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Ma 1Sang MaMrs.Ditanna Ap Language and Composition 15 December 2017 Future of Social SecurityDuring the 1930s, the worst financial slump in America began when the stock market crashed. Although that was not the main reason, it left millions of Americans unemployed. This time in history is referred to as the Great Depression. During the Great Depression, the unemployment rate increased drastically while business activity continued to decrease in the United States. The federal government was finally involved when “private philanthropy” no longer worked and millions of people were living in poverty. Franklin D. Roosevelt, the president of the United States at the time, created a policy called the New Deal in order to counteract the economic crisis. Under the New Deal, Franklin D. Roosevelt established the Social Security Act of 1935 in hopes of helping retired workers by providing stable income for them after retirement. However, as times changed, the Social Security Act also went through many changes that makes the program the way it is today. However, in recent years, many people have been questioning the future of Social Security and whether or not it will still be able to support people in the future . (Social Security in Action 10)Even though the program did support most members of the economy when it started, coverage was limited. The social security program was originally for older people starting at age Ma 265. The program was originally only for people at age 65 because the remaining life expectancy after that age ranged from only twelve to fourteen more years. Coverage was also occupationally categorized. Covered workers had to be employed in “commerce and industry”. Professionals such as doctors, lawyers, and government employees were not able to receive any coverage. Benefits received by the people that met the requirements were based on “total cumulative covered wages” in which a worker earned in covered employment. Therefore, the more money earned during employment, the greater the benefit amount. In order to further support social security, payroll tax had to be imposed equally among employers and employees. The tax rate was initially one percent for each individual and was going to increase every three years. By the late 1940s, more than 90 percent of the covered workers had their earnings subject to the tax. (ssa.gov) Before seeing how Franklin D. Roosevelt’s plan actually worked in the long term,  some Americans were still reluctant to support the program because they thought that it was unusual for the government to give them money and support their individual economic issues. However, the Social Security program was a success. By 1977, the program gave disability payments and payments for divorced husbands and wives if they met all the requirements. By 1995, ninety five percent of the workforce was covered by the Social Security program. In modern day America, about eighty years after the Social Security Act was first established, the Social Security program is organized into three major programs. The retirement program, the disabilities program, and the survivors program. All three major programs will provide monthly lifetime income for those that are qualified.  (Ourdocuments.gov) Ma 3 The retirement program today remains similar to the way it was when it first started. It serves the purpose of providing lifetime monthly income for workers that are qualified once they reach their retirement age, which ranges from sixty five to sixty seven. Similar to before, the benefit amount depends on the amount of income the worker earned before retiring. But people do not automatically qualify for these benefits just by working, they must work and “pay a minimum level of Social Security taxes for at least 40 quarters during their working lives”. Which means that workers will be fully qualified once they work and pay for ten years worth of Social Security tax. (heritage.org) In the disabilities program, one has to be “disabled” for at least one year with medical evidence in order to be eligible for the program. In this case, “disabled” means the inability to perform “substantial gainful work due to severe physical or mental impairment.” In some circumstance, benefits can be provided to the eligible person’s spouse or children that are under the age of eighteen. The benefits provided by the Social Security program to the qualified individual greatly depends on that individual’s earnings in the past. Social Security’s survivors program also provides monthly lifetime income. The income goes to the spouse of the worker that passed away once they reach retirement age. The benefit amount would depend on the income of both spouses when they were working. Similar to the disabilities program, the survivors’ program also provide for children that are under the age of eighteen in that household. However, the benefits for the children under the survivors’ program ends once they turn eighteen or graduate from high school. (nasi.org) Ma 4Despite the many benefits that the program provided for the people in the past and in the present, many are still doubtful about its abilities to provide for future generations because of baby boomers. Between 1946 and 1964, more than seventy  million people were born in America. Therefore, people born between those years were referred to as “boomers” or the “baby boom generation” (Brookings.edu). The generation of the baby boomers have altered and impacted American culture and economy in many different ways. For instance, they crowded the nation’s schools during the 1950s and 1960s, and during the 1970s and 1980s, they crowded labor markets and housing markets. As time pass, the generation of baby boomers continue to impact America, such as affecting the finances of the current Social Security system. (Brookings.edu)The first of the baby boom generation officially turned sixty five in 2010, which means that many of them expected stable and secured retirement benefits provided to them by the Social Security program. However, the baby boom generation creates an increase in the “elderly dependency ratio.” That ratio is the number of elders qualified for the benefits relative to the number of people that are of the working age. It is reported that as more baby boomers reach the age in which they are qualified to receive stable income from the Social Security program, the dependency ratio will further increase. (Stlouisfed.org) Some factors that contributes to this rising ratio is the increase of adult life expectancy and declining fertility. As stated before, the average life expectancy increased for both men and women throughout the years. The eligible age for elders to receive retirement benefits from the Social Security program is sixty five, and it stayed that way for many years. However, it is Ma 5 estimated that the age of eligibility will gradually increase to sixty seven by the year 2025. During the 1950s, the average woman had three children in her lifetime, but by 2002, the fertility rate decreased to an average woman having only two children in her lifetime. Declining fertility is so significant because it implies that there is going to be fewer people in the workforce that can support the growing population of the older generations. As a result, the payroll taxes that went into the Social Security system in 2017 was not enough to cover benefits that were guaranteed. However, the Social Security Trust Fund was able to “cover the shortfall until 2041″ (npr.org), which means that the Social Security system will be able to remain solvent. Even though the system is still able to provide the guaranteed benefits to the people, many are suggesting to make new modifications to the system. There has been suggestions to increase the age in which elders will be eligible for retirement  benefits because of the increasing life expectancy as well as suggestions to substantially raise taxes on current workers altogether. (Stlouisfed.org) The solvency of the Social Security program is defined as ” the ability of the trust funds at any point in time to pay the full scheduled benefits in the law on a timely basis” (ssa.gov), and it is a question that many individuals have about the financial status of the system. For instance, when the taxes dedicated to a specific fund is not enough, that specific fund is not allowed to borrow in order to pay for those benefits. The Old Age and Survivors Insurance(OASI) and the Disability Insurance(DI) are examples of trust funds that are completely dependent on the assets that are available in their trust funds and can not borrow. Whether those assets are able to Ma 6withstand long enough to support future generations is important in determining the solvency of the Social Security system. (ssa.gov)