President Jimmy Carter

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2. REMARKS ON SIGNING H.R. 3 INTO LAW-- October 25, 1977
5. SOCIAL SECURITY AMENDMENTS OF 1977 --December 20, 1977

Social Security System -- May 9, 1977

Message to the Congress. May 9,1977

To the Congress of the United States:

The Social Security system affects the lives of more Americans than almost any other function of government. More than 33 million people currently receive benefits. Another 104 million people are making contributions with the expectation that they will receive benefits when they retire or become disabled, or when their survivors need help.

Today, the Board of Trustees of the Social Security Trust Funds is submitting its 1977 report to the Congress. The report tells us that the system critically needs financial support in the short term. The high unemployment of recent years has curtailed Social Security's revenues, while benefits have risen with inflation. Since 1975 expenditures have exceeded income; and existing reserves will soon be exhausted.

Unless we act now, the Disability Insurance Trust (DI) Fund will be exhausted in 1979 and the Old Age and Survivors Insurance (OASI) Trust Fund will run out in 1983.

The Trustees' Report indicates that there are serious longer term problems as well. Under current law the Social Security system will have an estimated deficit of 8.2 percent of taxable payroll over the next seventy-five years. About half of this deficit is due to changes in the projected composition of our population over those years. Higher life expectancy and lower birthrates will make the nation older as a whole. About half is due to a technical flaw in the automatic cost of living formula adopted in 1972.

While campaigning for President, I stressed my commitment to restore the financial integrity of the Social Security system. I pledged I would do my best to avoid increases above those already scheduled in tax rates, which fall most heavily on moderate and lower-income workers. I also promised to correct the technical flaw in the system which exaggerates the adjustment for inflation, and to do so without reducing the relative value of retirement benefits as compared with pre-retirement earnings.

I am announcing today a set of proposals which meet those commitments and which solve both the short-term and long-term problems in the Social Security system through the end of the twentieth century. These proposals are designed to:

--Prevent the default of the trust funds now predicted to occur.

--Bring income and expenses into balance in 1978 and keep them that way through the end of the century.

--Create sufficient reserves to protect the system against sudden declines in revenue caused by unemployment or other economic uncertainties.

--Protect the system's integrity beyond the turn of the century to the extent we can predict what will happen in the next 75 years.

--Provide for an orderly review and examination of the system's basic structure.

My proposals are the result of a number of hard choices. I am convinced that action is needed now, and that these steps will restore the financial integrity of the Social Security system.

I will ask the Congress to take the following specific actions:

1. Compensate the Social Security trust funds from general revenues for a share of revenues lost during severe recessions. General revenues would be used in a counter-cyclical fashion to replace the payroll tax receipts lost as a result of that portion of unemployment in excess of six percent. General revenues would be used only in these carefully limited situations. Because this is an innovative measure, the legislation we submit will provide this feature only through 1982. The next Social Security Advisory Council will be asked to review this counter-cyclical mechanism to determine whether it should be made permanent.

2. Remove the wage-base ceiling for employers. Under present law employers and employees pay a tax only on the first $16,500 in wages. Under this proposal the employer ceiling would be raised over a three-year period, so that by 1981 the ceiling would be removed. This action will provide a significant source of revenue without increasing long-term benefit liabilities.

3. Increase the wage base subject to the employee tax by $600 in 1979, 1981, 1983, and 1985, beyond the automatic increases in current law. This will provide a progressive source of financing.

4. Shift revenues from the Hospital Insurance Trust Fund to the Old Age, Survivors, and Disability Trust Funds. In part, this shift will be made possible because of substantial savings to the Medicare system from the hospital cost containment legislation that I have proposed.

5. Increase the tax rate on the self-employed from 7 percent to 7.5 percent. This will restore the historical relationship between the OASI and the DI rates paid by the self-employed to one and one-half times that paid by employees.

6. Correct certain technical provisions of the Social Security Act which differentiate on the basis of sex. This will include a new eligibility test for dependent benefits. Recent Supreme Court decisions would result in un-financed increases in the cost of the system and some inequities without this change.

These six steps, along with measures already contained in existing law, will eliminate the short-term financing problem and improve the overall equity of the Social Security system.

