Welfare: Drunkard's Dream

The dangers of government aid for substance abusers


Not every bad government program strews corpses behind for people to find. But Bob Coté has stumbled upon a few that he lays at the feet of the Social Security Administration's Supplemental Security Income program. Coté runs Step 13, a Denver shelter for "street people," as he unsentimentally calls them. He reels off some names of the victims of a program he calls "killing people on the installment plan."

Through the innocent-sounding Supplemental Security Income program, the federal government is "the country's largest supplier of alcohol and drugs to addicts," Coté charges. And that alcohol and those drugs often kill their users, as well as leaving them prey to a violent street culture that leaves many battered bodies for every dead one.

The program began in 1974 as a supplement to the 1956 Social Security Disability Insurance program, which gave disability relief money only to those who had paid in to the Social Security tax fund. SSI, unlike Social Security Disability Insurance, comes out of general Treasury funds, and you needn't have paid in money beforehand to cash in. You just have to be destitute and disabled, according to government definition.

The deadly rub, say Coté and congressional critics, is that alcoholics and drug addicts meet that definition. This has led to greater and greater amounts of federal money going to an "aid" program that subsidizes potentially deadly habits, is expanding ever more rapidly (often through fraud), and shows no evidence of helping any of its disabled charges to mainstream. Attempts at congressional reform have begun, but they have not gone nearly far enough and could easily be stymied by bureaucratic and judicial activism.

Coté's Step 13 accepts no government money. He complains that a liquor store down the street gets the equivalent of his $210,000 yearly budget in SSI money from drunks. SSI demands that a third party receive and disburse the dole money for drug addicts and alcoholics (DA&A, in SSI lingo); unfortunately, in many cases that third party is a drug dealer, liquor store, or flophouse runner. The first of the month, when the SSI checks come in, is eagerly awaited as "Christmas Day" by Denver's street people.

It's a day of mayhem and violence as well. Street criminals are well aware there are plenty of drunks wandering around then, pockets bulging with cash. "Someone's always sticking another one to get what's left," says Coté. "I know one guy, he gets beat up every month for his SSI check. He doesn't have his check any longer than four hours. He picks it up at a clinic, goes to the bar–in later stages of alcoholism it just takes one or two drinks to get 'em going–as soon as he goes to the bathroom, street pirates are all over the place, beat him up and take the rest. I ask him, 'Bob, how many times does this have to happen to you?'"

It can only keep happening for three more years. Maybe.

In response to press reports of abuses of the program–convicts getting on SSI in prison, unscrupulous translators coaching immigrants to fake disability, children encouraged by their parents to act crazy to climb aboard the gravy train–and testimony from people like Coté, Congress last year passed a reform bill imposing a 36-month limit on getting SSI cash just for being a drunk or drug addict. The bill also toughened, on paper, fraud controls and requires, again on paper, more reviews of past claimants to make sure they still belong on the rolls.

Congress is demanding 100,000 reviews a year from 1996­–98, plus a review of everyone on the children's rolls who hits age 18—standards the Social Security Administration has never been able to meet in the past. SSA spokesman Tom Marganau complains there is no increased funding for the reviews, which cost on average $1,000 per case. Whatever their upfront costs, the reviews promise big dividends down the line; SSA estimates $4.00 in lifetime savings for every dollar spent on case reviews.

The reviews are important not only to check on changed circumstances, but also to double-check on past fraud. In a paper done for the Cato Institute, Christopher Wright, publisher of Activists Online on the World Wide Web, has gathered many fraud reports, both from government watchdogs and the press.

Such cases include Cambodian interpreters in Southern California coaching recent immigrants on how to fake mental disability during interviews and providing them with bogus psychiatric testimony, and a clever New Yorker who pretended to be, alternately, a psychiatrist, neurologist, and attorney in order to funnel multiple SSI claims to himself. Some investigations and press reports suggest that the use of crooked translators and third-party helpers in getting SSI cash is widespread, but the government's own statistics on fraud have been stagnant since 1985″—largely attributable to insufficient monitoring and enforcement," says Wright. The program's enormous growth since 1985 makes a steady fraud amount unlikely.

The main impetus for third-party fraud is the back payments you can get when you're accepted on SSI, dating to when you first applied. You can make big money helping people get on the rolls, fraudulently or not. Coté was enraged by a billboard across from his shelter placed by a law firm "poverty pimps"–encouraging people to use the firm for help in getting on the SSI dole, for a percentage of the back benefits. These huge lump-sum giveaways, which can amount to tens of thousands of dollars, can lead, Coté says, to often-fatal drinking and drug binges. After the billboard appeared in a newspaper story on SSI, the sign was taken down. Here in Los Angeles, I regularly hear radio ads for a firm encouraging people to come to them for help in getting on SSI.

There's a big "but" in the new congressionally mandated 36-month limit for DA&As. If you can prove any other psychiatric or physical disability–and often long-term drunks or drug addicts have made themselves sick–you can get back on the rolls under that category. Even now, there are plenty of substance abusers on the rolls for reasons other than their substance abuse, and the 36-month limit doesn't apply to them. But the possibility of their using the dole money to support damaging habits still remains.

So last year's reforms don't go nearly far enough toward ending the federal subsidization of self-damaging habits. Congress is mulling further reforms this year that might do better. The initial House bill eliminates the DA&A category and gives drug treatment money to the states instead, kicks off most noncitizens, and toughens requirements for children getting on the rolls. A bill from the Senate Finance Committee going to the floor at press time also restricts payments to DA&A and noncitizen categories. Other possibilities to stem SSI growth include sending the whole program back to the states in block grants or establishing a flexible ceiling with adjustments only for inflation and population growth. It's too early to say what's going to happen right now. But with last year's action and this year's talk, the program is beginning to feel embattled.

