The disappearance of the "extended" family
A marked increase in life expectancy
The Industrial Revolution transformed the majority of working people                from self-employed agricultural workers into wage earners working                for large industrial concerns. In an agricultural society, prosperity                could be easily seen to be linked to one's labor, and anyone willing                to work could usually provide at least a bare subsistence for themselves                and their family. But when economic income is primarily from wages,                one's economic security can be threatened by factors outside one's                control--such as recessions, layoffs, failed businesses, etc.
Along with the shift from an agricultural to an industrial society,                Americans moved from farms and small rural communities to large                cities--that's where the industrial jobs were. In 1890, only 28%                of the population lived in cities, by 1930 this percentage had exactly                doubled, to 56%.
The year 1920 was a historical                        tipping-point. In that year, for the first time in our nation's                      history, more people were living in cities than on farms.
This trend toward urbanization also contributed to another significant                shift in American society, the disappearance of the extended family                and the rapid rise of the nuclear family. Today we tend to assume                that "the family" consists of parents and children--the                so-called nuclear family. For most of our history, we lived in "extended                families" that included children, parents, grandparents and                other relatives. The advantage of the extended family was that when                a family member became too old or infirm to work, the other family                members assumed responsibility for their support. But when the able-bodied                left the farms to seek employment in the cities, often the parents                or grandparents stayed behind. And when new immigrants first arrived                in our land, it was often the breadwinner who first made the passage                and only later could he bring the family over.
And finally, another significant change happened in the early decades                of this century. Thanks primarily to better health care and sanitation,                and the development of effective public health programs, Americans                began to live significantly longer. In three short decades, 1900-1930,                average life spans increased by 10 years. This was the most rapid                increase in life spans in recorded human history. The result was                a rapid growth in the number of aged persons, to 7.8 million by                1935.
The net result of this complex set of demographic and social changes                was that America was older, more urban and more industrial, and                fewer of its people lived on the land in extended families. The                traditional strategies for the provision of economic security were                becoming increasingly fragile.
The Stock Market Crash & The                Great Depression
When the New York Stock Exchange opened on the morning of October                24, 1929, nervous traders sensed something ominous in the trading                patterns. By 11:00 a.m. the market had started to plunge. Shortly                after noon a group of powerful bankers met secretly at J.P. Morgan & Co. next door to the Exchange and pledged to spend $240 million                of their own funds to stabilize the market. This strategy worked                for a few days, but the panic broke out again the following Tuesday,                when the market crashed again, and nothing could be done to stop                it.
Before three months had passed, the Stock Market lost 40% of its                value; $26 billion of wealth disappeared. Great American corporations                suffered huge financial losses. AT&T lost one-third of its value,                General Electric lost half of its, and RCA's stock fell by three-fourths                within a matter of months. (It would take 25 years for the stock                market to return to its pre-crash level following the 1929 crash.)
As America slipped into economic depression following the Crash                of 1929, unemployment exceeded 25% ; about                10,000 banks failed ; the Gross National Product declined from                $105 billion in 1929 to only $55 billion in 1932. Compared to pre-Depression                levels, net new business investment was a minus $5.8 billion in                1932. Wages paid to workers declined from $50 billion in 1929 to                only $30 billion in 1932.
Radical Calls                to Action
The decade of the 1930s found America facing the worst economic                crisis in its modern history. Millions of people were unemployed,                two million adult men ("hobos") wandered aimlessly around                the country, banks and businesses failed and the majority of the                elderly in America lived in dependency. These circumstances led                to many calls for change.
This classic                      photo of a Depression-era family captured the anguish of the                      times. Photo by Dorothea Lange for the Resettlement                      Administration-1936.
Every Man a King:
Huey Long was Governor                    of Louisiana from 1928 to 1932 and was elected to the U.S. Senate                    in 1930. A nominal Democrat, Huey Long was a radical populist.                    He wanted the government to confiscate the wealth of the nation's                    rich and privileged. He called his program Share Our Wealth. It called upon the federal government to guarantee every family                    in the nation an annual income of $5,000, so they could have                    the necessities of life, including a home, a job, a radio and                    an automobile. He also proposed limiting private fortunes to                    $50 million, legacies to $5 million, and annual incomes to $1                    million. Everyone over age 60 would receive an old-age pension.                    His slogan was "Every Man A King."
The Share Our Wealth program immediately became a movement.                    Clubs were formed in every state in the nation. By 1935 the                    movement claimed 27,000 local clubs with 7.7 million members.
The Townsend                Movement:
Francis E. Townsend was a lean, bespectacled                doctor from Long Beach, California. In 1933 he found himself unemployed                at age 66 with no savings and no prospects. This experience galvanized                him to become the self-proclaimed champion of the cause of the elderly.                He devised a plan known as the Townsend Old Age Revolving Pension                Plan, or Townsend Plan for short.
The basic idea of the Townsend                        Plan was that the government would provide a pension of                        $200 per month to every citizen age 60 and older. The pensions                        would be funded by a 2% national sales tax. There were three                        eligibility requirements:
the person had to be retired;
"their past life is free from habitual criminality;"
the money had to be spent within the U.S. by the pensioner                            within 30 days of receipt.
Dr. Townsend published his plan in a local                        Long Beach newspaper in early 1933 and within about two                        years there were 7,000 Townsend Clubs around the country                        with more than 2.2 million members actively working to make                        the Townsend Plan the nation's old-age pension system.
Following the passage of                        the Social Security Act in 1935, most of these alternative                        pension schemes disappeared as quickly as they had arisen.                        The Townsend Plan, however, hung around at least until the                        passage of the 1950 Amendments to the Social Security program,                        which made benefits much more generous and finally took the                        last of the steam out of the Townsend movement. But as late                        as November 1949, in the House of Representatives 179 members                        signed a discharge petition to force a floor vote on the Townsend                        Plan--barely 39 members short of the number needed to force                        the House to consider the final version of the Townsend Plan                      as a replacement for the Social Security system.
Fire & Brimstone:
Another influence on Depression-era                    public policy was the Union for Social Justice movement led                    by a radio preacher by the name of Father                    Charles E. Coughlin . Father Coughlin had a weekly radio                    program with 35-40 million listeners which he used to mix a                    little religion with a lot of politics. His enemies, in addition                    to the devil himself, were Roosevelt, international bankers,                    communists, and labor unions, and he was not shy in describing                    them in interchangeable terms. At the height of his popularity,                    Father Coughlin had a greater share of the weekly broadcast                    audience than Howard Stern, Rush Limbaugh, Paul Harvey and Larry                    King combined.
Although Father Coughlin's main effort was to pillory his enemies,                    he did have a broad program of social reforms that included                    a deliberate inflation of the currency and the nationalization                    of all banks. He was also an anti-Semite and isolationist whose                    views were so extreme that the Catholic Church finally censured                    him and forced him to cease his political activities. In 1936,                    Coughlin, along with Townsend and the remnants of Huey Long's Share the Wealth Movement, would join to form a third party                    to contest the presidential election in the hopes of preventing                    President Roosevelt from being re-elected.
