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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Deadline set for Congress to act on disability trust fund

David Lauter Tribune News Service

WASHINGTON – Nearly 11 million Americans who receive federal disability benefits risk seeing their checks reduced unless Congress acts by next year to replenish the system’s trust fund, the Social Security trustees reported Wednesday.

The pending cash crunch in the disability fund is one of those slow-motion – and largely self-created – crises that Congress usually fails to resolve until a deadline hits. The latest report sets that deadline, the date when the disability trust fund will hit insolvency, for late next year.

After that point, tax revenues will cover only about 80 percent of scheduled disability benefits, unless Congress acts to fix the system.

The trustees also forecast that the main Social Security retirement fund will remain solvent until 2034, one year longer than previously reported. The Medicare trust fund will remain solvent until 2030, the trustees projected, the same date reported last year.

“Both Social Security and Medicare are secure today and will remain secure in the years to come,” Treasury Secretary Jack Lew said in announcing the latest forecasts.

While Social Security and Medicare face long-term financial problems related to the growth in the number of retirees in the country, the problems of the disability insurance system are more urgent, although long predicted.

The number of disabled workers in the United States has doubled since 1995 due to several factors, including the aging of the baby boom generation, which means there are more workers in their 50s and 60s, the peak ages for disability. The rise in the Social Security retirement age has also led to more people working later in life.

The growth in the number of disability recipients has slowed in the last two years, largely because the economy has improved, but the number of people on the rolls already has grown beyond the system’s current financing.

Disability benefits are financed by a portion of the Social Security taxes that workers and their employers pay. Currently, 0.9 percent of earnings go to the disability fund and 5.3 percent go to the retirement fund.

Most Democratic lawmakers and advocates for disability recipients argue that Congress should solve the disability system’s problem by increasing the share of the tax that goes to the disability fund. Congress has shifted the allocation formula in both directions several times going back decades.

This year, however, Republicans in Congress adopted a rule designed to prevent that shift from taking place. They argue that too many workers are receiving disability payments and that the system should be reworked as part of any solution to the disability system’s financial problems.