The incoming GOP majority approved late Tuesday a new rule that experts say could provoke an unprecedented crisis that conservatives could use as leverage in upcoming debates over entitlement reform. The largely overlooked change puts a new restriction on the routine transfer of tax revenues between the traditional Social Security retirement trust fund and the Social Security disability program.
House Republicans, literally on the first day of the new Congress, quietly went after Social Security last night, and as Sen. Elizabeth Warren (D-Mass.) put it, GOP lawmakers are "inventing a Social Security crisis."
Here's the deal. Social Security doesn't just provide benefits to seniors once they retire; the system also includes a disability-insurance program for those who want to work but can't due to health reasons.
Over the course of the last several decades, when the disability-insurance program runs short on funds, Congress transfers money from elsewhere in the Social Security system to prevent benefit cuts. It's never been especially controversial -- in fact, it's been done 11 times over the last seven decades.
And, with the disability-insurance program facing a shortfall next year, Social Security proponents expect this Congress to do what previous Congresses have done. The system's trustees have seen this coming -- it's largely the result of demographic changes -- and the fix should be pretty straightforward.
Not only do congressional Republicans oppose the fix, as Dylan Scott explained, GOP lawmakers also took steps yesterday to make the solution almost impossible to pass.
Republicans didn't prohibit the transfers, sometimes called "reallocation," but the new policy does say that transfers must "improve the overall financial health of the combined Social Security Trust Funds." And as TPM's report added, "While that language is vague, experts say it would likely mean any reallocation would have to be balanced by new revenues or benefit cuts."
And that's a problem.
At first blush, a provision that says it want to "improve the overall financial health" of the Social Security system may sound great, but the devil is in the details. For one thing, transferring funds to the disability-insurance program would have little discernible effect on the system's financial health, so it's not as if Republicans can say this new policy of theirs is somehow intended to "protect" Social Security.
For another, this little unannounced stunt on the House floor last night seems to clear the way for proposed Social Security cuts, which would be consistent with congressional Republicans' larger goals.
And finally, if the disability-insurance program doesn't get the resources it needs, households that rely on these benefits -- which is to say, people who physically cannot work -- will face drastic Social Security reductions.
When looking ahead to the more contentious fights of the 11th Congress, many of us, including me, hadn't given much thought to Social Security. As of last night, that changed.