Aging baby boomers and laid-off workers are inundating Social Security's disability program with benefit claims, a financial strain that new congressional estimates report could leave the program bankrupt by 2017.
Applications have increased by 50 percent over the past decade, according to a report from the Congressional Budget Office (CBO), as more people with disabilities lost their jobs -- and often remain unemployed for months or even years -- in an economy that has been hemorrhaging jobs.
Currently, about 56 million Americans are receiving some kind of payment from either the Social Security Disability Insurance or Old-Age and Survivor Insurance (OASI) fund, which experts believe could be tapped out by 2040.
As more members of the baby-boom generation (that is, people born between 1946 and 1964) enter retirement, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the shortfall (in the Disability Insurance (DI)) fund will begin to grow around 2017, according to the CBO's 2011 Long-Term Projections for Social Security report.
About one-fifth of the federal budget -- equivalent to $733 billion -- currently goes toward Social Security payments, with OASI payments accounting for 82 percent of those payments and DI accounting for 17 percent, according to the report.
The new figures may bring a new conflict to congressional Republicans and Democrats, who have locked horns in recent months regarding federal budget cuts, especially those that would affect entitlement programs. So far, politicians have been reluctant to cut Social Security benefits, fearing the backlash of older voters.
Trustees who oversee Social Security are urging Congress to strengthen the disability system by reallocating money from the retirement program, which lawmakers successfully did in 1994, The Associated Press reports. However, that solution would also only provide short-term relief and could damage the already fledgling retirement program.
About 3.3 million people are expected to apply for federal disability benefits this year, approximately 700,000 more applicants than in 2009 and one million more than a decade ago.