SSA Disability Trust Fund Slated to Go Broke by 2016
Posted on Jun 18, 2012
Current projections are now estimating that the trust fund that supplies the money for Social Security Administration (SSA) disability beneficiaries will run out in 2012, only four years from now. This is much sooner than either Medicare or SSA retirement funds will deplete.
About eleven million Americans with disabilities currently depend on the SSA disability program to make ends meet for themselves, their children and spouses. If something is not done about the rapidly dwindling funds soon, the trust fund will run out of cash, which will result in a 21 percent cut in benefits.
Mark Duggan, a University of Pennsylvania economist and adviser to the SSA says, “It’s really striking how rapidly this is growing, how big it’s become and how D.C. is just afraid of it.” Duggan is referring to the fact that Congress spends much more time talking about Medicare and the Social Security retirement plan than about the SSA disability program.
There are several key reasons for this crisis. First, the baby boomers are expected to overload the system. Also, SSA disability applications have risen more than 30 percent since 2007 and the number of beneficiaries has risen by 23 percent.
The disability benefits attorneys at Keefe Disability Law view this as an alarming development. Because many of the SSA disability beneficiaries rely on the program to keep them out of poverty, this is not good news, either for them or for the country. With the average benefit set at $1,111 per month, a decrease of even 21 percent could be disastrous for many families.
The trust fund covers that 21 percent; the remaining 79 percent is covered by payroll taxes. Because the program is not allowed to run a deficit, the threat is very real unless Congress acts soon.