In order to guarantee the financial integrity of the system into the next century, two additional steps must be taken. I will be asking the Congress to:

1. Modify the Social Security benefit formula to eliminate the inflation over-adjustment now in law. This modification, known as "decoupling," should be done in a way that maintains the current ratio of retirement benefits to pre-retirement wages.

2. Adjust the timing of a tax rate increase already contained in current law. The one percent tax rate increase presently scheduled for the year 2011 would be moved forward so that .25 percent would occur in 1985 and the remainder in 1990.

Taken together, the actions I am recommending today will eliminate the Social Security deficit for the remainder of this century. They mill reduce the estimated 75-year deficit from the Trustee Report forecast of 8.2 percent of payroll to a manageable 1.9 percent.

Prompt enactment of the measure I have recommended will provide the Social Security system with financial stability. This is an overriding immediate objective.

In addition, I am instructing the Secretary of Health, Education and Welfare to appoint the independent Social Security Advisory Council required by law to meet each four years. I will ask the Council to conduct a thorough reexamination of the structure of the system, the adequacy of its benefits, the effectiveness and equity of disability definitions, and the efficiency and responsiveness of its administration. Their report, which will be issued within the next two years, will provide the basis for further improvements.

I call upon the Congress to act favorably on these major reform initiatives.

Jimmy Carter

The White House,

May 9, 1977.

Remarks on Signing H.R. 3 Into Law-- October 25, 1977
thumbnail photo of President Carter signing bill
We seem to have some happy people here today.

As most of you know, I was Governor for 4 years and later spent 2 years campaigning around the country to be elected President. I think one of the greatest problems that we have in this Nation is a distrust of government and its ability to administer programs of great benefit to our people in an honest and efficient way.

Perhaps one of the most sensitive issues is in health care. We have seen the cost of a day's stay in the hospital increase since 1950 more than 1,000 percent. The cost of hospital care is going up a hundred percent, doubling every 5 years.

At the same time, we see highly publicized instances when the Medicaid and Medicare programs in recent years have been shot through with fraud. This was one of my frequent campaign comments. And I'm very proud today to sign into law a bill that has been evolved with close cooperation between the executive branch of Government, particularly HEW, and the House and Senate.

This bill will go a long way to eliminating fraud in the administration of the health care programs of our country. It will shift to heavier penalties for those who are convicted of false claims, kickbacks--changing these from misdemeanors to felonies--and also prohibiting those who are convicted of this crime from delivering any services in the future.

This legislation also permits--in fact, requires--the Department of HEW to set up both simplified and also standardized forms for reporting the delivery of services in the health care field and also the charging for those services.

In the past it's been quite difficult, as you know who have watched the evening news, to determine exactly who owns the health provider entities that deliver health care and quite often conceal who is responsible when a violation of the law does exist. This legislation requires that anyone who owns as much as 5 percent in a health provider company or hospital or health care center must reveal their identity to the public.

We have included also in this bill an allocation of aid funds to establish among the States, or within each individual State, a fraud unit to detect and to root out and to prevent fraud from continuing. And this bill also provides more effective use of the PSRO's, or the professional standards review organizations, that are designed to let health care providers themselves monitor their own activities and their own efficiency of operation.

The overwhelming majority of doctors and hospital and nursing home administrators are honest, patriotic, and deeply dedicated to giving good health care according to the law and in the best interests of their patients. And we want to make sure that they who are honest can have a more efficient means by which they can patrol or monitor their own professions.

I'm very thankful today to sign into law the House of Representatives bill number 3. And I want to congratulate Danny Rostenkowski and Paul Rogers and Senator Talmadge and their fellow workers in the Congress behind me for having been so successful in passing this bill.

We hope, without too much delay, to have a hospital cost containment legislation passed as well. All these men and their committees are working on this. And I hope, certainly early next year, we might get this additional law on the books.

But this is a major step forward. And as I sign this legislation, it's with a great deal of gratitude to them for their fine leadership in moving our Nation one step forward toward better health care, more efficient for the taxpayers, and with a restoration of the confidence in our government that is so well deserved.

[At this point, the President signed H.R. 3 into law.]

Thank you very Much. I made it.

NOTE: The President spoke at 1: 31 p.m. at the signing ceremony in the Rose Garden at the White House.

As enacted, H.R. 3 is Public Law 95-142, approved October 25.