A Writer & his EPIC:
Upton Sinclair was a famous novelist and                social crusader from California , and an avowed Socialist, who                in 1933 was asked by a dissident group of Los Angeles Democrats                to help them draft a platform proposal for dealing with the state's                economic problems. They were so impressed by Sinclair's plan--which                he christened the End Poverty in California, or EPIC plan--that                they persuaded him to change his registration to Democratic and                to run for the party's nomination for governor in 1934.
Sinclair's EPIC scheme                    was a 12-point program to remake the Californian economy. It                    involved the issuance of scrip currency, the creation of large                    state-run bartering enterprises, a tax on idle land and floating                    a large state bond for $300 million. Point 10 of the plan was                    a proposal to give pensions of $50 a month to all needy persons                    over 60 who had lived in California for at least three years.                    There was a state pension plan in operation in California at the time, but its benefits were very low, and the eligibility                    requirements were so severe that most elderly Californians could                    not qualify. (This was true of many of the state pension programs                    around the country.) Sinclair's pension proposal was very popular                    because in one fell swoop it reduced the minimum age for pensions                    by 10 years, almost doubled their value, and eliminated restrictive                    eligibility requirements.
Sinclair's EPIC program, and especially its pension proposal, had                a great appeal in Depression-weary California. Sinclair and his                supporters organized EPIC clubs, published newsletters, formed ad                hoc organizations and found a large chorus of supporters with unlimited                enthusiasm for his ideas. In short order, Upton Sinclair's EPIC                movement captured the Democratic party and Sinclair became the Democratic                nominee for governor in the election of 1934. The party's platform                became the EPIC program, including the pension plan.
When the votes were counted, Upton Sinclair got 37% of the vote,                the Republican candidate got 48% and a third-party progressive candidate                took another 13%. Had it been a two-man race, Upton Sinclair might                have become Governor of California and the EPIC pension plan might                well have become the California model.
Ham & Eggs:
During the 1930s California was a virtual hot-house for new pension schemes, and one of the most creative (and dubious) of the pension                schemes of the 1930s went by the unlikely moniker of "Ham & Eggs." Ham & Eggs was the brainstorm of a self-promoting                huckster in-aptly named Robert Noble. The scheme was based on a                call for the state government to issue special currency called "scrip" that would be paid each week to every unemployed Californian age                50 and older. Questions about the validity of the economics did                not dampen the enthusiasm of the movement's supporters, nor even                did the numerous scandals, financial and otherwise, involving the                movement's leaders. The eventual form of the plan called for the                state to issue "$30 every Thursday," which became the                rallying cry of the movement. The simplicity of the movement was                expressed in a bit of doggerel from the organization's newsletter                the National Ham and Eggs :
"Let's stay away from politics
Regardless of who hollers
Let's not be fooled by childish tricks
LET'S GET OUR THIRTY DOLLARS"
The Ham & Eggs movement had more than 300,000 members--and                many more supporters. In 1938 the successful Democratic candidate                for governor, Culbert Olsen, openly supported the plan and a proposition                was placed on the ballot to adopt the Ham & Eggs plan as California                state policy. The proposition was narrowly defeated by a vote of 1,143,670 in favor to 1,398,999 against.
The Ham & Eggs movement was based on dubious economics, it                was founded and run by a succession of characters of questionable                integrity, it suffered from internecine rivalries and frequent scandals,                and yet, at the peak of its influence in 1938, more than a million                Californians, including the state's Governor, believed that it was                the solution to the problem of income security for the aged. That                such a poor candidate for a public policy would be so widely embraced                is strong evidence of how hungry the public was for action to address                the problem of income security for the elderly.
Bigelow Plan:
In Ohio, Reverend Herbert S. Bigelow initiated a proposed State                amendment to guarantee an income of $50 a month ($80 for married                couples living together) to those over sixty years of age who were                without gainful employment. This particular plan was to be financed                partly out of an increased tax on real estate (2% hike on land valued                at more than $20,000 an acre), and partly out of an income tax equal                to one-fourth the federal income tax paid by individuals and corporations.                The Bigelow pension plan garnered nearly half a million voters before                it was defeated. As some experts of the time calculated, the plan                would cost more than the existing state budget for two years.
General Welfare Federation of America:
A woman in South Carolina scrawls a note to a man in Washington                whom she addresses as "Dear Mr. President." "I'm                72 years old and have no one to take care of me." Another letter comes to the White House from Virginia. "I'm a 60 year-old                widow greatly in need of medical aid, food and fuel, I pray that                you would have pity on me." Letters such as these came by the                thousands from old folks across the country to the President, to                Mrs. Roosevelt, to almost every one in Washington whose name was                familiar to them.
Typical                Letter to President Roosevelt, Appealing for Old-Age Pensions
It isn't any wonder then, why the elderly looked to the various                organizations that sprang up around the country offering salvation                in some form of an old-age pension plan. One such organization was                the General Welfare Federation of America. Headquartered in Washington,                DC, and founded by Arthur L. Johnson, who denounced the newly established                Social Security Act as a "great American fraud." He was                just as severe in attacking other organizations such as the Townsend,                Ham-and-Eggs, and Bigelow plans as "crackpot" pension                schemes.
Mr. Johnson's plan, like most of the others, wiped out the elaborate                system of employment records kept under the present Social Security                Act. Instead, it provided for a pension to every citizen on or after                reaching the age of 60, with the simple stipulation that they not                engage in gainful employment, that they spend their pension for                American goods and services, and that they not maintain able-bodied                male dependents between the ages of 30 and 60.
The pension would be fixed at not less than $30 a month and not                more than $60 a month. The actual amount would be determined by                dividing the total funds available by the total number of annuitants.                The funds would be derived from a gross income tax of 2 percent                on individuals and corporations, with exceptions to protect charitable,                religious, cooperative and similar organizations. The proponents                of the this plan did manage did get it introduced in the House of                Representatives, however, the bill died in committee in 1939 before                ever reaching a House vote.
Technocracy:
Out of America's fascination with technology came another eccentric "reform" movement known as Technocracy. Founded in 1918                by a California patent attorney it would briefly flare as a serious                intellectual movement centered around Columbia University; although                as a mass-movement its real center was California where it claimed                half a million members in 1934. Technocracy counted among its admirers                such men as the novelist H.G. Wells, the author Theodore Dreiser                and the economist Thorstein Veblen.
Technocracy held that all politics and all economic arrangements                based on the "Price System" (i.e., based on traditional                economic theory) were antiquated and that the only hope of building                a successful modern world was to let engineers and other technology                experts run the country on engineering principles. Technocracy's                rallying cry was "production for use," which was meant                as a contrast to production for profit in the capitalist system.                Production for use became a slogan for many of the radical-left                movements of the era. Upton Sinclair, among others, affirmed his                belief in "production for use" and the Technocrats briefly                made common cause with Sinclair, and even Huey Long, in California.                But the Technocrats were not of the political left, as they held                every political and economic system, from the left to the right,                to be unsound.
The Technocrats believed that the solution to                    all problems of economic security were the same, the rigorous                    application of engineering principles in a system freed from                    the Price System. They conceived of retirement as being made                    possible at age 45 for everyone due to the vast prosperity the                    new age of Technocracy would usher in. Rejecting all forms of                    traditional political science, the Technocrats refused to even                    use standard geographical maps because their boundaries were                    political, so they would refer to states only by their geographical                    coordinates. Names, too, were suspect for some reason so members                    of the movement in California were designated only by numbers.                    A speaker at one California rally was introduced only as 1x1809x56!
