Even the shackles of sequestration haven't stopped the Obama Administration from dreaming up new schemes for government handouts.
In the latest hustle, those twin mortgage misfits, Fannie Mae and Freddie Mac, have created an insidious subterfuge to reward irresponsible behavior at the expense of taxpayers who bailed out the agencies five years ago.
In a little noticed move, the mortgage giants have announced they will offer lower payments to borrowers who become 90 days or more past due without requiring any proof of hardship. Fannie and Freddie bragged the plan would reduce monthly mortgage payments 30 percent. Repayment terms would be extended to 40 years under the plan.
With implementation scheduled in July, Democrats also are pushing behind the scenes for even more aggressive loan modifications, including reductions in the principal owed by distressed borrowers. The Congressional Budget Office estimates 1.2 million borrowers would be eligible under the arrangement.
These maneuvers are more about politics than economic reality.
Housing prices have rebounded in most markets. Sales are on the upswing. The share of homeowners behind in their payments is shrinking. The latest figures reveal that borrower delinquencies have dipped to their lowest level since 2008, according to the Mortgage Bankers Association.
When the need was greatest during 2008, the Obama Administration rolled out flawed programs aimed at struggling homeowners. The arrangements were roundly criticized by academics and policymakers. The programs, designed to reach 3 million borrowers, only had 900,000 takers.
Past failures have been swept under the rug in the mad rush to dole out government favors before the mid-term elections.
With the latest gimmick, Fannie and Freddie are eliminating most paperwork used to establish a genuine hardship. Instead, they will aggressively court borrowers with letters containing the loan modification offer. Lower payment terms will be offered to borrowers without having to document their finances.
Once a homeowners inks the offer, the reduced remittances automatically become permanent after three payments are made. Like magic, poof, the homeowner gets to pay less money while occupying a home he couldn't afford. Homeowners who kept up their payments get nothing.
In case you have forgotten, Fannie and Freddie went belly up in 2008. Taxpayers shelled out $137 billion to bail out the firms, which were taken over by the Treasury Department. Although the government backed companies have begun repaying Treasury, taxpayers are out $127 billion.
A bi-partisan policy group, which includes former Democrat Sen. George Mitchell and ex-Housing and Urban Development Secretary Henry Cisneros, is calling for replacing Freddie and Fannie with a public guarantor to oversee the mortgage market.
One proposal by the group would wind down Fannie and Freddie. The suggestion is long overdue. The mortgage behemoths deserve to be scrapped before their risky lending behavior leads to another plea for a taxpayer bailout.
Monday, May 27, 2013
Monday, May 20, 2013
IRS: Obama's Brown Shirt Brigade
Mounting evidence that the Obama Administration enlisted the strong arm of the Internal Revenue Service (IRS) to bully and intimidate its political enemies may be the scandal that lingers, threatening to neuter the president as his second term begins.
The chilling revelations about IRS harassment of conservative groups have awakened a nation that mostly ignored the administration's scandalous behavior in the Benghazi embassy attack. What makes this different is that the IRS is universally loathed and feared by average Americans.
Taxpayers take notice when the IRS makes headlines for singling out groups and individuals for coercion and persecution. They have nightmares about being the next victim.
That's why the administration's handling of the embarrassing IRS disclosures has taken center stage in the arena of public opinion. While IRS officials have fumbled every opportunity to defuse public angst, Obama has lamely claimed ignorance in what has become a familiar excuse for this president.
Obama must have a sign on his desk in the Oval Office that reads: The Buck Never Stops Here.
Americans are supposed to believe that low level officials in the federal government write their own rules, pursue their own agenda, mete out punishment as they see fit. At least that is what Obama expects Americans to conclude.
Obama and his puppets in the media have attempted to paint a picture of the president as innocent bystander while the supposedly independent IRS did the dirty work for his reelection campaign. This characterization leaves the president looking clueless at best or incompetent at worse.
