2: Social Security Retirement: What is Social Security Disability?

Social Security Disability is meant only for contributing workers disabled due to accident, injury, or illness which occurs "on the job". A worker can seek evaluation for "early retirement" if that worker cannot return to do that job. For example, a worker who sustained a back injury lifting who cannot return to that job because of the severity of that injury may be able to receive Social Security disability payments.

Social Security Disability was not intended to be a general welfare fund. "Welfare State" politicicans have been borrowing from or against Social Security Retirement funds for general welfare recipient payments for congenital "disabilities" (like cerebral palsy) and other forms of mental retardation and developmental problems in infants, children, or young adults (like premature infant neurological syndromes or dyslexia) who obviously have not been workers contributing to the retirement fund.

Misuse of the term "social security" to gain access to funds in welfare fraud and "entitlements" takes money from workers who "pay-in", depletes the fund, and brings negative attention to this "pay-in" retirement fund.

In this time of high unemployment, social security retirement funds should be used as "early retirement" monies for contributing workers. This would alleviate some of the unemployment hardship the fund was created to prevent. This is particularly true for older workers who have more difficulty finding stable jobs.

Stable jobs are not as highly valued by "Business" and "Finance" in this economy as in the past. During this period of relative de-industrialization at home, while exporting factories and labor to third world countries, America is "growing" an investment growth economy which devalues employment. Wages and salaries for jobs are considered an unnecessary business expense, a loss of profit for owners and investors. How to maintain an economy which maintains possibilities for employment and income for its citizens is a focus for debate involving and going beyond the Social Security Retirement fund issues.

How to fund general welfare is another problem to be solved. This question should not be avoided by borrowing from a retirement fund. This avoidance has already caused a crisis for the Social Security Retirement fund.


(Return to http://monthlynotesthree.blogspot.com for the first blog in this series, to http://monthlynotes.blogspot.com and http://monthlynotes.blogspot.com on www.google.com for other US blogs on issues of general interest by the monthlynotesstaff. Email mary at mkrause381@gmail.com for a copy of this blog or to make additional comments.)

1: Social Security Retirement: Why is a "Pay-in" Called an Entitlement?

Almost 75 years ago, the Social Security Retirement system was created in the The Social Security Act of 1935 by then U.S. President Franklin D. Roosevelt and the Congress. A part of the New Deal legislation, the "pay-in" or contributory retirement system arose from the Great Depression of the 1930s. The retirement system was established to prevent hardship due to loss of jobs and business closings for future working people, particularly older employees and those injured on the job.

Many plans were proposed to alleviate hardship in the 1930s, including a Hollywood "Ham and Eggs" plan to dole out $30 to each elderly person each Thursday. Dr. Frances Townsend proposed $200 per month to non-working elderly. "Kingfish" Huey Long, former governor and senator of Louisiana, promoted a "Share the Wealth" pension of $30 per month for those over 60 years old earning less than $1,000 per year and with no more than $10,000 in assets.

The first Social Security check was mailed to Ida May Fuller of Ludlow, Vermont in 1940 at the end of the Depression. While the intention was prevention of future hardship due to unemployment during a later depression, the fund also created a source of revenue for the government.

Social Security Retirement actually is a tax, paid by both employee and employer, to the Federal government with each work paycheck. In 2000, the tax was 6.2% of salaries up to $76,200. Those who earn more than $76,200 are expected to establish private retirement accounts, individually or through their employers. Independent Contractor "employees" also are expected to provide for their own retirement

Social Security "pay-out" is described as an annuity type system. The government pays retired workers from the time of retirement until the worker-beneficiary and certain dependents are no longer living. The retirement age has been increased to extend the years of "pay-in" and lengthen the time to initial "pay-out" for workers who contribute to the retirement system. This of course makes work a necessity for older workers without other retirement savings.

Younger working contributors "pay-in" as older workers leave the workforce and get their "pay-out". Government statisticians note that originally 25 workers "paid in" for each retiree "pay-out", but by 2002 only 3.25 workers "paid-in" per retiree. This may be significant for the future of the fund. Could this reflect other trends in employment and retirement, increases in workers funding their retirements outside of the social security system or choosing not to contribute, for example, more independent contractor "employees", more early retired work-injury disabled, high unemployment and shifts to welfare from the workforce?

The ruckus over Social Security as a "burdensome entitlement" program is disturbing to older workers who have paid in and await their retirement, particularly with current higher unemployment rates. The seeds of this misunderstanding of the "pay-in" retirement fund as "entitlement" can be found in the language of the original act.

The expressed intention of the Act to provide for the "general welfare by establishing a system of old-age benefits, and by enabling the several states to make more adequate provision for aged," describes the retirement fund for aging workers. However, the 2009 revision extends the Social Security Act beyond contributory pension fund to include "blind persons, dependents and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue, and for other purposes".

This general welfare fund language extends the "pay-in" pension fund beyond its "pay-out" pension purpose. These are the "entitlement" issues which clearly overextend the fund into phenomenal amounts the fund could not possibly pay-out per worker pay in.

The worker who "pays in" is "entitled" to the pension fund "pay out". It is frightening to think Congress would attempt to base a enormous general welfare fund of non-contributory benefits on the per paycheck pension "pay ins" of workers participating in a retirement fund.

The Social Security Act no longer is easily accessible on government information online. The Library of Congress Thomas Jefferson "Thomas" legislative online search index did not include "Social Security Act of 1935", "Social Security Act", "Social Security Administration" as successful search terms as of July 31, 2010.

(The ad above by the Social Security Board, 1935, Library of Congress, and other historical facts, are found in JW Markham "Social Security Act of 1935" in Major Acts of Congress, Vol 3, BK Landsberg, Editor, Macmillan, NY, 2004.)

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