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New budget act breathes life into SSDI system


During the past few months, the insolvency of the Social Security disability insurance (SSDI) system has loomed large while Congress has debated ways to handle the cash-strapped program. As a prior post on this blog explained, the most recent report from the Social Security Trustees showed that the Social Security Administration (SSA) would have to slash Social Security Disability (SSD) benefits by as much as 20 percent at the end of 2016 if Congress was unable to find a solution to the program's dire financial problems.

However, Houston residents may be interested to hear that recently, Congress did find a way to keep paying out full SSD benefits, at least through the year 2022. As part of the Bipartisan Budget Act of 2015, which Congress passed and President Obama signed into law, payroll taxes will be the primary method of keeping the SSD program afloat without cutting benefits to the nearly 11 million Americans that rely on the monthly payments. The Budget Act re-allocates a small percentage of Americans' current payroll taxes toward the SSD program.

The new law also grants the SSA more authority to test innovative programs that might ultimately secure the long-term future of the SSDI system. In addition, the Budget Act also contains provisions to improve the process by which the SSA evaluates initial applications, and reviews existing benefits.

People in the Houston area who receive SSD benefits may be relieved to hear that the government has found a way to keep payments at their current level. However, the new law could also mean that the SSA will deny a larger percentage of claims in the future. Likewise, the SSA could also be more aggressive about revoking benefits from people who are currently receiving them.

While the Budget Act's measure to help the SSDI system are helpful to keeping the program solvent for the next few years. However, Congress will likely need to come up with more robust long-term solutions.

Source: MarketWatch, "Crisis in Social Security disability insurance averted, but not gone," Jason J. Fichtner, Nov. 30, 2015

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