Treasury Secretary proposes SSDI funding fix
As Colorado voters know, the mid-term election is fast approaching. In the days leading to November, we can expect the intensity of debates over a wide variety of issues to heat up and the volume and frequency of TV ads to increase. One of the issues that might move into the hot lights by election day is the question of how the nation will solve a budget shortfall due to hit Social Security Disability in 2016.
Treasury Secretary Jack Lew recently offered a possible solution to the problem when he said Congress should “reallocate” payroll tax revenues to the SSDI trust fund.
Lew noted that the Social Security Administration’s trustees said in recent days that the disability fund had just over $90 billion remaining in reserve at the end of fiscal year 2014. While that might sound like a lot, the disparity between income and expenditures on benefits is substantial. Slightly more than $143 billion was spent on SSDI while just over $111 billion of revenues went into the fund. That deficit will mean reserves will be exhausted in just two years.
Media outlets point out that if Congress does nothing about the looming SSDI shortfall, it’s possible that beneficiaries could then see benefits slashed by as much as 20 percent, even though many have no other source of income and depend solely on the monthly benefits to pay for housing, food, clothing, utilities and other necessities.
Lew says a relatively simple solution is to combine the retiree and disability funds, enabling Social Security Administration to cover full payments for both for nearly another 20 years.
Of course, for those fighting today for SSDI claim approval, future political battles are less important than their current efforts to successfully appeal an application denial. For many struggling with illness, it’s a comfort to know they are allowed to get appeals assistance from an attorney experienced in navigating the complex process.
Source: Wall Street Journal, “Lew Supports Funding Change for Disability Program,” Damian Paletta, July 28, 2014