The latest accounting figures and analyses of Social Security trust fund assets were released this week, and the news was not good. According to the Social Security Board of Trustees’ annual report, its disability benefits programs will become insolvent by 2033, three years sooner than the last projected estimate, unless something is done to address what they see is a long-term funding deficit.
What happens if nothing is done before 2033? At that time, says U.S. Treasury Secretary Timothy Geithner, “incoming revenues and trust fund resources will be insufficient to maintain payment of full benefits.” In practical terms, this means that the federal agency will only be able to pay disability recipients about 75 percent of their scheduled benefits in 2033 and beyond.
Social Security Commissioner Michael Astrue also expressed concern about the numbers in the annual report and called for Congress “to act within four years to avoid automatic cuts to people receiving disability benefits.”
What does all this mean for Oregon residents who are applying for or currently receiving disability benefits? Truthfully, it’s impossible to say until lawmakers in Washington, D.C. take action to address the problem. That said, this latest annual report does propose a few solutions that could have an immediate impact.
One of the report’s proposals calls for an immediate, 1.3 percent payroll tax increase on workers and employers, which would allegedly be enough to ensure the program’s solvency for at least 75 years. Alternatively, the report points out, long-term solvency problems could be adequately addressed by immediately reducing benefits by 16.2 percent. A third possible solution could also be reached with a combination of these two measures.
In the meantime, Oregon Social Security Disability recipients can expect to receive the full amount of benefits they are entitled to. We will also, of course, continue to provide updates on these concerns as developments warrant.
Source: U.S. News & World Report, “6 Facts About the Social Security Trust Fund,” April 24, 2012