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Fiscal Cliff Threatens Social Security Disability Insurance

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Fiscal cliff budget negotiations are ongoing through the end of this year. Republican House Speaker John Boehner put forth his proposal this week: cutting 600 billion from federal healthcare programs over the next ten years via raising the Medicare eligibility age and moving to a chained CPI (Consumer Price Index)for Social Security. Meanwhile the White House has asked for some sizable revenue increases through tax rate increases and tax reform.

CPI is an inflation benchmark used for costs of living adjustments for Social Security and other programs. A chained CPI would indicate a slower rate of inflation. Using a chained CPI has the advantage of reducing spending on large government programs like Social Security while also boosting tax revenues
According to the Congressional Budget Office, Social Security would save over $108 billion over ten years if it used a chained CPI. However, the Consortium for Citizens with Disabilities opposes this change as it would be a substantial benefit cut to some of the nation’s most vulnerable people. Many seniors and people with disabilities already live on the edge of financial disaster. Any cuts to these programs mean a cut in basic needs: food, housing, clothing and medicine.

Many Democrats argue that Social Security does not contribute to the federal deficit (as it is funded through a separate payroll tax) and should not be part of the fiscal cliff negotiations. However, rising costs in Medicare and Medicaid are not part of the payroll tax funding. Progressives have argued for modernizing the system to reduce health care costs as opposed to cutting benefits.

If an agreement is not reached by the end of the year, then the original budget deal including government spending cuts and tax increases will go into effect. However, Social Security, Medicare and Medicaid, and veterans benefits are all exempt from this deal. Republicans however insist that these programs must be part of the current negotiations.

Lisa Siegel is a Social Security disability lawyer helping persons with disabilities in the metro Atlanta region recover their rightful disability benefits. If you are eligible for Social Security, and have had a claim denied, speak with us to learn your rights.