Just Facts.com --> Social Security

Whenever the word, "projections" is used, this refers to projections done by the United States Social Security Administration. The process of making projections is not an exact science, and actual outcomes often differ from the projected ones. The Social Security Administration produces high, low, and intermediate projections. Only the intermediate numbers are cited here. [1]

Unless otherwise stated, all dollar figures are indexed for inflation, wage growth, and other economic parameters to produce numbers that are consistent in terms of the year 2000. In an example where a person earns $40,000 per year, this refers $40,000 in the year 2000, and an equivalent amount adjusted for wage growth in the years prior to and after that. In an example where a person is projected to receive $15,000 in Social Security benefits in the year 2017, this refers to an amount of money that would have the same buying power as $15,000 in the year 2000.

Unless otherwise stated, all facts are current as of 2000. Figures from specific years are used based on availability, and not to produce a desired result.

This page contains comprehensive details about Social Security. For a shorter list of key facts click here

* In 1935, Congress passed and President Franklin D. Roosevelt signed into law the "Social Security Act." This law created "a system of Federal old-age benefits" for workers and their families. In 1956, the law was amended to also provide disability benefits. [2] [3]

* Social Security is composed of two separate entities: The "Old Age and Survivors" program and the "Disability" program. Each program has separate finances, but for the purpose of simplicity, the figures shown below reflect the combination of both programs unless otherwise stated. [4] [5]

* The "Supplemental Security Income" program provides benefits for aged, blind, and disabled people without regard to prior workforce participation. It is administered by the Social Security Administration, but it is not funded by Social Security taxes. This program is not covered in this list of facts. [6]

* Social Security taxes and Medicare taxes make up what is referred to as "FICA taxes." The acronym FICA stands for the "Federal Insurance Contributions Act." (Medicare is a program that provides medical benefits for elderly people.) [7]

* The FICA tax amounts that appear on paychecks generally do not account for the taxes that employers pay. [10]

* Social Security taxes are subject to a wage threshold. Any income earned above the threshold is not taxed. In 2000, the threshold was $76,200. [11]

* The Social Security Act of 1935 set the wage threshold at $3,000. Income earned above this amount was not subject to Social Security taxes. This threshold was a fixed amount that was not indexed for inflation. [12]

* Between 1950 and 1971, various Congresses and Presidents passed at least 6 laws to increase the threshold. [13]

* In 1972, the Congress and President Nixon passed a law to automatically index the threshold based upon the national average wage. [14]

* In 1977, the Congress and President Carter passed a law that increased the threshold in 1979, 1980, and 1981 at higher rates than the growth in the national average wage. [15] [16]

* Since 1982, threshold increases have been based upon growth in the national average wage. [17] [18]

* In 1951, the wage threshold was 129% of the national average wage. In 1998, the threshold was 237% of the national average wage. [19]

* The Social Security Act of 1935 set the initial tax rate at 2% and specified increases that would bring the rate to 6% by 1949. [20]

* In 1939 and during the 1940's Congresses and President Roosevelt postponed the tax rate increases that were scheduled in the original Social Security Act. The tax rate of 6% was delayed until 1960. [21] [22]

* Since 1950, various Congresses and Presidents have passed at least 9 laws to increase Social Security tax rates above the 6% level specified in the original Social Security Act. [23]

* During the year 2000 presidential race, the Gore/Lieberman campaign posted the following statement on their web site:

* In 1936, the federal government published an informational pamphlet on Social Security. It stated:

* After adjusting for inflation, the result of the calculation in this statement equals a maximum tax collection of $1620 per person. In 2000, the maximum tax collection per person was more than 5 times this amount. [27]

* In 2000, Social Security taxes accounted for about 25% of all federal tax collections. [28]

* For workers with average incomes, the government collects the equivalent of 6 weeks worth of their salary in Social Security taxes every year. [29]

- Note: The following projections are based upon what the current law specifies. This does not mean that there will be enough money in the Social Security program to pay for these benefits. Information concerning the financial stability of the Social Security program is contained in the next section.

* In general, to qualify for old age benefits, a person must work for ten years, earning at least $3,120 a year. [32]

* Old age benefits are calculated based upon a formula that takes into account the average Social Security taxes paid by the worker. [33]

* This formula gives a better ratio of benefits to taxes for people with lower incomes and for those who have not worked as long. Old age benefits for people who turned 65 years old in the year 2000:

* Old age benefits are generally increased once a year based upon the increased cost of living. The benefit increase for 1999 was 2.4%. [35]

* The age at which a worker receives full Social Security old age benefits is referred to as the "full retirement age." A person's full retirement age can be between 65 and 67 years old, depending upon their year of birth. (More details in footnote.) [36]

* Workers have the option to start receiving Social Security benefits at the age of 62, but the benefits are permanently reduced. (More details in footnote.) [37]

* Workers have the option to start receiving benefits later than their full retirement age, and the benefits are permanently increased. (More details in footnote.) [38]

