Wednesday, March 16, 2016 1:14 am
Trust fund for disability will dry up in 2016
STEPHEN OHLEMACHER and RICARDO ALONSO-ZALDIVAR | Associated Press
WASHINGTON – The 11 million Americans who receive Social Security disability benefits are facing steep cuts next year, the government said Wednesday, handing lawmakers a fiscal and political crisis in the middle of a presidential campaign.
The trustees who oversee Social Security and Medicare said the disability trust fund will run out of money in late 2016. That would trigger an automatic 19 percent cut in benefits, unless Congress acts.
The average monthly benefit for disabled workers and their families is $1,017. The typical beneficiary would see a reduction of $193 a month.
The date that the disability fund will run dry is unchanged from last year’s report. But as the deadline gets closer, advocates say the need to act becomes more urgent.
"Today’s report shows that we must seek meaningful, in some instances even urgent, changes to ensure the program is on stable ground for future generations," said Jo Ann Jenkins, the chief executive officer of AARP.
In more bad news for beneficiaries, the trustees project there will be no cost-of-living increase in benefits at the end of the year. It would mark only the third year without an increase since automatic adjustments were adopted in 1975.
Separately, about 7 million Medicare beneficiaries could face a monthly premium increase of at least $54 for outpatient coverage. That works out to an increase of more than 50 percent.
The annual report card on the financial health of Social Security and Medicare shows that the federal government’s largest benefit programs are feeling the strain of aging baby boomers as they both approach milestone anniversaries.
Medicare turns 50 at the end of the month and Social Security turns 80 two weeks later. Together, the programs accounted for more than 40 percent of federal spending last year.
There is an easy fix available for the disability program: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.
President Barack Obama supports the move. And acting Social Security Commissioner Carolyn Colvin said shifting the tax revenue "would have no adverse effect on the solvency of the overall Social Security program."
But Republicans say they want changes in the disability program to reduce fraud and to encourage disabled workers to re-enter the work force.
In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. Paul, who is running for president, joked that half the people getting benefits are either anxious or their back hurts.