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LESSON
PLAN: HOW SECURE IS SOCIAL SECURITY?
By
Greg Timmons, teacher and Executive Director of The Constitution Project in Portland,
Oregon Subjects:
government, social studies, history, economics Time:
3 class periods Lesson
Objectives:
1.
Students will understand the history of the Social Security system as it has evolved
to meet the needs of retirees.
2. Students will understand how the Social Security
program benefits the retirees.
3. Students will examine how the changing demographics
of workers and upcoming swell of retirees has caused problems for future generations
and called for changes in the system.
4. Students will understand the "lock
box" concept of trust funds and determine how solvent this funding is.
5.
Students will examine and evaluate the effectiveness of several proposals being
considered to help ensure ample future funding of the Social Security program,
including President Bush's "personal account" proposal.
6. Students
will understand that the debate surrounding Social Security reform is highly politicized
with rhetoric and political posturing accompanying the process of addressing the
problems with the Social Security program. Overview:
The lesson is divided into five parts, with student groups conducting
research on one aspect of the Social Security program, developing presentations
and sharing their findings with the class. However, the lesson's structure allows
teachers to modify the material to suit their classroom needs as necessary. The
main goal of the lesson is to provide students with enough information about Social
Security's operation and projected problems to make informed conclusions on how
to address these problems. The lesson can be extended further with any of the
Extension Activities that follow. Background
This
lesson will provide students a solid understanding of the Social Security program,
its history and operation and some of the current problems it is facing. It will
also give students the opportunity to examine the effectiveness of several possible
solutions including President Bush's proposal to set up "personal accounts."
The concept of personal accounts is not new. Congress debated the idea before
the program was enacted in 1935. Other politicians from Barry Goldwater to Bill
Clinton have promoted this option in some form. President Bush has made it a cornerstone
of his second term in what journalist Richard Stevenson of the New York Times
calls, "…one of the biggest gambles of Mr. Bush's political career."
No matter how it's decided the political underpinnings are most evident. The President's
desire to change Social Security intersects with conservative interest groups'
desire to have less government involvement in the finances and affairs of private
citizens. However, for many, such a change would challenge the fundamental philosophical
assumption of President Roosevelt's New Deal, regarding the relationship between
individuals and their government. For Americans witnessing and participating in
the debate, it will be important they understand the problems the Social Security
program faces and how any of the proposed solutions will effectively address them.
To
make these lesson plans better 
Correlation
to National Standards
Materials
Needed Procedure:
PART
I: Opening Activity: (approx.. 15 minutes) 1.
Have students work in small groups to answer the following questions you put on
the board or an overhead: What is Social Security? Where does the money come from
to pay for this program? What do you know of the status of this program at this
time? 2.
Pass out Handout "Pay Check Stub." Review with students the parts of
the form for gross pay and deductions. Point out the yellow highlighted section
on Social Security and tell them this deduction is to fund the federal retirement
program also sometimes known as FICA when it includes the tax on Medicare. Ask
them to figure how much this deduction is from the pay check. (6.2%). Mention
that the employer is also obligated to contribute 6.2% to this fund. Then ask
them if they believe they will receive any of this money when they retire.
PART
II: A close look at the Social Security program (Group
questions in this section also found in the student handouts listed in the "Materials
Needed" section.) 1.
Explain to students that they are now going to examine the history of the Social
Security program, how it works, the concerns around the program meeting its future
obligations, and the plans being proposed to address this concern. Much of the
content material for this lesson was taken from the NewsHour's Social Security
Reform Web site at http://www.pbs.org/newshour/bb/social_security/reform/index.html
and the Social Security Administration's Web site at http://www.ssa.gov.
However, some of the questions require further research and links to other Web sites
have been provided. 2.
Divide the class into the following five groups:
- Historians
- Operations
- Problem
analyzers
- Solution
providers
- The
President's Proposal
3.
Each group will be responsible for completing each of the questions in their sections.
