A heroic first responder is injured on the job and ends up permanently disabled. Should he be able to retire on a decent pension? Almost everyone would say yes. But it turns out that programs that pay extra for alleged disabilities are subject to unbelievable amounts of systematic overpayment if not outright fraud.
Examples are legion. The latest comes from the front page of yesterday's New York Times, which reports that the New York City Department of Health has just issued a very large study comparing cancer incidence in World Trade Center responders versus the general public. Result: no evidence of heightened risk of cancer in the WTC responders.
Oops, that was the wrong answer. They studied over 55,000 people, and seem to have done very careful work. Meanwhile, the New York and New Jersey Congressional delegations spent years trying to get Federal payouts for WTC responders who had subsequently contracted cancer. After failing in several efforts, they finally broke a Senate filibuster and got the so-called "Zadroga" Act passed in the lame duck session after the big Republican election victory in 2010. The Zadroga Act opened up the WTC victims compensation fund -- the spigot of Federal dollars -- to additional categories of people, including potentially those who subsequently contracted cancer. It then went to the National Institute of Occupational Safety and Health to decide which cancers to include. NIOSH issued the list, including most every form of cancer, just two months ago, in October 2012. And now the New York City Department of Health comes along to spoil the party with an actual study. Who wants to take bets on whether the payments go forward anyway?
And by the way, who was Zadroga? He was a New York City policeman who was a first responder at the WTC and died in 2007 of lung disease at the age of 34. That certainly sounds like a compelling case for compensation. Oops again: the New York City Medical Examiner's office did an autopsy and determined that his lung disease and death were caused by self-injection of prescription drugs. But that didn't stop Zadroga from becoming the poster child for expanded compensation programs for former Ground Zero workers who have contracted cancer or respiratory disease. Besides the Federal act named after him, there is also a New York State law, passed in 2006, making cancer and respiratory disease in Ground Zero workers a presumptive ground to get a disability pension. A disability pension carries enhanced payouts and also exemption from state and local income taxes as compared to a regular pension. In other words, billions of dollars of extra payouts, and now it turns out that there is no basis for the causal connection.
The more you look at disability pensions the worse it gets. Here is an article from the New York Post in March 2012 reporting that some three-quarters of New York City firemen who retire get disability pensions. Does anyone think that could possibly be honest? The article focuses on the story of one Cliff Stabner, retired since 2003 on a New York City disability pension of $95,000 per year, who now works as an emergency worker at NASCAR races. Wait, we thought he was disabled!
But of course the 75% "disability" rate of New York City firemen is small time compared to the rate of Long Island Rail Road workers, which was more like 97% for years until someone thought to actually take a look. Turns out almost all of them are fraudulent.
Nor is this confined to New York. Here's a report from Quincy, Massachusetts in 2009. The best vignette: