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9/11-15/08 
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SOCIAL SECURITY REFORM
FACTS & LINKS
www.stoptheraid08.com As many Americans now know, Social Security currently runs a surplus, but will begin to run a deficit by about 2017. What many are surprised to learn is that Congress is spending today's Social Security surplus on pork and earmarks— such as the $3,000,000 the federal government gave to the Cal Ripken, Sr. Foundation or the $1,700,000 it paid for the International Fertilizer Development Center.
History of Social Security
1935 - The Social Security Act, which covered workers in commerce and industry, was signed by President Roosevelt.
1937 - The Federal Insurance Contribution Act (FICA) required workers to pay taxes to support the Social Security system. Payroll taxes were 2%. 
1939 - Social Security was expanded to cover dependents and survivors. Payroll taxes were 2%.
1939 - Social Security was expanded to cover dependents and survivors. Payroll taxes were 2%. 1950 - Coverage was expanded to job outside of commerce and industry, and benefit levels were increased. Payroll taxes were 3%.
1956 - Disability Insurance was created, and expanded over the following years. Early retirement at age 62 for women was permitted. Payroll taxes were 4%.
1961 - Early retirement at age 62 for men was permitted. Payroll taxes were 6%.
1972 - Automatic cost-of-living-adjustments (COLAs), which index benefits to inflation, were introduced. The formula to calculate increases initially overstated inflation by 25%, and people born between 1910 and 1916 received an unintended windfall. Payroll taxes were 9.2%.
1977 - The mistake in the benefit formula was corrected. The "notch" refers to the difference in benefits paid to the group that received the windfall and those who retired following the formula correction. Social Security was thought to be actuarially sound. Payroll taxes were 9.9%.
1983 - The National Commission on Social Security Reform was created in response to the actuarial unsoundness of the system. The commission called for 1) and increase in the self-employment tax; 2) partial taxation of benefits to upper income retirees; 3) expansion of coverage to include federal civilian and nonprofit organization employees; and 4) an increase in the retirement age from 65 to 67, to be enacted gradually starting in 2000. Again, Social Security was declared actuarially sound. Payroll taxes were 10.8%.
1985 - The Social Security Trust Funds were moved "off-budget" so that the funds earmarked for the Social Security system would be tracked separately from the rest of the budget. Payroll taxes were 11.4%.
1986 - COLAs were increased to respond to minor levels of inflation. Payroll taxes were 11.4%.
1993 - The amount of taxable benefits for upper income retirees was increased to 85%. Payroll taxes were 12.4%.
1996 - The Social Security Trustees' Report stated that the Social Security system would start to run deficits in 2012, and the trust funds would be exhausted by 2029. All members of the Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarially sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%.
1997 - All members of the presidentially-appointed Social Security Advisory Panel agreed that some or all of Social Security's funds should be invested in the private sector. To keep the unchanged system actuarially sound, payroll taxes would have to be increased 50%, to 18% of payroll, or benefits would have to be slashed by 30%."
1999 - The Social Security Trustees' Report stated the Social Security Retirement System's unfunded liability increased by $752 billion since the 1998 Trustee Report was published. This brings the total long-term unfunded liability to more than $19 trillion.
The System Today Social Security is the single largest item in the federal budget, consuming over 22% of total expenditures. (For comparative purposes, 17% of the budget is spent on national 
defense, 0.5% is spent on training and employment, and 2.5% is spent of food and nutritional assistance.) In 1996, the system is projected to collect $387 billion in tax revenues and distribute $355 billion to over 43 million recipients.
There are a number of basic principles underlying today's structure of Social Security system, including: The system is work related - Benefit levels for retirees and their families are related to earning history and wage level. The higher the contributions, the higher the benefits.
Benefits are not means tested - Benefits are paid regardless of income from saving, pensions, insurance, or other forms of non-work income. Workers do not have to prove need to receive benefits.
Universal compulsory coverage - Workers may not opt out of the Social Security system. By mandating participation, adverse selection (the situation that arises when individuals who draw the most from an insurance system are the ones who join it) is avoided.
Benefits are defined by law - Any person who meets the legal requirements qualifies for benefits. Disagreements may be taken to court.
defense, 0.5% is spent on training and employment, and 2.5% is spent of food and nutritional assistance.) In 1996, the system is projected to collect $387 billion in tax revenues and distribute $355 billion to over 43 million recipients.Social Security is an entitlement program and is thus funded automatically rather than through the annual appropriations process. All individuals who are legally eligible for benefits automatically receive them. As a result, it is demand, not supply, that sets spending levels for the program. The only way to alter spending for Social Security is to change the guiding legislation.
There are a number of basic principles underlying today's structure of Social Security system, including: The system is work related - Benefit levels for retirees and their families are related to earning history and wage level. The higher the contributions, the higher the benefits.
Benefits are not means tested - Benefits are paid regardless of income from saving, pensions, insurance, or other forms of non-work income. Workers do not have to prove need to receive benefits.
Universal compulsory coverage - Workers may not opt out of the Social Security system. By mandating participation, adverse selection (the situation that arises when individuals who draw the most from an insurance system are the ones who join it) is avoided.
Benefits are defined by law - Any person who meets the legal requirements qualifies for benefits. Disagreements may be taken to court.
Protect Social Security
Take a stand for Social Security. The Bush plan would cut benefits and privatize Social Security which would gut a sound program and cost trillions of dollars of debt.
Tell your Senators and Representative to oppose Social Security privatization.
