taken care of in state hospitals, that mental disabilities were difficult to diagnosis, and that mental disabilities had created problems in foreign disability insurance programs, such as the one in Sweden. They worried that benefits for people with mental disabilities would result in malingering. This suspicion of mental illness as a basis for disability benefits persisted in the program that was passed in 1956 and made it difficult for the system to cope with the revolution in social policy unleashed by the deinstitutionalization movement in the 1960′s.

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Supplemental Security Income, the other pillar of our modern disability system, arose as part of a discussion of welfare reform that President Richard Nixon initiated in 1969.

Here, as with SSDI, historical particulars mattered. As it became clear that the President’s comprehensive plan to change the Aid to Families with Dependent Children program would not pass Congress, attention shifted to the reform of what policymakers called the adult welfare categories. In particular, the notion arose that the administration of Aid to the Blind, Aid to the Permanently and Totally Disabled, and Aid to the Elderly should be federalized and run by the Social Security Administration.

Because policymakers did not engage in the sort of oversight (that, for example, the present hearing represents), anticipation of important trends failed to be considered. At the time people pointed to more adequate benefits as a reason for the creation of the program.

In particular, Congress hoped to do away with such things as lien laws and to model the new law on practices in the more progressive states. Social Security Administration officials supported the law because they hoped it would take away some of the pressure to raise the minimum benefit under Social Security and hence to strengthen the relationship between contributions and benefits.

At the time, few people thought to ask what effect the new law would have on disability. Instead, policymakers reflexively assigned welfare beneficiaries to the administrative apparatus already established to administer SSDI benefits. Hence, states made the initial disability determinations under SSI, just as they did under SSDI, and the two programs used a common definition of disability.

In thinking about the new program, policymakers envisioned that it would apply mainly to the elderly, who had traditionally dominated the adult welfare categories. Social Security officials believed that many SSI recipients would be people already receiving Social Security benefits but who found that these benefits were not enough to bring them out of poverty.

Initially, these assumptions proved to be correct. When SSI began in 1975, blind and disabled adults and children represented only 42% of the caseload. At the same time that Congress considered SSI, however, the incidence of disability was growing at an unprecedented rate. The highest rates of growth of the SSDI rolls, for example, occurred between 1971 and 1975.

Hence, circumstances favored a rise in the disability categories of SSI. Furthermore, in the same year that Congress created SSI, it also provided a 20% increase in Social Security benefits and indexed benefit levels to the rate of inflation. This action had the effect of raising replacement rates under Social Security and lessening the chance that an elderly Social Security recipient might also need to receive SSI.

As a result of these two forces, adults and children who were either blind or disabled represented nearly two thirds of the SSI caseload by 1994.

That meant that just as disability was grafted on to a retirement program for the elderly in the (SSDI) Social Security Disability Insurance program so it was added to a welfare measure that Congress intended primarily as a means of serving the elderly.

Another anomaly in Supplemental Security Income was that the entire discussion by some that focused on what many called the “adult welfare categories.” As things worked out, however, many SSI recipients turned out be children.

By 1992, for example, 16 percent of SSI beneficiaries under age 65 were children. That meant that a disability determination system intended to serve people who had been in the labor force was forced to handle many claims from children. Friction developed between the courts and other overseers of the disability determination process and the Social Security Administration, leading to such cases as the 1990 Sullivan v. Zebley decision.

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