What’s in the budget agreement for Social Security disability?

October 27, 2015 Geordie Featured Posts, News and Opinion 15

There were a lot of rumors swirling around (including in the New York Times and the Hill) about some truly terrible proposals for Disability Insurance in the proposed budget deal being negotiated now. I don’t know what the final word will be, but I link here the PDF of what I believe to be the bill introduced at 11:30PM Monday night (26th) by the Republican leadership as the substance of the proposed budget deal. I thought I’d put a rough translation into plain English of what I see in there – I used to draft Social Security and SSDI legislation myself when I worked on the Hill in the 1980’s so I hope I can give an explanation that will help reassure people. Caveat – this is not the last word, I may have some things wrong, and things will undoubtedly change. But the worst stuff that people are upset about don’t seem to be in this bill, at any rate.

Here is the link to the PDF – http://docs.house.gov/billsthisweek/20151026/BILLS-114hr-PIH-BUDGET.pdf

I have now found the “section by section” description of the bill, which is what the staff prepares for the members to read so they know what they’re discussing, and my quick and dirty description which follows is pretty much correct. Here’s the PDF of that document. http://docs.house.gov/meetings/RU/RU00/CPRT-114-RU00-D001.pdf

My sources are saying that the $168 billion in savings figure seems to be something the Republicans are circulating to exaggerate the effects of the proposal, and is apparently the total over decades, possibly over 75 years. The savings over 10 years seems to be about $5 billion,which sounds like a lot but given the size of the program is not really that much.

What the proposed DI legislation calls for, as I read the discussion draft which is as of 11:30 PM Monday night Oct. 26th.

Section 811 – Expansion of Cooperative Disability Investigations Units – requires SSA to expand arrangements to work with local authorities to investigate I presume disability fraud.
Section 812 – excludes evidence, in DI determinations, from anyone or any entity previously convicted of Medicare or Medicaid fraud (I think that’s the main thrust, although it might be broader than that)
Section 813 – beefs up penalties for Social Security fraud generally, and suspends or terminates benefits for anyone penalized for fraudulently concealing work activity.
Section 814 – electronic communications – inconsequential
Section 815 – changes in administrative funding for redeterminations of eligibility under SSI – doesn’t affect benefit amounts as far as I can see.

Subtitle B – titled Promoting opportunity for Disability beneficiaries

Section 821 and 822 – reauthorization of existing program of DI demonstration projects designed to help DI beneficiaries return to work if they are able
Section 823 – new demo project authority to allow partial monthly payments for DI beneficiaries participating in the project and returning to work – essentially, offsetting their benefits $1 for every $2 earned, but not affecting their fundamental entitlement to benefits so that they can return to full benefit payments if the work effort cannot be sustained. [This kind of thing has been talked about for decades, as a way to encourage people to try to work without endangering their benefit eligibility.] This is demonstration project authority only – I don’t see any requirement that any beneficiary participate in such projects.
824 – Administrative changes in payroll data to get more information on whether DI beneficiaries are working for pay.
832 – Requirement for medical review – no determination of disability can be made until SSA has made reasonable effort to ensure a qualified psychiatrist or psychologist, for mental impairments, and qualified physician for physical impairment, has completed the medical portion of the case review and functional capacity assessment.

There is nothing particularly earth shattering in here. The best news for DI beneficiaries is that in other sections of the bill, they are authorizing the transfer of funds from the OASI trust fund to the DI trust fund to make up the shortfall and prevent any cuts in current benefits.

About Geordie 1 Article
Retired law professor, living in Florida, wishing she were in Seattle

15 Comments

  1. This seems like very good news indeed:

    The best news for DI beneficiaries is that in other sections of the bill, they are authorizing the transfer of funds from the OASI trust fund to the DI trust fund to make up the shortfall and prevent any cuts in current benefits.

  2. I hope you don’t mind if I use this post to discuss Medicare and Social Security “reform”.

    Here is what Jeb! says about Medicare and Social Security:

    First, I’ll work to implement bipartisan Medicare premium support (where Medicare provides seniors with a fixed amount toward a set of guaranteed coverage options):

    Seniors will still get a simple brochure in the mail from the government every fall. They will be able to review and choose from their local options from Humana, Anthem, United or another private plan, or traditional Medicare. Seniors will have access to new options, like plans that specialize in treating congestive heart failure or diabetes or Alzheimer’s.

    Tech-savvy or homebound seniors might choose a plan the covers the ability to talk to their doctors with technology like video on their laptop, tablet, or smartphone. The government will base its payments on the average price of those competing plans. And premiums will be lower for seniors by 6 percent on average.

    Representative Paul Ryan (R-WI) and other courageous conservatives have championed this approach to improve the structure of Medicare. If we act now, we can leave the next generation of Americans with a more prosperous future.

    Vouchers. And if the coverage you choose is not right for you, then “die but die quickly, please”. The please is added because he wants the olds to realize he is a nice young man and please vote for him.

