The Lincoln Plawg - the blog with footnotes

Politics and law from a British perspective (hence Politics LAW BloG): ''People who like this sort of thing...'' as the Great Man said

This page is powered by Blogger. Isn't yours?
Saturday, April 09, 2005

Social security trust fund lies started with - FDR?

My, untutored, view on what is surmised to be Bush's proposals on social security [1] is - If it's that good, why are the arguments made for it so shifty and deceptive?

However, my current bête noire [2] is the Swift Boat Veterans-scale mendacity of the denial made by the opponents of Bush's plan (whatever it is) that, as the Clinton Treasury Department put it [3], the social security trust funds
do not consist of real economic assets

I'm mulling the substance.

But I was curious about what Franklin Roosevelt himself might have said on the issue. And I'm referred by this piece [4] to FDR's Address at Worcester, Mass on October 21 1936, in which he said
I want to say a word also to the wage earners who are finding propaganda about the security tax in their pay envelopes. I want to remind them that the new social security law was designed for them, for the greater safety of their homes and their families. The fund necessary to provide that security is not collected solely from workers. The employer, too, pays an equal share. And both shares—yours and the employer's—are being held for the sole benefit of the worker himself.

One of the achievements of Roosevelt's first term had been to establish a legal framework for the issue and sale of securities under which statements like his on social security - false or misleading - would result in a lengthy spell in Club Fed [5].

Whilst we are down Memory Lane, there is another twist: according to this - which purports to be the Social Security Act of 1935 as originally enacted, two funds were set up:

In Title IX, §904
established in the Treasury of the United States a trust fund to be known as the ''Unemployment Trust Fund"

But, in Title II, dealing with contributory pensions, §201 provided that
There is hereby created an account in the Treasury of the United States to be known as the ''Oil-Age Reserve Account'' hereinafter in this title called the ''Account''.

So, if the text is accurate, not only has the main social security trust fund never been a real trust fund, it wasn't even originally called a trust fund!

  1. There are no proposals. And the surmises seem to alter over time.

  2. What's got my goat - though not, of course, my Pet Goat.

  3. My piece of March 24.

  4. Imperfectly: his reference (fn 7) is to the dead-tree Public Papers series.

  5. Security Exchange Act of 1934 §32 (version as amended).

free website counter Weblog Commenting and Trackback by