Social Security Disability Insurance Program

Floor Speech

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Mr. SANDERS. Mr. President, yesterday the Budget Committee, of which I am the ranking member, held a very important hearing on the Social Security Disability Insurance Program, which is a life-and-death program for nearly 11 million Americans, including more than 1 million veterans and almost 2 million children who rely on this program to get the nutrition they need, to heat their homes, and to pay for their medicine. This is a program that impacts some of the most vulnerable people in this country.

Let me be very clear in describing this program. This is a program American workers have paid into. It is an insurance program. This is not charity.

When Americans pay 6.2 percent of their income in payroll tax, almost 1 percent of that amount goes into the disability insurance program. The average disability insurance benefit is less than $1,200 a month, and for 30 percent of beneficiaries this is all of the income they have--$1,200 a month, 30 percent of the beneficiaries of SSDI. For them this is all of their income. Nobody is getting rich off of disability benefits.

Sadly, on the very first day of the new Congress, House Republicans passed a rule that would lay the groundwork for a 19-percent cut in Social Security disability insurance benefits. Specifically, this rule would prohibit the reallocation of payroll taxes from the Social Security retirement fund to the disability insurance fund, a routine accounting practice that has been done 11 times in the past in a very noncontroversial, nonpartisan way. But Republicans in the House said they will not allow this to happen unless it is accompanied by a cut in Social Security benefits or an increase in taxes.

In other words, what the House Republicans are saying is that either there will be cuts to the disability program or, if that fund is to be replenished, the money will have to come from cuts to the Social Security Retirement Program. In my view, that is very wrong.

If the Social Security disability program was cut by 19 percent, it would mean the average benefit of approximately $13,980 a year for a disabled person--which is already where the poverty level is--would be cut by 19 percent to $11,324. That is what a 19-percent cut to the average Social Security disability insurance benefit would mean.

Do any of my colleagues believe a person with a severe disability--maybe that person is facing a terminal illness, maybe that person is paralyzed, maybe that person is an amputee. Does anybody believe a disabled person in America in the year 2015 should be forced to live on $11,324 a year?

Unfortunately, that is what the House Republicans are laying the groundwork for. That is what a 19-percent cut in disability benefits would mean, and we must not allow that to happen.

In my view, the debate we are having is nothing more than a manufactured crisis which is part of the long-term agenda of a number of Republicans who in fact are trying to cut Social Security. In my view, cutting Social Security is a very bad idea.

Let us be very clear because there is a lot of misinformation about Social Security that is getting out there. The fact is Social Security has a $2.8 trillion surplus and can pay out every benefit owed to every eligible American for the next 18 years.

Let me repeat that. Social Security has a $2.8 trillion surplus and can pay out every benefit owed to every eligible American for the next 18 years. That is not the opinion of Senator Bernie Sanders. That comes from report of the Social Security trustees.

There are a lot of folks out there who are talking in one way or another about cutting Social Security. Some of them are saying let's raise the retirement age. Let's have struggling workers work another 1 or 2 years or more before they can get Social Security benefits. Other people are saying these COLA benefits are just too generous. In recent years, Social Security beneficiaries know we have had several years where people have gotten a zero cost-of-living increase and other cost-of-living increases in recent years has been minuscule. Yet some are saying let's move to a so-called chained CPI and lower the cost-of-living adjustments.

Other people are talking in one form or another about a means test, which would mean significant reduction in benefits for many seniors. Others who are bolder--including some of our Republican colleagues--are talking about the privatization of Social Security. As many will remember, under President Bush that proposal in fact was brought forward and pushed very hard by Republicans.

Because of an aging population, because more women are in the workforce today, and because of an increase in the retirement age, it is true there has been an increase in the number of Americans who are receiving disability benefits, but this is not a surprise. This is a demographic reality that the Social Security Administration predicted would happen back in 1994. The fact that the Social Security Disability Insurance Program is facing a funding shortfall next year is a surprise to absolutely no one. It was predicted 20 years ago.