They can conduct their research from the Web sites listed in their questions or
from other sources. Be sure to review any other sources with them to ensure their
credibility. When groups have finished their research, they are to construct a
presentation to the class on their findings. Encourage students to create presentations
with visual aids such as flow charts, graphs or diagrams to help their classmates
understand the complexities of the Social Security system and the various plans
being discussed to strengthen its future.
Group
1: HISTORIANS
This group will research the history of the Social Security
program, reporting on the reasons the program was instituted, what benefits it
provided and some of its provisions to help meet people's retirement needs. Students
are encouraged to develop visual aids to assist in their presentation. Have students
review the Social Security Timeline found at http://www.pbs.org/newshour/bb/social_security/reform/timeline.html
to prepare their presentation. Additional information can be found at http://www.ssa.gov/history/. 1.
State when and explain why the Social Security Act was instituted. What kinds
of problems were Americans facing during the Great Depression that led to this
law?
2. State when Social Security benefits were first expanded and in what
areas. Also, explain the change that occurred in how people received their retirement
money.
3. State when the first cost-of-living adjustment (COLA) was enacted.
Explain why this adjustment was made and identify the years other COLA adjustments
were made?
4. Record the dates and details of other Social Security program
expansions such as adding benefits for permanently and totally disabled workers
or extending health coverage.
5. From the very beginning, funds for the Social
Security program have come from a payroll tax. State the original percentage workers
and employees had to contribute to the fund and the dates and amounts of subsequent
increases to this payroll tax.
6. In 1981, President Ronald Reagan and Congress
created the Greenspan Commission to study the Social Security program's financial
problems and make recommendations. Describe the changes Congress put into place
to help strengthen the program and how these actions would help strengthen the
program. For further information on the provisions of the 1983 legislation, go
to the Social Security Administration's History Web site at http://www.ssa.gov/history/1983amend.html.
Group
2: OPERATIONS
This group will report on how the Social Security program
works; how contributions are made, where they are "stored," and how
benefits are disbursed. Students are encouraged to develop visual aids to assist
in their presentation. Have students review the Social Security Basics at http://www.pbs.org/newshour/bb/social_security/reform/faq_flash.html
to prepare their presentation. Additional information can be found at http://www.ssa.gov/pubs/simpleconcept
and at http://www.ssa.gov/OACT/ProgData/fundFAQ.html.
1.
Describe how the Social Security works? (Explain how contributions are made, how
the "pay-as-you-go system" works and how recipients receive their benefits.)
2. Explain why the Social Security system was created?
3. Explain the
significance of the numbers on the Social Security card.
4. Describe the different
types of benefits available to individuals.
5. Explain how the Medicare program
fits into the picture (Explain how it relates to FICA and how contributions to
Social Security taxes are divided up between Social Security and Medicare.)
6.
Develop a chart or other visual device that explains how the Social Security Trust
funds work. (Explain what they are, how they are created, and when they are predicted
to be unable to meet their obligations.)
Group
3: PROBLEM ANALYZERS
This group will report in detail the problems currently
facing the Social Security program. Students will explain the trust fund system
and how increases in the number of retirees will cause shortfalls in the system's
ability to pay out benefits. Students are encouraged to develop visual aids to
assist in their presentation. Have students review The Future of Social Security
at http://www.ssa.gov/pubs/10055.html
to prepare their presentation. Additional information can be found at http://www.pbs.org/newshour/bb/social_security/reform/FAQ_flash.html
and other sources listed below. 1.
Briefly review how the trust fund program works.
2. Explain how trust funds
are invested and what happens to taxes that go into the trust funds. (Additional
resources at http://www.ssa.gov/OACT/ProgData/fundFAQ.html)
3.
Review and document the performance of the trust funds from 1987 to 2005 http://www.ssa.gov/OACT/ProgData/assets.html.
Show the income growth during this time and how the difference between the "Income"
and "Outgo" of funds has created a surplus.
