Disabling Entitlement Reform
September 14, 2015
The "One Social Security Act" introduced by Representative Xavier Becerra (D-CA), will stall the exhaustion of the disability trust fund but would cause great damage to Social Security in the long run. Social Security does not need the cover-up Mr. Becerra is offering, it needs sustainable reform.
Two separate payroll taxes fund the two separate programs of Social Security, the Old Age and Survivors plan and the Disability Insurance program. The disability trust fund will be depleted in 2016, and then a 19 percent cut in benefits will be required since the fund will only be supported from current payroll-tax revenues.
- Nearly half of the increase in disability caseloads since 1980 is attributed to looser eligibility standards.
- The average disability benefit for a new beneficiary in 2014 is $1,222 a month.
- The employment rate of U.S. citizens with disabilities has declined by almost 50 percent since 1981.
In the 1990s Holland began to reform national disability programs. Before receiving benefits, applicants were required to participate in a rehabilitation program designed to address the disability and help identify work opportunities. At the same time the government offered incentives to employers of those with disabilities. In 1980, Holland's disability beneficiaries per 1,000 workers was triple the U.S. level. Today the disability rate is slightly lower than the current U.S. rate. These reforms had great success and similar measures could be implemented in the U.S. Social Security does need to be reformed, but offering incentives to keep workers with disabilities working or benefits to employers for hiring employees with disabilities is a better solution then simply covering up the lack of funds with the "One Social Security Act."
Source: Andrew G. Biggs, "Disabling Entitlement Reform," Wall Street Journal, September 7, 2015.
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