The limited form of the Social Security program began as a move to implement "social insurance" during the Great Depression of the 1930s, when poverty rates among senior citizens exceeded 50 percent.
The Social Security Act came into force on 14 August 1935. The law was drafted during the first term of President Franklin D. Roosevelt by the Presidential Committee on Economic Security, under Frances Perkins, and endorsed by Congress as part of the New Deal. The law is an attempt to limit what is seen as a danger in modern American life, including old age, poverty, unemployment, and the burden of widows and orphans. By signing the Act on August 14, 1935, President Roosevelt became the first president to advocate for federal assistance to parents.
The law provides benefits to pensioners and unemployed, and lump-sum benefits at death. Payments for pensioners are currently financed by payroll taxes on current wages of workers, half as directly as salary and half paid by employers. The law also provides money to states to provide assistance to elderly individuals (Title I), for unemployment insurance (Title III), Relief for Families with Dependent Children (Title IV), Maternal and Child Welfare (Title IV) Title V), public health services (Title VI), and the blind (Title X).
Video History of Social Security in the United States
Origins and design
The idea of ​​a federally funded pension plan was popularized by Francis Townsend in 1933, and the influence of the "Townsend Plan" movement on the debate on social security lasted until the 1950s. The initial debate on Social Security design centered on how the benefits of the program should be funded. Some believe that the benefits to individuals should be funded by the contributions they make themselves during their careers. Others argue that this design will harm those who have started their careers in the course of the program because they do not have enough time to collect sufficient benefits.
Initial disapproval
Controversial Social Security when initially proposed, with one point of opposition is that it will reduce labor, but advocates argue otherwise that older workers' retirement will free up employment for young men, who during the Depression are an important point of concern.
Opponents also criticized the proposal as socialism. At the Senate Finance Committee hearing, a Senator asked the Minister of Labor Frances Perkins, "Is not this socialism?" He said that it was not, but he continued, "Is not this very little socialism?"
Most women and minorities are excluded from the benefits of unemployment insurance and old-age pensions. Employment categories not covered by law include workers in agricultural work, domestic services, government employees, and many teachers, nurses, hospital employees, librarians and social workers. The action also denied coverage to individuals who worked intermittently. This work is dominated by women and minorities. For example, women make up 90 percent of domestic work in 1940 and two thirds of all black women employed work in the household. Exceptions exclude almost half of the working population. Nearly two-thirds of all African Americans in the workforce, 70 to 80 percent in some areas of the South, and more than half of all working women are not covered by Social Security. At the time, the NAACP protested the Social Security Act, describing it as "a sieve with a hole big enough for a majority of Negroes to fall."
Some authors state that this discrimination resulted from the strong position of the South Democratic Party on two very important committees for legislation, the Senate Finance Committee, and the Means and Means Committee in the House. However, Larry DeWitt has denied the argument, showing no evidence for them. Indeed, the South Democrats in 1935 were generally liberal and strongly supported by the New Deal and Social Security. They became much more conservative after 1937. The Social Security Act is very unpopular among many groups, especially farmers, who hate additional taxes and fear they will never be good. They try hard not to be included. Furthermore, the Treasury realizes how difficult it is to prepare a payroll cut-off plan for farmers, for domestic servants employing helpers, and for nonprofit groups; therefore they are expelled. State employees are issued for constitutional reasons (the federal government can not impose taxes on state governments). Federal employees are also excluded. Many textbooks, however, erroneously point out that exceptions are a product of the southern racial hostility towards blacks; there is no such evidence in the record. Other scholars have replicated and supported DeWitt's analysis, agreeing that exceptions are made by policy experts on a technical basis and not based on racial hostilities. Rodems and Shaefer noted in all other countries' unemployment insurance programs "excluding domestic and agricultural workers when they are first implemented, a fact that key New Deal policymakers are well aware." Exceptions follow consultations with leading experts in Europe as well as the United States, including William Beveridge, Henry Steel-Maitland, and R.C. Davison in England, Andre Tixier of the International Labor Organization, and Edwin Witte, Wilbur J. Cohen, and Evelyn Burns in the United States.
