Part A: History and Today We all know that social security is taken out of our paychecks each time.
A program created by the U.S government to assist the elderly over the age of 65 with monthly income. Created by the Lloyd’s of London in 1696, using an insurance principle to allow a person to contribute funds to receive benefits when suffering a loss. Fast forward about sixty years the one of the first insurance company was developed by Benjamin Franklin in 1752, creating social insurance for a person to receive funds when they are unable to support themselves. When the great depression had hit America it was catastrophic, beginning in 1929, the depression affected everyone. At first the elderly had lost their jobs and had no reliable cash fund. The cause of the depression event that led Americans to a social insurance system.
During the depression pension movements were made such as Townsend plan, promised Americans 60 and over a retirement benefit of $200 per month. The term social security was actually an act that was signed by president Franklin D. Roosevelt on August 14th, 1935. The act created a social insurance program that enabled workers 65 and over to receive income after retirement.. For the first time ever taxes had been collected in January of 1937.
During 1937 to 1939 the amount of Americans receiving social security benefits skyrocketed. The expansion of the program was a major change called the “second start” that later benefited married couples and families as well. 1939 a amendment was made to benefit wives and widows not only to benefit an individual worker. By the 1940’s social security was at a straight line, nothing had changed the benefits didn’t increase and tax rates weren’t raised during an entire decade. In 1942 began the start of monthly benefits.
Three features of the program before 1950 had been a disadvantage towards workers. The program had only covered 50% of workers in the economy, benefits were at a low rate and their had been no provision for periodic benefit increase. During 1950 “amendments” had been passed to raise the level of benefits for the program by 77%. Major features of the law being passed had provided people in the military wage credits and workers with coverage and financing for retirement on a major scale.
The 1950 legislation resolved the issue of the program’s financing and added an additional 10 million workers under coverage. In the long run the percent of civilian workers for social security coverage had increased periodically every year. Two years later the benefits were raised by 12.5% in 1952.
A “disability freeze” was proposed to not allow a worker to receive compensation any year if they were disabled and earned little to no income. Congress had enacted this proposal and later took effect in the amendments of 1954. The “freeze” had introduced cash benefits in 1956 that enabled workers 50 to 64 to receive paid benefits and the disability program was created. The 1956 legislation had enabled women to have early retirement at 62 and coverage of the disability program extended to members of the military, police and firefighters. 1960 the age of disabled workers had been made to any age due the program not being problematic. The same year the “children’s survivor benefit” was made, allowing unmarried children under the age of 18 to be able to receive social security benefits. The “amendments” of 1965 had lowered the age required for a widow from 62 to 60 and had also created the Medicare program. A health insurance program that covered the cost of certain injuries for people 65 and older.
Another reduction was set in place in 1967 to reduce the required age for widows to 50. This had added additional wage credits to the military and allowed ministers coverage. Since the end of world war II till the early 1970’s their had been steady growth for the economy wages had increased by 2% and the benefit percentage for social security grew. 1972 had been a major impact towards the program, two bills had been enacted to expand the program and end policy making. By the end of 1972 the expansions had been delay retirement credits for workers that postponed to file social security and to provide disabled workers with medicare coverage after two years of receiving their benefits. Five years later more “amendments” were made to resolve the programs financing. To resolve the issue taxes had increase and their had been a reduction on benefits.
The minimum benefit stood at $122 per month, benefits for spouses set off and monthly income had became annually. The goal of resolving the program’s finance was reduce payroll deficiency from 8.20% to 1.
46%. The outcome was the program’s solvency was restored for the next 50 years. The disability program was renewed in 1980 to control cost in the program and remove those who are not qualified for the program. This had projected savings of $10 million over the next five years. April 20th, 1983 president Ronald Reagan signed a bill changed features and added benefits in the social security program. Increasing the retirement age from 65 to 67, doubling the self-employment tax rate and introduced the Windfall Elimination Provision.
This act reduced benefits for working americans who receive pension from employment. Through the years the program was a positive outcome and congress had enacted the disability benefit reform act of 1984. Allowing the SSA (social security administration) to federalize state agencies making decisions towards the program that couldn’t work with couldn’t with federal regulations.
