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 [https://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=https://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=https://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 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>[https://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>https://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>[https://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.

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

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

[[File:Editgrf11.jpg|thumb|241px|right|Graph: ''USA Today'']]

[[File:Editgrf11.jpg|thumb|241px|right|Graph: ''USA Today'']]

The cost of Social Security benefits that were promised to 70 million Americans of the "baby-boom" generation exceeds $53 trillion ($53,000,000,000,000).<ref>https://www.usatoday.com/news/nation/2004-10-03-debt-cover_x.htm</ref><ref>https://www.usatoday.com/news/graphics/debtcalculator/flash.htm</ref><ref>http://fiscalsolvency.com/the_3_parts_of_our_fiscal_crisis.htm</ref> To understand the magnitude of this figure by contrast, the [[World Bank]] estimates the [[GDP]] of the planet (total economic output) for the year 2008 as $61.063 trillion.<ref>http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=gdp#met=ny_gdp_mktp_cd&tdim=true  See also CIA World Fact Book [https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html]</ref> The sum total of promises made to all working age adults in the U.S population is estimated at over $106 trillion,<ref>http://www.cnbc.com/id/38979552</ref><ref>http://www.forbes.com/2009/05/14/taxes-social-security-opinions-columnists-medicare.html</ref> more than one and half times the total annualized economic activity of the planet.  An editorial in ''[[USA Today]]'' claims "Without action, outlays on benefit programs such as Medicare and Social Security, combined with interest on the [[national debt]], are projected to grow so fast that they will devour all tax revenue in as soon as 20 years. That means every government department and agency, except for those that pay benefits and service the debt, could be eliminated — and Washington would still run a deficit."<ref>[https://www.usatoday.com/news/opinion/editorials/2010-11-11-editorial11_ST_N.htm Our view on government inaction:] Gridlock's just another word for lack of leadership, ''USA Today editorial, November 11, 2010.</ref>

The cost of Social Security benefits that were promised to 70 million Americans of the "baby-boom" generation exceeds $53 trillion ($53,000,000,000,000).<ref>https://www.usatoday.com/news/nation/2004-10-03-debt-cover_x.htm</ref><ref>https://www.usatoday.com/news/graphics/debtcalculator/flash.htm</ref><ref>http://fiscalsolvency.com/the_3_parts_of_our_fiscal_crisis.htm</ref> To understand the magnitude of this figure by contrast, the [[World Bank]] estimates the [[GDP]] of the planet (total economic output) for the year 2008 as $61.063 trillion.<ref>http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:USA&dl=en&hl=en&q=gdp#met=ny_gdp_mktp_cd&tdim=true  See also CIA World Fact Book [https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html]</ref> The sum total of promises made to all working age adults in the U.S population is estimated at over $106 trillion,<ref>https://www.cnbc.com/id/38979552</ref><ref>https://www.forbes.com/2009/05/14/taxes-social-security-opinions-columnists-medicare.html</ref> more than one and half times the total annualized economic activity of the planet.  An editorial in ''[[USA Today]]'' claims "Without action, outlays on benefit programs such as Medicare and Social Security, combined with interest on the [[national debt]], are projected to grow so fast that they will devour all tax revenue in as soon as 20 years. That means every government department and agency, except for those that pay benefits and service the debt, could be eliminated — and Washington would still run a deficit."<ref>[https://www.usatoday.com/news/opinion/editorials/2010-11-11-editorial11_ST_N.htm Our view on government inaction:] Gridlock's just another word for lack of leadership, ''USA Today editorial, November 11, 2010.</ref>

===Reform===

===Reform===

In 2005 President Bush proposed a privatization program that would allow people to control their own Social Security accounts, especially by investments in the stock market.  He argued that the stock market provided higher rates of return.  The proposals got little support and were dropped. The stock market collapse in the [[Recession of 2008]] chilled enthusiasm for similar proposals, and no prominent politician in 2009 is proposing privatization.

In 2005 President Bush proposed a privatization program that would allow people to control their own Social Security accounts, especially by investments in the stock market.  He argued that the stock market provided higher rates of return.  The proposals got little support and were dropped. The stock market collapse in the [[Recession of 2008]] chilled enthusiasm for similar proposals, and no prominent politician in 2009 is proposing privatization.

In the 2012 Trustees report, the Trustees projected that in a good economy Social Security may be solvent until 2033.  They provide less optimistic projections in which the Social Security is unable to pay full benefits in 2027.  (http://www.ssa.gov/pressoffice/pr/trustee12-pr.html)

In the 2012 Trustees report, the Trustees projected that in a good economy Social Security may be solvent until 2033.  They provide less optimistic projections in which the Social Security is unable to pay full benefits in 2027.  (https://www.ssa.gov/pressoffice/pr/trustee12-pr.html)

===Pros and cons of social security===

===Pros and cons of social security===

== Criticism ==

== Criticism ==

Social security has been called a "Ponzi Scheme" that "shifts wealth from private individuals to government."<ref>https://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>

Social security has been called a "Ponzi Scheme" that "shifts wealth from private individuals to government."<ref>https://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>[https://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. https://www.businessinsider.com/who-owns-us-debt-2011-7#social-security-trust-fund-17</ref>

Most notably, the first recipient of Social Security, [[Ida May Fuller]], paid in less than $25 while she received well over $20,000 in return over the course of 35 years.

Most notably, the first recipient of Social Security, [[Ida May Fuller]], paid in less than $25 while she received well over $20,000 in return over the course of 35 years.

==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) ''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>

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, ''[https://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==

* Beland, Daniel. ''Social Security: History and Politics from the New Deal to the Privatization Debate'' (2007) [http://www.amazon.com/Social-Security-Politics-Privatization-Government/dp/0700615229/ref=sr_1_14?ie=UTF8&s=books&qid=1256563533&sr=1-14 excerpt and text search]

* Beland, Daniel. ''Social Security: History and Politics from the New Deal to the Privatization Debate'' (2007) [https://www.amazon.com/Social-Security-Politics-Privatization-Government/dp/0700615229/ref=sr_1_14?ie=UTF8&s=books&qid=1256563533&sr=1-14 excerpt and text search]

* Glenn, Brian J. and Steven M. Teles, eds. ''Conservatism and American Political Development'' (2009), two chapters on conservatives andSocial Security issues since 1930s [http://www.amazon.com/Conservatism-American-Political-Development-Brian/dp/0195373936/ref=sr_1_1?ie=UTF8&s=books&qid=1256562179&sr=1-1 excerpt and text search]

* Glenn, Brian J. and Steven M. Teles, eds. ''Conservatism and American Political Development'' (2009), two chapters on conservatives andSocial Security issues since 1930s [https://www.amazon.com/Conservatism-American-Political-Development-Brian/dp/0195373936/ref=sr_1_1?ie=UTF8&s=books&qid=1256562179&sr=1-1 excerpt and text search]

* Shoven, John B. and George P. Shultz. ''Putting Our House in Order: A Guide to Social Security and Health Care Reform'' (2008), a conservative analysis [http://www.amazon.com/Putting-Our-House-Order-Security/dp/0393066029/ref=sr_1_6?ie=UTF8&s=books&qid=1256563427&sr=1-6 excerpt and text search]

* Shoven, John B. and George P. Shultz. ''Putting Our House in Order: A Guide to Social Security and Health Care Reform'' (2008), a conservative analysis [https://www.amazon.com/Putting-Our-House-Order-Security/dp/0393066029/ref=sr_1_6?ie=UTF8&s=books&qid=1256563427&sr=1-6 excerpt and text search]

==See Also==

==See Also==