Obama’s 2016 Budget Challenges Republicans on Social Security Rule

Capitol dome

President Obama released his 2016 budget on Monday, and one line item challenges a Social Security rule tweak passed by Republicans last month.

In January, Congress passed a rule that barred the movement of money from Social Security’s old-age fund to the disability fund.

The disability fund is in danger of running out of money in the near future. In the past, insolvency has been staved off by replenishing the disability fund with money from Social Security’s old-age fund, which is significantly healthier.

But the rule tweak prevents such a transfer.

[Read more about the rule change here.]

Obama’s 2016 budget, however, calls for this exact transfer – and is being viewed as a direct challenge to the Congressional Republicans who passed the law.

More from Talking Points Memo:

Obama’s budget included the transfer of tax revenue from the program’s retirement fund to the disability fund, which would otherwise start being unable to pay full benefits in late 2016. House Republicans passed a rule in January that would block the transfer — known as reallocation — unless Social Security’s overall solvency was improved.

The GOP made clear that it wanted to force a debate over the program, and some conservative policy wonks said that they hoped Congress would use the need for reallocation as an opportunity to pursue broader changes to Social Security. Democrats on the Hill have advocated for a ‘clean’ reallocation not predicated on changes to the program. Reallocation has happened 11 times in the past on a bipartisan basis; the most recent reallocation occurred in 1994.

The budget also warns Republicans against making any cuts to Social Security benefits in the name of solvency. The budget reads:

“Any reforms should strengthen retirement security for the most vulnerable, including low-income seniors, and should maintain robust disability and survivors’ benefits…The Administration will oppose any measures that privatize or weaken the Social Security system and will not accept an approach that slashes benefits for future generations or reduces basic benefits for current beneficiaries.”

Obama’s 2016 budget can be accessed 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

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