Los Angeles, CA (PRWEB) May 07, 2012
The Founder and Managing Director of Disability Group, the nation’s premier disability advocacy group, noted today that while the annual report of the Trustees of the Social Security and Medicare Trust Fund offered some indications that Social Security is laboring under the weight of retiring baby boomers and revenue shortfalls, Social Security’s retirement and disability programs currently have funds sufficient to cover benefits for the next 20 years.
The Trustees of the Social Security and Medicare Trust Funds’ annual report on the financial status of these entitlement programs noted that Social Security is 100% solvent until 2033, and until that point, Congress has an opportunity to take action to supplement the reserves. These annual reports have been published for decades, and are generally recognized as the most credible, unbiased, and objective assessment of the financial health of these programs.
“It’s important to note that the Trustees project that the trust fund assets will be adequate to pay out benefits over the next two decades. At that time there will be enough tax revenue coming in to pay about 75 percent of scheduled benefits,” said Ron Miller, Managing Director of Disability Group. “I am confident that Congress will take appropriate measures to ensure the long-term solvency of this important program, and will act within four years to avoid any limitations for people deserving of disability benefits.”
In 2011, Social Security had a surplus – revenue plus interest income in excess of outgo – of $69 billion. Reserves are projected to grow to $3.1 trillion by the end of 2020. If Congress takes no action in the meantime, reserves would start to be drawn down to pay benefits. In the highly unlikely event that Congress does not act before 2033, the reserves would be depleted and revenue coming into the trust funds from workers’ and employers’ contributions would cover about 75 percent of scheduled benefits
“The reality is that our government operates these programs quite efficiently. Millions of people regularly receive the benefits they've been promised through our current systems and processes with very modest administrative costs,” said Miller.
The rise in Social Security claims has been anticipated for decades, and the Office of the Chief Actuary of the Social Security Administration recently suggested that a temporary redirection of 0.2% of the FICA tax, for just 12 years, would meet the current and future demands of the Disability Trust Fund.
In addition, the Trustees project only a small increase in Social Security benefits next year. They project a cost-of-living-adjustment, or COLA, of 1.8 percent for 2013; the actual amount won't be known until October. It’s also important to note that beneficiaries got a 3.6 percent increase this year, the first after two years without one.
Pundits and observers have offered many likely remedies, should there be any sort of anticipated shortfall, including the possibility of simply abolishing the current trust fund model, and paying for promised benefits by allocating appropriate government budgetary funds. Just as the government finances other promised benefits, like pensions and healthcare for retired government workers and military retirees, the government could also budget for social security disability benefits.
In addition, the Trustees suggest several changes that could restore the program to solvency for the next 75 years. An immediate payroll tax increase of about 1.3 percent for both workers and employers would correct the projected deficit, as would immediately reducing benefits by 16.2 percent, or some combination of these two approaches.
In the end, there are many solutions to any anticipated shortfall in funding, and Disability Group reported confidence that we will be able to meet the demands on the current system.
About Disability Group:
Founded in 2006 in Los Angeles, California, Disability Group (http://www.disabilitygroup.com) is dedicated to serving the needs of the disabled as the second largest nationwide advocacy groups. With locations nationwide, we serve clients' Social Security Disability and Supplemental Security Income needs in all 50 states, Puerto Rico, and all U.S. territories.
For more information, visit http://www.disabilitygroup.com or call Linda Fisk at 424-243-8337.