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Economist urges a rebalance of SSA trust funds for sustainability

There are predictions that the trust fund that pays for the Social Security Disability Insurance benefits program will run dry some time in 2016. This is widely understood to be fact and the concern is that millions of people who have been granted those funds and depend on them will suddenly face major cuts.

As anyone in Wilmington who keeps up with current affairs likely knows, that information has sparked a lot of outcry from a lot of different quarters. Some critics say the problem is that the system is out of control and fraught with beneficiaries taking advantage. But as we noted in a post earlier this month, that just isn't the case.

Still, the calls for some sort of crackdown continue to come. That's in spite of the fact that denial of SSDI benefits on initial application are not uncommon.

There are more than a few analysts who say a crackdown isn't the answer. One of them is the chief economist of the Center on Budget and Policy Priorities.

In a recent article in U.S. News and World Report, the economist acknowledged that the number of people on the SSDI rolls have increased in recent decades. But he notes most of the rise is due to demographic factors that were expected. The economist also acknowledged that many disability beneficiaries stand to face big cuts in their benefits if some kind of action isn't taken now.

But he suggests major reforms aren't necessary. Rather, he recommends the relatively simple action of adjusting how Social Security revenues are distributed to the two trust funds that pay for the retirement and survivors programs on one hand and SSDI on the other.

Both funds are fed by the Social Security deductions coming in from workers. And he calls for adjusting the flow, temporarily, so more goes into the SSDI fund than the other. He says this is something Congress has seen fit to do many times before, and that doing it again now would put Social Security on a track of solvency until 2033.

The question seems to be whether action is possible with the current Congress in place.

Source: U.S. News and World Report, "The Myth of 'Out of Control' Disability Benefits," Chad Stone, Aug. 22, 2014

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