Essay About Social Security And Baby Boomers

Social Security
Join now to read essay Social Security
Social Security was created in 1939 as a safety net for the elderly and
disabled. Four years after enactment the Administration and Congress
revised it. President Franklin wanted more to be done to revise the
program.
Social Security is a source of financial security for millions of
Americans. The program provides financial benefits for retirees, disabled
persons, and family of survivors of retired, disabled and deceased
workers currently 48 million people have collected benefits this year.
Baby boomers are the largest generation in American history. The 76
million persons born in 1946 through 1964 are making up the boom era.
In 2008 baby boomers will be reaching 62 years in age. The cost of
Social Security will increase much faster than income tax due to the
population of persons 65 and older will grow faster than that of the working
aged population. The baby boom generation and life expectancy
increasing will contribute to an aging population. When Social Security began
life expectancy at age 65 was 12 and one half years. Today that number
has grown to seventeen and one half years, and by 2030 it is expected to
reach 19 years. Beneficiaries will continue to grow while tax rates
remain the same.
Social Security taxes must be paid by public employees, self-employees,
State and local government public employees; the tax is referred to as
F.I.C.A (Federal Insurance Contribution Act). Employers also pay Social
Security tax that matches the employees contribution. The employers
share is a deductible business expense for income tax purposes. There is
an additional tax on workers earnings to pay for Medicare hospital
insurance. Higher income Social Security beneficiaries pay federal income
taxes on their benefit income which also help finance Social Security.
The tax began at two percent, and has been raised more than twenty
times, currently it is at 12.4 percent. The system today is pay-as-you go.
Under this current system it is widely believed it will become bankrupt
in the very near future. As benefits are increasing, longer living
Americans, the younger generations promised benefits will be greatly
decreased. In past years the number of workers that support Social Security
beneficiaries have decreased and somehow serve as proof that todays
system will not survive. Today there are 3.3 workers supporting a single
beneficiary. By the time todays younger generation reach age 70 this
number is expected to decline; there will be 2 workers for every
beneficiary. Advocates as well as President Bush feel if the system is not
reformed it will result in extremely higher tax rates, massive borrowing
will have to occur, or a drastic reduction in benefits or other
government programs will occur.
President Bush is dedicated to reforming the current system. In doing
so he has promised not to change the system for those born before 1950.
The system today is