A Critique of the Old Age and Survivors Insurance Program of the United States

Abstract

I am pleased that the Association for Social Economics has included our most comprehensive social insurance program among the subjects for discussion on the thirty-fifth year anniversary of the Social Security Act. early history of social insurance is replete with contributions made by the academic community. I have expressed my concern in recent years over certain indicators of declining academic interest in social insurance reflected in areas such as research, courses offered in American universities and papers presented at allied social science association meet? ings in this important field. I believe this subject was last discussed at an annual meeting of this Association in 1958 when the late Edwin E. Witte presented a significant contribution to the literature on social insurance in a paper entitled The Objectives of Social Security. Review of Social Economy, however, has carried articles and reviews on this subject since that time. Charles O'Donnell has painstakingly documented the case for major changes in the OA SI program based on the inadequacy of private pen? sions and personal assets as supplements to social insurance benefits. It might be of interest also to note that nearly 8 percent of all OASI beneficiaries aged 65 and over are forced to supplement their inadequate benefits through public assistance. data in the O'Donnell paper also emphasized the failure of OASI benefits to adequately replace pre? retirement earnings. O'Donnell proposal for periodically adjusting the earnings base and benefits to reflect changes in the current wage level is one that merits serious consideration and no doubt will be adopted eventually in the United States as it has in some other countries. It will be my con? tention in this discussion, however, that a number of major changes should be made in our social insurance programs, most of which are necessary to correct many of the basic inadequacies in benefits stressed in the O'Donnell paper, before adopting the program advocated by Professor O'Donnell.