SSDI, which is funded through a 1.8 percent payroll tax on all workers, was recently described by the Congressional Budget Office as “not financially sustainable.” The nearby chart shows that SSDI benefit payments have soared 119 percent since 1995 in real or inflation‐adjusted terms:
What was supposed to be a narrowly tailored program to help individuals who could no longer work has blossomed into a gigantic budgetary burden that acts more like an unemployment program. Indeed, the number of individuals receiving SSDI benefits has jumped more than 10 percent in the last two recessionary years. So a large number of people seem to be abusing the system by claiming disability in order to get government handouts. What makes the problem worse is that, unlike standard unemployment insurance, there’s no time limit for how long an individual can receive SSDI.
The long‐term upward trend in real benefit payments also suggests abuse because fewer people should be having career‐ending injuries.
From a 2006 paper on SSDI by economists David Autor and Mark Duggan: