A recently issued Congressional Budget Office (CBO) issue brief discusses the financial sustainability of the Social Security disability insurance program. The report discusses the program's current financial picture and the factors that have contributed to that picture, but mentions only in general terms the possible approaches for addressing the looming financial insolvency.
The number of program participants and the amount of benefits and expenses has dramatically increased since 1970. The average annual cost per person (including benefits and administrative expenses) increased from $6,900 to $12,800 during this period. Total expenditures increased nearly sevenfold, from $18 billion in 1970 to $124 billion in 2009 (using 2010 dollars). However, tax receipts will be about 20% less than expenditures by 2015. Thus, the program's trust funds will be exhausted by 2018, according to the CBO.
The report outlines several factors that have contributed to this situation:
- An aging workforce, since older workers are more likely than younger ones to qualify for a disability benefit (2 out of every 1,000 people among individuals 30–34 vs. 17 out of every 1,000 among individuals 60–64).
- Growth in the number of working women has increased the number of individuals qualifying for a disability benefit.
- Advances in health care allow individuals to live longer after the onset of a disability.
- An expansion of the ways in which an individual can qualify for a disability benefit.
- Reduction in the number of disability reviews. However, less than one percent of CDRs result in the termination of benefits.
- A reduction in employment opportunities results in many individuals who are unemployed seeking disability benefits and individuals receiving benefits find it more difficult to return to work.