Social Security just turned 90, and the program is at a crossroads

Social Security was signed into law 90 years ago this month by President Franklin D. Roosevelt. Over the years, we’ve come to think of this critical program as just one component of retirement income – intended from the start to be just one leg of a “three-legged stool” supporting retirees. The other two legs of the stool supposedly are savings and pensions. 

But pensions, 401(k) and IRA accounts didn’t exist in the 1930s -they came along much later.

Today, Social Security is our only universal retirement program. By contrast, only about half of private sector workers are covered by retirement saving plans, and many arrive at retirement with inadequate savings. 

Social Security also ushered in two critical ideas to American life.

One is the very idea of retirement as a time of independence from work. 

In 1935, Americans had no meaningful way to plan for an income after work ended. When people stopped working, they either relied on their families or became impoverished. Some wound up in poorhouses — government-run facilities that provided support, such as shelter and food, often in exchange for work. Social Security income changed all that.

But when Roosevelt signed Social Security into law on August 14, 1935, he also was inaugurating a new era of social insurance in the United States — the concept of government-sponsored national programs that pool contributions by employers, workers and (in some cases) the government to protect Americans. Today, social insurance programs include not only Social Security, but Medicare, Medicaid and unemployment insurance.

Here’s what FDR said at the signing ceremony for the Social Security Act of 1935:

“We can never insure one hundred percent of the population against one hundred 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.”

Roosevelt also noted that the “law, too, represents a cornerstone in a structure which is being built but is by no means complete.” 

Today, nearly all American workers contribute to Social Security and can expect to receive a benefit — and the program has been amended and expanded numerous times over the years. Social Security distributes not only retirement benefits but protection against disability and the death of a spouse or parent. 

But as it turns 90, Social Security is at a crossroads. The program faces two critical challenges:

1. Program solvency: Social Security’s retirement trust fund is forecast to be depleted in 2033, which would lead to large benefit cuts if Congress fails to act. 
2. Customer service: The Social Security Administration, which administers the program, is under pressure from the Trump administration, which has pushed out about 7,000 employees at a time when its work force already was spread too thin. It also has initiated sweeping changes in its systems, asserting that the agency is rife with waste, fraud and abuse.

A key barrier to progress is consistent misinformation about Social Security peddled by Republicans over the years. We hear consistently that the program is “running out of money,” that it is a driver of the federal deficit and that the trust fund is imaginary. Or, we hear Elon Musk repeating the old (false) saws that Social Security is a “Ponzi scheme,” and that the program is wife with waste, fraud and abuse. 

Getting Social Security back on track will require sorting out these myths from the truth. In my latest column for the New York Times, I examined the history of Social Security’s creation, and debunk the six most commonly heard myths about the program.