As more people in the Obama Administration became aware of the effort to target conservatives, did no one think to advise the president? Why not? Did the president never ask about the very public accusations more than a year ago as accounts circulated that the IRS was snooping into the tax exempt status of Tea Party organizations? If not, was the president tacitly sanctioning the misuse of power?
The president clumsily "fired" two IRS executives, hoping the appearance of action would pacify the critics. This is a president accustomed to spectacle over substance, supported by a media that routinely accuses Republicans of fomenting revolution to overthrow Obama.
Obama and his handlers have failed to grasp the deep animus Americans have for those who limit the exercise of free speech. The IRS scandal is about what happens when an administration and the Democrat Party demonize and seek to destroy those who oppose its political agenda.
Slipshod management is one thing, but politicizing the IRS is a grave matter. The articles of impeachment against former President Richard Nixon included the misuse of taxpayer information for political purposes. Nixon was rightly held accountable for the actions of the IRS.
It may be time to start thinking of launching impeachment proceedings against Barrack Obama.
The chilling revelations about IRS harassment of conservative groups have awakened a nation that mostly ignored the administration's scandalous behavior in the Benghazi embassy attack. What makes this different is that the IRS is universally loathed and feared by average Americans.
Taxpayers take notice when the IRS makes headlines for singling out groups and individuals for coercion and persecution. They have nightmares about being the next victim.
That's why the administration's handling of the embarrassing IRS disclosures has taken center stage in the arena of public opinion. While IRS officials have fumbled every opportunity to defuse public angst, Obama has lamely claimed ignorance in what has become a familiar excuse for this president.
Obama must have a sign on his desk in the Oval Office that reads: The Buck Never Stops Here.
Americans are supposed to believe that low level officials in the federal government write their own rules, pursue their own agenda, mete out punishment as they see fit. At least that is what Obama expects Americans to conclude.
Obama and his puppets in the media have attempted to paint a picture of the president as innocent bystander while the supposedly independent IRS did the dirty work for his reelection campaign. This characterization leaves the president looking clueless at best or incompetent at worse.
As more people in the Obama Administration became aware of the effort to target conservatives, did no one think to advise the president? Why not? Did the president never ask about the very public accusations more than a year ago as accounts circulated that the IRS was snooping into the tax exempt status of Tea Party organizations? If not, was the president tacitly sanctioning the misuse of power?
The president clumsily "fired" two IRS executives, hoping the appearance of action would pacify the critics. This is a president accustomed to spectacle over substance, supported by a media that routinely accuses Republicans of fomenting revolution to overthrow Obama.
Obama and his handlers have failed to grasp the deep animus Americans have for those who limit the exercise of free speech. The IRS scandal is about what happens when an administration and the Democrat Party demonize and seek to destroy those who oppose its political agenda.
Slipshod management is one thing, but politicizing the IRS is a grave matter. The articles of impeachment against former President Richard Nixon included the misuse of taxpayer information for political purposes. Nixon was rightly held accountable for the actions of the IRS.
It may be time to start thinking of launching impeachment proceedings against Barrack Obama.
Monday, May 13, 2013
Benghazigate: Shield Hillary, Suppress the Truth
Desperate Democrats and their media collaborators began circling the wagons today as damaging testimony from whistle blowers oozed like raw sewage from the House Oversight Committee hearings on the embassy attack in Benghazi, Libya.
For their part, President Obama and his apparatchik ex-Secretary of State Hillary Clinton have stiff armed the committee by stonewalling, equivocating and evading. Instead of transparency, the duo have unleashed their accomplices to defame the whistle blowers in a sleazy attempt to stymie the truth.
It is obvious that Democrats and their media lapdogs only care about one thing: applying Teflon-coating to Hillary to insure her presidential anointment in 2016. The nation's interests are a distant second. A murdered ambassador and three other dead Americans are mere collateral damage.
It has become clear that President Obama wants Hillary to take the fall for Benghazi. This helps explain his glowing tribute to Clinton in a carefully orchestrated television interview after her decision to step down from her post. It was Obama's parting gift to purchase her loyalty.
