[Congressional Record (Bound Edition), Volume 161 (2015), Part 2]
[Senate]
[Pages 1964-1965]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    DISABILITY INSURANCE TRUST FUND

  Mr. HATCH. Mr. President, I rise to speak about the impending 
exhaustion of the disability trust fund administered by the Social 
Security Administration.
  The Social Security system contains two important programs. One is 
the Old-Age and Survivors Insurance--or OASI--Program, often referred 
to as the retirement program. That program provides income to insured 
workers and their families at retirement or death, based on their 
payroll tax contributions to the OASI trust fund. The other is the 
disability insurance--or DI--program, which provides income to insured 
workers who suffer from a disabling condition, based on their payroll 
tax contributions to the DI trust fund. Unfortunately, both trust funds 
face trillions of dollars in unfunded obligations.
  Each trust fund is legally distinct, although they have been 
commingled in the past into an imaginary fund labeled the ``OASDI trust 
fund'' or mingled with the General Fund.
  Reserves in the DI trust fund are projected to be exhausted sometime 
late in calendar year 2016, after which beneficiaries face benefit cuts 
of around 20 percent. The DI program alone faces unfunded obligations 
over the next 75 years of more than $1.2 trillion. Reserves in the OASI 
trust fund are projected to be exhausted in 2034, after which retirees 
and their survivors face benefit cuts of around 25 percent. The 
retirement program alone faces unfunded obligations of around $9.4 
trillion over the next 75 years.
  Financial operations of the OASI and DI trust funds are overseen by a 
board of trustees composed of six members. Four of them serve based on 
their positions in the Federal Government, and two are appointed by the 
President and confirmed by the Senate.
  Currently, Treasury Secretary Lew, Labor Secretary Perez, HHS 
Secretary Burwell, and Social Security's Acting Commissioner Colvin 
serve on the board. This is not what anyone would consider a band of 
fiscal hawks. Yet, in their most recent report, these trustees--who 
are, once again, high-ranking officials in the Obama administration--
urged Congress to take action ``as soon as possible to address the DI 
program's financial imbalance.'' Those are pretty clear words. Those 
are not the words of any Republican trying to manufacture a crisis. 
They are not the words of any Republican trying to hold anyone or 
anything hostage, as some of my friends on the other side have claimed. 
Rather, they come from Obama administration officials who, in their 
roles as trustees, are forced to acknowledge reality.
  I want to take this opportunity to once again urge the administration 
and my colleagues--particularly those on the other side of the aisle--
to begin to work with me to find solutions that will at least begin to 
chip away at the known financial imbalances in the DI trust fund so 
that we can prevent the coming benefit cuts.
  Last year, in a Finance Committee hearing on the DI program, I made 
clear my willingness to work with anyone in Congress or the 
administration to examine options and ideas about the DI program before 
the DI trust fund becomes exhausted. Indeed, I have been trying for 
years to get the administration to engage on this issue. Unfortunately, 
to date I have heard nothing from the administration and very little 
from my friends on the other side of the aisle about this issue. What I 
have heard is fearmongering about supposed Republican plans to slash 
benefits or engineer a false crisis or hold beneficiaries hostage. I am 
not exaggerating; those are the very words they have used.
  In budget after budget, the President has all but ignored Social 
Security in general and the DI program in particular. The President's 
budgets generally only include calls for more administrative funding 
for the Social Security Administration or the occasional idea for an 
experimental trial.
  After years of my asking the administration to engage on the DI 
program's financial challenges, the President quietly inserted his 
policy position on DI just recently. With his fiscal year 2016 budget, 
we finally learned that the President supports a ``stand-

[[Page 1965]]

alone reallocation'' of incoming tax receipts away from the retirement 
trust fund over to the disability insurance trust fund. Oddly, one of 
the objectives appears to be to make a reallocation so that both the 
disability and the retirement trust funds become exhausted in the same 
future year, which, according to the budget, is 2033.
  Needless to say, having a joint trust fund exhaustion as a target 
does not solve any fundamental financial problem facing the long-run 
financial challenges of Social Security. Moreover, it takes away any 
urgency for Congress to improve the disability program now, before it 
becomes harder to do so down the road.
  By stand-alone reallocation, the administration means that it wants 
to shift funds from the retirement fund to the DI fund with no 
accompanying policy changes of any kind--no change in overall payroll 
taxes, no change in benefits, no substantive changes in program 
integrity aside from the persistent call for more mandatory 
administrative funds, not even a study.
  There have recently been many misconceptions and misstatements about 
the idea of a reallocation in general and a stand-alone reallocation in 
particular.
  The last time Congress made a reallocation from the retirement trust 
fund to the DI trust fund was in 1994. At that time, Social Security 
trustees wrote the following about the reallocation and the DI trust 
fund:

       While the Congress acted this past year to restore its 
     short-term financial balance, this necessary action should be 
     viewed as only providing time and opportunity to design and 
     implement substantive reforms that can lead to long-term 
     financial stability. . . .

