Senators Seek Elimination of Wasteful and Overlapping Benefit Payments | Citizens Against Government Waste

Senators Seek Elimination of Wasteful and Overlapping Benefit Payments

The WasteWatcher

On June 6, NBC News and The Wall Street Journal released a poll that showed Americans blame welfare programs more than any other reason for persistent poverty in the United States.   The poll was conducted between May 30 and June 2 and sampled 1,000 adults.

Respondents were given a list of eight factors and were asked to choose which one was the most responsible for continued poverty; 24 percent chose “too much government welfare that prevents initiative.”   The next most significant reason was “lack of job opportunities” at 18 percent, followed by “lack of good educational opportunities” and “breakdown of families” at 13 percent.  The lowest ranked factor at 2 percent was racial discrimination.

On the same day as the poll was released, as if on cue to address the problem of ever-growing government handouts leading to perpetual poverty and dependency, Senators Tom Coburn (R-Okla.), Jeff Flake (R-Ariz.), Angus King (I-Maine) and Joe Manchin III (D-W.Va.) introduced S. 1099, the “Reducing Overlapping Payments Act.” The bill would stop individuals from receiving Unemployment Insurance (UI) and Social Security Disability Insurance (DI) at the same time.  In this situation, the duplication and overlap exacerbate the role that the government programs play in causing continued poverty.

It would seem incredulous that anyone could receive unemployment benefits and disability benefits.  In order to receive unemployment benefits, one must be willing and able to work; to receive disability benefits one cannot work because they are disabled.  Unfortunately for taxpayers, this absurd practice has not been revised or eliminated.

According to a July 2012 Government Accountability Office (GAO) report, “Overlapping Disability and Unemployment Benefits Should be Evaluated for Potential Savings,” there are “117,000 individuals [who] received concurrent cash benefit payments from the Disability Insurance (DI) and Unemployment Insurance (UI) programs of more than $850 million, which is allowable in certain circumstances under current program authority.  While these individuals represented less than 1 percent of the total beneficiaries of both programs, the cash benefits they received totaled over $281 million from DI and more than $575 million from UI.  One individual GAO selected for further investigation received over $62,000 in overlapping benefits in a year.”

The GAO noted that the Social Security Administration must reduce DI to an individual if that person is also receiving other disability benefits such as worker’s compensation.   However, the Department of Labor (DOL) allows the states to determine who is able and available for work, which results in having individuals with a disability under federal law remaining eligible for UI under state law.  There is no process for the SSA or DOL to identify these overlapping payments.  But S. 1099 would end this practice and stop allowing individuals to double dip into UI and DI.

One of the purposes of S. 1099 is to implement a recommendation from President Obama, whose fiscal year FY 2014 budget includes “a proposal to reduce an individual's entitlement to a disability insurance benefit in any month in which the individual also receives a state or federal unemployment compensation benefit.”

In the joint press release for S. 1099, Sen. Coburn said, “In order to protect safety-net programs for those who truly need them most, Congress must act to reduce wasteful and overlapping payments.  Absent new legislation, there is no way to prevent beneficiaries from essentially double-dipping and receiving disability insurance while also obtaining unemployment insurance.”  Sen. Coburn had previously identified this problem in his 2011 report, “Back in Black” (p. 339).

Sen. Flake noted that “With the Social Security Disability Insurance Trust Fund’s projected depletion in 2016, it’s unacceptable that thousands each year game the system by collecting benefits for two conflicting purposes.”

Sen. King added, “The disability and unemployment insurance programs are vital … Preserving those funds will allow us to keep resources intact for those who need it most.”

Sen. Manchin pointed out that “With our national debt exceeding $16.7 trillion and many of our essential benefits programs continuing on an unsustainable path, we must get rid of the waste, fraud and abuse in our system to make sure that those who need benefits will continue to receive them.”

The senators also provided additional background information on the legislation.  They make it clear that individuals who receive DI and become eligible for UI in a particular month will have their DI payments suspended and remain eligible for restoration of those benefits once they no longer need unemployment payments.

While sequestration has forced members of Congress to look more closely at every opportunity to save money in order to avoid federal worker furloughs or adversely impact essential services, eliminating nonsensical program overlap is a good idea at anytime.  In the case of DI and UI dual payments, a resolution is long overdue.  S. 1099 should be swiftly moved through the Senate and passed by an overwhelming bipartisan vote.


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