EPISODE 310

The Trump administration tried to make it harder for older workers to qualify for Social Security Disability Insurance (SSDI), but backed down under public pressure. Kathleen Romig of the Center on Budget and Policy Priorities says this mean-spirited policy would have stripped coverage from 1.5 million disabled workers over 10 years. She also explains why the 2026 Social Security cost-of-living adjustment (COLA) comes up short. (Note: This episode was recorded & posted shortly before the Trump administration abruptly withdrew the restrictive new SSDI rules.) 

TRANSCRIPT:

ANNOUNCER: It’s You Earned This, the Social Security and Medicare podcast, brought to you by the National Committee to Preserve Social Security and Medicare. And now, your host, Walter Gottlieb. 

WALTER: Meanness seems to be the mantra for the Trump administration when it comes to the most vulnerable people in our society. The president’s Big, Ugly bill slashed Medicaid and food assistance for needy families. Now, Trump is targeting Social Security Disability benefits with new eligibility rules that could hit older disabled workers really hard. 

Our friend Kathleen Roemig of the Center on Budget and Policy Priorities (CBPP) is one of the foremost Social Security experts here in Washington. And she reminds us that if Trump cuts Social Security Disability Insurance (SSDI), he is cutting Social Security. We’ll also ask Kathleen about the Cost-of-living Adjustment (COLA) for Social Security for 2026.

Good afternoon, Kathleen. 

KATHLEEN: Good afternoon. Happy to be here. 

WALTER: Yeah, it’s so good to see you. So, you were our third guest on this podcast when we started it in early 2024. And since then, you left Center on Budget and Policy Priorities, went to work for Martin O’Malley at the Social Security Administration (SSA), and came back after Biden left? 

KATHLEEN: That’s right. 

WALTER: What a ride!

KATHLEEN: Yeah. Its been quite a ride, exactly.

WALTER: How does it feel to be back? 

KATHLEEN: It’s wonderful to be back. I’m really enjoying being with my colleagues and engaging on so many issues that are important to the Social Security Administration. And I really care so much about that place, having worked there not just last year, but before that as well. 

WALTER: Well, we thank you for all of that service, everything you did. 

Let’s start with the COLA, the Cost-of-Living adjustment for 2026, the announcement of which was delayed by the shutdown, right. But it hasn’t been announced quite yet. By the time this airs, it may have. But it looks like it’s going to be around 2.7% increase. So, A, is that what you’re hearing? And B, how does that stack up as a COLA increase for beneficiaries? 

KATHLEEN: Yeah, I’m hearing about that amount as well. And, the COLA is so important for Social Security. Social Security is the main source of income for most retirees and the only source of income for, you know, quite a large fraction. 

And it’s not just the retirees, but also disability beneficiaries and survivors. It’s extraordinarily important because most people don’t have life insurance or disability insurance. And so, ensuring that those benefits maintain their purchasing power is very important. So, this COLA is about, you know, a pretty typical one. 

WALTER: 2025’s COLA was 2.5%, right? 

KATHLEEN: Yeah. 

WALTER: It’s a little better. 

KATHLEEN: Yeah. So, it’s a little more because inflation is a little higher as anyone who’s gone to a grocery store lately. 

WALTER: Yeah. Wasn’t Trump supposed to fix that? 

KATHLEEN: Well, that does not seem to have happened yet. 

WALTER: And a whole other podcast, unfortunately, or maybe fortunately. 

Will a lot of that COLA increase of 2.7% be eaten up by Medicare Part B premiums? 

KATHLEEN: Yes, that’s right. So, the Medicare trustees are expecting this year’s premium to increase by one of the highest amounts ever. 

WALTER: Oh boy.

KATHLEEN: Yeah. So, a lot of beneficiaries are going to have that whole COLA be eaten up by the Medicare premium increase. But luckily, Social Security does have a hold harmless… so no one is going to be worse off after paying that COLA. 

WALTER: Right. 

KATHLEEN: Yeah. So that’s another really important feature that protects low-income beneficiaries. 

WALTER: So you won’t have a net loss, but you may not get a dime, in reality, of this cost-of-living increase. 

KATHLEEN: That’s right. And if you get the Part D prescription drug benefit, there’s not a hold harmless for that. So, you will be paying more for that. 

WALTER: So, Kathleen, we have long advocated for the CPI-E as a formula for calculating COLAs, that would be the Consumer Price Index for the Elderly. Can you explain to folks what that is and how it might help at least a little bit? 

KATHLEEN: Sure. The CPI-E—any form of CPI-E —just takes what they call a “basket of goods.” So, the kinds of things that people need to buy, and kind of averages it out. So that would include housing, and transportation, and each particular product that people buy at the grocery store, electricity, everything. But of course, that basket varies from person to person. You know, a mom of toddlers is going to buy a different basket of things than a grandma. 

WALTER: Right. 

KATHLEEN: And so BLS has developed what they call an “experimental index” called the CPI-E for elderly. And that looks at: What does a typical elderly person buy? What kind of products and services does a typical elderly person buy? 

