B’nai B’rith Encouraged by Social Security Trustees Report, Calls on Congress to Take Routine Action on Disability Insurance
B’nai B’rith International is encouraged by the relative stability outlined in the 2014 Social Security and Medicare Trustees Report, but concerned about the immediate need to address the funding challenges facing the Social Security Disability Insurance program (DI).
The big news out of the trustees report was the overall health of Social Security with a surplus of about $2.8 trillion, and income to the program set to exceed expenditures in 2014. These numbers are in line with last year’s projections and this year’s report expects Social Security’s surplus to grow to $2.9 trillion by 2020.
The other important but unsurprising “news” out of the report is that the DI trust fund is at risk of being depleted by 2016. B’nai B’rith International urges Congress to increase the DI’s allocation from the payroll tax—a measure which has been routinely carried out 11 times over the life of the program—or many vulnerable or impoverished people face dire consequences in their everyday lives.
“We've actually been aware that this would happen in or around 2016 since the DI’s tax allocation was last adjusted in 1994. But in the current political environment, adjusting the split between the two funds for the 12th time in Social Security's history may be harder to do than it should be,” B’nai B’rith International President Allan J. Jacobs said.
DI program funding, as a part of the Old Age Survivors (OAS) and Disability Insurance Fund, is currently allocated based on a formula, most recently adjusted in 1994. When the actuaries drew up the percentages, they quite accurately predicted the DI portion of the fund would become insolvent in 2016. Congress needs to act on replenishing the DI fund now or benefits will be slashed by 20 percent across the board.
“The DI benefits are meager—checks come in at about $1,500 per month—with half of beneficiaries bringing a combined-family annual income of $30,000 or less,” B’nai B’rith International Associate Executive Vice President Mark D. Olshan said. “These are the people who need whatever help they can get, and cutting an already small income source could be a catastrophic upheaval for many.”
Opponents of increasing DI’s payroll tax allocation point to an overly generous program with rampant fraud as the reason for DI's 2016 shortfall date.
“The truth is we've known this would happen for 20 years. And anyone who has ever applied for disability knows that the claims of lax standards or that the benefits can be easily obtained are simply absurd,” B’nai B’rith International Director of Aging Policy Rachel Goldberg said. “We did hear of some outrageous acts of fraud carried out this year, but it’s important to note these people were caught. It's not perfect, but the system does work.
“The need to replenish the DI fund or to tilt the balance toward the OAS fund are both completely normal for these programs. This is a result of factors that were accurately predicted two decades ago. There's no reason or justification for making this reallocation an opportunity to make other changes to the disability program.” Goldberg continued. “The fact that the DI’s cash flow did not run out prematurely suggests a responsible federal program appropriately distributing benefits to those who need it. Congress must act quickly to secure the funding the DI needs to remain fully effective.”
This week the senate will have a second opportunity to discuss these programs when they take up the nomination of Acting Social Security Commissioner Carolyn Colvin to serve as commissioner.
“There are certain areas of Social Security Administration policy that should be open to legitimate debate, but we hope these hearings do not become an attack on the disability program, or to promote already debunked claims about the Social Security's program future,” Goldberg said.
B’nai B’rith hopes all involved will remember that reallocation is not a surprising or partisan issue. Disabled workers already face a process that is detailed and difficult to prove their disability to qualify for benefits. Less than 50 percent of all claims are eventually approved. Many legitimate claimants are then forced into an appeals process that can take years. Those who legitimately achieved benefits should not also have to face the possibility of cuts to their benefits, which could be easily avoided.
B’nai B’rith will continue to advocate for this sensible and responsible adjustment.