The Pardu

Connect The Dots USA: Social Security Crisis? (GOP Fantasy)

In Connect The Dots USA, Disability Insurance (DI), GOP, Social Security crisis?, The Old-Age & Survivors Insurance (OASI) program on September 3, 2015 at 9:22 AM

Connect The Dots USA…feeds the brain like few others.
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The next time some “Chicken Little” tries to convince you that the Social Security trust fund is empty, show them this annual accounting statement. Notice how in 2014, the trust fund earned $98 Billion by loaning the surplus back to other parts of the U.S. government. That’s a 3.7% annual rate of return and makes more economic sense than stuffing the money under the mattress (or in a lock box) where it earns no interest and gets eaten up by inflation.

Also note that the outlays for Disability Insurance (DI) exceeded income by $30 Billion so that amount of treasuries had to be sold by the Disability trust fund. How could all this happen if the trust fund were empty?

The Old-Age & Survivors Insurance (OASI) program can pay out full benefits until 2035. After that, even if nothing is changed, it can still pay out 77% of benefits from its dedicated payroll tax. A 23% cut to seniors is a terrible thing, but it’s hardly a 100% cut as if the Old-Age fund were completely empty. The Trustees specifically define “solvency” to mean the program can pay out full benefits for the next 75 years! That is a very high bar.

The Disability program, however, presents a much more urgent matter. Its trust fund will be depleted late next year (2016). Currently, the Old-Age fund gets 10.6% payroll tax, but the Disability fund gets just 1.8%. If nothing is changed, DI will only be able to pay out 81% of benefits owed.

Read official report here:

Eleven times in the past, Congress has temporarily reallocated funds between the Old-Age fund and the Disability fund to cover shortfalls. Unfortunately, Republicans voted early this year to block that reallocation solution in order to manufacture a Social Security crisis. Because… of course they did.

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