LIKE Medicare, the Social Security program is in need of fixing - not a radical restructuring, but a few repairs - to preserve it for generations to come.
Last spring, the trustees of the Social Security and Medicare Trust Funds reported that although Social Security is financially stable, there is trouble ahead. By 2013, the trustees warned, the money being paid out to beneficiaries will exceed the money being taken in from payroll taxes. And 17 years after that, about the time today's thirty-somethings hit retirement age, the trust fund will be bankrupt, unable to pay a dime in benefits to anyone.
Abuse of tax dollars
One of the biggest problems plaguing the Social Security Administration is the unfettered growth of the disability programs.
Over the past decade, the number of recipients of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) benefits has risen from about 4.2 million to more than 7 million - an increase of nearly 70 percent. About $4 billion in cash payments is sent out each month under these programs. But despite this enormous outlay of cash, very little attention has been paid to how these taxpayer dollars are spent, even though the SSDI program has a direct affect on the overall stability of the Social Security Trust Fund.
Fraud and abuse are rampant in the disability programs. Last year, for example, my Aging Committee staff found that more than a quarter million drug addicts and alcoholics were together receiving about $1.4 billion a year in cash benefits. Few, however, were receiving any treatment or making any legitimate effort to get off the rolls.
Instead, these addicts were using government checks to feed their addictions to drugs and alcohol. Some checks were even going directly to the owners of bars or liquor stores, who conveniently ran a tab for their best clients.
In other cases, addicts who had waited months for their applications to be processed were receiving retroactive, lump-sum payments of thousands of dollars - an invitation for out-of-control binges.
New law attaches strings
Reforms I authored were signed into law last summer. Among the changes are new requirements that addicts undergo treatment as a condition of receiving benefits and an elimination of the lump-sum payments. Additionally, the new statute stipulates that benefits be paid to a legitimate third party such as a treatment center or community organization.
The disability programs are also plagued by a failure to rehabilitate beneficiaries so they can return to work. Getting on the disability rolls often means a lifetime of benefits - even if the individual wants to and could return to work. In fact, only about 1 of every 1,000 recipients ever gets off the rolls because of Social Security Administration rehabilitation efforts. Rather, the programs perpetuate dependency by providing few incentives and little encouragement to those seeking to return to work.
We must find ways to encourage those who could and want to get off the rolls to do so. An improved review process is one answer; the Social Security Administration has a backlog of close to 2 million cases awaiting review.
If we allow these abuses and administrative failings to fester, they will continue to undermine confidence in the entire Social Security system. Problems in the disability program are already affecting retirees: In 1994, money had to be borrowed from the retirement trust fund to pay disability benefits.
But the key to preserving Social Security lies in an effort to change the fundamental public perception of its role. Social Security benefits were never intended to be the sole source of retirement income for older Americans. Rather, benefits were intended to supplement the income of the elderly as well as protect widows, the disabled, and children from poverty in case of the sudden loss of family income.
Encourage private pensions
We need to do more to encourage individuals to plan for their retirement years, through savings and increased reliance on private pension plans. The federal government does little to encourage businesses, particularly small businesses, to establish and maintain quality pension plans for their employees. We must do a better job of ensuring that pensions are adequately funded and stable enough for benefits to be available down the road. Social Security should become a supplement again, not a staple.
The future of Social Security may not be as bleak as that of Medicare, which is projected to be bankrupt in less than seven years, but it is serious and warrants attention.
We should act prospectively, rather than waiting for the crisis to descend. The Social Security program has been a part of the fabric of American life for six decades.
It is our responsibility to ensure that it remains that way for many more.