Social Security reinforces the traditional view of family life. Women are generally eligible to benefit only through their husbands or children. Pension mother (Title IV) based on the right to assume that the mother will be unemployed.
Historical discrimination in the system can also be seen with regard to Help for dependent children. Since this money is allocated to states to be distributed, some regions consider black families needing less money than white families. This low level of grant makes African American mothers unable to work: one program requirement. Some countries also exclude children born out of wedlock, an exception that affects African American women more than white women. One study determined that 14.4% of eligible whites received funding, but only 1.5 percent of eligible black individuals received this benefit.
The debate on the constitutionality of the Act
In the 1930s, the Supreme Court dropped many parts of the Roosevelt New Deal law, including the Railway Retirement Law. The Social Security Act's similarity with the Railway Dispute Act caused Edwin Witt-the executive director of the Presidential Committee on Economic Security under Roosevelt regarded as "the father of social security" - to question whether the bill would be passed; John Gall, an Associate Counsel for the National Association of Manufacturers who testified before the US House of Representatives who supported the action, also felt that the bill was rushing through Congress too quickly and that the old age provisions of the action were "gado-gado" it is better to have a higher constitutional possibility. Courts dispose of the center of the New Deal, the National Industrial Recovery Act, the Agricultural Adjustment Act, and the New York minimum wage laws. President Roosevelt responded with an attempt to crack the court through the Judicial Procedure Reform Bill of 1937. On February 5, 1937, he sent a special message to Congress proposing a law granting new powers to the President to add additional judges to all federal courts every time there sitting judges age 70 or over who refused to retire. The practical effect of this proposal is that the President will be able to appoint six new Judges to the Supreme Court (and 44 judges for lower federal courts), thus instantly changing the political balance in the Court dramatically in his favor. The debate about this proposal is heating up and expanding, and lasts for six months. Beginning with a set of decisions in March, April, and May 1937 (including cases of the Social Security Act), the Court will maintain a series of New Deal laws.
Two Supreme Court decisions confirm the constitutionality of the Social Security Act.
- Steward Machine v. Davis, 301 US, 548 (1937) holds, in decision 5-4, that, given the urgency of the Great Depression, "[It] is too late today because of the argument to be heard with tolerance that in extreme crisis the use of state money to alleviate unemployment and their dependents is the use for a narrower purpose than general welfare promotion ". The argument against the Social Security Act (articulated by Butler's judges, McReynolds, and Sutherland in their opinion) is that the act of social security goes beyond the powers granted to the federal government in the Constitution. They argue that, by imposing taxes on employers that can be avoided simply by contributing to state unemployment compensation funds, the federal government basically forces every country to establish unemployment compensation funds that would meet the criteria, and that the federal government's government does not have the power to impose such a program that.
- Helvering v. Davis, 301 US 619 (1937), resolves on the same day as Steward, supporting the program because "The proceeds of both [employee and employer] taxes must be paid into Treasury such as internal income tax in general, and not set aside in any way ". That is, Social Security Tax is constitutional as a mere exercise of the general tax power of Congress.
Maps History of Social Security in the United States
Implementation
The first Social Security payments reported were to Ernest Ackerman, a Cleveland motorman who retired just one day after Social Security began. Five cents were deducted from his wages during that period, and he received a seventeen-cent lump-sum payment from Social Security.
The first monthly payment was issued on January 31, 1940 to Ida May Fuller from Ludlow, Vermont. In 1937, 1938, and 1939, he paid a total of $ 24.75 into the Social Security System. The first check is $ 22.54. After the second check, Fuller has received more than he contributed over a three-year period. He finally reached his 100th birthday, died in 1975 and he raised a total of $ 22,888.92.
