Social Security's funding shortfall is typically viewed as a long-term problem. After all, the Old-Age and Survivors Insurance fund is expected to have enough funds for another couple decades. But the Social Security Disability Insurance fund will probably become insolvency by the end of 2016.
If Congress doesn't act soon, the disability fund won't have enough money to pay benefits. The fund, reports
CNNMoney, will be able to pay approximately 80 percent of benefits to 8.8 million disabled workers and their spouses and dependents.
Not surprisingly, it's not clear when Congress might take up the issue or how — or even if — it might solve the problem.
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Experts offer varying predictions of what Congress will do and when it will act, according to CNNMoney.
"Our best guess is that a fix will occur as close to the disability solvency deadline as congressionally possible. Think debt-ceiling negotiations," says Jim Kessler, senior vice president for policy at the think tank Third Way.
On the other hand, Congress could do nothing and simply let benefit checks be cut across the board. Disabled workers now receive an average of $1,146 a month.
"I might have said it was impossible, but that was before witnessing sequestration and the government shutdown," Marc Goldwein, senior policy director at the bipartisan Committee for a Responsible Federal Budget, tells CNNMoney.
Congress could also increase the portion of the Social Security tax going into the disability fund. The Social Security tax is now 12.4 percent, evenly split between workers and employers, up to $117,000 of income, with a seventh going into the disability fund.
Critics say that amounts to robbing Peter to pay Paul. Social Security's retirement fund would go bankrupt sooner, and Congress would miss the chance to pass needed reforms.
On the other hand, Congress is unlikely to pass substantial reforms, so at least reallocating the payroll tax would avoid drastic and imminent cuts in benefits, Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities, tells CNNMoney.
The disability fund could become a major issue in this fall's mid-term elections, according to
The Washington Post.
Republican Senators want hearings on the fund this summer, probably to attack the program, Sen. Sherrod Brown, D-Ohio, tells The Post. Democrats should advocate raising the income cap and increasing benefits, Brown argues, saying that would give them an advantage in mid-term elections.
"The electorate is older, so the field is fertile for Democrats to talk about this. We should turn up the volume."
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