From a Congressional Budget Office (CBO) Study(footnotes omitted):
Between 1970 and 2009, the number of people receiving DI benefits more than tripled, from 2.7 million to 9.7 million. That jump, which significantly outpaced the increase in the working-age population during that period, is attributable to several changes—in characteristics of that population, in federal policy, and in opportunities for employment. In addition, during those years, the average inflation-adjusted cost per person receiving DI benefits rose from about $6,900 to about $12,800 (in 2010 dollars). As a result, inflation-adjusted expenditures for the DI program, including administrative costs, increased nearly sevenfold between 1970 and 2009, climbing from $18 billion to $124 billion (in 2010 dollars). Most DI beneficiaries, after a two-year waiting period, are also eligible for Medicare; the cost of those benefits in fiscal year 2009 totaled about $70 billion.Under current law, the DI program is not financially sustainable. ... Without legislative action to reduce the DI program’s outlays, increase its dedicated federal revenues, or transfer other federal funds to it, the Social Security Administration (SSA) will not have the legal authority to pay full DI benefits beyond [2018].
When you wrote that SSA will not have the legal authority to pay benefits, that means their automatic draw from the Treasury would have ended.
ReplyDeleteDI is in "trouble," because benefits exceed income, thus Treasuries have to be redeemed.
But this process occurs as all other federal expenditures - from the current budget.
So, not only is there a drain on the budget, but the former "surplus" in the DI fund was able to reduce the unified deficit.
Now, the opposite is occuring.
Don Levit
It is terrible how the raid on the SSA trust fund is causing this problem. Then we have increased Medicare spending that is largely underfunded. Why not charge a small premium for Part-A, instead of it being "free"? Other savings could be to reduce the way that DI is paid. Now it pays at the rate of full retirement age, perhaps that should change?
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