FDR signed the first Social Security Act into law in 1935. Thirty years later, that part of FDR’s New Deal became part of the President Lyndon Baines Johnson's (LBJ) Great Society and established Medicare when LBJ signed the Social Security Act of 1965 into law.
Only half of Americans 65 and older had any health insurance at the time. The bill LBJ signed also created Medicaid, the public health insurance program that today covers over 60 million people, including one in three children, eight million people with disabilities and nearly six million low-income seniors. Each state administers its own Medicaid program. Republicans have scorned the entitlement programs of the Great Society ever since, now more so than ever.
Here is how we pay for those programs. Social Security and Medicare entitlements are paid for by the FICA [Federal Insurance Contributions Act] tax. The rate is 7.65 percent of our pre-deduction [gross] earnings. 6.2 percent goes for OASDI [Old-Age, Survivors, and Disability Insurance]. 1.45 percent goes for Medicare. The Social Security system pays for old-age, survivors, and disability. Hospital insurance is funded by Medicare. Income tax funds the government. It is called revenue and is a separate and different issue. Republican rhetoric obfuscates that point.
While the public may be somewhat divided about the debt ceiling, they are not so confused when it comes to entitlements. “The public decisively supports maintaining the status quo,” according to the Pew Research Center. “Six-in-ten (61 percent) say it is more important to keep Social Security and Medicare benefits as they are; only about half as many (32 percent) say it is more important to take steps to reduce the budget deficit.”
LBJ argued that helping the poor was in the best interest of business by providing stability to society. GOP disdain for Johnson’s Great Society and its War on Poverty continue. Republicans demand sharp cuts to Medicare and Social Security. Programs for the poor and the aging are the “reckless spending” recitations of Republican rhetoric that compound the deficit conundrum that confronts House Speaker John Boehner.
At a recent press conference Boehner said, “I agree with the president we cannot allow our nation to default on our debt.” He added, “But to prevent a default, a bill must pass the Congress.” For that to happen, “the bill must include spending cuts in excess of the increase in the debt ceiling.” He faced a similar challenge in April with the government shut-down threat. He also faces factional opposition within the Republican House majority and its fame-seekers, like Reps. Cantor and Ryan.