Mandatory Spending

Function 600 - Income Security

Eliminate Supplemental Security Income Benefits for Children

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
Change in Mandatory Outlays 0 -10 -11 -11 -10 -11 -12 -12 -13 -13 -42 -103
Change in Discretionary Outlays 0 -1 -1 -1 -1 -1 -1 -1 -1 -1 -4 -10

Note: This option would take effect in October 2014.

The Supplemental Security Income (SSI) program provides cash assistance to people who are disabled, aged, or both and who have low income and few assets. Currently, about 60 percent of SSI recipients are disabled adults (between the ages of 18 and 64), about 15 percent are disabled children (under age 18), and about 25 percent are aged adults (age 65 or older) with or without disabilities. To qualify for benefits, adults age 65 or older need to have low income and few assets, and adults younger than 65 must also demonstrate that they have a disability that prevents them from participating in "substantial gainful activity," which in 2013 is considered to mean work that would produce earnings of more than $1,040 a month. Children are not expected to work, so to qualify for benefits, they must have "marked and severe functional limitations" and, in most cases, must live in a household with low income and few assets. The maximum SSI benefit is specified in law and indexed to inflation, and the amount someone receives is the difference between that maximum and a measure of the person's income. In 2013, the maximum benefit is $710 per month, and the average benefit is about three-quarters as large.

This option would eliminate SSI benefits for children. The Congressional Budget Office estimates that making this change would reduce mandatory spending by $103 billion through 2023. The administrative costs of SSI are paid through annual discretionary appropriations; by eliminating the need to administer the program for children, the option would generate an additional $10 billion in discretionary savings over the same period if appropriations were adjusted accordingly.

One rationale for limiting SSI to adults is to focus the program on replacing earnings for people who cannot work. Policymakers might choose to make this change to SSI and leave other programs unchanged. Alternatively, if policymakers wanted to continue to provide support for disabled children, they could create a new program to do so or they could increase funding for other existing programs. For example, states could be given grants to provide educational, medical, and social services to disabled children and their families. That approach might help to ensure that the appropriate services are effectively integrated with one another, and it might increase policymakers' confidence that government spending directly benefits disabled children—whereas SSI benefits are usually paid to children's parents or guardians, without a way to ensure that the money is used in ways that help the children. As other examples, federal funding for Temporary Assistance for Needy Families (TANF) could be expanded, or federal funding for states' education programs could be expanded. To the extent that funds that would have been used to provide SSI benefits for children were instead used for a new program or to increase the resources of other existing programs, federal savings from this option would be correspondingly reduced.

One rationale for maintaining SSI benefits for children, and against this option, is that the benefits are generally well targeted to needy people. Parents of disabled children—especially mothers—tend to work less than other parents, which lowers their income, and even parents who receive government-provided educational and medical services for disabled children still face other costs associated with those disabilities. According to one study, forgone work by mothers with a disabled child reduces their families’ earnings by roughly $5,000 per year, on average, and the direct cost of treatments for disabled children is around $1,000 per year, on average. (Those treatments include health care; therapeutic, behavioral, and educational services; transportation; services by caregivers; and other special needs services.) That study did not attempt to estimate how much of the reduction in mothers' work results from SSI itself; because the child's eligibility and benefits are affected by his or her parents' monthly wages and self-employment income, the availability of SSI could reduce the incentive to work. However, any such effect appears to be small.