    On Social Security:

    First, I’ll encourage private saving to reduce dependency on the government.

    While access to private retirement accounts is at an all-time high, more can be done to help workers in small businesses. Under my plan, small businesses who cannot afford to contribute toward workers’ retirement plans can set up “starter 401(K)s” for their workers, and businesses would have the ability to pool together to access a single retirement savings plan, which will save administrative costs and reduce complexity.

    Additionally, I’ll stop the Obama Administration’s proposed regulations to limit consumers’ choice of financial advisors and drive up the costs of private saving. Instead, I will review and streamline regulations that add unnecessary costs and make it difficult for individuals to save.

    Second, we need to recognize that Americans are living longer, healthier lives, and we should make it easier for those who choose to work longer.

    Life expectancy has increased substantially since Social Security was created in 1935. Yet Social Security’s structure still discourages work past the age of 62. Reforms should update Social Security to respect seniors’ desires and abilities to work later in life.

    Translation from GOP-ese to human:
    First, I will set up something for businesses that we can then use as an example that we don’t need a Social Security trust fund … just get a Starter 401k and then hope your boss does not stop funding it or that he goes out of business or gets some really crappy financial advice.
    Second, you need to work longer because I can work longer (ignore that I took off for a few years in between political jobs and earned most of my money sitting on corporate boards having my name on the letterhead of corporate boards). Suck it up and work ’til you’re 70, granny!!

  3. More on the budget from HuffPo:

    Under the arrangement detailed by congressional aides, the debt limit, predicted to be hit on Nov. 3, would be extended into March 2017 — well into the next president’s term.

    Additionally, over the next two years, government spending would rise $80 billion above the caps that sequestration currently allows. That money would be doled out evenly between defense and non-defense accounts, with $50 billion budgeted for the first year and $30 billion for the second.

    On top of that, the bill would include $32 billion for the overseas contingency fund — a veritable piggybank for administrations to cover the costs of wars — split over the next two years. That would bring the deal’s total spending increase to $112 billion over two years.

    The pay fors?

    The deal is offset with cuts elsewhere. According to sources, Congress would cover some of the costs by selling additional broadcast spectrum bandwidth and oil from the strategic petroleum reserve, as well as by making changes to crop insurance programs. A host of lesser known items also would likely find the chopping block.

    But the real pay-for would be felt on two major entitlement programs. The deal would extend the sequester’s cuts to mandatory spending through 2025, which mostly involves a 2 percent cut in reimbursements to Medicare doctors. That reduction was scheduled to expire in 2021 under the 2011 Budget Control Act, which put sequestration into place. It was extended to 2023 under Murray-Ryan deal.

    The new agreement also would prevent a 20 percent cut in benefits next year to the 11 million Americans enrolled in the Social Security Disability Insurance program. The cut would be avoided by diverting some of the incoming payroll tax money from Social Security’s much bigger retirement insurance program for six years, something Republicans previously said they wouldn’t do without cuts to benefits.

    Hill sources said the disability changes would save roughly $4 billion to $5 billion over 10 years by requiring all states to have doctors review initial disability applications, which in some states are now checked by Social Security Administration officials and not medical professionals.

    I don’t understand that last part … maybe Geordie can explain it to me.

    • Republicans appear to hate this more than Democrats.

      No ExIm and no highway bill but the highway bill can probably pass on its own because big bucks road builders will be leaning on their members.

  4. The doctor thing is something the Republicans believe will make it harder for DI applicants to get benefits – I guess the thinking is a doctor is tougher to “fool” than disability staff. I think that’s nonsense, myself, but maybe – the bottom line here is Republicans hate DI even more than the retirement portion of Social Security because they don’t believe hardly anyone is really so disabled that they can’t work. So they as a party view the entire program as a boondoggle made up of beneficiaries who are faking their disability and compliant administrators who are letting them. This is nonsense, of course – there undoubtedly is SOME fraud, but when your baseline is, as the Repugs is, “snap out of it and get back to work, you lazy faker”, you see fraud everywhere. And I think the estimates show that – $4-5B over 10 years in a big program like SSDI is not a huge amount, really and who knows if even that will materialize. For the budget bill, all that matters is the estimate.

    • Hey, we can get optimistic and hope that if a DI application has to be approved by a doctor first they’ll quit automatically denying them. Right? Right? sigh.

    • Ha! So the Republicans think they have a gotcha because their Fox talking points tell them that doctors will root out all that fraud? Sad for them to have thier heads so firmly up their nether regions but good for us because we can nod and say “yes, let’s have the doctors make this final determination.” And of course there is fraud and there will always be fraud. The decision we make as a compassionate society is that helping the 95-99% who truly need help is worth the risk that someone who does not need the help will game the system.

    • Thanks Geordie……my eyes glaze over easily when I try to read and understand these issues, but this helps me be better informed. I appreciate it!

  6. Thanks, Geordie and Jan. Don’t understand much of any of it except that the Rethugs hate Social Security and simply want to push all of us old people right off a cliff. I dislike the word “entitlement.” We paid for those programs—put money into them all our working lives.

