On this day in 1935, President Franklin D. Roosevelt signed the nation’s first major social insurance program into law. In the 88 years since then, Social Security has provided bedrock financial security for generations of retirees, people with disabilities, and their families.
In 1940, the year the first Social Security checks were issued, there were 220,000 beneficiaries. Today, that number has grown to nearly 67 million. The program has also been amended several times to widen the umbrella of protection from what FDR called “the hazards and vicissitudes” of modern life.
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Indeed, the program was never meant to be frozen in place. Roosevelt referred to Social Security as a “cornerstone in a structure which is being built but is by no means complete.” He knew that socioeconomic and demographic changes would require adjustments to Social Security in the future. Some of those changes would have been difficult to predict in 1935: the impending baby boom that would swell the ranks of retirees in the 21st century; the decline in the number of younger workers to contribute to the system; and decades of stagnant wage growth resulting in lower than anticipated Social Security payroll tax revenues.
Congress acted in 1983 to strengthen Social Security’s finances in the face of some of these demographic changes. Today, with 10,000 baby boomers turning 65 every day and a continually shrinking base of younger workers, we find ourselves at a similar juncture. The program’s trust fund reserves are projected to become depleted in 2034 — which will result in an automatic benefit cut of about 20%—unless Congress takes action.
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We’d like to see the kind of action that Roosevelt would have supported. I’m fairly sure that FDR would want his landmark program strengthened, not cut. Everyday Americans seem to agree. Polling suggests that voters across party lines would like Social Security to be preserved in a way that does not demand beneficiaries bear the cost. That’s only fair, considering that Social Security benefits are already so modest.
The average retirement benefit is $1,827 per month—only about $22,000 per year. And yet, nearly half of retirees depend on Social Security for all or most of their income. Communities of color are even more reliant on the program to stay afloat financially. Without Social Security, 50.5% of Black Americans would be living in poverty.
I have had the pleasure of hosting town halls across the country this summer to emphasize the value of Social Security to American workers. When we ask people what Social Security means to them, we get answers like, “security,” “stability,” “income,” and “caring.” My favorite response came from a senior who simply said, “Thank God for Social Security.”
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Of course, workers really have themselves to thank for Social Security, because they are the ones who fund it through payroll contributions over the course of their working lives. Social Security is not a “handout” or a welfare program. Nor is it an “entitlement,” as conservatives are fond of saying. Social Security is an earned benefit. As our social media commenters so aptly put it, “That’s our money. Hands off!”
FDR and his policy advisers were quite canny in designing Social Security this way. In fact, Roosevelt famously said, “We put those payroll contributions there to give the contributors a legal, moral, and political right to collect their…benefits. With those taxes in there, no damn politician can ever scrap my Social Security program.”
Unfortunately, that hasn’t stopped some politicians from trying. The Social Security Trustees’ projection that the program’s trust fund reserves will run out in little more than a decade from now has triggered a slew of conservative proposals that wouldn’t exactly “scrap” FDR’s program, but would seriously shrink it and undermine the program’s founding principles.
So-called ‘fiscal hawks’ have proposed cutting Social Security for future retirees, as if our children and grandchildren will not need their promised benefits as much as today’s seniors do. With growing income inequality, disappearing pensions, and market instability, it will be even harder for future seniors to save for retirement. Without cuts, the average millennial is on track to receive $1 million in lifetime benefits (not to mention the disability and life insurance that Social Security provides all adults). If current economic trends continue, today’s younger adults will depend on every dollar of their benefits to retire with basic financial security.
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Nevertheless, conservatives on Capitol Hill are pushing to raise the Social Security retirement age for future seniors to 69 or 70. (The 1983 reforms already nudged the full retirement age up to 67 for workers born in 1960 or later.) Make no mistake: raising the retirement age would be a huge cut in lifetime benefits. Proponents of raising the retirement age argue that people are living longer today—so theoretically they should be able to work longer. But that’s not true for everyone, especially workers with chronic health conditions or physically demanding jobs. Even if some people can work longer, age discrimination may prevent them from staying employed into their late 60s.
Other conservative proposals include means testing benefits, which, to save the program any significant amount of money, would have to reach deep into the middle class — another benefit cut. Privatizing the program by investing workers’ contributions in the stock market would be risky and necessitate cuts. Adopting the chained CPI — a more miserly method for calculating Social Security cost-of-living adjustments (COLAs) — would allow inflation to erode retirees’ earned benefits.
Many fiscal hawks blame Social Security for the nation’s growing debt, even though the program is self-funded by American workers. As President Ronald Reagan said, “Social Security has nothing to do with the deficit.” Meanwhile, according to the Center on Budget and Policy Priorities, the number one driver of the debt is “tax expenditures” — windfalls for the wealthy like the Trump/GOP tax cuts of 2017 which Republicans now want to make permanent.
Lately, key conservatives have advocated the creation of a special commission to explore Social Security fixes. But, more than anything, commissions of this kind are designed to give lawmakers political cover for cutting benefits.
We reject fiscal hawks’ solutions, because they rely on slashing Social Security, which punishes workers. Meanwhile, most conservatives in Congress refuse to consider revenue-side proposals that would spare beneficiaries from cuts. Senators Bernie Sanders (I-VT) and Sheldon Whitehouse (D-RI), and Rep. John Larson (D-CT) have introduced legislation that would bring more revenue into the system by having the wealthy begin contributing their fair share of wages and investment income.
This fix would keep the trust fund solvent for decades to come — with no benefit cuts. Sanders’s and Larson’s bills would even enhance benefits, especially for the nation’s most vulnerable seniors.
We strongly support solutions that extend the solvency of Social Security’s trust fund by increasing the contributions of the highest earners, along with common sense benefit improvements — and no benefit cuts. We also advocate the adoption of a more accurate formula for calculating Social Security COLAs — the CPI-E (Consumer Price Index for the Elderly) — which reflects the true impact of inflation on seniors’ living expenses. We endorse repeal or reform of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which currently reduce or eliminate Social Security benefits for public servants and their families.
It’s hard to believe, but Social Security benefits have not been expanded in more than 50 years. Meanwhile, the cost of growing old in America continues to soar. A recent AP/Ipsos poll revealed that one in three Americans don’t believe they’ll ever be able to retire. A crucial part of the American dream — a secure retirement — is fading. That’s all the more reason to strengthen and expand Social Security now.
On Social Security’s third anniversary in 1938, Roosevelt celebrated the program as a curative for “nationwide insecurity, human (need) and fear. This is the frontier—the America — we have set ourselves to reclaim.”
Though some of the sources of financial insecurity have shifted since the Great Depression, it is obvious that we must work to preserve, if not reclaim, his landmark social insurance program on behalf of all American workers.
Max Richtman is president and chief executive of the nonprofit National Committee to Preserve Social Security and Medicare.