Social Security Disability Reduction

On the heels of a new report detailing how the President’s Social Security privatization proposal will reduce disability benefits for millions of Americans, Senator Tom Harkin (D-IA) called on the Bush Administration to ensure that American with disabilities will be entitled to the same reliable benefits that current beneficiaries receive. The Center on Budget and Policy Priorities report found that the Bush Administration’s privatization proposal would reduce benefits for average earners and that this reduction would apply equally to retirees, survivors, and people with disabilities.

“Three in ten currently healthy twenty-year olds will become disabled at some point in their lives and, as a result, will require financial assistance to survive. The majority of these workers will not have worked long enough to have accumulated enough money in private accounts to meet even their most basic needs,” Harkin said. “The American people need to see a plan that confirms the President will not cut these needed benefits.”

President Bush has proposed to privatize Social Security which would drive up the debt at $5 trillion and put Social Security at risk. In addition to privatization, the President has proposed changing the Social Security benefit structure through “progressive price indexing” which Social Security Administration’s actuaries have said would reduce benefits for average earners by approximately one-third. This reduction would apply equally to retirees, survivors, and people with disabilities. If disability benefits are not cut, retirement benefits for middle-class workers will be slashed even more deeply than the figures cited above.

The report also points out that Americans with disabilities could face further cuts when they reach retirement age. Currently, those receiving disability benefits are automatically converted to retirement benefits when they reach retirement age. Since retirement benefits would be cut under the proposal, people with disabilities would see their benefits reduced at that time.

“President Bush says that he has no current plans to cut disability benefits. Unfortunately, the president’s Social Security privatization plan points to substantially decreasing this much-needed support,” Harkin said. “Before Congress can begin to consider Social Security reform, it is essential to know with certainty how people with disabilities will be affected.”

Social Security is critical for the 6.2 million Americans that receive disability benefits. For many, it is their sole source of income for necessities such as prescription drugs, groceries, and housing. Equally important, people with disabilities rely on all facets of Social Security, including Retirement Insurance when they age out of SSDI, benefits from their parents who have reached retirement age, and Survivor’s Insurance. All the while, Social Security has been able to provide this support at a relatively low cost.

Harkin and eighteen other Senators wrote to President Bush asking him to make clear that the administration will protect disability insurance for the millions of disabled Americans, and that workers who become disabled in the future, and families eligible for survivor benefits, will be entitled to the same reliable benefits that current beneficiaries receive.