* Family members of workers who are receiving old age benefits may also be eligible for benefits, even if they have not worked. (More details in footnote.) [39]

* As of 2001, Social Security is paying an average of $10,140/year to individuals receiving old age benefits. [40]

* As of 2001, the federal government defines the poverty level for an individual at $8,590/year. [41]

* As of 2001, Social Security is paying an average of $16,920/year to couples receiving old age benefits. [42]

* As of 2001, the federal government defines the poverty level for a family of two at $11,610/year. [43]

* If a married worker passes on, their spouse receives between 50% and 67% of the couples' combined benefits. There are additional benefits paid to families with children who are minors or disabled. [44] [45]

* As of 2000, 1/3 of Americans have no savings and 1/3 have less than $2,500 in savings. [46]

* The following applies to people who are still working when they begin to receive old age benefits: Individuals who earn more than $25,000/year and couples who earn more than $32,000/year pay income taxes on up to 50% of their old age benefits. [47]

* The $25,000 and $32,000 thresholds at which people are required to pay these taxes are not indexed for inflation or wage growth. [48]

* In general, to qualify for disability benefits, a person must work for 5 years. [49]

* In general, recipients begin to receive disability benefits after they have been disabled for five full months. [50]

* Disability benefits are calculated based upon a formula that takes into account the average Social Security taxes paid by the worker. [51]

* The formula gives a better ratio of benefits to taxes for people who have lower incomes and for those who have not worked as long. [52]

* A 55 year old person and a 25 year old person, each with annual incomes of $30,000 receive the same disability benefits. [53]

* Disability benefits are generally increased once a year based upon the increased cost of living. The benefit increase for 1999 was 2.4%. [55]

* Family members of workers who are receiving old age benefits may also be eligible for benefits, even if they have not worked. (More details in footnote.) [56]

* As of June of 2000, 45.2 million people are receiving Social Security benefits. In 2000, the Social Security program paid out $407.6 billion dollars in benefits. [57]

* The Social Security administration is required by law to send statements to workers once a year outlining their projected benefits. You should receive it about 3 months before your birthday. If you do not receive it, call 1-800-772-1213 or go to http://www.ssa.gov/. [59]

* The Social Security program has an independent budget that is separate from the rest of the federal government. [60] [61]

* Since 1982, the Social Security program has had surpluses ranging between 89 million and 153 billion dollars per year. [62]

* By law, Social Security surpluses must be loaned to the federal government. The federal government is required by law to pay this money back to the Social Security program with interest. [63] [64]

* According to projections, in 2015, the Social Security program will begin to spend more money than it collects in taxes. At that point, the Social Security program will begin to collect on the money that it has loaned to the federal government. [65]

* According to projections, between 2015 and 2037, the annual shortfalls of the Social Security program will be covered by the money that federal government will pay back to the Social Security program. [66]

- Note: The above fact does not mean that the federal government will have enough money to pay back the Social Security program. Information concerning the ability of the federal government to pay this money back to the Social Security program is contained in the section: Impact on National Debt

* In 2037, it is projected that the money and interest that the federal government owes to the Social Security program will be paid in full. [67]

* Between 2037 and 2075, the Social Security program is projected to run annual deficits totaling 30 trillion dollars. [68]

* This shortfall comes to $154,000 (in year 2001 dollars) for every person projected to be paying Social Security taxes in the year 2075. [69]

* To keep the Social Security program solvent, the tax rate would need to be raised by about 50%, or the benefits would need to be cut by about 33%. [70] [71] [72]

* One of the causes for the projected deficits is that the number of people paying taxes compared to the number of people receiving benefits has fallen and is projected to fall further.

* Factors that have contributed to the falling ratio of people paying taxes compared to people receiving benefits:

1) Increase in life expectancy without a comparable increase in the retirement age.

2) The higher birth rate of the baby boom generation compared to the birth rates of succeeding generations.

1) Increase in life expectancy without a comparable increase in the retirement age:

* Since the inception of the Social Security program, the retirement age has not changed. Current law requires that it be moved back 2 years by the year 2025. [74]

* When Social Security began paying benefits in 1940, the average 65 year old male had a life expectancy of 11.9 more years. As of 2000, the average 65 year old male has a life expectancy of 15.9 more years. This is a 34% increase. [75] [76]

* When Social Security began paying benefits in 1940, the average 65 year old female had a life expectancy of 13.4 more years. As of 2000, the average 65 year old female has a life expectancy of 19.2 more years. This is a 43% increase. [77] [78]

* Benefits and taxes are annually indexed to compensate for inflation and wage growth. The retirement age is not indexed to compensate for increased life expectancy. [79]

2) The higher birth rate of the baby boom generation compared to other generations:

* The baby boom generation was born between the late 1940's and early 1960's. During this time, the average birth rate per woman reached a high of 3.7. [80] [81]

* By 1976, the average birth rate had fallen to 1.7. As of 2000, it is about 2.1. [82]