Oddly enough, alone among this collection of radical movements                    of the 1930s, the Technocracy movement survives, if not quite                    thrives, into the present day.
Sign on outskirts of Depression-era town proclaims regular Monday meeting of                          the local branch of Technocracy. Note the use of the ancient                          Chinese Yin/Yang symbol as a Technocracy emblem. Library                          of Congress photo.
The classic 1941 Frank Capra                    film "Meet John Doe," staring Gary Cooper and Barbara                    Stanwyck, depicts this period of quixotic mass movements through                    the story of a fictional "John Doe" who represents                    an amalgam of many of the ideas of these various movements.
The Establishment Response
If America was to avoid the siren songs of the "radical calls                to action," responsible political leaders would need to offer                some persuasive alternatives. As the Depression grew, three general                approaches emerged: do nothing; rely on voluntary charity; and expand                welfare benefits for those hardest hit by the Depression.
The Do Nothing Response
It seemed to many politicians and leading public figures that the                Depression was just another dip in the economic cycle and that it                would right itself soon enough. These voices counseled a restrained                response, or no response at all. In the early aftermath of the stock                market crash such views were especially common.
This view that nothing very much was wrong and nothing very much                needed to be done, began to fade quickly as the Depression deepened.                Even so, it held considerable sway in the early years after The                Crash.
President Hoover's "Volunteerism"
President Hoover had a distinguished                career before becoming president. He made a name for himself in                international relief efforts before and after World War I. He helped                feed millions of starving people, through the efforts of voluntary                partnerships of government, business and private giving. He knew                this kind of "volunteerism" worked, on a massive scale,                and he saw no reason why it should not work to solve the problems                of the Depression. So although he engaged in some limited federal                relief efforts, his main response to the Depression was to advocate                voluntary efforts, which never materialized.
The main problem with this strategy was that America was able to                help rebuild Europe in the aftermath of World War I because America's                economy was basically sound. In the Depression the total wealth                of the nation was cut in half during the first three years after                The Crash. This made voluntary charity a difficult ideal to achieve.
President                        Hoover's candid assessment of the Depression
Expand Welfare
Even before the Depression hit, the States had been forced to deal                with the problems of economic security in a wage-based, industrial                economy. Workers Compensation programs were established at the state                level before Social Security, and there were state welfare programs                for the elderly in place before Social Security. Prior to Social                Security, the main strategy for providing economic security to the                elderly, in the face of the demographic changes discussed above,                was to provide various forms of old-age "pensions." These                were welfare programs, eligibility for which was based on proof                of financial need. By 1934, most states had such "pension" plans. Even at the state level, however, these plans were inadequate.                Some had restrictive eligibility criteria which resulted in many                of the elderly being unable to qualify. The most generous plan paid                a maximum of $1 per day.
In the Congress, the consensus of conventional wisdom was for more                old-age assistance like that available in the states.
The "New" Alternative
With the coming to office of President Roosevelt in 1932, and the                introduction of his economic security proposal based on social insurance                rather than welfare assistance, the debate changed. It was no longer                a choice between radical changes and old approaches that no longer                seemed to work. The "new" idea of social insurance, which                was already widespread in Europe, would become an innovative alternative.
Social insurance, as conceived by President Roosevelt, would address                the permanent problem of economic security for the elderly by creating                a work-related, contributory system in which workers would provide                for their own future economic security through taxes paid while                employed. Thus it was an alternative both to reliance on welfare                and to radical changes in our capitalist system. In the context                of its time, it can be seen as a moderately conservative, yet activist,                response to the challenges of the Depression.
The Social Insurance Movement
Bismarck The Social Security program that would eventually                    be adopted in late 1935 relied for its core principles on the                    concept of "social insurance." Social insurance was                    a respectable and serious intellectual tradition that began                    in Europe in the 19th century and was an expression of a European                    social welfare tradition. It was first adopted in Germany in                    1889 at the urging of the famous Chancellor, Otto                    von Bismarck . Indeed, by the time America adopted social                    insurance in 1935, there were 34 nations                    already operating some form of social insurance program (about                    20 of these were contributory programs like Social Security).                    Philosophically, social insurance emphasized government-sponsored                    efforts to provide for the economic security of its citizens.                    The tradition of social insurance would come to be seen as the                    reasonable, practical alternative to the radical calls to action                    represented by Townsend, Long, Sinclair and the others.
Although the definition of social insurance can vary considerably                in its particulars, its basic features are: the insurance principle under which a group of persons are "insured" in some way                against a defined risk, and a social element which usually                means that the program is shaped in part by broader social objectives,                rather than being shaped solely by the self-interest of the individual                participants. Social insurance coverage can be provided for a number                of different types of insured conditions, from disability and death                to old-age or unemployment. We may find it obvious to think of death,                disability or unemployment as conditions causing loss of income                and which can be ameliorated by pooling of risk. It is at first                a little odd to think of old-age or retirement in these same terms.                But that is precisely how the early social insurance theorists conceived                of retirement, as producing a loss of income due to cessation of                work activity.
One of the first American books on social insurance was by a Columbia                University economics professor named Henry Seager. Seager explained                the principle of old-age security based on social insurance in his                1910 book, "Social Insurance, A Program of Social Reform":
"As changing economic conditions are rendering the dependence                of old people on their descendants for support increasingly precarious,                so, on the other hand, new obstacles are arising to providing for                old age through voluntary saving. . . The proper method of safeguarding                old age is clearly through some plan of insurance. . . for every                wage earner to attempt to save enough by himself to provide for                his old age is needlessly costly. The intelligent course is for                him to combine with other wage earners to accumulate a common fund                out of which old-age annuities may be paid to those who live long                enough to need it."
One of the earliest American advocates of a plan                that could be recognized as modern social insurance was Theodore                Roosevelt . In 1912, Roosevelt addressed                the convention of the Progressive Party and made a strong statement                on behalf of social insurance:
"We must protect the crushable elements                    at the base of our present industrial structure...it is abnormal                    for any industry to throw back upon the community the human                    wreckage due to its wear and tear, and the hazards of sickness,                    accident, invalidism, involuntary unemployment, and old age                    should be provided for through insurance." TR would                    succeed in having a plank adopted in the Progressive                    Party platform that stated: "We pledge ourselves                    to work unceasingly in state and nation for: . . .The protection                    of home life against the hazards of sickness, irregular employment,                    and old age through the adoption of a system of social insurance                    adapted to American use."
The Threshold of Change
So as 1934 dawned the nation was deep in the throes of the Depression.                Confidence in the old institutions was shaken. Social changes that                started with the Industrial Revolution had long ago passed the point                of no return. The traditional sources of economic security: assets;                labor; family; and charity, had all failed in one degree or another.                Radical proposals for action were springing like weeds from the                soil of the nation's discontent. President Franklin Roosevelt would                choose the social insurance approach as the "cornerstone" of his attempts to deal with the problem of economic security.
