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WORKERS COMPENSATION, FEDERALISM, - page 19 / 43

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Washington saw no good reason why identically disabled workers in Georgia and California, or any other state, should be treated differently. They saw no good reason why the government should limit coverage to disabilities “arising out of and in the course of” employment, as stipulated by states’ compensation laws. Someone who accidently fell at home while repairing a roof was as much in need of help as someone who fell while building a roof at a construction site. Indeed, one of the fundamental sources of friction in workers’ compensation had been the need to prove that a given injury was work-related: employers and insurers regularly denied claims because the injuries were deemed to have occurred away from the job; workers regularly accused them of violating the law; and the disputes ended up before a state commission or court.

The logical thing to do was create a single national disability program, with uniform benefits and no distinction between occupational and nonoccupational injuries. There was some initial support for this path. In 1938-39, President Roosevelt’s Interdepartmental Committee to Coordinate Health and Welfare Activities surveyed the nation’s health needs and issued five major policy recommendations. One of these was for “Federal action to develop a program of compensation for wage loss due to temporary and permanent disability,” regardless of the source of disability (Altmeyer 1966: 95). Because the Committee included senior officials from the Treasury and Labor Departments, substantial change to workers’ compensation now had advocates in Washington that had been absent in 1934-35.

Policy makers ignored these proposals and decided instead to design a more limited disability program that would operate alongside workers’ compensation. Why the shift? The answer starts with the Social Security Board,20 which was not represented on the Interdepartmental Committee, but which was the main engine for expanding social insurance programs within the administration. Social Security officials preferred a more incremental approach to reform, one designed to dampen opposition from conservative politicians, special interests, and a public still suspicious of big government (Altmeyer 1966; Derthick 1979). In the process of designing disability insurance, they picked their battles carefully.

The early signs were that any form of disability insurance would meet considerable resistance. In its 1938 report to the Senate Finance Committee, the Advisory Council on Social Security was divided over the desirability of national action. Some Council members worried that DI would depart from old age insurance in several respects: its costs would be less predictable; disability determination would require more subjective judgments than verification of age and work history; and medical expertise would be required to determine eligibility. To address these concerns, Social Security officials limited their proposals in the 1940s to the permanently and totally disabled. In 1948, the Advisory Council further stipulated that eligibility for the disability program depend on “recent and substantive attachment to the labor market,” and that benefits be paid only after

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