Social Security Disability --- 20% Reduction in Benefits Imminent


Democrats have defended Social Security for decades.
Democrats may become the reason for a 20% cut in Social Security Disability benefits in 2016. Senator Orrin Hatch made a floor speech in the Senate this year, which confirms that this is the case. It is also confirmed in the letter posted here.
Mic Hudson is a friend, who receives about $700 a month in Social Security Disability benefits. He has had a broken neck, prostate cancer, and had a recent gall bladder operation . He moves about in a wheel chair. His benefits will be $560 per month, if nothing changes.
There are about 11,000,000 people on  Social Security Disability..
The US workforce is about 146,000,000.
I wrote to my Congressman Keith Rothfus.
He did reply, and his letter is below. [1]
Either the two Senators did not reply, or I missed them.
I proceeded to try to find out what is in the Social Security Disability Trust Fund. [2] I was unable to find out, or I have not looked hard enough.
I thought that Barry's regime had robbed Social Security of $500 Billion dollars, but found that technically, it isn't true. But, I did find out that Obamacare has it's fingers in Social Security. Hence, Democrats have their fingers in Social Security via Obamacare.
There's  a provision for a tax increase in Obamacare, which involves Social Security. The tax on Social Security went up .9%.
I thought that increasing the Social Security tax, might solve Mic Hudson's dilemma. But, the government hijacks trust funds.
I'm going to try to find out whether people like McConnell and Boehner really know how to fix this problem. I would guess that Barry doesn't want it fixed, or doesn't care.

Part I
To be continued.

March 5, 2015

Dear Mr. Wolfman,

          Thank you for contacting me about Social Security Disability Insurance (SSDI).  It is good to hear from you and I appreciate the opportunity to respond. 

          As you know, Social Security is a social insurance program designed to protect workers and their families in the event of a loss of earnings resulting from retirement, disability, or death. The program is divided into two trust funds: retirement and disability.  Both trust funds are funded by a 6.2% payroll tax on workers and employers. Of this percentage 5.3% is allocated to the retirement fund and 0.9% to the disability fund.  In order to receive Social Security retirement benefits, a worker must be at least sixty-two years old and have at least ten years of Social Security covered employment in which a portion of their wages were paid into Social Security. To receive disability benefits, an individual must demonstrate a permanent impairment that prevents work.

          SSDI is an important program that provides benefits to disabled Americans who are facing difficult life challenges.  Unfortunately, the Social Security Trustees announced that the disability trust fund will be exhausted by the end of 2016.  Absent any reform, disabled Americans will face nearly a 20% cut to their disability benefits to keep payroll tax revenue equal to SSDI benefit payments. 

          In July 2014, President Obama's Treasury Secretary Jacob Lew proposed that funds in the Social Security retirement fund be reallocated to the disability fund to shore up the fund's losses.  This "solution", however, only kicks the can down the road and does not address the fact that the retirement fund is also insolvent.  In a recent report, the Social Security Trustees estimated that the retirement program will become insolvent in 2033.  In fact, Social Security has been paying out more in retirement benefits than is being paid in by payroll taxes since 2010, and that trend will continue permanently if we do nothing.  The Trustees also expect that revenue will only be enough to cover 77% of owed benefits in 2033 at current rates.  

          Simply put, the Obama Administration's suggestion to fund the disability fund by raiding the equally insolvent retirement fund of our nation's seniors is not a viable solution.  This would only provide a temporary stop-gap measure and would hasten the insolvency of both trust funds.  In short, we must have a serious conversation about ways to save and protect Social Security retirement and disability for future generations.

          To set the stage for this conversation, Chairman Sam Johnson [TX-3] of the House Ways and Means Subcommittee on Social Security proposed a rule to prevent any lawmaker from diverting funds from the retirement fund to the disability fund.  This rule ensures that members of Congress will engage in real conversations to address the disability fund's insolvency.  Chairman Johnson's provision was included in the House of Representatives' rules package (H.Res. 5) which passed the House on January 6, 2015, by a vote of 234-172.

          Chairman Johnson and the House Ways and Means Committee have already announced scheduled hearings during the 114th Congress to work on meaningful legislation to address the SSDI trust fund insolvency.  Although, I am not a member of the Ways and Means Committee, protecting the future of both Social Security and SSDI critical priorities for Congress. Please know that I am committed to working with anyone regardless of party label who is serious about finding ways to strengthen and preserve this critical program.  I will keep your concerns in mind when considering legislation related to Social Security.

         Thank you again for contacting me about this important issue.  It is an honor to represent you and Pennsylvania's Twelfth District in Congress.  If you have additional thoughts or concerns, please do not hesitate to contact me.  To read more about my views and positions on a wide  range of issues, you can follow my official Twitter feed at http://www.twitter.com/KeithRothfus, check out my Facebook page at  www.facebook.com/KeithRothfus  or sign up to receive the District E-Mail Newsletter by visiting http://rothfus.house.gov/get-the-rothfus-report/


Keith J. Rothfus
Member of Congress
In calendar year 2014, the DI trust fund received roughly $114.9 billion in revenues, of which roughly $109.7 billion represented payroll tax contributions, roughly $3.4 billion interest on the trust fund paid from the government’s general fund, and roughly $1.7 billion deriving from the income taxation of benefits. There were roughly $145.1 billion in expenditures from the DI trust fund in 2014, of which $141.7 billion were benefit payments, $2.9 billion administrative expenses and $0.4 billion transfers to the Railroad Retirement program. These expenditures, when netted against revenues, caused trust fund reserves to decline from $90.4 billion at the start of 2014 to $60.2 billion at year’s end.