April 9th, 2012|
Even though Franklin D. Roosevelt was the President who proposed Social Security in 1935, this editorial writer from Ohio’s Columbia Dispatch opines that FDR would not like what Social Security has evolved into today.
FDR envisioned a contributory pension plan: workers’ payroll taxes would be collected, saved, invested, and used to pay their retirement benefits.
Roosevelt rejected Social Security as a “pay-as-you-go” system that channeled the taxes of today’s workers into a fund that would pay today’s retirees.
Unfortunately, Roosevelt’s original plan did not prevail. In the 1940s and early 1950s, Congress gradually switched to a pay-as-you-go system.
Millions of Americans falsely believe that our payroll taxes have been separated to pay for our retirement benefits. Thus we believe that we have “earned” or are “entitled to” these benefits.
Even Roosevelt said “We put those payroll contributions there so as to give the contributors a legal, moral and political right to collect their pensions.”
The trouble is that the Social Security contributions are not saved, much less invested. The contributions–payroll taxes–go to today’s beneficiaries.
FDR consistently advocated a fully funded Social Security. He used his second veto on a 1942 tax bill that delayed higher payroll taxes. But Congress overrode the veto.
Part 2 of this blog will offer some solutions to this dilemma.
If you or someone you know needs help with Social Security Disability benefits, contact the Social Security Disabilty lawyers at Fleschner, Stark, Tanoos & Newlin.