Social Security’s disability trust fund will run out of money next year, the program’s trustees reported Wednesday — but a California congressman said there’s a short-term fix that would require Republicans to put aside hope of immediate and broader reform.
The main retirement program, known as old age and survivors benefits, will remain solvent through 2034, the trustees reported, at which point the program will pay 79 percent of promised benefits.
But the disability fund is more precarious, with payouts already far outstripping tax revenue and the trust fund quickly depleting. Without changes, beneficiaries will face a 19 percent benefit cut once money runs out next year.
To stave off the cut, Rep. Xavier Becerra, California Democrat, proposed merging the two trust funds, using retirement money to cover the disability fund shortfall in the near term.
“The accounts were created separately because the different programs were created in different times during the twentieth century,” Mr. Becerra said, adding that Congress has nearly a dozen times before tapped one fund to cover a potential shortfall in the other.
House Republicans have been reluctant to mix the two funds, however, arguing instead for an overhaul to leave both the disability and retirement programs in better shape. They even wrote chamber rules earlier this year prohibiting tapping one fund to cover shortfalls in the other.
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Mr. Becerra’s bill would get around that by permanently mixing the two funds, and he said that makes more sense anyway.
“You only make one contribution to Social Security, you don’t make a contribution separately to disability insurance or to life insurance for your survivors or for retirement. It’s all one,” Mr. Becerra said.
The trustees’ report is an annual update on the fiscal health of the country’s public pensions program.
Both trust funds are taking in less each year in taxes than they pay out in benefits, but are being sustained by money from their trust funds and interest payments on those funds.
In 2014, the Social Security Administration took in $786 billion in payroll and benefit taxes, but spent $848 billion on its 59 billion beneficiaries.
The fund also claimed $98 billion in revenue from interest payments on the $2.8 trillion the trustees said is in the trust fund.
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The trustees estimated that by 2020, the cost of paying benefits will exceed all revenue, including interest, and the program will begin to draw down the trust fund.
The report spurred calls for reform from all sides.
Senate Finance Committee Chairman Orrin Hatch, Utah Republican, blamed President Obama for “kicking the can down the road” instead of proposing immediate and sweeping reforms for the whole program.
“In the end, waiting will only delay the pain and make it worse,” he said in a statement.
Mr. Becerra’s bill does not include a plan for how to extend Social Security’s solvency beyond 2034, sticking instead to the short-term fix for disability. Mr. Becerra said his new bill wouldn’t affect the 2034 deadline for the retirement program.
Max Richtman, the president of National Committee to Preserve Social Security and Medicare, which backs the short-term fix, said that shouldn’t interfere with whatever bigger reforms Congress wants to make.
“We’re not saying don’t ever deal with Social Security, but you don’t have to create a crisis,” he said. “This [House] rule creates a crisis, and that’s not the way to handle Social Security.”
• Anjali Shastry can be reached at ashastry@washingtontimes.com.
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