Roosevelt Signs the Social Security Act Summary

  • Last updated on November 10, 2022

Despite objections raised by those who equated it with socialism, the Social Security Act passed the U.S. Congress by an overwhelming margin, creating the first national program of economic protection for Americans during retirement, unemployment, and disability. The program achieved such great popularity that it later became known as the “third rail” of politics, meaning that any attempt to alter it would be equivalent to political suicide.

Summary of Event

Although Social Security in the United States is most often associated with a program for older, retired persons, the creators of the 1935 legislation viewed old-age dependency in the larger context of major changes in the economy and in family structure. They tended to believe that if economic security could be assured to the oldest members of society, such security could also be made a reality for other citizens. The original legislation did not profess to solve deep structural problems of unemployment and poverty: It was designed to provide the first links in the safety net that would protect U.S. citizens from future economic disasters. From the beginning, social welfare programs reflected an uncertainty of purpose between adequacy—a concept that benefits should be based on the needs of the recipients—and equity—a notion that benefits should reflect contributions made by the participants. [kw]Roosevelt Signs the Social Security Act (Aug. 14, 1935) [kw]Social Security Act, Roosevelt Signs the (Aug. 14, 1935) [kw]Act, Roosevelt Signs the Social Security (Aug. 14, 1935) Social Security Act (1935) Old-age pensions[Old age pensions] Social insurance Pensions Unemployment insurance;U.S. [g]United States;Aug. 14, 1935: Roosevelt Signs the Social Security Act[08950] [c]Laws, acts, and legal history;Aug. 14, 1935: Roosevelt Signs the Social Security Act[08950] [c]Economics;Aug. 14, 1935: Roosevelt Signs the Social Security Act[08950] [c]Social issues and reform;Aug. 14, 1935: Roosevelt Signs the Social Security Act[08950] Perkins, Frances Witte, Edwin E. Roosevelt, Franklin D. [p]Roosevelt, Franklin D.;Social Security Act Wagner, Robert F. Lewis, David J. Townsend, Francis E. Cohen, Wilbur J.

Surrounding President Franklin D. Roosevelt as he signs the Social Security Act are (from left) Representative Robert Doughton, Senator Robert Wagner, Secretary of Labor Frances Perkins, Senator Pat Harrison, and Representative David L. Lewis.

(Library of Congress)

By the 1930’s, most of the nations of Western Europe had enacted some kind of social insurance legislation providing for old-age care and unemployment compensation. For a number of reasons, however, the United States had lagged behind in such efforts. It was not until the administration of President Franklin D. Roosevelt that the United States adopted an effective social security measure. The general economic depression of the decade undoubtedly contributed to the momentum needed to pass social security legislation, for during the Great Depression, many people in the United States came to see economic insecurity as a social problem, not merely a matter of individual virtue and responsibility. By 1934, considerable support had developed for utopian schemes, such as that developed by Francis E. Townsend, whose Old-Age Revolving Pension Club Old-Age Revolving Pension Club[Old Age Revolving Pension Club] was lobbying for a monthly grant of two hundred dollars for every citizen over sixty years of age.

There was nothing radical about a plan for old-age pensions. Both private pensions and veterans’ benefits existed long before the New Deal. Partly because such plans had proved inadequate during the Great Depression, the Democratic platform of 1932 called for public retirement pensions and for unemployment compensation. By the 1930’s, almost half the states had some kind of old-age pension, but these were generally limited in scope. Only Wisconsin had a working unemployment compensation plan. In 1932, Senator Robert F. Wagner of New York and Congressman David J. Lewis of Maryland introduced bills in Congress calling for a federal unemployment plan patterned after that of Wisconsin. The same year, Senator Clarence C. Dill Dill, Clarence C. of Washington and Congressman William P. Connery Connery, William P. of Massachusetts introduced a bill providing for federal grants to those states establishing old-age pensions.

