Fool me once, fool me twice

By Jim Terry

If you find yourself with nothing to do and you have a strong constitution, go to the Social Security Administration website and read the debates on Social Security from the 74th Congress in 1935. That is the year the politicians who run your government gave you your old-age pension we know today as Social Security. The Social Security website contains six Senate and ten House debates from the Congressional Record. (https://www.ssa.gov/history/senate35.html)

Franklin Roosevelt's New Deal plan for old age security was one of many, but the most society changing of his socialist plans for Americans. Rep. Joseph Monaghan, a two-term Democrat from Montana, expressed the Marxist sentiment of the New Deal socialist Democrats of the day when he said on April 18, 1935, in a house floor debate on Social Security, "The malady affecting our Nation is maldistribution of wealth."

When the 74th Congress convened, the Democrats controlled the Senate with seventy votes to twenty-three for Republicans. Democrats controlled the House with 322 seats to the Republicans' 103.

Unlike the vote to create the train wreck, Obamacare, which socialized America's health care system, and which was solely Democrat-passed legislation, the vote to create Social Security was bi-partisan. However, one Texas newspaper, the Shamrock Texan, in a front-page headline of April 20, 1935, described the passage of the Social Security bill: "Social Security Bill Rammed Through House by Vote of 372-33." The following article described how many Republicans switched their nay votes to aye votes on the final roll-call vote, "in an attempt, as they expressed it, 'to keep from committing political suicide.'"

These debates reveal several things about your government. They reveal its promises to you regarding Social Security, which have subsequently been broken, and how some of those politicians in 1935 were prophets.

The May 20, 1935, Congressional Record-Senate contains the text of a radio speech by Senator Byron Harrison (D-Mississippi), chairman of the Senate Finance Committee, on the subject of old-age security.

Beginning In 1937, the employees of the country – the regular workers in industry – will begin paying into the Federal Treasury a very small tax, which will be a minute percentage of their regular pay check. For every nickel that they pay, their employers will likewise pay a nickel. Thus funds will be brought into the Federal Treasury which, in the course of time, will make it possible for all those employees to get regular monthly checks of anywhere from $10 to $85, after they reach the age of 65 and retire from regular employment. Under this Federal system, the first regular benefits will begin in 1942. The amount which a man will receive will depend, of course, upon the amount of money which he earned during the years when he was employed and upon which he paid these taxes. The taxes that will be paid will gradually build up a sound reserve, which is to be invested, making it possible to continue these regular annuities without having to impose any other taxes to raise the money.

The last sentence of his speech is the important part of the speech and the legislative intent, the promise, that no other taxes will be imposed to pay for Social Security. Of course, those who receive Social Security benefits know that today up to eighty-five percent of those benefits are taxable. President Reagan signed legislation in 1983 to tax up to fifty percent of benefits and ten years later, President Bill Clinton raised the amount to eighty-five percent.

The June 14, 1935, Congressional Record contains another brief discussion by Senator Harrison during Senate debate explaining how Social Security is to be funded.

Beginning in 1937, all employees in the United States, save casual and agricultural labor, private domestic servants, employees of the Federal or State Governments, and of nonprofit religious, charitable, scientific, literary or educational employers, will pay a Federal tax of 1 percent of their wages, up to $3,000 per year salary, which tax will be increased one-half per cent each 3 years, until it reaches a maximum of 3 percent for 1949 and thereafter.

This tax is calculated as sufficient to provide funds, covering the cost of the annuities in the years to come, which will be paid, with only one or two small exceptions, to these workers in Industry who paid the tax.

Again, the legislative intent, and promise, was that the maximum payroll tax of three percent to be paid by the employee and three percent to be paid by the employer beginning in 1949 and thereafter would be "sufficient to provide funds, covering the cost of the annuities in the years to come." And, the other legislative intent, promise, of a $3,000 per year salary cap was made.

The politicians who run your government, however, broke the promise of a three percent maximum payroll tax in 1950 when they raised it to one and one-half percent. The next year, they broke the other promise and raised the salary cap to $3,600.

The current Social Security payroll tax is 6.2% each, for the employee and the employer – more than double the rate promised – and the salary cap for 2017 is $127,200 – more than forty-two times the amount promised by your government.