Expansion and evolution
Social Security provisions have changed since the 1930s, shifting in response to economic concerns as well as concerns about changes in gender roles and minority positions. Officials have responded to more women's concerns than minority groups. Social Security is gradually moving toward universal coverage. In 1950, the debate moved from which working group should be included in how to provide more adequate coverage. Changes in Social Security reflect a balance between promoting equality and efforts to provide adequate protection.
In 1940, the allowances paid amounted to $ 35 million. This increased to $ 961 million in 1950, $ 11.2 billion in 1960, $ 31.9 billion in 1970, $ 120.5 billion in 1980, and $ 247.8 billion in 1990 (all figures in dollars nominal, not adjusted for inflation). In 2004, $ 492 billion in benefits was paid to 47.5 million beneficiaries. In 2009, nearly 51 million Americans received $ 650 billion in Social Security benefits.
The Social Security effect took decades to manifest itself. In 1950, it was reported that as many as 40% of Americans over 65 were employed in some capacity, but by 1980 that figure fell to less than 20%. In 1990, fewer than 11% of Americans over 65 were employed, an all-time low after the numbers began to slowly rise again.
During the 1950s, over-65 continued to have the highest poverty rates of any age group in the US with the greatest percentage of nation's wealth concentrated in the hands of Americans under 35. In 2010, this figure has dramatically reversed itself with the largest the percentage of wealth is in the hands of Americans aged 55-75 and those under 45 are among the poorest. Elder poverty, once a normal sight, has become rare in the 21st century.
The 1939 amendment
Economic worries
One of the reasons for the proposed changes in 1939 was the growing concern over the impact that the reserves created by 1935 acted upon the economy. The 1937 recession was blamed on the government, due to the sharp decline in government spending and the $ 2 billion that has been collected in Social Security taxes. Benefits became available in 1940 instead of 1942 and changes to the benefit formula increased the amount of benefits available to all recipients in the early years of Social Security. Both of these policies are combined to minimize backup size. The original law has understood the program as paying the benefits of large reserves. This law changed the Social Security concept into something of a hybrid system; while the reserves will continue to accumulate, most early beneficiaries will benefit on a pay-as-you-go system. Equally important, changes also delayed planned increases in contribution rates. Ironically if this has been abandoned in place they will apply during the wartime boom in wages and will help it help alleviate wartime inflation.
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The amendment establishes a trust fund for any surplus funds. The manager of this fund manager is the Secretary of Finance. The money can be invested in securities that can not be marketed and marketed.
Steps to family protection
The call for Social Security reform came within a few years after the 1935 Act. Even as early as 1936, some believed that women were not getting enough support. Fearing that a lack of assistance can push women back into the workforce, these people want a Social Security change that will prevent this. In an effort to protect the family, therefore, some are calling for reforms that tie women's relief more concretely to their dependence on their husbands. Others expressed concern about the complicated administrative practices of Social Security. Concerns about the size of the pension fund's reserve fund, accentuated by the recession in 1937, led to further calls for change.
This amendment, however, avoids the question of a large number of workers in the excluded category. In contrast, the 1939 amendment made family protection a part of Social Security. This includes raising federal funds for Children Depending on Relief and raising the maximum age of children eligible to receive money under Help for Children Depends on 18. The amendment adds wives, old widows, and people who depending on the male workers who are protected to those who can receive old-age pensions. These individuals have previously been given lump-sum payments only upon death or coverage through the Assistance for Children Dependent program. If a woman who gets paid her own wages has benefits less than 50% of her husband's profits, he is treated as a wife, not a worker. If a woman covered by Social Security dies, the dependents are not eligible for the benefit. Since support for widows depends on husbands as closed workers, African-American widows are poorly represented and undisturbed by these changes.
To convince fiscal conservatives who worry about the cost of adding family protection policies, the benefits for single workers are reduced and lump-sum death payments are waived.
