What Was The Social Security Act

Raising Taxes On The Wealthy

Currently, Social Security is funded through payroll taxes of 6.2% paid by both workers and their employers. But those taxes only apply to income up to $147,000 as of 2022.

Hirono and Deutch’s bill calls for phasing out the cap over the next seven years. For contributions above the cap, it would provide additional benefits.

Sanders and Warren’s proposal would apply the payroll tax on all income above $250,000 a year, including capital gains, while also raising taxes on net investment income and certain business income.

Larson’s bill calls for reapplying the payroll taxes for wages above $400,000. The difference between the current cap and the $400,000 threshold a so-called donut hole would eventually close as the cap goes up every year.

Earning Credit For Caregivers

The goal of providing earnings credit for caregivers is to provide retirement compensation in Social Security credits to those who had to leave the workforce to care for loved ones. Whether an ill child under the age of 12 or a chronically dependent relative, people can receive up to 5 years of credit towards future Social Security benefits under this bill.

This would expire at the end of 2026.

Could This Bill Cut Taxes And Shore Up Social Security

Rep. Angie Craig has proposed to eliminate taxes on Social Security benefits through legislation called the You Earned It, You Keep It Act.

As Social Security becomes a salient political issue again, there are several proposals before Congress to change how Social Security works.

The latest comes from Rep. Angie Craig , who has proposed to eliminate taxes on Social Security benefits through legislation called the You Earned It, You Keep It Act.

The bill would eliminate what is described as the unjust double tax on Social Security benefits of the current system. The proposal would repeal all of the federal taxation on Social Security benefits beginning in 2023, putting money directly into the pockets of middle-class retirees.

The change would be paid for by raising the cap for individuals earning more than $250,000 annually and asking them to continue paying into Social Security each year.

Current benefit levels would not be affected.

Social Security Works has endorsed the proposal.

Craigs proposal has been referred to the Committee on Ways and Means and the Committee on Energy and Commerce.

Does the legislation have any chance to pass? None of the Social Security reform proposals introduced in the current Congress have gotten much traction, nor the specific endorsement of the White House or Congressional leadership.

Let me ask you have you ever seen the Republicans on Capitol Hill do anything to protect or increase or to benefit Social Security? Biden added.

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Brown Collins Reintroduce Bipartisan Bill To Get Public Employees Full Social Security Benefits

WASHINGTON, D.C. Today, U.S. Sens. Sherrod Brown and Susan Collins led a bipartisan group of their colleagues in reintroducing legislation that would ensure public sector workers and their families can receive full Social Security benefits after two previous statutes reduced them. The Senators bill, the Social Security Fairness Act, would repeal the Windfall Elimination Provision and the Government Pension Offset from the Social Security Act. Both of the statutes significantly reduce benefits for nearly 2.3 million Americans, including more than 250,000 Ohioans, many of which are teachers, police officers and state, county and local government workers.

These workers have dedicated their careers to serving our communities, and its up to us to make sure they can retire with their full Social Security benefits, said Senator Brown.This small fix will help Ohio teachers, police officers, and other state and local government employees and their families have the peace of mind that their Social Security benefits will be there for them when they retire from a life of dedicated service.

The Windfall Elimination Provision , enacted in 1983, reduces the Social Security benefits of workers who receive pensions from a federal, state, or local government for employment not covered by Social Security.

The Social Security Fairness Act would repeal both the WEP and GPO statutes, ensuring public sector workers and their families receive their full Social Security benefits.

Fact #: Social Security Benefits Are Modest

Social Security benefits are much more modest than many people realize the average Social Security retirement benefit in January 2022 was about $1,614 per month, or about $19,370 per year. For someone who worked all of their adult life at average earnings and retires at age 65 in 2022, Social Security benefits replace about 37 percent of past earnings. Social Securitys replacement rate fell as the programs full retirement age gradually rose from 65 in 2000 to 67 in 2022.

Most retirees enroll in Medicares Supplementary Medical Insurance and have Part B premiums deducted from their Social Security checks. As health care costs continue to outpace general inflation, those premiums will take a bigger bite out of their checks.

Social Security benefits are also modest by international standards. The U.S. ranks just outside the bottom third of developed countries in the percentage of an average workers earnings replaced by the public pension system.

Social Security is important for children and their families as well as for older adults. Over 6.5 million children under age 18 lived in families who received income from Social Security in 2019. That number included nearly 2.8 million children who received their benefits as dependents of retired, disabled, or deceased workers, as well as others who lived with parents or relatives who received Social Security benefits.

Social Security lifted 1.1 million children above the poverty line in 2020, as the chart shows.

