There has been a stated level of confusion on how disability benefits through the Social Security Administration will be funded; this level of confusion has not been seen before. Some of the confusion impacts the general public’s perception of SSA disability, but perhaps more importantly, the confounding dilemma of benefit funding may also throw off those in positions of power.
Jason Fichtner, Senior Research Fellow at the Mercatus Center at George Mason University, wrote on MarketWatch that this confusion has meant the steps to reform, vital to the survival of the SSA, have not been taken. Instead, he said there has just been a “financial Band-Aid” put on the SSA time and again.
Last year’s Social Security Trustee report found that the disability trust fund could potentially run out in 2016, making SSA disability benefits a likely presidential election issue.
One option Ficther pointed out is “to allow the disability trust fund to borrow from the retirement trust fund for a temporary period. This interfund borrowing would provide the short-term financial patch necessary to ensure that those receiving disability benefits would continue to receive full benefits.” However, this would simply be another Band-Aid for SSA disability. To fully fix the program, there would need to be an honest look in the mirror as a country to see how we want and need to move forward with disability benefits.
In the past, Congress has allowed the disability and retirement programs to borrow from each other as needed. Recently, there has been Congressional action to stop this transfer of funds, thereby placing the disability program in crisis. This is purely a political move and is not only ill considered, but harmful to a program that many people, who cannot work, depend on to pay for the basic necessities of life.
Since the disability program potentially serves all Americans, it should not be used as a political football. Perhaps a solution to help continue to run the retirement and disability programs is to lift the ceiling on the Social Security income tax cap. This way, higher income individuals pay their fair share into the system and maintain its solvency.