Committee for a Responsible Federal Budget

A Bipartisan Bill to Reduce Overlapping Payments in UI and DI

Jun 6, 2013 | Economics| Social Security

Bipartisanship will be a crucial element when it comes to reforming Social Security and achieving other budget related reforms in the near future. In this regard, the introduction of the bipartisan Reducing Overlapping Payments Act, by Senators Tom Coburn (R-OK), Jeff Flake (R-AZ), Angus King (I-ME), and Joe Manchin (D-WV) is an encouraging sign and a step in the right direction for more reform of the Social Security and other parts of the budget.

The bill would end the ability to claim both unemployment insurance and disability insurance benefits simultaneously. As the requirements for each program happen to be mutually exclusive, it is a clear example of current duplication in the budget. To receive UI an individual must be seeking work, while in order to receive DI, an individual must be unable to work for the time being due to a disability. With the new legislation, SSA would have the authority to identify and act on any individuals who benefit from both programs. The bipartisan nature of the proposal is also bolstered by the fact that it was also included the offer portion of the President's budget. OMB estimated that it would save $1 billion over ten years, while CBO did not attach a specific score to it.

The Social Security Disability Insurance trust fund is due to be exhausted in 2016, at which point benefits will be cut by 20 percent or require a transfer from the old-age Social Security trust fund, which as a whole will become insolvent in 2033. While not a large fix for the finances of the Disability Insurance program, there are a significant amount of beneficiaries that receive benefits from both. According to the Government Accountability Office, "In fiscal year 2010, 117,000 individuals received concurrent cash benefit payments from the Disability Insurance (DI) and Unemployment Insurance (UI) programs of more than $850 million, which is allowable under certain circumstances under current program authority." Senator Manchin emphasized that preventing this abuse is necessary to protect those who benefit from the program, “With our national debt exceeding $16.7 trillion and many of our essential benefits programs continuing on an unsustainable path, we must get rid of the waste, fraud and abuse in our system to make sure that those who need benefits will continue to receive them."

It's good to see bipartisan support for this bill and a comittment to reduce duplication and overlap where it makes sense. Hopefully, this is just the start and lawmakers will work to find more common ground on reforms such as these throughout the federal government.