    May karma deal with them as they deserve.

    • I prefer “earned benefits”. I have literally paid my dues for the past 45 years and those benefits are due to me. If I use my health insurance to see my doctor, is that an “entitlement” or a benefit of having paid my policy premium? Words matter.

  7. Based on the Twittering I saw yesterday, there are plenty of folks willing to believe that President Obama and Congressional Democrats pushed granny (and her disabled grandson) off the cliff. But it is the same ones who have been claiming, since 2011, that the President has been working on a “grand bargain” that goes against every Democratic Party principle. I have no patience for them because they were wrong then and they are wrong now. He never did and he never will bargain away important protections that our most vulnerable citizens need.

    In this budget bill, I see Republicans caving on the sequester and the debt ceiling and failing to block funding for Planned Parenthood, something that Erick Son of Erick said should result in the “dissolution of the Republican Party”. Good!! Start now and save us the pain of the long election contest.

    The ExIm reauthorization passed as a separate bill on a bipartisan vote but Mitch McConnell said he would not let the Senate vote on it, presumably because it did not go through normal channels (it used a discharge petition to get to the floor because Boehner would not release it). The House also voted to fund highway maintenance until November 20th so the highway bill will be the first piece of legislature to test Paul Ryan’s ability to keep the House from festooning must-pass legislation with gifts for the right wing, creating a bill that President Obama will veto.

  8. Geordie – So glad you posted this here – and Jan thank you for the discussion. I am very protective about my teeny SS check – and my husband was on SS D for 3 years – while he couldn’t work. He was thankfully able to go back – but I feel for those folks who without it – couldn’t survive.

    Its important to get information we can understand.

    • People’s “teeny SS check” can be the difference between making ends meet and coming up short for food or medicine. It is going to be a challenge for people of our generation to find affordable housing and, eventually, end of life care because there are so many of us and the Republicans have been robbing the various old age funds for years to give tax cuts to the wealthiest. We need a Ronald Reagan-Tip O’Neill moment and fix the caps again so that this is not a political football for the next 20 elections. We might have to wait until we have a filibuster-proof majority in the Senate and take the House back before anything is done.

  9. Here are a couple more articles on the budget deal that the House is expected to vote on today including these news outlets’ take on the SSDI issue we are discussing here.

    Al Jazeera: Relief on Capitol Hill after budget deal

    The tentative budget deal agreed to late Monday night between House and Senate leaders (and representatives from the White House) was greeted mostly with a sense of relief on Capitol Hill on Tuesday.

    Rather than trumpet the reported tangible benefits or even take shots at the compromises and concessions, the spin in most of official Washington seems to be that the budget brinkmanship that marked much of the five-year tenure of House Speaker John Boehner, R-Ohio, is (like Boehner’s speakership) soon to be a thing of the past.

    In stepping down and presumably handing the gavel to Rep. Paul Ryan, R-Wis., Boehner said he wanted to “clean the barn” for his successor. Without the Ohio Republican’s mucking out, the incoming speaker would have almost instantly faced a divided caucus in the battle to raise the debt ceiling, something periodically required to maintain a healthy relationship with the government’s creditors. Then in December, the stopgap spending agreement passed earlier this month would have expired, setting up another internal tug of war in the congressional GOP. […]

    Social Security disability insurance (SSDI) guidelines currently differ by state, but Monday’s agreement would standardize and slightly tighten eligibility rules, which is projected to save the government $5 billion. Money would be transferred among Social Security trust funds to keep disability officially solvent — a move that used to be accomplished without much objection before the more recent era of fiscally hawkish Republican majorities in the House.

    Many of those who favor social spending see the deal as a win, in that it isn’t a defeat. “They stiffened the penalties for fraud, they extended nationwide efforts to make sure that payments are accurate, and they closed a loophole in which people were gaming the system,” said Nancy Altman, the president of Social Security Works, a group that advocates Social Security expansion, in an interview with Greg Sargent. “They didn’t change eligibility requirements or reduce the level of benefits.”

    NPR: What’s In The Budget Deal: More Spending, Some Savings, A Few Gimmicks

    Congress just might give the nation a reprieve on the fiscal drama for all of 2016. House and Senate leadership, together with the president, have agreed on a two-year spending deal, and they have also agreed to put off a debt-ceiling fight until March 2017.

    If it passes, it would mean no more fears of defaults or shutdowns for a while, but it’s ultimately a short-term fix. The new budget is more of a political victory than a fiscal one, leaving many of the nation’s underlying budget issues in place. […]

    Shift Social Security money around. The Social Security Disability Insurance fund will, as of right now, be unable to pay full benefits late next year, when it would have to slash them by 19 percent. This bill would shift money from the old age fund and into the disability fund — a tactic Congress has used several times before.

    Tougher qualifications for disability. The deal tightens rules on qualifying for disability insurance and raises penalties for Social Security fraud, among other things.

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