The Two-Income Trap - Elizabeth Warren [49]
In addition, under the current SSDI guidelines, the disability must be so severe that the individual is unable to perform any job anywhere in the entire country, not just the job for which the worker is trained and has spent a lifetime building skills and qualifications. This means that someone who had worked for decades as an electrician or as a surgeon, but who developed a disability that prevented him from performing those duties, would not receive a single dime if he were deemed well enough to work as a telemarketer or a toll collector. The SSDI program could be modified to provide a sliding benefit depending on the level of disability (akin to many private disability policies), and temporary benefits could be offered while the worker undergoes retraining.
Universal, state-sponsored disability benefits would be ideal to fill the gap in the safety net. But families don’t have to sit back and wait for the government to take action; they can purchase insurance in the private market, either through their employers or on their own. Expanded coverage won’t protect families against every danger. A disability policy wouldn’t have saved Carmen and Mike (from chapter 3), because it covers only workers who fall ill, not those who must take time off to care for other family members. But it could make a very big dent in the risks facing many families. We estimate that universal, comprehensive disability coverage could help as many as 300,000 families avoid the bankruptcy courts every year—and hundreds of thousands more who are on the brink of collapse.62
Similarly, a couple can purchase a long-term-care insurance policy for themselves—or for their aging parents—that covers both home health and nursing home care. Today, fewer than 10 percent of the nation’s elderly have purchased private insurance to protect themselves against the risk that they will someday need long-term care, and even fewer working-age adults are covered.63 Once again, these policies don’t provide coverage against every possible contingency, but they offer another way for a family to mitigate one of life’s dangers.
The solutions we propose here wouldn’t be free to taxpayers, and the private market for insurance is far from perfect. On the other hand, these proposals aren’t all that radical either. We haven’t suggested a complete overhaul of the tax structure, and we haven’t demanded that businesses cease and desist from ever closing another plant or firing another worker. Nor have we suggested that the United States should build a quasi-socialist safety net to rival the European model. All of the solutions we have proposed thus far—creating tax incentives for saving, expanding state-funded disability coverage, and encouraging families to insure themselves against an uncertain future—can be implemented within America’s current blend of public and private systems without drastic changes or massive tax increases.
The Myth
When Orrin Hatch claims that the real change needed in America is for individuals to “take personal responsibility for their debts,”64 we are left to wonder exactly what he has in mind. Should people take more responsibility for losing their jobs or for having heart attacks? Or does he mean that “responsible” families should sell their homes and move into the street as soon as they are laid off so they run no risk of falling behind on the mortgage or owing money to a landlord? Many of the families we studied lead lives