Social Security Act of 1935

The Law Federal law written to provide social insurance for American workers and aid for other social sectors

Date Signed August 14, 1935

The Social Security Act was an important piece of legislation introduced in response to the problem of suffering elderly and unemployed Americans. It signified the federal government’s earliest financial involvement in the collective social welfare of its citizens and is one of the longest lasting pieces of law introduced by President Franklin D. Roosevelt’s New Deal programs of the 1930’s.

The Social Security Act was formulated during the Great Depression under President Roosevelt. During the economic downturn of the 1930’s, many Americans, especially the elderly, were economically and socially disadvantaged. At the time, the United States did not have a suitable program for providing financial security for its citizens; thus, the leadership of the day decided that a change was necessary.

Background and Context

In a speech on June 8, 1934, President Roosevelt stated that a social security law needed to be comprehensive and had to involve both federal and state governments. Its measures would also need to bring about a solution to the problem of income security and provide help to the elderly and the unemployed. Thus, on June 28, 1934, Executive Order 6757 established the Committee on Economic Security (CES) and the Advisory Council on Economic Security. The duty of the committee was to research the economic problems faced by certain individuals in society and then to report and make recommendations to the president. In addition, the advisory council’s purpose was to assist the CES. A draft of the law was submitted to Roosevelt on January 15, 1935, and served as the outline for what became the Social Security Act. Certain sections of this draft were amended to include the subsidization of employer and employee payroll taxes to help fund the programs of the act.

On August 14, 1935, Roosevelt signed the Social Security Act into law. Since then, the U.S. Congress has amended Social Security several times. As part of the act, the federal government provided guidelines and limited aid to states, and the states enacted their own legislation for the act’s implementation.

In addition to President Roosevelt, several other individuals were key players in the evolution and development of this law. Frances Perkins, the secretary of the Department of Labor, was heavily involved in the organization of the CES. She became one of the major governmental spokespersons to publicly support the Social Security Act during the 1930’s. She also recruited Arthur J. Altmeyer, the second assistant secretary of the Department of Labor. He is credited as the author of President Roosevelt’s 1934 speech before Congress on economic security. Altmeyer was chairman of the Social Security Board from 1937 to 1953 and was much involved in the amendments that took place in 1939 and 1950. He was often called “Mr. Social Security.” Edwin E. Witte, a professor at the University of Wisconsin, has been called the father of Social Security. He became the executive director of the CES and played a crucial role in designing the legislation, which he defended before Congress.

Two of the most important measures of the Social Security Act concerned unemployment and old age. Under the provisions of the act, unemployment compensation would be supported by the contributions of employers and employees through payroll taxes. This unemployment insurance also was to be supported by both state and federal governments. The old-age system focused on providing income security to the elderly, including those who worked, those who had no jobs and inadequate resources, and those who were retired; the program also covered beneficiaries of the elderly. This program was to be managed directly by the federal government and supported by taxes on employer and employees. Workers’ tax contributions assisted those already retired. The first set of retirement checks were scheduled to be mailed in 1942, which changed to 1940, and were paid to persons who were sixty-five years old and older who had worked in certain jobs for five days or more every year from 1937 through 1941 and had netted a certain income. Ida M. Fuller was the first recipient of Social Security benefits. Ten years later, she continued to receive the same amount: $22.74 per month.

The Social Security Act also incorporated several other aspects of public welfare and included assistance to the blind, disabled, dependent children, and children in need of special assistance. It made provisions for public health, providing maternity coverage; rehabilitative services; and programs from vocational training.

Impact

The creation and implementation of the Social Security Act of 1935 has been far reaching. It demonstrated a departure in the federal government’s hands-off approach toward the economic prospects of the elderly. Prior to the act, care for the elderly was left to themselves and their families. The Depression led directly to the Social Security Act, one of the most politically influential pieces of legislation in the history of the United States. Under the law, the socially and economically disadvantaged were assisted by the government. In the following years, amendments to the law included increases in benefits, additions to the classes of workers covered, the broadening of public health services to citizens, and the reduction of the retirement age. The Social Security Act was praised as a solution to existing problems, which was one reason for its quick adoption by Congress. However, the act has encountered problems. Although amended several times throughout the years, the Social Security system is headed toward bankruptcy because it distributes more in benefits than it collects in taxes. Other critics have argued that this act has led to the formation of a “welfare state” in the United States.

Bibliography

Axinn, June, and Mark J. Stern. Social Welfare: A History of the American Response to Need. 7th ed. Boston: Pearson/Allyn and Bacon, 2008. Focuses on the history of social welfare in the United States, from the nation’s colonial period to the early twenty-first century. Highlights the U.S. governmental involvement in the social welfare of its poor and disadvantaged citizens, including the problems faced by these groups and the programs implemented in response to these problems.

Dixon, John, and Robert P. Scheurell, eds. Social Security Programs: A Cross-Cultural Comparative Perspective. Westport, Conn.: Greenwood Press, 1995. Comparative and cross-cultural perspective on global social security programs.

Haber, William, and Wilbur J. Cohen. Readings in Social Security. New York: Prentice-Hall, 1948. Divided into nine sections. Includes discussions of the implementation of social security, the theory and philosophy of social security, the developments in the system in the United States after the 1930’s, and unemployment insurance and other programs included under the Social Security Act.

Johnson, Dennis W. The Laws That Shaped America: Fifteen Acts of Congress and Their Lasting Impact. New York: Routledge, 2009. Chapter 5 contains an explanation of the background, implementation, and aftermath of the Social Security Act of 1935.

Schieber, Sylvester J., and John B. Shoven. The Real Deal: History and Future of Social Security. New Haven, Conn.: Yale University Press, 1999. Account of the evolution of the Social Security Act; includes its key players and modifications made from its implementation through the 1990’s.

Witte, Edwin E. The Development of the Social Security Act: A Memorandum of the Committee on Economic Security and Drafting and Legislative History of the Social Security Act. Madison: University of Wisconsin Press, 1962. Historical and autobiographical account of the events surrounding the development of the Social Security Act from the point of view of Witte, executive director of the CES.