It’s been a week of the new 114th Congress, with Republican majorities in both the House of Representatives and the Senate. So how are things going for disabled people so far?
It didn’t take a day for the attack on the Social Security disability insurance program to begin. According to the Associated Press, it was Congressman Tom Reed, Republican from New York, who sponsored a provision to be included in the rules setup for the House that would effectively block full funding of our disability insurance program, causing severe benefit cuts to disabled recipients as early as 2016. This was a typical legislative back-door move, slipped into what are essentially housekeeping arrangements for the upcoming session that would not seem to be the place for matters of such substance and importance to be decided without at least a debate.
Virtually all Republicans in Congress voted to do this. Democrats unanimously opposed it. The Republican majority won.
Disabled people are now caught in the partisan wars between Republicans and Democrats.
Our Social Security programs work like this: We all pay Social Security premiums through payroll withholding (FICA). We make one premium payment each pay period that covers both our disability insurance (DI) and our old-age and survivors insurance (OASI). For accounting purposes, the Social Security Administration puts the one premium payment into two separate accounts, one for DI and one for OASI. There is no magic formula for how much of the premiums paid should go into each account. The division is based on forecasting of population needs, and has been revised from time to time through the decades as the forecasts change. The Social Security Administration (SSA) likely would have reallocated the funds already but for one problem.
Congress must approve the accounting change.
The allocation we are currently struggling with was the allocation established by Congress in 1983 – over thirty years ago – when too much money was taken out of the disability insurance allocation and given to the retirement allocation. In less than ten years, that reallocation was recognized to have been based on faulty forecasting. But instead of returning to the pre-1983 allocation for a full correction, Congress in 1994 reallocated the premium payment to the two funds in a way that was known to have corrected the situation for the next twenty years, but no longer. Congress knew in 1994 that this partial correction would still cause the disability fund to come up short beginning in 2016. The retirement fund would be next to experience a shortage, but not for another fifteen years. For an excellent discussion of this history, read the July 31, 2014 report by The Center on Budget and Policy Priorities.
So 2016 is now here and the funds are exactly as predicted. It’s time to rebalance the accounts.
A simple accounting change to finally correct the 1983 misallocation, if approved by Congress this year, would provide for another twenty years of solvency for both the disability and retirement programs. But the Republican led House of Representatives has stated that it will not even discuss averting the crisis with this straightforward solution. Some price must be first exacted from the disabled. Just what that price is to be is not yet determined, but the recently submitted Coburn bill in the Senate (S.3003) and December’s report from the House Oversight Committee both give some insight. Both will be discussed in upcoming posts.