Old Age, Survivors And Disability Insurance

The Social Security Act was signed by FDR on 8/14/35. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940... The term was first used in the U.S. by Abraham Epstein in connection with his group, the American Association for Social Security. Originally, the Social Security Act of 1935 was named the Economic Security Act, but this title was changed during Congressional consideration of the bill...Under the 1935 law, what we now think of as Social Security only paid retirement benefits to the primary

The state of our current Social Security program is that there are fewer workers to fund the Social Security program through payroll taxes due to the decrease in number of birth rates per woman. Simple math shows that less people to contribute equals less money being funded. Social Security payroll taxes were just reduced from 6.2% to 4.2% per worker. To be eligible to receive Social Security benefits, you must earn 40 “credits” which is equivalent to 10 years of working. The monthly retirement benefit amount is based on the retired workers lifetime earnings.

The passing of the Social Security Act generated a social insurance program that protected a multiplicity of people by supplying a monthly benefit to societal individuals age 65 and older who were no longer actively working; it was a means of income to individuals once they retired and was based on the person’s payroll tax contribution (Martin & Weaver, 2005). The longer amount of years a person was employed, the higher their benefit amount is set to be. Social weighing was a method they used to guarantee that the lower earning people receive a respectively greater income than their past earnings. (DeWitt, 2010). Not long after the Social Security Act was passed, legislation had considerable amounts of amendments to the original Social Security Act of 1935, and in 1939 the notion of economic security became family based; which it was then modified in order to supplement benefits to the spouse or young children of a retired worker, also providing welfare to a household who lost the loved one that was a covered worker (King & Cecil, 2006). In addition, the Social Security amendments of 1939 altered the benefits to be given to earlier participants and not focusing on giving benefits to future members in the Social Security program, also causing the arrangement of welfare to be provided to families rather than just an individual (DeWitt, 2007). Social Security being emphasized as an insurance rather than a savings, and carrying payroll tax money into the future would have

Many politicians have utilized the privatization of social security as a political platform. For example, former President George W. Bush has had 47% of Republicans that has voted in support to privatize the system. Presently, the payments received from the Social Security system grants monetary payments to the millions of Americans that are either retired or the family members of the retired and disabled for deceased workers. The federal government is held responsible for collecting these payments. Back in 1935, the social security system was formerly known as the Old Age and Survivors Insurance (OASI). During this time, it only took seventeen contributions from workers to pay one retiree. In comparison to now, a quarter of the employed U.S households that has contributed into the Social security funding

Senior citizens were not able to work and because of the bank crash, many had lost all the money they had saved for retirement. In addition to this, many people were out of work, meaning that they could not afford to support the elderly members of their family. To solve this FDR created the SSA. The SSA provided a monthly income to senior citizens. it accomplished this by taxing the working class and business owners. This program still exists today, however, “in recent years concerns have arisen about the viability of continuing to fund the program as the Baby Boom generation reaches retirement age” (Kelly, n.d.).

The economy effected Social Security’s projection that it would collect $45 billion less in payroll taxes in 2011 than it pays out in retirement, disability and survivor benefits, according to the nonpartisan Congressional Budget Office (CBO). That number almost tripled to $130 billion when the new cut in payroll taxes was included (The Fiscal Times Staff). CBO said in 2010 that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016, (Associated Press) which again had changed because of the slower economic recovery. “Social Security law requires program spending to match revenue, so a lack of action by lawmakers by that time will mean benefits will have to be cut 23 percent -- or the Social Security payroll tax increased to 16 percent, or a combination” (Armstrong and Faler).

In the midst of the worst financial crisis in modern history, President Franklin Delano Roosevelt signed the Social Security Act in August of 1935 to combat high unemployment and poverty, especially among the elderly. In the process, he laid the foundation for a modern safety net. The act has been amended over the years and consists of several welfare and social insurance programs including the State Children’s Health Insurance Program (SCHIP), Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), among other medical assistance programs.