* Around 2010, the baby boom generation will begin to retire. Between 2010 and 2030, it is projected that the number of people eligible for old age benefits will increase by about 80%. During the same time period, the number of people paying Social Security taxes will increase by about 2%. [83] [84]

* Between 1960 and 2000, the U.S. population grew by 56%. During the same period, the number of people receiving disability benefits increased by 876%. [87]

* Less than a month later, President Clinton submitted a budget proposal to Congress that included $300 million in new Medicare spending, $1.2 billion in new spending for food stamps, $5 billion in new spending for education grants, $3.2 billion in new spending for child care grants, and $800 million in new spending for unemployment insurance. [89]

* Clinton's additional spending proposals totaled to 43 billion dollars over a five year period. [90]

* With regards to the "surplus" Clinton spoke of, more information is contained in a section below: Impact on National Debt

* The word 'savings' or 'save' does not appear in the Social Security Act of 1935. The word 'benefit' appears 25 times. [91]

* In 1999, 82% of the taxes that workers and employers paid into the Social Security system were spent to pay benefits for current recipients. [92]

* The first person to collect monthly Social Security benefits was a legal secretary by the name of Ida May Fuller. She paid a total of $24.74 in Social Security taxes and received a total of $22,888.92 in Social Security benefits (numbers not adjusted for inflation). Ms. Fuller started paying taxes at the outset of the Social Security program and retired three years later at the age of 65. She lived to be 100 years old. [93]

* No money has been taken from the Social Security program.[94] Social Security surpluses are loaned to the federal government.[95] This is a requirement that was established in the original Social Security Act.[96] The federal government is required by law to pay back this money to the Social Security program with interest, and it has never failed to do so. [97] [98] [99]

* The assets of the Social Security program include all of the money that it has loaned to the federal government.[100] [101] Even when this money is repaid with interest, the Social Security program is projected to become insolvent in 2037, and have an accumulated deficit of 30 trillion dollars by 2075. [102] [103]

* If extra money had not been added into the Social Security program by increasing the tax rate, it would have become insolvent before 1980. [104]

* In 1999, the administrative overhead of the Social Security program was 3.4 billion dollars. This is equal to 0.9% of the benefit payments that Social Security made that year. [105]

* In January of 2000, a bipartisan commission (consisting of 4 people appointed by Congress and 3 people appointed by Bill Clinton) issued a report concerning the Social Security Disability program. The report stated:

* The New York Times published an article outlining the findings of this report. The article mentioned George W. Bush 5 times. Bush had been in office for less than a month. [107]

* The article did not mention Bill Clinton. At the time the report was released, people appointed by Bill Clinton had been running the Social Security Administration for the past 8 years. [108] [109]

* During Bill Clinton's tenure, the administrative costs per disability beneficiary increased by 11%. During Ronald Reagan's and George H. Bush's tenures, the administrative costs per disability beneficiary decreased by 16%. [110]

* As of 2000, there is no law to prohibit felony fugitives from receiving Social Security retirement or disability benefits. The Social Security Administration estimates that it pays between 39 and 179 million dollars per year to felony fugitives. [111]

* In 1999, the Social Security Administration paid $17 million dollars in benefits to 2,091 people who were deceased. [112]

* The Social Security program has an independent budget that is separate from the rest of the federal government. [113] [114]

* When the Social Security program collects more in taxes than it spends, it generates surplus money. By law, the only thing that the Social Security program can do with surplus money is to loan it to the U.S. government. [115] [116]

* When the Social Security program loans money to the U.S. government, the government is obligated by law to pay this money back to the Social Security program with interest. This money becomes a part of the national debt. [117] [118] [119]

1) Money that it owes to federal entities such as the Social Security program and federal employee retirement funds.

2) Money that it owes to non-federal entities such as individuals who have purchased U.S. Savings Bonds. [120]

* The U.S. government uses the terms "Intragovernmental Holdings" and "Nonmarketable Debt" to refer to the money that it owes to federal entities. The government uses the terms "Debt Held by the Public" and "Marketable Debt" to refer to the money that it owes to non-federal entities. [121]

* The federal law (USC Title 3, Chapter 31, Section 3123) that governs the repayment of the national debt draws no distinction between the debt owed to federal versus non-federal entities. Both must be repaid with interest. The average interest rate that the U.S. government pays on the debt that it owes to federal and non-federal entities is about the same. [122] [123]

* When the Social Security program loans money to the U.S. government, the government can use this money to pay off debt that it owes to non-federal entities. This leaves the national debt unchanged because the U.S. government needs to pay back this money to the Social Security program. Some politicians have referred to this action as, "Putting Social Security into a lockbox." [125]

* When the Social Security program loans money to the U.S. government, the government can use this money to spend on government programs. This increases the national debt because the U.S. government has spent the money that it has borrowed from the Social Security program. Some politicians have referred to this action as, "Raiding the Social Security Trust Fund." [126]

* When the U.S. government takes either of the above actions, the finances of the Social Security program are not affected. In both cases, the law requires the government to pay the money back to the Social Security program with interest. [127] [128]

