From the Rank and File Catholic: Social Security
By Bill Londrigan, President Kentucky State AFL-CIO
St James Church, Louisville, KY
On August 14, 1935 President Franklin Roosevelt signed the Social Security Act into law. At the signing ceremony he said, “We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”
I don’t think that FDR could have imagined just how successful the Social Security Act would be and what a huge difference it would make for millions upon millions of Americans as well as our economy and national ethos. Since the Social Security Act was signed over 80-years ago, the system has not missed a payment. Another remarkable aspect of the Social Security system is that its operating costs account for less than one percent of the system while serving 61 million people. One in five Kentucky residents, including retirees, disabled, widowers and children receive Social Security benefits.
Most people aged 65 and older receive a majority of their income from Social Security, and without it 39.2 percent of elderly Americans would have incomes below the official poverty line. With Social Security benefits 9.2 percent fall below the poverty line which means that 15.3 million elderly Americans are lifted above the poverty level thanks to Social Security.
Social Security is important for children and their families as well as the elderly. About 6.1 million children under age 18 lived in families that received income from Social Security in 2017. Almost 3 million children under age 18 qualified for Social Security payments themselves in 2017. In Kentucky 269,000 people live above the poverty line because of Social Security.
Since the mid-1980s, Social Security has collected more in taxes and other income each year than it pays out in benefits and has amassed combined trust funds of $2.9 trillion. But Social Security’s costs will grow in coming years as baby boomers retire.
Alarmists who claim that Social Security won’t be around when today’s young workers retire either misunderstand or misrepresent the projections. For example, increasing the FICA rate by just .9% would keep Social Security in balance for the next 75 years or raising the tax ceiling to include earnings over $87,900 a year would also contribute to keeping the system in balance in the long term. What we need to do is close the funding gap in Social Security that is mostly due to demographic changes – not fundamentally change the system by introducing the private investment element which is actually the biggest threat to the system in the long term.