Social Security in the United States

Overview

• Social Security is a system where individuals pay a payroll tax to fund government assistance programs and benefits.
• Provides pensions to:
  • The elderly
  • The disabled
  • The unemployed
  • Their dependents

Historical Background

• Social Security was introduced by President Franklin Delano Roosevelt (FDR).
• Aimed to help Americans during the Great Depression and improve their quality of life.
• Part of the New Deal, a series of reforms to offer relief and economic improvements.

Development of Social Security

• Second New Deal (1935): Included the Social Security Act, signed into law on August 15.
  • Workers pay into pension funds and receive payments upon retirement.
  • Social Security was structured as an insurance program to avoid being labeled as welfare.
  • Each citizen was assigned a Social Security account number.

Amendments and Expansions

• 1939 Amendments: Added dependent and survivors' benefits.
• 1950 and 1954: Expanded coverage to farm and domestic workers.
• 1956: Social Security Disability Insurance Program established under President Eisenhower.
• 1965 Amendments: Creation of Medicare under President Johnson.
• 1983 Amendments: Under President Reagan, made payouts taxable and raised retirement age.

Current Relevance

• Social Security remains crucial for economic security in retirement.
• Demographic shifts, such as longer lifespans, challenge the system's sustainability.
• Continues to be a central part of FDR's New Deal legacy, sparking ongoing debates over its future viability.