Myth and Reality of the Safety Net: The 1983 Social Security Reforms

In 1983 the Social Security Trust Fund was rapidly emptying. President Reagan appointed a bipartisan commission headed by Alan Greenspan to recommend solutions. The commission could not agree. Republicans adamantly opposed tax increases and Democrats opposed any slowdown in the growth of benefits. Finally Senators Dole and Moynihan broke off a rump group that came up with a compromise involving some of each. Later an important, gradual increase in the full retirement age was added on the House floor. Chairman Greenspan later said that compromise would not have been possible were it not for a quiet agreement between President Reagan and Speaker Tip O’Neill not to oppose the recommendations of the commission.