U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security, today announced a hearing series on Securing the Future of the Social Security Disability Insurance (SSDI) Program. The first hearing of the series will focus on the history of the disability insurance program, the income security it provides and its financing challenges. The hearing will take place on Friday, December 2, 2011, in B-318 Rayburn House Office Building, beginning at 10:30 a.m.
In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing.
BACKGROUND:
The Social Security Act Amendments of 1956 (P.L. 84-880) created the SSDI program to provide protection against economic insecurity resulting from a disabled worker’s loss of earnings. The SSDI program pays benefits to those who have worked in the past but are determined to be unable to work because of a severe medical condition that is expected to last more than a year or result in death.
Monthly cash benefits are payable to disabled workers and their families after a five month waiting period. These benefits currently average $1,070 per month for disabled workers. Social Security is an important source of income to SSDI beneficiaries. According to the Social Security Administration (SSA), almost half of families receiving SSDI benefits rely on Social Security for the majority of their family income.
After a two year waiting period, most SSDI beneficiaries are also eligible for Medicare. On average, each disability benefit award is valued at $250,000 in SSDI and Medicare benefits over a beneficiary’s lifetime.
In September 2011, $9.7 billion in benefits were paid to 8.5 million disabled workers and 2.0 million of their spouses and dependent children. According to the Congressional Budget Office (CBO), the cost of Medicare benefits for those receiving SSDI benefits in fiscal year 2009 totaled about $70 billion.
SSDI benefits are primarily financed through the Social Security payroll tax, but the Disability Insurance Trust Fund also receives income from the partial income taxation of SSDI benefits, and interest earnings on its assets. Of the total tax rate of 12.4 percent (or 6.2 percent paid by employers and employees, each), 1.8 percentage points are allocated by law to the Disability Insurance Trust Fund, while the rest funds the Old-Age and Survivors Insurance Trust Fund. In their 2011 Annual Report, the Social Security Trustees project that the Disability Insurance Trust Fund will become exhausted in 2018, at which point revenues will cover only 86 percent of benefits.
According to CBO, between 1970 and 2009, the number of people receiving disability benefits more than tripled from 2.7 million to 9.7 million. During the same period, inflation-adjusted expenditures for the SSDI program, including administrative costs, climbed from $18 billion to $124 billion. The reasons for this apparent growth are complex, and demographic changes play an important role. During this same four-decade period, the size of the overall workforce has grown, the large baby-boom generation has aged into its most-disability prone-years, women have entered the workforce and become insured for benefits should they become severely disabled, and Congress has periodically revised eligibility guidelines. In addition, wage levels – which are the basis for both the program’s financing and its benefit levels – have also risen substantially.
In announcing the hearing series, Social Security Subcommittee Chairman Sam Johnson (R-TX) said, “Disabilities have a devastating effect on individuals and their families, and Social Security Disability Insurance benefits provide important income security that they rely on. Yet in just seven years the disability program will be unable to pay full benefits unless changes to the law are made. Through this hearing series the Subcommittee will lead a much-needed conversation about the challenges facing this vital program and solutions that can meet the needs of those with disabilities and the workers who support the program through their hard-earned tax dollars.”
FOCUS OF THE HEARING:
The hearing will focus on the history of the SSDI program, the importance of its benefits, the growth of the program and the drivers of that growth along with program’s current and future financing challenges.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select “Hearings.” Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.” Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close of business on Friday, December 16, 2011. Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-1721 or (202) 225-3625.
FORMATTING REQUIREMENTS:
The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. All submissions must include a list of all clients, persons and/or organizations on whose behalf the witness appears. A supplemental sheet must accompany each submission listing the name, company, address, telephone, and fax numbers of each witness.
The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.
Note: All Committee advisories and news releases are available on the World Wide Web at http://www.waysandmeans.house.gov/.