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Social Security provides vital financial support for more than 57 million beneficiaries. Social Security also provides critical benefits to widows and those with disabilities.  With 10,000 “Baby Boomers” turning 65 every day, it is essential that we work to preserve the programs these seniors have come to count on.  As Speaker of the House, one of my top priorities is to preserve the Social Security safety net and make sure the program remains solvent for future generations.

Social Security is Going Broke

Social Security is funded by the payroll taxes of current workers to pay the benefits of current retirees.  Projected long run program costs are not sustainable under current program parameters.  The Social Security Trustees project that the cash flow deficits that began in 2010 will continue permanently.  That means that to pay full Social Security benefits, the government must cut spending, raise taxes, or borrow more money to finance pension payments.

A central factor in the looming financial crunch is the fact that our society is aging.  The “Baby Boom” generation has already started to collect their Social Security retirement benefits.  As a result, the number of retirees has grown more rapidly than the number of individuals whose taxes pay for future retirees’ benefits.  There are currently two workers supporting each retiree compared to the 17 workers that supported each retiree at the time Social Security was created.  Increasing life expectancy and the approaching retirement of more Baby Boomers continues to put increasing pressure on Social Security. According to a Congressional Budget Office report, the number of beneficiaries is expected to increase by nearly one-third from 59 million in 2014 to 78.2 million in 2025, an increase of 32.4 percent.  Because of this, the number of workers supporting each Social Security recipient is projected to fall.

The Need for Reform

According to the most recent Social Security Trustees Report, beneficiaries will face a painful 21 percent benefit cut in 2034 when the Trust Funds are exhausted.  At that time, even those who are currently on Social Security may experience indiscriminate cuts in benefits at a time when they are increasingly reliant on the program.

The Bipartisan Budget Act of 2015

In the 20th century, the federal government forged a social contract with working families. At the end of their careers, the government would provide health and income security in their retirement.  In the 21st century, that contract is in jeopardy.  Rising healthcare costs and an aging population threaten to bankrupt two crucial programs: Medicare and Social Security.

The failure of politicians in Washington to be honest about Medicare and Social Security is putting the health and retirement security of all Americans at risk.  The fact is that Medicare and Social Security are in dire need of reform.  With both programs weighed down by tens of trillions of dollars of unfunded liabilities, the federal government is making promises to current workers about their health and retirement security for which it has no means to pay.  Without reform, these empty promises will soon become broken promises.  Both parties must work together to chart a path forward on common sense reforms, and the House-passed budget provides the nation’s leaders with the tools to get there.

H.R. 1314, the Bipartisan Budget Act of 2015, calls for setting in motion the process of reforming Social Security.  The 2015 Social Security Trustees Report projected that the Disability Insurance (DI) Trust Fund would be depleted in 2016.  This means that disabled beneficiaries could have faced a 19 percent across-the-board cut in benefits in the fourth quarter of this year unless Congress enacted reforms.  The budget reallocates .57 percent of the 12.4 percent payroll tax away from the Social Security retirement program and to the DI program each year of the 2016 – 2018 period.  According to the Ways and Means Committee, this would make the DI program solvent until 2022, and when combined with other reforms in the bill, would not shorten the life of the retirement program.  H.R. 1314 allows the Social Security Administration (SSA) to undergo a more rigorous evaluation when a beneficiary asks for a waiver of an overpayment adjustment when the beneficiary claims they are without fault and are unable to repay. 

The bill also requires the SSA to establish cooperative disability investigations (CDI) units, which investigate DI claims and help uncover and prevent fraud, in every state.  It prohibits the inclusion of medical evidence from unlicensed individuals or doctors convicted of fraud when making determinations in the disability claim and increases criminal penalties for Social Security fraud.  The amount that can be spent above the discretionary budget caps for CDIs and other tools to investigate DI fraud were increased by a total of $484 million over the FY 2017 – 2020 period. 

In an effort to promote opportunity for disability beneficiaries, this budget agreement expands congressional oversight and requires the SSA to establish a new demonstration project that would allow beneficiaries to work while avoiding a “cash cliff.”  Under this demonstration project, participating beneficiaries would see their benefits reduced by one dollar for every two dollars earned from work above the gainful activity limit.  This provides an incentive for those beneficiaries who are able to return to work to do so.  H.R. 1314 removes the burden on beneficiaries to report this information by enabling the SSA to obtain earnings about beneficiaries from payroll providers with the beneficiary’s consent. It would also allow beneficiaries who self-report earnings to do so electronically. Recognizing the need to save Social Security, this budget offers a step in that direction.

Social Security and FY2016 Consolidated Appropriations

Members of the House and Senate Appropriations Committees introduced the Fiscal Year 2016 Consolidated Appropriations Act on December 15, 2015.  The bill combines the 12 separate appropriations bills into a single bill and provides funding for the whole government through September 30, 2016.  This $1.1 trillion appropriations bill is the product of a process that I have long criticized, a process that is too closed and driven by crisis and brinksmanship instead of by collaboration and big ideas.  That said, as speaker, I had a duty to take ownership of the process that I inherited and, in doing so, I worked hard with my colleagues to make the best of the situation in order to produce a bill that will allow the House to return to regular order.

It is worthwhile to note that $1.4 billion was authorized for Program Integrity activities within the Social Security Administration.  This is a $30 million increase from the enacted FY 2015 level.  These programs include activities to ensure that disability and SSI benefits are properly paid.  The consolidated appropriations bill, H.R. 2029, was passed in the House on December 18, 2015—with my support—by a vote of 316 to 113.  Later that same day, it was passed by the Senate and signed into law by President Obama.

Social Security Cost of Living Adjustment

To compensate for the effects of inflation as measured by the Consumer Price Index (CPI), Social Security recipients may receive a Cost-of-Living-Adjustment (COLA) in their checks beginning in January of each year. On October 13, 2017, the Social Security Administration announced that there will be a 2.0 percent increase for 2018.  I will continue to work with my colleagues to ensure that Congress does more to encourage economic growth and bolster savings.

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