Several acts were passed during the 1990’s that had a positive result for the social security program. The Omnibus Budget Reconciliation Act of 1993 raised federal taxation. The Contract with America Advancement Act of 1996 stop people whose disability was the cause of alcoholism and drug addiction. The Ticket to Work and Work Incentives Improvement Act of 1999 enabled disabled people to obtain a voucher that could be used for employment and rehab services.The goal was to have disabled people return to the workforce in order to have a source of income. Looking back at the 1983 “amendments” that were a key factor towards the social security program, the trust fund reserves projected has dramatically increased throughout the years. When 2020 is to arrive it is estimated the fund will reach 3,146 (billion). Since social security act was signed in 1935 and the program started in 1937 till today, the number of individuals that benefit from the program has increased in the millions and compensation has steadily grown in the thousands.
Over the past 85 years the percentage of elderly people living in poverty had decreased every year. Social Security is crucial benefit towards an American’s life. The program today still benefits individuals in the millions and still grows every year. Part B: Social Security program benefits and $ spent by the government on it Social security, a United States federal program run by the United States Treasury. The program provides income towards individuals who are retired from the workforce and disabled. Benefits such as medicaid and monthly compensation is given.
The program is financed through payroll tax. Each and every paycheck a person receives a small percentage is taken out towards social security. The small amount of money steadily increases throughout a person’s life, and they receive a monthly income of that money after retiring at the age of 65 so that they are no longer needed to work.
Several benefits are provided for an certain individual when receiving social security such as widows and widowers. A monthly check is received in order to be financially stable and provide necessities for the family. The federal government spends around $3.95 trillion for programs, 24% goes to social security. Since the program began in the 1930’s, the annually spending has steadily increased throughout the years. By 2015 $750 billion was spent on the program and it is estimated by 2024 it will be $1.04 trillion.
Part C: Republicans vs Democrats The two major parties have different approaches and goals towards social security. Several candidates on each side have proposed beneficial alternatives to the program. Two candidates have created an idea to develop a caregiver credit, in order to provide individuals with social security who are caring for children.
This would enable the social security minimum benefit to increase. Republicans want to reestablish the retirement age while democrats want to reduce benefits but increase revenue. Reestablishing the retirement age would allow a person to receive 100% of their retirement benefit. Increasing the age would require workers to work longer or receive a reduction in benefits by claiming early. Republicans want to privatize the program due to a third of americans receiving benefits are not retired, this would also the a shift of funds into a investment account for workers.
In order to complete this workers would have put away two to four percent of their payroll into private accounts. The downside is if the program were to become private the national debt and GDP would dramatically leading to reduce benefits and increased interest rates. Making it more harder for a person to retire by time they are 65. Republicans believe american workers should have more control of their retirement investments.The Democratic party are against the Republicans ideas of cutting benefits and privatizing the program.
Resolving the issues of the program is key for them because they believe it’s the most vital economic issue faced by Americans. Democrats are concerned on the protection of social security and want Americans to have a healthy and secured retirement. There goals are to expand saving incentives and reform pension.
To accomplish these goals Democrats want to create retirement saving so that Americans can secure additional retirement income. The downside is that the lifespan of an American has increased throughout the years, resulting in them outliving the amount of income they had for social security. Both sides have their own approach towards social security, each having their own goals. Whether to cut the programs budget or increase tax rates, the real goal is to restore social security. Donald Trump the U.S president does not support social security.
In May of 2017, media spread all across the internet that Trump had broken his promise on budget proposal. The proposal was to make cuts to certain programs and add more spending towards others. His administration plans to cut Social Security Insurance.
Sixty four billion dollars would be cut out of the program making it extremely difficult for retired individuals who are disabled. Part D: Point of View Around 850 billion dollars is spent each year on social security, it’s insane to spend that much when only 56 million Americans receive social security. The budget for the program needs to be reduced so that the money saved could be used for other programs. A reduction of 100 Billion dollars of the programs budget needs to be set, this would also impact the monthly income for retired workers. With the 100 Billion dollars saved, support programs for social security can be developed and funded or could increase the budget for medicare.Currently retired Americans receive around $1300 each month for social security which is about $15000 each year. The budget for social security needs to drastically increase so that monthly compensation can increase so that retired Americans and disabled workers can have financially stable and could support themselves.
In order to generate funds I’d increase the payroll tax so that more money could be contributed to an individual’s social security and medicare. I would increase taxes based on an individual’s yearly income, more money more taxes rather than taking money from another program.The amount of money spent on the Social security program is appropriate, it’s essential to working Americans when retiring. The billions of dollars that is spent each year for the program is necessary because it provides benefits to millions of Americans. It’s one of the most funded programs in the U.
S that also aids the elderly and disabled. Despite the controversy of cutting the programs budget, it provides income and several benefits for the elderly.