Under Obama: Disability Trust Fund Runs Record 5 Straight Yrs Of Deficits – CNS
In the fourteen fiscal years that preceded President Barack Obama’s inauguration in 2009, the tax receipts coming into the federal government’s Disability Insurance Trust Fund exceeded the benefits paid out, and the trust fund ran a surplus.
In each of the five fiscal years Obama has served as president, the trust fund has run a deficit as the number of people receiving disability benefits has surged. The Disability Insurance Trust Fund has never before run five straight years of deficits.
In fiscal 2013, which ended on Sept. 30, the Disability Insurance Trust Fund ran a record deficit of $31.494 billion, according to newly released data from the Social Security Administration. That followed deficits of $8.462 billion in fiscal 2009, $20,831 billion in fiscal 2010, $25.264 billion in fiscal 2011, and $29.701 billion in fiscal 2012.
From fiscal 1995 through fiscal 2008, the Disability Insurance Trust Fund ran surpluses, as receipts from the disability insurance taxes paid by people who were working exceeded the value of the benefits paid to those claiming disability.
Congress created the federal disability insurance program by adding an amendment to the Social Security Act in 1956. The government paid the first disability benefits in fiscal 1957.
That year, the Social Security and disability programs were funded by payroll taxes that equaled a combined 5.625 percent of a person’s earnings. If someone was employed by someone else, this included a 2.0 percent tax for Social Security that was withheld from a person’s paycheck, an 0.250 percent tax for disability that was also withheld from the paycheck, a 3.0 percent tax for Social Security that was paid by the employer, and an 0.375 percent tax for disability that was paid by the employer.
A self-employed person paid the full 5.625 percent directly from his or her earnings.
Over the years, the payroll taxes for Social Security and disability have more than doubled to 12.4 percent. Self-employed individuals pay the entire 12.4 percent directly. People employed by someone else see 5.3 percent withheld from their paycheck for Social Security and 0.9 percent withheld for disability. Employers pay the other 6.2 percent on the worker’s behalf.
In 1957, the Disability Insurance Trust Fund took in $709 million and paid out only $59 million in benefits – or 8.3 percent of total revenues. A surplus of approximately $649 million was deposited in to the Trust Fund.
In reality, that means the government took that “surplus” and used it to pay for other government expenses, giving the Trust Fund an IOU to pay the money back later.
In the 57 fiscal years that the federal disability program has operated, it has run deficits in only 11 years – with five of those years coming under Obama. Prior to the last five fiscal years, the longest run of deficits in the Disability Insurance Trust Fund was the four-year span from fiscal 1962 trough fiscal 1965, when John F. Kennedy and Lyndon Johnson were president.
The trust fund also ran three straight years of deficits from fiscal 1975 through fiscal 1977, when Gerald Ford and Jimmy Carter were president.
When President Obama took office in January 2009 – which was the fourth month of fiscal 2009–there were 7,442,377 workers on disability, according to the Social Security Administration. As of October 2013, there was a record 8,936,932. That means the number of people on disability has increased by 1,494,555 while Obama has been in office – a jump of 20 percent.
In addition to the 8,936,932 workers collecting disability in October, there were also 157,676 spouses of disabled workers who collected additional benefits, and 1,871,127 children of disabled workers who collected benefits.
All told, 10,965,735 people collected federal disability benefits in October.
At the end of fiscal 2008, there was a net balance of $216.239 billion in the Disability Insurance Trust Fund – meaning the Treasury owed $216.239 billion in IOUs to the trust fund for surplus disability insurance tax receipts it had taken in previous years and used for other government expenses.
At the end of fiscal 2013, the net balance in the Disability Insurance Trust Fund had dropped to $100.486 – a decline of $115.753 billion.
That $115.753 billion, the cumulative five year deficit of the disability insurance program, equals the amount of money the Treasury had to borrow from other sources to pay disability benefits during that time.
From the last day of January 2009 through the last day of September 2013, the total debt of the federal government climbed from $10,632,005,246,736.97 to $16,738,183,526,697.32—an increase of $6,106,178,279,960.35.
That equaled approximately $53,091 in additional debt for each of the 115,013,000 households that the Census Bureau now estimates there are in the United States.
Since the last day of September, the federal government’s total debt has continued to increase, hitting $17,200,725,370,597.56 as of Tuesday—or approximately $149,555 per household.
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