The magnitude of those problems will become clearer when the trustees for Social Security and Medicare issue their annual report cards.
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At that point, the 10.9 million beneficiaries of the program face an immediate 19 percent cut in benefits, unless Congress intervenes. Failure to do so would be nothing short of devastating to millions of workers with disabilities and their families and would erode Americans’ confidence in Social Security. That means the typical beneficiary would see their benefits reduced by $193 a month. Treasury Secretary Jacob Lew said he was confident that Congress would come up with a fix. Congress has done similar reallocations in the past, most recently in 1994. The two programs accounted for 42% of federal spending past year, up from 36% in 2011, and the costs are estimated to rise as the baby boom generation ages.
Social Security would be able to pay about 81 percent of disability benefits starting in “late 2016”, the Treasury Department said in a statement. At that point, Social Security will collect enough in payroll taxes to pay about 75 per cent of benefits.
The trust fund for Medicare hospital insurance will be depleted by 2030, unchanged from past year. But some in Congress note that the longer lawmakers wait, the harder it gets to address the shortfall without making significant changes. President Barack Obama has endorsed the move, but Republicans in Congress want changes in the program to reduce fraud and to encourage disabled workers to re-enter the work force.
The Obama administration has proposed shifting an additional 0.9% of payroll to the disability trust fund. That would keep the disability system above water for a couple of decades – buying time for other reforms.
In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. The trust fund that specifically supports disability insurance is scheduled to run out next year.
Both funds are taking in less each year in taxes than they pay out in benefits, but are being sustained by money from their trust funds and interest payments on those funds. But the two trust funds are separated by law, and Congress will have to act before 2016 to avoid cuts to disability recipients.
The Medicare premium increases would affect Part B, which provides coverage for outpatient services.
Over the next year, the millions of people who depend on benefits checks will be put through a lot of unnecessary anxiety as the deadline approaches, he said, adding that “beneficiaries deserve better”.
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Indiana A slow in nursing paying has shored it comprises of the raising a fund like gmail or hotmail for the federal government program that is actually takes care of older Americans’ medical expenses, trustees of the program said on Wednesday.
