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1 1 (December 2017)

handle is hein.amenin/aeiaagq0001 and id is 1 raw text is: Despite a Temporary Reprieve, the Social Security Disability Insurance Program Needs Structural Reform By Tejesh Pradhan and James C. Capretta December 2017 The Social Security disability program needs structural reform. There has been a long-term trend toward higher rates of disability among covered workers as the standards for assessing disability have accommodated larger numbers of applicants with musculoskeletal and mental health conditions. Congress should pass legislation soon to test far-reaching changes in the program, including: providing temporary health and income support benefits to some applicants who might be able to return to work with proper medical care and job-placement assistance and experience-rating the payroll tax for employers to encourage them to take steps to prevent elevated rates of disability among their workers. The 2017 report of the Social Security trustees, re- leased in July, shows modest improvement in the financial status of the Disability Insurance (DI) trust fund compared with prior reports. The new report shows the trust fund will be depleted of its reserves in 2028, five years later than projected in the 2016 report. New applications for disability benefits are coming in below the rates that were projected in 2016. Regrettably, some policymakers may assume that this slightly improved outlook for the disabil- ity trust fund means it is no longer necessary to pursue significant reforms in the program. They would be mistaken. Even with this slowdown in new disability claims, the DI trust fund is in severe financial distress and probably would already be in- solvent were it not for stopgap legislation passed by Congress in 2015 to temporarily shift tax reve- nue from the retirement side to the disability side of the program. This shift in payroll tax receipts is not a long-term solution to the disability program's funding problems because the Social Security re- tirement program is also racing toward insolvency and cannot afford to lose the tax revenue shifted to disability on a permanent basis. Indeed, the retire- ment portion of Social Security faces even larger funding shortfalls than the disability program, which calls into question the advisability of even a temporary shift of revenue. The 2017 trustees' re- port projects the Old-Age and Survivors Insurance (OASI) trust fund will be depleted in 2035. Looked at together, the combined retirement and disability trust funds will be depleted of reserves in 2034. The disability program needs reform because it has evolved away from its original design and can no longer be supported by the level of taxation pre- viously assumed to be sufficient to finance it. The program needs a more fundamental restructuring

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