Social Security Essay, Research Paper

The social security program in the United States was enacted in 1935. It was legislated by Congress during the Franklin D. Roosevelt presidency as part of his “New Deal” program. Social security is the federal social insurance program of the United States. Today social security is in a joint program with the Department of Health, Education and Welfare. In the U.S. today social security is the Nation’s method of providing income when a family’s earnings are reduced or stopped because of death, retirement, or disability. Nearly one out of seven people in the U.S. get monthly social security checks in the mail each month. Almost every family in the U.S. contributes to or collects from the fund known as social security.

The need for a social security program was brought about by changes in our country due to the industrial revolution of the 19th century. One major change was urbanization. This change often caused families to live far from each other in order that they would have a job. This broke up the extended family whereby many family members lived together and cared for each other in times of old age, illness or disability. Families no longer took responsibility for these extended family members. Another major change was the rise in an individual’s life expectancy. Greater numbers of people were reaching old age and were unable to work and there was no one to care for them.

Then in the 1930’s the nation was plunged into the Great Depression. Millions of Americans of all ages were now living in poverty, but those most affected were the elderly. These people had no income, no pension and were unable to re-enter the work force when economic times improved. Spurred by the condition of the populace of the

Country President Roosevelt enacted the Social Security, which was legislated by congress on August 14, 1935.

Many of the changes made to the social security program since its beginning were made to improve the protection it provides workers and their families. When social security first began it only covered workers when they retired, but in 1939 the law was changed to pay the family when the worker passed away and certain dependents when he retired. When it first began it only covered workers in industries and commerce, but in the 1950’s social security was extended to include farm workers, government employees, people in the Armed Services, clergymen and people owning their own businesses. Therefore, social security applies to almost all jobs in the U.S. today.

In 1965, social security was changed once again. Medicare, which assured hospital and medical insurance to workers 65 and older, would now be a benefit of social security. People who are disabled are also eligible for Medicare. Legislation enacted in 1972 assured the United State’s citizens that social security benefits will automatically increase as the cost of living goes up. Social Security will probably continue to have future changes made to it, if the economy of the nation and needs of the people merit it.

The Social Security Administration, which has headquarters in Baltimore, Maryland and the Health Care Financing Administration, which has headquarters in Washington, D.C oversee the running of the system today. The top social security officer is called the Commissioner of Social Security and is appointed by the president and confirmed by the Senate.

The social security system provides benefits for five basic groups: elderly, dependents, people on disability, hospital and physicians medical insurance which takes care of the Bills. Social security pays monthly benefits in three ways: retirement checks, disability checks, and survivor checks. A worker can retire at age 62 and begin to receive social security checks. A worker who would become disabled can receive social security benefits before the age of 65. Social security considers a person disabled if they have severe physical or mental problems which prevents them from working and the condition is expected to last for at least 12 months or has lasted for twelve months or is expected to result in the individual’s death. The benefits would start in the sixth full month of the disability and continue as long as the individual is disabled. If a person is severely disabled they can receive benefits even if they have some type of employment. If a worker dies their family gets their social security check and but not full benefits. Sometimes a lump sum payment is made to the widow or widower when the worker dies.

The basic premise of social security is very simple. Social security benefits are intended to replace part of the income an individual or family has lost due to the retirement, death or disability of the individual. During the years of working an individual pays contributions towards social security. These contributions go into a group fund which, is used to pay the benefits of people collecting social security at the current time. When the individual is no longer able to work and pay into the fund he can then collect benefits from the fund which will continue to be funded by people still working. Part of the money contributed to the fund goes to hospital insurance under Medicare, then a worker or his family will have help paying hospital bills when they are eligible for Medicare.

Social security is funded equally by an individual and his employer; each pays half of his total contribution due. If you own your own business, known as self-employment, you pay a contribution rate 1 ? times the employee rate for retirement, death and disability benefits. The Medicare and hospital insurance rates are the same whether an individual is employed or self-employed. An individual is required to pay a social security contribution as long as he receives earnings covered by law. An individual has to pay social security contributions even if he is collecting social security benefits. The Government offers its share of social security contributions from general revenues of the U.S. Treasury.

Some think that Social security was enacted in the 1930’s and has been promoted ever since with misleading labeling and deceptive advertising. A private enterprise that engaged in such a labeling and advertising would be severely castigated or punished by the Federal trade Commission. The impression is given that a worker’s benefits are financed by his contributions. The thing is taxes are being collected out of your paycheck to pay for the retirement or the hospital bills. Payments are determined neither by the amount paid nor by the financial status.

There is a link between taxes paid and benefits received. The amount of money someone gets depends on all sorts of circumstances. A woman who has never worked may qualify for the same benefits as a woman who has worked all her life because she is a widow.

As this information indicates the social security program involve a transfer from young to old. To some extent such a transfer has been likened to the young supporting their parents in old age. The difference between social security and this is that it is compulsory and impersonal, earlier arrangements were voluntary and personal. Moral responsibility is an individual matter, not a social matter. Children helped their parents out of compassion, therefore strengthening the bonds of the family.

Social security also offers a change, to less well off to better well off. The benefit is based on the person with the low wages, but this affect is much better off set by another. Children from relatively poor famies start to work and pay taxes at a young age, children with a higher income start working till a later age. People with a higher income usually have a longer life span then those with a less income.

One problem with social security is that soon there is not going to be enough money to pay the retired or the disabled people bills. The problem is that there are more older people in the United States then younger people and there will be too many people to all be paid a check once a month. For example think of a pyramid. The bottom part is paying the top part which is like 9 people paying 1, but pretty soon its going to be flipped around and its going to be like 1 person paying 9 people, and the social security people are going to run out of money to send to everybody once a month.

One part of a solution is increase the pay in to the social security contribution, for example today you pay 15 percent they might raise it up to 18 percent to solve the problem of running out of money. Or you could lessen the benefits to the retired a sick people and even out the crises by lowering the pay out and increasing the pay in. Another solution is have people start there own savings and have the government have nothing to do with it, and eliminate social security.

Bibliography

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1997. Electric Library. 1997