Outside the Box: Social Security needs to be strengthened — not cut

by | Aug 14, 2023 | Stock Market

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.

Read: Medicare is quietly being privatized. Does anyone care? 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. Read: America could learn something from this country’s national pension 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 acti …

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