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BASIC PROGRAM PRINCIPLES
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Work-Related
The first principle underlying the program is that security
for the worker and his family grows out of his own work. He earns
his future security as he earns his living and he pays toward the
cost of his social security protection out of his earnings.
Contributory
Because his contributions help meet the costs of the benefits,
an insured worker can expect the benefits to be paid to him and his
dependents or survivors without undue restrictions. The knowledge
that it is possible to plan ahead on one's own, without the fear of
having to exhaust all savings and resources should earnings stop,
encourages him to provide additional protection for himself through
personal savings, private insurance, home ownership, and other investments.
The contributory nature of the program also encourages a responsible
attitude toward the program. Knowing that the financing of the present
program and of any improvements that are made in it depends on social
security taxes that he helps to pay, the worker has a personal interest
and stake in the soundness of the program.
Compulsory
Another important principle is that to the extent possible
coverage is compulsory. A society cannot be secure if large numbers
of its members are not protected against the loss of earnings that
results from the retirement, disability, or death of the family provider.
If the program were not compulsory, many of the people who need its
protection most would not participate. Many low income workers, for
example, as much as they might recognize the need to protect themselves,
would choose not to pay social security tax contributions because
of the difficulty they have in meeting their current needs. In the
end they would have to be supported through assistance from the general
revenues of the Government.
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A worker earns his future security
as he earns his living and as he pays toward the cost of his
social security protection out of his earnings.
Under the social security law as first enacted, only employees
in commerce and industry were covered. Since that time, coverage
has been extended to almost every occupational group--to the
self-employed in the cities, to household employees, to farm
people, and also to the Armed Forces.
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Rights Clearly Defined in Law
Still another principle is that a person's rights to social
security benefits--how much he gets and under what conditions--are
clearly defined in the law. A person who meets the conditions provided
in the law must be paid, and if a claimant disagrees with the decision
in his case, he can appeal to the courts.
Because the conditions of eligibility and the amount of benefits to
be paid are clearly set out in the law and are generally related to
facts that can be objectively determined, the area of administrative
discretion is greatly circumscribed. And since payment is not discretionary,
a person is free to act without fear that his personal or political
behavior will keep him from getting benefits.
Self-Supporting
The program is designed so that contributions plus interest
on the investments of the social security trust funds will be sufficient
to meet all of the costs of benefits and administration, now and into
the indefinite future--without any subsidy from the general funds
of the Government. Both the Congress and the Executive Branch, regardless
of political party in power, have scrupulously provided in advance
for full financing of all liberalizations in the program.
In its studies of the social security law and possible changes in
that law, Congress reviews the operations and status of the trust
funds and the estimates for the future and also hears the testimony
of actuaries and other financial experts both inside and outside the
Government.
Even when social security legislation is not under consideration,
Congress continues to keep an eye on the financial operations of the
social security program: Section 201 (c) of the Social Security Act
provides for a Board of Trustees of the Trust Funds, composed of the
Secretary of the Treasury, the Secretary of Labor, and the Secretary
of Health, Education, and Welfare. The Board of Trustees is required
by law to make a report to Congress each year on the operations and
status of the Funds during the previous fiscal year and expected operations
and status in the 5 following years and for the long-run future.
The Social Security Act also requires that an Advisory Council be
appointed every few years to review the financing of the program and
to prepare a report of findings and recommendations. |
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