For good reason. SSI has been ballooning beyond any expectations. Just from 1987­–93, the number of under-65 SSI clients rose 65 percent, from 2.3 million to more than 3.8 million. And the percentage of DA&As has skyrocketed in the past decade. In 1984, there were only 4,021 such on SSI. In 1991, there were 33,869; and then in just two years the number more than doubled, to 78,730 in 1993; the 1994 estimate is 101,000. That's a small percentage of the total, but it's still a lot of drunks to support. (The bulk of the others on SSI are not traditional disabilities like blindness or lack of mobility, either; 57 percent on the SSI dole are there for mental disorders.) The rise in DA&As isn't hard to figure out from talking to Coté: SSI is a drunkard's dream if I ever did see one, and Coté talks contemptuously of SSI gatekeepers with "their masters in sociology coming up against guys with doctorates in streetology."

What has caused this phenomenal program growth? Even SSA researchers rule out more bleeding-heart answers such as a worsening economy driving more disabled into penury. The real reasons seem to be typical of the modern welfare state: self-perpetuating bureaucracies more interested in serving their perceived client base than the taxpaying commonweal, and judicial action spreading entitlement rights further than lawmakers envisioned.

The main reason SSI rolls are exploding is that SSI spends millions beating the bushes for new clients. Congress gave SSI $21 million in 1990 for a multiyear outreach project. Much of that money went to various local advocacy groups to find disabled people and guide them through the application process. Coté first found out about SSI from pamphlets being distributed by suited gentlemen to his skid-row clientele. Funding interested activists to help balloon government aid rolls is one government program that works just as planned.

The institutional mindset, as SSA's Marganau explains it, has never been to streamline costs or keep the program at a manageable level; it has been that "there weren't as many people on the program as are potentially entitled. SSA wasn't doing enough to go out and find them, encourage them to sign up." SSA this year announced an entirely new application procedure that it says will save lots of money, but that calculation is based on the assumption that making the application process easier will not increase the number of people on the program.

But proposed reforms set forth in the SSA's Fall 1994 Social Security Bulletin seem designed to do just that. They include making sure SSI information packets are more widely available to advocacy groups; encouraging "interested third parties…to participate in the development of claims" and then letting them do all the interviewing, checking of medical records, and form filing with only cursory occasional monitoring from SSA; not requiring face-to-face interviews with claimants; ensuring that disability claims workers never "discourage a claimant from filing an application" and go out of their way to ensure people don't "inappropriately withdraw" from applying. All of these reforms, of course, "cannot be implemented without the full funding, development, and installation of a new case processing computer system." The end result is unlikely to be a cheaper, leaner program.

The point of these programs, proponents say, is not to be cheap, but to help those who need help. But giving people debilitated by alcohol and drugs money to buy more is in no way helping them. While SSI theoretically requires its charges to go to treatment, the General Accounting Office found that only one in five actually went, and of course such treatment is not always effective.

The federal government's vocational rehabilitation program for the disabled doesn't really help either, says a 1993 GAO study. GAO looked at around 865,000 rehab candidates from 1980 and traced them both before and after the program. It found that any "gains in economic status made by clients rehabilitated in 1980 were quite temporary. [Among those] classified as rehabilitated…after 2 years the proportion with any earnings from wages returned to near or below pre-program levels." And those were the clients who were considered rehabilitated; many going through the program were not. GAO estimates that "not more than 1 out of every 1,000 DI and SSI beneficiaries leaves the rolls as a result of SSA's return-to-work assistance." Only one out of 200 beneficiaries of the two programs are even sent to vocational rehab.

The courts are another petri dish for runaway program growth. The 1990 Supreme Court case Sullivan v. Zebley widened the standards for letting children on the rolls. As a result, the number of children on SSI rose 191 percent from 1987­–93; not only were future applications affected, but past denials are being reviewed under the new standards. In the early '80s, the Reagan administration tried kicking 490,000 people off the SSI and DI rolls. The results? First, lawsuits galore, with hundreds of thousands who had been kicked off SSI being kicked back on again by judges, and then the 1984 Social Security Benefits Reform Act that cemented into law new barriers to kicking anyone off again.

The same thing could well happen after any new reform. Congress, for example, could decide to kick noncitizens off the rolls. But as Christopher Wright points out, courts have generally taken a dim view of restricting noncitizens, who are still taxpayers, from enjoying taxpayer benefits on an equal basis.

The details of the SSA's proposed program reforms, the Zebley decision, and the Reagan-era experience in attempting to clean the stables of SSI all make any short-term optimism about meaningful control over the program doubtful; what the legislature achieves, the bureaucrats and judges can undo.

Still, SSI's current growth trend can't go on forever. Wright projects SSI costs rising 60 percent by 2000 from its 1994 $22 billion price tag, and the SSA considered 2.7 million new applications in fiscal 1994. One way or another, the program must change. As a separate program for the disabled poor, it has been a total failure. It doesn't do anything effective to change their situation and in many cases helps them to destroy themselves. But meaningful change is unlikely to come before Bob Coté discovers the corpses of more of his charges.

"I try to fix people, not just feed 'em," he says. "The bar down the street gets almost my budget from the government to kill them."