Social Security Administration

SOCIAL SECURITY ADMINISTRATION

The Great Depression of the 1930s exacerbated a growing need for income support in the United States that could not be met by the limited resources of states, local communities, or private charities. In response, President Franklin D. Roosevelt announced his intention to make recommendations for additional measures of protection against destitution and dependency during a message to Congress on 8 June 1934. A year later, the Social Security Act of 1935 was passed, symbolizing the essence of President Roosevelts New Deal. Included in the Social Security Act was a social insurance program to pay benefits to retired workers age sixty-five or older. This federal Old-Age Benefit system formed the basis for the current Old Age, Survivors, and Disability Insurance (OASDI) programs now administered by the Social Security Administration (SSA).

Evolution of the OASDI programs

Development of the Social Security Act began with the Committee on Economic Security (CES), which President Roosevelt created by Executive Order on June 29, 1934. The CESs function was to study problems relating to economic security and make recommendations for legislation that would promote the economic well-being of individuals. The CES was composed of Secretary of Labor Frances Perkins; Secretary of the Treasury, Henry Morgenthau, Jr.; Secretary of Agriculture, Henry Wallace; Attorney General, Homer Cummings; and Federal Emergency Relief Administrator, Harry Hopkins. In January 1935, the committee sent its report to the president, who introduced the report to both houses of Congress on 17 January 1935. President Roosevelt signed the Social Security Act on 14 August 1935.

The Social Security Act of 1935 provided for several new programs. The one that would grow to affect the largest population was the Old-Age Benefit system, which is now commonly known as Social Security retirement benefits. Even before the Old-Age Insurance program was in full operation, lawmakers enacted significant changes. As originally enacted, Old-Age Insurance would pay benefits only to retired workers. The Social Security Amendments of 1939 broadened the program to include benefits for spouses, dependents, and survivors. The first monthly checks were issued in January 1940, even though they were not originally scheduled to begin until 1942.

The next major changes in benefits and coverage were made in the 1950s. The 1950 Social Security Amendments, signed by President Harry S. Truman, provided the first cost-of-living adjustment (COLA) in monthly benefits since they began in 1940providing an (average) increase of 77 percent (the increase was more generous to low wage than to high wage workers). The 1950 amendments also extended coverage to several categories of workers, including regularly employed farm and domestic workers, federal civilian employees not covered under the Federal Civil Service Retirement System, some state and local government employees (at the election of employers) some not covered under another retirement program, and employees of nonprofit organizations. Even more categories of workers were added in subsequent years. On 1 August 1956, lawmakers amended the Social Security Act to provide monthly benefits to permanently and totally disabled workers age fifty to sixty-four, and to adult children who became disabled before age eighteen and whose parents were deceased or retired workers. Two years later, lawmakers eliminated the minimum age requirement for disabled workers. The 1956 amendments also made reduced, early retirement benefits available for women between sixty-two to sixty-four years of age. Amendments enacted in 1961 extended early retirement to men.

By the 1960s, the basics of the OASDI programs were in place, but further program changes created new categories of beneficiaries, increased benefits to maintain purchasing power, and adjusted tax rates to insure adequate financing. President Lyndon B. Johnson signed the 1965 amendments that created the Medicare program, to be administered by the Social Security Administration. The Medicare program originally provided health insurance to people age sixty-five and older, but was expanded in 1972 to include disabled persons who had received Social Security or Railroad Retirement benefits for twenty-four months. In 1969, the responsibilities of the Social Security Administration were further increased through the creation of Black Lung Benefits for miners and their dependents.

Two major changes in the 1970s were the automatic indexation of OASDI benefits and the creation of the Supplemental Security Income (SSI) program. In the time between the OASDI programs enactment and the 1972 amendments, Congress and the president provided benefit increases on an ad hoc basis. The 1972 amendments provided that, effective in 1975, increases in the cost of living, as measured by the Consumer Price Index, would determine annual benefit increases. These annual increases would help insure that inflation would not erode the value of benefits. The 1972 Amendments also created the SSI program, to be administered by the Social Security Administration. The SSI program replaced state programs that provided benefits for low-income aged, blind, and disabled persons. Payment of SSI benefits began in 1974.

