Social Security U.S.A.-- The Program & Its Administration


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The first principle underlying the program is that security for the worker and his family grows out of his own work. He earns his future security as he earns his living and he pays toward the cost of his social security protection out of his earnings.


Because his contributions help meet the costs of the benefits, an insured worker can expect the benefits to be paid to him and his dependents or survivors without undue restrictions. The knowledge that it is possible to plan ahead on one's own, without the fear of having to exhaust all savings and resources should earnings stop, encourages him to provide additional protection for himself through personal savings, private insurance, home ownership, and other investments. The contributory nature of the program also encourages a responsible attitude toward the program. Knowing that the financing of the present program and of any improvements that are made in it depends on social security taxes that he helps to pay, the worker has a personal interest and stake in the soundness of the program.


Another important principle is that to the extent possible coverage is compulsory. A society cannot be secure if large numbers of its members are not protected against the loss of earnings that results from the retirement, disability, or death of the family provider. If the program were not compulsory, many of the people who need its protection most would not participate. Many low income workers, for example, as much as they might recognize the need to protect themselves, would choose not to pay social security tax contributions because of the difficulty they have in meeting their current needs. In the end they would have to be supported through assistance from the general revenues of the Government.

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A worker earns his future security as he earns his living and as he pays toward the cost of his social security protection out of his earnings.

Under the social security law as first enacted, only employees in commerce and industry were covered. Since that time, coverage has been extended to almost every occupational group--to the self-employed in the cities, to household employees, to farm people, and also to the Armed Forces.

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Rights Clearly Defined in Law

Still another principle is that a person's rights to social security benefits--how much he gets and under what conditions--are clearly defined in the law. A person who meets the conditions provided in the law must be paid, and if a claimant disagrees with the decision in his case, he can appeal to the courts.

Because the conditions of eligibility and the amount of benefits to be paid are clearly set out in the law and are generally related to facts that can be objectively determined, the area of administrative discretion is greatly circumscribed. And since payment is not discretionary, a person is free to act without fear that his personal or political behavior will keep him from getting benefits.


The program is designed so that contributions plus interest on the investments of the social security trust funds will be sufficient to meet all of the costs of benefits and administration, now and into the indefinite future--without any subsidy from the general funds of the Government. Both the Congress and the Executive Branch, regardless of political party in power, have scrupulously provided in advance for full financing of all liberalizations in the program.

In its studies of the social security law and possible changes in that law, Congress reviews the operations and status of the trust funds and the estimates for the future and also hears the testimony of actuaries and other financial experts both inside and outside the Government.

Even when social security legislation is not under consideration, Congress continues to keep an eye on the financial operations of the social security program: Section 201 (c) of the Social Security Act provides for a Board of Trustees of the Trust Funds, composed of the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health, Education, and Welfare. The Board of Trustees is required by law to make a report to Congress each year on the operations and status of the Funds during the previous fiscal year and expected operations and status in the 5 following years and for the long-run future.

The Social Security Act also requires that an Advisory Council be appointed every few years to review the financing of the program and to prepare a report of findings and recommendations.