If depleted, the DI trust fund would be able to pay about 80% of scheduled SSDI benefits. Between 1980 and 2013, non-interest income to the DI trust fund (adjusted for inflation) increased 181%, while spending on benefits grew 219%. The increase in spending is due largely to the growth in the number of beneficiaries on SSDI. Over the same period, the number of disabled workers and their dependents more than doubled, rising from 4.7 million in 1980 to 11 million in 2013. To assist lawmakers in addressing the sustainability of the program, this report provides an overview of reform proposals to manage the long-term growth in the SSDI rolls. The third section investigates some of the causes of growth in SSDI, including changes in the demographic characteristics of the working-age population, changes in opportunities for work and compensation, and changes in federal policy. The fourth section examines various options to manage the growth in the SSDI rolls, namely, (1) stricter eligibility criteria, (2) improved administration of the program, (3) stronger return-to-work incentives, and (4) policies to encourage employers to help disabled workers continue to work. Many of the options discussed in this report could reduce spending by slowing or even reducing the growth of SSDI over the long term; however, such options are unlikely to produce savings in time to prevent the projected exhaustion of the DI trust fund in 2016. Like Old-Age and Survivors Insurance (OASI), SSDI is a form of social insurance that replaces a portion of a worker's earnings based on the individual's career-average earnings in jobs covered by Social Security. Specifically, SSDI provides benefits to insured workers under the full retirement age (FRA) who meet the statutory test of disability and to their eligible dependents. FRA is the age at which unreduced Social Security retirement benefits are first payable (currently 66). To meet the statutory test of disability, insured workers must be unable to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for at least one year. In 2015, the monthly SGA earnings limit is $1,090 for most workers and $1,820 for statutorily blind individuals. In general, workers must have a severe condition that prevents them from doing any kind of substantial work that exists in the national economy, taking into account age, education, and work experience. Causes of the Growth in the SSDI Rolls

Ascribing shares of the growth in the SSDI program to specific factors has engendered disagreement among researchers, advocates, and some Members of Congress. In general, people who support higher spending on SSDI focus on changes in the demographic characteristics of insured workers. In contrast, individuals who want to limit program spending typically focus on the effect of changes in the economic incentives to apply for SSDI and legislative changes to the program's eligibility criteria. Changes in the Demographic Characteristics of Insured Workers

			Growth in the Working-Age Population

One factor behind the increase in the total number of beneficiaries on SSDI is the overall growth in the working-age population ( Figure 6 ). For an overview of options to reduce benefit levels or to increase program revenues, see CBO's 2012 report, Policy Options for the Social Security Disability Insurance Program , available at https://www.cbo.gov/publication/43421 . As noted previously, while many of the proposals discussed in this report have the potential to slow or even reverse the prevalence of SSDI receipt and thus generate savings to the program over the longer term, such proposals are unlikely to produce savings in time to forestall the projected exhaustion of the DI trust fund. To avoid a 20% cut in benefits in 2016, lawmakers would likely need to enact some kind of short-term financing, such as a reallocation of the Social Security payroll tax rate or interfund borrowing. On the other hand, some people who could no longer qualify for SSDI would seek other federal support. Additionally, the agency received funding in FY2009 and FY2010 to increase the number of DDS staff by more than 2,900 employees.
Social Security Disability Insurance (SSDI) provides benefits to nonelderly workers with certain disabilities and their eligible dependents. As in Old-Age and Survivors Insurance (OASI)—Social Security's retirement program—SSDI benefits are based on a worker's past earnings. To qualify, individuals must have worked and paid Social Security taxes for a certain number of years and be unable to engage in substantial gainful activity (SGA) due to a severe mental or physical impairment that is expected to last for at least one year or result in death. In 2015, the monthly SGA earnings limit for most individuals is $1,090. In general, disabled workers must be unable to do any kind of substantial work that exists in the national economy, taking into account age, education, and work experience.
Recently, some Members of Congress and the public have expressed concern over the growth in the SSDI program. Between 1980 and 2013, the number of disabled workers and their dependents more than doubled, rising from 4.7 million to 11.0 million. This increase has placed pressure on the Disability Insurance (DI) trust fund, from which SSDI benefits are paid. Over the same period, spending on benefits increased by more than 50%, from 0.54% of gross domestic product (GDP) in 1980 to 0.84% of GDP in 2013. Without legislative action, the DI trust fund is projected to be depleted by the end of 2016. After that, ongoing tax revenues would be sufficient to pay about 80% of scheduled benefits.
Most researchers agree that changes in the demographic characteristics of the working-age population account for a large share of the growth in the number of individuals on SSDI. Demographic changes consist of (1) the aging of the baby boomers, (2) the influx of women into the labor force, and (3) the overall growth in the working-age population. However, there is considerable disagreement among researchers over how much non-demographic factors contributed to the growth. Non-demographic factors include (1) changes in opportunities for work and compensation (e.g., slow wage growth for low-skilled workers and high unemployment), (2) changes in federal policy that made it easier for some people to qualify as disabled, and (3) the rise in the full retirement age for unreduced Social Security retirement benefits. In general, people who support higher spending on SSDI focus on changes in the demographic characteristics of workers. In contrast, individuals who want to limit program spending typically focus on the effect of changes in the economic incentives to apply for SSDI and legislative changes to the program's eligibility criteria.
To assist lawmakers in addressing the sustainability of the program, this report provides an overview of proposals to manage the long-term growth in the SSDI rolls. Most of the proposals focus on reducing the inflow (enrollment) of new beneficiaries into the program. These proposals involve (1) tightening eligibility criteria, (2) improving the administration of the program, and (3) providing incentives for employers to help keep employees working when they become disabled. On the other hand, some of the proposals seek to increase the outflow (termination) of beneficiaries from the program. These proposals entail (1) providing stronger incentives for beneficiaries who can work to return to the labor force, and (2) increasing the number of periodic continuing disability reviews, which stop benefits for people found to be no longer disabled. This report does not examine options to reduce benefit levels or increase program revenues.
Although many of the options discussed in this report have the potential to slow or even reverse the growth of SSDI receipt and thus generate savings to the program over the longer term, such proposals are highly unlikely to significantly forestall the projected exhaustion of the DI trust fund. To avoid a 20% cut in benefits in late 2016, lawmakers would almost certainly have to use cash infusions to bolster the assets of the DI trust fund. For example, Congress could reallocate the Social Security payroll tax rate to give the DI trust fund a larger share (as was done in 1994), or it could authorize interfund borrowing from the OASI trust fund or Medicare's Hospital Insurance (HI) trust fund. These short-term financing options would give lawmakers more time to develop and implement some of the longer-term proposals mentioned in the report if they wished to slow the growth in the disability rolls.