Changes

With the abject failure of the [[New Deal|First New Deal]] to create any net new private sector jobs, the Social Security Act was passed in 1935 and started operations in 1937. Since benefits required at least 5 years of payments, a special program was included in 1937 to help old people who already were retired and who had high rates of poverty. The program was never intended to be the sole means of support for retirees; in a 1939 message to Congress President Roosevelt said,

With the abject failure of the [[New Deal|First New Deal]] to create any net new private sector jobs, the Social Security Act was passed in 1935 and started operations in 1937. Since benefits required at least 5 years of payments, a special program was included in 1937 to help old people who already were retired and who had high rates of poverty. The program was never intended to be the sole means of support for retirees; in a 1939 message to Congress President Roosevelt said,

{{Cquote|We shall make the most orderly progress if we look upon Social Security as a development toward a goal rather than a finished product. We shall make the most lasting progress if we recognize that Social Security can furnish only a base upon which each one of our citizens may build his individual security through his own individual efforts.”<ref>A Message Transmitting to Congress a Report of the Social Security Board recommending certain improvements in the Law. January 16, 1939. Retrieved from the [http://www.ssa.gov/history/stool.html Historian’s Office of the Social Security Administration,] January 5, 2011. </ref>}}

{{Cquote|We shall make the most orderly progress if we look upon Social Security as a development toward a goal rather than a finished product. We shall make the most lasting progress if we recognize that Social Security can furnish only a base upon which each one of our citizens may build his individual security through his own individual efforts.”<ref>A Message Transmitting to Congress a Report of the Social Security Board recommending certain improvements in the Law. January 16, 1939. Retrieved from the [http://www.ssa.gov/history/stool.html Historian’s Office of the Social Security Administration,] January 5, 2011.</ref>}}

The 2014 Social Security Trustees' Report says that there is an unfunded obligation of $13.4 trillion over the next 75 years based on the current taxes and benefits under the program.  However, the trust fund balance has enough to pay these benefits through 2033.<ref>{{cite web|url=http://www.heritage.org/research/reports/2014/08/social-security-trustees-report-unfunded-liability-increased-11-trillion-and-projected-insolvency-in-2033|title=Social Security Trustees Report: Unfunded Liability Increased $1.1 Trillion and Projected Insolvency in 2033|work=Heritage Foundation|date=August 4, 2014|accessdate=March 1, 2016}}</ref>

The 2014 Social Security Trustees' Report says that there is an unfunded obligation of $13.4 trillion over the next 75 years based on the current taxes and benefits under the program.  However, the trust fund balance has enough to pay these benefits through 2033.<ref>{{cite web|url=http://www.heritage.org/research/reports/2014/08/social-security-trustees-report-unfunded-liability-increased-11-trillion-and-projected-insolvency-in-2033|title=Social Security Trustees Report: Unfunded Liability Increased $1.1 Trillion and Projected Insolvency in 2033|work=Heritage Foundation|date=August 4, 2014|accessdate=March 1, 2016}}</ref>

===President Franklin Roosevelt's proposal for an overwithholding slush fund===

===President Franklin Roosevelt's proposal for an overwithholding slush fund===

The Social Security Act was drafted by President [[Franklin Delano Roosevelt]]'s committee on economic security, under Edwin E. Witte, and passed during FDR's first term which provided for workers who reach the age of 65 a pension of $8 a week at most. The plan had to be pushed through against FDR's procrastination until finally in the 1934 congressional elections the Republicans denounced him for his tardiness. When FDR finally consented to a bill, it contained a plan for building a huge reserve fund that would extract billions from the workers' payrolls without any adequate return. Over the protest of the President, the Congress finally took that provision proposed by Roosevelt out of the law. <ref>[http://mises.org/books/rooseveltmyth.pdf ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, pp. 67-68, 424-425 pdf.</ref>

The Social Security Act was drafted by President [[Franklin Delano Roosevelt]]'s committee on economic security, under Edwin E. Witte, and passed during FDR's first term which provided for workers who reach the age of 65 a pension of $8 a week at most. The plan had to be pushed through against FDR's procrastination until finally in the 1934 congressional elections the Republicans denounced him for his tardiness. When FDR finally consented to a bill, it contained a plan for building a huge reserve fund that would extract billions from the workers' payrolls without any adequate return. Over the protest of the President, the Congress finally took that provision proposed by Roosevelt out of the law.<ref>[http://mises.org/books/rooseveltmyth.pdf ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, pp. 67-68, 424-425 pdf.</ref>

===President Lyndon Johnson raids the Social Security Trust Fund to wage the Vietnam War===

===President Lyndon Johnson raids the Social Security Trust Fund to wage the Vietnam War===