4. Explain how changing
demographics (the "Baby-boom" generation) has created a need for changes
in the Social Security system.
5. Develop a chart like the one shown in question
three that illustrates the projected shortfalls of the program over the next 75
years.
6. Review Paul Solomon's report "Keys to the Lock Box" http://www.pbs.org/newshour/bb/economy/july-dec01/lockbox_8-22.html
and "Coming up Short" http://www.pbs.org/newshour/bb/social_security/july-dec04/deficit_10-12.html
reports for the Newshour. (These reports can be presented in a video stream to
the class.) Incorporate Mr. Solomon's explanation of the "special issue"
securities as government IOUs onto your report and answer the question as to whether
these funds will ever be available to future retirees.
Additional
charts can be found on Public Agenda's Web site at http://www.publicagenda.org/issues/factfiles.cfm?issue_type=ss
Group
4: SOLUTION PROVIDERS
This group lists and explains several different
proposals to address the Social Security problem. Students are encouraged to develop
visual aids to assist in their presentation. Have students review the potential
solutions for Social Security at http://www.ssa.gov/pubs/10055.html#choices
to prepare their presentation. Additional information can be found at http://washingtontimes.com/upi-breaking/20040419-123716-5298r.htm
Students
should review each of the following suggested solutions from the source links
above. They should describe each solution; provide an example of how each will
work to address the problem, and what critics say about each suggested solution.
-
Reduce benefits or slow down their increases
- Raise
the payroll tax rate above 12.4%
- Raise
the payroll tax cap above the first $90,000 in a wage-earner's salary
- Raise
the taxes on Social Security benefits
- Raise
the retirement age
- Levy
an additional tax on state and local governments
- Government
invests Social Security reserves in stocks and bonds.
Group
5: THE PRESIDENT'S PROPOSAL
This group will report on President Bush's
proposal to address the Social Security problems. Students are encouraged to develop
visual aids to assist in their presentation. Have students review the plan at
http://www.pbs.org/newshour/bb/social_security/reform/accounts.html
to prepare their presentation. Additional information can be found at http://www.whitehouse.gov/infocus/social-security/. 1.
Describe the President's personal accounts proposal and explain how it is philosophically
part of the "ownership society" promoted in his second term agenda.
2.
Briefly describe the history of this idea and why it wasn't instituted when Social
Security was first established.
3. Describe the three proposals generated by
the President's Commission to Strengthen Social Security developed in 2001.
4.
Focusing on Model Two, the one preferred by the Bush Administration, describe
the higher level of benefits future retirees would receive over the current system.
Describe how workers' money would be invested in the two-tiered system envisioned
by the president's commission and explain why supporters of this plan believe
it reduces the risk of investing in the stock market.
5. Currently, employees
and employers together pay 12.4% of gross income (income before taxes) into the
Social Security system for a worker's retirement. Under the personal accounts
model, 4% of gross income would go into a private account and 8.4% would go in
to the existing Social Security system to pay the benefits of current retirees.
Describe the "transition costs" this plan would create and where the
money would come from to pay for them.
6. Describe what critics say about investing
Social Security contributions in the stock market, reducing the amount of funds
available from 12.4% to 8.4% to pay for current retirees, and the overall costs
of funding the personal accounts plan.
PART
III: Drawing the Battle Lines - Debriefing Questions: There
are many different perspectives on the issue of the Social Security program as
the article in the NewsHour's Social Security Reform Web site shows http://www.pbs.org/newshour/bb/social_security/reform/battle_lines.html.
The following activity is designed to be used as debriefing questions for all
students after their presentations. It contains quotes from those deeply involved
in the debate. It can be conducted in a full class or as small group work. It
can also be used as an assessment tool for group projects or individual assignments.
