Could The GOP Turn Social Security Into A Perennial ‘Crisis’ Like The Debt Limit?

House Budget Committee Chairman Rep. Paul Ryan, R-Wis., right, accompanied by House Speaker John Boehner of Ohio, left, takes reporters' questions as during a news conference on Capitol Hill in Washington, Wednesday,... House Budget Committee Chairman Rep. Paul Ryan, R-Wis., right, accompanied by House Speaker John Boehner of Ohio, left, takes reporters' questions as during a news conference on Capitol Hill in Washington, Wednesday, Dec. 11, 2013, as House Republicans signaled support for a budget deal worked out yesterday between Ryan and Senate Budget Committee Chair Sen. Patty Murray, D-Wash. The budget deal was one of a few major measures left on Congress' to-do list near the end of a bruising year that has produced a partial government shutdown, a flirtation with a first-ever federal default and gridlock on President Obama's agenda. (AP Photo/J. Scott Applewhite) MORE LESS
Start your day with TPM.
Sign up for the Morning Memo newsletter

With a fight over Social Security brewing in the new Republican Congress, advocates are worried that a possible GOP angle is to turn Social Security into a perennial crisis in much the same way raising the debt limit has become. By setting up a series of forcing events, the argument goes, Republicans would be able to create an ongoing crisis atmosphere around Social Security that would create a pretext for dramatic changes to the 80-year-old program.

As TPM has documented, the House passed a rule on the first day of the new Congress that prohibited the routine transfer of tax revenue between Social Security’s retirement and disability funds, the latter of which will stop being able to make full benefit payments starting in late 2016. The transfer, known as reallocation, has been done under Democratic and Republican administrations multiple times in the past, most recently in 1994, but the new House rule forbids it unless it is accompanied by measures that improve the overall solvency of Social Security.

House Republicans have been transparent about their intentions of using the new rule to force a debate on changes to the program, while advocates and Democrats warned that the rule could lead to benefit cuts. But there is another possibility: Republicans could pass a short-term reallocation that would set up another shortfall a few years down the road — and one that could arrive under a new Republican president.

It would in theory turn Social Security reallocation into something akin to the debt ceiling of the last few years: A formerly routine accounting move that the GOP is now trying to use as a leverage point to advance conservative proposals. Advocates told TPM that it was a scenario they were taking seriously.

“Just as with the debt limit, Congress could require regular short-term action, keeping a climate of crisis and requiring new legislation frequently,” Nancy Altman, co-director of Social Security Works, told TPM. Advocates are pushing for a clean reallocation, which is projected to keep both funds solvent until 2033.

It isn’t just advocates dreaming up this scenario, though — conservative wonks and the lead Social Security actuary have floated the possibility of a short-term fix. It could take a number of forms: The retirement fund could loan money to the disability program, which then must be paid back by a certain time and with interest, which would be intended to force Congress to look at changes to the program so that the loan could be paid off. Or, alternatively, the debt would be waived if cost-saving changes to the program were made. It might not be their first choice, but it’s an option.

“That presumably would keep pressure on Congress then to do some sort of reform sooner, rather than 20 years down the road,” Jason Fichtner, a senior research fellow at George Mason University’s Mercatus Center, who has written on the inter-fund borrowing proposal and was a top official at the Social Security Administration under President George W. Bush, told TPM.

Another possibility, outlined to Politico by Steven Goss, Social Security’s lead actuary, is a very small ‘clean’ reallocation that skirts the fine print of the House rule, but would only cover a year or so. That would lead to a similar scenario to the one Republicans are seizing now in the very near future.

These are options being watched closely by Social Security advocates, who say they’ve heard that House leadership might be interested in taking that course.

“That’s a very real concern. Whether it plays out that way, it remains to be seen,” Webster Phillips, senior policy analyst for the National Committee to Preserve Social Security and Medicare, told TPM. “Even if in the end there is some kind of a reasonable outcome, that will be just a great deal of anxiety that’s created in the minds of the 11 million people who are receiving disability benefits.”

If congressional Republicans do take the short-term route, expect that last point — the uncertainty for Social Security recipients — to be a major talking point from the advocacy groups.

“We can’t imagine why Congress would take this path, when there’s a simple solution that puts both of Social Security’s funds on a steady financial path through 2033,” T.J. Sutcliffe, a program director at The Arc, which represents the disabled, told TPM. “People who apply for DI, or who look to DI for essential income, are often living in extremely precarious financial situations.”