As the hearings opened, Democrat conspirators in Washington framed the proceedings as partisan political theater designed to dredge up settled issues. The problem with that template is the whistle blowers aired explosive new testimony that contradicted Clinton's accounts at a Senate hearing.
Among the reputation-shredding evidence unveiled about Clinton at the House hearings:
1. The second in command to slain ambassador Chris Stevens disclosed he spoke directly to Secretary of State Clinton at 2 a.m. on the night of the attack. The deputy, Gregory Hicks, told her that the embassy had been raided by terrorists. Yet Clinton waged a public campaign blaming the slaughter on Muslin reaction to an obscure, anti-Islam video posted on the Internet. Clinton even took the unusual step of denouncing the video next to the flag-draped coffins of the victims. When questioned at a Senate hearing about the reasons behind the attack, the impetuous Clinton cried foul, claiming "what difference does it make?"
2. Hicks was ordered not to talk to Congressional investigators by Clinton's chief of staff, Cheryl Mills. When he refused to follow her instruction, Clinton's State Department tired to muzzle Hicks, dispatching an attorney to accompany the deputy on any discussions with members of Congress. Later, Hicks was demoted in retaliation for his defiance.
3. U.S. security chief Eric Nordstrom asserted that Clinton "absolutely" was briefed on the slain ambassador's repeated requests for additional safeguards at the Libyan embassy. Clinton's signature appears on memos denying the ambassador's pleas for additional security. It is well documented that the Benghazi compound was below minimum security standards. Only the Secretary of State is authorized to grant exemptions to this standard. Clinton never acted, despite the obvious security threats.
In spite of the weight of this evidence, the nation's media only recently awoke to the serious lapses in Clinton's judgment. Once they could no longer ignore the scandal, their mission became to shield Hillary by trying to shift the blame to her subordinates in a lame attempt to spare her reputation.
In light of the committee hearings, Speaker of the House John Boehner should appoint a special counsel to investigate the lack of adequate security at the embassy, the failure to send aid during the attack and the resulting cover up by Clinton and Obama Administration officials.
The special counsel's first order of business should be to subpoena Hillary Rodham Clinton.
For their part, President Obama and his apparatchik ex-Secretary of State Hillary Clinton have stiff armed the committee by stonewalling, equivocating and evading. Instead of transparency, the duo have unleashed their accomplices to defame the whistle blowers in a sleazy attempt to stymie the truth.
It is obvious that Democrats and their media lapdogs only care about one thing: applying Teflon-coating to Hillary to insure her presidential anointment in 2016. The nation's interests are a distant second. A murdered ambassador and three other dead Americans are mere collateral damage.
It has become clear that President Obama wants Hillary to take the fall for Benghazi. This helps explain his glowing tribute to Clinton in a carefully orchestrated television interview after her decision to step down from her post. It was Obama's parting gift to purchase her loyalty.
As the hearings opened, Democrat conspirators in Washington framed the proceedings as partisan political theater designed to dredge up settled issues. The problem with that template is the whistle blowers aired explosive new testimony that contradicted Clinton's accounts at a Senate hearing.
Among the reputation-shredding evidence unveiled about Clinton at the House hearings:
1. The second in command to slain ambassador Chris Stevens disclosed he spoke directly to Secretary of State Clinton at 2 a.m. on the night of the attack. The deputy, Gregory Hicks, told her that the embassy had been raided by terrorists. Yet Clinton waged a public campaign blaming the slaughter on Muslin reaction to an obscure, anti-Islam video posted on the Internet. Clinton even took the unusual step of denouncing the video next to the flag-draped coffins of the victims. When questioned at a Senate hearing about the reasons behind the attack, the impetuous Clinton cried foul, claiming "what difference does it make?"
2. Hicks was ordered not to talk to Congressional investigators by Clinton's chief of staff, Cheryl Mills. When he refused to follow her instruction, Clinton's State Department tired to muzzle Hicks, dispatching an attorney to accompany the deputy on any discussions with members of Congress. Later, Hicks was demoted in retaliation for his defiance.
