Senate Democrats Propose Social Security Funds to Thwart Disability Program Crisis

With GOP representatives and presidential hopefuls looking for ways to cut funding to the program, Senate Democrats are trying a different approach. Many Democrats believe the answer to our impending to Social Security Disability Fund crisis is to simply combine its budget with the Social Security retirement fund.

moneyhand.jpgThere are two separate funds administered by the United States Social Security Administration (SSA). First, there is the Social Security retirement fund with which most people are familiar, and then there is the Social Security disability fund. The disability fund provides money for Social Security Disability Insurance (SSDI) benefits and Supplemental Security Income (SSI) benefits. Since the two funds operate programs that serve different functions, under current law, they must be separately maintained.

As our Boston disability lawyers can explain, the disability fund is set to run out of money late next year, while the retirement fund has enough reserves to last until 2034. In the past, when a budget shortfall was approaching, Congress would agree to move money from one fund to other. It would not even take much money, in relative terms, as a one-year reduction in the retirement fund budget would add over 15 years to the disability fund budget.

However, according to a recent news article from The Week, Congressional republicans have been able to include provisions in massive expenditure bills that make it illegal to move money from one fund to the other. This has created much debate about the future of the disability program, which, in turn, has become fodder for political debates of candidates in the upcoming presidential nomination process.

One alternative some democrats have suggested, as a means around this problem, at least in the immediate future, is to simply combine the two funds into a single Social Security fund. This would solve the immediate problem, and most employees would probably not even notice, as many people do not even consider how their Social Security deductions are allocated into separate funds.

While many may differ on the politics of the situation, it would offer much relief to the roughly 9 million Americans who currently depend on Social Security Disability Insurance benefits to survive each month.

The reason for any budgetary shortfall has to do with how the programs were created. The Social Security retirement program was created as part of the New Deal, and the Social Security Disability Insurance program, created 60 years ago, did not have any starting balance in terms of tax dollars paid into the system. Since the workers who first started getting taxed could not exactly support those new beneficiaries to the system, the system had to borrow money, so it was always running at a deficit. Essentially, without a substantial tax increase, there was not exactly enough money in taxes to fully fund the program on an annual basis, so there is not much that could have been done to change that. For this reason, from time to time, the current system will need re-allocations to correct for funding shortages in one program, but not the other.

Since there is no longer a way to do this, merging the programs would accomplish the goal. While there is no way to do this under the current law, there is no reason Congress could not simply do away with the two system requirement, as it turns out to be fairly arbitrary in terms of actual historical management of the system.

If you or a loved one is seeking Social Security Disability Insurance in Boston, call for a free and confidential appointment at (617) 777-7777.

Additional Resources:
The Democrats’ brilliant plan for reforming Social Security , May 12, 2015, The Week
More Blog Entries:
Social Security Disability Claims Process, Jan. 23, 2015, Boston Social Security Disability Insurance Lawyer Blog

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