Means testing and other various Social Security reforms are hot topics now because of the upcoming presidential election, but this time of the year also brings another event that puts Social Security reform on the table – the spring release of the annual trustees report. The report’s official title will be “The 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.” It typically comes out in April or early May of each year and brings a frank look at the financial situation of Social Security.
Last year’s report was bleak regarding Social Security’s finances. It projected that all Trust Funds would be exhausted in 2036, a year earlier than the previous prediction. The money coming in that year is anticipated to be only enough to pay 77 percent of expected benefits.
The 2011 report also focused on the difficulties faced by Social Security disability benefits programs whose financial difficulties are more severe than those faced by retirement benefits. Disability benefits are expected to run out in 2018. The report also noted that reforms to disability benefits often end up hurting the program through unintended consequences.
On a more optimistic note, the cost of running Social Security remains cheap. In 2010, Social Security paid $702 billion in benefits to 54 million Americans. Administrative costs were just 0.9 percent of the total paid out.
We expect the forthcoming 2012 report to paint just as bleak of a picture of Social Security programs, particularly disability benefits. Congress has not enacted any reform in the past year, while the poor economy, continued payroll tax cuts, and retirement of Baby Boomers continue to be major strains on Social Security benefits of all types.
Do you and your family benefit from a Social Security program? How would the various proposals and reforms impact you?
Troutman & Troutman, P.C. – Tulsa Social Security disability attorneys