And of course, they are consuming significantly more health care than a working age person or a child would consume. 

WALTER: Absolutely. 

KATHLEEN: And health care prices are rising faster, and have been rising for some time faster than other prices. So, that index tends to rise a little bit faster than the CPIE for everybody else. 

WALTER: So, if we adopted the CPI-E, which we advocate, then seniors might get a little bigger bump. 

KATHLLEN: Correct. 

WALTER: In their Social Security check every year. 

KATHLEEN: Yes. On average, it’s slightly higher than the CPI-W, which is what the Social Security Administration uses now. 

WALTER: Which is not appropriate because that’s for urban wage earners, which, like you point out, have very different expenses than grandma or grandpa. 

So, Kathleen, last week you wrote a blog post, a very important one, with the headline “Trump Administration Plans Deep Cuts to Social Security Disability Insurance.”

So here we have a president who swears that he will protect Social Security, clearly is not doing that, and now is instituting a new assault on SSDI eligibility, which will really hurt older workers in particular. Can you explain what’s going on?

KATHLEEN: Sure. So, first of all, I just want to establish that Social Security has three different parts. There’s retirement, which I think is the most famous part of Social Security, but also survivors benefits for people who are widowed or children whose parents die. And then, finally, the disability part of Social Security. 

It is very much part of Social Security and that’s something that I want everyone to understand because, like you said, the President promised over and over again not to cut Social Security, and so cutting SSDI is certainly a Social Security cut.

WALTER: Absolutely. You can’t get around that. 

KATHLEEN: Yeah, and it’s very well integrated with the rest of Social Security. The same payroll taxes that we use to pay for retirement benefits we also use to pay for disability benefits.  

The same formula used to calculate benefits and decide eligibility applies to both retirement and disability, so it’s very much one in the same program. People who receive disability benefits seamlessly transition to retirement benefits when they reach the retirement age. 

WALTER: What is it that the Trump administration is proposing to change about these SSDI eligibility rules?

KATHLEEN: They are planning to significantly cut the number of people who will be eligible for benefits, and those cuts target older applicants. So, if you are an applicant for disability insurance who’s over the age of 50, the rules are going to get a lot stricter. It’s going to be a lot harder to qualify. The first Trump administration had worked on a draft version of this rule and, from what we’ve heard, it would cut the number of people who qualify for Social Security disability insurance by up to 20%. 

WALTER: Right…

KATHLEEN: And those cuts would be even deeper for older applicants in particular. 

WALTER: Your blog post says that 750,000 fewer people would receive Social Security disability benefits within 10 years if these rules take effect. 

KATHLEEN: Yeah, and that’s an estimate from the Urban Institute which is actually based on a 10% cut. If it actually does become a 20% cut, it would be a double that: a million and a half fewer people qualifying for this important program. 

WALTER: So, you say that nearly 80% of people on SSDI are age 50 or older? 

KATHLEEN: Exactly, the odds of a person becoming disabled increase with each passing year. Older people are just much more likely to become disabled than younger people. And so, SSDI is a program that primarily serves older workers, so when you take aim at older applicants, you’re really taking aim at the heart of the program. 

WALTER: I said in the intro that this is a pretty mean policy… on the face of it, at least. Do you know where these rules are coming from? Trump obviously doesn’t know anything about how Social Security works. So, who is really behind these changes and what are they up to? 

KATHLEEN: Yeah, it’s a good question. The rule was first developed during the first Trump administration, and Mark Warshawsky —who is now at the American Enterprise Institute—was a Trump appointee during the first administration and was really spearheading this rule. Okay, and certainly now I’ve heard that it’s a priority of Office of Management and Budget (OMB) Director Russ Vought as well. 

WALTER: The author of project 2025, who’s behind a lot of the most notorious cuts to the federal government. 

So, paint us a picture of these older workers. They’re not old enough for Social Security yet, but they can’t any longer support themselves because of their disabilities. Right?

KATHLEEN: Correct. So, you know, when you look at who receives SSDI, they tend to have worked in physical jobs, so the occupations are things like mining or working in a factory, for example. So… much more physical jobs. They tend to have less formal education, and they tend to live in certain regions of the country. Those include Appalachia, the South and the Rust Belt. Those are really where the rates of disability receipt are higher. 

WALTER: Sounds like a bunch of red states to me. 

KATHLEEN: Mm-hmm, exactly.

WALTER: It’s not that easy to get SSDI in the first place, right? 

KATHLEEN: Yeah. 

WALTER: They’re going to make it harder, but as of now… right now, something like 60% of all applications get rejected. 

KATHLEEN: Exactly, and that’s even after all levels of appeal. 

WALTER: Oh…

KATHLEEN: So, on the first try, it’s about a third of people get benefits, and then, once they exhaust all levels of appeal —which takes years often—it’s only about 40% are getting benefits in the end. So, it’s a very strict standard. 

WALTER: Just a quick side step. So, when you were at SSA, I believe that Commissioner O’Malley and his team, which you were a part of, helped to cut down on the delays and SSDI hearings. Is that the case? And has it gotten worse again under the Trump administration? Do we know? 

