Peter Orszag, director of the White House Office of Management and Budget from 2009 to July 2010, a distinguished visiting fellow at the Council on Foreign Relations and a contributing columnist for The New York Times has shared his thoughts on what he considers one of the key challenges facing our weakened economy – the long-term unemployed workers who give up looking for work, in some cases, permanently, and who apply for disability insurance where, in a robust economy, they might have continued to stay in the work force.
The number of applications for Social Security disability has reached more than 750,000 – – an increase of more than 50% from four years ago. That is not even including all of the applications for disability coverage through employers or privately owned. Orszag correctly notes that the weak labor market is driving people who might otherwise be working or at least looking for work to apply for disability benefits.
The author points to a paper released by the Center for American Progress and the Hamilton Project argues that employers should be required to offer private disability insurance and restructure the relationship so that disabled workers would be privately financed for two years and then be able to apply for Social Security Disability Benefits.
It’s not a simple problem, and the solutions he proposes will no doubt see tremendous push-back by employers. But we’re glad that at least a dialogue is taking place, and not necessarily limited to one driven by litigation.