Leading House Dem Proposes Bill to Merge Trust Funds

Rep. Xavier Becerra (D-CA) has introduced legislation that would merge the Social Security retirement and disability trust funds. The purpose of the merge is to reallocate revenues from the retirement to the disability plan, which would forestall the disability plan's insolvency, projected for late 2016. The Committee for a Responsible Federal Budget has a nice blog post summarizing the issues surrounding a trust fund merger.

But I'll be more blunt: merging the trust funds is an effort to -- almost literally -- paper over the larger policy problems with the Disability Insurance program. Yes, DI is suffering financially due to population aging and the larger number of women who qualify for benefits.

But if these were the only factors, it's unlikely we'd have seen such a large shift in the causes of disability applications from things like circulatory disorders (think heart disease) to mental and musculoskeletal disorders. Congressional changes in eligibility rules in the 1980s made it easier to apply for benefits based on those latter types of ailments.

It's also unlike we would have seen the shift in applicants toward less-educated, less-skilled workers had loosened eligibility rules, combined with stagnating wages for working-class individuals, made DI benefits more attractive.

But living on DI isn't an attractive life. You can survive, but only just. And you'll never get ahead, even modestly. It's not a life you'd wish for someone if there were any good alternatives. And there are. A substantial number of studies show that many DI beneficiaries have significant ability to work. If we reward work -- say, by making the EITC more generous -- and require that DI applicants first go through rehabilitation and re-employment training, we can shift the incentives toward staying in the workforce

But that's only going to happen if we decide to grapple seriously with disability reform. Rep. Becerra's bill to paper over the DI program's problems indicated that such an effort isn't likely.