Committee for a Responsible Federal Budget
Social Security

Washington Post on SSDI: An Opportunity for Bipartisan Compromise

Jul 28, 2015 | Social Security

The Washington Post yesterday issued Congress "a wise prescription for Social Security Disability Insurance," urging lawmakers to use the program's impending insolvency as an opportunity to enact longer-term structural reforms. The Social Security Disability Insurance (SSDI) trust fund is slated for depletion by the end of 2016, at which point benefits would be cut across the board by 19 percent. Lawmakers have repeatedly stated their intent to avert the cut for the nearly 9 million disabled workers and their nearly 2 million dependents who receive SSDI. Many expect that lawmakers will extend solvency by redirecting some of the funds currently going into the Old-Age and Survivors' Insurance (OASI) trust fund to SSDI, extending SSDI's solvency by 17 years according to the Social Security Trustees, while bringing forward OASI's insolvency date by 1 year.

The Post by contrast called on Congress to go beyond just clean reallocation and enact a reallocation “linked to structural changes” that would address flaws they see in the core design of the program:

The problem is that SSDI is far from functioning optimally; while most of the program’s rising cost is, indeed, due to demographics, not all of it is. As recent research in labor economics has shown, some of the growth is due to post-1984 program rules that made it easier to claim disability on the basis of mental or musculoskeletal ailments. Perversely, SSDI provides employers no incentive to keep individuals at work, earning wages, while providing those who get benefits no incentive to return to the workforce. As economist David Autor of MIT has written, “the SSDI program spends too few societal resources helping individuals with disabilities to remain employed and too many resources supporting the long-term dependency of individuals who could be self-sufficient with . . . appropriate accommodation and support.”

While millions of people with disabilities rely on SSDI benefits support, many others could be better served by providing better opportunities to re-enter the workforce when possible. Also, shoring up the program's finances will provide greater certainty for all beneficiaries.

As the Post further points out, quoting the Social Security Trustees' Report, “[the] last tax reallocation, 20 years ago, ‘was intended to create the time and opportunity for such reforms.’” Congress should certainly seize on this opportunity to enact reforms that place Social Security on a path towards long-term solvency; as the Post notes, it is "an opportunity for bipartisan compromise" that could greatly improve the program.

To assist lawmakers by providing a variety of options, the McCrery-Pomeroy SSDI Solutions Initiative has commissioned 12 papers to offer policy proposals aimed at shoring up the trust fund and improving the program for people with disabilities. Lawmakers would be wise to examine those suggestions and others to include with any solvency plan.

To read the full article by the Washington Post, click here. For our 7-page analysis of the Social Security Trustees' report, click here.