FICA
In the original 1935 law, the provisions of benefits are in Title II of the Act (which is why Social Security is sometimes referred to as the "Title II" program.) The taxation provisions are in a separate title (Title VIII) (for related reasons with the constitutionality of the 1935 Act). As part of the 1939 Amendment, the taxation provisions of Title VIII are taken from the Social Security Act and placed in the Internal Revenue Code and renamed the Federal Insurance Contribution Act (FICA). Social Security payroll taxes are thus often referred to as "FICA taxes."
The 1950s and 60s amendments
After years of debate about the inclusion of domestic workers, domestic workers working at least two days a week for the same person were added in 1950, along with non-profit and self-employed workers. Hotel workers, laundry workers, all agricultural workers, and state and local government employees were added in 1954.
In 1956, the tax rate was raised to 4.0 per cent (2.0 per cent for employers, 2.0 per cent for employees) and disability benefits added. Also in 1956, women were allowed to retire at the age of 62 with benefits reduced by 25 percent. Widows of closed workers are allowed to retire at the age of 62 without any benefit reduction.
In 1961, retirement at age 62 was extended to men, and the tax rate increased to 6.0%.
In 1962, the changing role of women workers was recognized when the benefits of closed women could be gathered by husbands, widowers, and dependent children. However, these individuals must be able to prove their dependence.
Medicare and Medicaid were added in 1965 by the Social Security Act of 1965, part of the "Large Society" program of President Lyndon B. Johnson.
In 1965, the age at which widows could begin collecting benefits was reduced to 60. Duda was not included in this change. When a divorce, rather than death, becomes the main cause of marriage over, divorce is added to the recipient's list. Divorces over the age of 65 who have been married for at least 20 years, remain unmarried, and may show dependence on their ex-husband receiving benefits.
The government adopted an integrated budget in the Johnson administration in 1968. This change resulted in a single measure of government fiscal status, based on the sum of all government activities. The surplus in Social Security guarantees offset the total debt, making it appear much smaller than it should be. This allows Congress to increase spending without having to risk the political consequences of raising taxes.
The 1970s amendment
1972 Amendment
In June 1972, the two United States Congressional assemblies approved a major 20% increase in benefits for 27.8 million Americans. Average monthly payments rose from $ 133 to $ 166. The bill also sets the cost of living adjustment (COLA) to take effect in 1975. This adjustment will be made annually if the Consumer Price Index (CPI) increases by 3% or more. This addition is an attempt to index benefits against inflation so that benefits will increase automatically. If the inflation is 5%, the goal is to automatically increase the allowance by 5% so that their real value does not decrease. A technical error in the formula causes this adjustment to too much to compensate for inflation, a technical error called a double indexer. COLA actually causes benefits to double from the inflation rate.
In October 1972, a $ 5 billion Social Security law came into force extending the Social Security program. For example, the minimum monthly benefit of individuals employed in low-income positions for at least 30 years is raised. The increase was also made to retire 3.8 million widows and dependent widowers.
This Amendment also stipulates Additional Income Security (SSI). SSI is not a Social Security benefit, but a welfare program, because disabled parents and poor people are entitled to SSI regardless of employment history. Likewise, SSI is not a right, as there is no right to SSI payments.
Throughout the 1950s and 1960s, during the Social Security phase-by-term period, Congress was able to provide generous benefit perks because the system had a short-term surplus. The congressional amendment to Social Security took place in the even years (election years) because the bills were politically popular, but by the end of the 1970s, this era was over. Over the next three decades, Social Security's financial projections will show a huge long-term deficit, and in the early 1980s, the program played with immediate bankruptcy. From now on, Social Security amendments will take place in odd-numbered years (years not eligible) because Social Security reform now means tax increases and benefits reductions. Social Security is known as the "Third Rail of American Politics." Touching it means political death.
