If one looks at the early days of the Social Security Administration the motivations of todays RNC /Cato/Heritage Alliance should be self evident. FDR's creation the Social Security Administration was under fire from the RNC of the 1930's from the legislation's introduction into the congress to its enactment into law. Each step was a battle against the RNC .
P.L. 271-74th Congress, Enactment
of the Social Security Act
The Social Security Act became law on August 14, 1935, when President
Roosevelt signed H.R. 7260. Title II of the Act created a compulsory national
old-age benefits program, covering nearly all workers in commerce and
industry and providing monthly pensions at age 65 for insured workers.
A benefit weighted toward lower-paid workers was to be based on cumulative
wages and was to be payable beginning in 1942 to persons aged 65 and over
who had paid Social Security taxes for at least 5 years. The benefit was
to be withheld from an otherwise qualified person in any month in which
he or she did any work. Under Title VIII of the Act, a payroll tax of
1%, each, on employees and employers, payable on earnings up to $3,000
each year, was to be imposed as of January 1, 1937, on covered jobs, and
was scheduled to rise in steps to 3% by 1949 P.L. 271-74th Congress.
This is what FDR wanted IF the above had been left in the legislation and the tax increases had been enacted as prescribed there would have been no potential problems today. The Social Security system would have been a "prepaid system" with a huge reserve earning interest at a unbelievable rate. But the RNC and some stupid Democrats .
C. Payroll Tax Freeze, 1942-1947
Between 1942 and 1947, the Social Security payroll tax rate increase
was postponed seven times. It was not until 1950 that the 1% Social Security
tax rate was allowed to rise to 1.5%.
1. The Revenue Act of 1942, P.L. 753 (H.R. 7378, 77th Congress) was signed
by President Roosevelt on October 21, 1942. It provided that for calendar
year 1943, the payroll tax rate for old-age and survivors benefits would
be frozen at the existing rate of 1% for employees and employers, each,
instead of being increased to 2% on each as otherwise would have been
required.
2. P.L. 211, (H.J. Res. 171, 78th Congress), a joint resolution regarding
the Tariff Act, signed by President Roosevelt on December 22, 1943, froze
the payroll tax at the 1% rate until March 1, 1944. The purpose of the
resolution was to give Congress time to consider the scheduled payroll
tax increase before it went into effect.
3. The Revenue Act of 1943, P.L. 235 (H.R. 3687, 78th Congress), was
vetoed by President Roosevelt on February 22, 1944; the veto was overridden
by the House on February 24, 1944 and by the Senate on February 25, 1944.
The bill deferred the scheduled payroll tax increase (from 1 to 2%) until
1945……..
……
Although Senator Vandenberg (R-MI) was the main spokesman for postponing
the payroll tax increases, the legislative effort to defer tax increases
was bipartisan. "Without regard to party or ideology, elected representatives
of the people were not willing to argue for increases in an earmarked
tax if a current need for them could not be demonstrated," one scholar
has observed.(49)
The afore mentioned fun and games from the 78th congress is what created the last two funding short fall scares. A chart of the tax increases since that debauchery. looks like this .
The Bush Con Job
The SADISTIC NE-CON EVANGELICAL ACTIVISTS bag of tricks is deep and ripe with a diverse array of deceptions as one can present to the U. S. electorate and still maintain a semblance of credibility.
The tell tale signs of a Boondoggle began to show in the Communicating Social Security Reform Pdf By The House Republican Conference Chairman Deborah Pryce, January 2005. This document let the cat out of the bag. Now every body knew that the RNC / Cato/Heritage Alliance is willing to say any thing to accomplish their goal of destroying The Social Security Administration.
If one reads the actuarial economic assumptions of the " Intermediate" model the attempted con job becomes apparent. Table V.B2--Additional Economic Factors Calendar Years 2005-80 Intermediate Assumptions depicts a long period ( from 2014 to 2080 ) during this period the Real GDP drops below 2% and is frozen at 1.8% for 35 years???? After spending 16 years stuck 1.9%??? Is some one cooking the books or is the RNC / Cato/Heritage Alliance predicting the mother of all recessions? This outrageous assumption along with other strange depictions of economic reality were used to produce the fabled " Three Outcomes Chart"
From The SSA Condition Report
So says the Social Security Administration actuaries in their LTAM ( Long Term Actuarial Model ). This model is a "deterministic" model that is loaded with the economic assumptions selected by the actuaries at the Social Security Administration .
Then came OCACT Stochastic Model (OSM, Version 2004.1) The new stochastic model of the Social Security Trust funds. This model does not use "fixed" pre determined values of it's economic assumptions instead the value of each assumption is stepped through a range of values. The range of the values is based on a probability distribution about a known point or value ( historical value ). The computation involves trend line analysis as an input to the predictions. In many ways this system mirrors the LTAM model but differs in one very important way, this system follows TRENDS. If the economy has been improving over the last few years OSM will reflect this if the economy is taking a nose dive over the past few years OSM will reflect this automatically.
This is a block diagram of the OSM Social Security Trust fund model
The required computations to obtain the Social Security Trust fund balances remain the same . here is a sample of OSM output.
From http://www.cbo.gov/showdoc.cfm?index=6064&sequence=0
As one may note the Social Security Trust fund goes to zero about 2055. As can be seen in the well known three out comes chart the year of Social Security Trust should be 2041.
"
This is the latest projection from the chief actuary in recent testimony before congress.
What we have here is
OSM LTAM divergence . The reason for this divergence is simple.
OSM is self adjusting as the economic conditions change so will the assumptions in the
OSM model. The
Bush Administration has demanded that the last group of out side actuaries be held over to continue the effort of privatization effort. These same people
LOWERED the assumed interest rate for the
Social Security Administration Trust assets in an environment of rising interest rates this kept the year of LTAM's
Social Security Administration trust exhaustion fixed at 2041 where they want it. This is what passes for actuarial science in the
Bush Administration .