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Cuts in Disability Benefits Seen in Social Security Plan

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January 18, 2005

By Leigh Strope, Campaign For America’s Future

The question of privatization raises big questions about how investment accounts would be structured for the disabled, especially if they are injured at a young age or are dependent on a parent. Disabled beneficiaries typically work less and need benefits sooner, so the accounts would not provide enough income to them.

"The Social Security programs are insurance programs, not investment programs, designed to reduce risk from certain life events," said Marty Ford of the Consortium for Citizens with Disabilities.

Currently, disabled workers move seamlessly through the Social Security system, often unaware they draw their benefits from the disability program until they reach retirement age and shift to the retirement program. That would change with investment accounts, advocates say, with people falling through holes in a new system.

About 16 percent of the 47 million people receiving Social Security benefits are disabled workers and their dependents. The impact of accounts on beneficiaries who aren't retirees has not been publicly discussed by the Bush administration.

Supporters of Bush's overhaul contend that the disability program should be treated separately.

"The proper way to deal with this is to essentially make it clear that these are two different programs and to separate the benefit formulas," said David John, Social Security senior analyst at the conservative Heritage Foundation.

"One is an insurance program and one is essentially a retirement program," John said. "They have vastly different characteristics, they have vastly different administrative structures."

EM Prentiss

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