Each year, the trustees of the Social Security and Medicare trust funds draft an annual report detailing the current and projected financial status of the Social Security program. The purpose of the report is to advise Congress on issues facing the program. In the most recent “Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds” released in July of 2014, the trustees recommended immediate change to the Social Security Disability Insurance (SSDI) trust fund.
The report emphasized that the SSDI trust fund has come close to depletion. According to the Heritage Foundation’s summary of the report, the program only has resources to pay full benefits until 2016. The diminution of the fund is largely caused by the high disability rates of the baby boomers as they increase in age. Many baby boomers are receiving disability benefits long before they are eligible for Old-Age and Survivors Insurance (OASI) benefits, placing additional strain on an already weakened program. If Congress does not act soon, nine million disabled Americans will face a 20% deduction in benefits. This results in a $218 reduction in monthly benefits for the average beneficiary. While the report urged Congress to take immediate action in order to prevent complete depletion of benefit funds, whether any meaningful change will take place remains to be seen.
