Social Security is what is known as a pay-as-you-go system. Remember all those times you read about the Social Security Trust Fund? There isn’t one. The money comes in from payroll taxes and goes right back out in payments. You can’t go to Washington or Fort Knox and see the little drawer where the government keeps the money that’s been withheld from your paycheck week after week. It’s been spent already, and there isn’t any little drawer.
The great political sin, or miscalculation, is that it is a Democratic president who is at the head of the chain gang to change cost-of-living adjustments, which, by the way, weren’t even made in 2010 and 2011 because inflation was so low. Barack Obama floated this idea in his budget proposal and immediately the lions pounced, proclaiming him an apostate, saying he had broken faith with the elderly, claiming that he had betrayed a glorious line of Democratic presidents going back to Franklin Delano Roosevelt.
Hold it right there. Social Security was President Roosevelt’s brainchild and perhaps his most precious child. But when Social Security went into effect, there was no talk of cost-of-living adjustments, chained or otherwise. In fact, the first cost-of-living adjustment was implemented under a Republican president, Gerald R. Ford. (It was a whopper -- an 8 percent increase. The cost-of-living increase implemented this January was 1.3 percent.)
The Social Security Act was a radical departure in American life, but its features were far more modest than its current incarnation. In fact, when FDR signed the legislation in 1935, he had this to say:
“We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”