Extensions activities to further explore the issue can be found in the Extension
Activities section. Discussion
Questions:
The following quotes best articulate the feelings and attitudes
of many of those closely involved in the debate to address the Social Security
issue. Have students review each and comment on: - the
statement's meaning on the issue of Social Security reform,
- the
statement's position taken in relationship to the opposing side's view point
- whether
the statement provides substance or political rhetoric
President
George Bush: "I like the idea of encouraging more people to say, I
own my own home, I own my own business, I own and manage my health accounts, and
now I own a significant part of my retirement account." "Trying to fix
the system by raising taxes would only buy time, and then future generations would
need to come back and raise taxes again and again." Senator
Edward Kennedy, (D-MASS): "We will not let any president turn the
American dream into a nightmare for senior citizens and a bonanza for Wall Street.
The biggest threat to Social Security today is not the retirement of the baby
boomers. It's George Bush and the Republican Party." Vice
President Dick Cheney: "We need to remember that raising taxes will
not fix the current system as long as the costs continue to rise relative to the
size of income that could be taxed. Trying to fix the system by raising taxes
would only buy time, and then future generations would need to come back and raise
taxes again and again." Senator
Olympia Snow (R-Maine): "I'm certainly not going to support diverting
$2 trillion from Social Security into creating personal savings accounts. The
existing program, as it has been developed in the last 70 years, provides a stable
monthly income that has prevented seniors, almost 50 percent from falling into
poverty. I don't think we want to erode the principles of that system." Marie
Smith and Bill Novelli of AARP: "Most of us would then have to pay
twice to gamble on this [the personal accounts] new plan -- first to keep our
commitments to current retirees and again to pay into these private accounts.
Some critics of these personal accounts think that Wall Street, not retirees,
would be the real beneficiaries."
Extension
Activities
1.
Interview someone on SS or close to retirement for their opinion. Write an article
on their views and what you learned from them and them from you. 2.
Develop a Web site or newsletter with all the info gathered from the class presentations.
3. Ask
someone from the local SS administration to come in and talk to the class. Develop
a list of questions from the class prior to their arrival. The Social Security
Administration seeks opportunities to communicate with the public about important
issues surrounding Social Security. Speakers are available nationwide for conferences,
seminars, classrooms, workshops, etc. If you are interested in having an Social
Security representative speak in your class go to this Web site http://www.ssa.gov/organizations/
or call your local Social Security office. 4.
Further analysis of the topic can be found at Public Agenda's Web site http://www.publicagenda.org/issues/frontdoor.cfm?issue_type=Ss
Here you will find discussion guides, fact files, and choice options to further
explore the issue.
Correlation
to National Standards
McRel K-12 Standards Addressed:
Civics
Standard
5: Understands the major characteristics of systems of shared powers and of parliamentary
systems
Standard 20: Understands the roles of political parties, campaigns,
elections, and
associations and groups in American politics Language
Arts Reading
Standard
7: Uses reading skills and strategies to understand and interpret a variety of
informational texts Listening
and Speaking
Standard 8: Uses listening and speaking strategies for different
purposes Working
with Others
Standard 1: Contributes to the overall effort of a group
Standard
4: Displays effective interpersonal communication skills Resources:
Social
Security Administration http://www.ssa.gov/
The
White House - http://www.whitehouse.gov
Cato Institute - http://www.cato.org/
Brookings
Institution - http://www.brook.edu/
Public
Agenda - http://www.publicagenda.org/
Media Matters for America - http://mediamatters.org/
Just Facts http://www.justfacts.com/
American Association of Retired Persons (AARP) http://www.aarp.org/socialsecurity
About
the Author Greg Timmons is a teacher, curriculum writer and Executive Director
of The Constitution Project in Portland, Oregon. He has taught middle school and
secondary Social Studies for over 30 years, wrote lessons, and directed institutes
on U.S. Constitution related issues. He is a member of the Board of Directors of
the Oregon Council for the Social studies. To
find out more about opportunities to contribute to this site, contact Leah Clapman at extra@newshour.org. | 
