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SOCIAL SECURITY disability on verge of insolvency – Dispatch

August 21, 2011

Aug 21, 9:17 AM EDT

Social Security disability on verge of insolvency


Associated Press

WASHINGTON (AP) — Laid-off workers and aging baby boomers are flooding Social Security’s disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.

Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can’t find new ones in an economy that has shed nearly 7 million jobs.

The stampede for benefits is adding to a growing backlog of applicants – many wait two years or more before their cases are resolved – and worsening the financial problems of a program that’s been running in the red for years.

New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security’s much larger retirement fund is projected to run dry as well.

Much of the focus in Washington has been on fixing Social Security’s retirement system. Proposals range from raising the retirement age to means-testing benefits for wealthy retirees. But the disability system is in much worse shape and its problems defy easy solutions.

The trustees who oversee Social Security are urging Congress to shore up the disability system by reallocating money from the retirement program, just as lawmakers did in 1994. That would provide only short-term relief at the expense of weakening the retirement program.

via Dispatch.

One Comment
  1. August 21, 2011 8:03 AM

    Word on the street is this program is “easy pickins” for the laid back. If true, perhaps it would be more economically sound to do some house keeping. Give private sector a chance to look at “best practices” and make recommendations.

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