|
MSN Money
Battle lines
form in fight over Social Security payment reductions
Eric Pianin
With as many as 11 million Americans facing a 19 percent cut in their
Social Security Disability Insurance (SSDI) benefits next year absent
intervention by Congress and the White House, Republican lawmakers are
suddenly moving to devise a plan to avert the crisis.
The Republicans are considering an approach that combines money-saving
reforms to the disability insurance program and a
substantial “loan” from the much larger old age and survivors’ benefits
fund (OASI) -- one that eventually would have to be repaid. The Obama
administration favors a simple transfer of funds from the OASI fund to
the cash-strapped disability fund and a series of experimental reforms
to save money.
The controversy has received relatively scant attention until now, as
Congress has focused on the U.S.-Iran nuclear deal, federal highway
spending and bitter disputes over Planned Parenthood funding and
overall spending levels for defense and domestic programs. Until
recently, it looked like another problem that would be kicked to next
year.
Neither party wants their finger prints on a reduction in Social
Security benefits in the midst of the 2016 presidential and
congressional campaigns, so there may be incentive for both parties to
find common ground on this issue. But the Obama administration and
Republican congressional leaders have been at odds for months over
precisely how to address the looming spending crisis.
The problem shouldn’t come as a surprise. Social Security trustees and
other financial experts have been sounding the alarm for years that
Congress must act to staunch the hemorrhaging disability insurance
trust fund, which is financed with federal payroll taxes and
supplements the income of physically disabled workers.
Social Security card.© FreezeFrameStudio/Getty Images Social Security
card.
With growing numbers of Americans seeking assistance -- and frequent
reports of widespread fraud adding billions of dollars to the overall
cost -- the latest Social Security trustees’ report warned last month
that the disability insurance fund would be depleted by late 2016, with
beneficiaries likely to lose on average $2,545 in benefits every year.
Although the program comes in for substantial criticism, the benefits
it provides are relatively meager – an average of $1,165 per month, or
$14,000 a year...
Read the rest of the article at MSN Money
|
|
|
|
