The budget that passed the U.S. House of Representatives included a temporary funding measure of Social Security’s beleaguered Disability Insurance Trust Fund.
This summer, the annual trustees’ report said the SSDI’s trust fund was expected to be depleted by the end of 2016.
That meant the program would only have enough income to pay about 80 percent of scheduled disability payments, which support about 11 million Americans.
But the budget bill, which passed by a vote of 266 to 167—all of the votes against the law were Republican—authorized $150 billion funds from the larger Social Security Trust Fund to be allocated to the SSDI fund.
This summer, newly-elected Speaker of the House Paul Ryan, R-Wisconsin, vowed to protect the program from cuts, in spite of the fact that Republican lawmakers in the House approved a rule that would prohibit such transactions, which have happened 11 previous times.
Ryan was one of 79 Republicans to vote for the budget.
President Obama’s budget for 2015 called for the allocation, which is expected to keep the program solvent until 2022.
While authorization of the allocation is viewed as a victory for Democrats and the Obama White House, the budget bill does provide for new measures to address what Republicans say is widespread fraud and abuse in the program.
The percentage of the population claiming disability has increased from 2.8 percent in 1994 to 5.1 percent today.
Social Security’s investigation units will be expanded and authorized to work with local law enforcement to prosecute cases of fraud, the penalties for which will be increased.
The budget also includes a provision that would reduce disability payments for those that receive benefits and work at the same time.
Another section of the bill closes what the Obama Administration has argued is an unintended loophole in the Social Security Act that primarily benefits wealthier beneficiaries.
The so-called “file-and-suspend” provision allows the higher earner in a marriage to delay receiving benefits until age 70, while the lower earning spouse can claim spousal benefits at regular retirement age, and later shift to their own full benefit.
The Center for Retirement Research has estimated the loophole costs the Social Security Trust Fund $9.5 billion annually.
Existing file-and-suspend payments will be allowed.
Suspension of new file-and-suspend arrangements will begin 180 days after the bill is signed into law.
The Senate is expected vote on the budget bill by the end of the week.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
