Social Policy and the Social Security System Essay

Social Policy and the Social Security System - Essay Example As addressed by bush in the State of the Union Address in 2005, "One of America's most important institutions - a symbol of the trust between generations- is in need of wise and effective reform. Social Security was a great moral success of the 20th Century, and we must honor its great purpose in this new century. The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security." The threat of bankruptcy that the Social Security System is facing is a source of much concern throughout the United States and is an issue that the past and current administrations have taken very seriously (The Problems Facing, 1). Since its establishment in 1935 with the signing of the Social Security Act by President Roosevelt, the Social Security System has undergone a great number of changes. Originally formatted to provide income to retired workers, the Act was adapted in 1939 to include coverage for the dependents and survivors of deceased workers, greatly increasing the payout to each retiree. In 1956 the system had two major changes, the first being the creation of Disability Insurance and the second being the allowance of early retirement for women at the age of 62 (History of Social Security, 1). The same early retirement was allowed for men by 1961. In 1972 the issue of inflation was addressed with the introduction of Cost of Living Adjustments (COLAs) (History of Social Security, 1). The COLAs had many problems, which were remedied in 1977. Created in 1983 was the National Commission on Social Security Reform. "The commission called for 1) an increase in the self-employment tax; 2) partial taxation of benefits to upper income retirees; 3) expansion of coverage to include federal civilian and nonprofit organization employees; 4) an increase in the retirement age from 65 to 67, to be enacted gradually starting in 2000" (History of Social Security, 1). The Social Security system went through a major change when The Social Security Trustees' Report in 1996 announced starting in 2012 the system would begin running deficits, exhausting the trust funds by 2029. The very next year it was decided by the Social Security Advisory Panel that Social Security's funds would be invested in the private sector. Payroll taxes were drastically affected by this change. (History of Social Security, 2). Social Security is a system initially established in 1935 when the vast majority of women were housewives (The Problems Facing, 1). When the program was established, many factors attributed to the great success of the program. One of the contributing factors was the much lower life expectancy in the United States. In many cases, workers would not live long enough to qualify to receive Social Security. As a result, "there were more than 40 workers to support every one retiree" (the Problems Facing, 1). Those statistics have drastically changed since the establishment of the system. Today, the average life expectancy is 77 years old. In addition, more than 60% of women are currently working. With this change of statistics, the ratio of workers to retiree's has shifted, causing the gradual