KATHLEEN: Unfortunately, during the pandemic, the amount of time that people waited on their initial disability application really skyrocketed, and it rose to the highest ever levels. People were waiting over seven months for an initial decision. 

The number of people waiting for that initial decision has been steadily declining over the past year or two and, yes, a lot of that is some reforms that Commissioner O’Malley put into place and that we’re seeing… it’s bearing fruit now. 

WALTER: Okay.

KATHLEEN: As far as the appeals… there were terrible backlogs in appeals a few years ago. Those became much more manageable over time, but those are starting to re-emerge now. 

Some of that is because the big backlog that we saw at the initial level is now kind of moving through the process, and is showing up at the appeals level. So, I think that’s something to keep an eye on… there are more people waiting longer amount of time to work through that appeals process. 

WALTER: Okay, well, thank you for breaking that all down. Sounds like the Trump administration is counting on people believing the myth that able-bodied workers are somehow scamming the system and collecting SSDI when they don’t deserve it. This is the same argument they used with Medicaid. Like, these people on Medicaid are undeserving. So, if we cut it nearly a trillion, we’re not really hurting anyone.

KATHLEEN: Right. Those are the kinds of arguments they make. And if you just look around and you see people in your own life, people who have been working on their feet, doing manual labor their whole lives. They often are really struggling to make it to retirement age.  It’s often they develop health problems that just don’t allow them to work anymore. Not to mention things like cancer and MS and ALS and any number of things that can strike people as they get older. It just makes it too difficult to continue to work, and it’s really unfair when people say things like some of these stereotypes. 

I was just an event this morning when I heard someone saying these awful stereotypes that people are lazy or sitting on the couch, when in fact these people really want to continue to work…

WALTER: Of course. 

KATHLEEN: But it just becomes too difficult when their health challenges are too much. 

WALTER: What will happen to the folks who would have gotten on to SSDI as older adults who now may not be able to… are they going to have to claim Social Security retirement benefits early, and what does that do to their financial stability? 

KATHLEEN: : That’s a great question, and we have some indication of what will happen by looking at people who are rejected now, because the standard is (already) so strict. Typically, especially for older applicants, if they apply and they are rejected, they still have serious health conditions… but maybe they don’t quite meet this strict standard. 

Most of them are not able to go back to work in a meaningful way. And so, what happens is they spend whatever savings they have — whether that’s retirement savings or general savings. They struggle. 

We see higher rates of things like foreclosure and hunger. And then, yes, they tend to get Social Security retirement benefits as soon as they can. And if you do that, and you claim at age 62, you’re locking in a 30% reduction in your monthly benefit…

WALTER: For life!

KATHLEEN:, Exactly, and for your family too. So, if you have children or a spouse who are also eligible, you’re locking it in for your widow, for example. 

WALTER: Good point. 

[00:14:08] Speaker 3: And so that really undermines people’s retirement security in every way if they are hit with a life-changing disability at the end of their career and they’re not able to access SSDI because it demolishes their savings and it reduces their Social Security benefits.

WALTER: Just plain mean. Like I said at the beginning, it’s interesting that Trump claims to be protecting Social Security, when his administration is doing everything it can to undermine the program. 

KATHLEEN: Yeah. And it’s not only these cuts that they’re proposing, but also the way that it’s much harder to access Social Security benefits now, because thousands of staff have been pushed out of the agency this year. It’s hard to get through on the phone. It’s even harder to get an appointment in person or to walk into an office and get service in person. We’re seeing people having delays that they didn’t have to experience before, and it’s really hard, all for no good reason. 

WALTER: They say it’s to cut down on quote “waste, fraud and abuse,” but that is statistically small. 

KATHLEEN: Yeah, it’s very tiny, just a tiny fraction of 1% of Social Security. We know they’re spreading these myths that don’t comport with the facts. Even when you look at the government’s own statistics about improper payments, it just doesn’t line up. 

WALTER: At CBPP, where you’re the chief Social Security expert, do you consider yourselves advocates or analysts, academicians? I’ve always been curious about that. 

KATHLEEN: Yeah, I think kind of a hybrid of all of those things. We certainly try to be very, very rigorous and look at the evidence in all things, but we do have a point of view, which is that we need to protect programs that are really important to American families, particularly low and moderate income families, and we need to do that in a way that is fiscally responsible as well. 

WALTER: Amen. Well, thanks for everything you do, Kathleen. We appreciate that, and thanks for coming in in person…. it’s always great to see you. 

KATHLEEN: Yeah, great to see you too. 

WALTER: If you’d like to join the fight to protect Social Security and Medicare, visit our website at ncpssm.org and click “join us.” You can become a member of the National Committee and participate in the pushback against Trump and DOGE. And, by the way, this podcast has a new website. It’s: youearnedthisorg. You- earned- this- dot- org. You can listen to all our previous episodes and learn more about us.

Our engineer is Shahab Shokouhi, our editor is Steve Lack, and I’m Walter Gottlieb reminding you: “You earned this!”