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Social Security turns 70 as Congress debates the system's future
Scripps Howard News Service


August 13, 2005

WASHINGTON - When President Franklin Roosevelt signed the Social Security Act into law 70 years ago Sunday, he told Americans the system would save them from "a poverty-ridden old age."

Five years later, Ida Mae Fuller of Ludlow, Vt., cashed the first monthly Social Security check, totaling $22.54, and went on to collect more than $22,000 in benefits over 35 years before she died at 100 in 1975.

It took until 1971, with the addition of Medicare health coverage and Social Security cost-of-living adjustments, however, for seniors to stop being the poorest segment of the U.S. population.

Today President Bush wants to "save" Social Security by letting workers invest some Social Security payroll taxes in the stock market and by reducing promised benefits for better-off workers now younger than 55.

But with Social Security's trustees projecting the system can pay full benefits until 2041 and 75 cents on the dollar of promised benefits thereafter with no changes, public support for private accounts has fallen steadily since Bush made them the centerpiece of his second-term domestic agenda in his 2005 State of the Union address.

Bush says he's "as committed as ever" to overhauling the system. But House Republicans, tired of eroding public support, will offer their own plan when Congress returns from its five-week August recess.

Republican leaders concede that their proposal won't address the president's demand for long-term solvency. Still, Rep. Jim McCrery, R-La., the House Social Security subcommittee chairman, says the proposal will "stop the raid" on surplus Social Security funds.

Instead of spending that surplus on the Iraq war, homeland security, national parks, farm subsidies and other federal programs, the House GOP plan would invest surplus Social Security payroll tax dollars in special Social Security bonds. That same amount of money then would be earmarked for private accounts.

House Democratic Whip Steny Hoyer of Maryland contends that the House GOP plan is a "shell game" that counts the same Social Security money twice in hopes of winning over "the frightened 55" House members who have yet to take a stand on overhauling the system.

House Speaker Dennis Hastert of Illinois said Republican sponsors will spend August pressing their case for private accounts at town-hall meetings back home.

Meantime, Social Security Commissioner Jo Anne Barnhart will host an anniversary celebration for Baltimore headquarters employees on Friday, with regional Social Security offices staging their own celebrations. Barnhart also will travel to FDR's home in Hyde Park, N.Y., to speak at a 70th birthday party being thrown by the Roosevelt Institute

Grass-roots critics of the Bush and House Republican plans are pushing undeclared lawmakers with "gorilla" tactics to dramatize their cause. Americans United to Protect Social Security and its affiliates are staging more than 100 celebrations at home for wavering House members:

- A 28-foot gorilla was parked outside the district office of Rep. Charles Boustany, R-La., to symbolize the size of possible Social Security reductions for Louisianans, while protesters in duck suits marched behind a "ducking" Rep. Jerry Weller, R-Ill., in a hometown parade.

- Coloradans United to Protect Social Security served up plates of hot waffles when accusing Rep. Bob Beauprez, R-Colo., of "waffling" on private accounts.

- Four Florida Republicans - Reps. Mark Foley, Clay Shaw, Katherine Harris and Ginny Brown-Waite - were served with "Cut the Cake, Not Social Security" sheet cakes.

- In Albuquerque, Las Cruces and Santa Fe, N.M., 70th-anniversary parties are aimed at Rep. Heather Wilson, R-N.M. "She may not get a cake, but she'll get an earful," says Americans United spokesman Brad Woodhouse.

- Ohio critics of private Social Security accounts are staging multiple 70th-birthday parties to woo newly elected Republican Rep. Jean Schmidt of suburban Cincinnati and win over Republican Sens. Mike DeWine and George Voinovich should the Senate take up the issue.

That's a big "if."

Senate Finance Chairman Charles Grassley, R-Iowa, spent the spring and summer seeking support for private accounts among committee Republicans only to be rebuffed. Grassley says he remains committed to private accounts as part of a solvency plan, but any successful proposal must command a filibuster-proof 60 senators who simply are not there.

Private-accounts proponent Kevin Hassett of the American Enterprise Institute declared the Social Security overhaul dead when the White House wouldn't sign onto the House Republican plan. To Hassett, the "last breath" was expelled when Treasury Secretary John Snow and new Bush Council of Economic Advisers Chairman Ben Bernanke insisted that any account proposal make Social Security solvent.

Accounts opponent Henry Aaron of the Brookings Institution says that investing Social Security money in the stock market was dead before arrival in Congress: Americans are still recovering from the 2000-2002 stock-market drop, when the NASDQ plummeted 70 percent and the Standard & Poor's 500 index lost almost half its value, he says.

But Aaron also remembers, too, that politicians seldom move on Social Security unless they absolutely must. The system was only weeks away from bouncing benefit checks in 1983 when Congress and President Ronald Reagan approved tax hikes, a gradual increase in the retirement age to 67 and other changes.

The solution was supposed to "save" Social Security and make it solvent for at least 75 years. But that answer appears to have fallen short, largely because wages subject to Social Security payroll taxes haven't kept pace in the 22 years since.


Contact Mary Deibel at DeibelM(at)

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