Ways & Means Starts the Conversation on Reforming SSDI

The House Ways & Means Committee held a hearing last week to investigate possible changes to the Social Security Disability Insurance (SSDI) program that would encourage beneficiaries to return to work when possible. The hearing, the first on the program for the full committee since 2008, launches a larger conversation on possible improvements to SSDI as depletion of the trust fund's reserves approaches at the end of 2016.

As one of the fiscal speed bumps lawmakers must address in the 114th Congress, the impending insolvency of the SSDI trust fund presents both a need to secure additional program funding and an opportunity to make improvements to better serve the disability community and taxpayers. Some experts argue, and survey results have shown, that some SSDI beneficiaries wish to return to the workforce but are hesitant to do so because of the complexities and potential loss of benefits if they do.

Much of the hearing focused on the "cash cliff" inherent in the program, and how to fix this work disincentive. Currently, beneficiaries lose benefits after making monthly income above "substantial gainful activity" ($1,090 in 2015). While no solution has been settled on, many have been proposed, like the Benefit Offset National Demonstration (BOND) program or the Generalized Benefit Offset that gradually reduce benefits with income instead of eliminating them entirely.

House Ways & Means Committee Chairman Paul Ryan (R-WI) began the hearing by reiterating the four principles laid out earlier this year by Social Security Subcommittee Chairman Sam Johnson (R-TX), promising that not only would the automatic benefit cut be averted, but also that the program would be improved and promote opportunity for beneficiaries who want to work. Ranking Member Sander Levin (D-MI) shared in Ryan's sentiment on protecting benefits, saying that the nearly 11 million Americans who currently receive SSDI benefits need to be considered in any changes made to the program.

Five witnesses testified before the committee, each representing different perspectives on disability insurance. Mike Zelley, president of The Disability Network, and James Smith of the Vermont Agency of Human Services both spoke on the need to alleviate uncertainty in the current SSDI program. They emphasized how many beneficiaries want to work but find the rules around returning to work too confusing and complex to navigate without fear of losing their benefits. Jill Houghton, executive director of the U.S. Business Leadership Network, represented employers' perspective, noting how the SSDI program's current configuration makes it difficult to attract employees with disabilities due to the uncertainty around program benefits and eligibility when they begin working. Professor John Kregel of Virginia Commonwealth University repeated these concerns and added in frustration over the complexity of administration in the SSDI program. Each supported some type of benefit offset program that would ease the transition back to work.

On the other hand, Paul Van de Water of the Center on Budget and Policy Priorities cautioned the committee against overestimating the work capability of the SSDI population. While he agreed that the cash cliff presents a policy problem if beneficiaries experience it often, Van de Water was wary of any cost savings that a benefit offset program could achieve and indicated that benefit offsets might increase program costs.

Members from both sides of the aisle recognized the complexity in approaching a solution for the cash cliff, though they differed in their desired approaches. Ryan and Reps. Dave Reichert (R-WA), Pat Tiberi (R-OH), and Kevin Brady (R-TX) asked about the importance of softening the cash cliff, to which some witnesses described it as crucial to help workers with disabilities return to labor participation. Levin and Reps. Jim McDermott (D-WA), Lloyd Doggett (D-TX), and Danny Davis (D-IL) agreed with Van de Water that any changes to be made to SSDI must be done precisely and with evidence to support them.

This hearing represents the start of a thoughtful conversation on strengthening the SSDI program into the future. To add to the approaches discussed by the Committee, the McCrery-Pomeroy SSDI Solutions Initiative has commissioned 12 papers with other ideas for lawmakers to consider as we approach trust fund depletion. The initiative is releasing the ideas at its SSDI Solutions Conference on August 4, 2015.

Click here to RSVP if you'd like to attend the SSDI Solutions Conference.