Exactly 83 years ago this week, the Social Security Act was signed into law. It was Aug. 14, 1935, and Franklin Delano Roosevelt was in his first term as president.
Social Security is a program that benefits the elderly, as well as disabled individuals, their families, or the families of the deceased. The program has been the source of political and economic tension in the country in recent years, as people count down the days until they can collect Social Security, while also nervously counting the days until the trust funds that hold Social Security's assets are depleted.
Many younger Americans will tell you they're not even sure they'll ever see Social Security when their time comes to retire.
There's no denying the program needs help. If nothing is done to support Social Security, monthly checks to individuals may be cut 23% by 2034. The situation is dire. People are living longer and will rely on receiving Social Security checks longer, and Social Security currently provides the majority of retirement income for about half of all Americans, according to the Center for Economic and Policy Research.
Still, Nancy Altman, president of Social Security Works, is hopeful about the program. Social Security Works is an organization dedicated to maintaining Social Security, and is funded partially by the public as well as a grant from Atlantic Philanthropies. Altman, who released her latest book on Social Security's anniversary, called "The Truth About Social Security: The Founders' Words Refute Revisionist History, Zombie Lies and Common Misunderstandings," says the program should do even more, such as assist Americans with paid parental leave and medical leave. People should stop worrying about it no longer existing and instead focus on ways to improve it for all Americans, as the founders would have wanted, she said.
Altman spoke with MarketWatch about her new book and what Americans may not know about Social Security.
Q: What would you say about Social Security as it stands today?
A: The truth about Social Security today is that it works extremely well. It is completely consistent with the founder's vision and in fact, although some revisionist historians today say the founders wouldn't recognize it, not only would FDR recognize it today but they'd be shocked that it wasn't larger and didn't include Medicare for All, or paid parental leave, or medical leave, because those are all aspects they envisioned. They were very pragmatic, so they wanted to start there. FDR said he didn't want to start extravagantly because he wanted it to be a success but it was a cornerstone on which to build.
Q: How does Social Security help Americans? How much would you say Americans rely on it?
A: Social Security provides a foundation for economic support. We need insurance against loss and that’s what Social Security provides. It is extremely important to everyone. It is particularly important to women and people of color, who have been discriminated against, or people who have earned less in jobs that are more physically demanding or jobs that do not have private pensions. Social Security is important to everyone. I read a story that I found fascinating — an extremely wealthy man had invested all of his money with Bernie Madoff and today is only living on Social Security because Bernie Madoff stole all of his money. [Social Security] is really important for everyone — even the wealthiest among us.
Q: What are the biggest misconceptions about Social Security?
A: One huge misconception is that it is going bankrupt and it is unaffordable. Whether to expand Social Security or cut Social Security is a question of values, not affordability. We're the wealthiest country in the world. There's no question we can afford not only the current Social Security program but the expanded Social Security if that's what the American people want.
Another misconception is that it is a government handout. It is, in the words of the elite, an entitlement. The truth is it is an insurance each of us earns through our work and payroll contributions.
Key retirement milestones
Q: What are some things people don't actually know about Social Security?
A: People don't realize it is the nation's largest children's program. It lifts 1.7 million children out of poverty each year. It is the largest source of income for grandparents supporting their grandchildren. As a result of Social Security, about 9% of America's children, either because they are children of deceased or disabled workers, or live with grandparents with Social Security, directly or indirectly benefit from Social Security. Another thing: one out of three beneficiaries are not seniors, but workers with disabilities and their families, and family members of survivors.
Q: What do you think Franklin Roosevelt and other Social Security creators would think of the program today?
A: They had a bold vision. They saw Social Security as a synonym for economic security and they understood that to have true economic security, you needed a healthy childhood, you needed an education, you needed a job that provided a living wage, you needed housing and health insurance — it went from the cradle to the grave. They had a very expansive view. Arthur Altmeyer, who was the first commissioner of Social Security, said that for the rest of the world the term Social Security had become synonymous with the good life, but in the U.S. it became more narrow. The founders started cautiously and expected future generations to build on it. They'd be surprised benefits aren't larger than they are and don't cover other areas where we lose wages or incur additional expenses, like when we're sick or take time out of the workforce to care for family members who are sick or take parental leave. I think they'd be surprised we don't have Medicare for all.