3. U.S. security chief Eric Nordstrom asserted that Clinton "absolutely" was briefed on the slain ambassador's repeated requests for additional safeguards at the Libyan embassy. Clinton's signature appears on memos denying the ambassador's pleas for additional security. It is well documented that the Benghazi compound was below minimum security standards. Only the Secretary of State is authorized to grant exemptions to this standard. Clinton never acted, despite the obvious security threats.
In spite of the weight of this evidence, the nation's media only recently awoke to the serious lapses in Clinton's judgment. Once they could no longer ignore the scandal, their mission became to shield Hillary by trying to shift the blame to her subordinates in a lame attempt to spare her reputation.
In light of the committee hearings, Speaker of the House John Boehner should appoint a special counsel to investigate the lack of adequate security at the embassy, the failure to send aid during the attack and the resulting cover up by Clinton and Obama Administration officials.
The special counsel's first order of business should be to subpoena Hillary Rodham Clinton.
Monday, May 6, 2013
Immigration: Pandering to Hispanic Voters
As Congress hammers out details of a bipartisan immigration bill, pundits and the media elite have begun lecturing Republicans on why they must embrace the sweeping legislation. Conventional wisdom maintains it would be political suicide for the GOP to oppose reform, even if it is flawed.
This notion fluttered out of the ashes of GOP nominee Mitt Romney's stinging defeat to President Obama, who won 71 percent of the Hispanic vote. A hue and cry arose about Romney's chilly support (27%) among Hispanics as evidence the elephantine party would never win another national election.
Political hacks, inside the Beltway eggheads and the GOP cognoscenti panicked, calling for Republicans to pander to Hispanics to regain power. Latino birthrates are soaring, which means hordes will be voting for Democrats unless there is a sea change, they argued.
There is just one problem with this story line. Mitt Romney lost the election because of the low turnout among white voters and a high black voter turnout, not because of the Latino vote. Had turnout among whites and blacks matched 2004 levels, Romney would now occupy the Oval Office.
That is the conclusion of demographer William H. Frey of Brookings Institute. Frey reached that determination after examining Census data, voter turnout records and exit polling conducted by the Pew Research Center and others in the last presidential election.
African-American voter turnout eclipsed Hispanics. The later represented 10 percent of the total vote, while blacks were 13 percent. Turnout among Latinos was a dismal 50 percent, compared to 65 percent for blacks. Overall turnout was 58 percent of registered voters.
There is so much misinformation about Hispanic voters that a few facts are required to set the record straight:
- Beginning with the 1980 presidential election when research began, Democrats have always carried the Latino vote by healthy margins. No Republican has ever received more than 40 percent, a high water mark reached by George W. Bush in 2004. Democrats have garnered at least 60 percent of the Hispanic vote in every presidential election since 1980 with the exception of 2004. Hispanics with household incomes below $50,000 voted overwhelmingly Democrat (82% vs. 17%) in the last presidential election.
- Despite rising population growth, Hispanics are not projected to surpass the share of eligible black voters until at least 2024. That estimate is based on historic turnout, voter registration levels and the requirement of citizenship to cast a ballot. Today Latinos represent 17 percent of the population, but only 11 percent of eligible voters. By comparison, African-Americans represent 12 percent of eligible voters.
- Even if the 11 million illegal immigrants now living in the U.S. are granted instant citizenship, Hispanics could only claim 16 percent of eligible voters by 2026. That assumes current registration levels among this minority group. Some media estimates have put the number of potential Latino voters at 25 to 30 percent of the electorate in 13 years Pseudo experts are basing those guess-estimates solely on birth rates, an unreliable gauge of registration and turnout.
No one is arguing that Republicans ignore Hispanics or any demographic for that matter. However, Republicans have been trying for decades to coax a larger share of the black vote without success. Their chances with Latinos are equally bleak. Both minorities have historic Democrat Party roots, cultivated for decades by embedded liberal activists groups and community agitators.
