New Federal Budget Averts Social Security Crisis

Most of the attention on the two-year budget agreement signed into law by President Obama Monday has focused on the political machinations involving the debt ceiling and a possible government shutdown. But buried in the document are important changes to the Social Security Disability Insurance Program (SSDI).

SSDI Trustees reported recently that the $150 billion program that supports disabled people when they are unable to work faced “an urgent threat of reserve depletion.” The report predicted the fund would run out of money late next year, forcing a near 20 percent reduction in benefits.

The new budget deal averts the crisis through a number of steps.

First, it shifts more money from the Social Security retirement program into disability. For three years starting next year, another .57 percent will be taken from the 12.4 percent payroll tax (for a total of 2.37 percent). Budget analysts say that will be sufficient to pay benefits until 2022.

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