The Senate yesterday passed, 87 to 1, a bill to slash benefits an average of 9 percent for future recipients of Social Security disability insurance, to save the government money and encourage the disabled to go back to work.
The original bill, passed by the House last year with President Carter's approval, would cut benefits even more, about 12 percent to 15 percent in many categories. It was estimated that it would save the government about $2.6 billion over the next five years.
The milder Senate version initially would have saved the government $914 million over the five-year period. But this saving was offset when the Senate adopted amendments, By Birch Bayd (D-Ind.), speeding benefits to the terminally ill.
As a result, the bill would cost the government a net of about $25 million over the next five years, unless a house-senate conference waters down or kills the Bayh proposals.
Floor manager Russell B. Long (D-La.) warned that added sweetners would amount to "budget busting" and show Congress to be in a "spending orgy."
The monthly benefit cuts, applicable only to future beneficiaries, not those already on the rolls, are typified by this example given by Long: a disabled worker with two dependents and average earnings of $10,600 a year would receive total family benefits of $720 a month under existing law, $595 under the House bill and $630 under the Senate version.
The Senate also adopted an amendment by Max Baucus (D-Mont.), setting up a voluntary program under which the department of health and human services, if requested by an insurance company, would examine the company's "medigap" policies, designed to fill in the cracks in Medicare coverage, and certify whether they meet minimum standards.
Bayh's amendment would add $840 million over fiscal year 1981 to 1984 to the cost of the bill by permitting disabled persons, diagnosed by two doctors as likely to die within a year, to receive benefits immediately instead of after the normal five-month waiting period. Long predicted yesterday that the cost eventually would rise to $3 billion a year because pressure from nonterminally ill people to collect benefits without a five-month waiting period would become overwhelming if the Bayh amendments survive conference.
Pressure to tighten the disability insurance program developed in the mid-1970s, when the program began expanding rapidly, though this has leveled off in the past few years.In 1970 benefits totaled $2.8 billion, and pensioners -- people under 65 determined to be unable to work because of disability totaled 2.7 million, including dependents. By the current fiscal year, benefits had jumped to nearly $15 billion annually, and beneficiaries and their dependents to 4.8 million.
It was estimated that about 30 out of every 100 male workers newly entering the labor force might end up on the disability rolls at some time in their lives.
A major cause, many believed, was high benefits, which discouraged workers from going back to work even if they could.
The answer, the critics said, was to put a ceiling on family benefits so that no one could receive a family total greater than about 80 percent of previous average earnings. The House voted this rule, and the Senate liberalized it slightly to 85 percent. Both bills also make other changes to cut benefits and to encourage work by allowing longer trial work periods without loss of benefit eligibility or Medicare.