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Social Security Could Decide Who Controls Congress
Social Security

Social Security Could Decide Who Controls Congress

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The narrative has become all too familiar. What legislators might once have treated as a routine vote to extend the solvency of a pre-existing government fund becomes a polarizing issue. (Just see last year’s federal government shutdown.) And that's likely to be the fate of Social Security Disability Insurance (SSDI)the taxpayer-funded benefits available to the 8.9 million disabled Americans who qualify. Unless Congress reallocates Social Security funds or increases the percentage of payroll taxes that go to cover SSDI, most estimates predict the program’s trust fund reserves will run out by 2016, leaving it to rely solely on tax revenue and to fall short of the necessary funding by about 20 percentthus threatening the well-being of millions who rely on SSDI for food, medical bills, and other living expenses.

According to Rebecca Vallas, associate director of the Center for American Progress’s Poverty to Prosperity Project, the deadline for taking action is “whenever the reserves in the trust fund are depleted”although the exact time that happens is unclear. A deadline of 2016, though, would seem to give Congress at least some time for action. But SSDI has become a political flashpoint, so its fate will likely come down to which party blinks first. Many Republicans are wary of suggesting cuts to popular retirement benefitseven though they have, in the past, advocated for a privatization of the social safety netso are instead targeting SSDI. Just as they did with the phantom welfare queens of decades past, Republicans argue that SSDI beneficiaries are the perpetrators of the waste and abuse they claim afflicts the entire system. And while the debate is, on the surface, about SSDI, it’s really about the whole of Social Security. By attacking SSDI specifically, Republicans seem to think they can start dismantling the larger program without openly targeting it.

This in turn has pushed Democrats up for election this November to be markedly outspoken on their support for the expansion of Social Security benefits. The partisan politicization of Social Security is nothing new, but Democratic observers see the willingness to champion the program by party candidatesrather than simply defend it from further cutsas a favorable development (even as Republican tactics for dismantling it become ever more oblique).

 

SSDI is one of the two major trust funds that comprise Social Security (the other being the Old Age and Survivors Insurance (OASI) fund). SSDI protects more than nine out of every ten American workers and their families should a disability or illness prevent them from engaging in substantial work. The 8.9 million beneficiaries include more than one million veterans. Benefits also go to about 157,000 spouses and to nearly two million children of disabled workers. 

OASI and SSDI are technically separate, but Congress can choose to reallocate their respective tax revenues and/or adjust their respective tax rates. That way, if one fund is receiving more revenue than it needs and the other is receiving less, the fund unable to meet costs can remain solvent, without ever increasing the overall fiscal burden on taxpayers. SSDI was established in 1957, and since then, OASI and SSDI tax rates have been reallocated eleven times, most recently in 1994. Reallocation, according to the nonpartisan Center on Budget and Policy Priorities, is “a traditional and noncontroversial action that has occurred many times in the past.” 

At the time of the last reallocation in 1994, it was projected that the fund’s reserves would be depleted by 2016, putting us on the path to our current predicament: 

Recent projections have confirmed the likelihood of this projection if no action is taken. 

 

With this deadline likely in mind, over the last few months, top conservatives have done their best to portray beneficiaries of disability insurance as fraudulent freeloaderswhich, if successful, would help build consensus around the idea that an overall reduction in Social Security benefits is in taxpayers’ best interests. Last month, California Representative and Chairman of the House Oversight Committee Darrell Issa claimed that hundreds of thousands of people were wrongfully receiving SSDI benefits as a result of the excessive clemency of three Social Security administrative law judges. He released a report entitled “Systemic Waste and Abuse at the Social Security Administration: How Rubber-Stamping Disability Judges Cost Hundreds of Billions of Taxpayer Dollars,” citing the projected 2016 depletion of SSDI trust fund reserves as a mandate for “reform.” In July, Issa and two other House Republicans appealed directly to Carolyn W. Colvin, acting Social Security Administration administrator, to express their concern about the alleged fraud. Oklahoma Senator Tom Coburn, who has long warned of disability fraud, testified upon the release of Issa’s report, saying that he believes SSDI incentivizes disabled workers to remain on disability pay for good instead of going back to work, even if they are able. (It is worth noting that not all Senate Republicans have engaged in such Social Security skepticismbut that doesn't mean they're eager to vote for reallocation, either. At a hearing last week on SSDI, Utah Senator Orrin Hatch, ranking member of the Senate Finance Committee, said that while he does not think SSDI is "rife with fraud," he nonetheless believes "that it would be irresponsible ... at this time to merely rubber stamp a payroll tax reallocation.")

