Modest Disability Fund Fix Will Test The GOP’s Appetite For Governing

Isaiah J. Poole

Republican Party, on January you’ll control both houses of Congress and will want to show that you can use that control to actually get things done, and not just use it to hate on all things Obama. The opportunities to do that will be legion, but here’s one thing on the to-do list that should be simple, and you’ll put at ease millions of people who are receiving Social Security disability insurance.

As noted in a report released Tuesday by the Center for Budget and Policy Priorities, the Social Security Disability Insurance (DI) trust fund needs to be replenished before the end of 2016. “That necessity comes as no surprise and does not pose a crisis,” the report said, “and policymakers can address it with a simple, time-honored solution: boosting DI’s share of the Social Security payroll tax, which also funds retirement benefits.”

Paul N. Van de Water, one of the authors of the report, told me that a bill to do just that would likely be introduced in Congress next year. But right-wing opponents have a head-start in poisoning the political climate for that bill. The Heritage Foundation issued a broadside this summer that asserted right in its headline that such a reallocation would “rob Social Security and prevent necessary disability insurance reforms.” Their “necessary” reforms would, as you might expect, strive to sharply limit the ability of people with disabilities to obtain benefits.

But the “robbery” charge is laughable in the context of the 11 times since 1968 that Congress has moved money between the disability insurance fund and what’s commonly known as the Social Security trust fund (technically Old-Age and Survivors Insurance, or OASI). These transfers have since the 1980s maintained a roughly five-to-one balance between the larger Social Security fund and the disability fund. If anything, the report said, “past reallocations have left DI underfunded” – most notably a 1983 change that lowered the share of the payroll tax going to disability in order to keep solvent the Social Security program.

The change envisioned in the CBPP report would mean that, assuming Congress did nothing else, both the disability and Social Security funds would be able to pay full benefits through 2033. That would shorten by about a year the ability of the Social Security fund to pay full benefits under current law. Still, that should be an easy call for a Congress focused on governing: Take the short-term step now to address the disability fund shortfall, then work through what’s needed for the long-term viability of both funds.

The long-term trust fund solvency issue may be a harder lift politically in the fevered political swamp of Capitol Hill (although it really isn’t outside the Beltway). But it’s not so complicated: “According to the program’s actuaries, increasing real wage growth by 0.5 percentage points would close about one-quarter of Social Security’s 75-year deficit,” Van de Water said, and the rest could be closed by making high-wage workers pay the same share of their income into Social Security that low-wage and middle-class workers pay.

In other words, creating more jobs with good wages – ensuring that working people share more of the fruits of economic growth – and making payroll taxes more fair would make the Social Security and disability programs solvent for decades to come – without increasing the retirement age or making it harder for people with disabilities to qualify for benefits.

But first, let’s see if Republicans have the governance capacity to make a small adjustment to extend the life of the disability insurance program – or if they revert to demagoguery and obstruction.

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