«

»

Aug 08

Print this Post

The ADAAA’s unintended consequence on the federal budget

Serious disagreements exist as to how to “solve” the “debt crisis”. Actually, the debt is simply the result of budget deficits, so the real challenge involves a mismatch between spending and taxes.

The federal entitlement program that will go broke first is getting almost no press – namely Social Security Disability Insurance (SSDI). SSDI is a payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and is designed to provide income supplements to people who are physically restricted in their ability to be employed because of a notable disability, usually a physical disability. SSDI can be supplied on either a temporary or permanent basis. Unlike Supplemental Security Income (SSI), SSDI does not depend on the income of the disabled individual receiving it. SSDI is also called Disability Insurance Benefits (DIB) and Title II benefits, named for the chapter title of the governing section of the Social Security Act.

The Social Security Administration projections, as shown in this article, show SSDI going broke fairly soon. But these projections do not take into account the Equal Employment Opportunity Commission’s changes. On March 25, 2011, the EEOC announced its “final revised Americans with Disabilities Act (ADA) regulations and accompanying interpretive guidance” to implement the ADA Amendments Act of 2008 (ADAAA). The EEOC enforces Title I of the ADA, as amended in the ADAAA, which prohibits employment discrimination on the basis of disability. These new regulations are effective on May 24, 2011. According to the EEOC,

In enacting the ADAAA, Congress made it easier for an individual seeking protection under the ADA to establish that he or she had a disability within the meaning of the statute…The EEOC regulations implement the ADAAA – in particular, Congress’s mandate that the definition of disability be construed broadly.”

This will likely have the following consequences on the SDDI program:

  1. The more friendly burden-of-proof for claimants against employers could impact the legal standard used to evaluate SSDI claims, and
  2. Any time disability claims become a bigger challenge for business, the would-be protected group is treated more cautiously by potentially employers. Those with disabilities will likely file greater SDDI claims once they face unemployment.

 

About the author

Nicole Liska

I am a Principal at Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I hold an ABD and MA in economics from the University of California, San Diego. I perform damages analyses and serve as a damages expert witness. My resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2011/08/the-adaaa%e2%80%99s-unintended-consequence-on-the-federal-budget/

1 comment

  1. Tod

    Large follower from this site, plenty of your writes have truly helped me out. Looking forward to improvements!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*