* The impact of one action compared to the other is whether the national debt remains unchanged or increases. The national debt is not paid for with Social Security taxes. It is paid for with income taxes, corporate taxes, sales taxes, and excise taxes. [129] [130] [131] [132]

* In 1999, Republican Congressman Wally Herger sponsored a "lockbox" bill in the House of Representatives. This law would have restricted Congress from using money borrowed from the Social Security program to spend on other government programs. It passed the House by a vote of 416 to 12. [133]

* In the Senate, Republicans attempted to bring this bill up for a vote. To do this, 3/5 of the Senators must agree to do so. The motion to bring this bill up for a vote failed. 100% of Republicans voted for it. 100% of Democrats voted against it. [134]

* As of 2000, the U.S. government owes 1,016 billion dollars to the Social Security program. This comes to $3,600 for every man, woman, and child living in the United States. [135] [136]

* In 2015, the U.S. government is projected to owe 2,879 billion dollars to the Social Security program. This comes to $9,000 (in year 2000 dollars) for every man, woman, and child who will be living in the United States at that time. The interest on this debt is projected to be 181 billion dollars a year. [137]

* Since 1998, politicians, TV networks, radio stations, magazines and newspapers have referred to the budget as "balanced" or asserted there is a "surplus." [138] [139] [140] [141] [142]

* Their description of the budget as "balanced" or as having a "surplus" does not account for the interest owed on the debt to federal entities. [143] [144]

* According to the United States Treasury, the national debt has risen every year since 1960, including 1998, 1999, and 2000.

* The debt that President Bush referred to in this statement excludes the debt that is owed to federal entities such as Social Security. [147]

* The following information was not included in Bush's speech to Congress. It was found on page 201 of his budget proposal:

- The reduction in the debt owed to non-federal entities is offset by an increase in debt owed to federal entities such as Social Security. [148]

- Under Bush's budget proposal, the national debt increases by 1.5 trillion dollars over the next ten years. [149]

* The debt that Al Gore referred to in this statement excludes the debt that is owed to federal entities such as Social Security. [151]

* During the 2000 presidential race, Al Gore and Joe Lieberman released a 192 page economic plan that contained over 150 uses of the word "debt." This document does not acknowledge or account for any of the debt that is owed to federal entities. [152]

* This assertion was repeated 11 times in the Gore/Lieberman economic plan. Bill Clinton and his economic advisor Gene Sperling made similar assertions. [154] [155] [156]

* Keeping Social Security "in a lockbox" as Gore, Lieberman, Clinton and Sperling proposed, reduces the debt that is owed to non-federal entities. This is offset by an equivalent increase in debt owed to federal entities. The result is that the amount of national debt and the interest on it remain unchanged. [157] [158] [159]

* The Gore/Lieberman economic plan states that the money used to extend the life of Social Security is "based on actual resources that are freed up by devoting the Social Security surpluses to debt reduction." [160]

* The Gore/Lieberman plan contains a budget proposal for the years 2001 through 2010. In that proposal, no resources are devoted to extend the life of Social Security. The tables in the Gore/Lieberman economic plan that contain "actual resources" stop after the year 2010. Their proposal to extend the life of Social Security is structured so that no money is required until 2011. [161]

* Unless taxes are raised or federal programs are cut starting in the year 2011, the Gore/Lieberman plan would add 9 trillion dollars to the national debt. [162] [163]

* In 1936, the federal government published an informational pamphlet on Social Security. With regards to benefits, it stated:

* Three years later, Congress and President Franklin D. Roosevelt eliminated two benefits from the Social Security program.[167]

* In 1960, the Supreme Court ruled that entitlement to Social Security benefits is not a contractual right. [169]

* Under current law, the money that people pay in Social Security taxes is not saved for them and is not their property. [172]

* Proposals have been made to change a portion of Social Security from a benefit program to a savings program. These savings would be the personal property of each person who chose to participate. In turn, their Social Security old-age benefits would be reduced to correspond with the amount of taxes they paid into the program. [173]

* George W. Bush has proposed that each worker be given the option to place 16% of their Social Security taxes into a personal account. [174] People who choose this option would be able to put their money into bank accounts, government bonds, CDs, or the stock market. There would be investment guidelines to prohibit people from making high risk investments. [175] [176]

* Bush's proposal would have a negative effect on the short term finances of the Social Security system because the program would receive 16% less tax revenue from people who opt to place their money into a personal account. [179]

* Bush's proposal would have a positive effect on the long term finances of the Social Security system because the program would spend less money on benefits for people who opt to place their money into a personal account. [180]

* The Republican Party supports giving workers the option to place a portion of their Social Security taxes into a personal account. [177]

* The Democratic Party is opposed to giving workers the option to place a portion of their Social Security taxes into a personal account. [178]

* In October of 2000, during a debate with George W. Bush, Al Gore stated that Bush’s proposal would cut the value of senior citizens’ Social Security checks by 16% unless Bush came up with the money from somewhere else. [181]

