As a consequence, a new contribution structure was developed that the Reagan Administration and the Congress assured the American public would provide for the fiscal integrity of the retirement trust funds to a point at least mid-way through the twenty-first century.
The new contribution structure was made to order for the Reagan Administration, because the structure increased federal revenue collections while the Administration was simultaneously telling the American public that the Reagan Administration countenanced only reduced federal revenue collections through federal tax cuts. At this stage, the Reagan Administration was fully prepared to acknowledge that payments into the social security trust funds by workers and their employers were in fact contributions that were providing funding for future benefits to the contributing workers.
Almost immediately following the revision of the social security contribution structure, however, the Reagan Administration launched a new two-pronged attack against the social security program. The first prong of this attack involved attempts to remove individuals from the beneficiary rolls, reduce the levels of social security benefits, and delay the payment of such benefits (Social security, 1985, p. 465). The second prong of the Reagan Administration attack was the sacking of the social security retirement funds through a process of disinvestment (Grace, 1989, pp. 390-394). Regardless of the fact that the increased contributions were supposed to be for social security trust funds, the Reagan Administration recommended and persuaded Congress to pass a law requiring trust fund surpluses to be invested in federal government securities and permitting the disinvestment of existing trust fund monies from private sector investments and reinvesting those funds in governmental securities as required to fund the federal government budget deficit (Grace, 1989, pp. 390...
The Social Security Program During Reagan's Administration. (1969, December 31). In LotsofEssays.com. Retrieved 05:42, July 31, 2016, from http://www.collegetermpapers.com/viewpaper/1304303075.html