[blindlaw] Social Security Disability Benefits face cuts in 2016 N.Y. Times

[Ross A. Doerr]

I have copied and pasted the text of a N.Y. Times article about the SSDI
trust fund running low in 2016. I hpe I did not miss anything.

IF this didn't come through very well to the list, it is on line via a
simple google search.

I see this topic come up every election season. What I find interesting this
time is that they are predicting a 19% drop in benefits if the issue is not
addressed in a substantive way, and as usual, it is the Democrats v.
Republicans.

Much of this is familiar - do something more about the fraud in the SSDI
system and do something more to help recipients go back to work.

If they'd just make sure we could get jobs that pay a living wage we
wouldn't need. never mind.

 So, as I read the article below, Those on SSDI will, if nothing is done,
get a 19% reduction in benefits. Will employees at the SSA get a 19%
reduction in pay to ensure that the savings to the program is maximized? 

This concludes my rant and cheap shots for the day.

Ross

 

***

Social Security Disability Benefits Face Cuts in 2016, Trustees Say - The
New York Times

July 22, 2015

By ROBERT PEAR

 

WASHINGTON - Eleven million people face a deep, abrupt cut in disability
insurance benefits in late 2016 if Congress fails to replenish Social
Security's disability trust fund, which is running out of money, the Obama
administration said Wednesday.

Officials expressed concern about the program as they issued their annual
report on the financial condition of Medicare and Social Security, which
together account for about 40 percent of all federal spending.

The trustees of Social Security, including three cabinet secretaries, said
the disability trust fund would be depleted in the last quarter of 2016.
After that, they said, benefits would automatically be cut by 19 percent
because revenues, largely from payroll taxes, would be sufficient to cover
only 81 percent of scheduled benefit payments.

The report sets up a fight between President Obama and Republicans in
Congress. Mr. Obama wants to replenish the disability trust fund by shifting
some payroll tax revenues from Social Security's retirement trust fund.

Republicans, however, want more significant changes to improve the program's
finances. These changes could include reductions in disability benefits,
restrictions on eligibility, new measures to combat fraud or new strategies
to help people return to work. In January, Republicans adopted a new rule in
the House that could block a direct reallocation of money at the expense of
the trust fund that provides benefits for retirees.

The White House acknowledged the financial problems of the disability
program in a separate report issued last week by Jeffrey D. Zients, director
of the National Economic Council, and Shaun Donovan, the president's budget
director.

The trustees, in their report, said that the squeeze on the disability
program was "but the first manifestation of larger financial imbalances
facing Social Security as a whole, as well as Medicare."

They predicted that Medicare's hospital insurance trust fund would be
exhausted in 2030, the same as projected last year.

While trustees say the Social Security retirement fund will remain solvent
through 2035, the disability insurance fund is expected to run out of money
late next year. 



Combined fund

Retirement fund

Disability Insurance fund

Years

40

30

20

10

'95

'05

'95

'05

'95

'05

'15

'15

'15

Year of projection



Combined fund

30 years

20

10

'95

'05

'15

Year of projection

Retirement fund

40 years

30

20

10

'95

'05

'15

Year of projection

Disability Insurance fund

30 years

20

10

'95

'05

'15

Year of projection

Sources: Social Security Administration, Congressional Research Service 

JULY 22, 2015 

By Kim Soffen 

And they said that the reserves of Social Security's retirement and
disability trust funds, taken in combination, would be depleted in 2034, one
year later than projected in 2014. After that, the report said, income to
the trust funds would still allow Social Security to pay about three-fourths
of scheduled benefits for 50 years.

Though often considered together, the trust funds for retirees and disabled
workers are "distinct legal entities that operate independently," the
trustees said. Officials cannot divert money from one to the other unless
Congress explicitly authorizes such a shift, as it has done several times in
the past.

The most recent reallocation of the Social Security payroll tax occurred in
the mid-1990s, when Congress bolstered the disability trust fund, according
to the Congressional Research Service. But money has sometimes been shifted
in the other direction.

Disability insurance is a fundamental part of Social Security. Most
beneficiaries were earning middle incomes, averaging a little more than
$42,000 a year, when they became disabled, officials said. Benefits average
$14,000 a year.

The shortage of money in the disability trust fund should not be a surprise,
experts said. It reflects demographic factors like the aging of baby boomers
into their 50s and 60s and the increase in the number of women in the labor
force, which makes them eligible for disability insurance, they said.
Another factor, they said, is improper payments to some people who are not
disabled.

Treasury Secretary Jacob J. Lew, the manager of the two trust funds, said
the reallocation of revenue proposed by Mr. Obama was "a common sense
solution to improve the solvency" of the disability fund.

The trustees' report said that "some reallocation of resources between the
two trust funds" was necessary but not sufficient. Congress, they said,
should take other, unspecified steps to address the long-term financial
problems of the trust funds.

Senator Orrin G. Hatch, Republican of Utah, the chairman of the Senate
Finance Committee, said that "reshuffling funds," as proposed by Mr. Obama,
was no solution to the serious fiscal problems documented in the report.

Social Security officials said they did not expect to provide a
cost-of-living adjustment to Social Security beneficiaries in 2016, although
that could change, depending on changes in consumer prices over the next few
months.

The report projects a big increase in Medicare premiums for about 30 percent
of the 55 million people who have health insurance through the program
because of complex rules meant to protect the other 70 percent. The standard
premium for the unprotected group is expected to rise to $159.30 a month in
2016, from the current level of $104.90. For the highest-income
beneficiaries, the report shows premiums rising above $500 a month in 2016,
from $335 this year.

The report assumes that 70 percent of beneficiaries will be "held harmless."
Most people on Medicare have premiums deducted from their monthly Social
Security checks. Under federal law, their premiums cannot rise more than the
dollar amount of the cost-of-living increase in their Social Security
checks. So if there is no inflation adjustment in Social Security, their
Medicare premiums would not increase.

But Medicare will still need more money to pay doctors, and the government
could increase premiums for the 30 percent of beneficiaries who do not have
protection. Administration officials said they had policy options to avoid
huge increases and would decide on 2016 premiums in October of this year.

Sylvia Mathews Burwell, the secretary of health and human services, said the
Affordable Care Act had extended the life of Medicare's hospital insurance
trust fund by 13 years. The law reduced the growth of Medicare payments to
many health care providers. Under prior law, officials estimated that the
trust fund would be depleted in 2017.

Medicare spent an average of $12,430 per beneficiary last year, up 2 percent
from 2013, the report said. The total includes $4,900 for hospitals and
other institutions, $5,400 for doctors and other outpatient services, and
$2,100 for prescription drugs.

 

A version of this article appears in print on July 23, 2015, on page A15 of
the New York edition with the headline: Disability Benefits Face Cuts in
'16, Trustees Say. 

 

 

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