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Republicans seeks broader changes on Social Security

Obama wants to shift $330 billion from retirement fund to disability program.

Senate Republicans pressed the Obama administration Wednesday for a plan to address the long-term health of Social Security as lawmakers began a debate over the rapidly approaching shortfall in a program that benefits millions of disabled Americans.

Congress is in the early stages of negotiation over the Woodlawn-based agency's disability insurance program. Without intervention, some 11 million beneficiaries, including about 150,000 in Maryland, will be hit with a 19 percent cut in benefits late next year.

President Barack Obama wants lawmakers to shift $330 billion in payroll tax revenue from Social Security's retirement fund to the disability program. Republicans say that approach, by itself, is at best a short-term patch and at worst would delay more serious reforms.

"I'm really tired of bailing out water when the boat has got a hole in it a mile wide," Sen. Lindsey Graham said at a Senate Budget Committee hearing on the issue Wednesday.

"Somebody, someday, somehow up here is going to have to do the hard things," said the South Carolina Republican, who is considering a run for president in 2016.

Carolyn W. Colvin, acting commissioner of the Social Security Administration, defended Obama's proposal to reallocate the revenue.

"It simply buys some time for Congress to come up with a bipartisan solution" to address insolvency, Colvin said. "We still have 18 years."

"That's not very long, is it?" asked Sen. Bob Corker, a Tennessee Republican. He pointed out that Washington has failed to address the problem for decades.

"I would hope it wouldn't take us 18 years to come to a solution," Colvin responded.

Congress has shifted funds from the retirement fund to the disability fund 11 times in the past. Colvin noted it is ultimately the job of Congress to deal with funding shortfalls, either by cutting benefits in the program or raising taxes.

Neither approach is politically popular.

The disability fund, with 10.9 million beneficiaries, is expected to experience a shortfall late next year — which means it would no longer be able to pay full benefits.

The retirement program, with 48 million recipients, isn't set to run into trouble until 2034. If lawmakers approved a five-year transfer of revenue, actuaries predict, it would shorten the retirement fund's solvency by one year.

"The debate we are having today is nothing more than a manufactured crisis," said Sen. Bernie Sanders, a Vermont independent who is also considering a run for president in 2016.

"Short-term, we have to do what has been done 11 times in the past," he said. "Long-term, we have to work together to make Social Security solvent for our kids and our grandchildren."

Disability insurance has long been controversial, and the program drew increased scrutiny in recent years as the number of beneficiaries soared.

Enrollment grew 50 percent, from 7.2 million to 10.9 million, from 2002 to 2012. The value of benefits paid out over that period also grew, from $66 billion to $137 billion.

But there are indications that trend is beginning to change. Partly because the Baby Boomer generation is aging out of the program and partly because the economy is improving, the number of disability applications has been falling since 2011.

The total number of beneficiaries — including dependents — fell last year for the first time since 1983, according to agency data.

Colvin, an Odenton resident with a long history at the agency and in Maryland government, has served as acting commissioner since 2013. Obama nominated her for a full, six-year term, but her confirmation fell apart in the final hours of last year's Congress.

Senate Republicans objected to her because of concerns about a $300 million computer contract that is being investigated by a federal inspector general.

Obama has not renominated Colvin for the job. She said Wednesday she expects he will.

Discussion about the disability program was elevated last month when House Republicans approved a rule that will make it more difficult to approve a transfer of money without some changes intended to deal with long-term solvency.

GOP lawmakers have said that the pressing deadline is a good time to force changes on the larger issues.

"The idea that this is a trumped-up, phony crisis is absolutely ridiculous," said Sen. David A. Perdue, a Georgia Republican. "The longer we wait, the harder it is to solve this."

Congress created the program in 1956. The agency has struggled for years with a backlog in processing claims. The number of cases awaiting a hearing grew from about 694,000 in mid-2010 to about 955,000 last year, according to the agency's inspector general. The average processing time for a hearing increased from 415 days to 437 days during that period.

john.fritze@baltsun.com

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