In the United States, if a citizen has a dispute with an executive agency, they can take the dispute in front of an administrative law judge (ALJ). The judge is supposed to act as a neutral arbiter in resolving the dispute. For example, if the Social Security Administration (SSA) denies someone disabilities benefits, that person can appeal the decision, and an ALJ is supposed to either award or deny the claim based solely on the facts of the case.
The Office of Personnel Management (OPM) has tried to ensure ALJs remain neutral agents. The OPM has established rules and procedures that try to ensure that executive agencies only select neutral judges. To address this issue, ALJs are appointed to different positions based on how they well they do on an Administrative Law Judge examination, not based on their political preferences. In addition, judges are not supposed to have the incentive to become biased in any way after the agencies select them. To address this issue, after agencies select judges, the agencies are not supposed to influence the judges’ decision-making. ALJs are only supposed to make decisions based on the facts of the cases.
If ALJs are neutral, then (1) ALJs should always make decisions based on the rules and the facts of the case and (2) the local political preferences where the ALJs hear cases should not be related to the judges’ decisions. For the ALJs in the SSA’s disabilities claims division, this is not the case. Not only have some ALJs denied legitimate disability claims, local political preferences are correlated with ALJs decisions. I discuss these two issues below.
Politicizing Social Security Disability Benefits
Although paying into Social Security Disability Benefits is mandatory for workers in the US, being able to receive benefits from the program is very difficult. To receive disability benefits, a person must have paid into Social Security and must have a medical condition that prevents them from working any job for an extended time frame (this includes not being able to fold laundry or bag groceries). Since the standard to receive benefits is so high, the SSA denies most claims. According to Graph 1 at the beginning of this post, in 2013, the SSA only awarded 39% of claims in 2012.
Even though it is difficult to receive disability benefits, and even though millions of Americans pay into the program every year, the program is not self-sustaining. It will run out of funds in 2016. As a result, the SSA has restructured the program in several ways to make it even harder for individuals to receive benefits (supposedly to prevent fraud and save resources). First, the SSA is now hiring more ALJs that were former employees of the SSA. This could give the SSA the opportunity to choose ALJ applicants who are more likely to deny cases, as the SSA can review their records as SSA employees. Second, the SSA makes the approval/denial rate of each judge publicly available. This could pressure judges to deny more cases, especially if they reside in a conservative state.
In the last few years, since these changes have taken place, the approval rate for disability benefits claims have gone down. Does this mean that the SSA is getting better at screening applicants who should not receive benefits? Not necessarily—there are several examples of ALJs denying legitimate claims. For example, in one case, an ALJ denied a claim of a 28 year old woman with degenerative disc disease based on the opinion of two court appointed doctors—a pediatrician and an anesthesiologist— neither of whom were experts in spinal cord problems. In another case, an ALJ denied a claim from a man with Huntington’s disease, a debilitating and fatal disease. He should have been approved for benefits. Additionally, the SSA’s disability program is so notoriously bad at helping disabled workers that even the American Cancer Society cautions cancer patients not to rely on the program for financial assistance.
It seems apparent that ALJs are awarding fewer legitimate claims as time progresses. This could be partially due to an increase in the number of former SSA employees becoming judges. It can also be because ALJs are overworked, and hence are more likely to make mistakes. However, it is also possible that ALJs feel public pressure to deny claims since their case approval rates are public record. To address this claim, I gathered data from the SSA’s public data files on all ALJs’ approval rates from the last year. To measure partisanship in each state where each ALJ resides, I also gathered data on the percentage of votes President Obama received in each state in 2012. I expected that ALJs in more conservative states were more likely to deny claims than ALJs in more liberal states.
The data provide support for the claim that ALJs in conservative states deny more claims than ALJs in liberal states. The average approval rate in a “Romney 2012” state was 51.1%, whereas the average approval rate in an “Obama 2012” state was 55.1%. In addition, when I regressed Obama’s vote percentage in a state against an ALJ’s approval rate, the coefficient was statistically significant at the 0.001 level. Moreover, after controlling for interoffice and interstate variance, the effect of partisanship on approval rates remained statistically significant. The results suggested that a 4% point increase in an Obama vote share in a state led to about a 1% increase in an ALJ’s approval rate. Within the data, that meant that an ALJ could have anywhere between a 47% approval rating to a 64% approval rating based on the partisan makeup of voters in a state.
The Social Security disability benefits program seems to be in decline. Employees are forced to pay into the program, but it seems unlikely that they will ever benefit from the program. Not only is the program financially insolvable at this point, the structure of the program makes it difficult for anyone to receive a claim, even if they are terminally ill. Those who do receive benefits may be lucky enough to get a judge that lives in a more liberal state. As a result, the future of the disability benefits program seems dim. In addition, the structure of the ALJ system within the SSA provides a good example as to why the decisions of ALJs should be not subject to public opinion. If ALJs are supposed to make neutral decisions, they should not have to worry about public pressure to approve or deny more cases.