Social Security, Part 1


2005-1-27

I'm Phoebe Zimmermann with the VOA Special English EconomicsReport.

The Social Security system in the United States provides monthlypayments to retired people and the disabled. Most of the money comesfrom a wage tax paid by workers and employers.

For now, Social Security collects more money than it pays out.The surplus goes into a trust fund for workers who will retire inthe future. But the future will have more retirees and fewer workersto support them. Last June, the Congressional Budget Office saidSocial Security is expected to have a deficit beginning in twothousand nineteen.

President Bush says "now is the time to act." On Wednesday, atthe first news conference of his second term, he said the programwill be out of money in two thousand forty-two. Mister Bush wantsCongress to make changes. But there is intense debate about how muchfixing this popular program needs.

Social Security was born out of the Great Depression. Povertyspread during this period from nineteen twenty-nine to the beginningof World War Two. Many leaders spoke of creating a system toguarantee payments to the disabled and the retired. Critics calledit socialism.

Some states created their own plans. President Franklin Rooseveltwanted a national system that could pay for itself. He proposed theSocial Security Act in January of nineteen thirty-five.

Congress passed the law that year. But payments did not startuntil nineteen forty. Until then, money gathered in the trust fundso the program could start with a surplus.

At first, Social Security was meant to provide a small amount ofmoney to retired industrial workers. In time, other jobs were added.The government also offered benefits to people who survived thedeath of someone on Social Security.

In nineteen sixty-five, President Lyndon Johnson and Congressadded two programs to offer medical benefits. Medicare, for olderAmericans, and Medicaid, for the poor, are no longer under theSocial Security Administration.

In nineteen eighty-three, Social Security faced a deficit.Congress agreed to increase the retirement age and Social Securitytaxes. Lawmakers also required all federal workers to be in thesystem. These changes were meant to fix the system for seventy-fiveyears, until around two thousand sixty.

Next week, we look at the current debate about the future ofSocial Security.

This VOA Special English Economics Report was written by MarioRitter. I'm Phoebe Zimmermann.