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February 10, 2005
FDR and Social Security
Via John Fund:
Republican members of Congress have a ready response for Democrats crying foul over President Bush's constant references to Franklin Roosevelt and other icons of liberalism to bolster his call for Social Security reform.
They note that in an address to Congress on January 17, 1935, President Roosevelt foresaw the need to move beyond the pay-as-you-go financing of the current Social Security system. "For perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions," the president allowed. But after that, he explained, it would be necessary to move to what he called "voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age." In other words, his call for the establishment of Social Security directly anticipated today's reform agenda: "It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans," FDR explained.
"What Roosevelt was talking about is the need to update Social Security sometime around 1965 with what today we would call personal accounts," says one top GOP member of the Ways and Means Committee. "By my reckoning we are only about 40 years late in addressing his concerns on how make Social Security solvent."
Update: I'm getting some complaints that I'm posting Republican propoganda with this selective quote. I'll have more to say but here is a reply to the above by Al Franken and here is the unedited quote from FDR:
In the important field of security for our old people, it seems necessary to adopt three principles: First, non-contributory old-age pensions for those who are now too old to build up their own insurance. It is, of course, clear that for perhaps thirty years to come funds will have to be provided by the States and the Federal Government to meet these pensions. Second, compulsory contributory annuities which in time will establish a self-supporting system for those now young and for future generations. Third, voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age. It is proposed that the Federal Government assume one-half of the cost of the old-age pension plan, which ought ultimately to be supplanted by self-supporting annuity plans.
Sounds to me that FDR A) understood the need to get part of the Social Security system in real assets and B) recongized a way to do this was through "voluntary contributory annuities by which individual initiative can increase the annual amounts received in old age."
But hey... I report, you decide.
Posted by Peter Mork at February 10, 2005 5:14 PM
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