The GOP needs to disabuse itself of the idea that support for immigration reform will make Latinos swoon for Republicans. No matter what happens on immigration, Hispanics will cling to the Democrat Party. That's why Republicans should base their immigration vote on principles not politics.
Monday, April 29, 2013
Microsoft Cashes In With Obama
President Obama may be opposed to the Keystone project, but he favors the money pipeline than runs from Redmond, Washington, to The White House. During his past two presidential campaigns, millions of dollars have flowed from Microsoft's headquarters to Obama campaigns.
Microsoft, a corporate behemoth, shoveled $815,536 from its Political Action Committee (PAC) to the Obama re-election campaign in 2012, according to data compiled by the Center for Responsive Politics, a non-partisan organization that posts the information online at OpenSecrets.org.
The center combed Federal Election Commission records to collect the data. Its findings paint a graphic picture of the way Washington works, where companies that do business with the federal government are politically active in national campaigns.
Microsoft's largess extended far beyond its PAC donation. Executives and managers from Microsoft passed the hat and collected nearly $1 million in contributions for the president's campaign last year. With 90,000 employees, there was fertile ground to be tilled by Microsoft managers.
The money was raised by so-called bundlers. Don't be fooled by the innocuous sounding word. Bundlers are arm-twisters who canvass friends, acquaintances and fellow employees for donations. The solicitations usually are led by individuals who bump up against personal giving limits.
Microsoft wasn't finished after the brazen bundlers were done. They forked over another $764,059 to help fund the festivities surrounding the president's inauguration. For the first Obama inauguration, Microsoft doled out even more, $852,167.
Therefore, it came as no surprise when the military announced on January 3 that it had signed the most comprehensive Microsoft contract ever. The Department of Defense (DOD), despite facing supposedly Draconian sequester cuts, agreed to pay Microsoft $617 million over three years for software services.
The department is Microsoft's single largest customer. In the past, the DOD has tested new versions of Windows and Office for the Redmond-based company. The cozy relationship no doubt has been tightened by Microsoft's political involvement.
And the DOD is not the only large government customer. The Department of Agriculture two years ago issued a contract to Microsoft for its web-based email and other services, beating out IBM and Google. At the time, the agreement was called the "largest federal contract" for cloud computing.
However, Microsoft's chummy relationship with Obama may be tested. Federal investigators are poking their noses into claims that a Microsoft executive provided monetary kickbacks to Chinese officials in exchange for government issued contracts.
There are other allegations involving business relationships in Romania and Italy, too. The probe is being conducted by the Justice Department and the Securities and Exchange Commission under the Foreign Corrupt Practices Act.
The allegations have sullied Microsoft's reputation. But don't discount an investigation that results in a slap on the wrist and nothing more. After all, money covers a multitude of sins in Washington.
Microsoft, a corporate behemoth, shoveled $815,536 from its Political Action Committee (PAC) to the Obama re-election campaign in 2012, according to data compiled by the Center for Responsive Politics, a non-partisan organization that posts the information online at OpenSecrets.org.
The center combed Federal Election Commission records to collect the data. Its findings paint a graphic picture of the way Washington works, where companies that do business with the federal government are politically active in national campaigns.
Microsoft's largess extended far beyond its PAC donation. Executives and managers from Microsoft passed the hat and collected nearly $1 million in contributions for the president's campaign last year. With 90,000 employees, there was fertile ground to be tilled by Microsoft managers.
The money was raised by so-called bundlers. Don't be fooled by the innocuous sounding word. Bundlers are arm-twisters who canvass friends, acquaintances and fellow employees for donations. The solicitations usually are led by individuals who bump up against personal giving limits.
Microsoft wasn't finished after the brazen bundlers were done. They forked over another $764,059 to help fund the festivities surrounding the president's inauguration. For the first Obama inauguration, Microsoft doled out even more, $852,167.