Social Security Financing Bill -- October 27, 1977

White Statement on House Action on the Bill. October 27,1977

We commend the action of the House of Representatives today in passing the social security financing bill [H.R. 9346]. The President requested such legislation on May 9, 1977, and it now appears possible that a bill can be enacted this year.

The House bill contains many provisions requested by the administration, including the correction of the inflation adjustment mechanism, maintenance of benefit levels in the future, and the use of general revenues as an insurance policy to protect the trust funds against a future economic downturn. We would like to see more moderate increases in the tax rate for workers. In particular, we are concerned that the removal of the earnings limitation passed by the House will require too great a tax increase. We expect that the tax levels will be moderated in the final measure passed by Congress.

The American people deserve a social security system which is financially sound. The response of the House to the President's initiative is an important first step toward that goal. We are confident that the Senate will soon take action on the bill to be reported from the Finance Committee.

We look forward to working with the Members of the House and Senate in the coming weeks in a joint effort to ensure the financial integrity of the social security system into the middle of the next century.

Social Security Financing Legislation -- December 1, 1977

Letter to Congressional Leaders.

December 1, 1977

I would like to commend you and your colleagues for the progress which has been made on the social security financing legislation I proposed to Congress. I am confident that an effective and equitable bill can emerge from the conference committee.

I believe that it is very important that a social security financing bill be enacted before the end of this year. The continuing problems of the system have eroded public confidence leading many persons to fear that their benefits will not be available when they need them. It is incumbent on us to restore that confidence.

As you know, I submitted to Congress a set of proposals designed to restore the financial integrity of the social security system and keep it strong into the next century. Those measures sought to increase revenues without burdening the average worker and his employer, and reduce expenditures by correcting a flaw which caused double-indexing for inflation. I am pleased to note that the House and Senate versions of the bill incorporate many of these proposals.

I am nevertheless deeply concerned about provisions in the House and Senate bills which would unwisely add to the tax burden borne by all workers and employers, in order to increase benefits for a relative few. These proposed increases are all well intentioned, but we cannot afford them at the present time. The benefit increases called for in the two bills could cost from $7-$10 billion a year by 1983. As a direct result of these increases in expenditures the new tax rates imposed on today's already burdened workers and employers are higher than they need be.

The bill also contains a new income tax credit and an amendment to the veterans pension law which add an additional $1-$2 billion to the cost of the legislation.

I call upon the members of the House and Senate to join me in developing a final fiscally responsible social security financing bill which will be less burdensome to the workers and employers who must pay the taxes, and adequate to restore public confidence in the financial integrity of the social security system. Secretary Califano and his staff stand ready to work with the members of the conference committee in its deliberations.


Jimmy Carter

Social Security Amendments of 1977 --December 20, 1977

Remarks at the Bill Signing Ceremony.

December 20, 1977

THE PRESIDENT. Since the social security system was evolved under the administration of Franklin Roosevelt, it's been a sacred pact between the employees and the employers with the framework established and guaranteed by the Government to be sure that the working people of this Nation had some guarantee of security after they reached the age of retirement or after they were disabled and unable to earn their own livelihood.

In recent years, because of the highest unemployment rate since the Great Depression and the greatest inflation rate since the Civil War, the integrity of the social security system has been in doubt. This was an unanticipated drain on the resources of the reserve funds.

Then I campaigned throughout the country for 2 years, one of the most frequent questions asked me by working family members and also by those who had already retired was what can be done to assure us that the integrity of the social security system will be maintained. It's a very difficult issue.

It is never easy for a politically elected person to raise taxes. But the Congress has shown sound judgment and political courage in restoring the social security system to a sound basis.

This legislation is wise. It's been evolved after very careful and long preparation. It focuses the increased tax burdens, which were absolutely mandatory, in a way that is of least burden to the families of this Nation who are most in need of a sound income.

The level of payments were raised for those who are wealthier in our country where they can most easily afford increased payments. In the past they've avoided the rate being applied to their much higher income than the average working family.

At the same time, the Congress has removed the unnecessarily stringent limits on how much a retired person can earn and still draw [from] the social security system for which that person has paid during his or her working years. The limit will now be increased to $6,000 per year income over 2 or 3 years without losing social security benefits.

This legislation also moves to eliminate discrimination because of sex. It removes references to the sex of the recipient.

