News that the Social Security disability trust fund is set to run out of money by next year, which could result in disabled workers receiving a 20 percent pay reduction in monthly benefits, has encouraged politicians, policy experts and everyone else to speak-up about what should be done about the pending crisis. Jason Fichtner, a former deputy commissioner at Social Security has a proposal that is not a typical solution you have heard before.
Fichtner suggests that the disability trust fund borrow from the retirement trust fund, which also has its funding issues, but is in better shape than the disability trust fund, for a “temporary” period of time. The same approach was used in 1982 when Congress authorized the retirement fund to borrow money from the disability trust fund to ensure it could meet obligations. Fichtner also discusses another option, merging the two trust funds into one. He claims that “merging the [retirement and disability trust funds] and their obligations would create the least amount of unnecessary fiscal accounting and associated stress. Furthermore, merging the two trust funds would acknowledge that some interaction effects exist between the two programs.”
Regardless of which quick fix option is decided upon it does not change the fact that there probably needs to be some substantive changes made to both the disability and retirement programs to ensure solvency for future generations.
Fichtner says that reforms to Social Security should focus on improving the program’s long-term solvency, provide incentives for those who can work to do so and ensuring a safety net for the temporarily or partially disabled individuals who rely on the program to survive. One thing is clear, the clock is ticking on what Congress will do to solve the problem.
For more information on Fichtner’s approach to solving the Social Security disability crisis, click here.