Therefore, it came as no surprise when the military announced on January 3 that it had signed the most comprehensive Microsoft contract ever. The Department of Defense (DOD), despite facing supposedly Draconian sequester cuts, agreed to pay Microsoft $617 million over three years for software services.
The department is Microsoft's single largest customer. In the past, the DOD has tested new versions of Windows and Office for the Redmond-based company. The cozy relationship no doubt has been tightened by Microsoft's political involvement.
And the DOD is not the only large government customer. The Department of Agriculture two years ago issued a contract to Microsoft for its web-based email and other services, beating out IBM and Google. At the time, the agreement was called the "largest federal contract" for cloud computing.
However, Microsoft's chummy relationship with Obama may be tested. Federal investigators are poking their noses into claims that a Microsoft executive provided monetary kickbacks to Chinese officials in exchange for government issued contracts.
There are other allegations involving business relationships in Romania and Italy, too. The probe is being conducted by the Justice Department and the Securities and Exchange Commission under the Foreign Corrupt Practices Act.
The allegations have sullied Microsoft's reputation. But don't discount an investigation that results in a slap on the wrist and nothing more. After all, money covers a multitude of sins in Washington.
Saturday, April 20, 2013
Exposing The Truth About Planned Parenthood
Nothing raises the blood pressure of Democrats and their titular leader President Obama like threats to federal funding for Planned Parenthood. They become apoplectic over the slightest hint of criticism aimed at the organization, regarding any honest appraisal as hostility towards women's health.
Yet so many of the claims made by Democrats and the president about Planned Parenthood are simply not true. However, an apparatchik media has protected the government-funded program shielding it from a legitimate evaluation of how well Planned Parenthood performs.
On January 4 of this year, Planned Parenthood Federation of America released a plethora of data about its operations, including annual reports covering financials and services during the period from July 1, 2011 to June 30, 2012. The pro-abortion mainstream media has buried its head in the sand.
An independent analysis of the information exposes many of the myths about Planned Parenthood that have been fostered by the organization and its fawning supporters in the Democrat Party and the puppet media. Here are just a few:
Conservatives have played into the hands of the abortion crowd with emotionally-charged arguments against federal funding. Instead of fighting over abortion policy, Republicans should attack Planned Parenthood on the basis of its failures to deliver on its own mandate of providing health care services to women.
Abortion is not health care. There should be not one scintilla of taxpayers funds used to support an organization which does so little to advance women's health care.
Yet so many of the claims made by Democrats and the president about Planned Parenthood are simply not true. However, an apparatchik media has protected the government-funded program shielding it from a legitimate evaluation of how well Planned Parenthood performs.
On January 4 of this year, Planned Parenthood Federation of America released a plethora of data about its operations, including annual reports covering financials and services during the period from July 1, 2011 to June 30, 2012. The pro-abortion mainstream media has buried its head in the sand.
An independent analysis of the information exposes many of the myths about Planned Parenthood that have been fostered by the organization and its fawning supporters in the Democrat Party and the puppet media. Here are just a few:
- The number of overall health-related services preformed by Planned Parenthood at its 750 affiliate centers nationwide has been declining since 2010. In 2012, it reached its lowest level since 2006. Planned Parenthood is not delivering on its promises to offer expanded health services to women. For example, the organization claims it needs more funding to provide breast exams for women. An analysis of the group's own data shows it is performing fewer exams each year. Since 2007, exams have declined nearly 25 percent.
- Planned Parenthood claims abortion procedures are a small part of the services it provides, but it may be the most profitable. An analysis finds that abortions increased 9.3 percent from 2007 to 2011. Figures for the latest year indicate a record number of abortions were performed. Since 2007, the centers have recorded 1,624,523 abortions. The procedure clearly is a cash cow for Planned Parenthood, which charges between $300 and $950 for each abortion. Costs for health services are either "free" or offered at nominal expense.