It was not until 1934 that President Roosevelt decided to take the initiative in the field of social insurance legislation. He asked Congress to delay action on the existing bills while he appointed a special committee to look into all aspects of social security, with the aim of presenting a comprehensive measure during the 1935 congressional session. In June, 1934, Roosevelt established the Committee on Economic Security, Committee on Economic Security with Secretary of Labor Frances Perkins as chair and economist Edwin E. Witte as executive director. Perkins took a broad view of her job and aimed to bring U.S. social insurance up to that of advanced European countries. She soon discovered, however, that there were divergent opinions, especially on the subject of how unemployment compensation should be handled.

The debate centered on whether the compensation should be strictly a national operation. On one side of the question stood a group of Wisconsin social workers, such as Paul Rauschenbush Rauschenbush, Paul and his wife, Elizabeth Brandeis Rauschenbush. Rauschenbush, Elizabeth Brandeis They advocated a joint state-national plan that would allow for greater experimentation and variety. They also pointed out that a joint approach would be more likely to pass constitutional scrutiny. Others, such as Rexford Guy Tugwell, Tugwell, Rexford Guy Abraham Epstein Epstein, Abraham —former secretary of the American Association of Old-Age Security—and Professor Paul H. Douglas Douglas, Paul H. of the University of Chicago, recommended a solely national system to avoid unequal coverage and to protect the highly mobile U.S. worker. Perkins sided with the Wisconsin group, and the final recommendation of the committee followed the decentralized approach: Unemployment compensation would be financed by a federal tax on total payrolls, with 90 percent of the tax going to the states to implement the program. The report also advocated a contributory national program of old-age pensions. Roosevelt accepted the committee’s report.

The Social Security bill was introduced into Congress in January, 1935, by Senator Wagner and Congressman Lewis. The air was filled with warnings that the act would destroy individual responsibility and the principles of self-help, but it was passed in the Senate by 76 votes to 6 and in the House by 371 votes to 33. On August 14, 1935, Roosevelt signed the measure.

Money to fund the old-age insurance plan was to come from a tax to be levied on employees’ wages and employers’ payrolls. Benefits would be payable at sixty-five years of age. The unemployment compensation provisions followed the recommendations of the Perkins Committee. In addition, the federal government would extend grants to the states for the care of those destitute elderly not covered by Social Security and provide aid on a matching basis to states for the care of dependent mothers, children, and the blind and for public health services. The Social Security Board was set up to administer the various provisions of the act.

Significance

Although clearly innovative for its time, the Social Security Act was considered inadequate by many of its planners. The requirement that a worker pay one-half the cost of his or her own retirement stopped far short of most of the European plans. As Tugwell pointed out in 1934, the worker would already be paying a disproportionate share as a consumer, because the employer’s payroll tax in the program would immediately be passed on in the form of higher prices. Roosevelt defended the payroll tax by pointing to the political strength it gave the program. Because workers contributed to the pension fund, they built up equity in it. The sense that workers had earned a right to future benefits would make it difficult, if not impossible, for subsequent administrations to deny coverage or to dismantle the program.

A weakness of the law was its limited scope: It omitted farmworkers and domestics from unemployment compensation and contained no health insurance provisions of any kind. The law also reflected the assumptions of its framers that men were the principal wage earners and that women were economically dependent. Nevertheless, the act represented the beginning of a growing belief that the federal government has a responsibility to ensure certain benefits to its citizens. It provided a floor of basic economic protection and a greater level of uniformity of assistance among the states. Social Security Act (1935) Old-age pensions[Old age pensions] Social insurance Pensions Unemployment insurance;U.S.

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Achenbaum, Andrew. Social Security: Visions and Revisions. New York: Cambridge University Press, 1986. An excellent general history of Social Security from the early background of the law to the 1980’s. The book is especially useful as a guide to the changes in Social Security after 1935. The bibliography is very complete. Achenbaum advocates medical and other benefits for all.
  • citation-type="booksimple"

    xlink:type="simple">Altman, Nancy J. The Battle for Social Security: From FDR’s Vision to Bush’s Gamble. Hoboken, N.J.: John Wiley & Sons, 2005. Provides the background developments leading up to passage of the Social Security Act, the history of the Social Security program, and attempts to reform the program in the late twentieth and early twenty-first centuries. Bibliographic references and index.
  • citation-type="booksimple"

