Last year Congress feared that the Social Security disability trust would run out in 2016, so lawmakers acted and took money from the Social Security retirement fund to extend how long the trust would last. Estimates projected that this measure would fund disability benefits up to 2022, and a new report confirms that estimate, but did that measure actually fix the problem?
How Long Will The Social Security Trust Last?
The annual Social Security and Medicare trustee’s report has just been released, and things seem to be on track for now, but the future of these programs is still in danger. The Social Security Administration predicts that it will only be able to pay 79 percent of promised benefits after 2034—if it combines and uses both the disability fund and the retirement fund. Separately, the retirement fund would only last until 2035 while the disability fund would be exhausted by 2023.
So as it stands, Social Security is relatively set for nearly 20 years, but that doesn’t mean lawmakers don’t have a problem down the road. When the retirement fund becomes insolvent, it will only be able to pay beneficiaries 77 percent of promised benefits, and the disability program will only be able to pay 89 percent when its fund runs dry. The SSA recommends that lawmakers don’t wait for this to happen.
How Can Social Security Funding Problems Be Solved?
Some experts are recommending solutions that involve a payroll tax increase from 12.4 percent to 14.98 percent on the first $118,500 of a person’s wages, or a 16 percent benefits cut, or a combination of the two methods. However, the leading presidential candidates have their own plans… kind of.
Trump says he won’t curb spending on Social Security, and that he will take money from other areas to shore up the program, but he has also released no specifics for how his plans to carry out this policy. Clinton says she will also shore up Social Security and expand benefits by increasing the taxes on the highest-income earners in America.
Who do you think has the better plan? Will these plans ensure the future of disability benefits? Are there any other solutions you think will help? Log onto Facebook and Twitter and tell us what you think.