In the late 1970s, the OADSI programs faced new challenges precipitated by economic and demographic conditions that were unfavorable to the programs finances. High inflation, coupled with low or negative real wage growth, caused benefit expenditures to increase rapidly while payroll taxes went up more slowly. This was exacerbated by high unemployment, which also reduced payroll tax revenue. Since the payroll tax is the primary source of funding for the OASDI programs, this meant that financing would become inadequate to pay benefits in the future. In addition, demographic projections showed declining birth rates and increased life expectancy. This meant there would be fewer workers paying payroll taxes per retiree, and that retirees would be receiving benefits longer.

In 1979, actuaries estimated the Old-Age and Survivors Insurance Trust Fund, through which retirement and survivors benefits were paid, would not be able to fund benefits by some point in the 1980s. In December 1981, President Ronald Reagan formed the National Commission on Social Security Reform (NCSSR). Based on the NCSSRs recommendations, the Congress enacted a package of provisions in 1983 intended to resolve the financing crisis. This package moved to earlier years the tax rate increases already scheduled in law, taxation of Social Security benefits for certain higher-income beneficiaries, and gradual increases in the age of eligibility for unreduced retirement benefits. The 1980s also saw changes in the Disability Insurance program regarding periodic review of a workers disability status.

From the mid-1980s through the 1990s, program changes centered on refinement of disability determinations, adjustments in taxation of Social Security benefits and the payroll tax, and expanded benefit coverage for certain groups of workers. One significant change was instituted with the Social Security Independence and Program Improvements Act of 1994, signed by President William J. Clinton. This act made the Social Security Administration an independent agency effective 31 March 1995.

A major change also occurred in the disability program on 17 December 1999, when President Clinton signed the Ticket to Work and Work Incentives Improvement Act of 1999. This law provides disability beneficiaries with a voucher to be used to purchase vocational rehabilitation services, employment services, and other support services from an employment network of their choice. The Ticket to Work initiative shifted the disability programs emphasis away from administration of monthly benefits and more toward rehabilitation and assistance in helping disabled beneficiaries return to work.

Programs the Social Security Administration currently administers

SSAs responsibilities have evolved as the OASDI programs expanded and lawmakers created additional programs to meet the needs of society. Today, SSA has complete responsibility for administering the Old-Age Insurance program, the Survivors Insurance program, the Disability Insurance program, and the Supplemental Security Income program. SSA also administers enrollment in the Medicare program; however, the Centers for Medicare and Medicaid Services (CMS) administers benefit payments and other aspects of the Medicare program. Finally, SSA provides administrative support to other programs, such as the Black Lung program, Medicaid, Food Stamps, and Railroad Retirement. The following descriptions provide a basic overview of the current programs for which the Social Security Administration has primary responsibility.

Old-Age Insurance. Retirement benefits are available to retired workers as early as age sixty-two, at a reduced rate. Unreduced benefits are available at age sixty-five if the worker was born before 1938. The age for full retirement benefits is scheduled to rise gradually from age sixty-five to sixty-seven, with the first increase affecting workers who reached sixty-two in the year 2000. To qualify for retirement benefits, a worker must have paid Social Security payroll taxes for at least ten years (or forty quarters) over the course of a lifetime.

Survivors and Disability Insurance. If a worker who has paid Social Security taxes for a specific length of time dies, monthly survivor insurance benefits may be paid to the workers widow or widower (including those from marriages ending in divorce) as well as to children, and dependent parents. If a worker becomes disabled and meets certain conditions related to his ability to work, he or she may qualify for disability insurance benefits. The disabled workers dependent children and the other parent of his children may also qualify for benefits.

Supplemental Security Income. If a worker is not eligible for benefits under the OASDI programs, or only qualifies for a small payment, he may receive benefits under the SSI program. The SSI program is a means-tested program designed to help low-income aged, blind, or disabled individuals. Unlike OASDI benefits, SSI payments and related administrative expenses are financed from general tax revenues rather than a specific payroll tax.

