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President Lyndon Johnson raids the Social Security Trust Fund to wage the Vietnam War
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.
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.
===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 FDFR'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> ''Roosevelt Myth'', Book 3, Chapter 14, [http://www.rooseveltmyth.com/book/fdrmyth_Chapter_Fifteen___The_Roosevelt_.htm ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948.</ref>
The Social Security Act was drafted by President [[Franklin Delano Roosevelt]]'s committee on economic security, under Edwin E. Witte, and passed during FDFR'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> ''Roosevelt Myth'', Book 3, Chapter 14, [http://www.rooseveltmyth.com/book/fdrmyth_Chapter_Fifteen___The_Roosevelt_.htm ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948.</ref>
===President Clinton's proposal to privatize===
===President Lyndon Johnson raids the Social Security Trust Fund to wage the Vietnam War===
President Johnson created the 'unified budget' in the late 1960s to mask the cost of the [[Vietnam War]]. President Johnson did not want to ask for income tax increases to pay for several ambitious government programs of that era (the Vietnam War, the [[Great Society]] War on Poverty, the [[NASA]] Space Race). Putting surpluses from Social Security overwithholding “on budget” (adding them to the general operating budget of the United States Government) so the overwithholding could be used to pay for other government programs would make the federal budget appear balanced. The resulting debt to trust funds would be presented “off budget.”
In 1967 President Johnson appointed a Commission on Federal Budget Concepts which in its October 1967 report proposed a unified budget to do this. Johnson submitted the first unified budget to a Democratic Congress for Fiscal Year 1969 scheduled to begin
on July 1, 1968. Thus was born the practice of using Social Security Trust Fund surpluses – or "Intra-governmental Holdings of Debt" to mask the size of the overall federal deficit.
===President Bill Clinton's proposal to Privatize Social Security ===
Social Security has been called the "third rail of American politics" because politicians get badly burned if they try to tamper with it. In 1999 [[President Clinton]] proposed investing the Social Security Trust Fund in what some might consider "risky" assets in the [[stock market]] and [[bond]]s. The stock market then was in the late stages of a bull market cycle with stock prices and indexes overvalued. Clinton told a joint meeting fo the U.S. House of Representatives and Senate,
Social Security has been called the "third rail of American politics" because politicians get badly burned if they try to tamper with it. In 1999 [[President Clinton]] proposed investing the Social Security Trust Fund in what some might consider "risky" assets in the [[stock market]] and [[bond]]s. The stock market then was in the late stages of a bull market cycle with stock prices and indexes overvalued. Clinton told a joint meeting fo the U.S. House of Representatives and Senate,