Much discussion occurs on the topic of the Social Security programs and whether the system is going “bankrupt.” Ohio Rep. Marcy Kaptur weighed in on the subject last month during a floor speech in the House of Representatives. She asserted that the program would “function well into 2038” and that the system could still pay 80 of benefits after that.
She decried the use of a chained-CPI, which would index the cost of living increases for Social Security programs, including Social Security disability insurance (SSDI) and the old-age and survivors insurance (OASI). A chained-CPI would work a reduction in the rate of increase for those benefits, saving taxpayers money, but costing the elderly and disabled benefits in the long run.
Under the present funding, OASI is calculated to remain solvent into the 2030s. However, the SSDI program faces a much closer insolvency date. The SSDI trust fund faces insolvency as soon as 2016 and this would have significant consequences for Ohio SSDI beneficiaries.
SSDI payments would have to be cut by almost 20 percent if Congress does nothing before 2016. Most people would have a difficult time coping with a 20 percent cut in their income and for disabled workers on the SSDI program such cuts would create severe hardships.
For almost half of SSDI beneficiaries, their SSDI check amounts to 90 percent of their income. Because they are disabled, they frequently have no other options outside of SSDI. They cannot just quit the program and get a job. Given that current payments are barely above the federal poverty line, a 20 percent cut would be very bad news.
The problem can be easily solved by Congress’ enactment minor reallocations if tax revenue or a 0.2 percent tax increase for SSDI.
Source: PolitiFact Ohio, “Rep. Marcy Kaptur says Social Security trust fund is sound into future,” May 15, 2013