 
The Social              Security Act--Passage and Development
 
The Committee                on Economic Security (CES)
On June 8, 1934, President Franklin D. Roosevelt, in                a message to the Congress , announced his intention to provide                a program for Social Security. Subsequently, the                President created by Executive Order the Committee on Economic Security ,                which was composed of five top cabinet-level officials . The committee was instructed to study the entire                problem of economic insecurity and to make recommendations that                would serve as the basis for legislative consideration by the Congress.
The CES assembled a small staff of experts borrowed from other                federal agencies and immediately set to work. In November 1934 the                CES sponsored the first-ever national town-hall                forum on Social Security . The CES did a comprehensive study                of the whole issue of economic security in America, along with an                analysis of the European experience with these perennial problems.                Their full report was the first comprehensive attempt at this kind                of analysis in many decades and it stood as a landmark study for                many years. In slightly more than six months, the CES developed                a Report to the Congress and drafted a detailed legislative proposal.
"Security                        was attained in the earlier days through the interdependence                        of members of families upon each other and of the families                        within a small community upon each other. The complexities                        of great communities and of organized industry make less real                        these simple means of security. Therefore, we are compelled                        to employ the active interest of the Nation as a whole through                        government in order to encourage a greater security for each                        individual who composes it . . . This seeking for a greater                        measure of welfare and happiness does not indicate a change                        in values. It is rather a return to values lost in the course                        of our economic development and expansion . . ."
Franklin D. Roosevelt: Message                      of the President to Congress, June 8, 1934.
The Social Security                Act
In early January 1935, the CES made its report to the President,                and on January 17 the President introduced the report to both Houses                of Congress for simultaneous consideration. Hearings were held in                the House Ways & Means Committee and the Senate Finance Committee                during January and February. Some provisions made it through the                Committees in close votes, but the bill passed both houses overwhelmingly                in the floor votes. After a Conference which lasted throughout July, the bill was finally passed and sent to                President Roosevelt for his signature.
The Social Security Act was signed into law by President                Roosevelt on August 14, 1935 . In addition to several provisions                for general welfare, the new Act created a social insurance program                designed to pay retired workers age 65 or older a continuing income                after retirement. ( Full Text of                President Roosevelt's Statement At Bill Signing Ceremony. )
"We can never insure                        one hundred percent of the population against one hundred                        percent of the hazards and vicissitudes of life, but we have                        tried to frame a law which will give some measure of protection                        to the average citizen and to his family against the loss                        of a job and against poverty-ridden old age."--
President Roosevelt upon signing                      Social Security Act
Major Provisions                Of The Act
The Social Security Act did not quite achieve all the aspirations                its supporters had hoped by way of providing a "comprehensive                package of protection" against the "hazards and vicissitudes                of life." Certain features of that package, notably disability                coverage and medical benefits, would have to await future developments.                But it did provide a wide range of programs to meet the nation's                needs. In addition to the program we know think of as Social Security,                it included unemployment insurance, old-age assistance, aid to dependent                children and grants to the states to provide various forms                of medical care .
(Full text of 1935 Act)
The two major provisions relating to the elderly were Title I-                Grants to States for Old-Age Assistance, which supported state welfare                programs for the aged, and Title II-Federal Old-Age Benefits. It                was Title II that was the new social insurance program we now think                of as Social Security. In the original Act benefits were to be paid                only to the primary worker when he/she retired at age 65. Benefits                were to be based on payroll tax contributions that the worker made                during his/her working life. Taxes would first be collected in 1937                and monthly benefits would begin in 1942. (Under amendments passed                in 1939, payments were advanced to 1940.)
The significance of the new social insurance program was that it                sought to address the long-range problem of economic security for                the aged through a contributory system in which the workers themselves                contributed to their own future retirement benefit by making regular                payments into a joint fund. It was thus distinct from the welfare                benefits provided under Title I of the Act and from the various                state "old-age pensions." As President Roosevelt conceived                of the Act, Title I was to be a temporary "relief" program                that would eventually disappear as more people were able to obtain                retirement income through the contributory system. The new social                insurance system was also a very moderate alternative to the radical                calls to action that were so common in the America of the 1930s.
The Social Security                Board
Another provision of the Act established a Social                    Security Board (SSB) comprised of three members appointed by                    the President, with the chairman reporting directly to the President.                    The original members were John G. Winant, Chairman; Arthur J.                    Altmeyer; and Vincent M. Miles. (Winant was a former three-time                    Republican Governor of New Hampshire; Miles was a Democratic                    Party official in Arkansas; and Altmeyer was a civil servant                    working in Labor Department.)
During the first year, SSB was faced with the tasks of providing                    employers, employees and the public with information on how                    earnings were to be reported, what benefits were available and                    how they were to be provided. In addition, sites for field installations                    had to be chosen and personnel to staff these offices had to                    be selected and trained.
First                          meeting of the Social Security Board, September 14, 1935.                          Left to right: Arthur J. Altmeyer, John G. Winant (Chairman),                          and Vincent M. Miles.
Operation of the new program was hampered for several months when the budget bill for the Act was killed by a              Senate filibuster at the end of August 1935 . The new Social Security              Board had to borrow money from other federal agencies to operate until              January 1936 when the Congress reconvened and passed an appropriation              to fund the programs and operations under the Social Security Act.
 
Early Work-                Social Security Numbers
The monumental first task was the need to register employers and                workers by January 1, 1937, when workers would begin acquiring credits                toward old-age insurance benefits. Since the new Social Security                Board did not have the resources available to accomplish this, they contracted with the Post Office Department                to distribute the applications . The first application forms                were distributed in late November 1936. The numbers were assigned                in the local post offices. There is no record of who received the                first Social Security number (SSN).
John                            David Sweeney, Jr. The post offices collected the completed forms                    and turned them over to Social Security field offices located                    near major post office centers. The applications then were forwarded                    to Baltimore, Maryland, where SSNs were registered and various                    employment records established. The                    first SSN account number record established in Baltimore was                    assigned to John David Sweeney, Jr. of New Rochelle, New York .
Although, John Sweeney received the first SSN account, his was                    not the lowest number ever issued. That                    distinction fell to New Hampshire resident, Grace Dorothy Owen .                    Ms. Owen received number 001-01-0001.
( The process of issuing Social Security                    numbers is called "enumeration," and over the years                    it has been one of the most interesting topics involving Social                    Security. ) Over 30 million SSN cards were issued through this early procedure,              with the help of the post offices. By June 30, 1937, the SSB had established              151 field offices, with the first office opening              on October 14, 1936, in Austin, Texas . From that point on, the              Board's local office took over the task of assigning SSNs.
Trust Funds
After Social Security numbers were assigned, the first Federal                Insurance Contributions Act (FICA) taxes were collected, beginning                in January 1937. Special Trust Funds were created for these dedicated                revenues. Benefits were then paid from the money in the Social Security                Trust Funds. Over the years, more than                $8.7 trillion has been paid into the Trust Funds, and more than                $7.4 trillion has been paid out in benefits. The remainder is                currently on reserve in the Trust Funds and will be used to pay                future benefits.
First Payments
From 1937 until 1940, Social Security paid benefits in the form                of a single, lump-sum payment. The purpose of these one-time payments                was to provide some "payback" to those people who contributed                to the program but would not participate long enough to be vested                for monthly benefits. Under the 1935 law, monthly benefits were                to begin in 1942, with the period 1937-1942 used both to build up                the Trust Funds and to provide a minimum period for participation                in order to qualify for monthly benefits.
