The long-term solvency of Medicare and Social Security has improved slightly, but the imminent depletion of a fund for disabled workers highlights the risk of delays in addressing rising costs of the government programs.
An annual report card Wednesday from the trustees of both programs showed that the long-term deficits associated with the two largest benefit programs would be slightly smaller than forecast last year. The report also offered the latest warning that the Social Security disability-insurance program will exhaust its reserves late next year, which would trigger a 19% cut in benefit payments.
Treasury Secretary Jacob Lew said the shortfall should be addressed by Congress by reallocating the share of payroll taxes that fund the disability-insurance trust fund and the much larger retirement-benefit reserves. The reallocation would leave both funds depleted by 2034, one year later than estimated in last year’s report.
“It is vital that Congress move forward to maintain the integrity of this critical program sooner rather than later,” said Mr. Lew.
Republicans in Congress have said they won’t allow any transfer without taking other steps to improve Social Security’s finances.
Increasing eligibility among women and an aging workforce have contributed to an increase in the number of disability beneficiaries. Around 6% of workers who were eligible for disability insurance claimed those benefits in 2013, up from 4% in 2001.Read the rest of the story HERE.
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