Is Social Security Disability Really Becoming Insolvent?

These People Are Responsible For Fixing Future Problems with Social Security and Disability Benefits! Let them know what you want them to do!

What do you believe about this topic?

Do you think what they tell is about the system is true, that Social Security Disability is really on the verge of insolvency?

Perhaps you think the Social Security Disability problem is really nothing more than a political gimmick to make people think deep cuts in the program are necessary?

First, let me tell you what I know and then you should make up your own mind about what you think is the problem in Washington.

I know that everyone and his brother is on some form of assistance, being Welfare, Medicare, Social Security Payments for retirement, and Social Security Disability.

We know that laid-off workers and aging baby boomers are flooding Social Security’s disability program with benefit claims. Common sense tells us that those numbers, by themselves, have to make an impact on the system. The question is, however,  how much of an impact?

If it’s true that applications are up nearly 50 percent over a decade ago and that is the case because people with disabilities have lost their jobs and can’t find new ones in our present economy, and that nearly 7 million jobs have been lost according to a report I read (I suspect it is much higher than that) then it makes sense to me that the impact on the present system is tremendous.

If these numbers are true and the impact on the system is becoming a concern, then perhaps the system does need to be reviewed. I recognize the fact that, when this system was first put into law, it was not suppose to cover people for conditions we see it paying for now. In other words, it was NOT intended to pay for illegals and all the other people draining the system over the past twenty years. I’m sure it also didn’t take into account the last decade of high unemployment and an economy in the condition it is today.

If it’s true that new congressional estimates say the trust fund supporting Social Security disability runs out of money by 2017 and they will be unable to pay full benefits, then perhaps we should take this situation seriously. But Congress is unwilling to act the way the need to because it is a very unpopular thing to do politically, perhaps even suicidal for their career. If Congress continues to ignore the problem, Social Security benefits will run out as well.

I don’t know about you, but I believe that this is becoming a dire situation and that the Junior Congressmen and women see the problem and want to fix it but career politicians won’t touch it. However, some brave souls are discussing the idea of fixing Social Security’s retirement system by proposing the following:

• Raising the retirement age
• Testing benefits for wealthy retirees
• With the disability system still being in trouble, trustees who oversee Social Security urge Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994.

The bottom line is that, if Congress does not act soon, even though it is unpopular because a lot of people depend on it, the disability program will collect only enough payroll taxes to pay about 85 percent of benefits after the trust fund is exhausted in 2017.

 Even if Congress does act, the combined retirement and disability trust funds are projected to run out of money in 2036, the trustees say. The new congressional report estimates the combined fund would run out of money in 2038. At that point, the combined programs would collect enough in payroll taxes to pay about three-fourths of benefits.

Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can’t find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That’s 700,000 more than in 2008 and 1 million more than a decade ago. http://news.yahoo.com/social-security-disability-verge-insolvency-090119318.html

Social Security Commissioner Michael Astrue said in an interview that when people are let go from their jobs, they will likely try to get disability.

Other conditions to consider in this discussion are as follows:

• The disability program is also being hit by an aging population
• Disability rates rise as people get older
• The disability system has a tendency to encourage people to apply for more generous disability benefits instead of waiting until they qualify for retirement benefits with Social Security.
• Charles Blahous, one of the public trustees who oversee Social Security, said the disability program first experienced signs of trouble when standards for eligibility were more liberal in the 1980s.  ”Then it got another shove into bigger trouble during the recent recession,” said Blahous.
• Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income.

• Social Security is for people with substantial work histories, and monthly disability payments average $927.
• Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.
• As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don’t deserve.

• Last year, Social Security found $1.4 billion in overpayments to disability beneficiaries
• Most overpayments went to people who got jobs and no longer qualified but did not report it according to a recent report by the Government –according to the Accountability Office, an arm of Congress who investigates fraud.
• Congress is targeting overpayments in order to get a handle on abuse of the system.

• Congress enacted a deficit reduction package this month that would allow a boost in Social Security’s budget by about $4 billion over the next decade.
• This increase will give funds to invest in programs that identify people who no longer qualify for disability benefits; obviously, the honor system doesn’t work.
• The Congressional Budget Office estimates that increased enforcement would save nearly $12 billion over the next decade.
• Although there have been a backlog in processing Disability Claims, Social Security Commissioner Michael Astrue has pledged to reduce processing times for applicants’ appeals. Even though the number of people waiting for decisions has increased, their wait times are going down. Astrue said. “The backlog problem has gotten dramatically better.”

In conclusion, it appears that the Social Security Disability problem is being managed now but the question is “Will it be soon enough for you when you need to collect yours? ”

♦What we know from this report is that there is enough money in the system now, but there will NOT be enough to pay all the claims that are expected to come in the near future.

♦We know that Congress MUST get a handle now on stopping payment on fraudulent claims.

♦We know the job situation must improve so new disability claims will drop.

♦We know the systems needs to be tweaked to prevent Social Security Disability from running out of money by 2017 (that is only six years away) or 2038 at the latest.

♦We know that people MUST recognize the situation is dire and cooperate with their representatives so they can fix it without committing career suicide.

♦We know that this is not a political gimmick because the CBO report proves these claims.

I hope you will pass along this report to your friends and leave us a comment about how you feel about this report.

If you disagree with this report, please tell us so and why. If you agree, we would like to hear about it too and why you think this report is true and what you think we should do about it.

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Online:

Federal disability programs: www.ssa.gov/disability/

Congressional Budget Office projections: www.cbo.gov/doc.cfm?index=12375

Congressional Budget Office Long-Term Projections PDF: www.cbo.gov/ftpdocs/123xx/doc12375/08-05-Long-TermSocialSecurityProjections.pdf

Government Accountability Office report: www.gao.gov/products/GAO-11-724