Nov 10, 2015

Congress Kicks Can Down the Road on Social Security Reform — But Not Very Far

Post by Mary Kate Hopkins

When Congress approved the two-year budget deal on November 7, members of Congress who supported the bill on both sides of the aisle gave themselves a pat on the back for making what were described as significant reforms to the Social Security Disability Insurance (SSDI) program, which was on track to go bankrupt next year.

The only problem? They didn’t really change anything.

The tweaks that were made to the program do not address systematic problems or set SSDI on the path to sustainability. In fact, the only reason the deal extends the life of the disability benefit program is because it siphons funds from the Social Security fund for retirees. The deal transfers $117 billion from the retiree trust fund, which was already projected to become insolvent by 2035.

These minor reforms and bailouts from Social Security haven’t put disability on the path to stability. The trust fund is facing a projected $340 billion shortfall over the next ten years, but according to the Congressional Budget Office (CBO) reforms in this budget deal will only end up reducing spending by $4.4 billion over the same period of time. Despite cheering from Republicans and Democrats in Washington, SSDI remains on an unsustainable course.

trivialreforms

How has Congress let it get to this point? In order to understand the current problems facing SSDI, we must look to the program’s history.

SSDI was created in 1956 to provide monthly payments to workers with debilitating physical or mental conditions. However, eligibility standards have been modified, leading to a rapid growth in the number of Americans who utilize the program. The recent recession saw the number of participants increase as well. As such, enrollment has ballooned far beyond official projections, and so have the costs.

From 1990-2006, the number of beneficiaries on SSDI doubled. Currently, there are over 10 million Americans receiving SSDI funds. This means that the cost to American taxpayers has skyrocketed in recent years, reaching a staggering $141.7 billion in 2014.

Don’t let politicians fool you—the Social Security Disability Insurance program is still in desperate need of reform. The recent budget deal only slightly delayed the inevitable insolvency facing the program in its current state. Comprehensive reforms must include addressing the fraud and abuse in the administrative law judge system that deals with appeals from applicants who were denied benefits, and reworking the eligibility standards for the program (currently based on 30 year old data).

This program, like so many federal assistance programs, is on a path to insolvency and no amount of cosmetic changes will get the program out of trouble. Future generations stand to inherit a bankrupt country unless sensible action is taken. The disability program is an important place to start.