Social Security Act

Social Security Act (1935). The Social Security Act of 1935, the foundation for most federal welfare provisions and one of the most important pieces of legislation in U.S. history, has been widely misunderstood. The title phrase, “Social Security,” came to refer in general usage to only one of the eleven major sections or titles in the act, old‐age pensions, the nation's most popular welfare program. The term “welfare” became attached to another of Social Security's titles, Aid to Dependent Children, and few realize that it derived from the same omnibus legislation.

The Depression of the 1930s provided an opportunity, for which social reformers had been agitating since at least 1910, to create a federally sponsored economic security program. Two aspects of the Depression—widespread impoverishment that affected even the middle classes, and powerful social movements demanding economic provision—weakened resistance to government responsibility. President Franklin Delano Roosevelt supported temporary emergency relief with enthusiasm but at first opposed a permanent federal role. By late 1934, however, the deepening depression led the president to appoint a Committee on Economic Security to draft a bill. Its staff headed by Edwin Witte and his colleagues from Wisconsin's state government and the University of Wisconsin, the committee was dominated by proponents of social insurance. Their vision, derived from private life‐insurance plans, called for government funds to replace wages lost through illness, injury, unemployment, or retirement. Its advocates sought to serve the prosperous as well as the poor, thereby avoiding the stigma of “poor relief,” and to prevent, not simply alleviate, poverty. The committee adapted social insurance principles in designing three programs—unemployment compensation, old‐age pensions, and medical insurance, the last of which died owing to opposition from the organized medical profession.

Meanwhile a separate women's network of welfare reformers, at first unrepresented in discussions of the new bill, observed that social insurance, providing eligibility through the workplace, neglected the substantial number of women and children who had no supporting male breadwinner. They designed several other Social Security proposals, which became known as public assistance as distinct from social insurance. The most prominent of these was Aid to Dependent Children (ADC, forerunner of Aid to Families with Dependent Children, or AFDC). Organized on an entirely different principle, public‐assistance programs did not initially vest any entitlement in recipients. They provided states with only one‐third of the funding cost and limited eligibility to the needy and the “deserving,” which stipulation required means‐testing and supervising recipients. The women's network also introduced into the bill several programs to aid the disabled.

Congress radically amended both the social‐insurance and public‐assistance provisions before passing the Social Security Act. Powerful southern members of Congress forced the elimination of agricultural and domestic workers from the employment‐based programs, thus excluding the vast majority of workers of color. With ADC, they insisted on limiting federal oversight, thereby allowing the states to exercise great discretion in determining eligibility for ADC, discretion which notably included race discrimination. The act provided that the social insurance system would be funded by taxes paid partly by employers and partly by funds withheld from workers’ paychecks, so as to create the impression that these benefits were earned.

Amendments to Social Security accumulated rapidly. In 1939 Congress added survivors’ insurance to old‐age pensions and moved their first disbursement from 1942 to 1940. Later changes broadened eligibility, indexed benefits to inflation so as to maintain their real value, and added Medicare, health‐care insurance for the eligible elderly. The result was considerable reduction in poverty among the elderly. Unemployment insurance changed less, and as the twentieth century ended, typically offered six months of payments and continued to exclude the majority of the unemployed from coverage.

Public assistance also underwent substantial change over the years. Single parents, as well as their children, became recipients of AFDC in 1950; Supplemental Security Income, adopted in 1972, added assistance for the elderly and disabled poor; the food‐stamp system developed in the 1960s and 1970s; Medicaid was added in 1965. In the 1960s organized welfare recipients agitated for and won Supreme Court rulings guaranteeing several rights, including that to a hearing before being denied benefits. Meanwhile the numbers of AFDC recipients grew rapidly as many single‐parent families once excluded, such as unwed mothers and their children, gained access to the program. As a result, poverty in the United States declined substantially through the mid‐1970s. But that trend soon reversed itself, as rising prices shrank AFDC benefits and low‐paid workers were left without medical insurance and effective unemployment insurance. After 1980, poverty grew, particularly among children, partly as a result of deindustrialization and partly as a result of conservative administrations and Congresses that further reduced benefits out of a conviction that “welfare,” as public assistance had come to be called, stimulates poverty by discouraging work and promoting family disintegration. Congress repealed AFDC entirely in 1996.

By contrast, Social Security old‐age pensions, not considered “welfare” by most Americans although they disburse more taxpayer money than did AFDC, remained popular and protected from attack until the mid–1990s, when conservative economists and politicians asserted that the system of old‐age pensions, coupled with an aging and longer‐lived population, threatened to plunge the system into bankruptcy.
See also Depressions, Economic; Medicare and Medicaid; New Deal Era, The.

Bibliography

Roy Lubove , The Struggle for Social Security, 1900–1935, 1968.
W. Andrew Achenbaum , Social Security: Visions and Revisions, 1986.
Michael B. Katz , The Undeserving Poor: From the War on Poverty to the War on Welfare, 1989.
Edward D. Berkowitz , America's Welfare State from Roosevelt to Reagan, 1991.
Linda Gordon , Pitied but Not Entitled: Single Mothers and the History of Welfare, 1994.
James T. Patterson , America's Struggle against Poverty 1900–1994, 1994.

Linda Gordon