Professional Documents
Culture Documents
Introduction
Social Security is a pay-as-you-go United States scheme that was established on August 14,
1935. The program's aim was to offer incentives to seniors and others who were out of work at the
time. In addition, a lump-sum payout will be received following death to further cover any of an
individual's final expenses. In 2017, almost 169 million individuals in the United States paid for
the Social Security program.1 Approximately 61 million individuals were receiving income
support. This service provides a majority, if not all, of the wages for about 25% of all households
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in the United States. The estimated average monthly income for retired employees is about $1,400.
Jobs with disabilities are paid more than $1,100 a month. I chose the issue of the necessity to
restructure our country’s social security and safety net programs as it has been topic in both my
economics class this semester but also a focus in some of my previous political science courses.
Social security better known as Welfare is used for the Old-Age, Survivors, and Disability
Insurance (OASDI) program in the United States, run by the Social Security Administration (SSA),
which is a federal agency. While it is best known for retirement benefits, it also provides benefits
for survivors of the war and disability income. The social safety net (SSN) comprises of non-
contributory help existing in order to improve lives of weak families and people encountering
neediness and destitution. Examples of SSNs are non-contributory social annuities, in-kind and
food transfers, contingent and unequivocal cash transfers, expense waivers, open works, and school
feeding programs. The program is associated with the analogy of a trapeze artist walking across a
tightrope, but the programs are the safety net below the circus performer to ensure if they make a
wrong decision, they won’t lose it all.2 The program was initially intended for three purposes:
institutional reform, to make the programs politically feasible, and to diminish the poverty rate.
Both of these programs had early beginnings, as social orders developed in monetary and
social unpredictability, and as segregated homesteads offered approach to urban areas and towns,
Turner, Book • By Anna. “A Young Person's Guide to Social Security.” Economic Policy Institute,
www.epi.org/publication/socialsecuritytextbook/.
Ferrara, Peter. “How Welfare Reform Can End Poverty In America, And Promote Booming Economic Growth.”
Forbes, Forbes Magazine, 15 Aug. 2014, www.forbes.com/sites/peterferrara/2014/08/15/how-welfare-reform-
can-end-poverty-in-america-and-promote-booming-economic-growth/?sh=1213fe651532.
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Europe saw the improvement of formal associations of different sorts that looked to ensure the
financial security of their individuals. Likely the most punctual of these associations were
organizations framed during the Middle Ages by vendors or skilled workers. People who had a
typical exchange or business united together into common guide social orders, or organizations.
These societies directed creation and business and they additionally gave a scope of advantages to
their individuals remembering money related assistance for seasons of destitution or disease and
commitments to help settle the costs when a part kicked the bucket. Out of the custom of the
showing up in England in the sixteenth century. Again, composed around a typical exchange or
business, the amicable social orders would develop into what we currently call congenial
The development of the Social Security program sheds some light on current concerns over
scheme funding, payment adequacy, and return on payroll contributions. Policymakers, on the
other hand, pose certain specific problems for a completely mature scheme in which strategies like
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taking in vast numbers of uninsured employees or boosting relatively low payroll tax thresholds or
taxable maximums are no longer viable alternatives. Also, at the time of the program's most recent
major revisions (the 1983 amendments), the retirement of the baby boomers was recognized as a
challenge, but not an urgent one.3 The issue is now at hand, when the first baby boomers began to
retire in 2008. The massive retirement surge that is threatening Social Security is noteworthy in
another way. Cash welfare services, such as Social Security, are not the only ones that will face
financial difficulties. Most importantly, the Medicare and Medicaid services will expand rapidly.
As a result, the natural challenges that exist with improving Social Security would be exacerbated
our country although the incentives often reward those who take advantage of the system. Pundits
Rector, Robert. “Understanding the Hidden $1.1 Trillion Welfare System and How to Reform It.” The Heritage
Foundation, www.heritage.org/welfare/report/understanding-the-hidden-11-trillion-welfare-system-and-how-
reform-it.
