Seventy-eight years ago today, President Franklin Roosevelt signed the Social Security Act with this statement:
“Today a hope of many years’ standing is in large part fulfilled. The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last.”
That was almost eight decades ago. Now, almost 90% of Americans age 65 or older receive Social Security. Almost half of those people would be living in poverty, if they did not receive Social Security benefits.
“This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions. It will act as a protection to future Administrations against the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaks and valleys of deflation and of inflation. It is, in short, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness.”
Today, the Social Security Trust Fund has $2.7 trillion in assets. The “Old Age and Survivors Insurance” program is expected to have an annual surplus at least through 2020 (and only after 2020 would it need to dip into the Trust Fund to pay benefits).
The irony here is that President Roosevelt expected Social Security to “lessen the force of possible future depressions” and prevent the federal government from having to go “deeply into debt to furnish relief to the needy” during economic crises.
But instead, the program was used to help the federal government absorb the cost of the Bush tax cuts.
Today, we are at the decision-making point that Alan Greenspan predicted 10 years ago: either the Bush tax cuts need to (finally) end, or the government is going to have to “cover the $1 trillion price [of the tax cuts] by trimming future benefits in Social Security and other entitlement programs.”
Today, the Social Security program is under attack like never before. (Watch for my next post, about the GOP’s revived “Penny Plan”.)
And President Roosevelt’s assumption that the federal government would go “deeply into debt to furnish relief to the needy” during “possible future depressions”?
Looks to me like that’s just history.
Really worth reading, if you have a few more minutes: Tax attorney Paula Singer’s column “Social Security is a model, not a failure, for Washington budgetmaking.”