In an article released this summer NBC News claims that Congress may only have a few months to act to stop more than 11 million Social Security Disability recipients from facing severe disability cuts next year. In fact, according to reports, the Social Security Trust Fund crisis is an “urgent threat” that requires immediate actions by our federal representatives in Congress.
What’s the problem? Financial experts report that the Social Security Trust Fund, which is funded by employee payroll tax contributions, is set to run out of money in 2016. If the fund is exhausted it will initiate an automatic 19% cut in SSDI benefits. This means if a worker is making $1,017 per month their SSDI benefits could be lowered by $193 a month, a substantial amount of money for many families.
Solutions to solve the Social Security Trust Fund Crisis
Identifying the problem with the Social Security Trust Fund is not too difficult; getting Congress and the President to agree on a solution is another story.
While Democrats want to simply use funds from the Social Security retirement fund to the Social Security Trust Fund, Republicans argue that does nothing to solve the underlying issues. Instead, Republicans argue the program, including underfunding, fraud, and the lack of healthy participants going back to work, needs an overhaul.
Another issue is the aging population. As baby-boomers age they become more disabled. Unfortunately, there are fewer workers to support the increased demand for SSDI benefits. This will soon be an issue for both the retirement and the disability program, programs which accounted for more than 40 percent of federal spending last year.
What about my healthcare benefits?
If we’re going to have a frank and open discussion about Social Security Disability Insurance it’s also important to address something else that’s critical to the health and welfare of SSDI recipients- Medicare.
Not only is SSDI expected to be exhausted in a few years, the Medicare trust fund is also in trouble. According reports, “Medicare is adding 10,000 new beneficiaries a day as baby boomers reach age 65.” This number is also growing as more workers start to receive SSDI benefits. So what happens when the money is gone? Medicare taxes will only cover 86 percent of benefits.
Unfortunately, although many Americans may not be worried about these issues, up to 60 million individuals who receive SSA retirement benefits, disability benefits, or health care benefits should be concerned.
What can I do to protect myself?
Those living on a fixed income may have very little that they can do except pray and hope our representatives take the right steps to fix the Social Security Trust Fund. The solution will most likely involve cuts to benefits, raising the age of eligibility, and making it more difficult to win SSDI benefits. None of these solutions are easy or fun, but the truth is our government has promised too many people too many benefits, and the number of workers financing the Social Security Trust Fund is insufficient to meet our current debt obligations.
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