Let’s Look at the Issues
When the 115th U.S. Congress convened last week for the first time, the new and larger House Republican majority got to work immediately, taking a step that could mean some 11 million people who receive Social Security disability benefits will see their safety net benefits cut by 20% in 2016. It could even mean cuts to Social Security retirement benefits as well.
They managed to do this through a rule change. Under this change the GOP is stopping a transfer of money to the financially strapped Social Security disability fund from the far more solvent Social Security retirement trust fund. The Republicans’ new rule will only allow this transfer to occur if it improves the overall financial health of the combined Social Security trust funds. That sounds good, but it really means a cut in benefits.
As Hotel Voice has explained before, there are different Social Security trust funds. The disability trust fund no longer takes in enough money to pay out benefits, while the retirement fund currently takes in more money than it pays out in benefits. The problem with the disability fund has existed since the first term of President Ronald Reagan and it has always been corrected by transferring surplus money from the Social Security retirement fund. This is called a reallocation and in fact reallocations have occurred 11 separate times since 1982. Without these reallocations the Social Security disability fund would become insolvent. Without a new reallocation, the fund will run out of money next year.
Because of the new rule passed by House Republicans last week, the only way a transfer of money from the retirement fund to the disability fund can occur is if new revenue is raised or benefits are cut. Clearly, the Republican majority in Congress is not going to pass any new taxes, and that leaves only a benefit cut to resolve the poor financial state of the Social Security disability fund.
Senator Sherrod Brown, an Ohio Democrat, did not let this quiet Republican parliamentary maneuver go unnoticed. Brown said, “Reallocation has never been controversial, but detractors working to privatize Social Security will do anything to manufacture a crisis out of a routine administrative function. Reallocation is a routine housekeeping matter that has been used 11 times, including four times under Ronald Reagan. Modest reallocation of payroll taxes would ensure solvency of both trust funds until 2033. But if House Republicans block reallocation, insurance for disabled Americans, veterans and children could face severe cuts once the trust fund is exhausted in 2016.”
How sinister was this action by House Republicans? The Alliance for Retired Americans didn’t mince words, calling the maneuver “a direct attack on seniors, disabled Americans and the Social Security trust fund, and a complete disregard for keeping the promise to hardworking Americans who have contributed to Social Security.”
The coalition called Social Security Works called the House Republicans’ action a “stealth attack on America’s working families that is hostage-taking to force changes—that the American people do not want—to a vital program like Social Security.”
Max Richtman, president of the National Committee to Preserve Social Security and Medicare, said, “It is hard to believe that there is any purpose to this unprecedented change to House rules, other than to cut benefits for Americans who have worked hard all their lives, paid into Social Security and rely on their Social Security benefits, including disability insurance, in order to survive.”
Making matters worse is that Paul Ryan is now the Chairman of the House Ways and Means Committee. With Ryan holding this powerful position, the Republicans are likely to insist on drastic changes to the entire program rather than allow reallocation.
No one should be surprised to find that the Republicans are quietly undermining Social Security. While it is doubtful they can override a veto by President Obama on any legislation they pass that impacts Social Security, there is little the President or Democrats in Congress can do about this sneak attack on Social Security through a rules change. In short, the only thing that can stop the Republicans from busting up Social Security are voters. That’s why it’s fortunate that there will be one more national election (in November, 2016) before the Social Security disability fund becomes insolvent. If Americans go to the polls in 2016 understanding what House Republicans quietly did last week, you can bet the GOP majority in both Houses of Congress will be short lived.
