Social Security Disability Insurance May Be Facing Insolvency

According to the Wall Street Journal, insolvency looms for the Social Security program as states drain the U.S. disability fund. Created during the Eisenhower administration to help people who cannot work, the Social Security Disability Insurance program has turned into one of the largest federal entitlement programs. It is also on a quick path to become the largest federal fund with no money.

Some states such as Puerto Rico, New Jersey and Wyoming have the largest percentage of claimants. US states have a large say in who is approved for disability benefits, with most of those qualifications coming from doctor’s opinions. Those opposing Social Security’s current setup argue that such a process creates inconsistencies in who is approved for benefits.

Some argue that the system is corrupt and that claimants treat it as Uncle Sam’s money. As the economy has spiraled downward, the amount of new applicants requesting SSDI benefits has increased. In 2000, there were 6.6 million beneficiaries, while last year, 10.2 million received approval for benefits.

The government spends an average of $300,00 per SSDI recipient. One expert estimates that SSDI started spending more than it brought in from payroll taxes. While some call for reform of the program, it would also be difficult to increase payroll taxes in order to make up the monetary difference. Some experts argue that raising taxes could hurt those seeking to retire, as their benefits may be affected.

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