These Republicans seem to be ignoring the preponderance of evidence showing that the majority of AmericansDemocrats, Republicans, and Independents alikehave an overall favorable view of Social Security and are willing to pay more in order to preserve the benefits for future generations. Additionally, most favor SSDI specifically. This has created an opening for Democrats to make Social Security a focal point for the midterms. Ohio Senator Sherrod Brown was recently quoted in The Washington Post saying that since the electorate for midterms tends to be older, “the field is fertile for Democrats to talk about [Social Security]. We should turn up the volume.” And just a few weeks ago Brown headlined an event at the Center for American Progress on SSDI, which marked the release of a new report calling on Congress to ensure its ongoing solvency.

As noted in the Post article, Senators Mark Begich of Alaska and Jeff Merkley of Oregonboth incumbent Democrats running for reelection this yearhave publicly touted their opposition to cutting Social Security benefits. In Hawaii, incumbent Senator Brian Schatz has emphasized his proposals to “enhance” Social Security even within his primary battle against Representative Colleen Hanabusa (a fellow Democrat who voted for legislation opposed by the National Committee to Preserve Social Security and Medicare). While four-term Representative Bruce Braley, who is running for Senate in Iowa, advocated this month for increased funding for Social Security, his opponent, Joni Ernst, has endorsed privatization measures for younger workers, promising not to let the program “go broke.”

Perhaps the most striking and visible instance of Social Security as a campaign issue is in the race of Senator Mark Pryor. Pryor, a Democrat from Arkansas who finds himself in a tight reelection race against Republican Representative Tom Cotton, released the following ad:

It is important to remember that these Republicans are not coming out against Social Security explicitlyto do so would render them, in many cases, virtually unelectable. And SSDI and its funding woes are almost too technical to make for good campaign trail talking points. But we must not overlook that whoever wins these elections will likely be in Congress when a bill on reallocation comes up for a vote on the floor.

 

To be sure, the Republican argument about SSDI abuse is not wholly false. Social Security, like any government program, inevitably leaves the door open to some degree of fraud. The government knows this and has already taken steps to avoid it; recently the Government Accountability Office conducted a study on potentially improper SSDI payments and recommended that the Social Security Administration “assess the costs and feasibility of establishing a mechanism to detect potentially disqualifying earnings.” Nevertheless, the Republican claim is greatly exaggerated. In fact, the United States’ standards for beneficiary eligibility rank among the most stringent in the developed world, and a majority of applicants to the program are ultimately denied the benefits they seek:

Final Outcome of Disabled-Worker Applications, 2002-2010

And even when applicants do receive SSDI benefits, it’s not like they’re getting rich. The National Academy of Social Insurance reports that the average disabled worker receives about $13,560 a year, just above the federal poverty level for an individual living alone ($11,490), which beneficiaries use to cover basic costs of living.

The conversation, then, should not be about proving that, unlike seniors, those collecting publicly funded disability insurance are unworthy. Instead, lawmakers and candidates alike should propose and then act on reallocation policies of the kind that have been, and should remain, uncontroversialthe kind that ensure the continuation of necessary benefits for American workers.

*This piece has been updated to include information from last week's Senate hearing on SSDI.

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