Buried in new rules to govern the House over the next two years is the tipping point for a budding nasty congressional battle over Social Security finances -- one likely to unfold in the 11th hour of the 2016 presidential election.
Dylan Scott, a reporter for Talking Points Memo and a former reporter for Governing magazine, writes that the incoming GOP majority took aim at Social Security on their very first day of the 114th Congress when they put in a new restriction on what historically has been a routine transfer to ease funding strains caused by demographic trends.
The largely overlooked change would still allow for a reallocation from the retirement fund to shore up the disability fund -- but only if an accompanying proposal "improves the overall financial health of the combined Social Security Trust Funds."
The vague language, according to experts, would likely mean any reallocation would have to be balanced by new revenues or benefit cuts, giving conservatives leverage to provoke a manufactured crisis over "entitlement" reform.
Remember please, that Social Security is not an entitlement. We have all been paying it into this government escrow account for our entire adult lives, as did our parents. This is our money -- not an entitlement.
The Center for Budget and Policy Priorities says the disability insurance program -- the recipient of the reallocations that have been made routinely 11 times in the past -- "isn't broken." The transfers put money where it is needed as aging baby boomers cause swells in the disability program.
The Social Security and Medicare Boards of Trustees estimated last year that the disability insurance program would run short of money to pay all benefits some time in late 2016. Without a new reallocation, disability insurance beneficiaries could face up to 20 percent cuts in their Social Security payments in late 2016 -- providing the chit that would be of use to Republicans pushing for conservative entitlement reforms.
Liberal analysts counter that the retirement fund, which pays out $672.1 billion in benefits per year versus $140.1 billion for the disability fund, is more than healthy enough to allow for a reallocation, as has historically been done.
The CBPP's Kathy Ruffing has written that if a transfer was made before the 2016 deadline, both funds would be solvent until 2033.
"By barring the House from approving a 'clean' reallocation in 2016, the rule will strengthen the hand of lawmakers who seek to attach harsh conditions (such as sharp cuts in eligibility or benefit amounts) to such a measure," Ruffing says.
House Democrats are sounding the alarm about the new rule sneak attack. They say it would mean "either new revenues or benefit cuts for current or future beneficiaries."
And, of course, in today's political climate, new revenues are highly unlikely to be approved by the deeply tax-averse Republican-led Congress, leaving benefit cuts as the obvious alternative.