The Trustees report released yesterday on Medicare and Social Security is very interesting. The good news is that the Affordable Care Act has extended the solvency of Medicare by thirteen years to 2030 and Social Security has an added year of solvency until 2035. However, the Social Security disability fund will run out next fall 2016 and trigger cuts of 19% in benefits or $193 less per month from the average benefit of $1017.
The Trustees also said that there is likely to be no cost of living adjustment next year in benefits or it will be small when announced in October. Medicare Part B premiums could rise by $54 per month for some beneficiaries though most will be protected since current law says that the premium which taken out of the Social Security check can’t be increase if it would cut the amount of the check.
I find it interesting that conservatives who always say they want to fix Social Security for future generations and that today’s beneficiaries won’t be effected by changes are very willing to threaten to let the disability cut go through. They are doing this by a rule earlier this year which made it harder to allocate money between the disability fund and the retirement fund which was done in the past. President Obama supports the shift to solve the immediate shortfall. So, the conservatives are trying to force negotiations to cut the program and thereby cut it for people today on disability. These people aren’t working and can’t make up the cut.
Of course, those in Congress wanting to cut benefits never speak of adding revenues to a system which needs more revenue but rather to just cut benefits at a time of growing income inequality. They won’t discuss raising the earnings cap on Social Security which is $117,000 and workers who earn more than that don’t have to pay the tax after that amount.
Those who would cut the benefits to the disabled won’t win this battle. The fund will run short right before the presidential and Congressional elections next fall and no one will want to be blamed for the cuts. They will have to give in just like they did when they tried to shut the government down two years ago.