Threat to Social Security Disability Benefits

Long ago I made a rule for myself to stay out of politics. I am breaking that rule.

The election results from last November have resulted in a new Congress, which has acted in a way that I think you need to know about.  I have enclosed a summary of what Congress did on the first day of the 2015 session.

In effect, the action means it is almost certain that your monthly disability benefits will be reduced by as much as 20% sometime in 2016.  The reason is that the Social Security disability trust fund is predicted, by the accountants, to be depleted by 2016.  A simple fix to avoid the depletion of that account would be to increase the cap on taxable earnings for individuals.  For example, any worker who receives a paycheck will pay a “FICA” tax of 6.2% on their earnings.  Many people are not aware that that FICA tax amount is matched by the employer.  What Congress could do is increase the amount of earnings that can be taxable for purposes of FICA.  It would be really simple to do so.

In 2014 Congress set the maximum amount that would be taxable at $117,000.00 dollars.  When you think about it, you will realize most American workers do not earn $117,000 dollars per year.  I am not sure of the statistics but perhaps 20% of all American workers earn more than $117,000.00.

But of those who do earn more than $117,000 per year, many make millions yet are not taxed on any earnings in excess of $117,000 for purposes of Social Security disability/retirement.  Why?  Perhaps because it leaves those high-end earners more money in their pockets to contribute to the political campaigns to protect their interests.  It also means less taxes being paid by the employers since, under the present system, they would have to match what their employees pay.  That means the employers, i.e. corporations, have more money in their pockets to contribute to political campaigns to protect their interests.

Note that the enclosed summary of what Congress did shows that the "point of order" parliamentary rule adopted was done on purely party lines.  The election in November could turn out to be very significant.  I have broken my silence so that you could be made aware that there is trouble ahead regarding your monthly disability income.

If you have not registered to vote I encourage you to do so.  If you have registered, but have not voted-shame on you.  Whether you have registered or not you should be contacting your congressional and senatorial representatives to let your views be known.