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Is Di Out Of Sync With The Americans With Disabilities Act

The Social Security Advisory Board, which was created by Congress to advise the President, the Congress, and the Commissioner of Social Security, posed the question of whether the DI program and its test of disability is out of sync with the Americans with Disabilities Act . In April 2004, the Academy drew on findings of its Disability Policy Panel report, Balancing Security and Opportunity, to testify before the Board as follows:

The need for a disability wage-replacement program does not go away because we have the Americans with Disabilities Act . Nor is the need for such a program eliminated by advances in medicine, changes in the demands of jobs, new assistive technology, or other environmental accommodations. These developments may increase employment opportunities for some categories of individuals with disabilities. For example, the ADA expands opportunity for people who have highly valued skills whose main impediments to work had been based on discrimination, architectural barriers, or other impediments that the ADA alleviates. But other individuals may face increasing impediments to work as the work environment and demands of work change. For example, in an increasingly competitive world of work, emphasis on versatility and speed may impede employment prospects for people with mental impairments. Because the phenomenon of work disability will remain with us in a competitive economy, wage replacement programs remain essential.

The Impact Of The Social Security Act

The Social Security Act of 1935 had a profound impact on the lives of Americans, providing much-needed financial assistance to those who were elderly, unemployed, or disabled. The act created a social safety net that helped to protect Americans from extreme financial hardship. The act also helped to stimulate the economy by creating new jobs in the public sector.

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Shown Here: Introduced In House

Strengthening Social Security Act of 2021

This bill expands benefits, and increases specified taxes, related to the Social Security retirement and disability benefits program.

Changes to benefits include increasing the primary insurance amount for certain beneficiaries, calculating cost-of-living adjustments by using a price index that tracks the spending patterns of older consumers, and establishing an alternative benefit for widows or widowers in two-income households.

Changes to taxes include phasing out the cap on earnings subject to the Social Security payroll tax. Under current law, the maximum amount subject to this tax is $142,800.

Things You Didnt Know About Social Security

The Social Security Act of 1935 did a lot more than just establish the Social Security program. Here are 10 things you probably didnt know about this important piece of legislation:

1. The Social Security Act was part of President Franklin Roosevelts New Deal program to combat the Great Depression.

2. The act established several other programs besides Social Security, including unemployment insurance, Aid to Dependent Children, and Old-Age Assistance.

3. The act was originally passed by Congress in August 1935, but was later amended in September 1937 to include survivor benefits and disability insurance.

4. The original act only covered workers in industry and commerce coverage was later expanded to include most other workers, including self-employed individuals, agricultural workers, and domestic workers.

5. The first monthly Social Security benefit checks were issued in 1940.

6. Prior to the enactment of the Social Security Act, there was no federal government program to provide financial assistance to elderly or disabled Americans.

7. The act has been amended numerous times over the years, most notably in 1956 , 1965 , 1973 , and 1983 .

8. Since its inception, the Social Security program has provided crucial financial support to millions of Americans who are elderly, disabled, or both.

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Policy Basics: Top Ten Facts About Social Security

Social Security provides a foundation of income on which workers can build to plan for their retirement. It also provides valuable social insurance protection to workers who become disabled and to families whose breadwinner dies.

Eighty-six years after President Franklin Roosevelt signed the Social Security Act on August 14, 1935, Social Security remains one of the nations most successful, effective, and popular programs.

Fact #: Social Security Provides A Guaranteed Progressive Benefit That Keeps Up With Increases In The Cost Of Living

Social Security benefits are based on the earnings on which people pay Social Security payroll taxes. The higher their earnings , the higher their benefit.

Social Security benefits are progressive: they represent a higher proportion of a workers previous earnings for workers at lower earnings levels. For example, benefits for a low earner retiring at age 65 in 2021 replace about half of their prior earnings. But benefits for a high earner replace about 30 percent of prior earnings, though they are larger in dollar terms than those for the low-wage worker.

Many employers have shifted from offering traditional defined-benefit pension plans, which guarantee a certain benefit level upon retirement, toward defined-contribution plans s), which pay a benefit based on a workers contributions and the rate of return they earn. Social Security, therefore, will be most workers only source of guaranteed retirement income that is not subject to investment risk or financial market fluctuations.

Once someone starts receiving Social Security, their benefits increase to keep pace with inflation, helping to ensure that people do not fall into poverty as they age. In contrast, most private pensions and annuities are not adjusted for inflation.

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What Is The Social Security Act

The Social Security Act established benefits for old-age retirees and the jobless, as well as aid for dependent mothers and children, victims of work-related accidents, people who are blind, and those who have physical disabilities. It was signed into law in 1935 during the administration of President Franklin D. Roosevelt. Previously, such benefits were not provided at all by the federal government, aside from pensions for veterans.

Under the act, the U.S. government started collecting the Social Security tax from workers in 1937 and began making payments in 1940. It laid the groundwork for many aspects of U.S. labor law.