Furthermore, shortfalls in the Social Security Disability Insurance Program or the Social Security Retirement Program is nothing new. It has happened 11 times in the past and has always been resolved in a simple, noncontroversial way. That is the reason for the reallocation of payroll taxes between the Social Security retirement fund and the Social Security disability fund.

As this chart shows, reallocation was done in 1968 under President Johnson; in 1970 under President Nixon; in 1978, 1979, and 1980 under President Carter; in 1982, 1983, and 1984 under President Reagan; and in 1994, 1997, and 2000 under President Clinton. In other words, this is a commonplace procedure which has happened under Democratic and Republican Presidents in an absolutely noncontroversial way.

Interestingly, of the 11 times funds were reallocated, it turns out that on 5 occasions it was the disability fund that was reallocated to help the retirement fund. In other words, money was shifted from disability to the retirement fund. This time it is going the other way.

At an interesting committee hearing yesterday, a number of colleagues--Republicans and Democrats--made the point that the reallocation of funds in order to prevent a 19-percent cut in disability benefits was a short-term solution; that it was not going to solve the overall issue of how do we fund Social Security for our kids and our grandchildren. That point is clearly right. No one can argue with that. What we have to do right now in fact is to prevent a massive cut to the disability program, but at the same time, while Social Security can pay out all benefits for the next 18 years, it is important that sooner than later we begin to address the problem of how do we make Social Security solvent, not just for 18 years but for decades beyond that.

In terms of the disability program and the need to go forward with reallocation, every major senior organization in this country, representing tens of millions of people, wants us to do just that. These organizations include AARP, the National Committee to Preserve Social Security and Medicare, and the Alliance for Retired Americans, which together represent over 60 million older Americans. What they are saying loudly and clearly is it is imperative we go forward with this reallocation to prevent cuts in the Social Security disability fund. They are united in opposition to the rule passed by the House Republicans to make reallocation more difficult.

Yesterday AARP wrote a letter to the chairman of the Budget Committee, Senator Enzi, and to myself, the ranking member. Let me quote from this letter:

To prevent any imminent reductions in SSDI benefits, we urge you to rebalance the allocation of social security payroll taxes between the OASI trust and the DI trust as Congress has done with success in the past. Because of SSDI, millions of disabled Americans are able to live their lives with dignity, and support their families. The highest priority in the near term is to ensure that SSDI beneficiaries, most of whom are older Americans, are not put at risk of a 20 percent benefit cut in the very near future.

That is from AARP and virtually every major senior organization. Together, they represent some 60 million older Americans and agree exactly with the sentiment expressed by AARP.

I am delighted President Obama proposed this reallocation plan in his budget request. I applaud the President for doing that. As I mentioned, the Social Security trust fund can pay out every benefit owed to every eligible American for the next 18 years.

At yesterday's hearing, my Republican friends--and, again, some Democrats--made the very valid point that we have to go further than just reallocation, that we need a long-term solution to make certain our children and our grandchildren will have all of the benefits to which they were promised. I agree with that sentiment. That is why last year I introduced far-reaching Social Security legislation which in fact would make Social Security solvent for decades to come.

The concept behind this legislation is pretty simple. It would simply apply the Social Security payroll tax on income above $250,000. In other words, it would scrap the cap that currently exists. Right now in the midst of massive wealth and income inequality in our country, a Wall Street CEO who makes $20 million a year pays the same amount into Social Security as someone who makes $118,500. If you make $20 million or you make $118,000, the amount of money you put into the Social Security trust fund is the same because the cap is now at $118,000.

In 2013 I asked the Chief Actuary of the Social Security Administration to estimate how long the solvency of Social Security would be extended if we simply applied the Social Security payroll tax on income above $250,000. His answer was that Social Security would be made solvent until 2060--45 years from today. I refer my colleagues to the letter from the Social Security Chief Actuary that I had printed in the Congressional Record on February 5 of this year.

