• Republicans Eye Social Security Changes
  • September 11, 2015
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • In late 2016, the Social Security disability insurance trust fund is expected to lack the funds necessary to pay full benefits, resulting in a potential 20 percent cut to nine million disabled workers and their families.

    Ways and Means Chairman Rep. Paul Ryan (R-WI) is promising to push reforms to the Social Security program that will avert those cuts, but as is almost always the case when it comes to Social Security, those reforms could become a political lightning rod in Congress.

    Under discussion is a plan to gradually phase out benefits, sources said, while allowing disabled workers to earn more money than they currently can. But if the proposal hits those making the least amount of money, as some fear it might, Democrats are expected to balk.

    Ryan’s office is emphasizing that nothing has been finalized and that negotiations are on-going.

    If changes aren't made before the insurance trust fund becomes insolvent, money would likely need to be moved from the general Social Security trust fund as a loan. Republicans, however, insist that changes should be made before agreeing to such a move. Indeed, House Republicans passed a rule in January stipulating that they must improve Social Security’s overall solvency before agreeing to shift any funds around.

    The general idea behind the Ryan proposal would be to increase the amount of money that disabled workers can make without risking the loss of their Social Security benefits. The current threshold is $1,090 per month, and Republicans have criticized the so-called cliff as a disincentive to work. (The average Social Security check for disabled workers is $1,165 per month.)

    But a straight increase in the cap would cost the federal government money because more people would receive disability insurance. The proposal under discussion would help off-set the costs by introducing a tiered system. At the bottom threshold, people would start to lose some of their benefits, but beneficiaries would be able to keep receiving at least a small disability check while making more than the current $1,090 cutoff. The benefit losses would progress on a gradual scale up the income ladder.