You may have read articles that claim that Congress had “raided” the Social Security Trust Fund. “Raid” is an emotional word that may have been intended as rage bait — to make the reader think Congress had taken Social Security resources for non-OASDI uses.
Congress did take action that affected Social Security twice. Congress reallocated how the OASDI payroll tax was split, reducing Social Security’s share and increasing Disability’s. The payroll tax overall percentage was not changed. In both cases, Disability was going to run out of funds. Become insolvent.
The first time was in the mid-1990s. The reallocation was significant. Disability remained solvent for two decades. The amount shifted was enough to move the estimated year the Social Security Trust Fund would become insolvent up 13 years — from 2044 in the 1993 Trustees Report to 2031 in the 1995 Trustees Report.
The second time was in the budget deal Congress passed in 2015. Disability had been forecast to become insolvent in 2016 in the prior four Trustees Reports. The following chart shows how the reallocation was accomplished. It was short-term, initially keeping Disability solvent until 2023. Note where the total payroll tax started and ended. It wasn’t changed. For three years, however, Disability received substantially more.
The next chart shows the depletion dates for each program’s Trust Fund with the reallocations’ impacts highlighted.
A hidden part of this story is what happened to Disability and actually to its sister retirement program, behind the scenes of media coverage over the past ten years. Disability’s second crisis seemed to awaken political forces in the government. It is a very complex, detailed program.
Here’s my thinking, from reading many of those details in the Trustees Reports along with one media article that directed my attention to the Trump administration’s evolving 2020 budget proposals. (A search delivered the detailed reports and their line-by-line slight reductions in payments to Disability from changes tightening its operation.)
Changes to Disability were being examined in the Obama administration. They were shaped and then instituted during the Trump administration. Changes in important programs happen slowly and deliberately.
What these efforts did was to push out the forecasted Disability depletion date way into the future of the 75-year model. To the 2050s and beyond.
The coming crisis in Social Security does not need insolvency distractions from its much smaller sister program — Disability — which is also critical to well-being of many disabled Americans.
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