To say that Social Security has issues would be a bit of an understatement.

The latest Social Security Board of Trustees report, released in early June, suggests that the program will have higher expenditures than revenue collected this year for the first time since 1982. Although this net cash outflow will begin relatively small, with just $1.7 billion and $0.2 billion expected to flow out of the program's $2.9 trillion in asset reserves in 2018 and 2019, respectively, it'll ramp up with each successive year afterward. By 2034, Social Security's $2.9 trillion in excess cash could be completely gone. If this excess cash disappears and Congress fails to address the program's estimated $13.2 trillion cash shortfall, then a 21% cut to benefits could await existing and future beneficiaries. 

A messy pile of Social Security cards.

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Senator Sanders lays out a plan to bolster the services Social Security provides

But Social Security's woes are about more than money. There are procedural issues, too, that can make getting benefits a chore for certain folks, such as the disabled. This is what prompted former presidential candidate Sen. Bernie Sanders (I-VT) to introduce the Social Security Administration Fairness Act on June 27, 2018.

The Social Security Administration Fairness Act aims to make three substantive changes to the existing law.

To begin with, it would set the Social Security Administration's (SSA) funding at 1.5% of overall benefit payments. Last year, despite $952.5 billion in expenditures, the SSA received just $6.5 billion in funding to run offices and pay employees. Though this was an improvement from the $6.2 billion in funding apportioned for 2016, the fact remains that the program's funding has declined 9% since 2010 as its beneficiary count has grown by 15%. More than doubling the SSA's funding should help it work through an exceptionally long disability request backlog, as well as meet the expectations of beneficiaries who have questions or concerns.

Secondly, Sanders' bill would address the exceptionally long wait times those applying for disability contend with in regard to disability insurance payments and Medicare. This bill would eliminate the five-month waiting period to receive benefits for approved Social Security disability insurance (SSDI) recipients, as well as eliminate the two-year waiting period of SSDI beneficiaries to qualify for Medicare.

Third and finally, it would place a moratorium on the closure of Social Security field offices and contact stations that are on the front lines of providing services to the American public. 

Social Security cards and cash bills lying atop a payout card.

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Sanders' bill comes with a pretty big drawback

Essentially, the Social Security Administration Fairness Act is about removing barriers to benefits for those with long-term disabilities, as well as bolstering the SSA's annual budget to help those in need of assistance.

However, altering Social Security does have consequences.

The Social Security Office of the Chief Actuary examined Sanders' proposal and determined that parts of it would increase the long-term (75-year) actuarial deficit of the Old-Age, Survivors, and Disability Insurance (OASDI) Trust. Think of the actuarial deficit as the amount payroll taxes would need to increase today in order to completely offset the expected cash shortfall the program is projected to face over the next 75 years.

Interestingly, increasing the amount of funding to the SSA and placing a moratorium on office closures has a negligible impact over the long run. But removing the five-month window for SSDI beneficiaries, as well as the two-year wait period for Medicare for those with a long-term disability, would increase the OASDI long-term actuarial deficit by 0.17% (17 basis points). Using last year's Trustees report data, this would have increased the actuarial deficit to 3.00% from 2.83%. For a worker making $35,000 a year, depending on whether he or she is working for someone else or self-employed, this plan could cost an additional $30 or $60 a year in Social Security payroll tax to cover. 

The facade of the Capitol Building in Washington, DC.

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Good intentions with little chance of passage

Ultimately, Sanders' bill has good intentions of making Social Security benefits more accessible to the disabled, but it also has virtually no chance of being signed into law.

The biggest issue, as addressed above, is that it would worsen Social Security's long-term cash shortfall. With Congress demonstrating a lack of urgency in resolving the program's issues, it means a growing likelihood that the cost to fix Social Security would be even more painful for working Americans when implemented. Or, put in another context, there's little chance that an increase in spending is going to be authorized by Congress until some headway is made on the program's expected $13.2 trillion cash shortfall between 2034 and 2092.

The other problem here is that Congress is highly partisan when it comes to Social Security. With 60 votes needed in the Senate to pass any amendment to Social Security and both Democrats and Republicans digging in their heels on potential solutions, there's little chance that Sanders' bill would see the light of day -- especially in an election year in which politicians fear losing their seats in the House or Senate.

Clearly, something needs to be done to address Social Security's shortcomings in the service department. Unfortunately, nothing immediate appears likely due to the program's impending cash crunch.

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