Impact of Weak Economy on Diminishing Disability Trust Fund Increases Pressure for Entitlement Reform

March 25, 2011

A huge increase in the number of participants in Social Security’s Disability Insurance program will cause funding to run out in six years without federal intervention, according to the Congressional Budget Office (CBO).  The Disability Trust Fund has been pushed to the brink of insolvency by the weak economy as the number of beneficiaries has increased from 6.6 million in 2000 to 10.2 million in 2010.  According to CBO, the only way to save the Fund without raising payroll taxes or cutting benefits would be to fold it into the fund that pays Social Security’s retirement benefits, but that would shorten the life of the retirement trust fund by at least three years.  The program’s financial trouble poses a major test for the White House and Congress on entitlement reform when the House rolls out its 2012 budget in April.