"Marta Russell on Social Security Reform"

From http://www.counterpunch.org /:

January 19, 2005
8 Million Disabled Workers
Social Security Privatization and Disability
By MARTA RUSSELL

The Social Security privatization debate has omitted the
fate in store for Social Security Disability Insurance
(SSDI) as a part of the program's family of benefits.
Social Security not only provides Old-Age protection, it
consists of often overlooked Survivors and Disability
Insurance protections as well.

I'll wager that most Americans are unaware of the
importance of SSDI, especially young workers who are the
target of Bush's campaign to divert funds into private
stock market accounts.

I was unaware too until in the late 1980s I found myself
unable to work with an 8-year-old child to support. I had
worked to put myself through college and made a career in
the film industry. Even though I was born with cerebral
palsy it never occurred to me that someday I might not be
able to hold down a job and pay my own way. In fact, three
in ten Americans have a chance of becoming disabled before
retirement age.

I had been paying into SSDI (payroll taxes) so when faced
with a bodily breakdown I could apply for disability
benefits. Like retirement, SSDI is a wage earner social
insurance. It is calculated based on wages earned over the
number of years worked, it is not a personal savings
account. If one becomes unable to engage in "substantial
gainful activity" due to bodily impairment, SSDI is there
to furnish income in place of wages, as opposed to one's
401K, for instance.

SSDI won't be there in any meaningful form, however, if
President Bush succeeds in duping the public into
supporting his privatization plan. The Bush administration
could deliver a blow to the Disability Insurance Trust Fund
(a separate account in the United States Treasury) just as
it plans for the retirement fund.

The President's Social Security commission, in fact,
recommended cutting disability benefits to help pay for the
cost of private accounts--to make up the 2 trillion dollar
shortfall that must either be paid for by cutting retirees
benefits or added onto the deficit in order to continue to
pay current benefits. If the disability insurance elements
of the program were insulated from benefit cuts, then much
larger cuts in retirement benefits would be necessary to
achieve the same overall level of cost reductions--
reductions which are necessary because of the loss of the
Trust Funds' revenue to the individual accounts.

The sums are not insignificant. According to the Center on
Budget and Policy Priorities, one Bush plan being tossed
around to "save" Social Security--price indexing--would
cause a 46 percent drop in some workers' Social Security
retirement benefits compared to current law.

Currently retirement benefits are matched to changing wage
levels but tying Social Security to an inflation index will
significantly cut retirement benefits for all working
Americans since inflation usually grows at a much slower
rate than wages. SSDI is also matched to wage levels and it
too could be switched to an inflation index lowering the
already meager disability benefits to levels one cannot
survive on. In December of 2004, for instance, the average
disability benefit was $894 per month.

There are more ways SSDI regulations could be manipulated
to result in a lower output of government cash. The Bush
administration could make eligibility rules more
restrictive by changing the definition of "disabled" or
make formula changes that cut benefits. They could use
Continuing Reviews that determine whether a disabled person
can work or not to purge disabled people from the rolls,
increase the number of work credits required to qualify,
and eliminate the annual cost of living adjustments, to
name a few.

Over the years there have been rumblings about how the
disability rolls have grown out of control, how Social
Security bureaucrats function poorly by not meeting
mandates and that the disability system is in disarray.
These kinds of messages helped to drive the devastating
cuts to SSDI in the 1980s when Reagan was president. The
Reaganites arbitrarily sent tens of thousands of disabled
people notices that they were no longer "disabled" and cut
off their benefits entirely. This resulted in extreme
hardship and death in many instances.

In a double whammy to the SSDI program, Bush's Social
Security commission also recommended that access to
disability accounts prior to retirement age be barred. This
means reduced Social Security benefits, and no money from
the accounts to cushion the loss. Such a change would
defeat the purpose of SSDI entirely.

So you say, private disability insurance can pick up the
pieces. There is no private insurance plan that can compete
with the amount workers pay into Social Security and the
return on those payroll tax dollars. For a 27-year-old
worker with a spouse and two children, for instance, Social
Security provides the equivalent of a $353,000 disability
insurance policy. The vast majority of workers would be
unable to obtain similar coverage through private markets.

According to the General Accounting Office, in 1996, only
26 percent of private-sector employees had long-term
disability coverage under employer-sponsored insurance
plans. Work-related coverage has been shrinking not
expanding since then. It is not unheard of that after 40
years of paying into private disability insurance the
insurer refuses to recognize impairment as incapacitating
and denies a claim.

How about the prospect that private investment accounts
could replace lost disability benefits? In January 2001,
after examining a number of privatization plans, the
General Accounting Office concluded, "the income from
(workers' individual accounts) was not sufficient to
compensate for the decline in the insurance benefits that
disabled beneficiaries would receive."

This is in part because balances would accumulate over much
shorter periods of time than retirement accounts and would,
therefore, provide much less income in the event that a
worker becomes disabled.

Almost 8 million disabled workers and dependents rely on
SSDI. It is shameful that the Bush administration is
forcing us to defend Social Security rather than improve
it. I would like SSDI not only to remain intact for my
daughter in the event she may need it, I would like to see
it provide disabled workers with an income above the
poverty level. I suspect other parents feel the same.

Marta Russell is an independent journalist and author who
writes on the political, social and economic aspects of
disablement. She is the author of BEYOND RAMPS, DISABILITY
AT THE END OF THE SOCIAL CONTRACT (Common Courage Press,
1998). She can be reached: ap888@lafn.org

http://www.counterpunch.org/russell01192005.html

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