A YEAR AGO, President Carter proposed several minor trims and restrictions of future Social Security benefits. He rashly suggested that, if they were enacted along with hospital cost controls, it might be possible to cut the Social Security payroll tax in 1981. But none of the legislation has yet been passed, and its history illustrates the reasons why Social Security payments, and the tax, keep going up. Like his predecessors Mr. Carter complains about "uncontrollable" programs in his budget. But they aren't really uncontrollable. They are simply that half of the federal budget that has evolved into a gigantic and very popular insurance fund.Nobody has much heart for cutting the present benefits, and everybody has ideas for expanding them.
When Mr. Carter sent those Social Security cuts to Congress, all but one of them immediately sank from sight. The exception was a plan for a small reduction in Social Security's disability insurance benefits. Disability benefits had grown from $3.3 billion in 1970 to $15.3 billion this year, a disproportionate rise even by Social Security's standards. One reason seems to be that the rules, as they are written, give some of the beneficiaries little incentive to go back to work. For some, the monthly check's were as much as they ever earned. Going back to work also meant losing federal medical aid -- a frightening prospect for people recovering from severe injuries.
The House worked out a decent balance. It reduced the scale of benefits to keep them lower than the recipients' previous wages, but it also extended medical protection. As the House passed it in September, the bill would have saved about $2.6 billion over the next five years. The Senate did not care to go quite so far in shaving benefits. As it came to the Senate floor, the bill would have saved just under $1 billion over the next five years. Then came the Bayh amendment.
Under the present rules, a person must be disabled for five months before he can begin to collect benefits. The justification is that it's protection only against long-term incapacity. Sen. Birch Bayh urged waiving the five-month delay for anyone diagnosed as terminally ill. Several senators objected that this waiver would begin to turn disability insurance into something quite different -- catastrophic illness insurance. But the amendment swept through. It would cost slightly more than the rest of the bill would save.The legislation was orginally intended to hold down Social Security costs and take a little pressure off the payroll tax. But in the form in which the Senate passed it last week, the effect will be the opposite.