The most important thing, of course, is that without this legislation, the social security reserve funds would have begun to be bankrupt in just a year or two, by 1979. Now this legislation will guarantee that from 1980 to the year 2030, the social security funds will be sound.

I want to congratulate the congressional leaders assembled behind me here-- the chairmen of the appropriate committees, Senator Long, Ullman, Tip O'Neill, our Speaker, Bob Byrd, Senator Nelson, and many other Members who have worked so long and hard to guarantee that this legislation might be passed. It was not an easy task, but I believe that everyone in this Nation who values the concept of social security has been well served. And I want to thank these courageous and farsighted congressional leaders for their bold and appropriate action.

[At this point, the President signed H.R. 9346 into law.]

Well, Mr. Chairmen, you all did a good job.

REPRESENTATIVE TUCKER. Mr. President, I am flattered. I guess as one of the younger members of this crowd and of the Congress--

THE PRESIDENT. You'll pay more into the system. [Laughter]

REPRESENTATIVE TUCKER. That's right. Frankly, I hope the time is not too far distant when I can pay more on my own salary, as younger people all over the country have to pay on their salary.

My father was manager of the social security system in Arkansas all of my life before his death. I grew up with a respect and understanding of social security and its importance for the working people of this country.

And I am very proud that it was a Democratic President, Democratic committee chairmen, Democratic congressional leaders, and a Democratic administration that could give us this painful but absolutely necessary help to the social security system of this country. It's why I supported you and voted for you. I knew you had the guts to do it. And I'm proud to be here today.

THE PRESIDENT. Thank you, Jim Guy, very much.

SENATOR LONG. Mr. President, nobody really enjoys voting for taxes if he has to run for office. I know you know that as well as all the rest of us do. But in view of the fact that we are going to be paying anyway, I think that most people would prefer to pay a little more if need be, as they will, and have a sound program rather than be worried about whether or not the program will be financed.

Nelson Cruikshank and some others who were advocating the original social security bill are here, and Wilbur Cohen was here, who was part of it back at that time. And they advocated and visualized a system where people would be free of fear in old age. And that's what we're doing with this bill. We are proud to participate with you.

THE PRESIDENT. Thank you very much.

REPRESENTATIVE ULLMAN. Mr. President, I am sorry that our subcommittee chairman, Jim Burke, isn't here.

THE PRESIDENT. Yes, I was hopeful he would be.

REPRESENTATIVE ULLMAN. He is back in Massachusetts, but he was chairman of the subcommittee. This has been a long, onerous, difficult task, as you know. It's never easy to set a program straight by adding taxes, but this does it in a very responsible way. And I wanted to mention Jim Burke; he's been very important in this operation.

THE PRESIDENT. I understand. Well, with the help of these same leaders of Congress in 1978 we'll have tax reductions--[laughter]--which for every taxpayer will result in a lesser tax burden, even in spite of the fact that this does increase taxes to some degree. But I know that all of these leaders will be working with me to give us a tax reform package in 1978 which will be more progressive in nature, that is, put the burden of taxation where it can best be borne, will be greatly simplified, and will also be substantially reduced. So, we are looking forward to good tax reductions in 1978.

REPRESENTATIVE ULLMAN. That will be easy to pass. [Laughter]

THE PRESIDENT. Thank you very much, everybody.

Social Security Amendments of 1977

Written Statement on Signing S.305 Into Law. December 20, 1977

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 fever workers to support the system in the future--down from over 100 to 1 when the system started, to 14 to 1 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 with out 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.

Social Security Financing Legislation --April 10, 1978

Letter to Congressional Leaders. April 10, 1978

I will be releasing a statement today reiterating this Administration's position that the 1977 social security financing legislation should not be changed this year. The tax increases in that legislation have saved the system from bankruptcy, protected our older citizens, and insured current workers of a sound retirement system.

White House Statement. April 10, 1978:

We are very concerned about current efforts to amend the recently passed social security financing legislation. Upon signing the bill, the President praised the Congress for its political courage in voting for the taxes necessary to restore the financial integrity of the social security system. He did so, even though the bill adopted a financing plan different and more expensive than we had proposed.

It would be a mistake for the Congress to retreat from the 1977 legislation so soon after its passage. Hasty action now could result in ill-considered legislation which might again place the trust funds in jeopardy.

It is often forgotten that those taxes pay for important benefits for our people. Our first priority must be the protection of the social security system and the restoration of confidence of those who support it and those who benefit.

