Why do we have the Social Security Act? What is FICA? Now What?

How old are you?

Have you ever wondered how Social Security got started? Politicians are not known for helping out the disabled, indigent population just on a whim. So, why do we even have this? Here's my guess: FDR develped Polio when he was 39 years old. On December 8, 1941, FDR made his speech that Japan had attacked Pearl Harbor. It was such a horrible time, that I doubt anyone really noticed that he was in full leg braces, used a cane on one side and had his son on the other for support as he walked down the isle. All eyes were on him. FDR started Social Security. It was enacted in 1935 and the speech ws 1941, so there is no connection - but, it shows to me, at least, that here's a guy who understood what it was like to be disabled. FDRs plan - evedience all too real from the great depression - was just for Social Security Retirement. It wasn't until 1956 that Presiden Eisenhower's Administration allowed for individuals who could not make it to full retirement age get early retiremnt - referred to now as Social Security Disability

Social Security Retirement - The Federal Insurance Contribution Act forces people to fund retirement through an insurance policy - thus it's not "my money" sitting there. It's money in an insurance fund.You get the funds when you qualify. Younger people's payroll taxes actually pay for retired workers. The benefit you get out is based on what you paid in. But it isn't money that has been sitting there waiting for you.

Eisenhower: To me, it is no coincidence that President Eisenhower - extrememly involved with War Induced Disabilities - realized that there were people who were just not going to make it to full retirement age. Thus, his Administration provided for early retirement for disabled people.

Social Security Disability Insurance - If you can't make it to full retirement age due to a physical or mental disability that you can prove prevents you from doing the work you've done in the past 15 years, Retiremnt Insurance convernts into Disability Insurance. Some people will recognize this concept as "disability retirement" from their past employment.

FICA/Trust Funds Probably because they were enacted at different times, there are two separate funds for Retirement and Disability. It isn't "Social Security" that's running out of money. It's just one of the funds. That can be solved in the short term by moving money from one account to the other.

Supplemental Security Income (SSI): This has nothing to do with payroll taxes. It is Welfare in the purest sense. In 1974, the Nixon Administration (say what you want about the guy, but things did get done) decided an overhaul of State & Federal Welfare programs was needed. Before 1974, "Welfare" was an ill-defined collected of state and federal programs that had differnt standards & benefits state-to-state with some federal money thrown in there.

SSI is based on the belief that no one who cannot work should have to live on less than about $600 per month in today's dollars. At the time some states provided $0 and some provided more and the federal government added some in as well. Now, states that choose to (like California) can choose to add to the federral base rate (which I think is $600, could be lower) or not. But each state must do something.

General taxes - meaning your income tax dollars - pay for SSI. Not payroll taxes. Read that again. SSI is not Social Security. Your income tax out of the General Fund (US Treasury) supports this program.

It's the Supplemental in SSI that is the key. Say a disabled person makes $500 per month. (You don'thave to be flat on your back to be disabled.) the SSI benefit is reduced by that income. Say a disabled person is living for free with someone else. The rent that person is not paying will reduce the benefit. They are not fixed benefits in the way that Social Security Benefits are.

People disagree about whether those of us with more should be forced to help those with less due to age, disability or blindness. In my view, I'd vote to help, because I like helping. But, were I a person who did not want to help, I'd help anyway because I would not want "those people" living on the street by my house or business.

So, Now What? Most politicians these days Have No Clue what it is like to be physically and financially disabled up close and personal. Most have never been close to living in a box - I'm not joking about that. Many of my clients have lost their homes and "couch surf" with no permanent address. Most politicians like to point and yell and blame and threaten about something someone else has done.

So Why Do We Have This Problem: Well, shutting down the government isn't too helpful for one thing. But that aside, the problem is the law-makers of the past in both parties, and in every administration since Eisenhower, did not protect the fund. They'd like us to believe that we are at fault.

They (just google floor debates to see who "they" are) - for reasons that escape me - feel comfortable calling the 59 Million Americans who receive disability benefits liars, cheats and theives - Ok, not theives. But you get the point. 1 in 5 men and 1 in 7 women getting Social Security Disability die within 5 years of their onset date. 56 Million Americans (1 in 5) live with a disability. Of those, 38 Millionhave severe disabilities. Projections are tha 1 in 4 people who are 20 years old today will not make it to full retirement age due to a physical or mental illness. The stats are from the Social Security Website ssa.gov. The History lesson is jut my take on how things have developed.

How Do We Fix It? Stop Talking! Pick a solution and do it. If Congressmen and Senators can shut the governemnt down, let's find a way to shut them down until they fix it. Let's vote for the candidate that will veto everything until Congress does something. Ok, not realistic. Unfortunately, you will have to contact your Senator and Congressman - perhaps daily- to really make something happen. They do actually want to hear from you. They know that when one person calls (calls, not emails) there are 20 out there who feel the same way. We have to take a bit of responsibility here too. We need to tell them that this is important. Somehow FDR & Eisenhower figured it out for themselves. If we can't find someone who has a personal stake in helping disabled people, we have to demand that the others see us.

FYI: The average benefit paid under the Social Security Disability Insurance program was a whopping $1165 per month. No one wants to live on that. No one who's working will quit their job to ride the SSDI gravy train. I just don't see anyone committing fraud for that if they have held a pretty steady job over their lifetime.

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