By ANITA CREAMER
August 09, 2010
"She had no income at all except for what my father gave her"-- maybe $10 a month, said Sekula, 90, who lives in a senior residence in Sacramento County, Calif.
Today's older adults were youngsters when President Franklin D. Roosevelt changed the face of aging by signing the Social Security Act into law on Aug. 14, 1935.
They remember when old age took place in a bleak, Dickensian landscape of need. They remember the difference that Social Security made in ordinary people's lives. And they remember their parents' fears that Social Security amounted to socialism. Yet on the eve of the program's 75th anniversary Saturday, most of them can't imagine retirement without the small cushion of funds and dignity that it provides.
Social Security lifted the elderly out of poverty -- and as the most important source of income for most older Americans, it continues to do so, says Jean Ross, executive director of the California Budget Project.
But the recession has had a negative impact on Social Security, according to a trustees' report released last week. Reduced payroll taxes have resulted in Social Security's first projected annual deficit since 1983. Despite that, both the trustees and the Congressional Budget Office say that the program will remain solvent until 2037.
The huge demographic bubble of baby boomer retirees will take a toll on Social Security, as well. There are 3.2 workers for each recipient today; that number will drop to 2.1 by 2034, according to the Social Security Administration.
The 2010 trustees' report suggests that gradual increases in employment numbers, along with a new health insurance tax later this decade, will improve the program's financial picture.
Research consistently shows deep public support for Social Security, not only among the elderly but also among younger generations.
But without significant change -- either through privatization into investment accounts, as some advocates say; or by raising the minimum age for full benefits and lifting the payroll tax cap on income above $106,800, as others suggest -- the public remains plagued with concerns about Social Security's long-term viability.
Earlier this summer, House Republican leader John Boehner questioned whether the federal government should be giving Social Security benefits to the wealthy. "If you have substantial, non-Social Security income while you're retired, why are we paying you?" he said in an interview with the Pittsburgh Tribune-Review.
The Ohio Republican also suggested raising the retirement age to 70.
"Our view is that Social Security is not perfect, but it's not broken," said AARP California's Ernie Powell. "The folks who want to do radical reform want to create doubts that Social Security will be there. ... It's not in crisis, but there are reforms that we need to make to make sure its solvency continues beyond the 2040s."
For more than 51 million Americans -- including disabled workers and children receiving survivor benefits -- Social Security isn't a hot-button political talking point. It's survival.
The average benefit isn't much: only $1,100 a month. According to Social Security figures, half of elderly married couples receive 52 percent of their income from the program, as do almost 75 percent of elderly single people.
Without Social Security, 40 percent of Californians aged 65 and older would live in poverty.
Retirement these days can be tough enough with Social Security. Without it, would retirement even exist? For most people, probably not.
"Social Security was the first government program instituting the concept that we have a collective responsibility for each other," said Barbara Gillogly, who heads the gerontology department at American River College in Sacramento. "Before that, there was no real concept of retirement. Most people worked until they died or were too ill, and then they were at the mercy of their family and friends."
In the desperate 1930s, the elderly often ended up begging on the streets.
"A lot of older people in the Depression were starving to death," Gillogly said. "People with no other means of survival could go to poor farms."
For those who couldn't, going to the county poorhouse was a sign of disgrace. Yet census records from the 1930s show that poorhouses across the country were filled with people in their 60s, 70s and 80s.
Of the 6.5 million elderly Americans alive in 1935, only 350,000 had any sort of pension. The Social Security Administration arbitrarily fixed retirement age at 65, based on European pension models from the 1880s that were predicated on a low life expectancy.
The government also hoped Social Security payments would stimulate the dismal late Depression economy by getting more money into circulation, Gillogly said.
Olivia Sparrevohn, 83, remembers that Social Security made a difference in her grandmother's life. Carrie King Cralle was 68 in 1935, a widow who worked as a secretary and cared for an invalid daughter.
Monthly Social Security payments didn't begin until 1940. Before that, recipients were paid a lump sum. Even so, by 1940, 1 million older Americans had received money from the program.
"Suddenly, my granny got this check," said Sparrevohn, a retired technical illustrator who lives in Elk Grove. "She was very frugal. I know that check was small, but ... I can remember clearly that it was a big thing to her."
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