A Fair Cut to Social Security

social security card

Most economists agree that an honest, non-ideological strategy for solving the federal government’s debt problem must include a carefully crafted combination of spending cuts and tax increases. And these changes must be substantial enough to make a significant difference in the nation’s budget.

Social Security payments have been the largest single mandatory expenditure in the federal government’s annual budget since 1993, accounting for about 24% of total spending in 2013. The ongoing retirement of the Baby Boomer generation is constantly increasing this amount so some changes should be made to reduce the cost.

On the income side of the solution, I believe the fairest strategy is to increase the available revenue by raising the Social Security wage base. On the payment side, there are proposals to increase the age when people become eligible to begin collecting retirement benefits. I strongly oppose them because they would break a promise made to workers that have paid into the system for years. Furthermore, the mental health of a lot of people is based upon the hope they can retire at 62, the earliest age a person can begin receiving SSA retirement benefits.

But the Social Security Administration (SSA) pays out more than retirement benefits. They also issue disability benefits through the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. In order to receive these payments a person must be unable to work for at least 12 months or have a fatal disease. If they’ve previously worked and contributed to the Social Security system through payroll taxes, then they and their dependents are eligible for SSDI. If they didn’t, they are only eligible for SSI, which is typically a smaller check, and their countable assets cannot exceed $2,000. In other words, SSDI is a disability insurance program and SSI is welfare.

Disability Rules Should be Tightened

According to the SSA, in 2013 the payments to SSDI recipients totaled about $141 billion and SSI recipients received about another $53 billion. This is serious money, so tightening the eligibility requirements could produce significant savings, especially since SSI recipients are also categorically eligible for Medicaid.

Congress tightened the SSA’s disability rules in 1996 when it passed the Contract with America Advancement Act, which terminated benefits for SSDI and SSI recipients whose primary impairment was drug addiction, alcoholism, or both. This law also required the SSA to conduct regular reviews of each recipient’s medical condition, typically every three years, to verify they were still disabled.

But I think there are more self-induced medical conditions that should disqualify applicants for SSDI and SSI disability. For example, why should the taxpayers have to help support somebody whose medical problems are the result of obesity, chewing tobacco, or cigarette smoking?

I’m not suggesting that we should suddenly discontinue benefits for people like this who are already receiving payments without giving them a chance to change their behavior. The SSA already has a program called Ticket to Work that helps people to rejoin the work force, although participation is voluntary. But current recipients with self-induced disabilities which can be overcome should be required to participate in Ticket to Work. If they don’t want to participate, their benefits could be cut incrementally every year until they comply, or their checks could be stopped altogether.

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