* Including the negative short term effect of Bush’s plan, the Social Security program is projected have enough money to pay all benefits and produce surpluses amounting to 430 billion dollars over the next ten years. The total assets of the program would be about 1,482 billion dollars in 2010. [182]

* After the debate, ABC, NBC, CNN and Time Magazine ran stories evaluating the truthfulness of the candidates' statements. None of these stories challenged Gore’s assertion regarding Bush’s plan. [183] [184] [185] [186]

* As of 1996, 30-year-old black men have an average life expectancy of 2.4 years beyond their full retirement age. (White males - 8.6 years, Black females - 9.2 years, White females - 13.7 years) [187]

* In general, for people who are single and have no children under the age of 19, their benefits stop when they pass on. [188]

* Personal ownership allows people to pass their Social Security savings to their heirs upon death. [189]

* Under the current system, a 22-year-old person who works for the next 45 years earning $30,000/ year will contribute $167,400 to the Social Security program. When he or she turns 67 years old in 2045, all of the money they have contributed will be spent. Any old age benefits they receive would come from taxes paid by younger workers. [190] [191]

* Under Bush's proposal, if this same person chooses the savings option, 16% of their Social Security taxes will go into a personal account. If this money earns 5% above the rate of inflation, when he or she turns 67 years old in 2045, they will have saved $100,000. [192]

* Over the past 79 years (during a period that included the Great Depression), the average return on the stock market (S&P 500) has averaged 8.14% above the rate of inflation. [193]

* In 1981, the South American nation of Chile established an optional personal ownership system. Within 2 years, 90% of workers chose to join it. [194]

* The tax rate for the new system is 13%. The tax rate for the government program was 26%. [195] [196]

* The average retirement and disability incomes are higher in the personal ownership system than in the government program. [197]

* The personal ownership system has no deficit. The government program had a long term deficit equal to more than 100% of the Gross Domestic Product. [198]

* The government program pays benefits by taxing people who were currently working. [199]

* The personal ownership system is self funded. Every 3 months, workers receive a statement that informs them how much money they have saved. [200]

* In February of 2001, the New York Times published an article written by Robert Pear. The headline read:

"Study Says Disabled Would Lose Benefits Under New Social Security Plan."

The article stated:

"President Bush has said he wants to let workers put some of their Social Security payroll taxes into personal investment accounts, but at the same time he has championed the rights of people with disabilities."

"The new study, by the General Accounting Office, an investigative arm of Congress, concludes that "even under the best of circumstances, Social Security reform proposals would reduce benefits" for people with disabilities." [201]

* This study did not evaluate Bush's proposal, which contains no mention of changing the disability component of Social Security. [202] [203]

* This study compared the disability benefits produced by several personal ownership proposals to the disability benefits specified by current law. To pay the disability benefits specified by current law, the Social Security tax rate needs to be increased over time by 49%. [204]

* This information appears on page 44 of the congressional study and nowhere in the New York Times article.

* When the study compared the personal ownership proposals to the current Social Security system using the same tax rate for both plans, in the majority of cases, the personal ownership systems produced higher disability benefits than the current Social Security system. [205]

* This information appears on page 34 of the congressional study and nowhere in the New York Times article.

* Less than a month before the 2000 presidential election (Bush vs. Gore), the American Academy of Actuaries released the results of a study they had completed. The title of the press release was:

Bush and Gore Social Security and Medicare Reforms Judged “Incomplete” and “Potentially Misleading” [206]

* On the same day this press release was issued, the Washington Post published an article written by Glenn Kessler entitled:

"Actuaries Fault Bush Plan" [207]

* The fact that this study faulted Gore's Medicare plan was mentioned in one sentence located more than half way through the article. [208]

* Within 2 weeks, the Gore-Lieberman campaign produced and aired a commercial which stated:

"The American Academy of Actuaries looked at [Bush's] plan and concluded it would lead to catastrophic results..." [209]

* As a result of this commercial, the American Academy of Actuaries issued a press release which stated:

"We call upon the Gore campaign to stop misusing the American Academy of Actuaries' name and logo in its paid political advertisements. The Academy regrets that the public may have received the erroneous impression from these ads that it supports Vice President Gore's Social Security and Medicare proposals."

"In addition we ask that Vice President Gore stop using the following characterization of the Academy's analysis: 'The American Academy of Actuaries looked at his (Bush's) plan and concluded it would lead to catastrophic results...' This characterization of the Academy's analysis by Vice President Gore is erroneous." [210]

* The American Academy of Actuaries issued this press release on Election Day. The Washington Post never reported it. [211]

* The study published by American Academy of Actuaries was divided into two sections. One actuary wrote a section on Social Security and another wrote a section on Medicare. The person who wrote the section on Social Security was Ron Gebhardtsbauer. [212]

* Gebhardtsbauer pointed out that Bush's proposal would move up the date when the Social Security program would become insolvent. [223]

* Bush's plan has a negative effect on the short term finances of the Social Security program and a positive effect on the long term finances of the Social Security System. Gebhardtsbauer accounted for the negative short term effect and ignored the positive long term effect. [224] [225] [226]

