Social Security Turns 75
August 13, 2010
Saturday is the 75th anniversary of Social Security. Before President Franklin Roosevelt signed the law on August 14, 1935, about half of the senior citizens in American lived in poverty. That began to change on January 31, 1940, when the first monthly retirement check, for $22.54, was issued to retired legal secretary Ida May Fuller of Ludlow, Vt. (below right). Today, more than 52 million Americans, including more than 124,000 Vermonters, receive benefits. For three quarters of a century, Social Security has been a great success. The system is strong today, and Sen. Bernie Sanders has a plan to keep Social Security thriving for another 75 years.
Social Security is a proven success For 75 years, Social Security has succeeded in keeping millions of senior citizens, widows, and the disabled out of poverty. The fact of the matter is that Social Security has a $2.5 trillion surplus that is projected to grow to $4.6 trillion in 2023. According to the non-partisan Congressional Budget Office, Social Security will be able to pay full benefits to every recipient until the year 2039.
Social Security and seniors The median income for senior households today is $24,000 – reflecting just how much Social Security means to most American seniors. Social Security provides the majority of income for two-thirds of our elderly. For one-third, it provides nearly all their income.
Social Security and the disabled No private insurance plan that can compete with the disability benefits offered by Social Security. For a worker in her mid-20s with a spouse and two children, Social Security provides the equivalent of a $350,000 disability insurance policy. Most workers could not obtain or afford similar coverage outside of Social Security.
A better way to protect Social Security for the next 75 years According to the Congressional Budget Office, if the Social Security payroll tax was applied to all income, Social Security would be solvent for the next 75 years. Right now, someone who earns $106,800 a year pays the same amount in Social Security taxes as a billionaire. This makes no sense. A worker earning that maximum amount pays the same Social Security tax as a multi-millionaire or billionaire. Simply applying the Social Security payroll tax to all incomes would correct this inequity.
Making the case for Social Security In an August 6 letter to the National Commission on Fiscal Responsibility and Reform, Sen. Sanders and Rep. Peter DeFazio suggested making the wealthiest Americans pay the same Social Security payroll tax as the rest of us. “This revenue boost eliminates any reason to cut Social Security benefits,” they said. “We must reaffirm our commitment to one of the greatest legislative accomplishments without privatizing Social Security, reducing benefits or raising the full retirement age,” Sanders and DeFazio wrote to former Sen. Alan Simpson and former White House chief of staff Erskine Bowles, co-chairs of the Commission.