No, this debate took place 75 years ago this month as the House of Representatives debated and finally passed Social Security legislation. President Franklin D. Roosevelt, who conducted a tireless fight during the dark days of the Great Depression, to pass the legislation, signed it into law on Aug. 14, 1935.
In the ensuing three-quarters of a century, Social Security often has been misunderstood and frequently blamed for many perceived ills of the federal government. But with all due respect to the program’s early congressional opponents, Social Security has proven to be resounding success.
Social Security is the foundation of the modern U.S. pension system. It never was intended to provide an individual’s complete retirement income, but rather to be part of a three-legged income stool, supplementing an employer’s pension and an employee’s personal savings.
From its inception, some critics felt Social Security was an ill-advised interference with personal liberty that would undermine self-reliance. But the program, born in an atmosphere of distrust and suspicion, has worked remarkably well.
Social Security has drastically reduced poverty among elderly and disabled Americans, constituting more than half of the income of nearly two-thirds of retired Americans. For 1 in 6 Americans, Social Security is their only income.
Without Social Security, the number of older Americans living in poverty would be 1 in 2. Because of Social Security, it is only 1 in 12. In Arizona alone, Social Security is preventing 235,000 older people from living in poverty.
Nonetheless, Social Security is not without its critics – including those who call for the partial or even complete privatization of the system.
The impetus for such a dramatic change is clear. Up until this year, tax receipts and other income to the Social Security trust fund have exceeded expenditures. But that trend is slipping away.
This year and next, expenses and payments will exceed revenue. The system is expected to operate in the black for a couple of years after that, but in 2015 – only five years from today – benefits payments will start exceeding tax collections for the foreseeable future.
This is due largely to the inescapable demographic trend created by the Baby Boom generation. Between 2010 and 2030, the number of people aged 65 and older is projected to grow by 76 percent while the number of workers supporting the system is projected to grow by only 6 percent. This spike in Social Security beneficiaries will create a deficit in the Social Security Trust fund beginning in 2037.
But it is important to put the problem in perspective. Experts have projected that if revenue were increased by about one-half of 1 percent, it would make Social Security stable well into the 22nd century.
The president’s deficit commission, which is charged with developing a bipartisan plan to stabilize the soaring national debt, is evaluating a wide range of options to ensure the long-term stability of Social Security.
We can and we will find reasonable ways to make Social Security stable without switching to a risky privatization system. I am unwilling to gamble with seniors’ financial security in the stock market.
While the stock market may – and I stress may – return higher returns over a long period of time, one need only look at the wild gyrations in the past couple of years to see the kind of immense damage privatization could do to seniors too old to wait for a rebound.
For three-quarters of a century, we have proven the critics of 1935 wrong. Social Security is hardly “nefarious.” This “orgy of ruthless spending” has become America’s most successful retirement protection program – and it continues to serve Americans well.
I am dedicated to strengthening Social Security’s long-term finances so that it continues to provide a guaranteed base of retirement, disability and survivor’s income for current and future generations. Seniors have put in a lifetime of hard work, helping to make our economy grow and make our nation great. I refuse to play games with their security and well-being.