SOCIAL SECURITY REFORM

Social Security Reform

Social Security Reform

Introduction

Social Security was a social insurance program created in 1935 as part of the second stage of the New Deal during the Franklin Roosevelt administration. Social Security was created in response to the more radical proposals by Senator Huey Long and Francis Townsend. Social Security has three main provisions: It provides aid to those with disabilities, survivor insurance, and a pension for the elderly and retired. Social Security is one of the most popular federal government programs and is considered so sacrosanct that has been dubbed the “third rail” (untouchable; derived from the electrified third rail of a railway) in American politics (Arnold, 2008, 88).

For decades, public officials advocated the creation of a social insurance program. As president, Theodore Roosevelt advocated the adoption of a social security program. He cited the fact that Germany, which implemented social insurance legislation in 1889, possessed more advanced social insurance laws than the United States. In 1909, the first old-age pension legislation was introduced in Congress. When Theodore Roosevelt ran for president as the head of the Progressive Party, he supported a social insurance program for those who were retired or with disabilities. In 1912, Isaac Rubinow wrote Social Insurance, which influenced Roosevelt. In 1915, old-age pension legislation was enacted in Alaska. In 1923, old-age pension legislation was enacted in Montana and held to be constitutional. In 1930, California enacted old-age pension laws.

Discussion and Analysis

Social Security Reform is an issue that political leaders in Washington, D.C., do not like to deal with because there are 46 million current program beneficiaries and, thus, the potential for adverse political consequences of reform is great. However, there have been a variety of reform proposals in recent years concerning Social Security. Since the inception of the program in 1935, successive congresses and presidents have campaigned on, and eventually enacted, reforms based largely on the demands of their constituents.

In recent years, more political attention has been focused on the solvency of the Social Security system as a large number of potential beneficiaries will retire in the coming decades. The future of Social Security has become a campaign issue as a result of those demographic and fiscal pressures.

Reforming Social Security is often a campaign issue in federal elections. In the 1960s and 1970s, the issue became prevalent as President Lyndon Johnson advocated a healthcare program for those over the age of 65 that became the Medicare program in 1965. Cost of Living Adjustments (COLAs) also became a campaign issue that Congress addressed in 1973, by enacting automatic increases in monthly benefit payments tied to data supplied by the U.S. Bureau of Labor Statistics. Both of these issues become relevant as new reforms to the entitlement nature and fiscal solvency of Social Security and Medicare have both become campaign and political issues.

It was not until 1935 that pensions for the elderly and retired were enacted at the federal level in the form of the Social Security Act of ...