Several effects occurred simultaneously in the years following the amendment of 1972 which quickly changed the view of the long-term social security picture from positive to problematic. In the 1970s, a phase-by-period period, in which workers paid taxes but few collected benefits, mostly over, and the ratio of the elderly population to the working population increased. This development brings the question of long-term financial structure capacity under the pay-as-you-go program.
During Carter's administration, the economy experienced double-digit inflation, coupled with very high interest rates, oil and energy crises, high unemployment and slow economic growth. Productivity growth in the United States has declined to an average annual rate of 1%, compared with an average annual increase of 3.2% during the 1960s. There is also a federal budget deficit that increased to $ 66 billion. The 1970s are described as a period of stagflation, which means economic stagnation coupled with price inflation, as well as higher interest rates. Price inflation (an increase in the general price level) creates uncertainty in budgeting and planning and makes strikes in labor to pay rise to greater possibilities. This fundamental negative trend is exacerbated by a colossal mathematical error made in the 1972 amendment which establishes COLA. Excessive mathematical error for inflation is very detrimental considering double-digit inflation in this period, and it leads to an increase in benefits that are not financially affordable.
High inflation, double indexing, and lower-than-expected wage growth are financial disasters for Social Security.
The 1977 amendment
To combat the declining financial outlook, in 1977 Congress passed and Carter signed a law fixing a double index error. The amendment also changed the tax formula to raise more money, increasing the cut from 2% to 6.15%. With this change, President Carter said, "Now this law will guarantee that from 1980 to 2030, Social Security funds will be healthy." This was not the case. The financial picture declined almost immediately and in the early 1980s, the system was back in crisis.
1983 Amendment
After the amendment of 1977, the economic assumptions surrounding Social Security projections continue to be overly optimistic as the program moves toward crisis. For example, COLA is associated with an increase in CPI. This means that they change with price, not wages. Before the 1970s, wage measurements exceeded price changes. However, in the 1970s, this reversed and real wage declined. This means that FICA revenue can not keep up with the increased benefits. High unemployment rates also lower the amount of Social Security taxes that can be collected. Both of these developments reduce the reserves of the Social Security Guarantee Fund. In 1982, the projection indicated that the Social Security Trust Fund would run out of money in 1983, and there was talk of a system that could not afford the benefits. The National Social Security Reform Commission, headed by Alan Greenspan, was created to overcome the crisis.
The National Commission for Social Security Reform (NCSSR), chaired by Alan Greenspan, is inducted to investigate long-term Jamsostek solvency. The 1983 amendment for SSA is based on the NCSSR Final Report. The NCSSR recommends enforcing a six-month delay in COLA and changing the tax rate schedule for the year between 1984 and 1990. It also proposes income tax on Social Security benefits from high-income individuals. This means that benefits that exceed household income thresholds, generally $ 25,000 for singles and $ 32,000 for couples (the exact formula of computing and comparing the three different sizes) becomes taxable. This change is important to generate income in the short run.
Also of concern is the long-term prospects for Social Security due to demographic considerations. Of particular concern is the issue of what will happen when people born during the post-World War II baby boom retire. NCSSR made several recommendations to address this issue. Under the 1983 amendment to Social Security, an increase in previously applied payroll taxes accelerated, additional employees added to the system, retirement age benefits gradually improved, and up to half of the Social value. The security benefits made were potentially taxable.
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The 1983 amendment also includes provisions for excluding the Social Security Trust Fund from an integrated budget (to collect it "off budget"). However, Jamsostek is currently treated like all other trust funds from the Integrated Budget.
As a result of these changes, particularly the increase in taxes, the Social Security system began to generate large short-term cash surpluses, intended to cover the additional pension costs of "baby boomers." Congress invests this surplus into a special series of unutilized US Treasury securities organized by the Social Security Trust Fund. Under the law, government bonds held by Social Security are supported by full confidence and credit to the US government.
