Securing the future of the Social Security Disability Insurance (SSDI) program

Article Highlights

  • Share of working age Americans collecting disability insurance payments had doubled over past two decades

    Tweet This

  • US disability insurance program is under considerable financial strain

    Tweet This

  • Congress should regain control and reevaluate judgments/goals of DI program

    Tweet This

Read the full testimony as a PDF: Securing the Future of the Social Security Disability Insurance (SSDI) Program

Download PDF
Social Security's Disability Insurance (DI) program pays benefits to over 8 million disabled Americans, along with an additional 2 million dependents. Perhaps more importantly, it provides protection against disability for over 150 million workers. But over the past two decades, the share of working age Americans collecting disability insurance payments has doubled, from 2.3 to 4.6 percent of the population aged 25 to 64, with the largest increases coming among women. As a result, inflation adjusted costs have roughly tripled over that time period to over $125 billion in 2010, with at least $70 billion more in Medicare expenditures on the disabled. DI may not receive the same level of public attention as the retirement portion of Social Security, but it is clearly a large program both in terms of its costs to the taxpayer and its impact on Americans' lives.

Unfortunately, the Disability Insurance program is also under considerable financial strain. While we generally consider the Social Security program’s finances as a whole, legally the DI program is distinct from the Old-Age and Survivors (OASI) program with its own payroll tax and its own trust fund. Under the Trustees intermediate cost projections, the DI trust fund will become insolvent in 2018. By 2018, DI payroll tax and other revenues would be sufficient to pay only around 86 percent of scheduled benefits, with further reductions in coming years. Put simply, DI's fiscal shortfalls are no longer a long-term problem that can be put off indefinitely.

Andrew G. Biggs is a resident scholar at AEI

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Andrew G.
Biggs

What's new on AEI

Retirement crisis is hyped
image Why the Foley beheading will force Obama to continue US airstrikes
image How the New York Times misguides their readers on Internet regulation
image US still has time to stake out a position of strength on Ukraine
AEI on Facebook
Events Calendar
  • 18
    MON
  • 19
    TUE
  • 20
    WED
  • 21
    THU
  • 22
    FRI
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.