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The trust fund
is expected to
run out by 2018.

CBO: Social Security Disability Insurance not sustainable

by Astrid Fiano , DOTmed News Writer
The Social Security Disability Insurance program will exhaust its trust fund by 2018, according to a Congressional Budget Office (CBO) report, largely due to the significant growth of recipients. Between 1970 and 2009, the program increased from 2.7 million to 9.7 million people.

The reasons for the growth in beneficiaries include aging of the population; changes in laws that reversed previous restrictive policies in obtaining benefits; the growth of women in the workplace; and changes in overall health of the population. The last reason is not clearly defined, but may relate to some conditions no longer having the same mortality rate, such as HIV/AIDS. Another factor for the growth seems to be lack of job opportunities due to the current economic crisis.

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The program pays cash benefits to adults under age 66 who have worked in the past but are determined to be currently unable to perform "substantial" work. The CBO says that in 2009, the program paid benefits to nearly 8 million disabled beneficiaries and also two million beneficiaries' spouses and children.

The Disability Insurance Trust Fund is financed mostly through a 1.8 percent payroll tax. However, without action to reduce the program's costs, increase from tax revenue, or transference of other federal funds to the program, the CBO says the Social Security Administration will not have the legal authority to pay full DI benefits beyond 2018.

The CBO does suggest a number of changes that could help in addressing the potential exhaustion of the trust fund. These changes include increasing revenues dedicated to the DI program (payroll or other taxes), or reducing outlays by adjusting the program's rules (i.e., creating a stricter definition of disability, or benefit formula). Other approaches suggested are strengthening incentives for people with disabilities to continue to work through early intervention programs; incentives for employers to offer more support to workers with disabilities beyond regulations of the Americans with Disabilities Act (i.e. special accommodations to a disabled worker); the federal government directly paying a portion of a disabled worker's wages; or allowing people with disabilities to receive partial disability benefits for conditions that preclude full-time employment but allow part-time employment.

The full CBO brief can be accessed here.

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