The Social Security Board of Trustees released projections last month showing the Social Security Disability Insurance Trust Fund will remain solvent at current funding levels until 2052—20 years longer than last year’s projection. The revelation dispels just another myth often used by those who want to cut the program.
Pundits and politicians have been feeding the fear for years that unless drastic cuts in benefits are made, Social Security will run out of funds to pay beneficiaries. Fears of bankrupting the system have forced many to forgo applying for the disability benefits they deserve. The fact is Social Security is not going bankrupt.
The Trustees released their annual report April 24. The numbers show that the Social Security system is in relatively decent financial health, currently holding nearly $3 trillion in reserves. The Trustees projected that system can pay all scheduled retirement benefits in full until 2035. After that, it will still be able to pay approximately 8o percent of scheduled benefits. This is a year later than projected last year.
The news is even better for Social Security disability benefits, with the SSDI fund now projected to cover scheduled payouts of full benefits through 2052 and pay roughly 91 percent of scheduled benefits thereafter. Last year’s projection estimated that the SSDI fund would only be able to meet its full obligations until 2032.
“The large change in the reserve depletion date for the DI Fund is mainly due to continuing favorable trends in the disability program,” Acting Commissioner of Social Security Nancy A. Berryhill said in an April 22 statement. “Disability applications have been declining since 2010, and the number of disabled-worker beneficiaries receiving payments has been falling since 2014.”
These projections are based on funding for the program remaining at current levels. While the report projects funding a shortfall, that shortfall can easily be avoided with modest reforms. For instance, minor tax increases staggered over decades would erase the funding deficit.
However, the impending shortage has long been a political football, with some legislators proposing benefit cuts and others pushing revenue increases. The standoff continues.
The National Organization of Social Security Claimants’ Representatives (NOSSCR) said in a statement that the report shows that the Social Security system is in “solid financial health” despite the projected deficit.
“The most important take-away from the 2019 Social Security Trustees Report is that our Social Security system continues to work well for the American people, ” NOSSCR said. “Social Security does face a long-term funding shortfall that Congress will need to address but the system is solid and not in crisis.”