Primary source
Posted by Joshua Claybourn on 5 February 2005 | 7 responses
Recently Congressional Democrats gathered around a statute of FDR to stand in support of his Social Security legacy. In honor of that move here’s FDR in his Message to Congress on Social Security on Jan. 17, 1935:
“In the important field of security for our old people, it seems necessary to adopt three principles: First, noncontributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities that in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.”
Sound familiar?
7 Responses to “Primary source”
Gee, wouldn’t that make more sense when bundled with the rest of the new-deal, including provisions meant to eventually significantly reduce income inequality?
There are good reasons why lower-income types shouldn’t risk their savings on the stock-market. And distributional concerns are valid reasons to be critical of a proposed reform…
dlw
Note that this is exactly what we have today, not what is being proposed by the current administration.
Social Security did and has become a “self-supporting annuity plan,” per Roosevelt’s statement. Social Security, at least the old-age retirement portion, currently takes in more than it pays out (the definition of self-supporting) and takes zero (0) federal dollars (indeed, the federal government borrows money FROM Social Security, not the other way around).
And I, like millions of Americans, today voluntarily contribute thousands of dollars towards my own retirement annuity, contributes that I hope (but realize there’s no guarantee) will “increase the annual amounts received in old age.”
greg
How can it be a self-supporting annuity if there’s no funds in Social Security to draw interest like real annuities?
FDR would support SS Reform!
Bush is not the only President to support Social Security reform. It appears that the founder himself, FDR was also for “personalization” of social security (or “privitization” as the Democrats call it):
“…Second, compulsory contributory annuiti…
Very simple…SS was never intended to remain the Communistic Investment system that it is today…FDR wanted a splice of capitalism mixed in. Funny, how the founder wanted SS Reform and the Democrats oppose his very plan. Selah!
Bill Bennett, Fox, Glenn Reynolds (”Instapundit“) and others are all suggesting that FDR supported the idea of social security money being diverted to the private sector. As ostensible proof, they cite FDR’s proposal regarding “voluntary contributory annuities.”
However, FDR was clearly not talking about investment in the private sector, as the Bush plan encourages, and as implied by the Fox phrase “private investment accounts.” FDR’s proposal of “voluntary contributory annuities” was for insurance-type annuities, to be issued and guaranteed by the government. Income from this program “would go into the trust fund along with the payroll taxes collected under the mandatory program.” This is clearly explained here.
The phrase “private investment accounts” implies money is put in the hands of Wall St. Indeed, that’s what the Bush plan encourages. FDR’s phrase “voluntary contributory annuities” was referring to money that would be placed in the hands of the government. Fox is pretending this distinction is meaningless.
FDR was talking about allowing workers to voluntarily send extra money to the government, to add to the mandatory retirement fund, and to support a guaranteed benefit. Bush is talking about taking money that currently goes to the government and sending it to Wall Street instead. To treat these two proposals as equivalent is a fraud.
FDR on Social Security
FDR on Social Security