The earliest reported applicant for a lump-sum                    benefit was a retired Cleveland motorman named Ernest                    Ackerman, who retired one day after the Social Security                    program began. During his one day of participation in the program,                    a nickel was withheld from Mr. Ackerman's pay for Social Security,                    and, upon retiring, he received a lump-sum payment of 17 cents.
The average lump-sum payment during this period was $58.06.                    The smallest payment ever made was for 5 cents!
Ernest                            Ackerman
 
"Long before the economic                    blight of the depression descended on the Nation, millions of                    our people were living in wastelands of want and fear. Men and                    women too old and infirm to work either depended on those who                    had but little to share, or spent their remaining years within                    the walls of a poorhouse . . .The Social Security Act offers                    to all our citizens a workable and working method of meeting                    urgent present needs and of forestalling future need . . . One                    word of warning, however. In our efforts to provide security                    for all of the American people, let us not allow ourselves to                    be misled by those who advocate short cuts to Utopia or fantastic                    financial schemes. We have come a long way. But we still have                    a long way to go. There is still today a frontier that remains                    unconquered--an America unclaimed. This is the great, the nationwide                    frontier of insecurity, of human want and fear. This is the                    frontier--the America--we have set ourselves to reclaim." -- President Franklin Roosevelt August                    14, 1938, Radio address on the third anniversary of the Social                    Security Act
1939 Amendments
"It                      is impossible under any social insurance system to provide                      ideal security for every individual. The practical objective                      is to pay benefits that provide a minimum degree of social                      security—as a basis upon which the worker, through his own                      efforts, will have a better chance to provide adequately for                      his individual security." -- From the Report of the                      Social Security Board recommending the changes which were                      embodied in the 1939 Amendments.
 
 
The original Act provided only retirement benefits, and only to                the worker. The 1939 Amendments made a fundamental change in the                Social Security program. The Amendments added two new categories                of benefits: payments to the spouse and minor children of a retired                worker (so-called dependents benefits) and survivors benefits paid                to the family in the event of the premature death of a covered worker.                This change transformed Social Security from a retirement program                for workers into a family-based economic security program.
The 1939 Amendments also increased benefit amounts and accelerated                the start of monthly benefit payments to 1940.
Monthly Benefits
In 1950 all Social                          Security beneficiaries received a general "cost-of-living" increase--for the first time since benefits began in 1940.                          Ida May Fuller is seen here receiving her first increased                          benefit check on October 3, 1950.
Payment of monthly Social Security benefits                      began in January 1940, and were authorized not only for aged                      retired workers but for their aged wives or widows, children                      under age 18, and surviving aged parents.
On January 31, 1940, the first monthly retirement check was                      issued to Ida May Fuller of                      Ludlow, Vermont, in the amount of $22.54. Miss Fuller, a Legal                      Secretary, retired in November 1939. She started collecting                      benefits in January 1940 at age 65 and lived to be 100 years                      old, dying in 1975.
( Examining the first                      batch of checks )
Ida May Fuller worked for three years                          under the Social Security program. The accumulated taxes                          on her salary during those three years was a total of                          $24.75. Her initial monthly check was $22.54. During her                          lifetime she collected a total of $22,888.92 in Social                          Security benefits.
The Atlantic Charter
In mid-August, 1941, Winston Churchill                and Franklin Roosevelt met secretly aboard a warship off the coast                of Newfoundland in the North Atlantic . On the sixth anniversary                of the Social Security Act, they announced a joint-declaration known                as the Atlantic Charter. The 383-word Charter was an expression of "certain common principles in the national                policies of their respective countries on which they base their                hopes for a better future for the world." This brief charter                would be the founding document of the United Nations and among its                eight principles was a call for social insurance. Former Social                Security Board Chairman John Winant was then serving as the U.S.                Ambassador to Great Britain. Although Winant did not attend the                Conference, the social insurance provision was a suggestion he made                from London which was instantly accepted by Churchill and FDR.
Although social insurance began in Germany in the 19th century,                in the years following World War II the United States was the leading                model for nations around the world who were interested in designing                Social Security systems. This movement toward the internationalization                of Social Security can be symbolically fixed with the issuance of                the Atlantic Charter in 1941.
1950 Amendments
From 1940 until 1950 virtually no changes were made in the Social                Security program. Payment amounts were fixed, and no major legislation                was enacted. There was a significant administrative change in 1946,                however, when the three-person Social                Security Board was abolished and replaced by the Social Security                Administration, headed by a single Commissioner .
Because the program was still in its infancy, and because it was                financed by low levels of payroll taxation, the absolute value of                Social Security's retirement benefits were very low. In fact, until                1951, the average value of the welfare benefits received under the                old-age assistance provisions of the Act were higher than the retirement                benefits received under Social Security. And there were more elderly                Americans receiving old-age assistance than were receiving Social                Security.
Because of these shortcomings in the program, in                1950 major amendments were enacted . These amendments increased                benefits for existing beneficiaries for the first time (see The                Story of COLAs), and they dramatically increased the value of the                program to future beneficiaries. By February 1951 there were more                Social Security retirees than welfare pensioners, and by August                of that year, the average Social Security retirement benefit exceeded                the average old-age assistance grant for the first time.
The Story of COLAs
Most people are aware that there are annual increases in Social                Security benefits to offset the corrosive effects of inflation on                fixed incomes. These increases, now known as Cost of Living Allowances                (COLAs), are such an accepted feature of the program that it is                difficult to imagine a time when there were no COLAs. But in fact,                when Ida May Fuller received her first $22.54 benefit payment in                January of 1940, this would be the same amount she would receive                each month for the next 10 years. For Ida May Fuller, and the millions                of other Social Security beneficiaries like her, the amount of that                first benefit check was the amount they could expect to receive                for life. It was not until the 1950 Amendments that Congress first                legislated an increase in benefits. Current beneficiaries had their                payments recomputed and Ida May Fuller, for example, saw her monthly                check increase from $22.54 to $41.30.
These recomputations were effective for September 1950 and appeared                for the first time in the October 1950 checks. A second increase                was legislated for September 1952. Together these two increases                almost doubled the value of Social Security benefits for existing                beneficiaries. From that point on, benefits were increased only                when Congress enacted special legislation for that purpose.
In 1972 legislation the law was changed                to provide, beginning in 1975, for automatic annual cost-of-living                allowances (i.e., COLAs) based on the annual increase in consumer                prices. No longer do beneficiaries have to await a special act of                Congress to receive a benefit increase and no longer does inflation drain value from Social Security benefits.
Social Security Benefit Increases 1950-2013
Effective Date
12/13
1.7
* The increase in 3/74 was a special, limited-duration increase. It was effective for only 3/74-5/74. In June 1974, all payment levels reverted to their 2/74 level and the 11% increase was permanently applied on this base.
** The COLA for December 1999 was originally determined as 2.4 percent based on CPIs published by the Bureau of Labor Statistics. Pursuant to Public Law 106-554, however, this COLA is effectively now 2.5 percent.
