A technical rule change engineered by House Republicans on the first day of the new Congress may signal the beginning of a major battle over the future of the Social Security Disability program—and, more broadly, other federal programs for people with disabilities.
The immediate issue is the fate of the SSDI trust fund, which is expected to become exhausted in 2016. If new funding is not found, SSDI benefits will be cut by about 20 percent for 9 million workers, 2 million of their children, and about 160,000 spouses.
Until recently, disability advocates were confident that Congress would address the problem simply by shifting funds from the retirement portion of Social Security to the SSDI program. This would hardly be unusual. Congress has transferred money between the Social Security funds frequently over the past half century, sometimes moving payroll tax revenues from the retirement program to the disability fund, sometimes shifting them the other way.
But yesterday, the House moved to foreclose any transfer back to SSDI. An obscure package of procedural rules approved by a nearly party-line vote barred lawmakers from using retirement funds to support the disability program unless changes to the overall Social Security system result in a more stable trust fund. This isn’t the last word. House rules can always be waived and, in practice, often are. But it is a strong signal the GOP leadership wants to use SSDI’s coming insolvency as an opportunity to remake the program.
SSDI largely benefits older workers—70 percent of those on the program are 50 or older and one-third are at least 60. On average, recipients received about $1,150-a-month in 2014. That was only slightly above the $11,670 annual poverty-level income for a single individual and below poverty for a two-person household.
While the program is a critical safety net for working age people who become disabled, it has serious funding and design problems. Just cutting the program is no solution. But neither is preserving the status quo.
To start, it is important to recognize that SSDI’s share of the payroll tax has not kept up with costs.
In recent years, more workers have gone on the rolls. In part, this is because changing demographics have made more people eligible: As the Baby Boomers age, they are more likely to become disabled, and more women have worked enough to be eligible for the program. Those trends should surprise no-one and need to be acknowledged.
In addition, Congress has raised the eligibility age for full Social Security benefits, which means that some people will stay on disability for longer. And changing rules have made it easier for some people with diseases such as depression to claim benefits.
At the same time, the Great Recession may have increased the disability rolls. This remains a matter of uncertainty, but it appears that many more people apply for disability when the economy slows. While smaller percentage of these workers are approved than in a strong economy, the absolute number of people on disability probably increases.
But it is also important to recognize that the program is poorly run. Many people who should not get benefits do. And many who should do not. It takes far too long for the program to process applications. And the program is a powerful disincentive to work—a problem that should trouble both liberals and conservatives.
While SSDI recipients are allowed to earn some money once they become eligible for benefits, they risk losing asistance if they make more than about $1,100-a-month. They may also lose Medicare benefits. Thus, few ever go back to work at all.
The program can be fixed. Back in 2013, I moderated a panel discussion where experts agreed on several solutions, from job training to incentives that encourage employers to retain disabled workers.
Until now, many disability advocates are been unwilling to engage in a debate over SSDI, fearing that any effort to reform the program would only result in benefit cuts. And some conservatives are indeed only interested in cutting the program. But there are people across the political spectrum who are honestly looking for ways to improve SSDI. The time for reaching a consensus is growing short. It is a critical opportunity for all parties to find ways to fix the program, not just cut it.