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contend that SSN diminishes the motivators to work, gives no graduation consolation, destroys
public ties, and places a budgetary weight conceivably too substantially to even consider carry in
the drawn-out run.4 Moreover, it has demonstrated to be hard to diminish the SSN once it has been
broadened. Casper Runner-up Dahl, a Danish market analyst, finds that there is a solid negative
relationship between the liberality of OECD government assistance states and the hard-working
attitude of the people. 5The Swedish market analyst Martin Ljunge finds that an inexorably liberal
debilitated government help framework leads more youthful Swedes to remain more at home than
The impact of adding the Social Security tax on employer-sponsored health care premiums
on Social Security recipients is examined in a report prepared by policy makers. The brief
specifically looks at an alternative proposed by the Social Security Advisory Board, in which all
employee and company premiums will be counted as income for Social Security tax purposes and
later for compensation purposes. The findings of the Modeling Income in the Near-Term model
suggest that from 2017 to 2080, incomes for most Social Security recipients aged 60 or older
would steadily rise, and the poverty rate would decline more than under current law. Employer-
“Social Security Changes Coming in 2021.” U.S. News & World Report, U.S. News & World Report,
money.usnews.com/money/retirement/articles/social-security-changes-coming-next-year.
“Policy Basics: Top Ten Facts about Social Security.” Center on Budget and Policy Priorities,
www.cbpp.org/research/social-security/top-ten-facts-about-social-security.
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sponsored health care premiums being counted as income for Social Security purposes would
result in higher Social Security taxes for the vast majority of people.6
Social Security Administration's Office of Retirement Policy. “Social Security Administration.” Social Security
Administration Research, Statistics, and Policy Analysis, 1 July 2005,
www.ssa.gov/policy/docs/policybriefs/pb2005-01.html.
Gaille, Louise. “14 Chief Pros and Cons of Social Security.” Vittana.org, 25 July 2018, vittana.org/14-chief-pros-and-
cons-of-social-security.
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Deeper Look at Welfare
As for welfare, some similar issues arise such as the genuine expense of government
assistance or help to the poor is to a great extent obscure in light of the fact that the spending is
divided into horde programs.8 Current government assistance is centered to a great extent around
expanding advantages and enlistments and redistributing salary. 9Individuals and households
benefit from social welfare services such as health insurance, food stamps, unemployment benefits,
rental assistance, and childcare assistance. In the United States, each person or family applying for
compensation is assigned a caseworker who determines and confirms the applicant's needs, Person
advantages differ from state to state. Foolish practices that expansion the requirement for help is
concentration with another arrangement of interlinked objectives: decreasing foolish and self-
restricting practices, expanding self-uphold, and improving genuine human prosperity. Welfare
reform should first, require all able-bodied adult recipients to work or prepare for work as a
condition of receiving aid, second) remove the substantial penalties against marriage within the
DeWitt, Larry. “Social Security Administration.” Social Security Administration Research, Statistics, and Policy
Analysis, 1 Aug. 2010, www.ssa.gov/policy/docs/ssb/v70n3/v70n3p1.html.
Butrica, Barbara A. “Social Security Administration.” Social Security Administration Research, Statistics, and Policy
Analysis, 1 Apr. 2007, www.ssa.gov/policy/docs/ssb/v66n4/v66n4p1.html.
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welfare system, and third) fund programs aimed at improving behavior on a payment-for-outcome
President Clinton signed legislation on August 22, 1996, that significantly altered the
American welfare system. Many aspects of the new legislation were extended for six years,
including the TANF scheme, which replaced the Aid to Families of Dependent Children (AFDC)
program. The implementation of a five-year time limit for using discretionary funds to provide aid
to any adult and the mandatory use of financial penalties against households that do not meet with
service provisions is two of the most contentious aspects of the 1996 legislation. Given the heated
controversy on all of these topics, it would be surprising if Congress did not discuss them during
reauthorization. The Family Support Act, America's latest exertion at government assistance
change, starts to produce results this year. The new law looks to get single parents off government
appropriations, and kid uphold implementation. Cutting the government assistance rolls is, thusly,
expected to set aside the citizen wealth while upgrading the sense of pride of single parents and
their kids.
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One of the most widely observed and agreed-upon issues with welfare reform is that a
substantial percentage of people who are qualifying for food stamps and Medicaid do not receive
them. The Urban Institute, for example, discovered that many households fleeing welfare are
qualifying for food stamps but are not earning the compensation based on careful study in 12
states. Similarly, several investigations have shown that families and children are not providing the
Medicaid services to which they are eligible. The issue in both cases isn't that reforms in federal
laws through welfare reform rendered adults and children ineligible for food stamps or Medicaid.
