The Social Security Act of 1935 created the Social Security program to cover the lifetime benefits of retired workers. In order to implement the program, citizens, including employers and employees, are taxed a portion of their income, and then the money is disbursed to retirees or people who cannot work. There have been claims that social security is becoming insolvent, and in 2037, the trust fund will no longer have enough money to offer benefits. The main purpose of Social Security was to offer some form of cover to retirees and the elderly, with the employed working population funding the program. However, along the way, the demographics changed with an increased life expectancy that has led to the ratio of the working employees and employers to the retirees dropping. The shift in demographics means that the tax revenues would no longer be enough to support the benefits paid. The Social Security Trust Fund was created in 1985 to use the tax revenues to fund the social security needs. The additional trust funds were, however, placed in inflexible treasury bonds, and the government spent the revenues on general expenses. Because of this, there will be insufficient income taxes to pay the benefits (Smith, 2012).
The social security problem came to public and political awareness when the members of Congress realized that the social security surplus was being used for other federal government expenses. This happened in 1989 when Senator Earnest Hollings accused the Bush administration of misappropriating the social security surplus fund. The US government, through the treasury, was accused of siphoning the surplus funds in order to meet the federal government operating expenses. There were claims that the social security program would be paying more benefits than the revenues could sustain. Later in 1990, Senator Harry Reid said that the social security funds should have been used for the intended purpose and not for current government expenditure. Some of the senate members found the misappropriation of funds unacceptable and even suggested that they get cut to deny the government access to the money. However, the looting of the social security surplus fund continued for another decade until the issue was raised again during the presidential elections of 2000. The spending of the social security funds became a key campaign issue in 2000, with candidates pledging to end it (Galasso & Profeta, 2004).
Medicare is a public policy that is related to social security that came into being in 1965. Medicare is a medical plan by the federal government to cover medical expenses for American citizens who are 65 years and above. However, the evolution of Medicare goes back to the US government’s early efforts to provide medical cover for the elderly and poor citizens. Medicare has grown to be big and complex, and the health insurance program for this senior population and the disabled has grown too. In 2012, 51 million Americans were under Medicare cover. This population is likely to grow to about 70 million people by the year 2023. However, mismanagement and fraud have been topping the list in recent times have been increasing costs for running Medicare. Fraud claims by health institutions began since the program was created as there were few controls against fraud or criminal activity. The rising costs of the benefits program have also been attributed to the increasing number of beneficiaries compared to the fewer people paying for it (Martin, & Weaver, 2005).
The federal government under the leadership of President Ronald Reagan was involved in creating the social security problem. When he lowered the tax rates with intentions to get more revenue from taxpayers, the economy was in a crisis as there were deficits and increased national debts. Alan Greenspan, who was Reagan’s advisor, suggested that they increase the payroll taxes to increase the revenues and use the surplus like the income tax. They were borrowing money that would not be used to pay benefits in the next 30 years. Reagan defended the move to increase the payroll taxes by claiming that social security was at the edge of bankruptcy. The federal government, through Congress, passed the social security amendments that increased payroll taxes. Even though the public was made to believe that the surplus was to be invested in US treasury bonds, the money was used for non-social security purposes. Reagan’s successor, George H.W. Bush, also raided the trust funds to use for non-social security expenses (Galasso & Profeta, 2004).
Social security in the US is under an independent agency of the federal government known as Social Security Administration (SSA). The SSA was established through federal law and is the largest social welfare program that constitutes 37 percent of government expenditure. The federal government, therefore, fully administers the program creating a vital source of cover to a section of the US citizens. The SSA provides retired, elderly, disabled workers, their spouses, and the survivors of the insured with monthly benefits. Taxpayers who are generally employers, employees, and the self-insured primarily finance the programs. The revenues are then placed in trust funds under the federal government, after which payment is made to the beneficiaries. The role of the government in social security is, therefore, to set up structures that will ensure social welfare is provided for the elderly, retirees, disabled, and their survivors, and also to make sure that it exists for the working generation that funds the program (Goss, 2010).
