Jim Kolbe and Charlie Stenholm: Congress Can't Dodge Social Security Disability Insurance Trust Fund's Approaching Insolvency

Jim Kolbe and Charlie Stenholm are former members of Congress and members of the Committee for a Responsible Federal Budget. Jim Kolbe (R-AZ) served from 1985 to 2007, while Charlie Stenholm (D-TX) served from 1979 to 2005. They wrote a commentary that appeared in Roll Call, which appears below.

As if stirring, like Rip Van Winkle, from a 20-year snooze, Congress is finally awakened to the teetering finances of the Social Security’s disability program. Better late than never, but policymakers have known for years that this day would arrive — and it has.

While some say the alarms being raised about the projected depletion of the Social Security Disability Insurance Trust Fund by late 2016 is a manufactured crisis easily fixed by accounting maneuvers, it is actually a stark reminder of the need to address the structural imbalance in the Social Security system. We can’t afford for Congress to ignore these challenges for another 20 years

To understand the impending insolvency of the disability program, it is important to recognize that Social Security is technically two different programs — one for old age (the Old-Age and Survivors Insurance Trust Fund, or OASI) and one for disability — each with its own trust fund. Both these programs face huge financial shortfalls, but because the old-age fund is bigger and projected to run out of funds further in the future, the idea has been floated to extend the life of the disability program by “reallocating” funds currently dedicated to the old age program.

Some reallocation or transfer will likely be necessary given the short timeline. But as Congressional Budget Office Director Doug Elmendorf has noted, simply moving money around between programs does not advance the goal of actually improving either program, not does it improve the finances of the drastically out-of-balance Social Security system as a whole. Reallocation might buy some time for the disability fund, but it puts both programs on track to deplete their reserves and be unable to pay full benefits in the early 2030s — when today’s 45-year-olds are just retiring and today’s 62-year-olds are barely 80.

Many of the drivers of growth in the disability program will also apply to the old-age program — just a few years later. The aging of the baby boom generation into the ages when disability is most likely — 45 to 65 — is a major cause of the recent strain placed on the SSDI program and this same demographic wave is headed to the old age program next. It would be irresponsible for policymakers to ignore the warning buoy when it is clear the tidal wave is coming

Back in 1950, there were 17 workers for every senior collecting Social Security benefits. Today that ratio is 3 to 1. By the time the boomers are all retired in 2030, it will fall to 2 to 1. Not surprisingly, the result will be insolvency. Even without reallocation, the old age program is slated to exhaust its trust fund entirely sometime between 2032 and 2034. With reallocation the day of reckoning will only come sooner.

Many advocates of reallocation argue that the projected depletion of the DI trust fund is not a crisis because it has been anticipated for many years. But the fact is precisely why we can’t afford a reallocation that leaves actions to restore Social Security solvency for some time in the future.

When Congress enacted reallocation legislation in 1994, the Social Security Trustees warned that the reallocation would shore up DI finances only over the short term and needed to be followed by reforms that improved the DI program and addressed the shortfalls facing the entire program. The failure of Congress to heed those warnings over the last two decades has brought us to the place we are today, with the DI trust fund on the brink of depletion. With the combined Social Security trust fund facing depletion in less than two decades, we can’t afford a repeat of that experience.

When we started working together in 1997 to draw attention to the financial challenges facing Social Security, the problem seemed far into the future. The perception that this was a distant problem prompted many people to argue we could wait. This attitude contributed to the failure of policymakers to enact reforms to render the Social Security system financially sound.

There is still time for Congress and the president to put Social Security on a financially stable path through changes that are phased in gradually while strengthening the safety net for those who need it. The longer we wait to take the necessary reforms, the harder the task becomes. Republicans and Democrats can come together on this, as the two of us did when we were in Congress. We can have a healthy debate on exactly what policies should be in the final fix, but the worst thing we can do is to take options off the table and make action politically impossible.

Leaders must lead and have an honest conversation about the future of Social Security. Now seems to be a good time.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.