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Better than a market solution for SSDI?

The critics of Social Security like to suggest that everyone would be better off if Social Security allowed some form of a "market solution" that would hopefully generate a greater return on the funds invested. Of course, the difficulty with the market solution was demonstrated in 2000 and 2008 when the dot.com and real estate bubbles burst and took with them vast sums of the stock market's valuation.

Many people with primarily "market solution" retirement savings witnessed what happens when a bubble bursts and with it, their hopes for an early or any, retirement. The fundamental purpose the Social Security retirement and the Social Security disability insurance programs, is to provide a secure safety net for many Americans. 

When reviewing some material from the Social Security Administration (SSA), we noticed a fact that seemed to offer Congress one way to maximize the dollars it allocates to the SSA. The agency's anti-fraud program has proven to be very effective at preventing fraud and helping to ensure that SSDI benefits are paid to those who are genuinely disabled.

The SSA's internal fraud prevention program was able to proactively stop $340 million in attempted claims by those using fraud. This program generated a much better return on the dollar than any Wall Street investment scheme, with every $1 spent on the program, it returned $17.

For all those members of Congress who criticize the SSDI program as being rife with fraud, it seems obvious what they should do. They should earmark a special budget item to significantly increase the funding for this program, thereby earning the SSA a better than market rate return and helping ensure more funds are available for the disabled.

SSA.gov, "The Facts About Social Security’s Disability Program," May 2014

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Pennsylvania Bar Association Philadelphia Bar Co-Chair SSD Committee Philadelphia Bar Co-Chair SSD Committee