    xlink:type="simple">Berkowitz, Edward D. America’s Welfare State: From Roosevelt to Reagan. Baltimore: The Johns Hopkins University Press, 1991. Interprets the development and history of Social Security as a series of reasonable and pragmatic responses to political and economic conditions.
  • citation-type="booksimple"

    xlink:type="simple">Bernstein, Irving. A Caring Society: The New Deal, the Worker, and the Great Depression. Boston: Houghton Mifflin, 1985. An extensively researched, well-written assessment of the 1930’s from labor’s vantage point. Includes a comprehensive discussion of the passage of the Social Security Act. Solid documentation and full index. Crafted by a leading labor historian, this is among the best single-volume studies of the period.
  • citation-type="booksimple"

    xlink:type="simple">Davis, Kenneth. FDR: The New Deal Years, 1933-1937. New York: Random House, 1979. A detailed and scholarly account of the policies and strategies of President Roosevelt, with a chapter devoted to the passage of the Social Security Act.
  • citation-type="booksimple"

    xlink:type="simple">Douglas, Paul. Social Security in the United States: An Analysis and Appraisal of the Federal Social Security Act. New York: Whittlesey House, 1936. Written by one of the important participants on the Perkins Committee, the book gives a detailed account of the background and the legislative process in the passage of the act. The book reflects the period, and a complete text of the act is included in the appendix.
  • citation-type="booksimple"

    xlink:type="simple">Haber, Carole, and Brian Gratton. Old Age and the Search for Security: An American Social History. Bloomington: Indiana University Press, 1993. Emphasizes the importance of Social Security in replacing intrafamilial support for the aged with an intergenerational public strategy.
  • citation-type="booksimple"

    xlink:type="simple">Kollmann, Geoffry, and Carmen Solomon-Fears. Social Security: Major Decisions in the House and Senate, 1935-2000. New York: Novinka Books, 2002. Survey of all important Social Security legislation passed in the twentieth century. Bibliographic references and index.
  • citation-type="booksimple"

    xlink:type="simple">Louchheim, Katie, ed. The Making of the New Deal: The Insiders Speak. Cambridge, Mass.: Harvard University Press, 1983. A collection of fascinating essays by those who participated in the making of the New Deal, with Wilbur J. Cohen and Thomas Eliot explaining their roles in the formulation of the Social Security Act.
  • citation-type="booksimple"

    xlink:type="simple">Lubove, Roy. The Struggle for Social Security, 1900-1935. Cambridge, Mass.: Harvard University Press, 1968. An important work in the history of ideas, with a focus on the clash between the traditions of voluntarism and the goals of social insurance. The book is especially good in its treatment of the ideas and careers of Isaac Rubinow and Abraham Epstein.
  • citation-type="booksimple"

    xlink:type="simple">Nelson, Daniel. Unemployment Insurance: The American Experiment, 1915-1935. Madison: University of Wisconsin Press, 1969. A very scholarly and well-researched study devoted to the single issue of unemployment insurance, emphasizing the importance of the British model and the passage of Wisconsin’s law of 1932. The book has a great deal of interesting information about individuals such as Commons, Epstein, and Wagner. There is little information about other aspects of the Social Security Act.
  • citation-type="booksimple"

    xlink:type="simple">Perkins, Frances. The Roosevelt I Knew. New York: Viking Press, 1946. A delightful personal memoir by the woman who chaired the Committee on Economic Security, including an excellent chapter on the formulation and passage of the Social Security Act.
  • citation-type="booksimple"

    xlink:type="simple">Quadagno, Jill. The Transformation of Old Age Security: Class and Politics in the American Welfare State. Chicago: University of Chicago Press, 1988. An interesting study of how the elderly have coped in the United States from the nineteenth century to the 1980’s. The book compares American traditions with those of Europe and espouses a sociological theory that the organization of production determines social policy. Despite much useful material, the work is marred by an excessive use of sociological generalization and terminology.
  • citation-type="booksimple"

    xlink:type="simple">Witte, Edwin E. The Development of the Social Security Act. Madison: University of Wisconsin Press, 1962. An invaluable insider’s account of the planning for, drafting, and adoption of the Social Security Act of 1935 by the executive director of the Committee on Economic Security.

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