Motivated by news that the Social Security disability trust fund could run dry soon, I wrote to my federal representatives. President Obama was the first to reply to me but I recently received a reply that more directly addresses my concern from Senator Dianne Feinstein. Here is what she had to say:
Thank you for writing to me about Social Security benefits for people with disabilities. Your correspondence is important to me, and I welcome the opportunity to respond.
I recognize that millions of Americans with disabilities rely upon Social Security benefits to maintain their independence and live heathy, productive lives. According to the most recent figures, 709,509 disabled workers, 12,586 spouses, and 128,447 children in California received Social Security Disability Insurance (DI) benefits in 2014, and more than 1.3 million Californians received Supplemental Security Income (SSI) in 2013. I hope that Congress will act to ensure the long-term solvency of these important programs.
The Old-Age and Survivors Insurance (OASI) retirement program and DI programs are funded largely by revenue from a dedicated payroll tax collected from both employers and employees and paid into each program’s respective trust fund to earn compounding interest. The 2015 annual report by the Social Security Board of Trustees projects that DI trust fund reserves will be depleted by late 2016. In the absence of Congressional action, this reserve depletion would force the Social Security Administration (SSA) to implement an across-the-board reduction in payments to DI beneficiaries by an estimated 20 percent. This would mean that the average monthly DI benefit for July 2015 would be reduced from $1,022.16 to $817.73 per month.
In the past, Congress has routinely reallocated payroll tax revenue between the OASI trust fund that supports retirees and the much smaller DI trust fund, which supports people with disabilities and their families. Congress has reallocated payroll revenue between the trust funds a total of 11 times since 1968. In five instances Congress transferred payroll tax revenue from the DI trust fund to the OASI trust fund. According to a recent analysis by the Center on Budget and Policy Priorities, a reallocation of payroll tax revenue to put the two trust funds on an even footing would expedite the OASI trust fund’s projected reserve depletion by one year (from 2034 to 2033) while extending the solvency of the DI trust fund by an estimated 17 years (from 2016 to 2033).
You may be interested to know that I am an original cosponsor of the “Social Security Earned Benefits Payment Act of 2015” (S.2090), which was introduced by Senator Ron Wyden (D-OR) on September 28, 2015. This legislation would reallocate a part of payroll taxes to the Social Security Disability Insurance trust fund to ensure full benefits are paid through the early 2030s. S.2090 currently awaits action by the Committee on Finance, of which I am not a member.
As you may know, the SSI program provides monthly cash assistance to low-income people who are disabled, blind, or elderly with no real financial assets to help those individuals achieve a basic standard of living. Unlike OASI and DI, the SSI program is funded by general tax revenues from the U.S. Treasury and not Social Security payroll taxes. As such, each year Congress authorizes taxpayer funds that are used to pay eligible SSI recipients. Many SSI recipients who have worked long enough and paid payroll taxes are also eligible to receive Social Security benefits.
Please know that I will continue working with my Senate colleagues to preserve Social Security programs for the millions of Americans with disabilities and their families who count on these vital programs.
Again, thank you for your letter. If you have any additional comments or questions, please feel free to contact my Washington, D.C., office at (202) 224-3841 or visit my website at http://feinstein.senate.gov. Best regards.
I commend Senator Feinstein for co-sponsoring S.2090. Let’s hope the senate Finance Committee advances the bill to the floor.