Social Security disability funds running low: how Democrats would solve problem

Rep. Chris Van Hollen (D) of Maryland, the top Democrat on the House Budget Committee, charged Thursday that House Republicans have been engaged in “counterproductive” behavior – specifically, in “effectively threatening” not to fix a projected shortfall in the portion of the Social Security system that pays disability claims.

Representative Van Hollen, a key Democratic voice on economic policy, was referring to a nearly party-line vote last week on House rules. The GOP majority adopted a procedural rule to bar legislators from using Social Security retirement funds to support the disability program unless the move is accompanied by measures that stabilize the overall Social Security system. The Disability Insurance Trust Fund is projected to be unable to pay full benefits at some point in 2016.

Van Hollen’s comments are part of his week-long push to carve out a Democratic economic platform that’s more appealing to voters than the one rolled out for the 2014 midterms. Earlier this week, he unveiled a plan to cut taxes for the middle class and encourage wage growth. The cost would be offset with tax revenue from high-income individuals and the financial sector.

“The tax code right now is stacked in favor of those who make money from money and against those who make money from hard work,” Van Hollen said Thursday at a Monitor-hosted breakfast for reporters.

There should be a debate on how to deal with Social Security’s financial issues, the Maryland Democrat said. “I think it is counterproductive to launch that debate by effectively threatening to not address” the disability fund’s outlook, he argued.

Congress has on 12 previous occasions redirected payroll tax funds to prop up the disability fund, so “I don’t think anybody should be threatening insolvency in the near term in the disability fund when there is a clear path that the Congress has taken in order to deal with it,” Van Hollen said.

Not surprisingly, the new chairman of the House Budget Committee, Tom Price (R) of Georgia, disagrees with Van Hollen about the nature of the GOP approach. In an interview with The Hill, Representative Price said, “The fact of the matter is the Social Security Disability Insurance Trust Fund is going broke, going broke next year.... The recipients of disability insurance through the Social Security fund don’t have any friends on the other side of the aisle that are interested in fixing the program.”

The GOP favors an approach in which issues with the entire Social Security system would be addressed.

When asked Thursday about prospects for bipartisan agreement on budget issues, Van Hollen said a “modest” area of agreement might be finding a way to deal with automatic spending cuts mandated by the 2011 Budget Control Act.

“I agree that the defense cap is too tight, but I also think that the cap on things like our investment in education and scientific research is too tight,” he said.

He sees corporate tax reform as a more challenging area for potential bipartisan compromise. “But that is a very tough area even within one party,” Van Hollen cautioned.