In the run up to the 2000 presidential election, Vice President Al Gore talked a great deal about Social Security “lockboxes.” The truth of the matter is there was never a lockbox for Social Security and Medicare taxes, AKA FICA taxes and the truth is more terrible than you might think. In addition, Karl Rove, the advisor to President George W. Bush had a picture of President Lyndon Johnson (LBJ) in his office from 1966 because many people recognize, it was the year in the last half of the century that changed everything on the budget side of the ledger for the American people.
LBJ took over the presidency after the assassination of President Kennedy and the country needed healing. He shepherded the passage of the Voting Rights Act and the Civil Rights Act through the Congress, thanking Republicans for their help in making it a bi-partisan move. He also expanded the involvement in the Vietnam conflict and made sweeping promises on the social safety net and called it “The Great Society.” How was he going to pay for it? The economy was good, and President Kennedy had cut taxes and revenues were way up, but he needed more for what he called “Guns and Butter.” He had to fund the war and all his social programs.
In addition, LBJ had to solidify the Black vote for Democrats and find a way to pay for everything. Black people had only started voting for Democrats in 1960 because of JFK. They had voted Republican (when they could vote) up until that time because Democrats represented the party of Jim Crow, the KKK and segregation. While LBJ was majority leader of the Senate, Robert Caro, the author, points out he had to separate the 22 southern Democrat senators and neutralize them while standing up social programs he thought would ensure the growing Black vote for generations. There was only one solution for him, and it was obvious.
Baby Boomers were starting to turn 21 in 1966 and they would be the dominant force in the workforce for the next 60 years. The coffers of the Social Security and Medicare taxes were overflowing and far outpacing the use by those that were in their 60s and older at that time. LBJ made the decision to mix the Social Security and Medicare money with the general budget and use that as a cushion for whatever he wanted to spend. He said he would pay it back and I have been told there are actual “IOU’s” to prove it but that payback never happened. If you want to know why we have a spending spree from 1966 until today, you have only to look to 1966, the year we stopped keeping the books in an honest way in America.
Next week we will look at the endless campaign and how it is keeping Congress from working together.
