How to Reform Disability Insurance Finances?

The program has paid more in benefits than it took in each year since 2009. The Congressional Budget Office looked at the options to see how the program could be returned to financial stability.

Some kind of reform of the Social Security Disability Insurance (DI) program will be needed soon, and the nonpartisan Congressional Budget Office has prepared an Infographic explaining how the program works and what could be done to increase available revenues or decrease benefit outlays.

Each year since 2009, the DI program has paid out more in benefits than it received in dedicated revenues. In 2011, total benefits paid were $128 billion versus about $94 billion in revenues. During the past 40 years, the average monthly benefit received by disabled workers has climbed from about $560 to about $1,050 in 2010 dollars.

CBO posted the Infographic and accompanying information July 16. The program pays cash benefits to non-elderly adults who are judged to be unable to perform "substantial" work because of a disability but worked in the past; the program also pays benefits to some of those adults' dependents. As of 2011, the DI program provided benefits to 8.3 million disabled workers, nearly six times the 1.4 million disabled workers who received benefits in 1970. Including dependent spouses and children raises the total number of recipients of this assistance to 10.3 million.

CBO said many factors, including demographics, the labor force, federal policy, opportunities for work, and compensation during employment, caused enrollment to soar.

CBO listed promoting disabled beneficiaries' return to work (such as by moving to a partial disability system that relates benefits to the degree of disability), as well as changes in DI taxes, raising the age of eligibility, and modifying benefits as possible options for reforming the program.

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