Here’s where your Social Security contributions go and how Congressional opponents of Social Security tried to dismantle it during the budget negotiations, according to Nancy Altman, founder of Social Security Works:
- The Social Security contributions deducted from your paycheck are premiums you pay to the U.S. Treasury Department for insurance if you lose your job because of death, disability or old age.
- For no good reason, the treasury department divides the money it gets into an old age and survivors insurance trust fund and and a disability insurance trust fund. But, the money can be allocated between the funds any which way and reallocated to keep the funds in balance.
- For no good reason, the Secretary of the Treasury does not have the authority to rebalance the funds when necessary. It takes an act of Congress.
- Congress has rebalanced the funds 11 times, sometimes increasing contributions going to one fund and sometimes to the other fund. As a result of an over-allocation to the disability trust fund, it was projected to run dry in 2016, during the election season. Without Congressional action, the benefit to people with disabilities–people like us who have been in a car accident or diagnosed with a life-threatening illness– would have been cut 20 percent by the end of 2016. Today, the average benefit is $39 a day, and it is the primary or only income for about four out of five people receiving benefits. Without the benefit, half would live in poverty.
- Some Republicans in Congress tried to keep Congress from readjusting the Social Security funds, wrongly claiming that social security disability insurance is broken even though the Office of the Inspector General found that less than one percent, about one in three hundred cases they looked at, involved fraud. These opponents of Social Security lost only in part.
- Social Security Disability Insurance is now set to need funds in 2022, better than 2016. But, had Congress done its job, SSDI now would be financially secure until 2034. Moreover, the budget deal requires some monies to be diverted to address fraud that the Office of the Inspector General could not document. As a result, some workers will likely see their earned benefits delayed. No benefits were cut though and no eligibility rules changed.
Now it’s time to expand Social Security benefits and to lift the cap on contributions for wealthy people. And, there are more than six bills in Congress intended to do that. Click here for information on how to apply for Social Security Disability Income.