Two concerns raised by Republicans during these debates were the effects of the payroll tax on the economy and the discriminatory application of the new law. Everyone agreed that in the initial stages of Social Security the young workers of the country would bear the burden for the older workers since many of the older workers would begin receiving benefits by 1941, when they reached the age of sixty-five, and, therefore, would have paid into the system for only four years. A worker at the age of, say, thirty would be required to pay into the system another forty-five years to receive any benefit.

But one congressman, Senator Daniel O. Hastings (R-Del) saw an additional problem ahead for Social Security:

Now, Mr. president, I want to discuss for a few moments the possibility of creating or maintaining any such reserve fund as is here contemplated. It must be borne in mind that in order to create this fund there must be annual appropriations by Congress. It is contemplated that those annual appropriations shall be the amount of money collected from the employer and the employee: but does anyone doubt that when the Congress comes to these appropriations there would be manipulations so that the fund would not be accumulated but would be used for current expenses of the Government?

Mr. President, we have a fine example of that-very slight, indeed, because of the amount involved-in the case of the civil-service retirement fund. I wonder if Senators realize that, while there is supposed to be something like a billion dollars accumulated in that fund and that the actuaries say there ought to be about a billion dollars accumulated in it, there has been practically nothing accumulated in that fund? I blame no particular person for it; I know when the Government needs money for some purpose the question may readily be asked why should not the Government, when it needs money for other purposes, take out of its till and put in some other place a certain sum of money that is necessary for some retirement fund? There is nothing in the civil-service retirement fund except an I O U. Of course, the I O U is perfectly good: nobody questions that; but I call attention to the seriousness of the situation when it reaches the sum of $47,000,000,000. May I inquire whether it is recognized to whom this $47,000,000,000 will go? Who is to be in charge of that fund? It is estimated that the persons interested in it will be about 50 percent of the people who are gainfully employed; so somewhere between 25,000,000 and 30,000,000 voters of this Nation will be entitled to that $47,000,000,000. In this democratic form of government, does anybody think that the Congress can resist the demands of those 25,000,000 people with respect to that $47,000,000,000 of money? If we should ever be fortunate enough to accumulate any such fund as that, does anyone doubt that there would be proposals in the Congress to loan to the persons interested certain sums from the amount that has been accumulated? Does anyone doubt that there would be formed all over this land organizations that would want the Congress to give them a part of that $47,000,000,000 before they reached the age of 65? Think for a moment of what would happen in this land of ours if 25,000,000 people at the time the depression hit us had in the till somewhere, $47,000,000,000. Does anyone doubt that such a demand would have been made upon the Congress as would have destroyed the greater portion of that fund?

Mr. President, I submit that in a democratic form of government where a fund is created for the benefit of twenty-five or thirty million people, Congress itself would be as helpless as a child, because the man who should not respond to the demand of a group of voters such as that would simply give way to another man who would respond. That has been common experience in this country and could be demonstrated by precedent after precedent. (Congressional Record – Senate, June 17, 1935, p. 9422)

Senator Hastings' prophecy has been fulfilled, thanks to the politicians who run your government.

We are left with a serious question. Have the American people been scammed twice by Democrats with two of the most society-changing and socialistic pieces of legislation in the history of our nation?

It is well documented that Barack Hussein Obama lied to the American people, not once, not twice, but dozens of times about his health plan. And his architect of the plan, Jonathan Gruber, admitted that lies and deceit were used by the administration. He said that it was "written in a tortuous manner," with a "lack of transparency." He then said, "And basically, call it the stupidity of the American voter or whatever, but basically that was really, really critical to get for the thing to pass." Three years after the law was enacted, the White House finally admitted that Obama had lied to the American people about Obamacare.

So, did those Democrat politicians of the New Deal, who rammed Social Security through Congress in 1935, use the same tactics that the Democrat politicians who, in 2010, rammed through Congress the law we know as Obamacare? Did they also weave a conspiracy of lies and deceit?

Your federal government is run by 536 politicians. Congress – 535 of those politicians – currently enjoys a job approval rating of around twenty percent. I have often asked the question, why would anyone entrust the most important things in life to a gaggle of politicians? I believe anyone who does is a fool.

© Jim Terry