Further, the Center for Economic and Policy Research has estimated that my proposal--my legislation--would only impact the top 1.5 percent of wage earners. More than 98.5 percent of Americans would not see their taxes go up by one dime under this plan.

So I say to my colleagues, if you want to extend the solvency of Social Security--not just for the next 18 years, which is currently the case, but for the next 40 to 45 years--I hope you will join me in making sure the very wealthiest people in our country--the top 1.5 percent--pay their fair share into the Social Security trust fund. To my mind that is a much better idea than raising the retirement age, forcing hard-pressed workers to work another year or two before they get their benefits. It is a much better idea than cutting the cost of living adjustment. It is a much better idea than many of the ideas I have been hearing for the last few years.

We all know that the huge increase that we have seen in this country in wealth and income inequality has resulted in millions of Americans seeing a decline in their income, and we have people from one end of this country to the other working longer hours for lower wages.

In fact, while the wealthiest people have become much richer, real median family income today is almost $5,000 less than it was in 1999. Incredibly, the typical male worker--the man right in the middle of our economy--made $783 less last year than he did 42 years ago. The typical female worker--the woman in the middle of the economy--earned $1,300 less last year than she did in 2007.

Today the top one-tenth of 1 percent owns more wealth than the bottom 90 percent. As this chart shows, the top one-tenth of 1 percent owns as much wealth as the bottom 90 percent. In terms of income what we are looking at is a situation where almost all of the new income generated since the Wall Street crash goes to the top 1 percent.

Why is this significant? Well, obviously it is significant because millions of Americans have not seen growth in their income. In fact, they have seen a decline in their income. But what makes it also significant is that this decline in income for millions of Americans--this growth in income and wealth disparity--has also had a profound impact on the solvency of Social Security.

I want all of my colleagues to understand that if income inequality remained at the same level today as it was in 1983, Social Security would have $1.1 trillion more in the trust fund than it does today. Why? Because, obviously, when workers saw their wages go down, less money went into the Social Security trust fund. When people on the top went over the cap, they were no longer contributing from their income that was above the cap. So less money goes into the Social Security trust fund.

If the payroll tax had simply continued to cover 90 percent of all earnings, which it did in 1983, rather than the 83 percent that it covers today, the Social Security trust fund would be able to pay every benefit owed to every eligible American--not just for the next 18 years but for the next 38 years.

So when we talk about income and wealth inequality in this country, that is not only a tragedy unto itself; when we see the middle class shrinking and real wages for American workers going down, in some cases significantly, it is also a major problem for the Social Security trust fund.

Once again, if income levels had remained the same today as they were in 1983--if incomes had gone up rather than gone down--we would see over $1 trillion more in the Social Security trust fund.

So, I agree with my Republican colleagues who say that doing the reallocation for the disability trust fund is a temporary solution. It is. But it is an important solution, and it is something that has been done 11 times in the past. It is something that is supported by the AARP and every major senior organization. It is something we must do right now to prevent a 19-percent cut in benefits for some of the most vulnerable people in this country. So I won't argue with anyone who says, well, that doesn't go far enough. We need a long-term solution.

So I challenge my Republican friends: Do you have the courage to come up with a solution other than cutting benefits for seniors? Do you have the courage to come up with an idea that says: No, it is bad, it is wrong to raise the retirement age, and it is wrong to cut cost of living adjustments.

Are you prepared to deal with the reality that because of the growing disparity in income in America, we have lost substantial funding for Social Security, and the way to address that issue--the way to extend Social Security--is to ask the people on top, the people who have been doing phenomenally well in recent years, to pay more into the Social Security trust fund?

I do agree with my Republican colleagues that we have to look at Social Security from a long-term perspective for our kids and our grandchildren.

We have brought forth an idea: Raise the cap. Ask people making more than $250,000 a year to pay the same percentage of their income into the Social Security trust fund as somebody making $50,000 a year. I think that is a sensible idea, and I look forward to hearing some of my Republican friends work with us on this concept.

With that, I yield the floor.

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