* Gebhardtsbauer stated that "Bush is very much overspending Gore." [227]

* Bush's plan does not contain any new spending. It allows people to put a percentage of their current Social Security taxes into personal accounts. This would result in lower tax revenues which are offset by lower spending. [228] [229]

* Gebhardtsbauer wrote:

"Gore proposes to solve the Social Security shortfall by paying down the national debt now, and giving the savings in annual interest payments (currently $200 billion a year) to the Social Security Trust Fund." [213]

* Gebhardtsbauer stated that Gore's plan to "eliminate the debt by 2012 appears on target." [214]

* Gebhardtsbauer's and Gore's definition of the word "debt" excludes the debt owed to federal entities. Under Gore's plan, the national debt would be more than 5 trillion dollars in 2012. [215] [216]

* Gebhardtsbauer wrote that Gore's plan to extend the life of Social Security is funded by general revenues. [217] (General revenues come from income, corporate, and sales taxes; not Social Security taxes. [218] [219] [220])

* Gore's 10 year budget proposal uses all of the projected general revenues on programs other than Social Security, which Gebhardtsbauer did not mention. [221] [222]

* Gore's plan would require that an additional 9 trillion dollars in general revenues be added to the Social Security program. Gebhardtsbauer added this money into his analysis of Gore's proposal without accounting for the source of these funds. The graph that would have accounted for this money was only used to analyze Bush's proposal. [230] [231]

* Gebhardtsbauer published two different graphs in his analysis. The graph that would illustrate the positive effects of both proposals was only used to analyze Gore's proposal. [232]

* The Washington Post article referred to the American Academy of Actuaries as a "respected nonpartisan organization" and stated:

"Ron Gebhardtsbauer, senior pension fellow for the academy, stressed that the organization was not taking sides in the election but was merely applying standard evaluation techniques to the plans and rhetoric offered by the candidates." [233]

* Sixteen days prior to the publication of his study, Gebhardtsbauer donated $250 to a Political Action Committee, who stated in an article that they "campaigned vigorously for Al Gore for president." [234] [235]

* Gebhardtsbauer donated $250 to the Democratic National Committee in 1993 and $500 in 1994. [236]

* In 1998, Bill Clinton was scheduled to moderate a White House Conference on Social Security. He cancelled to attend a funeral. The night before the conference, the White House called Ron Gebhardtsbauer at his home and asked him to fill in for Clinton. [237]

Privacy

* Between 1946 and 1971, Social Security cards had the following words imprinted on them:

"FOR SOCIAL SECURITY PURPOSES -- NOT FOR IDENTIFICATION." [238]

* The web site of the New Jersey Department of Motor Vehicles states:

"Submission of the Social Security Number is required pursuant to N.J.A.C. 13:21-1.3. The number will serve as an internal secondary identifier to prevent errors, to enforce interstate motor vehicle laws, and to assist in collecting motor vehicle fees." [239]

* In 1994, Democrat Congressman Dick Gephardt sponsored a law that passed Congress with 67% of Democrats and 70% of Republicans voting for it. Bill Clinton signed it into law. This legislation contains a section entitled:

"TAXPAYER IDENTIFICATION NUMBERS REQUIRED AT BIRTH." [240]

* This law requires that that parents submit Social Security Numbers for their children with their tax return in order to obtain a tax exemption for their children. (Full text in footnote.) [241]

Footnotes

[1] "The 2000 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds." March 30, 2000. Accessed at http://www.ssa.gov/OACT/TR/TR00/index.html in June of 2001.

Notes:

A) Pages 11, 144

[2] "The Social Security Act of 1935." The Senate and House of Representatives of the United States of America, August 14, 1935. Accessed at http://www.ssa.gov/history/35act.html in May of 2001.

[3] "Charting the Future of Social Security’s Disability Programs: The Need for Fundamental Change." Social Security Advisory Board, January 2001. Accessed at http://www.ssab.gov/disabilitywhitepap.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) Page 6

[4] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 33

[5] "Social Security Trust Funds: Frequently Asked Questions." Social Security Administration of the United States of America, June 7, 1999. Accessed at http://www.ssa.gov/OACT/ProgData/fundFAQ.html in May of 2001.

[6] "Charting the Future of Social Security’s Disability Programs: The Need for Fundamental Change." Social Security Advisory Board, January 2001. Accessed at http://www.ssab.gov/disabilitywhitepap.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) Page ii

[7] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 169, 170

[8] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 169, 170

[9] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 169, 170

[10] Examined several different paychecks.

[11] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 5

B) Since 1994, there has been no threshold on Medicare taxes. Page 169.

[12] "The Social Security Act of 1935." The Senate and House of Representatives of the United States of America, August 14, 1935. Accessed at http://www.ssa.gov/history/35act.html in May of 2001.

