Social Security turns 90 today, and the program is at a crossroads
Financial solvency and customer service crisis both need attention
Social Security was signed into law 90 years ago today 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:
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.
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.
Data vs. reality at BLS and the SSA
If you don’t like what the data shows, go to war with the data. That’s the strategy behind Donald Trump’s decision to fire the head of the Bureau of Labor Statistics last week after he didn’t like the latest report on jobs, which pointed to a weakening employment situation. And I see a parallel in this development with the Social Security Administration, which has stopped reporting customer service performance metrics.
The BLS is widely regarded as a gold-standard data source. It reports on everything from inflation and prices to employment, wages, employee benefits and productivity.
The Federal Reserve, economists and investors all rely on the BLS to understand what’s going on in the economy. BLS data also impacts your pocketbook - reports are used to adjust everything from the dollar amount of tax brackets to Social Security COLAs and income cutoffs for Medicare premiums.
Trump fired BLS Commsissioner Erika McEntarfer, and nominated the chief economist of the Heritage Foundation as her replacement. E.J. Antoni has been leveling unfounded criticism of BLS reports for some time now, and has no evident qualifications to lead the agency. Even conservative economists criticized the nomination, for example Stan Veuger of the American Enterprise Institute. He told the Washington Post: “He’s utterly unqualified and as partisan as it gets.” The question now is whether BLS reports can be trusted.
Trump’s steps here undermine trust in BLS reports, and that’s very dangerous business for the economy. It’s related to similar moves to undermine or remove fact-based information across the federal government, and the regime’s attacks on universities and scientists.
Here on the retirement beat, I also see a parallel to what’s been happening at the Social Security Administration. In June, the agency stopped reporting in-depth information about its customer service performance metrics, making it much more difficult to know how it’s performing on toll-free wait times, disability claim processing and other key metrics.
The SSA has deleted a regularly-updated online spreadsheet that tracked disability claims and backlogs, walk-in visits to field offices, backlogs in SSA’s behind-the-scenes processing centers.
Here’s what an SSA spokesperson told me in response to a query about this decision:
“We have several metrics reported on our performance webpage. As Commissioner Bisignano continues to evaluate the agency, we are publishing metrics to our website that better reflect the real customer service experiences of the people we serve and highlight the fastest ways our beneficiaries can get service.”
The SSA performance page does highlight some areas of improved services. But experts who follow the agency closely say those gains result from surging resources to a handful of areas at the expense of other services. For example there was a 25% increase in toll-free staff - but that represents a shift of staff away from field offices.
All this is made possible by a lack of transparency. “It's much easier to cherry-pick metrics when the public can no longer see most measures, and when you no longer report anything by month,” says Kathleen Romig, director of Social Security and disability policy at the Center for Budget and Policy Priorities. “With the full data, you can see the kinds of games they're playing (like highlighting "improvements" in areas where workloads are significantly lower—disability claims and walk-in traffic—while hiding significant degradation in other areas—like processing centers).
What I’m reading
Wall Street’s big, bad idea for your 401k . . . Immigration crackdown hits senior care workforce . . .Obamacare insurers seek double-digital premium hikes for 2026 . . . Health insurers are denying more drug claims . . . Medicare rule change could change the way primary care doctors are paid . . . What a late-career layoff looks like, in five charts . . . Get ready for new tax rules on charitable giving . . . What’s behind the backlash against UnitedHealth . . . Pumping iron is their secret to aging well . . .An A.I. companion for dementia patients . . . Private equity in your 401(k) - what could go wrong?