Briefing Book

White House Conference

The Arc of the United States A national organization on mental retardation, formerly Association for Retarded Citizens of the United States Governmental Affairs Office 1730 K Street, NW, Suite 1212 Washington, D.C. 20006-3868 (202) 785-3388 FAX (202) 467-4179 TDD (202) 785-3411 E-mail: arcga@radix.net PEOPLE WITH DISABILITIES HAVE A STAKE IN SOCIAL SECURITY REFORM Old Age, Survivors, and Disability Insurance A common myth is that Social Security is just for people who have retired. The public debate has centered almost exclusively on Social Security retirement. However, the impact that any Social Security reform might have on the disability insurance program and the protections for survivors and dependents must also be included in any discussions concerning the future of Social Security. People with disabilities believe it is critical to remember that the Title II old age (retirement), survivors, and disability insurance programs are insurance programs, earned through payment of FICA taxes, designed to remove risk from certain life events for the individual. They insure against poverty in retirement years; they insure against disability limiting a person's ability to work; and they insure dependents and survivors of workers who become disabled, retire, or die by providing a basic safety net. While retirement years can be anticipated, disability can affect any individuals and families unexpectedly at any time. People with disabilities benefit from the Title II trust funds under several categories of assistance. Those categories include: disabled workers, based on their own work histories, and their dependents; retirees with benefits based on their own work histories; adult disabled children of disabled workers; adult disabled children of retirees; and adult disabled children who are survivors of deceased workers or retirees. In fact, more than one-third of all Social Security benefits are paid to non-retirees: people with disabilities, children, and widow(er)s. For the average wage earner with a family, Social Security insurance benefits are equivalent to a $300,000 life insurance policy or a $200,000 disability insurance policy. Beneficiaries with disabilities depend on Social Security for a significant proportion of their income. About 21 percent of beneficiaries with disabilities live in poverty, compared with rates of 13 to 15 percent for the general population in the early 1990s. The recently conducted National Organization on Disability - Harris Poll revealed significant data on employment of people with disabilities: 71 percent of working age people with disabilities are not employed, as compared to 21 percent of the non-disabled population. The capacity of beneficiaries with disabilities to work and to save for the future and the reality of their higher rates of poverty must be taken into consideration in any efforts to change the Title II programs. Privatization Proposals Privatization of the Social Security trust funds would shift the risks that are currently insured against in Title II from the federal government back to the individual. This could have a devastating impact on people with disabilities and their families as they try to plan for the future. The basic safety nets of retirement, survivors, and disability insurance would be substantially limited and individuals, including those with limited decision-making capacity, would be at the mercy of fluctuations in the financial markets. (Some policymakers have suggested that the federal government should take the responsibility of investing a portion of the retirement and disability trust funds in the private market with careful controls on decision-making. Since this proposal would not shift investment risk to individuals, we do not consider this "privatization" and have not opposed such investment.) In addition, many proposals to address the very high transition costs associated with privatization would negatively affect the disability programs. Some of the proposals would make drastic cuts in benefits in the disability insurance program and significantly reduce, if not eliminate, the value of protections for the dependents and survivors of covered workers. Other proposals simply do not address the disability programs and seem to ignore the impact of other changes on people with disabilities, such as changes in the benefit formula. Proposals to Reform Social Security. As discussions move forward, regardless of the proposal, people with disabilities must be included in analysis of the impact. It is imperative that policymakers ensure: Meaningful inclusion of people with disabilities and their families in discussions about the solutions to the Social Security Trust Funds projected shortfall. Preservation of the guarantees inherent in the disability insurance program and the protections for survivors and dependents in the Old Age, Survivors, and Disability Insurance programs of Title II of the Social Security Act. Protection of the integrity of the benefits provided (benefits must be at a reasonable level for support) and protection of the value of benefits (benefits must be indexed for inflation to protect their buying power). Other Concerns Finally, people with disabilities are concerned that the Supplemental Security Income program could potentially be affected by whatever actions are taken regarding the Title II benefit programs. For example, if there were reductions in benefits for retirees and people with disabilities, under current law, the SSI program would have to step in to support many of those who are forced further into poverty. We urge great caution in changes which might affect the SSI program. December 1998 Contact: Marty Ford, The Arc of the United States, (202) 785-3388 NOTE: This statement also reflects the position of the Consortium for Citizens with Disabilities Task Force on Social Security. Approximately 100 national organizations participate in CCD; 45 national organizations participate in the CCD Social Security Task Force.