Notes:

A) Section 811

[13] Kollmann, Geoffrey. "Summary of Major Changes in the Social Security Cash Benefits Program: 1935-1996." Congressional Research Service, Updated December 20, 1996. Accessed at http://www.ssa.gov/history/pdf/crs9436.pdf in May of 2001. (This is an Adobe PDF Document.)

Note: The phrase "at least 6 laws" was used because I found 6 laws in this 30 page document that raised the threshold during this time period. However, other documents indicated law changes that I could not find here. To be on the safe side, I used the lowest possible number in conjunction with the term "at least."

[14] Kollmann, Geoffrey. "Summary of Major Changes in the Social Security Cash Benefits Program: 1935-1996." Congressional Research Service, Updated December 20, 1996. Accessed at http://www.ssa.gov/history/pdf/crs9436.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) Page 11

[15] Kollmann, Geoffrey. "Summary of Major Changes in the Social Security Cash Benefits Program: 1935-1996." Congressional Research Service, Updated December 20, 1996. Accessed at http://www.ssa.gov/history/pdf/crs9436.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) Page 14

[16] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 34, 66

[17] Kollmann, Geoffrey. "Summary of Major Changes in the Social Security Cash Benefits Program: 1935-1996." Congressional Research Service, Updated December 20, 1996. Accessed at http://www.ssa.gov/history/pdf/crs9436.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) Page 14

[18] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 66

[19] Calculations done with data from "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 34, 35, 66

B) 1951 and 1998 are the earliest and latest years for which data was available in the 2000 Trustee's Report.

[20] "The Social Security Act of 1935." The Senate and House of Representatives of the United States of America, August 14, 1935. Accessed at http://www.ssa.gov/history/35act.html in May of 2001.

Notes:

A) Section 801

[21] Kollmann, Geoffrey. "Summary of Major Changes in the Social Security Cash Benefits Program: 1935-1996." Congressional Research Service, Updated December 20, 1996. Accessed at http://www.ssa.gov/history/pdf/crs9436.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) Page 4

[22] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 34

[23] Kollmann, Geoffrey. "Summary of Major Changes in the Social Security Cash Benefits Program: 1935-1996." Congressional Research Service, Updated December 20, 1996. Accessed at http://www.ssa.gov/history/pdf/crs9436.pdf in May of 2001. (This is an Adobe PDF Document.)

Notes:

A) The phrase "at least 9 laws" was used because we found 9 laws in this 30 page document that raised the tax rate during this time period. However, other documents indicated law changes that we could not find here. To be on the safe side, we used the lowest possible number in conjunction with the term "at least."

[24] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 34, 35

[25] "Securing a Decent Retirement for All Americans." Gore/Lieberman 2000. Accessed at http://www.algore.com/ in October of 2000.

[26] "The 1936 Government Pamphlet on Social Security." The Social Security Administration of the United States of America. Accessed at http://www.ssa.gov/history/ssn/ssb36.html in May of 2001.

[27] Calculations done with data from "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) The calculation specified in the pamphlet yields a result of $180.

B) To adjust for inflation, an average annual CPI of 4.4% was used. This figure comes from Page 151. It applies to the time period 1959-1998. We used it for the time period 1949-2000.

C) In 2000, the wage threshold was $76,200 and the tax rate was 12.4%. This yields a maximum tax collection of $9,448.

[28] Calculations done with data from:

A) "The 2001 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds." March 19, 2001. Accessed at http://www.ssa.gov/OACT/TR/TR01/index.html in May of 2001. Notes: (a) Page 3. Total taxes collected in 2000 = $492.5 billion.

B) "Options to Cut Taxes." Congressional Budget Office, June 2000. Accessed at http://www.cbo.gov/showdoc.cfm?index=2125&sequence=0&from=1 in April of 2001. Notes: (a) Table 1 - Total projected federal tax collections in fiscal year 2000 = 1,945 billion.

[29] 52 weeks/year X 12.4% tax rate = 6.5 weeks per year to pay Social Security taxes.

[30] "A Blueprint for New Beginnings – A Responsible Budget for America's Priorities." Executive Office of the President of the United States, February 28, 2001. Accessed at http://www.whitehouse.gov/news/usbudget/blueprint/budtoc.html in April of 2001.

Notes:

A) Page 45

[31] Smith, Kenneth D., "Disability epidemic." The Washington Times, September 7, 2000. Accessed at http://www.washtimes.com/ in September of 2000.

[32] "Your Social Security Statement." The Social Security Administration of the United States of America, 2000.

Notes:

A) The Social Security administration is required by law to send statements to workers once a year outlining their projected benefits.

[33] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) The formula takes into account the amount of Social Security taxes that a worker has paid during the 35 years in their career when they made the most income.

[34] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) The "average annual income" numbers were 1999 figures that were indexed by 2.2% for inflation to make them consistent in terms of the year 2000.

B) In 2000, the wage threshold was $76,200. Any income above this amount was not taxed and is not used to calculate benefits.

[35] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 65

[36] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) For those born before 1938, the full retirement age to qualify for Social Security benefits is 65 years old.

