This week, one House Subcommittee met to discuss the solvency of Social Security’s Disability Insurance (DI) trust fund, and The Senior Citizens League (TSCL) saw one new cosponsor sign on to the Notch Fairness Act.
Subcommittee Discusses Future of DI Program
On Wednesday, the House Ways and Means Subcommittee on Social Security met to discuss the future of the DI program, which is expected to become insolvent in the fourth quarter of 2016. At that point, if Congress fails to act, disabled beneficiaries will be faced with a 20 percent cut in monthly benefits.
In his opening statement at Wednesday’s hearing, Chairman Sam Johnson (TX-3) said, “This Congress should and must act to make sure that Disability Insurance benefits continue to be paid in 2016 and beyond to those who rely on them. And in doing so we should make this program work better for those who depend on it.”
Many at Wednesday’s hearing advocated for a short-term fix to the problem that would reallocate revenues from the payroll tax between the retirement and DI trust funds. One witness, Charles Blahous – a Public Trustee for the Social Security trust funds – backed the transfer so long as it is combined with “significant financing reforms.” He stated, “A standalone reallocation of funds might serve to delay DI reforms and much needed financial corrections … However, enactment of a more permanent solution could include a tax reallocation in the short run.”
Others at Wednesday’s hearing adamantly opposed the transfer of funds from one trust fund to another. In his opening statement, Chairman Johnson said, “Now some like to say that the President’s proposal to reallocate some of the payroll tax … is no big deal. Well I would argue that it is a big deal.” He later said, “I think we’re at the end of the road, and we don’t need to kick the can any farther.”
TSCL agrees that Congress should focus on a long-term solution in the months ahead, since simply transferring funds would worsen the financing of Social Security’s retirement program. In a recent poll, members and supporters of TSCL backed proposals to tighten DI eligibility requirements, conduct more continuing disability reviews, and require high wage earners to pay Social Security taxes on all of their incomes.
As talks continue on Capitol Hill we will be sure to monitor them closely, and we will post updates here in the Legislative News section of our website.
Notch Bill Gains New Cosponsor
This week, one new cosponsor – Rep. Tim Murphy (PA-18) – signed on to Rep. Grace Meng’s (NY-6) Notch Fairness Act (H.R. 314). The bill’s cosponsor total is now up to eleven. If signed into law, it would provide modest compensation to victims of the Social Security Notch, or those who were born between 1917 and 1926.
Just years before they were set to retire, these individuals learned that they would have significantly lower benefits than originally anticipated. The problem has grown and compounded over time, and TSCL believes that in order to make the program more equitable, some compensation for the injustice should be provided. We enthusiastically support Rep. Meng’s Notch Fairness Act, and we were pleased to see one more lawmaker sign on as a cosponsor this week.
