Investors Business Daily's Jed Graham reports on a seemingly small but important fact: Social Security's Old and Survivors (OASI) program is legally distinct from its Disability Insurance (DI) program, even if their finances are generally lumped together. The DI program is in far worse financial shape than OASI, such that its trust fund is currently projected to be exhausted in 2018. At that point, Congress must do something to keep checks flowing, even if that something is merely to allow for cross subsidization between the OASI and DI trust funds.
It would be nice, though, if we looked at real reforms. On one hand, I'm more open to tax increases for disability than retirement, since on the retirement end people can easily "tax themselves" simply by saving more. That's tougher to do with regarding to private disability insurance. At the same time, though, I'm worried about the increase in disability applicants coming from categories – particularly depression and musculoskeletal problems (read: back pain) – that are hard for SSA to confirm or disprove. My trade-off would be to allow for some higher taxes in exchange for tightened eligibility, but it's hard to predict whether Congress can make the tough choices.
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