Social Security: Broken Promises and Costly Changes

Social Security: Broken Promises and Costly Changes
by JBS President Emeritus John F. McManus

Social Security has been built over an array of broken promises and costly changes. The alterations are costly, not only for government, but also for the nation’s working people. The program’s initiator, President Franklin Delano Roosevelt, promised that it would be completely voluntary. Try to withdraw from it, and you’ll see the non-existing worth of that promise.

Franklin Delano Roosevelt, 1933, Photo by Elias Goldensky (1868-1943), United States Library of Congress’s Prints and Photographs division.

From a required payment of one percent of a participant’s first $1,400 of earnings when SS began in the 1930s, wage earners now see 7.56 percent of the first $90,000 extracted from their pay. And the employer has to match the amount taken from each worker – money that might otherwise be used to expand his business or given to employees. Many workers 50 years ago would see their paychecks grow every mid-summer when required payments into the program were met. That boost in take-home pay no longer exists. Formerly, payments to Social Security were deductible from taxable income. Like horse-drawn carriages, that practice too is gone.

All funds collected in the name of Social Security were supposed to be kept in a sacrosanct “trust fund” where they would be distributed only to legitimate SS beneficiaries. But there never has been a trust fund because the federal government spends Social Security funds at will. In the vaunted trust fund will be found only a stack of IOUs issued by the federal government. This practice existed from Social Security’s inception. In 1937, the Supreme Court decreed that funds collected in the name of the program were labeled taxes that “are not earmarked in any way.”

Retirees were promised that their Social Security benefits would never be classified as taxable income. That too was blown away and recipients must now add the bulk of their SS retirement income to their earnings and pay income tax on the total. So, people are taxed by Social Security while building their retirement fund, and when they actually retire, they get taxed again. What a great program!

During the Carter administration (1977-1980), the Social Security administration started giving benefits to immigrants, even those who never paid anything into the program. No wonder people come to the U.S. illegally.

The original 1935 Act contained the government’s “right to alter, amend, or repeal any provision.” In other words, the government can renege at any time on any portion of what the people have been told are firm promises. It can even abolish the program and cease sending checks to anyone. If a private insurance company operated the way Social Security performs, it would be hounded mercilessly and put out of business by the government.

Social Security should be phased out by Congress with the government continuing to pay the elderly, and then having younger workers keep their own money, so they can invest it into a privately run program or do whatever they want with it. It’s their money. Unfortunately, Big Brother government won’t let them escape its clutches.

Even though the program is bankrupt – fiscally, morally, and constitutionally – it will continue to function as long as the federal government can continue to tax, borrow, print, or computer generate new funds. Today’s government uses all four of those options with the result that the dollar’s value continues to shrink and each weekly trip to the supermarket requires leaving more dollars at the checkout counter.

Though he initially denounced anything resembling anything like the Social Security program, Franklin Delano Roosevelt reversed course completely in 1933 after he won the presidency. The plan he got through Congress and the Supreme Court was eerily identical to the proposal sought by U.S. Communist Party leader William Z. Foster in his 1932 book “Toward Soviet America.” He called for creation of a government-run “system of social insurance against unemployment, old age, sickness, accidents, etc.”

That’s exactly what the U.S. federal government gave us. And the American people are constantly inundated with cries claiming Communism is dead. What’s dead is honesty and freedom from unconstitutional taxation.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.


Standoff in Oregon Centers on Land Ownership and Control

Standoff in Oregon Centers on Land Ownership and Control
by JBS President Emeritus John F. McManus

Understanding the resistance to federal agencies currently shown in headlines and newscasts nationwide should begin with a reading of the U.S. Constitution. A good look at the venerable document will lead to the conclusion that the federal government’s numerous bureaus and agencies are illicitly controlling vast parcels of land, mostly in the 12 western states. They are doing so without constitutional authority. The amount of federal land holdings in 12 western states adds up to 47 percent of their total area. Federal control over parcels of land in the eastern states exists as well, although ownership in the east is not nearly as widespread. In states east of the Mississippi River, the federal government possesses only four percent of the land.

Image of the Bundy Ranch, Nevada, from their blog.

Today, vast swaths of western land are under the control of the Bureau of Land Management (BLM), the National Park Service, the Forest Service, and the Fish and Wildlife Service. In these federally dominated areas, ranchers have traditionally been permitted, after paying a fee, to lead their cattle to grazing areas. But permission to do so has always been arbitrary and subject to suspension at any time. After many years of sending their cattle to graze on federal lands, Nevada’s Bundy family faced not only cancellation of grazing permission but also the taking of their cattle by federal authorities. This led to a headline-grabbing confrontation in 2014. BLM personnel eventually backed off and Bundy-owned cattle are again grazing on the BLM land.

Currently, the situation in Oregon involves the Hammond family ranchers who claim BLM agents are unjustly harassing them. Their problems began in 2005 when they set what is called a “backfire” to protect their home and buildings from an advancing out-of-control blaze started by lightning. Their action succeeded when the two fires met and each petered out for lack of burnable material. Two members of the Hammond family were nevertheless prosecuted and convicted of eco-terrorism and sent to prison.

The new Oregon confrontation includes local individuals plus similarly fed up ranchers, loggers and farmers from surrounding states. Nevadan Ammon Bundy traveled to Oregon to support to the Hammonds and has become the spokesman for the previously unorganized group. The protesters have seized control of a structure owned by the federal government in the Malheur National Wildlife Refuge, close to the Hammond property. They intend to stay there until the BLM leaves and lets the people use the land as they once did. How this confrontation will end isn’t known.

Ammon Bundy has told reporters that the region, like others in surrounding states, suffers from economic decline because of federal control of valuable land. In a widely quoted statement, he claimed: “It is our goal to get the logger back to logging, to get the rancher back to ranching, to get the miner back to mining, and the farmer back to farming.” All of the protesters rely on a reading of the U.S. Constitution.

The Constitution’s Article I, Section 8, states that the federal government is awarded jurisdiction over the District of Columbia, and over other lands “for the erection of forts, magazines, arsenals, dock-yards, and other needful buildings.” That’s all! Whenever the federal government has a need to take land for such purposes, the Constitution further requires that it be “purchased by the consent of the legislature in which the same shall be.” Huge parcels of western land haven’t been purchased and no consent for their taking has ever been given by the state legislatures.

The confrontation in Oregon has potential for stimulating similar action throughout the west. There are many increasingly irate citizens whose main issue isn’t grazing on federally owned lands or wisely setting a fire to protect property. Their issue is control and ownership of land, one of the fundamental rights enjoyed by a free people.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.