Social Security Reform Proposals Address Solvency by Affecting the Level and Structure of Benefits

In order to address the solvency of the trust funds, a number of Social  Security reforms have been proposed. The effects of the PIA changes on the disabled worker  are shown in figure 4. Concluding Observations

In the cases we studied, our analyses indicate that most disabled  beneficiaries would receive higher benefits under Social Security reform  proposals than under a solvency scenario that maintained payroll tax rates  while reducing benefits. However, most disabled beneficiaries with the  characteristics we studied would receive lower benefits under reform than  under a solvency scenario that maintained current-law benefits while  raising payroll taxes. The proposals we studied treat DI beneficiaries similarly to OASI  beneficiaries. However, the circumstances facing disabled workers differ  from those facing retired workers. These differences  between disabled and retired workers suggest that Social Security reform  proposals should be viewed not only in light of their effects on retired  workers but also explicitly for their effect on disabled beneficiaries and  their families.
Why GAO Did This Study

There has been little analysis of how the various Social Security reform proposals might affect the Social Security Disability Insurance (DI) program. This report assesses the potential impact of these proposals on the solvency of the DI trust fund.

What GAO Found

GAO found that most disabled beneficiaries would receive higher benefits under the various Social Security reform proposals it reviewed than under a solvency scenario that maintained payroll tax rates while reducing benefits. However, most of the disabled beneficiaries GAO studied would receive lower benefits under three of the reform proposals reviewed than under a solvency scenario that maintained current-law benefits while raising payroll taxes. The proposals GAO studied treat DI beneficiaries similar to Old-Age and Survivor Insurance beneficiaries. However, the circumstances facing disabled workers differ from those facing retired workers. The differences between disabled workers and retired workers suggest that Social Security reform proposals should be viewed not only in light of their effects on retired workers but also explicitly for their effect on disabled beneficiaries and their families.