Disability
The Social Security Amendments of 1954 initiated a disability insurance                program which provided the public with additional coverage against                economic insecurity. At first, there was a disability "freeze", (here being signed by President Eisenhower) of a worker's Social Security record during the years when they                were unable to work. ( First application                for disability freeze being filed .) While this measure offered                no cash benefits, it did prevent such periods of disability from                reducing or wiping out retirement and survivor benefits. On August                1, 1956, the Social Security Act was amended to provide benefits                to disabled workers aged 50-64 and disabled adult children. In September                1960 President Eisenhower signed a law amending the disability rules                to permit payment of benefits to disabled workers of any age and                to their dependents. By 1960, 559,000 people                were receiving disability benefits, with the average benefit                amount being around $80 per month.
Medicare & Other Changes
The decade of the 1960s brought major changes to the Social Security                program. Under the Amendments of 1961 ,                the age at which men are first eligible for old-age insurance was                lowered to 62, with benefits actuarially reduced (women previously                were given this option in 1956). This created an additional workload                for the Agency as more beneficiaries entered the rolls. The number                of people receiving disability benefits more than doubled from 1961                to 1969, increasing from 742,000 to 1.7 million.
The most significant administrative change involved the signing                of the Medicare bill on July 30, 1965, by President Lyndon Johnson In the presence                of former President Truman, who received the first Medicare card                at the ceremony, Lady Bird Johnson, Vice-President Hubert Humphrey,                and Mrs. Truman. With the signing of this bill, SSA became responsible                for administering a new social insurance program that extended health                coverage to almost all Americans aged 65                or older. Nearly 20 million beneficiaries enrolled in Medicare                in the first 3 years of the program.
President Johnson Regarding                        Medicare:
"Thirty years ago, the American people made a basic decision                        that the later years of life should not be years of despondency                        and drift. The result was enactment of our Social Security                        program. . . . Since World War II, there has been increasing                        awareness of the fact that the full value of Social Security                        would not be realized unless provision were made to deal with                        the problem of costs of illnesses among our older citizens.                        . . . Compassion and reason dictate that this logical extension                        of our proven Social Security system will supply the prudent,                        feasible, and dignified way to free the aged from the fear                      of financial hardship in the event of illness." -January 7, 1965
SSI
In the 1970s, SSA became responsible for a new program, Supplemental                Security Income (SSI). In the original 1935 Social Security Act,                programs were introduced for needy aged and blind individuals and,                in 1950, needy disabled individuals were added. These three programs                were known as the "adult categories" and were administered                by State and local governments with partial Federal funding. Over                the years, the State programs became more complex and inconsistent,                with as many as 1,350 administrative agencies involved and payments                varying more than 300% from State to State.
In 1969, President Nixon identified                a need to reform these and related welfare programs to "bring                reason, order, and purpose into a tangle of overlapping programs." In 1971, Secretary of Health, Education and Welfare, Elliot                Richardson , proposed that SSA assume responsibility for the "adult categories." In the Social Security Amendments                of 1972, Congress federalized the "adult categories" by                creating the SSI program and assigned responsibility for it to SSA.
SSA was chosen to administer the new program because of its reputation                for successful administration of the existing social insurance programs.                SSA's nationwide network of field offices and large-scale data processing                and record-keeping operations also made it the logical choice to                perform the major task of converting over 3 million people from                State welfare programs to SSI.
The 1972 & 1977 Amendments
In 1972 two important sets of amendments were enacted. These amendments                created the SSI program and introduced automatic Cost-of-Living-Adjustments                (COLAs).
The bill creating the SSI program also contained important provisions                for increasing Social Security benefits for certain categories of                beneficiaries (primarily aged widows and widowers). It also provided:                a minimum retirement benefit; an adjustment to the benefit formula                governing early retirement at age 62 for men, in order to make it                consistent with that for women; extension of Medicare to those who                have received disability benefits for at least two years and to                those with Chronic Renal Disease; liberalized the Retirement Test;                and provided for Delayed Retirement Credits to increase the benefits                of those who delayed retirement past age 65.
The separate bill creating automatic COLAs also                    provided for automatic increases in the earnings subject to                    Social Security taxes and an automatic adjustment in the wage-base                    used in calculating benefits. This second adjustment was put                    in the law as a sort of companion to the COLA. The COLA adjusts                    for increases in prices, whereas the wage-base adjustment                    corrects for increases in wages. The purpose of the COLA                    was to maintain the purchasing power of benefits already awarded.                    The purpose of the automatic adjustment in the wage base was                    to maintain the relative value of Social Security benefits for                    future applicants. Unfortunately, the procedure for adjusting                    for price and wage increases contained a flaw which resulted                    in future benefit levels soaring out of control. Indeed, it                    became apparent that if the trends of the mid-1970s continued,                    future Social Security beneficiaries could end up receiving                    more in their monthly retirement benefit than their gross salaries                    while working. This problem was corrected in the 1977 Amendments.                    However, the correction led to the appearance of what came to                    be known informally as " The Notch ."
The Notch spawned a political protest movement of aggrieved "Notch Babies" who believe they have been the victims                      of unfair treatment.
The main purpose of the 1977 Amendments was to address the financing of the program. Shortly after passage                of the 1972 legislation, it became apparent that Social Security                faced a funding shortfall, both in the short-term and in the long-term.                The short-term problem was caused by the bad economy, and the long-term                problem by the demographics associated with the baby boom. By their                1975 report the Trustees said the Trust Funds would be exhausted                by 1979. This financing shortfall was addressed by the 1977 Social                Security Amendments. These amendments raised the payroll tax slightly                (from 6.45% to the current 7.65%), increased the wage base; reduced                benefits slightly; and "decoupled" the wage adjustment                from the COLA adjustment. These fixes restored the long-term balance                of the program for the next 50 years (but not the full 75 years                used by the actuaries). It was hoped the amendments would prevent                an expected short-term financing problem in the early 1980s. This                hope would prove elusive as the major amendments in 1983 would be needed to avoid the short-term problem, and to address the remaining                long-range program deficit.
Disability In The 1980s
The Social Security Amendments of 1980 made many changes in the                disability program. Most of these changes focused on various work                incentive provisions for both Social Security and SSI disability                benefits.
The 1980 Amendments also required SSA to conduct periodic reviews                of current disability beneficiaries to certify their continuing                eligibility. This was to become a massive workload for SSA and one                that was highly controversial. By 1983, the reviews had been halted,                and in 1984, Congress passed the Disability Benefits Reform Act                modifying several aspects of the disability program.
The 1983 Amendments
In the early 1980s the Social Security program faced a serious                short-term financing crisis. President Reagan appointed a blue-ribbon                panel, known as the Greenspan Commission ,                to study the financing issues and make recommendations for legislative                changes. The final bill, signed into law                in 1983 , made numerous changes in the Social Security and Medicare                programs, including the taxation of Social Security benefits, the                first coverage of Federal employees under Social Security and an                increase in the retirement age in the next century. (Summary                of the provisions of the '83 Amendments)
Program Growth
From its modest beginnings, Social Security has grown to become                an essential facet of modern life. One in seven Americans receives                a Social Security benefit, and more than 90 percent of all workers                are in jobs covered by Social Security. From 1940, when slightly                more than 222,000 people received monthly Social Security benefits,                until today, when over 50 million people receive such benefits,                Social Security has grown steadily. The SSI program has grown as                well from its inception in 1974.
