The board of trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds sent identical letters May 31 to the president of the Senate, Hon. Joe Biden Jr. and to the speaker of the House of Representatives, Hon. John A. Boehner.
The law requires the board of trustees to submit a report to each chamber of Congress when it determines that the balance ratios of a trust fund for any calendar year may become less than 20 percent.
The letters stated, “we project the asset reserves held in the Federal Disability Insurance (DI) Trust Fund will become inadequate” and continues, “the projected asset reserves of the DI Trust Fund fall below the 20 percent of annual cost during 2015 based on our ... assumptions.”
“Moreover, we project the reserves of the DI Trust Fund will be depleted one year later, in 2016, and only about 80 percent of the benefits scheduled in current law will be payable at that time if no legislative action is taken.”
The trustees recommended that “Lawmakers should take prompt action to strengthen the short-term finances of the DI Trust Fund.”
“… lawmakers could choose to increase revenues to the DI Trust Fund independent of any effect on the OASI (Social Security) program, to reduce cost through modification of the DI program, or to use a combination of the methods.”
That means increase the payroll taxes devoted to the DI Trust Fund or reduce the cost (reduce benefits) or a combination of those actions.
Also, the lawmakers could consider reallocating part of the existing payroll tax rate from the OASI (Old-Age and Survivors Insurance), also known as Social Security. However, taking funds from Social Security, as was done in 1994, just depletes it that much faster.
Yes, I understand there are some folks getting qualified for disability payments who might be able to work a little, but most of the folks getting disability payments really need the money.
Maybe we all need to contact our members of Congress and ask them to start working on solutions to the Social Security and especially the Disability Insurance Trust Fund’s projected depletion of the reserves.
Did you hear? “The government is like a baby’s alimentary canal, with a happy appetite at one end and no responsibility at the other.” — Ronald Reagan.
John Bullis is a certified public accountant, personal financial specialist and certified senior adviser who has served Carson City for 45 years. He is founder emeritus of Bullis and Co. CPAs.