Monday, April 09, 2012
FDR had intended Social Security to be an individualized, contributory pension program
Robert J. Samuelson has an interesting perspective in the Monday April 9 Washington Post, “How Social Security Got Away from FDR”, p. A13, online link here. The online title is "Would Roosevelt recognize today's Social Security?"
Samuelson says that Roosevelt actually intended Social Security to become a “contributory pension plan” for workers (although it would remain "defined benefit"). But liberals and conservative disliked that for their own reasons – although today conservatives would call that “privatization”.
Early beneficiaries did indeed receive an "undeserved" windfall.
Overtime, Samuelson says, Social Security has been budgeted as if today’s FICA taxes paid for yesterday’s retirees, and the money is not saved, but sent elsewhere to the treasury. As I noted Friday, this argument (that Social Security is a “tax”) could lead to new cries for immediate means testing.
As Samuelson points out, today’s demographics do not bode well for Social Security.