Social security in the United States is a federal system run by the Social Security Administration to provide monetary benefits, or welfare, to citizens who are retired, unemployed, or disabled. In 1935, President Franklin D. Roosevelt enacted the Social Security Act which limited the dangers of old age, unemployment, disability, and families with dependent children within the United States during the great depression. In order to obtain the funds paid out to current social security recipients payroll taxes called Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA) taxes are collected from the earnings of current workers.1 FICA and SECA

Social security has those who put money into the service, and those who are taking money out. It is most ideal to have more money pumping in than out. The ratio of has changed heavily, in 1960 the people who were paying into the system, to those who were taking out was 5.1:1. In 2005 this ratio has changed to 3.3:1. It is predicted that the number of people taking out will continue to grow until it reaches the point of exceeding those who are inputting money. The service is said to have enough money to pay off full benefits until 2042, then it no longer be able to. The predictions of the exact year this will happen vary, but it is viewed as a definite outcome without changing the system, which is a crisis to come. A higher tax cap is going

Economic uncertainty, coupled with the retirement of the baby boomers, skyrocketing medical costs, and rising life expectancy, have left our lawmakers at their wits end in regards to our ever-expanding budget. Barr states, “Contrary to popular belief, long-term trends Policymakers are now acting upon this, by enacting a policy beginning in 2017 and ending in 2036, to gradually increase the Social Security tax by “1/20th of 1 percent”. As of now, “employers and employee pay 6.2 percent tax to Social Security on earnings up to $110,000.00, while self- employed workers pay both the employer and employee share for a combined total of 12.4”. Our current policy works on pay-as-you-go basis, in which, current workers finance the benefits of

In 1935 the United States was in the throws of the worst economic depression our country had ever seen. The President at the time was Franklin Roosevelt. As part of Roosevelt's "New Deal", he instituted Social Security, which established an old-age pension system, to be administered by the federal government, and financed by taxes on both employers and employees. This system was to help the older citizens and dependents of workers of the U.S. However, since its inception, Social Security has been turned into a retirement plan of sorts. Many retired and older citizens rely solely on Social Security benefits to live. The program has been successful for the last 64 years, but in the near

At the forefront of many political and economic debates is social security’s insolvency. The number of social security beneficiaries compared to the number of workers is expected to rise 10% over the next 20 years (National Academy of Social Insurance). Specifically, solutions on how to find funding for the program from current workers are being discussed. Concerns about funding social security are not unknown. The unknown is how, if at all, social security can continue to remain solvent. While economists have proposed many reforms, funding social security through an asset tax on working age individuals is the best answer to the social security financing question. Funding the social security

Social Security system provides benefits to retired citizens by taxing the work force on payroll checks. The American Association of Retired People announces, “Maximum Taxable Earnings, in 2012, workers paid Social Security taxes on income up to $110,100. In 2013, the figure will rise to $113,700, based on an increase in average wages.” The AARP shares the maximum taxable earnings from workers has rose since last year. By raising the taxable amount, workers will then be taxed on a higher income. Time states, “People retiring today will be among the first generation of workers to pay more in Social Security taxes than they receive in benefits over the course of their lives, according to a new analysis by the Associated Press.” The analysis shares that many of the newer generation that will retire in the future will be paying more in

(5) Currently SS funds are collected and distributed on a pay - as - you -go (PAYG) system in which Social Security taxes from individuals are immediately distributed by the means of the SS Administration as it sees best fit. This means that taxes collected are not reserved for the individual who has paid them: in Rose 2 the current state he or she must rely on those persons paying SS taxes during the time of their retirement (Becker). For a number of these characteristics and future issues, the Social Security System must be reformed or completely abolished to meet the needs of tomorrow. The leading concerns of Social Security that merits the immediate initiation of reform are the demographic and economic circumstances in the coming century. Even though "forecasting the economy and budget over such a long period is uncertain" there remain many "certainties" regarding problems facing Social Security in the first half of the 21st century (OMB, Budget Perspectives 23). The Federal Government's responsibilities extend well beyond "the five- or six-year window" that has restricted the focus of recent budget analysis and debate. Of these "certainties" are the mounting challenges posed from the baby-boomer generation. This generation, born in the years after World War II, is aging

This goes to show that there is actually a problem with the system and that there is more than one reason as to why the future of Social Security is so uncertain. Defined-benefit plans are plans that the company one works for provides for each employee and they are based on things such as the number of years the employee works and the salary that they earn. Chuck Blahous, a former Senior Fellow at Hudson Institute who specialized in domestic economic policy, says that “the acceleration of Social Security’s difficulties is leaving egg on many a face- not only those of the most vocal problem-deniers, but on those of other forecasters as well” (27). Some people refuse to believe that Social Security is actually in the process of disappearing (Blahous 26). Denying the fact that there is a problem with this could leave many people in a lot of financial trouble if they realize that there is no more security to fall back on and they don’t have money to retire because they weren’t concerned with trying to find other ways of saving on their own.