State of the Social Security Trust Fund

Social Security Image Collage

A startling news item has been widely reported recently: the Social Security Disability trust fund is going broke. This means that the government program that provides monthly income to Americans unable to work because of disability – a vital part of our social safety net – will be unable to pay full benefits by 2017.

Even the Social Security Retirement program, whose precarious finances have stirred much public debate, is in far better shape. Social Security Retirement is not projected to run out of money until about 2037.

Both programs are funded by payroll taxes. Of every dollar withheld from employees’ paychecks or contributed by their employers to Social Security, 85 cents go pay retirement benefits, and 15 cents go to pay disability benefits.

Both programs – but especially the disability program – are severely under-funded, with potentially disastrous consequences for those dependent upon them.

Nor is it likely that things will get better before they get worse. Chronic high unemployment persists, while whole categories of jobs (remember gas station attendants, elevator operators, and keypunch operators?) disappear with no prospect of ever coming back. More and more out-of-work Americans find their prospects of ever finding suitable work growing bleaker by the day. Many will find that they cannot perform the jobs for which they might otherwise qualify because some physical or mental impairment severely limits their ability to function. For such individuals, Social Security Disability benefits offer at least a chance to make ends meet.

As a result, according to the Christian Science Monitor, applications for disability benefits are up nearly 50% over a decade ago.  Social Security Administration Commissioner Michael Astrue told the Monitor, “It’s primarily economic desperation. People on the margins who get bad news in terms of a layoff and have no other place to go … take a shot at disability.”

Does this mean that such people are applying to get money they don’t really deserve? Hardly. Of course, even to have a “shot” at qualifying for benefits, the applicant must have a medically documented disability severe enough to interfere with the ability to function. Some disabilities are so severe that the applicant will be found “disabled” under the rules regardless of any vocational considerations. But in most cases, the determination of whether the applicant qualifies will take into account such factors as age, education, work experience, and skills. In light of what the individual can still do despite his disability, the issue will focus on whether he could still do his past work or (if not) whether he could do any other work that exists in significant numbers in the national economy.

If such work does not exist in significant numbers, the applicant should get disability benefits. In making this determination, it makes no difference whether jobs exist in the immediate area where the applicant lives, or whether a specific job vacancy exists for him, or whether anyone would hire him were he to apply. The question is only whether or not such jobs exist in significant numbers in the national economy.

As our job base continues to shrink, many jobs that previously existed in significant numbers no longer do so. Persons whose capacity would permit them, at most, to do such jobs as have vanished, should find in Social Security Disability benefits at least a modest refuge from economic disaster.

That is, at least, if the means are found to keep this program afloat.

To do that, it will be necessary to increase the numbers in a nearly extinct occupation. Here, I do not refer to elevator operators, keypunch operators, or gas station attendants. Those are not coming back.

But what we do need in significant numbers are leaders who put long-term solutions ahead of short-term political advantage.

And in view of the parlous state of the Social Security trust fund, we better find such leaders soon.

By Charles W. Snyder, Attorney at Law