Our Social Security system is a foundation of our nation’s economic security. President Trump’s proposed 2020 budget – like his 2018 and 2019 budgets – would make substantial cuts to the Social Security programs for retirement and disability.
Nearly all U.S. workers pay in to Social Security and are insured for Old-Age, Survivors’ and Disability Insurance. The Supplemental Security Income (SSI) program, or SSI, is another core part of this system. SSI provides a basic standard of living for extremely low-income seniors and for children and adults with significant disabilities. President Trump’s proposed 2020 budget cuts over $84 billion from Social Security and SSI over 10 years, including at least $72 billion over 10 years proposed in cuts to the Social Security disability programs. Some of those cuts are as follows:
Cut: $47.6 Billion
Budget line item: “Test new approaches to increase labor force participation”
The budget proposes to generate nearly $50 billion in savings through Social Security demonstration programs to help disability beneficiaries to stay at work or return to work. Since 1980, Social Security has initiated 8 demonstrations to promote return to work. As summarized by Mathematica, all completed demonstrations have reported modest positive outcomes, including increased earnings. However, “none of the findings reported to date show that the demonstrations tested would likely lead to a substantial reduction in caseload sizes” (p. 5).
Cut: $2.3 Billion
Budget line item: “Offset overlapping unemployment and disability payments”
While the budget purports to promote work, it may punish Social Security disability beneficiaries for doing just that. Under longstanding bipartisan Congressional policy, Social Security already encourages disabled beneficiaries to attempt to work. Work incentives include allowing people to earn up to a “substantial gainful activity” level ($1,220 per month in 2019) as well as numerous other work incentives. Beneficiaries who attempt to work, but get laid off from a job through no fault of their own, may qualify for Unemployment Insurance benefits that their employers have paid for. As explained in this CCD fact sheet, cuts to these benefits would put beneficiaries’ ability to meet their day to day living expenses at risk and would deter work by punishing people who attempt to work. For these reasons, 75 national organizations have opposed past versions of this proposal.
Cut: $10 Billion
Budget line item: “Reduce 12 month retroactive Disability Insurance benefits to six months”
People who qualify for Social Security disability benefits may get benefits retroactively, for up to 12 months prior to application. Retroactive eligibility starts in the first month in the 12 months prior to application that Social Security finds that a person met all eligibility criteria, including having an eligible disability. Social Security has provided these retroactive benefits since 1958, after a study found that many people did not file for benefits in the first month that they were eligible – and as a result, lost out on one or more months of benefits. Retroactive benefits can be vital for many newly-qualified beneficiaries who can use the retroactive benefits to help pay off medical bills and other disability-related and daily living expenses. The average disabled worker receives $1,234 per month in Social Security benefits, representing over $7,400 on average for people who lose the full six months under this cut.
Cut: $6.8 Billion
Budget line item: “Create sliding scale for multi-recipient Supplemental Security Income (SSI) families”
SSI’s benefits average only about $565 per month, or $19 per day, and are the only personal income for roughly 3 in 5 recipients with disabilities. The maximum federal SSI payment for an individual ($771 per month in 2019) is less than 75 percent of the federal poverty guideline for a single person. SSI lifts roughly half of recipients out of deep poverty. According to the Consortium for Citizens with Disabilities (CCD), the largest consortium of national advocacy groups: “Sliding scale” proposals to cut SSI if recipients live together – including families – would run counter to the fundamental American value that people should be able to pull together in tough times.” CCD claims SSI cuts would harm already-struggling households, making it harder to put food on the table, keep the lights on, and meet out-of-pocket medical and disability related expenses. Also, “sliding scale” cuts would be very difficult and costly to administer.
Additional Cuts: $15 Billion
The budget proposes to cut an additional $15 billion out of Social Security programs – including the retirement, survivors’, and disability programs as well as SSI – in a variety of ways. These include by disallowing discharge of Social Security overpayment debts from discharge in bankruptcy, by increasing Social Security’s overpayment threshold, and by additional measures characterized as “reducing improper payments.”
Center for Budget Policy and Priorities Viewpoint: https://www.cbpp.org/research/federal-budget/2020-trump-budget-a-disturbing-vision