Over the years, these programs have grown both in terms of beneficiaries served and dollars spent. The Old-Age Insurance program, as originally enacted, covered approximately 60 percent of jobs. Over time, the OASDI programs changed, and today they cover 98 percent of jobs. The Social Security programs are now an essential part of insurance coverage for todays society. Approximately one in six Americans receives a Social Security benefit.

SSAs current organization and operations

A commissioner, who serves for a term of six years and is appointed by the president and subject to Senate confirmation, heads the Social Security Administration (SSA). The Social Security Administration has a staff of over 65,000 employees, with a central office located in Baltimore, Maryland. SSA relies on its decentralized field structure, including 10 regional offices, 1,340 field offices (FOs), 138 hearings offices, 36 teleservice centers, and 6 program service centers, to provide services at the local level. All components within SSAs central office perform a supporting role to SSA FOs by providing uniform directions, guidance, and resources.

Regional offices oversee operations of the field offices within a specific geographic area and assist field offices with administrative tasks and operational issues. Field offices are located both in cities and rural areas across the nation and are the agencys main physical point of contact with beneficiaries and the public. Field office employees explain the various Social Security programs and Medicare, discuss and review whether an applicant qualifies for benefits, and process claims for benefits. Field office staff also provides assistance in applying for other programs, such as Medicaid and food stamps.

If an individuals initial request for benefits and first level of appeal for benefits are denied, the Office of Hearings and Appeals (OHA) is responsible for holding hearings and issuing decisions to determine whether or not an applicant may receive benefits. Most cases handled by OHA deal with Disability Insurance and SSI claims.

Teleservice centers answer calls to Social Securitys 800 number and provide answers to public inquires over the phone and referrals to other appropriate sources of information. Program service centers act as application processing centers for OASDI benefits. The data operations center maintains records of individuals earnings and prepares benefit computations.

How to access SSA resources

The public has four methods available to access information on the Social Security Administration and the programs it administers: (1) visit a field office; (2) call the Social Security 800 number; (3) submit a request by U.S. mail, fax, or email; or (4) visit the Social Security Web site.

To find the most convenient field office location, one need only visit the Social Security Web site or call the agency. The public can obtain recorded information twenty-four hours a day, including weekends and holidays, by calling Social Securitys toll-free number, 1-800-772-1213. Service representatives are available on business days. People who are hearing impaired may call SSAs toll-free TTY number, 1-800-325-0778, on business days.

Social Security Online, the SSAs Internet Web site, is located at www.ssa.gov and contains a variety of information and services, including downloadable publications on all aspects of Social Security programs and forms to request various services. Social Security e-News, an electronic newsletter received by e-mail, is also available to help people keep up with the latest changes in Social Security programs.

Jane L. Ross Sophia Wright Laura Haltzel

See also Medicaid; Medicare; Social Security, and the U.S. Federal Budget; Social Security, History and Operations; Social Security, Long-Term Financing and Reform; Supplemental Security Income.

BIBLIOGRAPHY

Kennedy, David M. Freedom From Fear. New York: Oxford University Press, 1999.

Kollman, Geoffrey. Summary of Major Changes in the Social Security Cash Benefits Program: 19351996. Washington, D.C.: United States Congressional Research Service, 1996.

McSteen, Martha. Fifty Years of Social Security. Social Security Bulletin 8 (1985): 3644.

United States Social Security Administration. Annual Statistical Supplement 2000. Washington, D.C.: 2000.

United States Social Security Administration. A Brief History of Social Security. Baltimore, Md.: August, 2000.

United States Social Security Administration. The 2000 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds. Washington, D.C.: 2000.

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Ross, Jane L.; Wright, Sophia; Haltzel, Laura. "Social Security Administration." Encyclopedia of Aging. 2002. Encyclopedia.com. 30 Jun. 2016 <http://www.encyclopedia.com>.

Ross, Jane L.; Wright, Sophia; Haltzel, Laura. "Social Security Administration." Encyclopedia of Aging. 2002. Encyclopedia.com. (June 30, 2016). http://www.encyclopedia.com/doc/1G2-3402200376.html

Ross, Jane L.; Wright, Sophia; Haltzel, Laura. "Social Security Administration." Encyclopedia of Aging. 2002. Retrieved June 30, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3402200376.html

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