Buried in new rules that will govern the House for the next two years is a provision that could force an explosive battle over Social Security’s finances on the eve of the 2016 presidential election.
Social Security’s disability program has been swamped by aging baby boomers, and unless Congress acts, the trust fund that supports it [has never existed; it’s a pile of IOU’s from the Treasury — G.N.] is projected to run dry in late 2016. At that point, the program will collect only enough payroll taxes to pay 81 percent of benefits, according to the trustees who oversee Social Security.
To shore up the disability program, Congress could redirect payroll taxes from Social Security’s much larger retirement fund — as it has done in the past. However, the House adopted a rule Tuesday blocking such a move, unless it is part of a larger plan to improve Social Security’s finances, by either cutting benefits or raising taxes.
Long the third rail of American politics, tinkering with Social Security has never been easy. Throw in election-year politics and finding votes in Congress to cut benefits or raise taxes could be especially difficult.
But if Congress doesn’t act, benefits for 11 million disabled workers, spouses and children would be automatically cut by 19 percent. The average monthly payment for a disabled worker is $1,146, or a little less than $14,000 a year.
Rep. Tom Reed, R-N.Y., said he sponsored the provision in an effort to force Congress to find a long-term solution to the disability program’s financial problems.
“By putting this rule into effect, we are sending a clear indication that we’re not just going to allow the raid of retirement Social Security to be used to bail out the disability trust fund,” Reed said. “We need real reform. This makes that real reform that much more likely.” . . .
Social Security has more than $2.7 trillion in reserves [meaning no reserves: the reserves are a pile of IOU’s from the Treasury Department — G.N.], but the retirement program has been paying out more in benefits than it collects in payroll taxes since 2010.
The disability program has been paying out more than it collects since 2005.
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