Sunday, February 13, 2005

Social Security History

Washington and the Blogosphere alike are abuzz with the topic of Social Security Reform. (here here here here) One of the most helpful things bloggers and comment posters can do is to brush up on their history of Social Security. Both blind faith in the President’s position and blind bashing of it as destroying or disrespecting the history of Social Security serve to benefit no person or agenda.

So, just a little history of Social Security……

  • Social Security Act passed and signed into law in 1935. The law said that taxes would be collected from the outset, but that benefits would not be paid out until January 1942.
  • In 1939 Congress and FDR worked out the Social Security Reform Amendment of 1939. Among the reforms were added benefits like after death payments to children under 16 and for widows.
  • There was one other important change and one lack of change. The 1939 Amendment changed the start date for payments to 1940 rather than 1942 and did not increase payroll taxes to offset the 2 years the fund was not accumulating money.

Today we have a looming shortfall. Neither political party can or will deny this. Our history with Social Security shows that even the great Democrat saint, FDR, was willing to change social security and do so in a politically expedient rather than economically sound manner. As this current debate over Social Security reform plays out readers should keep in mind that Washington politicians have been playing around with Social Security for a long time, “borrowing” against surpluses for example.


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