Increasing Social Security earnings limit:
A critical time of decision for blind people

This memorandum explains the need to work with Congress in serving the blind.
For more information please contact Mr. James Gashel, Director of Governmental
Affairs, National Federation of the Blind, 1800 Johnson Street, Baltimore, MD
21230; telephone: (410) 659-9314.

If item seven in the Contract with America is enacted as proposed, a provision
in the Social Security Act for exempting earnings of blind people and senior
citizens to the same extent will be repealed. The amount of earnings allowed
without penalty for blind persons will remain where it is now, with only
marginal, future annual adjustments being made. Meanwhile, the earnings
exemption for seniors will be raised by five mandated annual increases in
order to reach $30,000 in the year 2000. The reason for doing this is to
diminish the disincentive of the earnings limit and to increase work and
productivity. By the same reasoning the higher earnings exemption should also
apply to blind people, who like the seniors are penalized for working.
In voting on the Contract with America, Congress must decide whether work
incentives for blind people are less important than raising the earnings
exemption standard for seniors to $30,000. Both goals have identical merit and
should be given identical weight. Work, productivity, and the opportunity for
more people to pay taxes would be the result. Accordingly, blind persons are
asking that their need to achieve economic independence through work not be
set aside.

DESCRIPTION OF EXISTING LAW
Under an amendment authorized by Congressman Archer in 1977, blind people who
have not attained age 65 are affected by the same earnings limit that the
Social Security Act imposes on age 65 retirees. Mr. Archer's amendment,
establishing an identical earnings exemption standard for blind people and
retirees, has been law for almost 20 years. Blindness and retirement age are
both defined eligibility conditions in section 216 of the Social Security Act.
The disability test  the inability to engage in Substantial Gainful Activity
 is not used to determine whether an individual meets the blindness criteria
in the Social Security Act. Only medical evidence is used for this
determination.

CONTRACT WITH AMERICA: PROPOSED CHANGES
Item seven in the Contract with America is a bill known as the Senior
Citizens' Equity Act  H.R. 8, by Congressman Jim Bunning, and S. 30, by
Senator John McCain. The modifications to the earnings limit being proposed
include five mandated upward adjustments in the exempt amount to reach $30,000
of annual earnings beginning in the year 2000. Section 101(b) of the bill
would specifically exclude blind people from the mandated adjustments.
The exclusion departs from existing law. The National Federation of the Blind
(along with every other organization having interests in the blindness field)
strongly opposes this change. The provision would create an earnings limit for
blind people which is far more stringent that the earnings limit for age 65
retirees  a serious change in direction which will have far-reaching and
harmful work disincentive effects upon the blind.

NEED TO REMOVE
WORK DISINCENTIVES
Continuing the existing policy by mandating the adjustments in the earnings
limit for blind people as well as for age 65 retirees will assure that an
estimated 104,300 blind beneficiaries will receive a powerful work incentive.
Most blind people could then not lose financially by working. The mandated
earnings limit changes, if made applicable to blind people, would be
cost-beneficial since, among those of working age, 70 percent are currently
unemployed or underemployed. Most of them are already beneficiaries. At
present their earnings must be strictly limited to $940.00 per month. When
earnings do exceed this exempt amount the entire sum paid to a primary
beneficiary and dependents is abruptly withdrawn after a trial work period.
When a blind person finds work, there is absolutely no assurance that earnings
will replace the amount of lost disability benefits after taxes and work
expenses are paid. Usually they do not. Therefore, few of the 104,300
beneficiaries can actually afford to attempt substantial work. Those who do
will often sacrifice income and will certainly sacrifice the security they
have from the automatic receipt of a monthly check. This group of
beneficiaries  people of working age who are blind  must not be forgotten as
the debate proceeds toward modifying the Social Security retirement test. Just
as with hundreds of thousands of seniors, their positive response to the
higher amounts of earnings allowed will bring additional revenues into the
Social Security trust funds.

ACTION REQUESTED
In taking a position on legislation to approve item seven in the Contract with
America, each member of Congress should vote to ensure that equity in the work
incentive policies of the bill applies, as under current law, to senior
citizens and blind people alike. To achieve this, we ask you actively to
promote striking the exclusionary provision  section 101(b)  of the Senior
Citizens' Equity Act so that an identical earnings exemption standard for
blind people and retirees alike  the policy of the present law  is
maintained.
To receive a free copy of the presentation Mr. Gashel made to the United
States House of Representatives Subcommittee on Social Security, please
contact: Mr. James Gashel, Director of Governmental Affairs, National
Federation of the Blind, 1800 Johnson Street, Baltimore, MD 21230; telephone:
(410) 659-9314.n
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