Social Security: What Would Happen If the Trust Funds Ran Out?

Social Security: What Would Happen If the Trust Funds Ran Out? Congressional Research Service, Library of Congress. William R. Morton, Wayne Liou. September 12, 2017

Social Security’s income and outlays are accounted for through two federal trust funds: the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund. Under their intermediate assumptions and under current law, the Social Security trustees project that the DI Trust Fund will become depleted in 2028 and the OASI Trust Fund will become depleted in 2035. Although the two funds are legally separate, they are often considered in combination. The trustees project that the combined Social Security trust funds will become depleted in 2034. At that point, revenue would be sufficient to pay only about 77% of scheduled benefits.

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Social Security: The Trust Funds

Social Security: The Trust Funds. Congressional Research Service, Library of Congress. William R. Morton, Wayne Liou. September 12, 2017

The Social Security program pays monthly cash benefits to retired or disabled workers and their family members and to the family members of deceased workers. Program income and outgo are accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust Fund. Projections show that the OASI fund will remain solvent until 2035, whereas the DI fund will remain solvent until 2028, meaning that each trust fund can pay benefits scheduled under current law in full and on time up to that point. Following the depletion of trust fund reserves (2028 for DI and 2035 for OASI), continuing income to each fund is projected to cover 93% of DI scheduled benefits and 75% of OASI scheduled benefits. The two trust funds are legally distinct and do not have authority to borrow from each other. However, Congress has authorized the shifting of funds between OASI and DI in the past to address shortfalls in a particular fund. Therefore, this CRS report discusses the operations of the OASI and DI trust funds on a combined basis, referring to them collectively as the Social Security trust funds. On a combined basis, the trust funds are projected to remain solvent until 2034. Following depletion of combined trust fund reserves at that point, continuing income is projected to cover 77% of scheduled benefits.

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The Budget Control Act: Frequently Asked Questions

The Budget Control Act: Frequently Asked Questions. Congressional Research Service, Library of Congress. Grant A. Driessen, Megan S. Lynch. September 1, 2017

When there is concern with deficit or debt levels, Congress will sometimes implement budget enforcement mechanisms to mandate specific budgetary policies or fiscal outcomes. The Budget Control Act of 2011 (BCA; P.L. 112-25), which was signed into law on August 2, 2011, includes several such mechanisms.
The BCA as amended has three main components that currently affect the annual budget. One component imposes annual statutory discretionary spending limits for defense and nondefense spending. A second component requires annual reductions to the initial discretionary spending limits triggered by the absence of a deficit reduction agreement from a committee formed by the BCA. Third are annual automatic mandatory spending reductions triggered by the same absence of a deficit reduction agreement. Each of those components is described in further detail in this report. The discretionary spending limits (and annual reductions) are currently scheduled to remain in effect through FY2021, while the mandatory spending reductions are scheduled to remain in effect through FY2025.

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Federal Health Centers: An Overview

Federal Health Centers: An Overview. Congressional Research Service, Library of Congress. Elayne J. Heisler. May 19, 2017

The federal Health Center Program is authorized in Section 330 of the Public Health Service Act (PHSA) (42 U.S.C. §254b) and administered by the Health Resources and Services Administration (HRSA) within the Department of Health and Human Services. The program awards grants to support outpatient primary care facilities that provide care to primarily low-income individuals or individuals located in areas with few health care providers.

Federal health centers are required to provide health care to all individuals, regardless of their ability to pay, and to be located in geographic areas with few health care providers. These requirements make health centers part of the health safety net—providers that serve the uninsured, the underserved, or those enrolled in Medicaid. Data compiled by HRSA demonstrate that health centers serve the intended safety net population, as the majority of patients are uninsured or enrolled in Medicaid. Some research also suggests that health centers are cost-effective; researchers have found that patients seen at health centers have lower health care costs than those served in other settings. In general, research has found that health centers, among other outcomes, improve health, reduce costs, and provide access to health care for populations that may otherwise not obtain health care.

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The Federal Minimum Wage: In Brief

The Federal Minimum Wage: In Brief. Congressional Research Service, Library of Congress. David H. Bradley. June 2, 2017

The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal legislation that establishes the minimum hourly wage that must be paid to all covered workers. The minimum wage provisions of the FLSA have been amended numerous times since 1938, typically for the purpose of expanding coverage or raising the wage rate. Since its establishment, the minimum wage rate has been raised 22 separate times. The most recent change was enacted in 2007 (P.L. 110-28), which increased the minimum wage to its current level of $7.25 per hour.

In addition to setting the federal minimum wage rate, the FLSA provides for several exemptions and subminimum wage categories for certain classes of workers and types of work. Even with these exemptions, the FLSA minimum wage provisions still cover the vast majority of the workforce. Despite this broad coverage, however, the minimum wage directly affects a relatively small portion of the workforce. Currently, there are approximately 2.2 million workers, or 2.7% of all hourly paid workers, whose wages are at or below the federal minimum wage of $7.25 per hour. Most minimum wage workers are female, are age 20 or older, work part time, and are in food service occupations.

Proponents of increasing the federal minimum wage argue that it may increase earnings for lower income workers, lead to reduced turnover, and increase aggregate demand by providing greater purchasing power for workers receiving a pay increase. Opponents of increasing the federal minimum wage argue that it may result in reduced employment or reduced hours, lead to a general price increase, and reduce profits of firms paying a higher minimum wage.

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The Financial Stability Oversight Council: An Essential Role for the Evolving US Financial System

The Financial Stability Oversight Council: An Essential Role for the Evolving US Financial System. Peterson Institute for International Economics. Policy Brief, 17-20. Simon Johnson and Antonio Weiss. May 2017

Among the most significant creations of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act was a Financial Stability Oversight Council (FSOC), aimed at improving coordination among US regulators to ensure a more holistic view of dangers to the financial system. Seven years later and especially since the 2016 US election, FSOC faces political pressure from elements of the private sector and their advocates in Washington. One legislative proposal would retroactively repeal virtually all of FSOC’s substantive authorities. The authors warn that abandoning, undermining, or curtailing the powers of FSOC would increase the risks of another major financial crisis—on the scale of what happened in 2008 or worse. No one can predict the precise nature or timing of the next crisis, but FSOC is the United States’ best and likely only guardian against systemic collapse. It must be preserved, protected, and even strengthened. FSOC leadership must carry out with vigor the core mandate of identifying risks to the financial stability of the United States. [Note: contains copyrighted material].

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The Importance of High Quality General Education for Students in Special Education

The Importance of High Quality General Education for Students in Special Education. Brookings Institution. Elizabeth Setren and Nora Gordon. April 20, 2017

Last month’s Supreme Court decision in Endrew F. v. Douglas County School District sets a higher bar for the “free appropriate public education” (FAPE) guaranteed to students with disabilities by the Individuals with Disabilities Education Act (IDEA). In the unanimous opinion, Chief Justice John Roberts wrote: “every child should have the chance to meet challenging objectives. This standard is more demanding than the ‘merely more than de minimis’ test applied by the Tenth Circuit.” While the new standard may be vague, it has rejuvenated public discussion around special education policy and practice.

As policymakers and practitioners think about what changes may be required to meet the new standard, they should not overlook the role of general education. New evidence suggests that it’s possible for special education students to make large achievement gains without their traditional services in schools with high quality general education programs. This points to the importance of the quality of general education for students schools might place in special education. [Note: contains copyrighted material].

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