Supreme Court and the evolution of Social Security
The Supreme Court has determined that no one has the legal right to Social Security benefit. The Court ruled, in Flemming v. Nestor (1960), that "the right to Social Security benefits is not a contractual right". In that case, Ephram Nestor, a Bulgarian immigrant to the United States who contributed to a closed wage for the necessary legislation "quarter coverage" was rejected after being deported in 1956 for belonging to the Communist party.
This case is specifically held:
2. An individual covered by the Social Security Act shall not have such right in the payment of the old-age benefit because it will result in any loss of "accrued" interest in violation of the Fifth Amendment Clause Clause. Pp. 608-611. (A) the non-contractual interests of employees covered by the Act can not be completely analogous to the annuity holders, whose rights to benefits are based on the payment of contractual premiums. Pp. 608-610. (B) To engrave on the Social Security System, an "accrued property rights" concept will remove the flexibility and courage [363 US 603, 604] in adjustment to the ever-changing conditions that it demands and which may be in the mind of Congress. when expressly reserved the right to change, amend or revoke the provisions of the Act. Pp. 610-611. 3. Section 202 (n) of the Act can not be condemned because it is lacking in rational justification for offending legal proceedings. Pp. 611-612. 4. Termination of appellee benefits under 202 (n) does not imply penalizing without trial, in violation of Art. III, 2, cl. 3, the Constitution or the Sixth Amendment; nor the 202 (n) law to achieve or ex post facto, as its purpose is not punitive. Pp. 612-621. [65]
The Supreme Court is also responsible for major changes in Social Security. Many of these cases are very important in changing the assumptions about the difference in wage income among men and women in the Social Security system.
- Goldberg v. Kelly (1970): The Supreme Court ruled that the supposed process clause of the Fourteenth Amendment requires that there be a proof-of-evidence before the recipients can be deprived of the benefits of the government.
- Weinberger v. Wiesenfeld (1975): Stephen Wiesenfeld is a widower who claims that he is entitled to the benefit of his deceased wife, before the case of a widow and their children is eligible to benefit from the Social Security of her husband, but if a wife dies only her children and not a widower who can receive benefits. Wiesenfeld believes that this violates his right to equal protection under the supposed process clauses of the 14th Amendment. The court upheld its claim, stating that it automatically grant widows benefits and deny them to widowers violating the same protection in the Fourteenth Amendment.
Date coverage for different workers
- 1935 All workers in trade and industry (except trains) are under the age of 65 years.
- 1939 Age restrictions removed; sailors, bank employees added; additional domestic workers and deleted food processing workers
- 1946 Railroad Revenues and Social Security are combined to determine eligibility for and amount of survival benefits.
- 1950 Regularly employ agricultural and household workers. Not self-employed (except professional groups). Federal civil servants are not in the pension system. Americans work outside the United States by American employers. Puerto Rico and the Virgin Islands. On the choice of State, State and local government employees are not in the pension system. Nonprofit organizations may choose coverage for their employees (other than ministers).
- 1951 Rail workers with less than 10 years of service, for all benefits. (After October 1951, the coverage was retroactive until 1937.)
- 1954 Agricultural self-employment. Professional entrepreneurs except lawyers, dentists, doctors, and other medical groups. Additional agricultural and domestic workers are employed on a regular basis. Homeworker. State and local government employees (except firefighters and police) under the pension system if approved by referendum. The Minister may choose the scope as an entrepreneur.
- 1956 Uniformed service members. The rest of the professional entrepreneurs except doctors. By referendum, firefighters and police in designated countries.
- 1965 Trainer. Doctor entrepreneur. Tips.
- 1967 Minister (unless the exception is claimed on the basis of a conscience or religious principle). Firemen under pension system in all countries.
- 1972 Members of the religious order are subject to the oath of poverty.
- 1983 All federal civil servants employed after 1983; members of Congress, President and Vice President and federal judges; all employees of nonprofit organizations. State employees and closed local governments are prohibited from opting out of Social Security.
- 1990 State and local government employees are not covered under the pension plan.
See also
- US labor law
Note
Source of the article : Wikipedia
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