  Unfortunately, those reforms never came. And now, also unfortunately, 
the President wants to tell the American people the same story: Punt 
now to provide time for later action.
  In addition, the financial challenges facing Social Security are very 
different from past trust fund account reshuffling, including the one 
in 1994. The public trustees of the Social Security trust fund wrote 
just last year:

       The present situation is very different from that of 1994. 
     . . . The DI Trust Fund's impending reserve depletion signals 
     that the time has arrived for reforms that strengthen the 
     financing outlooks for OASI and DI alike.

  Some of my friends on the other side of the aisle say that we have 
had many reallocations between the DI and OASI trust funds in the past 
and that it is just ordinary housekeeping or a technical change. It is 
something we do all the time, they say, so there is nothing really to 
see here.
  True, there have been trust fund reallocations in the past--sometimes 
from OASI to DI, sometimes the other way around, sometimes with overall 
payroll tax rate changes and sometimes not. But there has never--let me 
repeat that: never--been a stand-alone reallocation from the retirement 
to the disability trust fund.
  Most people who would dispute this talk about the reallocation of 
1994, which I mentioned earlier, but if the 1994 reallocation is 
somehow to be considered a model of ordinary housekeeping that we 
should repeat today, I think it is a bad model for the reasons I just 
identified. Following that model, we would defer action until later, 
all the while claiming that real changes were on the horizon. And 
following that model, we would continue to do nothing to place Social 
Security on a more stable financial footing.
  Moreover, thinking of reallocation as just a normal way of doing 
business raises many questions: Why was a separate DI trust fund set up 
to begin with? Why do we even call them trust funds if they are merely 
fungible accounting devices? Why not merge the OASI and DI funds and 
call them the singular Social Security trust fund? More generally, 
given the recent stimulus-inspired mingling of General Fund revenues 
with the OASI and DI trust funds, why have Social Security trust funds 
at all? And if historical reallocations are to be used to guide what we 
should do today, then perhaps the recent reallocations from the General 
Fund to both the OASI and DI trust funds, having been the most recent 
historical reallocation episodes, should be the most prominent 
precedents.
  When circumstances make us focus on the solvency of any trust fund, 
there are two options. Option one: We can face up to the known 
financial challenges, examine what can be done about them in a 
bipartisan way, and try to enact solutions. Option two: We can kick the 
proverbial can further down the road by taking the most expedient route 
to reshuffle resources temporarily in order to get the problem out of 
the way in the short term.
  Unfortunately, the President and his allies here in Congress seem to 
prefer the latter--to kick the can down the road, the kick-the-can 
strategy. This is especially disappointing given what the President 
said about Social Security when he took office in 2009. At that time, 
the President said about Social Security:

       What we have done is kicked this can down the road. We are 
     now at the end of the road and are not in a position to kick 
     it any further. We have to signal seriousness in this by 
     making sure some of the hard decisions are made under my 
     watch, not someone else's.

  Well, the President has been on his watch for 6 years now, and if we 
look at his administration's proposed solution to the coming DI trust 
fund exhaustion, he seems more than content to push any hard decisions 
off until his term is over. President Obama now not only wants to kick 
the can down the road, but he also wants to do it in a way that has 
never been done before.
  Elementary budget arithmetic makes clear that you simply cannot 
strengthen the financial outlooks for our two Social Security programs 
and their trust funds simply by shifting resources from one to the 
other. Indeed, Director Elmendorf of the nonpartisan Congressional 
Budget Office recently said: ``If you want to help both programs you're 
not going to accomplish that by just moving money around between 
them.''
  Rather than engaging in yet another unnecessary partisan battle, we 
need to take this opportunity to work together to see what can be done 
in a bipartisan way to address the impending exhaustion of reserves in 
the DI trust fund. Once again, I urge the administration and my friends 
on the other side of the aisle to work with me on this issue.
  Mr. President, I will have more to say on this issue in coming days. 
For now, I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.

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