It is no secret that the Social Security Disability Trust Fund is “running low.” There has been a lot of talks recently about the disability trust fund not being able to pay full disability benefits starting as early as 2016. What would this mean to beneficiaries? It would probably mean that their current benefits would be reduced. With monthly benefits averaging $1,100 a month, a reduction in that amount could be disastrous for individuals.
A possible solution would be to transfer funds from the Social Security Retirement Trust Fund to the Disability Trust Fund. This reallocation idea is not something new. The last time reallocation occurred was in 1994, at which point it was projected the Disability Trust Fund would be depleted in 2016. This disability dilemma is no surprise to anyone.
The Republican-controlled House of Representatives recently passed a bill prohibiting the transfer of funds from the Social Security Retirement Trust Fund to the Disability Trust Fund unless the transfer also included cuts in benefits or an increase in taxes. Essentially, no transfer from Retirement to Disability unless the retirement fund is benefited.
This comes as a shock to many since the country has traditionally managed Social Security as a whole rather than pitting retirees against the disabled workers. With 2016 being a big election year it is possible this move is a political tactic by either the republicans or democrats to bolster their party. Either way, this could have a serious impact on millions of Social Security beneficiaries, including veterans and children.
Now that the House has passed this bill, it will now be reviewed by the Senate. Senate Democrats are urging the Senate Majority leader to strike down this bill. In a letter sent to Senate Majority Leader McConnell, several Senate Democrats stated, “holding hostage the Social Security benefits of any American, particularly those of the 9 million Americans with disabilities who are at risk in the coming years, is an untenable proposition. It only increases the chances of yet another unnecessary manufactured crisis, akin to shutting down the government or threatening the full faith and credit of the United States. We ask that you speak out and forcibly reject the House Republican rule in order to take this reckless concept off the table and ensure Americans with disabilities that they can count on their government to act responsibly.”
It is hard to imagine the legislative branch will let this issue reach such drastic outcomes. More on this issue is certain to unfold in the ensuing year.