“What would a short-term action on DI say to people who rely on benefits,” she continued, “or to the workers who are currently paying into the system and may need to apply for DI in the future?

Latest DC
81
Show Comments

Notable Replies

  1. That’s probably why the rule was changed, they have to introduce drama to give the appearance of actually doing something relevant for the voters. It’s more of an effort to set the agenda than anything else.

  2. Avatar for buford buford says:

    The Gop hate and fear campaign is working…I really hate these people, and I fear the gop more than any Al Qaeda, or ISIS group…at least you know these people want to kill us…It seems the gop/baggers are much much more dangerous, and evil than the Islamic Extremists…The corporate corrupted media, and the bribed congress, will be the death of many more Americans than what any terror group can manage…

  3. Avatar for eykis eykis says:

    Each day more and more Boomers retire. Many have little or no retirement money or pensions and the Repigs who destroyed the economy want us to suffer in old age.

    Raising the cap on income = ALL INCOME - no funny accounting and no caps, ALL INCOME and then pay a LIVING INCOME for recipients.

    I am 61; have paid into Social Security since 1968, work a good full-time job to this day and I damn well earned every dime I will get from my ENTITLEMENT.

    Where is the INTEREST on all that money I’ve paid since 1968?

    Hubby is 62, same situation - we FULLY EXPECT to receive our FULL ENTITLEMENT dollars as do MILLIONS OF HARD-WORKING AMERICANS.

    Lyin Ryan and the Repig THIEVES have never worked a real job or a full-time job in their lives yet make a MINIMUM WAGE of $175,000 a year for 100 days of ‘easy work’ and have full retirement benefits and free healthcare for LIFE.

    FUCK THE REPIGS and DAMN IT, VOTE - YOUR LIFE DEPENDS ON YOUR VOTE.

    In 2020 we need to RE-DISTRICT and get rid of these GERRYMANDERED PIGS so we can vote in MODERN PROGRESSIVE POLITICIANS who work for WE THE PEOPLE.

    I live in Tennessee, one of the low-wage, high unemployment, right-to-work, at-will states. How can our governor, Bill Haslam, who is worth over 2 BILLION dollars understand the plight of the citizens? He cannot and the rich much be tossed from public office.

    BillionaireBill and the General Assembly of EvangeliBaggers did NOT expand TennCare (Medicaid) and 5 years later we are going to have a Special Session to work on the bastardized garbage the Repigs want approved by HHS. They want the ‘poor and disabled’ to PAY CO-PAYS for healthcare while jumping through more hoops to qualify. We have NO state exchange and the assholes have quit doing anything for TennCare and blame it on the ACA. The FACT the politicians decided the federal site should take care of state Medicaid recipients is one of the most heinous and ludicrous bills they passed. The feds did NOT expect to get ZERO help on healthcare, much less expect states to DUMP their obligations to their citizens squarely on the feds and not tell anyone is BULLSHIT. We pay higher insurance premiums because Medicaid was not expanded.

    FASCISM IS PREVALENT IN TENNESSEE. Former Senate Leader Bill Frist, a gazillionaire doctor of HCA and the Terri Schiavo Fiasco notoriety is getting $22 MILLION in tax breaks for building a building in downtown Nashville. He was going to build the building anyway.

    Tax breaks for BIG BUSINESS are the norm…tax revenues keep falling, we are the next Kansas with 9.75 sales tax on everything and now the PIGS want to raise the gas tax by 20 cents a gallon. But hey, no state income tax! Idiots in office cut state government to the extent no one can get ANY help.

  4. “…a possible GOP angle is to turn Social Security into a perennial crisis…”

    Proving they can’t manage the government.

Continue the discussion at forums.talkingpointsmemo.com

75 more replies

Participants

Avatar for josephebacon Avatar for littlegirlblue Avatar for Patriott Avatar for trippin Avatar for sywht Avatar for arrrrrj Avatar for rudesan Avatar for cometboy Avatar for jimtoday Avatar for tani Avatar for randyabraham Avatar for bluinmaine Avatar for Lacuna-Synecdoche Avatar for sherlock1 Avatar for missliberties Avatar for barblzz Avatar for dnl Avatar for azjude Avatar for darrtown Avatar for emilianoelmexicano Avatar for bubbanerdus Avatar for stevieD Avatar for bckrd1 Avatar for 62fender

Continue Discussion
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Deputy Editor:
Editor at Large:
General Counsel:
Publisher:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: