Happy Birthday, Social Security!
Posted on: 2015 07 27
In 1935, the United States was in the depths of the Great Depression. You saved absolutely everything you had, including string. Every household had the ball of string that you added to whenever a new scrap came along. Most Americans had very little money to live on. And senior citizens were among the people who were hit hardest. Many could no longer work, and their families were having difficulty supporting themselves, let alone trying to support Grandma and Grandpa. Roosevelt signed the Social Security Act August 14, 1935, and it saved the lives of hundreds of thousands of senior citizens, preventing almost certain financial ruin for each one. Jonathan Peterson in AARP Bulletin (July-August 2015) identifies three reasons why Social Security isn’t going anywhere.
- Americans want Social Security. “In a 2014 survey by the National Academy of Social Insurance, 84 percent of Democrats and 69 percent of Republicans agreed it is ‘critical’ ro preserve benefits, even if that meant increasing taxes.”(AARP Bulletin (July-August 2015) Major research/opinion polls, such as CBS News, the Pew Research Center and the National Institute on Retirement Security reveal almost 70{12470e0fe01d1e6fcc7df4df95300bd13a27d9338be1c3cc41e39732a8d70917} of American citizens support Social Security.
- Most Americans need Social Security. Increasing numbers of US citizens will become senior citizens with little financial resources other than Social Security. Privately funded pensions are rare these days. Individual retirement accounts help, but they do not provide a substantial amount of income for retiring seniors. The AARP article cited here says “The need for income in retirement is growing, people will rely more on Social Security every month, and they will depend on its benefits longer than ever.”
- Social Security can be strengthened. If Congress takes no action, the current $2.8 trillion surplus will be gone in 2033. What will strengthen Social Security? Lift the payroll tax cap (currently $118,500) to require wealthy citizens to pay their fair share of the payroll tax. The cap means the total amount of payroll tax paid does not increase with higher wages. As SCJ has stated many times over the past several years, the cap is unfair to the millions of Americans who pay their fair share, and Social Security is weakened as a result.
Peterson’s article is a good one, and SCJ recommends it to our readers. Dr Sharon Shaw Elrod