This week, the Senate Budget Committee met to discuss the future of the Social Security Disability Insurance (DI) program, which is set to become insolvent in 2016, and The Senior Citizens League (TSCL) announced its support for one new piece of legislation.
Budget Committee Debates Future of DI Program
On Wednesday, Members of the Senate Budget Committee held a hearing called “The Coming Crisis: Social Security Disability Trust Fund Insolvency.” They heard from a number of expert witnesses, including Carolyn Colvin, the Acting Social Security Commissioner.
Commissioner Colvin backed the plan to address the DI program’s looming insolvency that was released by President Obama in his recent fiscal 2016 budget blueprint. That proposal would adjust the distribution of payroll tax revenues for a period of five years, so that the DI program would receive 0.9 percent more than it currently is receiving, adding around seventeen years to the trust fund’s solvency.
TSCL has concerns about this approach, since it would mean that Social Security’s Old Age and Survivor’s Insurance (OASI) trust fund would receive 0.9 percent less in payroll tax revenues, worsening the retirement program’s financing. In a recent poll conducted by TSCL, this approach received virtually no support from respondents – less than 1 percent said shifting revenues from one trust fund to another would be the best way to fix the program’s solvency.
According to the results, TSCL’s members and supporters would prefer to see a more permanent solution. Forty-eight percent of respondents said the DI program should tighten its eligibility requirements and conduct more continuing disability reviews to reduce fraud, and 51 percent said high wage earners should be required to pay Social Security taxes on all of their incomes.
At Wednesday’s hearing, many lawmakers seemed to agree that Congress should begin working seriously towards a long-term plan, but it was clear that there is no consensus on what that plan should look like. One member of the committee, Senator Bob Corker (TN), said he would support a plan similar to the Simpson-Bowles proposal of 2010 that would increase Social Security’s age of eligibility and adopt the “chained” CPI, among other things.
Other members, including Senator Bernie Sanders (VT), backed proposals that would lift the cap on income subject to the payroll tax. The cap currently sits at $118,500, which means that no earnings above that amount are subject to the 6.2 percent payroll tax. Senator Sanders said on Wednesday, “That is patently unfair. If we apply the Social Security payroll tax to income above $250,000, we could immediately bring in enough revenue to the Social Security trust fund to extend it for decades and also be able to increase benefits.”
TSCL agrees that doing away with the payroll tax cap would be a fair and responsible solution to the Social Security program’s solvency issues. As the negotiations evolve over the coming months, we will continue to monitor them closely, and we will provide updates here in the Legislative News section of our website.
TSCL Announces Support for PRIME Act
On Monday, Representatives Peter Roskam (IL-6) and John Carney (DE) re-introduced the bipartisan Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act (H.R. 818) with the support of twenty-three original cosponsors. If signed into law, the bill would combat fraud, waste, and abuse within the two programs.
According to Rep. Roskam, the bill would enhance data sharing between states and agencies so that they can more easily catch scammers, and it would modernize outdated fraud prevention systems. Upon introducing the bill, Rep. Carney said, “In this Congress, it’s not easy to find areas where Democrats and Republicans agree, but fighting waste, fraud, and abuse while saving billions of taxpayer dollars just makes sense.”
TSCL agrees, and we enthusiastically support the PRIME Act. We look forward to working with Reps. Roskam and Carney through the remainder of the 114th Congress to help build support for the critical piece of legislation.