Policy Analysis No. 224

SSI: The Black Hole of the Welfare State

By Christopher Wright
April 27, 1995

Executive Summary

Congress is finally reforming the Supplemental Security Income (SSI) program. Unfortunately, the reforms currently under consideration fall far short of the dramatic overhaul that open-ended entitlement program needs.

SSI is one of the fastest growing welfare programs in the federal budget, and its costs are projected to accelerate by another 60 percent by 2000. SSI was originally designed to provide a safety net for low-income senior citizens, but it is now experiencing spectacular growth in recently eligible population groups, including drug addicts, the mentally ill, immigrants, and children. Government projections indicate that between 1990 and 2000 the number of immigrants on SSI will have grown fivefold and the number of drug addicts and alcoholics eightfold.

Many of the House Republican proposals, such as ending SSI for immigrants, are sensible, but they are insufficient to cap SSI’s skyrocketing costs. Some of the SSI reforms recommended in this study include the following: (1) terminating automatic cost-of-living increases for SSI, (2) eliminating lump-sum payments to SSI recipients, (3) ending all childhood disability benefits, (4) creating an enrollment cap, (5) scaling back mental impairment benefits, and (6) ultimately privatizing disability insurance.

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Christopher M. Wright is a lawyer in Alexandria, Virginia, and publisher of The Deficit Letter andActivists Online.