HILL: No need to take it to the streets to improve Social Security 

FILE - A woman holds a sign reading "France says no" during a demonstration in Marseille, southern France, Thursday, March 16, 2023. With President Emmanuel Macron thousands of miles away in China, French protesters and unions returning to the streets continue to reveal cracks in his domestic political authority. Hundreds of thousands are expected again for the 11th day of nationwide resistance to raising the retirement age from 62 to 64 Thursday, April 6 as the controversial law is being considered by the Constitutional Council. (AP Photo/Daniel Cole, File)

Something’s got to be done about Social Security.  

In France, citizens are taking it to the streets to protest President Emmanuel Macron’s efforts to raise the retirement age from 62 to 64. It is almost like they don’t believe they are going to live long in retirement. 

The Social Security eligibility age in America has been going up steadily since 2000. It used to be 65. Today, a person has to be 66 years and 4 months old to receive SS benefits. In 2027, a person will have to be 67. 

No one has even noticed. 

Social Security can be improved ― and made much more “fair, equal and equitable” ― if Democrats would join with Republicans quietly to make necessary changes to the program as were made in 1983 after the Greenspan Commission Report. No changes, however, will return Social Security to its original payout ratio, simply because it was not set up completely the right way in 1935. 

Ida Mae Fuller of Ludlow, Vermont, was the first American Social Security recipient in 1940. She received her first check in January for $22.54 at age 65. She worked for three years under the new Social Security law and paid a grand total of $24.75 in SS payroll taxes. 

She received almost her entire “contribution” (payroll tax) in a single month. 

The average life expectancy at the time of Ida Mae’s birth in 1874 was only 49 years. She was already living 15 years beyond her expected lifespan when she got her first SS check. 

Ida Mae had great genes and good health. She lived to be 100 years old. She passed away on Jan. 27, 1975. She received $22,888.92 in Social Security payments during her retirement after paying only $24.75 into it. 

No one else ever has come close to such a magnificent return on their Social Security “investment” (taxes paid) ever since.  

Ida Mae Fuller hit the proverbial jackpot when it comes to Social Security. 

Social Security was set up as a very simple pay-as-you-go system transferring payroll taxes paid by current workers to support retirees on Social Security. No person’s payroll taxes (“contributions”) ever go into an individual retirement account to build up wealth with compound interest over their working career. 

Social Security was not set up properly to be a permanent “retirement” or pension plan in the first place. FDR wanted a three-part program of old-age security consisting of: old-age welfare pensions; compulsory contributory social insurance (what we now think of as Social Security); and a third tier which would consist of optional annuity certificates sold by the government to workers who, upon retirement, could convert the certificates to monthly annuities which would be used as supplements to their basic Social Security retirement benefit,” according to the Social Security Administration website. 

Had Congress passed all three components in 1935 and workers today had the option of buying annuity certificates, or mutual funds, out of their SS payroll taxes, SS would not be facing imminent demise in the next decade. 

But they didn’t. No Congress or president has had the guts and internal fortitude to lead the nation in a thoughtful, coherent, comprehensive debate about the structure of Social Security ever since, mostly due to Democrat demagoguery of the issue. 

Will senior mature Democrats in Congress agree to continue the annual increase in the SS retirement age — which no one notices anyway — and allow it to hit 70 by 2037?  Will any rational Democrat agree uber-wealthy seniors such as Bill Gates and Warren Buffett should not remain on the social welfare teat and receive the maximum $4,555/month ($54,660/year) in SS benefits ― even though both most assuredly stopped paying payroll taxes decades ago? 

The Boomer Generation is the last cohort of American citizens who will receive a small net positive return on the money they contributed to Social Security over their lifetime. Every generation hereafter ― Gen Xers, Millennials, Gen Zers and all to come ― will suffer an increasingly net negative return on their contributions barring any radical improvement. 

Unless, of course, they way outlive their life expectancy like Ida Mae Fuller and live to be 150. 

Failing to talk about Social Security won’t make it any better for everyone under the age of 50 today. Taking it to the streets to protest changes like the French won’t either. Social Security has some very serious math problems which can’t be avoided and must be addressed today.