(At the Jefferson Humanist Chapter Meeting on March 23, Retired Social Security Employee, Dennis Lovaas, shared some myths and facts about social security. Dennis worked for Social Security for 37 years before retirement.)
By Dennis Lovaas, Retired Social Security Employee
Social Security was signed into law by FDR in 1935, creating the only Federal program entirely financed by a dedicated tax (FICA), also called the Trust Funds. By law, Social Security benefits must be paid solely from the Trust Funds, i.e., no borrowing and no payment out of general revenue. Thus, the Social Security program has never caused one dime of the Federal deficit
- Myth: Social Security is a “Ponzi Scheme.”
Fact: a) The courts found in 1937 that the new Social Security program did not constitute a “Ponzi Scheme” and thus could continue implementation. b) Bernie Madoff ran his Ponzi Scheme for decades but got caught and died in prison at age 82. c) Social Security has paid benefits on time for 85 years and will continue to do so, barring privatization efforts. - Myth: Social Security files were found with people as old as 150, obviously huge fraud.
Fact: That file is the numident file (numerical identification system), which contains every Social Security number (SSN) ever issued. That SSN record contains the date of issue and the person’s age. It only reflects info at the time of issue; it does not contain any possible future info, such as filing a claim for benefits, payment history, or date of death. Thus, zero payment fraud because people who have died (but whose death is not reflected in the files) are not receiving social security checks. A different system records their death and stops payment (unless it is going to a survivor.) - Myth: Published findings noted that the US population is approximately 353 million yet there are 531 million SSNs issued. That is a huge discrepancy and an obvious area of fraud.
Fact: The 531 million SSNs issued includes those issued an SSN but who have died over the last 85 years plus those issued an SSN who are still living. Thus, zero payment fraud. Remember, the Numident file does not contain info regarding a claim for benefits, payment history, or date of death, if any. That is noted in a separate process. - Myth: DOGE declared mission is to find fraud and waste and for ways to make government more efficient. There has also been expressed an intention to privatize Social Security.
Fact: The DOGE team has not documented even one instance of fraud or waste at the Social Security Administration. Nor will they. Why not? The claims and payment process has checks and balances that prevent fraud and waste. Specifically, a retirement claim requires 3 factors for eligibility: 1. Proof of age, 2. Proof of citizenship or legal entry status. 3. The work record compiled in SSA headquarters from employer reports quarter after quarter, year after year. No access would allow for tampering.
Will cutting staff and closing offices increase efficiency? No! Such actions will restrict or even deny the availability of service to our approximately 73 million aged and disabled recipients and to all future recipients.
There are many reasons why privatization will not work. The independent Congressional Budget Office (CBO) stated why privatization will not work most succinctly when President Bush began his second term in office with an effort to encourage privatization. The CBO stated that to privatize, someone will have to pay twice: first, to continue payments to those 50 and older until they all age through the system, and second, to pay for their private accounts. Will your kids go for paying twice?
Finally, if you are curious, search for “Social Security Systems around the World” for details on 190 other countries with their own Social Security systems.
