Legislative Update for Week Ending July 10, 2015

Legislative Update for Week Ending July 10, 2015

This week, the House Ways and Means Committee met to discuss the state of the Social Security Disability Insurance (DI) program, and The Senior Citizens League (TSCL) saw one key bill gain support.

House Committee Discusses Disability Program

On Thursday, the full House Ways and Means Committee held its first Social Security hearing in nearly seven years. The hearing focused on the Disability Insurance program – which is set to become insolvent next year – and more specifically on promoting work opportunities for beneficiaries.

In his opening remarks, Chairman Paul Ryan (WI-1) said, “We have two issues here. We’ve got a fiscal problem. We’ve got bankruptcy, insolvency. And we’ve got a messed-up work disincentive. And so we’ve got to try and find a way to harmonize those two objectives.”

Throughout the hearing, lawmakers and witnesses spoke about the need to reform the so-called “cash cliff,” which refers to the $1,090 limit on monthly earnings for disabled beneficiaries. Chairman Ryan explained the rule in his opening statement, saying: “If you make just one dollar more than you’re allowed, you get kicked off the program. In other words, it’s a lot safer to stay on the sidelines. No surprise then that only one-half of one percent earns enough to get off the program.”

The five expert witnesses at Thursday’s hearing made suggestions for improving the program’s work incentives. James Smith, the Budget and Policy Manager at the Vermont Agency of Human Services, recommended replacing the “cash cliff” with a graduated earnings offset, where every $2 earned would result in a $1 loss in benefits once earnings pass a certain threshold.

Smith cited data from four recent pilot programs established by the Social Security Administration that saw positive results. Together, the four states that tested the offset saw a 25 percent increase in the number of beneficiaries earning over the original monthly limit. Smith said, “Under this model, the beneficiary is always better off financially the more they work and earn. It provides a clear and simple incentive for the beneficiary to try to work as much as they possibly can.”

While most at Thursday’s hearing seemed to support a reform of the “cash cliff,” others were hesitant. Paul Van de Water, Senior Fellow at the Center on Budget and Policy Priorities, said the popular offset proposal would result in higher program costs and an increase in applications, since many would view “the combination of cash benefits plus earnings as more appealing than their current job.” Van de Water said, “Congress should not expect a magic bullet that will simultaneously trim costs, make beneficiaries better off, and avert the need to replenish the DI trust fund in 2016 and beyond.”

TSCL understands the complex nature of the DI program and that no "magic bullet" will address all of its challenges. Currently, our legislative team is working on a proposal for the Ways and Means Committee that will outline our recommendations for strengthening the DI program responsibly, without harsh benefit cuts. For updates, visit the Legislative News section of our website, or our new page on Facebook.

Key Bill Gains Support

This week, one new cosponsor – Rep. Sanford Bishop (GA-2) – signed on to the Social Security Fairness Act (H.R. 973), bringing the total up to 107. If signed into law, H.R. 973 would repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) – two federal provisions that unfairly reduce the earned Social Security benefits of millions of teachers, firefighters, peace officers, and other state or local government employees each year.

TSCL enthusiastically supports H.R. 973, and we were pleased to see one new cosponsor sign on to it this week.