In Washington, D.C. this month (August, 2015) there was a renewed focus on the debate over the future of Social Security funding, as congressional Republicans consider a new set of proposals which seek to avert looming fiscal shortfalls in the disability program.

Previous posts have detailed other potential plans to shore up the program’s finances, including raising the current cap on FICA taxes, reducing benefits, or transferring funds from the social security retirement trust fund into the disability trust fund to make up for the shortfall. The last option, referred to as an ‘inter-fund transfer,’ has until now been seen as the most likely way to keep the disability fund solvent.

The new Republican plan, however, will seek to combine reforms to the disability insurance program together with a “loan” from the retirement trust fund to the disability trust fund. Unlike inter-fund transfers, which have been accomplished several times in previous decades, the new Republican plan would instead involve an inter-fund loan, which must eventually be paid back to the retirement fund.

The proposed “reforms” which would be packaged with the loan remain unclear, though they would presumably start by making it much more difficult for individuals to qualify for disability benefits. Other proposals include offsetting SSDI benefits with any unemployment benefits the individual may have received, as well as reducing benefits to any disabled individual who managed to earn some income by returning to work part time.

Democrats and liberal advocate groups remain staunchly opposed to any measures that would reduce benefits to the disabled or retirees. They counter that inter-fund borrowing does nothing to solve the underlying fiscal imbalance, as the borrowed funds would need to be paid back eventually. This would simply borrow time without addressing the underlying funding shortfall, and set the stage for future crises in several months or years. Democrats also remain unwilling to cut already meager benefits for a vulnerable population, and with the ability to filibuster legislation in the Senate, and the President’s veto, this new proposal is unlikely to gain traction.

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