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

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  • US disability insurance program is under considerable financial strain

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

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

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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

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About the Author

 

Andrew G.
Biggs
  • Andrew G. Biggs is a resident scholar at the American Enterprise Institute (AEI), where he studies Social Security reform, state and local government pensions, and public sector pay and benefits.

    Before joining AEI, Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform. In 2001, he joined the staff of the President's Commission to Strengthen Social Security. Biggs has been interviewed on radio and television as an expert on retirement issues and on public vs. private sector compensation. He has published widely in academic publications as well as in daily newspapers such as The New York Times, The Wall Street Journal, and The Washington Post. He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue ribbon panel tasked with analyzing the causes of underfunding in public pension plans and how governments can securely fund plans in the future.

    Biggs holds a bachelor’s degree from Queen's University Belfast in Northern Ireland, master’s degrees from Cambridge University and the University of London, and a Ph.D. from the London School of Economics.

  • Phone: 202-862-5841
    Email: andrew.biggs@aei.org
  • Assistant Info

    Name: Kelly Funderburk
    Phone: 202-862-5920
    Email: kelly.funderburk@aei.org

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