====The Clinton/Gore Tax on Social Security benefits ====

====The Clinton/Gore Tax on Social Security benefits ====

In 1993 President Clinton sought to increase taxes on [[Social Security]] benefits of the elderly and disabled.<ref>http://www.house.gov/house/Contract/seniorsd.txt</ref>  The final version of the bill passed by the [[Democrat]]ically controlled Congress increased taxes on beneficiaries from the first 50% to 85%<ref>http://web.archive.org/web/20040408115747/www.ssa.gov/OACT/HOP/hopi.htm</ref> of benefits (or "annuity payments" as they were originally called). [[Vice President]] [[Al Gore]] cast the deciding tie-breaker vote in the Senate to make the tax increase law.  The Clinton-Gore tax increase on Social Security benefits included 15% more of the social security benefit at the beneficiary's marginal rate. It collected some taxes on retired couple making as little as $22,000 per year.<ref>[http://books.google.com/books?id=vLg4iJR0J9kC&pg=PA16593&lpg=PA16593&dq=Vice+President+Gore+cast+the+tie-breaking+vote%2Bsocial+security&source=bl&ots=-ImIDX6fHa&sig=ttWVUNAIVsLQoEg1ZhCntHB_02Y&hl=en&ei=dobVTMr9HoOglAe0iuX9CA&sa=X&oi=book_result&ct=result&resnum=2&ved=0CBYQ6AEwAQ#v=onepage&q=Vice%20President%20Gore%20cast%20the%20tie-breaking%20vote%2Bsocial%20security&f=false Congressional Record, Comments by Rep. Christopher Cox,] July 27, 2000.</ref>  

In 1993 President Clinton sought to increase taxes on Social Security benefits of the elderly and disabled.<ref>http://www.house.gov/house/Contract/seniorsd.txt</ref>  The final version of the bill passed by the [[Democrat]]ically controlled Congress increased taxes on beneficiaries from the first 50% to 85%<ref>http://web.archive.org/web/20040408115747/www.ssa.gov/OACT/HOP/hopi.htm</ref> of benefits (or "annuity payments" as they were originally called). [[Vice President]] [[Al Gore]] cast the deciding tie-breaker vote in the Senate to make the tax increase law.  The Clinton-Gore tax increase on Social Security benefits included 15% more of the social security benefit at the beneficiary's marginal rate. It collected some taxes on retired couple making as little as $22,000 per year.<ref>[http://books.google.com/books?id=vLg4iJR0J9kC&pg=PA16593&lpg=PA16593&dq=Vice+President+Gore+cast+the+tie-breaking+vote%2Bsocial+security&source=bl&ots=-ImIDX6fHa&sig=ttWVUNAIVsLQoEg1ZhCntHB_02Y&hl=en&ei=dobVTMr9HoOglAe0iuX9CA&sa=X&oi=book_result&ct=result&resnum=2&ved=0CBYQ6AEwAQ#v=onepage&q=Vice%20President%20Gore%20cast%20the%20tie-breaking%20vote%2Bsocial%20security&f=false Congressional Record, Comments by Rep. Christopher Cox,] July 27, 2000.</ref>  

In 2009 conservatives attacked the Democrats health care reform program because it reneged on promises made to Medicare beneficiaries.

In 2009 conservatives attacked the Democrats health care reform program because it reneged on promises made to Medicare beneficiaries.

===Social Security and African-Americans===

===Social Security and African-Americans===

When Social Security was first passed most blacks worked on farms or as domestics and were not covered.  Nearly all have left the farms--and the the few remaining domestics are now covered.  

When Social Security was first passed most blacks worked on farms or as domestics and were not covered.  Nearly all have left the farms—and the the few remaining domestics are now covered.  

The amount of social security benefits received depends on how long one lives after retiring. African-Americans generally have lower life expectancies than other groups. When a black man reaches age 65, he is expected to live only another 13.9 years, almost 2 years (24 payments) less than a white male. The RAND Corporation concluded that, because of differences in life expectancies and marriage rates, on a life-time basis the income transfer from blacks to whites is as much as $10,000 per person.  However, blacks aree more likely to receive disability benefits.

The amount of social security benefits received depends on how long one lives after retiring. African-Americans generally have lower life expectancies than other groups. When a black man reaches age 65, he is expected to live only another 13.9 years, almost 2 years (24 payments) less than a white male. The RAND Corporation concluded that, because of differences in life expectancies and marriage rates, on a life-time basis the income transfer from blacks to whites is as much as $10,000 per person.  However, blacks aree more likely to receive disability benefits.

===Medicare===

===Medicare===

In 1965, prodded by liberal president [[Lyndon Johnson]], Congress enacted the [[Medicare]] program as part of the "[[Great Society]]."  Medicare revenues operates as part of the Social Security program and reimburses some health care providers for beneficiaries over the age of 65. A [[Medicaid ]] program was established to provide health care for poor people who can not afford private health insurance.

In 1965, prodded by liberal president [[Lyndon Johnson]], Congress enacted the [[Medicare]] program as part of the "[[Great Society]]."  Medicare revenues operates as part of the Social Security program and reimburses some health care providers for beneficiaries over the age of 65. A [[Medicaid]] program was established to provide health care for poor people who can not afford private health insurance.

===Present liabilities promised to [[Baby boom]]ers===

===Present liabilities promised to [[Baby boom]]ers===

* Cash benefit for the elderly who haven't provided for private retirement plans.

* Cash benefit for the elderly who haven't provided for private retirement plans.