Social Security
c. Recipients of Federally-administered payments only.
d. Includes both Federal payment and Federally-administered State supplementation payments.
Independence For SSA
The Social Security Board (SSB) began its life in 1935 as one of                the federal government's "independent agencies." This                means that it was not part of a larger cabinet-level organization.                In 1939 this status changed when the SSB became part of the new                cabinet-level Federal Security Agency. Ultimately, the Social Security                Board became the Social Security Administration and it would finally                become an operating component of the Department of Health & Human Services. (See SSA Organizational History .)
Throughout the 1980s and 1990s, there was growing bipartisan support                for removing SSA from under its departmental umbrella and establishing                it as an independent agency. Finally, in 1994 the Social Security                Independence and Program Improvements Act of 1994 (P.L. 103-296)                was passed unanimously by Congress and, in a ceremony in the Rose                Garden of the White House, on August 14, 1994, President                Bill Clinton signed the act into law.
Legislative Changes in 1996 & 1997
Contract With America Advancement Act of 1996 (P.L. 104-121).
This bill, signed by the President on March 29, 1996, made a change                in the basic philosophy of the disability program. Beginning on                that date, new applicants for Social Security or SSI disability                benefits could no longer be eligible for benefits if drug addiction                or alcoholism is a material factor to their disability. Unless they                can qualify on some other medical basis, they cannot receive disability                benefits. Individuals in this category already receiving benefits,                are to have their benefits terminated as of January 1, 1997. Previous                policy has been that if a person has a medical condition that prevents                them from working, this qualifies them as disabled for Social Security                and SSI purposes--regardless of the cause of the disability. Another                significant provision of this law doubled the earnings limit exemption                amount for retired Social Security beneficiaries, on a gradual schedule                from 1996 to 2002. In 2002, the exempt amount will be $30,000 per                year in earnings, compared to $14,760 under previous law.
The Personal Responsibility and Work Opportunity Reconciliation                Act of 1996.
This "welfare reform" legislation, signed                by the President on 8/22/96, ended the categorical entitlement                to AFDC (Aid to Families with Dependent Children) that was part                of the original 1935 Social Security Act by implementing time-limited                benefits along with a work requirement. The law also terminated                SSI eligibility for most non-citizens. Previously, lawfully admitted                aliens could receive SSI if they met the other factors of entitlement.                As of the date of enactment, no new non-citizens could be added                to the benefit rolls and all existing non-citizen beneficiaries                would eventually be removed from the rolls (unless they met one                of the exceptions in the law.) Also effective upon enactment were                provisions eliminating the "comparable severity standard" and reference to "maladaptive behavior" in the determination                of disability for children to receive SSI. Also, children currently                receiving benefits under the old standards were to be reviewed and                removed from the rolls if they could not qualify under the new standards.
Omnibus Consolidated Rescissions and Appropriations Act of 1996.
Requires that all federal payments (including Social Security and                SSI) be made by electronic funds transfer (no more paper checks)                effective January 1, 1999, unless a waiver is granted by the Secretary                of the Treasury.
The Department of Defense Appropriations Act, 1997
This massive omnibus spending bill contained SSA's budget as well                as numerous legislative changes relating to the SSI program and                to issues involved in fighting fraudulent documents in connection                with obtaining Social Security numbers. The major SSI provision                makes sponsorship agreements legally enforceable for the first time.                In the area of identification-related documents, the law requires                the establishment of federal standards for state-issued birth certificates                and requires SSA to develop a prototype counterfeit-resistant Social                Security card.
The Balanced Budget Act of 1997
This bill passed the House on 7/30/97 by a vote of 346 to 85, and                passed the Senate the next day on a vote of 85 to 15. This law restored                SSI eligibility to certain cohorts of non- citizens whose eligibility                otherwise would be terminated under the "welfare reform" of 1996. It also extended for up to one year the period for redetermining                the eligibility of certain aliens who may ultimately not be eligible                for continued benefits.
The Social Security Advisory Board
From the very beginning, the Social Security program has had the                services of periodic Advisory Councils composed primarily of non-government                members whose function was to represent the public at large in advising                government officials on Social Security policy. The first such Advisory                Council was convened in 1934 in support of the work of the Committee                on Economic Security. Over the years, the Advisory Councils have                been very influential in setting the agenda for changes in Social                Security. The Councils were especially influential in shaping the                pivotal 1939 and 1950 amendments. Eventually, the tradition of periodic                Social Security Advisory Councils was made a standard provision                of the law, with a requirement that such a Council be appointed                every four years. This law stayed in effect until 1994, when it                was repealed as part of the legislation which made SSA an independent                agency. The 1994-1996 Advisory Council was thus the final Council, signaling the end of a long tradition                in Social Security. Under that 1994 law, the Councils are abolished                and a permanent 7-member Advisory Board was formed to serve many of the same functions.
Work Incentives
On December 17, 1999 the President signed the " Ticket                to Work and Work Incentives Improvement Act of 1999 "--one                of the most significant changes in disability policy in the last                20 years. This law creates a Ticket to Work and Self-Sufficiency                Program which will provide disability beneficiaries with a ticket                they may use to obtain vocational rehabilitation services, employment                services, and other support services from an employment network                of their choice. In addition to allowing beneficiaries to purchase                vocational services, the law provides incentive payments to providers                for successful rehabilitation in which the beneficiary returns to                work. The new provisions also provide a number of safeguards to                the beneficiaries to protect their benefits and health Taken together,                the Ticket to Work initiative seeks to shift the emphasis in the                disability program away from mere maintenance of benefits more toward                rehabilitating the disabled and assisting them in returning to productive                work.
Repeal of the Retirement                Earnings Test (RET)
On April 7, 2000 " The                Senior Citizens' Freedom to Work Act of 2000 " was signed                into law, eliminating the Retirement Earnings Test (RET) for those                beneficiaries at or above Normal Retirement Age (NRA). (The RET                still applies to those beneficiaries below NRA.)
The legislation began its swift march through                Congress on March 1, 2000 when the full House of Representatives passed H.R. 5 by a vote                of 422 to 0 . The Senate, on March 22, 2000                then passed the bill by a vote of                100-0 (with a technical amendment). On March                28, 2000 The House agreed to the Senate amendment by a vote of 419-0                and cleared the measure for transmission to the President.
This was a historic change in the Social                Security retirement program. From the beginning of Social Security                in 1935, retirement benefits have been conditional on the requirement                that the beneficiary be substantially retired. This requirement                was carried out by the provisions of the RET. The                RET has changed considerably over the years .                The requirement was first scaled-back in the 1950 Amendments, which                exempted workers age 75 and older from the RET. The exempt age was                reduced to 72 in 1954, and to age 70 and older in 1977. With the                new legislation, starting at the NRA, Social Security retirement                benefits will be paid to beneficiaries who are still working. Effectively,                for those who have reached full retirement age, this repeals the                requirement that the beneficiary be substantially retired in order                to receive full Social Security retirement benefits.
