President Franklin D. Roosevelt signed the Social Security Act into law 78 years ago Aug. 14, 1935.
More than 340 organizations nationwide are celebrating today, sharing personal stories and signing a birthday card to show support for Iowa Sen. Tom Harkin's proposal to fix Social Security's problems.
Things were different in the early years of Social Security. When the program was introduced in 1935, it was designed to help workers who were at least 65. Life expectancy at birth was 60 for males and 64 for females. The first monthly check was for $22.54, which, according to the Bureau of Labor Statistics, had the same buying power as $384.17 would in 2013.
Since then, our dependency on Social Security has grown. Social Security reports that the average worker in 2013 gets $1,257 and the average worker and spouse living in retirement receives $2,153. And we are living longer. Current life expectancy at birth is about 76 years for men and more than 81 years for women. A more relevant measure is life expectancy at 65. If you make it to age 65, a man can expect to live -- on average -- until age 84, and a woman turning age 65 this year can expect to live until age 86. Nearly 25 percent of 65-year-olds live past age 90, and 10 percent live beyond 95. The upshot is that Social Security is strapped.
A recent survey by the nonpartisan National Academy of Social Insurance found that most Americans support fixing the program as well as strengthening it. The survey showed that more than 70 percent of adults in every age group approved of this package of retirement planning changes and improvements:
- Eliminate the cap on payroll taxes for Social Security -- currently $113,700 a year -- so all workers and employers pay on total earnings.
- Raise the wage tax on both workers and employers from 6.2 percent of earnings to 7.2 percent. A worker earning $50,000 a year -- and the employer paying him -- would each pay about 50 cents a week more, the academy calculates.
- Raise Social Security's basic minimum benefit so that someone who paid into Social Security for 30 years can retire at age 62 and receive a benefit that puts his income above the federal poverty level.
- Adjust Social Security's cost-of-living, or COLA, formula to the CPI-E for elderly, which reflects increases in health care costs.
The academy says this package of changes would eliminate Social Security's projected shortfall and provide enough additional funding to pay for these improvements.
I grew up in a family where Social Security was considered a gift from above -- or as my Aunt Sissie used to say, "Franklin Delano Roosevelt sits at the right hand of God, and Harry Truman's on his left."
She died a few years ago at 94, still grateful for Social Security and the pension she had earned working as a matron at what is now known as the Federal Prison Camp Alderson in West Virginia. She was a tough old bird who didn't have any use for slackers, but I think she would have looked kindly on these proposals because we pay for them throughout our working lives. Our payments ensure that working people of all income levels have a shot at comfort and security in their old age -- and disability insurance if they are unable to work earlier than that.
Social Security is a good deal -- one worth celebrating and preserving.