Pastor Roger Anghis
January 29, 2012
Over the last few years we have heard that the Republicans want to take Social Security away from the elderly and leave them with nothing. This is so far from the truth, but the media refuses to report the truth. Surprise, surprise! I, personally have always had a problem with the government taking my money away from for me when I get older and then telling me how much of my money I can have, if any. If I die before I have the opportunity to collect any of it, then none of my family is allowed all the monies that the government took from me for me when I got older. That is nothing less than outright legalized theft!
I don’t have a problem with taking a little out of my paycheck and stashing it away for my later years, but when the government is the one ‘keeping’ it I have a big problem. The government doesn’t pay interest on all of that money (The government collects interest on it, but they keep it.), which any bank would, and if it was in a personal bank account then my heirs would have access to all of the funds including the interest accumulated over the years. That’s what the government doesn’t like. You be allowed to keep your money. That does not set well with them, especially the Democrats. The majority of the Democrats in Congress believe that they have more of a right to your money than you do.
I would like to take a good look at the history of Social Security to see just which party has been the one that has decimated the program. The bill was introduced as the Economic Security Bill in January of 1935. While it was in the Ways and Means Committee the name was changed to the Social Security Act of 1935 and was signed into law in August of 1935. Recent comments from some pundits have claimed that Social Security passed without Republican support. That fact, which some Democrats seem to ignore, is not quite true. In 1935 there were 319 Democrats in Congress and 102 Republicans. Of those 284 Democrats voted for the bill and 81 Republicans. That is 80% Republican support. Sounds bipartisan to me. In the Senate there were 96 Democrats and 25 Republicans. 60 Democrats voted for the bill and 16 Republicans voted for the bill. That is 64% of the Republicans. That sounds bipartisan to me. Even though the total number of Democrats vs. Republicans was substantial, the vast majority of the Republicans supported the Social Security Act of 1935.
The rules of the Social Security Act of 1935 were simple but defined.
A. Participation in the program was required if you worked in a job that was covered by Social Security. At that time only about half of the jobs were covered by Social Security.
B. The tax rate in the original 1935 law was 1% each on the employer and the employee, on the first $3,000 of earnings. This rate was increased on a regular schedule in four steps so that by 1949 the rate would be 3% each on the first $3,000.
D. That the annuity payments to the retirees were not taxed at the beginning of the program.
Some changes have occurred to the program that has had an effect on the program. Some of the changes have been directly to the program and some had nothing directly to do with Social Security but has had a drastic effect on it.
Since a pair of 1938 Treasury Department Tax Rulings, and another in 1941, Social Security benefits have been explicitly excluded from federal income taxation. (A revision was issued in 1970, but it made no changes in the existing policy.) This changed for the first time with the passage of the 1983 Amendments to the Social Security Act. Beginning in 1984, a portion of Social Security benefits have been subject to federal income taxes.
Following the 1979 Advisory Council, the National Commission on Social Security Reform (informally known as the Greenspan Commission after its Chairman) was appointed by the Congress and the President in 1981 to study and make recommendations regarding the short-term financing crisis that Social Security faced at that time.
In its Report, the Commission recommended that Social Security benefits be taxable: "The National Commission recommends that, beginning with 1984, 50% of OASDI benefits should be considered as taxable income for income-tax purposes for persons with Adjusted Gross Income (before including therein any OASDI benefits) of $20,000 if single and $25,000 if married. The proceeds from such taxation, as estimated by the Treasury Department, would be credited to the OASDI Trust Funds under a permanent appropriation."
Even though this bill was originally passed with bipartisan support there were some concerns about the constitutionality of the bill:
When the Act was debated in Congress, leading Republicans in the House and Senate made attempts to delete the provisions creating the old-age pension system. They said they preferred to rely solely on the assistance (charity/ welfare) approach to help the aged. They argued that the payroll tax/insurance mechanism of the old-age benefits provisions might be unconstitutional and that, at any rate, it would impose such a heavy tax burden on businesses that it would retard economic development. The minority membership of the Ways and Means Committee (Republicans) stated, in the Committee’s report to the House, that the age benefits program (title II) and the method by which the money was to be raised to pay for the program (title VIII) established a “bureaucracy in the field of insurance in with private business.” They contended further that the program would “destroy old-age retirement systems set up by private industries, which in most instances provide more liberal benefits than are contemplated under title II.”
The Social Security Amendments of 1954 ex-tended (1) mandatory coverage to, among others, some self-employed farmers, self-employed engineers, architects, accountants, and funeral directors, all Federal employees not covered by government pension plans, farm and domestic service workers not covered by the 1950 amendments, and (2) voluntary coverage to ministers, and certain State and local government employees already covered by staff retirement systems. The bill also raised the wage base for the OASI tax from $3,600 a year to $4,200; raised the tax rate to 3.5 percent each for employer and employees beginning in 1970, and to 4.0 percent each beginning in 1975, with the tax rate for the self-employed continuing at 1.5 times the employee rate (or 75 percent of the combined employee-employer rate).
Amendments, which that are hundreds of them, continued to occur to Social Security that would include more workers, larger percentages taken from our checks and the matching figure from the employer. What we begin to see is that this system, devised from communist mindset that government can take care of the people, will not work. The 1983 Amendments to the Social Security Act were done because the fund was running out of money and steps had to be made to keep the system afloat.
The Senate Report thus acknowledged that one motivating factor in introducing this change was to raise revenue for the Trust Funds. This was part of a much larger package of program changes designed to address the financial solvency of the program. One might fairly say that cutting benefits and raising revenues was the purpose of the 1983 Amendments, and the adoption of Social Security benefit taxation was simply one provision among many to facilitate these aims.
From 1979 to 1983 the problem of funding was addressed almost yearly. It was both parties and with bipartisan support that has made all the changes made to social security. The Democrats take credit for the good things and blame the Republicans for the bad things. The problem with the program is it can never do what it was designed to do. The entire program is faulty. Even though it was only designed from the start to be a supplement, it can’t even do that. Government is not supposed to be our source. There was a study done by the Wall Street Journal in the late 80’s, I have not been able to relocate it, that determined that if someone retiring in 1987 had taken that very same money that had been taken out of his paycheck all his working years for Social Security and put it into a simple passbook savings account, and never took anything out, he would be able to withdraw ten (10) times what Social Security was paying because there would be ten times more there. This is what the American people need to do and Bush tried to point the program in that direction in his first term but the Democrats went crazy.
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We can’t drop it completely immediately but we can begin to go in the right direction. Giving total control of those funds over to the individual people. The basis of Social Security is found in communism. The free market does not operate well under communistic direction. In fact, it can’t operate un communistic direction. We need to let the people control their retirement not the government. The government has failed in all of its endeavors, Medicaid, Medicare, Amtrack, USPS. None are profitable. Never will be.
Our Founders would have never envisioned the entitlements that we have today. Let the people and churches direct charity that is needed. They can do a much better job. Remember that when you are spending your money on you, you will have better quality and a much lower cost.
2. Major Decisions in the House and Senate Chambers on Social Security: 19354985
3. ID. Pg. 41
4. Research Note #12:
© 2012 Roger Anghis - All Rights Reserved
Pastor Roger Anghis is the Founder of RestoreFreeSpeech.org, an organization designed to draw attention to the need of returning free speech rights to churches that was restricted in 1954.
President of The Damascus Project, TheDamascusProject.org, which has a stated purpose of teaching pastors and lay people the need of the churches involvement in the political arena and to teach the historical role of Christianity in the politics of the United States. Married-37 years, 3 children, three grandchildren.
Web site: RestoreFreeSpeech.org