October 23, 2014

Disability Insurance Deadline Offers Chance for Reforms

  • Social Security, established in 1935, is the federal government’s largest program. It represents approximately one-fifth of the federal budget and...

This year’s report by the Social Security trustees reminds lawmakers that the next Congress will face a deadline to act on Disability Insurance by 2016, an opportunity that could be used to pursue comprehensive reforms to put all of Social Security on a sustainable track.

According to the trustees, congressional failure to act before that deadline would mean an automatic, across-the-board benefit cut of 19 percent for Disability Insurance (DI) beneficiaries. Such a steep cut would impose unconscionable harm on people who depend on the program.

Some analysts and policymakers suggest that Congress could simply reallocate the money to DI from the Old Age and Survivors Insurance (OASI) program, but this ignores the reality that both are unsustainable in their current forms.

Absent reforms, the trustees note, OASI beneficiaries would face a 25 percent across-the-board benefit cut in 2034 and beyond -- something any serious advocate of Social Security should find unacceptable.

Those who have insisted Social Security be dealt with independently of a “grand bargain” on the rest of the federal budget should use the next Congress to put their money where their mouth is and propose comprehensive solutions for OASI and DI that can gain bipartisan support.