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Hatch Introduces Proposals on Social Security Disability Insurance

By Steve Bell, Shai Akabas, Brian Collins

Friday, May 8, 2015

The Social Security Disability Insurance (DI) Trust Fund becomes insolvent next year. How to deal with that fact has drawn a number of suggestions. Senate Finance Committee Chairman Orrin Hatch offered his own legislative suggestions in a trio of bills introduced this week.

President Obama also offered a number of DI proposals in his Fiscal Year 2016 budget. In addition, the House of Representatives has passed a rule that prohibits a reallocation of funds from the retirement to disability trust fund unless it is accompanied by reforms that “[improve] the overall financial health of the combined Social Security Trust Funds.” Congress will not allow the DI fund to falter. The question becomes, “what will be the nature of any reforms upon which the President and Congress can agree?”

Chairman Hatch’s legislation would require the Social Security Administration to update the medical-vocational grid, which is used in the disability determination process, and provide online tools to assist beneficiaries in determining the impact of earnings on eligibility for benefits. Additionally, Chairman Hatch announced support for a bill that would bar use of evidence in the determination process from individuals, including physicians, who have been convicted of a felony or expelled from participation in Medicare or Medicaid.

President Obama’s budget includes proposals to establish a mandatory funding source for Continuing Disability Reviews, to test new approaches that help people with disabilities remain in the workforce, and to offset DI benefits for a period in which unemployment insurance was received. The Congressional Budget Office estimated that the latter proposal would reduce outlays by $1.65 billion through Fiscal Year 2025.

We expect at least some reform in the program, as well as a transfer of funding from the larger Old-Age and Survivors Insurance Trust Fund to deal with the imminent financial situation, but what such a package will look like is still to be determined. The Bipartisan Policy Center is currently working with a range of stakeholders and experts to build consensus around a set of reforms that will move the debate forward to ensure that DI recipients continue to receive benefits on time and in full, while improving the structure and operations of the program.

KEYWORDS: 114TH CONGRESS, CONGRESSIONAL BUDGET OFFICE, FY 2016 BUDGET, MEDICAID, MEDICARE, ORRIN HATCH, PRESIDENT BARACK OBAMA, SENATE FINANCE COMMITTEE, SOCIAL SECURITY ADMINISTRATION, SOCIAL SECURITY DISABILITY INSURANCE