B) For those born between 1938 and 1959, the full retirement age to qualify for Social Security benefits is defined by the following chart:

Year of Birth	Full Retirement Age
1938	65 and 2 months
1939	65 and 4 months
1940	65 and 6 months
1941	65 and 8 months
1942	65 and 10 months
1943 - 1954	66
1955	66 and 2 months
1956	66 and 4 months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months

C) For those born after 1959, the full retirement age to qualify for Social Security benefits is 67 years old.

[37] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) Workers have the option to start receiving retirement benefits at 62 years of age, but the benefit is permanently reduced by about 6.7% for every year they begin receiving benefits before their full retirement age.

[38] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) Workers have the option to start receiving retirement benefits later than their full retirement age, and the benefits are permanently increased by 6 - 8% for every year they wait to start receiving benefits after their full retirement age.

[39] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) Family members include a spouse, children under the age of 19, and adult children who are disabled.

B) Each family member may be eligible for benefits equal to 50% of the worker's benefit, but there is a limit on the amount of benefits that a single family can receive.

[40] "Understanding the Benefits." The Social Security Administration of the United States of America, February 2001. Accessed at http://www.ssa.gov/pubs/10024.html in May of 2001.

[41] "Summary Historical Figures and Federal Register References for the HHS Poverty Guidelines since 1982." The United States Department of Health and Human Services, Last updated February 16, 2001. Accessed at http://aspe.hhs.gov/poverty/figures-fed-reg.htm in June of 2001.

[42] "Understanding the Benefits." The Social Security Administration of the United States of America, February 2001. Accessed at http://www.ssa.gov/pubs/10024.html in May of 2001.

[43] "Summary Historical Figures and Federal Register References for the HHS Poverty Guidelines since 1982." The United States Department of Health and Human Services, Last updated February 16, 2001. Accessed at http://aspe.hhs.gov/poverty/figures-fed-reg.htm in June of 2001.

[44] Keating, Raymond J. "Grading the Candidates: Social Security." Small Business Survival Committee, July 27, 2000. Accessed at http://www.sbsc.org/LatestNews_Action.asp?FormMode=EntreEcon&ID=18 in May of 2001.

[45] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

[46] Noyes, Rich. "Networks Give One-Sided View of Social Security Debate." Media Research Center, May 19, 2000. Accessed at http://www.mediaresearch.org/fmp/medianomics/2000/mn20000519.html in May of 2000.

[47] "The House Passes H.R. 4865, The Social Security Benefits Tax Relief Act." Social Security Legislative Bulletin # 106-27, August 4, 2000. Accessed at http://www.ssa.gov/ in April of 2001.

[48] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Pages 110, 168

[49] "Your Social Security Statement." The Social Security Administration of the United States of America, 2000.

Notes:

A) The Social Security administration is required by law to send statements to workers once a year outlining their projected benefits.

[50] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

[51] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

[52] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

[53] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

[54] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) The "average annual income" numbers were 1999 figures that were indexed by 2.2% for inflation to make them consistent in terms of the year 2000.

B) In 2000, the wage threshold was $76,200. Any income above this amount was not taxed and is not used to calculate benefits.)

[55] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 65

[56] "Understanding the Benefits." The Social Security Administration of the United States of America, January 2000. Accessed at http://www.ssa.gov/pubs/10024.html in December of 2000.

Notes:

A) Family members include a spouse, children under the age of 19, and adult children who are disabled.

B) Each family member may be eligible for benefits equal to 50% of the worker's benefit, but there is a limit on the amount of benefits that a single family can receive.

[57] "The 2001 Annual Report of the Board of Trustees of The Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds." March 19, 2001. Accessed at http://www.ssa.gov/OACT/TR/TR01/index.html in May of 2001.

Notes:

A) Pages 3, 48

[58] Calculations done with data from the "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 51

[59] "Your Social Security Statement." The Social Security Administration of the United States of America, 2000.

[60] "History Myths - Social Security Trust Funds." History Page, Social Security Administration of the United States of America. Accessed at http://www.ssa.gov/history/offbudget.html in March of 2001.

[61] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 33

[62] "Financial data for the Old-Age, Survivors, and Disability Insurance Trust Funds, 1957-2000." Office of the Chief Actuary - Social Security Administration of the United States of America, Updated May 14, 2001. Accessed at http://www.ssa.gov/OACT/STATS/table4a3.html in May of 2001.

[63] "Social Security Trust Funds: Frequently Asked Questions." Social Security Administration of the United States of America, June 7, 1999. Accessed at http://www.ssa.gov/OACT/ProgData/fundFAQ.html in May of 2001.

Notes:

A) This document states: "By law, all income to the trust funds that is not immediately needed to pay expenses is invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government."

[64] "2000 Social Security Trustees' Report." Reference footnote [1]

Notes:

A) Page 7 of this report states:

The invested assets of the trust funds are backed by the full faith and credit of the U.S. Government, in the same way as other public-debt obligations of the United States.

B) Page 2