Little recourse seen for Democrats on Social Security rule change

Reuters News
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Posted: Jan 12, 2015 6:39 PM

By David Lawder

WASHINGTON (Reuters) - Democrats appear to have little recourse against a House of Representatives rule change that could prompt a steep cut to Social Security disability benefits next year, congressional aides said on Monday.

The new legislative rule, pushed through with little notice last week, would prohibit a routine transfer to the Social Security Disability Trust Fund, which is expected to be depleted by late 2016.

Without an injection from the main Social Security retirement fund, the disability program would have to cut benefits by some 20 percent, only paying out what it can collect from payroll taxes.

Congress approved the last such "reallocation" transfer in 1994 after several in the 1980s under President Ronald Reagan.

Republicans say they passed the rule change to force reforms to the disability program, which they claim is rife with fraud and mismanagement. Democrats, unable to stop the shift, have called it a "stealth" move to cut benefits.

On Monday, Senate Democrats issued a plea to Republican Senate Majority Leader Mitch McConnell to oppose an "audacious" rule change that would "hold hostage" benefits for some 9 million disabled Americans.

"It only increases the chances of yet another unnecessary manufactured crisis, akin to shutting down the government or threatening the full faith and credit of the United States," Richard Durbin of Illinois, the No. 2 Senate Democrat, and seven others wrote in a letter to McConnell. They asked him to "forcibly reject" the change.

McConnell has not commented on the request, but Republican aides say there is little he can do about a legislative rule passed in the House. Since revenue measures must originate in the House, the House rule would ensure that a routine transfer could not take place.

A Democratic aide on the House Ways and Means Committee acknowledged that not much can be done about the rule change until 2016, when the disability fund is close to depletion and an election-year showdown over benefit cuts could occur.

Republican Representative Sam Johnson, of Texas, who authored the rule change, said it was meant to protect Social Security retirement benefits from being "raided" by the "fraud-plagued disability program" and to encourage reforms.

(Reporting by David Lawder; Editing by John Whitesides and Leslie Adler)