Social Security Disability Insurance : Action Needed to Address Finances

Currently, 8.8 million disabled workers (and nearly 2 million of their children) receive Social Security Disability Insurance (DI) benefits. For many, DI benefits are nearly all the income they have. The DI trust fund reserves are projected to be depleted in 2016, after which tax revenues coming into DI would cover only about 80% of scheduled benefits. Congress has never permitted such a drop in Social Security benefits to occur. A temporary reallocation of part of Social Security’s 6.2% tax rate from the Old-Age and Survivors Insurance (OASI) trust fund to the DI trust fund would ensure that both funds can pay full benefits until 2033, after which scheduled taxes would cover about 75% of scheduled benefits. Congress has reallocated the tax rate 11 times in the past, making it what one expert has called “a traditional and noncontroversial action.” Alternatively, a 0.2% increase in the tax rate for DI would make DI solvent for the next 75 years