We learned in May that the Trustees of the Social Security and Medicare Trust Funds reported that the Social Security Disability Fund is expected to go broke in 2018. Of course, it is already broke as all it has are government IOU’s, but that’s not the reason for the post.
In an article from the Associated Press that appeared in today’s Boston Globe, the date is now apparently 2017. Our economy, or should I say, lack thereof, is the culprit.
Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and cannot find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That’s 700,000 more than in 2008 and 1 million more than a decade ago.
In a curious twist, although Americans can apply for reduced Social Security benefits at age 62, and full Social Security benefits at age 66, if you are found to be disabled (and, your work history supports it), you can receive full Social Security benefits long before reaching 62. And, after two years on disability, you are eligible for Medicare even though you are not 65.
The Trustees’ solution to this problem is to “reallocate” Social Security’s government IOU’s and use them for the disability program. Of course, that will further shorten the expected life of Social Security, but it does, as government does best, kick the can down the road.
I am not necessarily trashing this program as, if someone is truly disabled, this may well be all they have. However,
[l]ast year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress. [emphasis supplied]
I’m sure this discovery was “unexpected”.
And, I’m also sure that we can expect similar results from Obamacare.