Social Security in                the George W. Bush Administration
In his Inaugural                Address, President George W. Bush announced                his intentions to reform Social Security and Medicare. Throughout                the early months of his presidency the President made many speeches                and addresses in which this was a major recurring theme. In his first speech to a                joint-session of Congress in February 2001,                the President announced his intention to appoint a Presidential                Commission to recommend ways to address Social Security reform.                The President stated the Commission would operate under three broad                principles:
It must preserve the benefits of all current                  retirees and those nearing retirement.
It must return Social Security to sound                  financial footing.
And it must offer personal savings accounts                  to younger workers who want them.
On May 2, 2001 the President                announced the appointment of his Social Security Commission, the "President's                Commission to Strengthen Social Security." The Commission issued                its final report in December 2001.
At the beginning of his second term, President                Bush made it clear that Social Security reform would be a top                priority of his Administration. Although the President pushed for major changes in Social Security, none were enacted into law during the President's second term.
There were several relatively minor legislative changes enacted into law during the period 2001-2008. Among these were:
P.   L. 107-117 (H.R.   3338) was signed into law on January 10, 2002. This law eliminated deemed wage credits for members of the   uniformed services for all years after calendar year 2001.
P.L.   107-171 (H.R.   2646) the Farm Security and   Rural Investment Act of 2002 was signed into law on May 13, 2002. The law   provides Federal funding of up to $5 million for each fiscal year 2003-2007 for   access and outreach pilot projects. The law also restored eligibility for food   stamps for all legal immigrant children; restored food stamp eligibility for   qualified alien adults who are receiving disability benefits; and provides food   stamp eligibility to any otherwise eligible qualified aliens who have   continuously resided in the United States for 5 years or more.
Medicare Prescription Drug Benefits
A major change in the Medicare program was enacted into law during this period. P.L.   108-173 , the Medicare   Prescription Drug, Improvement, and Modernization Act of 2003 (H.R. 1),   was signed into law on December 8, 2003. The law amends title XVIII of the   Social Security Act to provide for a voluntary prescription drug benefit under   the medicare program. This was the largest single expansion of the Medicare system since its creation in 1965.
Social Security in the Obama Administration
On February 17, 2009, the President signed H.R. 1 , the "American Recovery and   Reinvestment Act of 2009" (Public Law 111-5). This law appropriated an additional $1 billion to the Social Security Administration's administrative budget, $500 million of which is to be used to replace  the National Computer Center, and the information   technology costs associated with such Center; and            $500 million for processing disability and retirement workloads, including   information technology acquisitions and research in support of such activities. The bill also provided special            a one-time economic   recovery payment of $250 to adults who were eligible for benefits from one of   the four following Federal benefit programs: Social Security, Railroad   Retirement, Veterans Disability, and Supplemental Security Income (SSI).
On September 18, 2009, the President signed into law H.R.   3325 , the “
" which became Public Law 111-64.
This   legislation extends, through fiscal year 2010, funding authorization for the   Work Incentives Planning and Assistance program and the Protection and Advocacy   for Beneficiaries of Social Security program.
On December 15, 2009, President Obama signed H.R.   4218 , the “No Social Security Benefits   for Prisoners Act of 2009”, which became Public Law 111-115.
The bill prohibits the payment of any retroactive Title II and Title XVI   benefits to individuals while they are in prison, are in violation of conditions   of their parole or probation, or are fleeing to avoid prosecution for a felony   or a crime punishable by sentence of more than one year.
 
 
Bibliography for              the Pre-Social Security Period
To assist students and other researchers we have              grouped the reference sources into three categories: Classic Sources,              which are the earliest published works and which are likely to be              out-of-print and available only in larger libraries; Academic Treatments,              which is meant to indicate a more scholarly approach to the subjects,              and may be more suitable for advanced students and in-depth researchers;              and Popular Accounts, which are works that seem suitable for a broad              general audience. These categories are arbitrary, imprecise, and flexible.              They are intended as a rough guide only and should not be taken too              literally.
Classic Sources:
Armstrong, Barbara, "Insuring the Essentials," Macmillan              Co., 1932. A scholarly review of the state              of social insurance efforts as they stood in the early 1930s, by one              of the principal designers of Social Security's old age insurance              program.
Epstein, Abraham, "Insecurity: A Challenge to America," Third Revised Edition, Harrison Smith and Robert Haas, 1936. A              classic study of social insurance, with one of the first published              critiques of the recently passed Social Security Act by a critic who              believed the Act did not go far enough in addressing the need for              social insurance programs.
Rubinow, I. M., "Social Insurance: With Special Reference to              American Conditions," Henry Holt, 1913.
Rubinow, I. M., "The Quest for Security," Henry Holt, 1934. Rubinow's two books were the most influential              on early thinking regarding social insurance. President Roosevelt,              in particular, was an admirer of Rubinow's work.
Seager, Henry, " Social              Insurance: A Program of Social Reform, " Macmillan Co., 1910. Believed              to be the first American work on social insurance.
Academic Treatments:
Chambers, Clarke, "Seedtime of Reform: American Social Service              and Social Action 1918-1933," University of Minnesota Press,              1963. In-depth discussion of events in the              period leading up to the creation of Social Security.
Katz, Michael B., "In The Shadow of the Poorhouse: A Social History              of Welfare in America," Tenth Anniversary Edition, Basic Books,              1996. An outline of the development of American              social policy from the earliest days.
Lubove, Roy, "The Struggles for Social              Security: 1929-1935," Harvard University Press, 1968.
Mitchell, Daniel J.B., "Pensions              Politics and the Elderly: Historic Social Movements and Their Lessons              for Our Aging Society," M.E. Sharpe, 2000. A discussion of the Townsend Plan, the Ham and Eggs movement,              and other alternative pension movements in California.
Skocpol, Theda, "Protecting Soldiers and Mothers," Harvard              University Press (Belknap), 1992. Source for information on Civil War pensions, Mothers pensions,              and early workmen's compensation efforts.
Schlesinger, Jr., Arthur M., three              volumes: "The Crisis of the Old Order," "The Politics              of Upheaval" and "The Coming of the New Deal." Houghton-Mifflin,              The American Heritage Library, 1988. This              is the classic history of this period.
Weaver, Carolyn, "The Crisis in Social              Security: Economic and Political Origins," Duke Press Policy              Studies, 1982. Contains an account of historical              developments from prior to 1900 through the Social Security amendments              of the early 1970s.
Popular Accounts:
Brinkley, Alan, "Voices of Protest: Huey Long, Father Coughlin              and The Great Depression," Vintage Press, 1983. A              good overview of Long and Coughlin.
Kennedy, David M., "Freedom From Fear: The American People in              Depression and War, 1929-1945." Oxford University Press, 1999. The early chapters in this book contain              a good summary of the period right before the Depression through the              passage of Social Security.
McElvaine, Robert S., "The Depression              and New Deal: A History in Documents." Oxford University Press,              2000. This books has lots of photos and              short essays and is easy to read.
Mitchell, Greg, "The Campaign of the              Century," Random House, 1992. This is the most comprehensive account of Upton Sinclair's              EPIC Plan.
Watkins, T. H., "The Great Depression:              America in the 1930s," Back Bay Books, 1993. Lots              of photos and short essays.
Watkins, T. H., "The Hungry Years: A Narrative History of the              Great Depression in America," Henry Holt, 1999. A              more in-depth account of this period.