There are two major trust funds administered by the Social Security Administration: the Old Age and Survivors Insurance fund (also called the “retirement fund”), which pays out Social Security benefits to retirees.
There is also the Disability fund, which pays disability benefits to qualifying people.
The Disability fund is in much worse financial shape than the retirement fund – projections suggest the fund could run out of money in just a few years.
Some believe that money will eventually have to be taken out of the retirement fund to “bail out” the Disability fund.
One Congressman, however, has proposed a rule change that would prevent lawmakers from transferring money out of the retirement fund.
Reported by the Leader:
U.S. Rep. Tom Reed is proposing a procedural rules change that would create a roadblock to prevent transferring money from the Social Security retirement fund to bail out the disability program.
[…]
Projections indicate the fund that covers disability payments under Social Security could be broke by the end of 2016.
Reed said it would take a 20 percent cut in payouts under the program to make the fund sustainable.
He said he’d like to see reforms that focus on eliminating fraud and abuse from the program, and changes to how disabilities are defined, rather than a “bailout” drawing on the retirement fund.
A vote on the measure could come as soon as this week.
Photo by Tony Brooks via Flickr CC License
