The Pros and Cons of Reapportioning Funds from SS Retirement to Cover the Social Security Disability Deficit

Everyone understands the financial challenges that the Social Security Administration is currently facing. We keep hearing that the programs that are run by this Administration will do not have adequate funding to meet their financial responsibilities. We keep hearing rumors that Social Security Disability recipients may stop receiving their checks at some point in the future, and that if something is not done to change the system, the retirement benefits that so many rely on will soon be diminished or cut altogether.

Is there any truth to the rumors? Unfortunately, the answer to that question is yes.

It seems that the Social Security Disability program is in much more danger than the retirement program at this point in time. The reason is largely due to the increasing number of Social Security Disability applicants and the withering fund that these recipients are paid from. As more disabled people are unable to find work due to the current employment situation, they begin applying for Social Security Disability benefits. As more people are approved for these benefits, the fund that these benefits are paid from becomes increasingly smaller and the Social Security Disability program becomes more and more volatile.

In response to this growing problem, some of the trustees who oversee the Social Security Administration's programs are asking congress to take money from the Social Security retirement program and reallocate it to the Social Security Disability program. This would help the SSA make the disability payments that so many disabled Americans count on each month.

There is serious doubt, however, about whether this reallocation is really a viable solution to the problem.

There are definitely benefits to the reallocation request that has been made by the trustees. First and foremost, a re-allocation would provide a way for the SSA to honor the disability benefits that it owes to the American people. It would also provide a short-term solution for the disability program's economic woes. However, “short-term” is the key phrase here.

Just as there are pros to this solution, there are also cons. Taking money from the retirement program and putting it into the disability programs is like putting a band aid on a wound that needs stitches. Sure, it will help for a little bit, but in the long run it's just going to make things worse. If these funds are re-allocated from the Social Security retirement program and put into the disability program and nothing else is done to address the financial issues that the Administration is facing as a whole, all the plan will manage to accomplish is weaken the already-in-jeopardy retirement program.

The bottom line is this- the reallocation plan will help to shore up Social Security in the short term, but it will only really provide a solution to the SSA’s financial problems if there are other measures taken to address fundamental problems and strengthen both programs.

There is no doubt, however, that something must be done soon if Social Security, in its current form, is going to survive.