Rich Fiesta, the Executive Director of the Alliance for Retired Americans told its New York State chapter at its biannual meeting on Wednesday that the House and Senate GOP leadership has changed rules in their chambers that will make it harder to avert a funding crisis for the Social Security disability fund. Fiesta said that the new Congress is again trying to push reforms in Social Security and Medicare that will hurt beneficiaries. He said that the Social Security retirement and survivors fund is solvent through 2037 but the disability fund which is also part of Social Security may run out of money by the end of 2016.
Fiesta said it is clear the GOP leaders are trying to “manufacture a crisis” so that they can seek concessions on overall entitlement spending. The ARA says that new House and Senate rules “establish a point of order prohibiting reallocation from the Old Age and Survivors Insurance (OASI) trust fund to the Disability Insurance (DI) trust fund within the Social Security program. This procedural change to the House rules is unprecedented. It will have the effect of holding the DI trust fund hostage, and is a direct attack on seniors, disabled Americans and the Social Security trust fund.” Fiesta noted that the Treasury Department has transferred between those funds numerous times in the past.
This sounds like a losing strategy for those who dislike Social Security and hopefully it will backfire just as efforts to shut down the federal government backfired on opponents who demanded major changes in the Affordable Care Act and risked a national default as well.
Fiesta said the Alliance for Retired Americans wants to lift the cap on Social Security earnings which is currently $118,500 per year. Doing so would enable Social Security to actually provide an $800 a year increase in benefits for those receiving the lowest benefits and would extend solvency of Social Security trust funds.
Advocates for increasing the minimum wage also note that raising the minimum wage to its 1968 equivalent value would add $35 billion in wages that would be subject to the Social Security and Medicare taxes.
For more information on how lifting the earnings cap helps the trust funds, here is a link