The Debt Ceiling Debate: Advocator's Analysis of the Impact on Social Security Benefits

As things currently stand, the United States government will lose its legal authority to borrow money on August 2, 2011. With this deadline drawing near, Social Security recipients are among the many groups of Americans who are wondering how this issue will impact their lives and more specifically, their monthly benefits. Should Congress fail to pass a plan to avoid default on the federal government's financial obligations, it is possible that benefits payments due in August (totaling $23 billion) will not be made on time.

  

In order to understand this issue and the potential impact on Social Security benefits payments, it is helpful to understand the background of the Social Security trust funds, 

as well as how income to the funds is invested over time.

  

The funds used to make Social Security payments reside among two large trust funds - one for Old-Age and Survivors Insurance (OASI) and one for Disability Insurance (DI). Legally, the funds are separate, but they often are described collectively as the OASDI Trust Funds. While in total the federal budget includes more than 200 trust funds, the OASDI fund is among the largest, at a total of $2,609 billion at the end of 2010. The Secretary of the Treasury is the managing trustee of the Social Security trust funds. So, all Social Security payments are made from the U.S. Treasury.

  

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities 

held by the trust funds are "special issues" of the United States Treasury. Such 

securities are available only to the trust funds. As tax income is deposited into the trust funds on a daily basis, it is invested in these special issue securities and the cash exchanged for the securities goes into the general fund of the Treasury and becomes indistinguishable from other cash in the general fund.

  

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities, on the other hand, are subject to market forces and suffer losses or enjoy gains if sold prior to maturity. Theoretically, investment in special issues gives the trust funds the same flexibility as holding cash.

  

That said, in order for the special issues to be redeemed for "cash," they must be purchased by the U.S. Treasury. Then, the U.S. Treasury can sell the bonds to the public. However, if the debt ceiling is not raised, the U.S. Treasury will not have sufficient funds to purchase the bonds from Social Security in the first place, meaning the bonds could not be turned into cash and used to make monthly payments to beneficiaries.

  

Given the uncertainty around how and when this issue will be resolved by Congress, disability beneficiaries and health and welfare benefit plans should prepare for the possibility that Social Security checks will not be distributed as planned on August 3. For beneficiaries who rely on this income, this obviously means planning for a possible interruption to that income. For health and welfare plans, on the other hand, it means advance planning to handle the anticipated influx of inquiries from beneficiaries, as well as determining how to navigate the application of Social Security offsets. 

This is National Stroke Awarness Month

When Facing a Disability - You Need an Advocate

On May 11, 1989, President George Bush created and signed into law, a Presidential Proclamation naming the month of May as National Stroke Awareness month.  In doing so, the President encouraged and designated a special time to create public interest and awareness of this life changing, challenging, and debilitating disease. 

According to the American Heart Association’s Heart Disease and Stroke Statistics (updated for 2011), “the estimated total cost (including health expenditures and lost productivity) from heart disease and strokes, in the United States is higher than that for any other diagnostic group.  According to the stats, over 700,000 people have succumb to a stroke, but less than half, have a fatal end.

So what happens to the hundreds of thousands of people who live, recover, and survive?

Whether you have suffered a heart attack, a minor stroke, or are suffering from any other disability, your life changes, and many feel, for the first time, like a victim; so vulnerable with nowhere to turn.   They may need disability benefits, but are hesitant and even afraid to pursue this course.  That is why you need an Advocate to represent you.

Social Security Disability Insurance (SSDI) – You’ve Earned It

What you don’t know about disability benefits, can really hurt you financially.  The average person tends to believe that social security benefits are strictly for their retirement.  Others may be hesitant to apply for any kind of disability insurance as they are totally unaware of their eligibility, and end up not applying for the very funds they need to sustain them at this crucial time. This type of reasoning has prevented many Americans from applying for the very help they so desperately require.  The fact is, that SSDI is funded by FICA tax deductions that Americans contribute to, through their paychecks.  This automatically earns them the right to apply for a benefit that they have already contributed to, throughout their years of employment.

The Advocator Group is Standing by – We Care and We Understand

The Advocator Group  has been helping thousands of individuals suffering from disabilities get the financial benefits that they have already earned and deserve. We are comprised of a nationwide staff of experienced and seasoned Case Advocates, who specialize in disability-related matters.  They, in turn, are supported by licensed attorneys referred to as Hearing Advocates, who are on call, if needed.  At The Advocator Group, we have all your bases covered.  We are here to help you navigate seamlessly through the process, making it pain free. 

As your disability benefit advocate, we are well aware of how difficult it can be when suffering from a disability.  You find yourself struggling your way around a Government website, trying to obtain the information needed, on top of having to cope with the application deadlines that must be met. It can be a very stressful experience.

The Advocator Group  gives you the representation that you need.  We will hold your hand in the process, with compassion and patience.  Our focus and passion is helping our clients receive their disability benefits quickly, getting the financial help that they require.

When you Have an Advocate – You are Never Alone

After a disability, your life will change.  Some people may go back to work, with a limited capacity, while others may have to leave their full time jobs and work from home.  Family and friends may be of great comfort, but at this time, you will need the facts, and need them quickly.

The Advocator Group is waiting to help you.  Just call our toll free number at:  (877) 261-1947.  We have the tools and resources that you need.  Let’s get started today.