Subject: NYTimes.com Article: Study Says Disabled Would Lose Benefits Under
New Social Security Plan
:
Date: Wed, 7 Feb 2001 11:01:29 -0500 (EST)
:
Study Says Disabled Would Lose Benefits Under New Social Security Plan
February 7, 2001
By ROBERT PEAR
WASHINGTON, Feb. 6 — People with disabilities would lose income and
benefits under the major proposals to revamp Social Security by
creating individual investment accounts, a new government study
said today.
The disabled account for 17 percent of Social Security
beneficiaries — about 7.5 million of the 45 million recipients —
but have received little attention in the national debate over the
future of the program.
President Bush has said he wants to let workers put some of their
Social Security payroll taxes into personal investment accounts,
but at the same time he has championed the rights of people with
disabilities.
The new study, by the General Accounting Office, an investigative
arm of Congress, concludes that "even under the best of
circumstances, Social Security reform proposals would reduce
benefits" for people with disabilities.
For a worker with average earnings who first receives disability
benefits at the age of 45, the report said, the reduction in
lifetime benefits would be in the range of 4 percent to 18 percent.
The average benefit for disabled workers is now $786 a month.
"Most disability insurance beneficiaries would be adversely
affected by the reform proposals," the office said in a report to
Senator Tom Harkin, Democrat of Iowa.
Proposals for individual investment accounts are often paired with
proposals that would reduce Social Security benefits, compared with
the amounts payable under existing laws. Advocates of such private
accounts say the income from investing in stocks and bonds would
largely offset the reductions in benefits.
That might be true for some or even many retirees. But the General
Accounting Office said, "Income from the individual accounts was
not sufficient to compensate for the decline in the insurance
benefits that disabled beneficiaries would receive" under the major
proposals.
Under many of the proposals, the study said, disabled workers
would receive less income from individual accounts than retirees
because the disabled typically have shorter work histories and
would have less time to accumulate money in their accounts.
In an interview, Mr. Harkin, the chief sponsor of the Americans
With Disabilities Act of 1990, said: "This report is a wake-up call
to policy makers, to all of us in Congress. Social Security is not
just about retirement. It's also about protecting people who are
wiped out by accident or illness that leaves them disabled. You can
plan your retirement, but you can't plan for disability. It can
happen to anyone at any time.
"Before we reform Social Security," Mr. Harkin said, "we better
stop and think about people with disabilities because they are
among the most vulnerable in society."
Michael Tanner of the Cato Institute, a major advocate of
individual investment accounts, said he had not closely analyzed
the effects on people with disabilities.
One of the proposals for individual accounts was offered in 1999
by Representatives Jim Kolbe, Republican of Arizona, and Charles W.
Stenholm, Democrat of Texas. An aide to Mr. Kolbe said today that
the congressman was revising his bill to address concerns about the
reduction in benefits for people with disabilities.
"We realize that a person who is permanently disabled at the age
of 25 may have only five or six years to accumulate money in a
personal account," the aide said.
The General Accounting Office said the major proposals for Social
Security, by reducing benefits, would probably increase the costs
of a separate program that provides cash assistance to low-income
people with disabilities — Supplemental Security Income.
More than 30 percent of the people receiving disability benefits
have mental impairments. Such impairments could, in some cases,
limit their ability to make wise investment decisions.
Quincy S. Abbot of West Hartford, Conn., said, "Take the case of
my daughter, Rebecca," who is 38 years old and has an I.Q. of 40 to
50. "I can't imagine someone like her making the investment choices
she'd have to make if she had a separate investment account," Mr.
Abbot said.
Most disabled people on Social Security, including disabled
workers, receive cash benefits from the disability insurance
program. But some in their 20's and 30's, who have been disabled
since childhood, receive assistance through the old-age and
survivors insurance program, as dependents of retired workers.
http://www.nytimes.com/2001/02/07/national/07BENE.html?ex=982561689&ei=1&en=
45628503ccf7d606
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