Readers of our blog know that the Social Security Administration has made a number of changes over the last few years. From budget cuts to the fear of the trust fund running out, an overhaul to the SSA system has been on the forefront of the legislative branch’s mind for quite some time. But with recent estimates pegging the dry-up period years sooner than expected, many Illinois residents, as well as others across the country, are left wondering if a plan is in place to save Social Security benefits for future generations.
As we mentioned in a recent post, President Obama’s new budget proposal focuses much of its attention on the problems facing SSA and its programs. While the idea of Chained CPI may address America’s fear of paying more in taxes, it does not address the fears of beneficiaries who will not see the amount of their benefits rise as the rate of inflation climbs. So what is going to happen when the money runs out?
The Social Security Trustees indicate that when the reserves dry up, incoming taxes are likely to cover about 75 percent of the program’s current benefits. Although the administration has not addressed how that 75 percent will be distributed, the likely outcome is that everyone’s benefits will see a decrease, including those receiving Social Security Disability and Supplemental Security Income.
The promise of eliminating the backlog that Commissioner Astrue has been working so hard on for the past year could be broken if the administration is forced to issue budget cuts. This could also lead to a number of cases falling through the cracks, some even being denied despite their legitimacy. All in all, these are things the government should think about before making a decision, and soon.
Source: Daily Finance, “What’s Next for Social Security?” Chuck Saletta, April 24, 2013