Congress Passes Social Security Rule Tweak – What Does It Mean?


Social Security’s disability fund could run out of money by 2016. In the past, shortfalls in the disability program have been addressed by shifting money into the disability fund from the old-age fund (the program that pays out Social Security benefits).

But the U.S. House of Representatives on Tuesday passed a rule change that will prevent such a money shift – unless benefit cuts are also enacted.

Democrats and Social Security advocates are calling the rule change a “sneak attack” and a thinly veiled attempt to decrease benefits.

Republicans say the rule change is necessary to prevent a “raid” on Social Security money.

More from Michael Hiltzik of the LA Times:

The rule hampers […] reallocation of Social Security payroll tax income from the old-age program to the disability program. Such a reallocation, in either direction, has taken place 11 times since 1968, according to Kathy Ruffing of the Center on Budget and Policy Priorities.

The disability program’s trust fund is expected to run dry as early as next year. At that point, disability benefits for 11 million beneficiaries would have to be cut 20%. Reallocating the income, however, would keep both the old-age and disability programs solvent until at least 2033, giving Congress plenty of time to assess the programs’ needs and work out a long-term fix.

The procedural rule enacted by the House Republican caucus prohibits the reallocation unless it’s accompanied by “benefit cuts or tax increases that improve the solvency of the combined trust funds,” as paraphrased by the National Committee to Preserve Social Security and Medicare.

In practical terms, the advocacy committee says, that makes the reallocation impossible; it mandates either benefit cuts across the board, which aren’t politically palatable, or a payroll tax increase, which isn’t palatable to the GOP.

Reaction from the Committee to Preserve Social Security and Medicare:

It is hard to believe that there is any purpose to this unprecedented change to House rules,” wrote Max Richtman, president of the committee, in an open letter Tuesday, “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.”

Republicans defended the rule change:

Rep. Sam Johnson (R-Texas), chairman of the subcommittee that oversees Social Security, championed the rule’s Social Security provision and said shifting the funds would constitute a “raid” on retirement insurance, which is solvent until 2033.


“To address this issue, my measure creates a point-of-order to prohibit any diversion of funds from the retirement program to the disability program,” Johnson said. “But more than that, the rule seeks to encourage much-needed reform.”

The text of the change can be read here.


Photo credit: “Capitol-dome” by EFF – Own work. Licensed under CC BY 3.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Capitol-dome.png#mediaviewer/File:Capitol-dome.png

Share This Post

Related Articles

Powered by WordPress · Designed by Theme Junkie
Facebook IconTwitter Icon