The new Republican-led Congress fired its first salvo by passing a rule that would prohibit fund shifting between the respective Social Security funds in order to address a potential shortfall in the Social Security Disability Fund which is set to endure a shortfall in 2016.
Due to this action, Acting SSA Commissioner, Carolyn Colvin (whose nomination confirmation has been held up by several Republican Congressmen for nearly a year) has proposed a $330B fund shift from retirement over the next five years which would stave off a 19% benefits cut to recipients if a Disability Fund shortfall occurs. The eventual cut to retirement beneficiaries will be 27% should a shortfall occur in that fund.
The Republicans have rebuffed the current proposal, claiming they are seeking a longer term solution, but have offered no proposal of their own. They make the claim that is wrong to “rob Peter to pay Paul”.
Democratic leads have proposed an tax on incomes in excess of the current $118,500 income cut-off which would result in a complete fix to the problem. Also, a raise in the Social Security tax from 6.2% to 7.6% without escalating the taxation to those with incomes about $118,500 would eliminate any future insolvency in the system. Again, these proposals have been ignored by the Republicans.
Such a refusal to address the pending disability shortfall is dangerous to persons who receive disability benefits as the reduction amount will put many thousands of the 150 million recipients in danger of losing their homes or apartments or being able to pay for food or medications (the average SSD recipient only receives $1090.00 in monthly benefits). A big cut from a small benefits will be too much for many to bear. This would be even greater for retirement recipients if a shortfall and consequent benefit reduction were to happen.
Instead of addressing the problem, Republicans have stayed true to their mantra of: “Blame the President for Everything” under all circumstances as well as articles denouncing instances of system fraud and demonizing disability recipients as “malingerers.” This is all occurring while the Republicans await the actual crisis caused by a benefit shortfall in order to reduce the number of disability recipients and cut benefits to those which survive the cuts.
Their current efforts seem to have an underlying intent of pitting retirement recipients against disability recipients, rather than making sure all recipients can receive their due entitlements. Such a premise is not very advisable as the looming shortfall for the disability program is a harbinger of the future projected shortfalls in the retirement and medicare programs. Therefore, taking chances with disability program will be seen by many as undermining the entire Social Security system. This will result in vast displeasure of the electorate, the great majority of which have paid into the system for most of their lives. Any action imperiling any aspect of the Social Security Program will be seen by many as “pulling the rug out from underneath them.”
The disability political football seems to be fully in play at this point and will remain a central point of discussion, especially with a looming Presidential Election in 2016. As a showdown over Social Security would cause major political fallout, it would behoove the parties to forge a temporary truce until the election cycle is completed. But, then again, if the parties continue their rancor, anything remains possible.