Recently, President Obama announced his new $4 trillion budget for fiscal
2016. Though much attention has been centered on his proposed plans for
raising the caps on defense and domestic program spending, there may be
more important issues involved that many have overlooked. For example,
the struggling Social Security Disability Insurance trust fund could get
the boost it needs from the proposed budget.
Within his massive budget plan, Obama has included numerous proposals that
are geared toward salvaging the program, one that experts believe is quickly
running out of much needed money. Social Security trustees and other financial
professionals have been warning the administration about the need for
more funds and support for years now, yet an effective plan has still
not been put into motion.
What is happening to SSDI?
SSDI works to provide support for physically disabled workers who, without
this financial crutch, may find themselves struggling to stay afloat.
The plan is funded by federal payroll taxes, but with more and more Americans
utilizing the program (and growing incidents of fraud), many project that
the claims will be dried up by the end of 2016.
If the reserves were to be depleted the government would be forced to use
incoming tax revenue to support the disability claims. However, experts
believe they would only have enough income to cover around 80% of disability
benefits, leaving many without support.
Congress Needs to Act Now to Prevent Depletion
While this has been a known danger for many years, Congress has still failed
to address any of the growing financial concerns. They will need a rush
of adjustments and proposals to bandage the bleeding before the program
runs completely dry by late next year. If they continue to fail to take
action, a large and very sudden cut will occur, affecting more than 10
million individuals who depend on these scheduled benefits for their livelihood.
So what is Obama’s suggested plan to fix this?
- Reallocate an increased small percentage of payroll tax to the SSDI fund
- Help potentially disabled individuals stay employed and prevent further injuries
- Incentivize providing work to the disabled for employers
- Bring on more administrative law judges to work through the backlog
- Bolster program that will review cases every several years to assess disabilities
- Eliminate individuals “double dipping” in government programs
While a majority of the actions were proposed in last year’s budget
plan, Obama hopes that this year the entire country will start to take
the looming threat of
losing SSDI benefits much more seriously. If legislation fails to respond again, it may mean
the end of support for millions of individuals across the country.