Tampa, FL (Law Firm Newswire) July 31, 2014 - Unless changes are made, the Social Security disability fund will run out of money by end of 2016.
Capitol Hill's notorious procrastination could soon impact millions of Americans receiving Social Security disability payments. Within the next three years, Congress must come up with a plan to keep the program financially afloat.
And given federal lawmakers’ proclivity for adopting short-term fixes at the eleventh hour, disabled workers may have to wait for a significant period before even finding about any stopgap measure that Congress passes.
As it stands, the trust fund for Social Security disability benefits will be insolvent no later than 2017 unless Congress finds a way to replenish it. If lawmakers do not refill the fund, the program will only be able to distribute an estimated 80 percent of earmarked benefits to the 8.8 million Americans who depend on them and of the benefits paid to spouses and dependents when the disabled worker is the primary beneficiary.
A Congressional election will be looming at the same time the fund is scheduled to run short of money, so there will eventually be a political incentive to solve the quandary. Even so, lawmakers have defied political winds before, engaging in brinkmanship during the federal sequestration and in the government shutdown crises of recent years.
“It is unconscionable that members of Congress would leave disabled Americans hanging while they play political chess,” said David Magann, an attorney in Tampa, Florida who specializes in serving the legal needs of Social Security disability recipients. “It seems to always be a matter of how close to a deadline Congress is willing to come before seeking a solution.”
To enact one frequently proposed solution, Congress could transfer funds from the Social Security retirement fund into the disability fund. Currently, 12.4 percent of the first $117,000 of a worker’s wages go toward Social Security — half paid by the employer and half by the employee — with one of every seven of those dollars set aside for the disability fund.
However, such an action would only resolve the concern for a few years. Were Congress to readjust the allocated amounts to the two funds, Social Security trustees have concluded that both funds would run out of money in 2033, after which only 77 percent of promised benefits could be met. “Regardless of the plan Congress chooses, such so-called solutions will not resolve the problem,” Magann said. “They only kick the can down the road.”
David W. Magann, P.A.
156 W. Robertson St.
Brandon, FL 33511
Call: (813) 657-9175
4012 Gunn Highway #165
Tampa, Florida 33618
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