Time is running out on the Social Security Disability Insurance program (SSDI).
Unless Washington acts, it will be depleted by late 2016, according to Social Security and Medicare trustees. Its latest report concludes that SSDI “satisfies neither the Trustees’ long-range test of close actuarial balance nor their short-range test of financial adequacy and faces the most immediate financing shortfall of any” of the entitlement programs.
To borrow Senator Rob Portman's (R-OH) words, this is "not a theoretical projection."
The Washington Examiner’s Joseph Lawler reports:
Social Security has been spending more than it has been taking in since 2010, and that imbalance is expected to worsen.
"What is changing is we're rapidly running out of time,” warned Charles Blahous, the Republican-nominated public trustee, at a press conference Monday. Blahous noted that Social Security's fiscal problems are especially acute in the disability program because the baby boomers have entered peak disability years before retirement.
The trustees’ report finds that two other major entitlement programs remain in bad financial shape.
Unless it’s reformed, starting in 2033, Social Security will be unable to make full payments to recipients. From then on, it will only be able to pay “about three-quarters of scheduled benefits.”
As for Medicare, things are slightly better. Slower health care cost increases has pushed back the depletion of the Medicare Hospital Insurance Trust Fund to 2030, when it will only be able to pay 85% of benefits. However, there’s no reason to celebrate. The trustees emphasize that the program “still faces a substantial financial shortfall that will need to be addressed with further legislation.”
The bottom line is this:
Not a single major entitlement program is expected to be financially solvent 20 years from now.
Without reform these program will eat up spending that can could go for other federal government functions like national defense, infrastructure, and education.
The unsustainability of our entitlement programs stares us in the eye. We can’t avoid it. In order to make reasonable reforms and phase-in adjustment, we must address this issue sooner rather than later. And in the case of SSDI, much sooner.
To learn more about the need for entitlement reform, check out 10 Truths About America's Entitlement Programs.
Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.