Lawmakers and the public have expressed increasing concern over the solvency of the Disability Insurance (DI) trust fund, from which Social Security Disability Insurance (SSDI) benefits are paid. Until recently, the DI trust fund was projected to be depleted in the fourth quarter of calendar year 2016, at which time ongoing revenues to the DI trust fund were projected to be sufficient to pay only about 80% of scheduled benefits. In November 2015, the Bipartisan Budget Act of 2015 ( H.R. 1314 ; P.L. 114-74 ) extended the projected solvency of the DI trust fund by authorizing a reallocation of the Social Security payroll tax rate between the DI and the Old-Age and Survivors Insurance (OASI) trust funds to provide DI with a larger share. Although the reallocation averted a potential benefit cut in late 2016, without additional legislation action (i.e., revenue increases, cost reductions, or some combination thereof), the DI trust fund is projected to be unable to pay scheduled benefits in full and on a timely basis by the early 2020s. This report provides an overview of the DI trust fund and its current financial outlook. It begins with background information on the SSDI program and the financing of the Social Security trust funds. Next, the report examines the financial status of the DI trust fund over the past 20 years and the causes of the DI trust fund's financial imbalance. It then discusses the projected status of the DI trust fund under prior law and under the Bipartisan Budget Act of 2015. Lastly, the report provides background information on the use of reallocations by Congress in the past, as well as on a House rules change in the 114 th Congress concerning payroll tax reallocations. The appendix of the report provides a congressional rationale for the creation of a separate DI trust fund as part of the Social Security Amendments of 1956 (P.L. 84-880). Enacted in 1956 under Title II of the Social Security Act, SSDI is part of the Old-Age, Survivors, and Disability Insurance (OASDI) program, more commonly known as Social Security. As in OASI—the retirement component of Social Security—SSDI is a form of social insurance that replaces a portion of a worker's income based on the individual's work history and career-average earnings in covered employment. Specifically, SSDI provides benefits to nonelderly insured workers who meet the statutory definition of disability and to their eligible dependents. In November 2015, the Social Security Administration (SSA) paid benefits to more than 10.8 million SSDI recipients, including 8.9 million disabled workers, 142,000 spouses of disabled workers, and 1.8 million children of disabled workers. To qualify for SSDI, workers must be (1) under the full retirement age (FRA), (2) insured in the event of disability, and (3) statutorily disabled. The FRA is the age at which unreduced Social Security retirement benefits are first payable, which is currently 66. To achieve insured status, individuals must have worked in covered employment for about a quarter of their adult lives before they became disabled and for at least 5 years of the 10 years immediately before the onset of disability. However, younger workers may qualify with less work experience based on their age. In 2014, SSDI provided disability insurance coverage to more than 151 million nonelderly workers. To meet the statutory definition of disability, an insured worker must be unable to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment that is expected to last for at least one year or result in death. In 2016, the SGA earnings limit is $1,130 per month for most workers and $1,820 per month for statutorily blind workers. Disability determinations are based on a five-step sequential evaluation process that takes into account a worker's medical records, age, education, and work experience. In general, workers must have a severe impairment (or combination of impairments) that prevents them from performing any kind of substantial work that exists in the national economy in significant numbers. Cash benefits begin five full months after a beneficiary's disability onset date. Initial benefits are based on a worker's career-average earnings, indexed to reflect changes in national wage levels. Benefits are subsequently adjusted to account for inflation through cost-of-living adjustments (COLAs), as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Monthly benefits payable to the worker and family members are subject to a maximum family benefit amount. Benefits may be offset if the disabled worker also receives workers' compensation or certain other public disability benefits. In November 2015, the average monthly benefit was $1,166 for disabled workers, $318 for spouses of disabled workers, and $350 for children of disabled workers. In addition to cash benefits, disabled workers and certain dependents are eligible for health care coverage under Medicare after 24 months of entitlement to cash benefits (typically 29 months after the onset of disability). In 2012, Medicare spending per disabled beneficiary averaged about $9,900. Generally, disabled workers retain their benefits as long as they (1) are under the FRA, (2) exhibit no substantial medical improvement, and (3) have average monthly earnings at or below the SGA limit. Although Social Security is often viewed as a single program, its financing comes from two legally distinct sources known as trust funds. A trust fund is an accounting mechanism that "records the revenues, offsetting receipts, or offsetting collections earmarked for the purpose of the fund, as well as budget authority and outlays of the fund that are financed by those revenues or receipts." The Federal Disability Insurance Trust Fund finances the benefits of disabled workers and their dependents, and the Federal Old-Age and Survivors Insurance Trust Fund pays for the benefits of retired workers and their dependents as well as survivors of deceased workers. Administrative costs are also drawn from the trust funds. Each trust fund is a separate account in the U.S. Treasury, and under current law, the two trust funds may not borrow from one another. The OASI trust fund was created under the Social Security Amendments of 1939 (P.L. 76-379), and superseded the Old-Age Reserve Account established under the original Social Security Act in 1935 (P.L.74-271). The DI trust fund was established as part of the Social Security Amendments of 1956 (P.L. 84-880)—the same legislation that created SSDI. The creation of a separate DI trust fund appears to have been a compromise to address concerns of some lawmakers at the time about SSDI's potential cost and potential negative impact on the OASI trust fund and its beneficiaries. For more information on the congressional rationale for the creation of a separate DI trust fund, see Appendix A . SSDI and OASI are financed primarily by dedicated payroll and self-employment taxes levied on the earnings of covered workers under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). FICA taxes are split evenly between employees and employers, whereas SECA taxes are borne fully by self-employed individuals. As shown in Table 1 , the Social Security FICA tax rate for employees and employers, each is 6.200%, with 1.185% allocated to the DI trust fund and 5.015% to the OASI trust fund. On a combined basis , the FICA tax rate is 12.400%, with 2.370% allocated to the DI trust fund and 10.030% to the OASI trust fund. The Social Security SECA tax rate is the same as the combined FICA tax rate. Social Security taxes are levied on covered earnings up to a maximum annual amount, which is $118,500 in 2016. The FICA rates for employees and employers are prescribed in Sections 3101 and 3111 of the Internal Revenue Code (IRC), respectively; the SECA rate is specified in Section 1401 of the IRC. The allocation of the tax rates between the OASI and DI trust funds, however, is set in Section 201(b) of the Social Security Act. Section 201(b) specifies the combined share of the Social Security tax rate allocated to the DI trust fund for both wages (FICA) and self-employment income (SECA), which, as noted above, is 2.370% (1.185% for employees and employers, each). Section 201(a) states that the combined allocation to the OASI trust fund for both wages and self-employment income is the combined Social Security payroll tax rate set in the IRC less the combined share prescribed in Section 201(b). Therefore, the combined allocation to the OASI trust fund is 12.400% minus 2.370%, which equals 10.030% (5.015% for employees and employers, each). In addition to payroll taxes, the OASI and DI trust funds are credited with income from the taxation of some Social Security benefits. The share of Social Security benefits that is taxable depends on whether the individual's provisional income exceeds certain thresholds. Provisional income equals adjusted gross income plus otherwise tax-exempt interest income (i.e., interest from tax-exempt bonds), plus 50% of Social Security benefits. Income derived from the taxation of up to the first 50% of Social Security benefits is credited to the OASI and DI trust funds based on the source of the benefits taxed. In other words, up to a certain rate, taxes paid on OASI benefits are deposited in the OASI trust fund and taxes paid on SSDI benefits are deposited in the DI trust fund.