Congress’ struggle to stop the Social Security disability program from going broke next year underscores the political paralysis that lies ahead when a flood of retiring baby boomers threatens to collapse the entire entitlement system, budget watchdogs say.
Lawmakers are divided over plans to shore up the trust fund for Social Security Disability Insurance, or DI, which is projected to be exhausted by the end of 2016. If they can’t agree on a solution and allow the fund to be depleted, beneficiaries will suffer a 19 percent cut in benefits.
Robert L. Bixby, executive director of the nonpartisan budget watchdog group Concord Coalition, said lawmakers were mistakenly treating DI’s cash flow problem as a “routine matter” that can be solved by shifting funds from the Social Security account for retiree benefits, as proposed by President Obama.
“That’s wishful thinking,” Mr. Bixby said. “There is nothing ’routine’ about DI’s current problem: It’s the canary in the coal mine for Social Security as a whole.”
Indeed, the Social Security trust funds for old age and survivors’ benefits, or OASI, is on track under current law to be exhausted by 2034, triggering more severe reductions in benefits for retirees than the cuts threatened today for the 11 million Americans collecting disability checks.
“Taking some money from OASI props up DI but leaves a bigger hole in OASI,” said Mr. Bixby. “It’s better than suddenly cutting benefits by 19 percent but it just postpones the inevitable, if politically inconvenient, reforms that are needed for the system as a whole.”
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Mr. Obama’s budget proposal includes a transfer of $330 billion from the Social Security retirement fund to the disability fund that would keep both programs solvent until 2033, according to an analysis by the Congressional Budget Office.
The president’s plan also would seek to control disability insurance costs by creating a pilot program for early intervention strategies to keep people in the workforce and expanding a program that reviews cases every three to seven years to determine if a disabled person’s condition has improved enough for a return to work.
Democrats back Mr. Obama’s plan. They note that Congress has approved transfers between the two trust funds 11 times since 1968, though those moves often came with measures to improve the program’s financial footing.
House Republicans have passed a new rule that would require transfers between the trust funds to be accompanied by measures to bolster the long-term health of the programs, likely affecting eligibility and benefits.
“Regrettably, President Obama isn’t doing anything to ensure that this [crisis] never ever happens again,” Sen. Mike Enzi, Wyoming Republican and chairman of the Senate Committee on the Budget, said at a hearing last week. “His effort to paper-over the problem is a classic example of Washington ducking a real American need.”
Sen. Bernard Sanders of Vermont, the committee’s ranking member, instead that Social Security isn’t in jeopardy.
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“In my view, the debate we are having today is nothing more than a manufactured crisis which is part of the long-term Republican agenda of trying to cut Social Security,” said Mr. Sanders, an independent who caucuses with Democrats. “The Social Security Trust Fund can pay out every benefit owed to every eligible American for the next 18 years. There is no imminent crisis.”
Mr. Sanders, who is considering a 2016 presidential run, has proposed increasing Social Security taxes on the wealthy to extend the life of the trust funds by another 75 years.
Congress has to agree to a fix for the disability program by early next year or else the cuts will take effect automatically.
Some areas of agreement have emerged for reforms to the disability program, such a measures to prevent beneficiaries from collecting disability checks and unemployment checks. Mr. Obama and Capitol Hill Republicans have voiced support to stop the double dipping.
Romina Boccia, a budget expert at the conservative Heritage Foundation, expressed pessimism about the prospects for a deal that would shore up disability and retirement benefits.
“I don’t see a lot of momentum in this Congress to do that,” Ms. Boccia said. “Unfortunately, the way politics tends to operate is that politicians wait until that moment, until that crisis moment, when they can no longer look the other way and they are forced to deal with the issues.”
“It is just very difficult in this environment,” she said. “There is just very little opportunity for bipartisan agreement and that’s what you need, and also popular support for some of these changes that are necessary if you don’t want a permanently bigger government that consumes a greater share of our economic product, because that is the course that we are on right now.”
• S.A. Miller can be reached at smiller@washingtontimes.com.
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