Our annual report on the state of Social Security and Medicare was issued yesterday, and from a 30,000-foot view, the AP sees Social Security's financial health as having grown no worse in the past year. In fact, the program's retirement trust fund is projected to be able to pay full benefits through 2034; in last year's checkup, the prediction was 2033. But for 11 million Americans, there was bad news: Unless the dwindling disability trust fund is replenished in short order, their benefits will automatically be cut 19% late next year. That's because as of Q4 of 2016, revenues would cover only the remaining 81%, reports the New York Times. What that looks like: Instead of an average $1,017 monthly check, disabled workers would get $824, reports the AP. That's $9,888 per year; the Times notes that beneficiaries' average salary before disability was $42,000.
The looming insolvency sets the stage for a potential battle between President Obama and the GOP. The president would like to see a portion of the payroll tax revenue earmarked for the retirement trust fund shifted to the disability one. That adjustment has happened before (in both directions), but only with congressional approval. Congress has indicated it's unwilling to repeat the move without some changes, such as adjustments to the program to cut down on fraud and help the disabled re-enter the workforce. Program trustees painted the "reallocation" as needed but not a long-term solution. The report also indicated there would not be an annual cost-of-living adjustment at year's end, though that could change. If it doesn't come to pass, it'll be only the third year without one since 1975. (Read more Social Security stories.)