President Obama is taking a strong line against one of the most despicable acts of the new Republican Congress, the House's effort to manufacture a Social Security crisis by attacking the disabled.
The president's proposed budget for fiscal 2016, released Monday, includes a concise reply to this stunt: No dice.
The issue is how to deal with the disability program's looming fiscal crisis. The reserve from which disability benefits are partially paid is expected to run out next year. At that point, payroll tax receipts allocated to disability will be sufficient only to pay about 80% of currently scheduled benefits. The consequence would be a cut of about 20% in benefits that today average about $1,165 a month -- a reduction to about $932.
The disability funding crisis has been looming for years, and not for the first time. In the past, the congressional remedy has been to reallocate payroll tax receipts from the old-age program to shore up the disability fund.
That could and should be done now, but the GOP caucus prefers intensifying the crisis to alleviating it. As I reported earlier, on the first day of the new Congress, Jan. 6, the House Republican caucus passed a rule blocking reallocation unless it's part of a deal to "improve the actuarial balance" of Social Security overall. Stripped of its technical gingerbread, that means a benefit cut or tax increase. And because Republican orthodoxy opposes tax increases, we're left with benefit cuts.
In practical terms, the rule change sets up a confrontation over Social Security's finances by pitting the program's retirees against its disabled beneficiaries and their dependents. The confrontation is totally unnecessary, because the required reallocation would have minimal effect on the old-age program. The old-age trust fund, which is still growing today and has not yet been tapped, is expected to last at least until 2034; the reallocation would make both the disability and old-age funds solvent until 2033, according to the latest estimates by the Social Security trustees.
The rule change does, however, reflect Republicans' cherished disdain for disability recipients, whom they love to caricature as malingering layabouts. Sen. Rand Paul (R-Ky.) slathered himself in iniquity last month when he told a New Hampshire audience: "Over half the people on disability are either anxious or their back hurts."
Obama's budget firmly rejects the GOP approach to the disability crisis. It calls for reallocation now "while a a longer-term solution to overall Social Security solvency is developed with the Congress," rather than making an overall solution the precondition for resolving the disability shortfall.
The only flaw in the president's approach is that it doesn't go far enough. The GOP rule change has an escape clause that would allow enough reallocation to keep disability solvent on a year-by-year basis. This is a signal that it hopes to make disability a perpetual pawn in its long-standing project to undermine Social Security, as it has used the federal debt limit to hold the budget hostage.
The solution is to take this weapon out of congressional hands, by giving the Treasury the authority to allocate payroll tax revenue as it deems fit -- effectively unifying Social Security's reserves as they should be.