BEYOND THE NUMBERS
I’ve explained that a new House rule will make it harder to reapportion payroll taxes between Social Security’s retirement and Disability Insurance (DI) trust funds to avert a one-fifth cut in benefits to severely impaired DI recipients in late 2016. In a revealing statement, co-sponsor Representative Tom Reed (R-NY) says the change is designed to prevent Congress from “raiding Social Security to bail out a failing federal program.” He’s doubly wrong.
First, far from “failing,” DI has grown mostly in response to well-understood demographic and program factors like the aging of the baby boom, and the program’s trustees have long anticipated the need to replenish the trust fund next year, as I noted yesterday. Second, DI isn’t distinct from Social Security; it’s an essential part of Social Security.
Though they might not even know it, more than 150 million workers have earned DI protection through their payroll tax contributions in case they suffer a severe, long-lasting medical impairment. Nearly 9 million of them, mostly in their 50s and 60s, receive disabled-worker benefits from DI. In fact, most DI recipients are close to or past Social Security’s early-retirement age of 62.
Statements like Representative Reed’s implicitly attempt to pit Social Security retirement and disability beneficiaries against each other. It’d be far better to do a straightforward reallocation of payroll taxes — a noncontroversial step that Congress has taken 11 times to shore up whichever trust fund needed it — while crafting a sensible plan to restore overall solvency to this popular and vital program.