{"id":197,"date":"2026-05-04T10:56:02","date_gmt":"2026-05-04T14:56:02","guid":{"rendered":"https:\/\/people.bsu.edu\/econbriefs\/?p=197"},"modified":"2026-05-04T10:56:02","modified_gmt":"2026-05-04T14:56:02","slug":"social-security-promise-policy-and-political-risk-by-dr-cecil-bohanon-and-dr-john-horowitz","status":"publish","type":"post","link":"https:\/\/people.bsu.edu\/econbriefs\/2026\/05\/04\/social-security-promise-policy-and-political-risk-by-dr-cecil-bohanon-and-dr-john-horowitz\/","title":{"rendered":"Social Security: Promise, Policy, and Political Risk\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz"},"content":{"rendered":"<p><span data-contrast=\"auto\">Every January, headlines announce \u201cnew laws\u201d taking effect\u00a0at the start of the\u00a0year. Here\u2019s one from nearly ninety years ago:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u00a0\u201c<\/span><a href=\"https:\/\/time.com\/archive\/6756086\/national-affairs-forgotten-tax\/\"><span data-contrast=\"none\">Effective January 1, 1937, we are compelled by a Roosevelt \u2018New Deal\u2019 law to make a 1% deduction from your wages and turn it over to the Government\u2026You might get this money back in future years&#8230; but only if Congress decides to make the appropriation for that purpose. There is NO guarantee<\/span><\/a><span data-contrast=\"auto\">.\u201d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559685&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 This and similar notices were\u00a0actually\u00a0issued by Republicans and anti-New Deal employers\u00a0in\u00a0November 1936, just before the presidential election between Roosevelt and Landon. New Dealers accused Republicans of trying to \u201cintimidate labor,\u201d and the Social Security Administration condemned the notices as \u201cnearly all misleading.\u201d\u00a0 Roosevelt went on to win the election in a landslide, garnering 61% of the popular vote and carrying every state except for Maine and Vermont.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Despite the ominous tone\u00a0reflected above\u00a0Social Security did pay benefits to workers who paid the tax. From 1937 to 1940, retirees\u00a0<\/span><a href=\"https:\/\/www.ssa.gov\/history\/briefhistory3.html#:~:text=From%201937%20until%201940%2C%20Social%20Security%20paid,enough%20to%20be%20vested%20for%20monthly%20benefits.\"><span data-contrast=\"none\">received one-time lump sum<\/span><\/a><span data-contrast=\"auto\">\u00a0payments. The first monthly retirement check was issued to Miss Ida May Fuller of Ludlow, Vermont, on January 31, 1940. Having paid a total of $24.75 in taxes over three years, her first check was for $22.54. Miss Fuller lived to be 100 years old and collected a total of $22,888.92 in benefits before her death in 1975. In 2024, Social Security expenditures were $1.5 trillion and accounted for 22% of Federal Government spending.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Yet the warning contained a kernel of truth:\u00a0Social Security benefits are entirely at Congress&#8217;s discretion. In\u00a0<\/span><a href=\"https:\/\/supreme.justia.com\/cases\/federal\/us\/301\/619\/\"><span data-contrast=\"none\">Helvering\u00a0v. Davis (1937)<\/span><\/a><span data-contrast=\"auto\">, the Supreme Court stated, \u201cThe proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way,\u201d implying Congress can spend the money in any manner they choose. This was reaffirmed in\u00a0<\/span><a href=\"https:\/\/www.oyez.org\/cases\/1959\/54\"><span data-contrast=\"none\">Fleming vs. Nestor<\/span><\/a><span data-contrast=\"auto\">\u00a0(1960). The\u00a0court held that Social Security benefits are not a contractual right but rather a non-contractual government benefit that Congress may modify at any time.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Despite the pleas of many, Social Security benefits are a political promise, not a legal guarantee. Current projections warn that the Social Security system will become\u00a0<\/span><a href=\"https:\/\/www.crfb.org\/blogs\/social-security-turns-90-its-racing-towards-insolvency#:~:text=Breadcrumb,the%20statutorily%20required%20benefit%20cut.\"><span data-contrast=\"none\">insolvent sometime in 2032<\/span><\/a><span data-contrast=\"auto\">.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Nearly ninety years later, the debate endures: Social Security was never a promise etched in law, only a policy shaped by politics. If you\u2019re betting your future on Social Security, you\u2019re betting on Congress.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every January, headlines announce \u201cnew laws\u201d taking effect\u00a0at the start of the\u00a0year. Here\u2019s one from nearly ninety years ago:\u00a0 \u00a0\u201cEffective January 1, 1937, we are compelled by a Roosevelt \u2018New Deal\u2019 law to make a 1% deduction from your wages and turn it over to the Government\u2026You might get this money back in future years&#8230; [&hellip;]<\/p>\n","protected":false},"author":112,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[1441,1099,1446,249,1729,1288,594,200,79,165],"class_list":["post-197","post","type-post","status-publish","format-standard","hentry","category-government","tag-entitlement-programs","tag-federal-budget","tag-fiscal-sustainability","tag-government-spending","tag-new-deal","tag-political-economy","tag-public-policy","tag-retirement","tag-social-security","tag-supreme-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Social Security: Promise, Policy, and Political Risk\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/people.bsu.edu\/econbriefs\/2026\/05\/04\/social-security-promise-policy-and-political-risk-by-dr-cecil-bohanon-and-dr-john-horowitz\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Social Security: Promise, Policy, and Political Risk\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs\" \/>\n<meta property=\"og:description\" content=\"Every January, headlines announce \u201cnew laws\u201d taking effect\u00a0at the start of the\u00a0year. 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