Unemployment Insurance Act Of 1940

In 1940, the federal government introduced the Unemployment Insurance Act, which represented a sea-change in Canadian social security arrangements. Unemployment Insurance was Canada’s first national social-insurance program . The program’s introduction in 1940 was linked to the mobilization of labour, a key element in the war effort. The war effort also resulted in the appearance of the Marsh report of 1943, part of the federal government’s plans for postwar reconstruction, and also a morale-building exercise for a country that was experiencing full employment and whose people were telling the politicians that a return to the conditions of the 1930s following the war would not be tolerated. The Report on Social Security for Canada provided a blueprint for a comprehensive social-security system built upon a foundation of full employment. It emphasized the use of contributory social insurance to protect the worker against a range of risks to income complemented by a universal system of public health insurance. Although the report had caught the imagination of the country, it was too radical for the federal government, which proceeded to bury it. One suggestion from the Marsh report was selected as a plank for the Liberal Party in the federal election expected in 1945. Thus the introduction of Family Allowances in 1945 helped the Liberals to another five years as government.

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Social security refers to government programs that replace people’s income lost due to pregnancy, illness, accident, disability, the death or absence of a family’s breadwinner, unemployment, old age or retirement. A cornerstone of Canadas social programming, it is a subject of recurring political debate and discussion and an increasingly important one, as Canadas population ages.

Early Forms Of Social Security

A large segment of American citizens received an early form of social security decades before President Franklin D. Roosevelt signed the Social Security Act of 1935.

Starting in 1862, hundreds of thousands of veterans disabled in the Civil War and their widows and orphans could apply for a government pension for veterans. In 1890, the law was amended to include any disabled Civil War veteran, regardless of how the disability occurred. In 1906, the law was amended again to include old age as a criterion.

Company pension plans came on the scene in 1882 when the Alfred Dolge Company created a pension fund for its employees. A handful of companies followed suit, but few employees received even a nickel. Most of the companies went out of business before the pensions could be distributed, or the pensions were never dispersed.

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The Social Security Act Overview

Created by FindLaw’s team of legal writers and editors| Last updated June 20, 2016

The Social Security Act is America’s foremost social welfare law, designed to counteract the dangers of old age, poverty, disability and unemployment through a range of government programs and benefits. The Act was originally passed in 1935, as part of Franklin Delano Roosevelt’s Second New Deal. It has been repeatedly amended, expanded, and adapted since that point, particularly in 1965 under Lyndon Johnson, with the creation of Medicare and Medicaid.

Industrial Revolution In America

According to the Social Security Administration, four changes beginning in the late 19th century helped abolish the economic security policies of the time: the Industrial Revolution, Americas urbanization, the vanishing extended family and a longer life expectancy.

Prior to the Industrial Revolution, many people were farmers and managed to support themselves during hard times, and extended family often lived together on family farms and cared for one another as they aged or struggled.

The Industrial Revolution, however, enticed people to flock to cities for jobs that were often threatened by layoffs and recession, leaving many without a way to support themselves if they lost their job. The urbanization of American also found many people leaving their extended family behind to fend for themselves.

As sanitary and general conditions in America improved, the life expectancy of its citizens did, too. When more and more people grew older, many were unable to work or became sick and required care.

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Elimination Of The Disability Earnings Cliff

Another disability provision is the elimination of the disability earnings cliff. The way this disability earnings cliff currently works is that when individuals receiving disability benefits go over a certain earnings amount for a certain period of time, they go into whats called an extended period of eligibility. During this 36 month period, if monthly earnings are over the substantial gainful activity threshold, even by one dollar, benefits are withheld for that month.

Once that 36 month period is over, if earnings go over the threshold, even by one dollar, the disability benefit is completely terminated.

The new law would remove the cliff and would simply reduce the disability payment by $1 dollar for every $2 over the limit in much the same way early Social Security benefits are reduced with the earnings limit.

One interesting note here is that the substantial gainful activity level they would be using would be the level for blind individuals which is substantially higher than the normal threshold.

This provision would sunset at the end of 2026.

Activity Two: Selling The Social Security Act

View each of the following posters, which were produced by the federal government to build support for the Social Security Act among the American public.

• Poster 1: Social Security Poster: More Security for the American Family, Old Man
• Poster 2: Social Security Poster: More Security for the American Family, Mother and Child
• Poster 3: Social Security Poster: More Security for the American Family, Widow

For each image, answer the questions below.

• Why do you think this poster was created for the Social Security Act?
• Who is portrayed in the poster? Which Americans are NOT portrayed in the posters? Why might they be missing from these images?
• In order to “sell” the Social Security Act to the nation, why do you believe the Roosevelt administration chose these images? Identify the ways in which the federal government attempted to “sell” the Social Security Act to the American people. Explain the reasons for your answers.
• How else could the federal government have “sold” the Social Security Act?

This next image was not among those used by the government to promote the Social Security Act. Answer the questions below, which require that you compare this photograph to the three posters you have already worked with in this activity.

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