Much of the concern about the 1977 legislation appears to be the result of misinformation. News articles have asserted that the law would triple the payroll tax burden on workers and employers. That is simply not so. The correct measure of burden is the percentage of earnings which is devoted to the social security tax. By that measure, the payroll tax burden on the average worker, and the worker earning the maximum covered wage, will increase from 6.05 percent in 1978 to 7.15 percent in 1987. The high-income worker earning $30,000 today will experience a more substantial percentage increase from 3.5 percent in 1978 to 5.9 percent in 1987, because the payroll tax has become more progressive. These increases in tax burden are far smaller than those so often mentioned. We believe that most Americans would agree that this is a reasonable price to pay to ensure that the social security system is once again made sound.

Moreover, the President's proposals to reduce income taxes will more than compensate most workers for the increases in payroll taxes. The reform of the income tax is part of a carefully coordinated economic program, which will improve the equity of the Federal tax system and sustain economic growth. We urge the Congress to focus its attention On those fundamental proposals, rather than a short-term reduction in the payroll tax.

Social Security Disability Amendments of 1980 -- June 9, 1980

Statement on Signing H.R. 3236 Into Law.

June 9, 1980

Today I have signed H.R. 3236, the Social Security Disability Amendments of 1980. This bill is the product of several years of intensive study and review conducted by this administration and the Congress. It forms a balanced package, with amendments to strengthen the integrity of the disability programs, increase equity among beneficiaries, offer greater assistance to those who are trying to work, and improve program administration.

Since the mid-1950's the social security disability insurance (DI) program has offered protection to insured workers who have lost wages because of unexpected and often catastrophic disabilities. More recently, since 1974, the Supplemental Security Income (SSI) program has provided Federal financial assistance to needy disabled persons whether or not they are covered under the disability insurance program.

Despite their medical impairments, most disabled DI and SSI beneficiaries would like to work. Often they are able to find employment either in their previous occupations or in new jobs. But returning to work can now cause a recipient to lose all his cash and medical benefits, and this formidable financial risk deters many beneficiaries from seeking or accepting serious job offers.

H.R. 3236 is designed to help disabled beneficiaries return to work by minimizing the risks involved in accepting paid employment. It does this in several ways:

--by providing automatic re-entitlement to benefits if an attempt to return to work fails within 1 year;

--by continuing medical protection for up to 3 years after a person returns to work, and by providing immediate re-entitlement to medical benefits if the individual subsequently returns to the disability rolls;

--by taking account of an individual's disability-related work expenses in determining eligibility for benefits; and

--by continuing, on an experimental basis for 3 years, cash and medical benefits to SSI recipients with low earnings.

H.R. 3236 establishes a special pilot program that will provide $18 million over a 3-year period to allow States to offer medical and social services to employed handicapped people to help them continue working. It also gives the Social Security Administration new authority to test the effect of further changes in the law. Changes which show promise for helping DI and SSI beneficiaries can then be made a permanent part of the law.

H.R. 3236 adjusts the maximum limitation on disability insurance dependents' benefits. The adjustment addresses problems that exist because some disabled workers can receive cash disability benefits that are greater than their previous employment income. The adjusted benefit limitation will not apply to people currently receiving benefits. In fact, no person now receiving benefits will have his or her benefits reduced as a result of any provision in this bill. The final version of the limitation is more restrictive than the administration proposed and will impact adversely on some beneficiaries. Therefore, I will expect the Department of Health and Human Services to evaluate carefully its effect on new beneficiaries and be prepared to recommend any changes that may be needed.

A major provision of H.R. 3236 establishes a voluntary certification program for health insurance supplemental to Medicare--commonly referred to as "Medigap" policies--in States that do not have adequate programs of their own to control abuses in the sale of these policies. The new voluntary certification program, which I strongly and actively supported, will do the senior citizens of our country a great service. It will ensure that approved policies meet prescribed minimum standards, and it will set penalties for furnishing fraudulent or misleading information and for other abuses.

Finally, I would like to recognize the contributions made by Congressman Jake Pickle, Congressman Al Ullman, Congressman Jim Corman, Congressman Claude Pepper, Senator Gaylord Nelson, Senator Russell Long, and Senator Max Baucus. Their able leadership and cooperation were essential to the passage of this bill.