Privatization of Social Security

Social Security Act of 1935

• “Pulling oneself up by the boot straps?”

• The Great Depression• Funded by payroll taxes• Goal of Social Security:

Provide a safety net– Protect American families and

workers in the event of retirement or disability

The Modifications of Social Security Act of 1935

• 1939: surviving spouses and minor children are included• 1950s: added more benefits, first cost of living allowance (COLA) was

added• 1956: disability insurance was added• 1961: Early age of retirement for men at 62 was allowed• 1965: L.B.J. signs the new Medicare Act, charging the SS Administration to

provide health care to the beneficiaries aged 65 or older and the Health Care Financing Administration takes care of Medicare now

• 1980s: Worries about social security begins; a new law allowed taxing of SS benefits, raised retirement age, increased money in the SS funds

• The Senior Citizens’ Freedom to Work Act of 2000: allowed beneficiaries above the retirement age to continue to work without their benefits being cut to solve one problem of social security