- Federal funding for Planned Parenthood has catapulted 77 percent since 2006, despite claims government support has dwindled. In 2012, taxpayers transferred $542.4 million to the organization. Federal dollars represented 45 percent of the organization's total income. The increases were required because Planned Parenthood has lost 27 percent of its individual and corporate donor base since 2007. The jump in federal funding is not commensurate with the services provided. Since 2009, Planned Parenthood reported its services have fallen 3.3 percent, hardly justification for the stunning increase in federal funding. The number of clients served has also declined since 2007.
Conservatives have played into the hands of the abortion crowd with emotionally-charged arguments against federal funding. Instead of fighting over abortion policy, Republicans should attack Planned Parenthood on the basis of its failures to deliver on its own mandate of providing health care services to women.
Abortion is not health care. There should be not one scintilla of taxpayers funds used to support an organization which does so little to advance women's health care.
Monday, April 15, 2013
The Fastest Growing, Tax-Hogging Entitlement
Job growth under President Obama may have inched along at a snail's pace, but one entitlement scheme has enjoyed an epic boom. Federal spending on Social Security disability benefits has skyrocketed, eclipsing taxpayer funding of welfare and food stamps combined.
Today there are 10.9 million people receiving disability benefits under the age of 65. A total of 8.8 million are former workers. The remainder are spouses of the disabled and their children. They collect an average of $10.6 billion every month. That's more than $127 billion dollars annually.
Spending on disability programs has grown at an annual rate of 5.6 percent, compared with 2.2 percent for the remainder of Social Security. Those figures were developed by David Autor, an economist at Massachusetts Institute of Technology.
As the economy has soured, disability applications have soared. From 2001 to 2010, applications ballooned 123 percent. A staggering 2.8 million disability cases were approved in 2012, double the number in 2000. Currently one in 18 adults of working age receives disability payments.
As more employees opt out for disability, the labor force shrinks. Without this decline, the current unemployment rate would be 10.8 percent, according to calculations by the American Enterprise Institute.
There are two factors spurring the explosive growth:
Today there are 10.9 million people receiving disability benefits under the age of 65. A total of 8.8 million are former workers. The remainder are spouses of the disabled and their children. They collect an average of $10.6 billion every month. That's more than $127 billion dollars annually.
Spending on disability programs has grown at an annual rate of 5.6 percent, compared with 2.2 percent for the remainder of Social Security. Those figures were developed by David Autor, an economist at Massachusetts Institute of Technology.
As the economy has soured, disability applications have soared. From 2001 to 2010, applications ballooned 123 percent. A staggering 2.8 million disability cases were approved in 2012, double the number in 2000. Currently one in 18 adults of working age receives disability payments.
As more employees opt out for disability, the labor force shrinks. Without this decline, the current unemployment rate would be 10.8 percent, according to calculations by the American Enterprise Institute.
There are two factors spurring the explosive growth:
- Disability eligibility standards have been liberalized. Congressional Democrats passed new standards in the 1980's making it easier to qualify for benefits and more difficult to be removed. Less than one percent of disability recipients in 2011 returned to the workforce. In the 1960's the top cause of disability awards was heart disease. Today it is back pain and mental illness, which are infinitely more difficult to dispute on a medical basis.
- As job prospects dim, more workers claim disabilities. Several studies have established the linkage between the economy and disability applications. One research project correlated the price of coal with worker disability claims. As coal prices fell, applications in Appalachia for disability rose. An increasing "faction of discouraged and displaced workers are seeking" disability benefits, found another study co-authored by MIT's Autor.
Dire warnings about an approaching financial storm for Social Security disability have gone unheeded in Washington. Politicians from both sides of the aisle are terror-stricken over tackling the issue, fearing backlash in the media and from genuinely disabled voters.
Yet Social Security chief actuary Steve Goss has forecast that disability program reserves will run out of money in 2016, a mere three years from today. A recent government report predicted by 2018, one in 14 working age adults will receive disability payments under current growth rates.
Like so many federal entitlement programs, the Social Security disability system is unsustainable. The longer the president and Congress dither on reform, the time horizon for solutions grows shorter and impending financial disaster looms larger.
Subscribe to:
Posts (Atom)