Rabu, 07 Juni 2023

Debt Limit Bill Passes House Of Representatives

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     The bill to increase the debt limit passed the House of Representatives yesterday. It would force a slight decrease in "non-defense discretionary" spending. That's only a relatively small portion of federal spending but it includes Social Security's administrative anggaran. If you consider inflation, which may be around 5% now, agencies affected can expect a significant decrease in operating funds. Exactly how much each agency in the "non-defense discretionary" category receives will be determined in the appropriations process that lies ahead. While we can hope that the Social Security Administration fares better than other agencies, the reality is that it has been disfavored in recent years, receiving less than most other agencies in the "non-defense discretionary" category.

     The projected cut in operating funds for Social Security probably won't be across the board. I am attaching a page from the debt limit bill. My guess is that the language about continuing disability reviews is intended to make sure that the Social Security Administration has more and more to spend on CDRs even though its appropriation otherwise will go down. Does anyone know whether there's more going on?

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Why Are Fewer People Drawing Disability Benefits Now?

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     From What Factors Explain the Drop in Disability Insurance Rolls from 2015 to 2019? by Siyan Liu and Laura D. Quinby for the Center for Retirement Research at Boston College:

In 2015, the number of individuals receiving Social Security Disability Insurance (DI) benefits began to drop for the first time in two decades. This drop was caused by a wave of terminations, as beneficiaries aged into the Old-Age and Survivors Insurance (OASI) acara, combined with a steep decline in the incidence rate (the number of new DI awards relative to the insured population). ...

The paper found that:

  • A strong economy accounted for about half of the drop in the incidence rate.
  • Policy changes – specifically the retraining of Administrative Law Judges – also accounted for about half the drop.
  • Population aging put slight upward pressure on the incidence rate.
  • In terms of the total number on the disability rolls, the impact of aging on terminations far exceeds its impact on new awards.

The policy implications are:

  • The time may have come to somewhat rebalance the goals of DI from encouraging labor force participation to protecting vulnerable people.
  • Congress may want to consider merging the DI and OASI trust funds. ...
    I'll pull out some interesting charts from this paper over the next few days.