Before I became President, the concern expressed to me most often was the fear that the social security system was in danger of bankruptcy. This fear was backed up by facts:
--A flaw had been introduced into the benefit formula which overcompensated for inflation and threw the system out of actuarial balance.
--Declines in birth rates meant that there would be fewer workers to support the system in the future--down from over 100 to 1 when the system started, to 14 to l in 1950, to 3 to 1 today, and to 2 to 1 in the next century.
--The worst recession since the Great Depression and the worst inflation since the Civil War had depleted the reserves in the trust funds to the point that the Disability Trust Fund would be depleted by 1979 and the Old Age and Survivors Trust Fund would run out by 1983.
--A majority of Americans did not believe that their social security benefits would be there when they needed them.
I am happy to be here today to sign legislation which will reassure the 33 million people who are receiving benefits and the 104 million workers now making contributions that the social security system will be financially sound well into the next century.
I congratulate the Members of Congress for the courage and leadership they have shown in enacting this bill this year. The public overwhelmingly supports the purposes of the social security system, and a clear majority feel that the Congress is showing real courage in raising additional taxes to save the system, according to a recent poll.
Although the final bill differs in some respects from the proposals I submitted last May, it does fulfill all of the campaign promises I made on social security: --Eliminates the yearly deficits of the social security system and restores the trust funds reserves to healthy levels.
--The delayed retirement credit is increased to reward those who choose to work beyond age 65 before claiming benefits.
--Corrects the flaw in the benefit formula and protects the purchasing power of present and future beneficiaries.
--Raises additional money primarily through increases in the taxable wage base making the system more progressive and minimizing the added burden for low- and moderate-income workers.
--Eases the earnings test, permitting recipients to earn as much as $6,000 without losing any benefits and those over 70 to continue with full benefits no matter how much they might earn.
--Several provisions are of great importance to women: It removes from the Social Security Act references to the sex of applicants, permits older persons to remarry without the fear of losing some of their social security benefits, and it makes homemakers who are divorced after 10 years of marriage eligible for benefits.
--Most importantly, it ensures our senior citizens today that their social security benefits will be protected during their retirement and further assures today's workers that the hard-earned taxes they are paying into the system today will be available upon their retirement.
Taken together, these are tremendous achievements and represent the most important social security legislation since the program was established.
The social security program is a pact between workers and their employers that they will contribute to a common fund to ensure that those who are no longer a part of the work force will have a basic income on which to live. It represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.
This bill was enacted this year in a spirit of compromise. The taxes are higher than those I proposed, but I believe that much of the increase can be offset by my income tax reduction proposals next month and additional reform in the social security system. I am happy that the Congress accepted my advice and avoided costly benefit increases at this time.
It should be clear to everyone that although we may have differed on some of the means to be used, we have been in full agreement on the goals of this legislation. I am particularly grateful to Senator Long, Congressman Ullman, Senator Nelson, Congressman Burke, and the House and Senate leadership for the efforts they put into making this bill a reality. I am pleased at how quickly we were able to move this massive piece of legislation through the Congress so that it could be signed today.
It is with great pleasure that I sign H.R. 9346.