The SSA is headed by the commissioner of social security and has more than 66000 employees. Below the commissioner are deputy commissioners, chief actuary, general counsel, inspector general, and the chief strategic officer. In 2010, the social security program paid more benefits than the tax revenue it was receiving from the taxpayers. This has raised political concerns among the republicans and democrats who realize that the trust fund would be depleted. Some Democrats and liberal advocates are of the idea that the benefits should be sliced. President Obama’s government has called for the reduction of benefits, increment of taxes, and retirement age again. Many Democrats have laid an argument that the social security program does not have an immediate funding crisis, and any changes in the program should therefore be argued separately. Some Republicans and Democrats share the idea that making small changes in the social security program will increase the trust funds in years to come and that this will also reassure the financial markets of lawmakers’ competency in fiscal issues. Some Democrats also are accusing republics of wanting to collapse social security and fear that the funds might be used to offset the country’s debt issues (Martin, & Weaver, 2005).
Social security has been entangled in the same public debate about taxes and government spending. Opinion polls have always shown that a large population of the American public supports the social security program. Americans have come to realize social security is a critical program for the larger population. A Majority of Americans do not mind being taxed for social security as the benefits provide stability and security to millions of retired citizens, the elderly, the disabled, and widows, and children of deceased employees and employers. The will to pay social security taxes also comes from the value it brings to the American citizens, as well as their families. However, a percentage of the public understand the looming financial problems and are calling for the privatization of the social security program. This is in a bid to sustain future generations by ensuring that the funds are available through stock investment. Others oppose privatization claiming that it would be risky, costly to oversee the process and that the government would be forcing taxpayers to direct their money in the stock market. The conflicting public opinions have raised political arguments that threaten crucial changes to the social security taxes or benefits, or even both. Despite the conflicting opinions, the massive social security program for retirement and disability could therefore be preserved with modest changes to the policy (Smith, 2012).
A public policy is a course of action by a government that is goal-oriented that is aimed at dealing with a problem. Social security is, therefore, such a policy that involves an interaction of the Congress, the president, political parties, cabinet, advisors, federal and state courts for its formulation, adoption, and evaluation. Social security was formulated based on the laws that are set by many people apart from legislators. Social security concerns began among individuals, societal groups, civil society, and government that had various plans to make a policy. The social security policy was adopted after all the decision-makers accepted the plans. Social security was built through a series of steps that made the complex current policy. Just like any other public policy, social security is accrued out by the administrative agency SSA that ensures that the policy is implemented. The policymakers evaluate the policy by assessing whether the terms are being accomplished. The federal government evaluates the implementation of social security by assessing the number of citizens in the program and the effectiveness of the funds. Most evaluations, however, come from other groups of policymakers like legislators, political parties, and civil groups. Current evaluations of social security are calling for some changes in the program after the realization that the trust funds might be depleted in the future (Goss, 2010).
Since the inception of the policy in 1935, benefits have been paid on time with the help of modifying the law. Congress intends to continue with the modifications and make changes in the revenue sources and benefits in order to sustain the program in the future. The project by the social security board of trustees aims at reducing the benefits and increase payroll taxes or a combination of these. These changes will ensure full payment of the benefits to the citizens for the next 75 years. Further modification of the policy by Congress shows the commitment to continue to evolve and shape the program. The future is always uncertain, and the projections of the financial and policy status of the program will somewhat vary over time. The certain thing about this policy direction is that the benefits that Americans will be entitled to continue to the future based on the modifications that will be appropriate for each period (Smith, 2012).
This essay discusses the nature and scope of social security as a public policy problem and how it came to public and political awareness. It also discusses the evolution of the Medicare program as a related public policy. Much emphasis is put on the key actors of the social security program, intergovernmental structure, and political concerns. It discusses the conflicting public opinion and the impact on policy solutions. The essay explains the approaches to policy formulation, adoption, and evaluation, as well as the suggested policy direction and future impact.