According to studies, if a family leaves AFDC or TANF, enrollment in food stamps and Medicaid
drops, perhaps because families are not told that they maintain eligibility.10 Furthermore, working
families may find it daunting and time consuming to return and welfare offices to validate their
qualifications, especially in states where families may physically attend the welfare office, and
families with regular shifts in income may be turned off by the continuous disclosure laws.
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Say, You've Earned a. “Updating Social Security for the 21st Century: 12 Proposals You Should...” AARP,
www.aarp.org/work/social-security/info-05-2012/future-of-social-security-proposals.html.
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Outcomes
Legislators making improvements to the Social Security policy must be able to predict how
those changes will impact prospective retirees' economic well-being. The very first step in
comprehending these consequences is determining the well-being of potential retirees under the
new Social Security scheme. To that end, this report forecasts and assesses the well-being of
retirees aged 62 and older in 2022 and 2062 using the Social Security Administration's MINT
(Modeling Income in the Near Term) formula.11 Since no one metric can adequately capture
whether prospective retirees will have enough money to satisfy their needs, we use a combination
beneficiaries' retirement well-being will increase in 2062 relative to 2022. Between 2022 and 2062,
the median per capita income of Social Security recipients is expected to rise by one-third (in real
terms), with a resulting decrease in estimated poverty rates. Furthermore, between 2022 and 2062,
the median level of financial capital would rise. Relative well-being indicators, on the other hand,
indicate a decrease in well-being for Social Security recipients in 2022 and those in 2062. The
the proportion where income-to-needs ratio is far less than half of the median ratio, will increase
with time. Despite of the metric used, some classes do poorly than others, including those who
never married, nonwhites, those without a high school diploma, and those with less years of work
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Sawhill, Isabel V., et al. “Welfare Reform Reauthorization: An Overview of Problems and Issues.” Brookings,
Brookings, 28 July 2016, www.brookings.edu/research/welfare-reform-reauthorization-an-overview-of-
problems-and-issues/.
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force experience and poor lifetime earnings. These vulnerable populations are more likely to rely
on Social Security checks for retirement income. As a result, they do particularly badly if Social
Security premiums are cut to match what is payable under current-law taxes. The results found by
many researchers highlight the importance of using several indicators when determining the well-
being of potential Social Security recipients. When using absolute indicators, Social Security
beneficiaries' retirement well-being will increase in 2062 relative to 2022. Around 2022 and 2062,
the total income of Social Security recipients is expected to rise by one-third, with a resulting
decrease in estimated poverty rates. Furthermore, between 2022 and 2062, the median level of
Such trust funds are used to supplement potential Social Security payments. Currently, the
tax income from Social Security contributions and interest in pension accounts were insufficient to
offset the costs of Social Security insurance. 12The trust fund is depleting. When the trust funds are
depleted, tax proceeds will only cover 75% of the coverage promised by the Social Security
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Eneriz, Ashley. “What Will Social Security Look Like When You Retire?” Investopedia, Investopedia, 26 Feb. 2021,
www.investopedia.com/articles/personal-finance/022516/what-will-social-security-look-when-you-retire.asp.
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scheme. The date that the trust funds will be depleted if no increases in taxes and compensation are
made is a key indicator in the trustees' study. The trustees predict that this date will be in 2035 in
their 2020 paper. However, this paper was published before the economy entered a slump as a
result of the pandemic. So, when economy suffers a downturn, unemployment increases, and less
people pay Social Security taxes. This occurred after the Great Recession of 2009, and it altered
the trustees' forecast at the time. In 2007, it was predicted that the retirement savings will be
depleted by 2041. 13The projection in 2010 was 2037. The date crept closer in the years that
followed, as the economy expanded steadily. However, as the economy changed prior to the
Conclusion
Citizens and households in poverty are helped by a social security infrastructure, which
includes services such as child insurance benefits, food stamps, and unemployment benefits.
Disaster relief and educational assistance are two lesser-known components of a social care
scheme. Via the Temporary Assistance for Needy Families (TANF) initiative, the federal
government issues grant to each state. Qualification for benefits is determined by a variety of
factors, including salary and family size. Without these systems in place the way many less
fortunate pays and afford to live would be affected as it has become a staple system in the U.S. it is
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imperative for us to restructure these broken systems and bring back its strengths in order to fix the
weaknesses.
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