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Republicans ban ‘Band-Aid’ solution to disability funds shortage

The Social Security Disability program’s trust fund is set to run out sometime during the last three months of 2016, and if that happens, 11 million SSD recipients could see devastating cuts to their benefits.

A short-term answer to the problem would have been to funnel payroll tax revenue from the larger Social Security retirement program into the disability trust, but House Republicans have likely blocked that from happening. 

Immediately after the new legislative session began, the Republican-controlled House approved a new rule that attempts to force lawmakers to find a more permanent solution to the dwindling disability funds, likely either by raising taxes or cutting benefits.

The Republican sponsor of the bill said it was aimed at preventing Congress from “raiding" the retirement funds in order to save the disability program. He said supplementing the disability funds with tax money from the retirement program would only be "a short-term Band-Aid."

However, a spokesman from the American Federation of Government Employees, the largest federal employee union, said the new rule “virtually guarantees devastating cuts for beneficiaries of the Social Security disability system.”

By the end of 2016, the trustees who manage Social Security said the disability program would be forced to cut all benefit checks by 19 percent, which would make the average check just $1,146 per month or less than $14,000 per year.

A potential mid-term solution to the problem would be to combine the Social Security retirement funds and disability funds, which would allow full benefits to be paid to all beneficiaries until 2033, thus giving lawmakers more time to figure out a more permanent solution.

Obviously this is an important issue for anyone who receives SSD benefits or cares about someone who does. Because so many Americans are affected, the issue will almost certainly be a focal point of the 2016 presidential election.

Source: Associated Press, “House GOP Forcing 2016 Debate on Social Security's Finances,” Jan. 7, 2015, Stephen Ohlemacher

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