1983 President Ronald Reagan signs the Social Security Act Amendment, which projected a balanced budget without removing protections, and ensured long-term stability.


Tinkering, but No Long-Term Solution


BY CARRIE SHEFFIELD AND MATTHEW LYSIAK


lawmakers stepped in at the last minute to win one for the Gipper and preserve benefits for millions of Social Security recipients. In the early 1980s, Social Se-


T


curity was nearing insolvency, with its trust fund projected to run out by mid-decade. During a period of economic


chaos — high inflation, reces- sion, and rising unemployment — millions of retirees worried about losing benefits. President Ronald Reagan


stepped in, passing a biparti- san solution by signing the So- cial Security Amendments of 1983 into law on April 20. This historic bill secured the pro-


he last time so- cial Security faced a financial cliff, a bipartisan group of


gram’s future for decades. To accomplish the task,


Reagan established the Na- tional Commission on Social Security Reform, led by Alan Greenspan. The committee’s proposals


— gradually raising the retire- ment age from 65 to 67, tax- ing benefits for higher-income earners, modest payroll tax increases, and covering federal workers — formed the basis of the bill. These measures balanced


the budget without removing protections, avoided immedi- ate cuts, and ensured long- term stability. At the signing ceremony,


Reagan emphasized bipar- tisanship, praising House Speaker Tip O’Neill and Sen- ate Majority Leader Howard


Baker for their efforts to over- come divisions. “Today, all of us can look


each other square in the eye and say, ‘We kept our promises.’ We promised that we would protect the financial integrity of Social Security. We have.” The reform said up to 50% of


Social Security benefits could be added to taxable income — if the taxpayer’s total income ex- ceeded certain benchmarks. In 1993, President Bill Clin-


ton signed a bill increasing taxes under the 1983 law. It raised from 50% to 85% the portion of Social Security ben- efits subject to taxation, how- ever, the increased percent- age only applied to “higher income” beneficiaries. Beneficiaries of modest in- comes might still be subject to


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