=====Security=====

=====Security=====

* Social security decreases extreme poverty, which in turn decreases crime <ref>Poverty, Income Inequality, and Violent Crime: A Meta-Analysis of Recent Aggregate Data Studies <i>Ching-Chi Hsieh</i> [http://cjr.sagepub.com/cgi/content/abstract/18/2/182]</ref>.

* Social security decreases extreme poverty, which in turn decreases crime.<ref>Poverty, Income Inequality, and Violent Crime: A Meta-Analysis of Recent Aggregate Data Studies ''Ching-Chi Hsieh'' [http://cjr.sagepub.com/cgi/content/abstract/18/2/182]</ref>

====Cons====

====Cons====

== Criticism ==

== Criticism ==

Social security has been called a "Ponzi Scheme" that "shifts wealth from private individuals to government."<ref>http://www.americanthinker.com/2011/03/the_politics_of_social_securit.html</ref> The Social Security tax (aka the payroll tax or the FICA tax - Federal Insurance Contribution Act) has been called a [[regressive tax]] by the [[liberals|political left]] because the effective tax rate decreases as income increases (because there is a taxable maximum).<ref>"Contribution and Benefit Base." Social Security Online. [http://www.ssa.gov/OACT/COLA/cbb.html]</ref> Social Security has also been widely (and wrongly) criticized for contributing to the United States's [[National Debt]] even though the Social Security Trust Fund is separate from the Treasury's general funds and the Social Security Trust Fund has actually financed a large portion of the national debt. <ref>"The Truth About Who Really Owns All of America's Debt." Business Insider. http://www.businessinsider.com/who-owns-us-debt-2011-7#social-security-trust-fund-17</ref>.

Social security has been called a "Ponzi Scheme" that "shifts wealth from private individuals to government."<ref>http://www.americanthinker.com/2011/03/the_politics_of_social_securit.html</ref> The Social Security tax (aka the payroll tax or the FICA tax - Federal Insurance Contribution Act) has been called a [[regressive tax]] by the [[liberals|political left]] because the effective tax rate decreases as income increases (because there is a taxable maximum).<ref>[http://www.ssa.gov/OACT/COLA/cbb.html "Contribution and Benefit Base." Social Security Online]</ref> Social Security has also been widely (and wrongly) criticized for contributing to the United States's [[National Debt]] even though the Social Security Trust Fund is separate from the Treasury's general funds and the Social Security Trust Fund has actually financed a large portion of the national debt.<ref>"The Truth About Who Really Owns All of America's Debt." Business Insider. http://www.businessinsider.com/who-owns-us-debt-2011-7#social-security-trust-fund-17</ref>

==The future of Social Security==

==The future of Social Security==

[[File:National Debt Clock by Matthew Bisanz.jpg|right|thumb|450px|Each one dollar withheld from workers earnings as FICA tax is one dollar added to the [[National debt]]; due to this structural flaw by the founders of Social Security, the U.S. Public Debt can not be paid down by labor.<ref>http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtOwner</ref>]]

[[File:National Debt Clock by Matthew Bisanz.jpg|right|thumb|450px|Each one dollar withheld from workers earnings as FICA tax is one dollar added to the [[National debt]]; due to this structural flaw by the founders of Social Security, the U.S. Public Debt can not be paid down by labor.<ref>http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtOwner</ref>]]

Social security will face many problems in the 21st century, most notably the aging of the population in developed nations, although more problematic in Europe and especially Japan, will strain American social security budgets <ref>Will social security and Medicare remain viable as the US population is aging? (pdf) <i>Henning Bohn</i>[http://www.econ.ucsb.edu/~bohn/papers/Aging.pdf]</ref> In calendar year 2010, Social Security's outlays will exceed tax revenues (that is, the trust funds' receipts excluding interest) for the first time since the enactment of the Social Security Amendments of 1983.<ref>Congressional Budget Office, ''[http://www.cbo.gov/doc.cfm?index=11943 Long-Term Projections for Social Security]'', October 2010. </ref> According to the [[Congressional Budget Office]], Social Security will exhaust its current sources of revenue completely by 2042 and will be "unable to pay full benefits without changes in law."<ref>Ibid.</ref>

Social security will face many problems in the 21st century, most notably the aging of the population in developed nations, although more problematic in Europe and especially Japan, will strain American social security budgets <ref>Will social security and Medicare remain viable as the US population is aging? (pdf) ''Henning Bohn''[http://www.econ.ucsb.edu/~bohn/papers/Aging.pdf]</ref> In calendar year 2010, Social Security's outlays will exceed tax revenues (that is, the trust funds' receipts excluding interest) for the first time since the enactment of the Social Security Amendments of 1983.<ref>Congressional Budget Office, ''[http://www.cbo.gov/doc.cfm?index=11943 Long-Term Projections for Social Security]'', October 2010.</ref> According to the [[Congressional Budget Office]], Social Security will exhaust its current sources of revenue completely by 2042 and will be "unable to pay full benefits without changes in law."<ref>Ibid.</ref>

==Further reading==

==Further reading==

==References==

==References==

<references/>

<references/>

[[category:New Deal]]

[[Category:New Deal]]

[[Category:Welfare State]]

[[Category:Welfare State]]