Although Social Security retirement plans and Medicare have been on the hot seat for congressional budget cutters, few people have noticed that Social Security’s disability trust fund is also dangerously close to running out of money. Social Security disability money is likely to be depleted much sooner than the other two programs, leaving 11 million Americans with a more than 20 percent cut in their resources.
Those people, all of whom are disabled, rely upon the government funds to keep themselves and their families above the poverty line.
Few members of Congress have discussed the issue, primarily because they are scared of the political ramifications. The biggest reason that the fund is projected to run short is the baby boomer generation, which will also overwhelm the retirement and Medicare spending. More boomers are filing for disability before they qualify for retirement benefits, a move that is draining SSD coffers.
Applications for the program have risen by a whopping 30 percent since 2007, according to experts. The number of Americans who actually receive those benefits has also jumped by nearly a quarter.
To add some perspective, SSD benefits cost America about $132 billion during the last fiscal year. Payments average out to about $1,111 per month per recipient. Those figures do not count the additional $80 billion in Medicare benefits that were distributed to the same population.
Incoming payroll taxes will account for fewer than 80 percent of anticipated need. The program is not allowed to run a deficit, so that means if Congress doesn’t identify additional revenue streams that benefits could be slashed. Georgia residents receiving disability benefits should let their members of Congress know how essential the benefits are.
Source: The Washington Post, “Social Security disability trust fund projected to run out of cash by 2016,” Brian Faler, May 30, 2012