Social Security Essay

The Social Security Act came to be because of two separate factors, the Industrial Revolution and the Great Depression. You see, before these two events which shaped the United States to what we know it as today security for the elderly came from another source. In this time prior to the 1930’s America was almost entirely an agricultural nation. A typical life in this period would be to grow up on the farm working the land until you were too old to do so. Once this occurred your extended family would take care of you until you passed away, so there was no need for social security. But, as all good things must come to an end so did this fairy tale world where blood actually was thicker than water. The industrial revolution was what started it making the extended family and the family farm less common sources of financial security. Then, the Great Depression finished this metamorphosis off so to speak by making things so economically difficult that it was every immediate family for themselves. And so the Social Security Act was born.

On June 8th, 1934, President Franklin D. Roosevelt first spoke of his idea of a social security program to Congress. To tackle the actual creation of such a policy the President appointed by Executive Order the Committee on Economic Security. The committee was told to examine the entire problem of economic insecurity and to then devise a plan to help those most in need. In early 1935 the committee made its report to President Roosevelt and by January 17th he had introduced the findings of the committee to both houses of Congress so that there idea could be considered. Soon the houses were able to come to majority decision as the Social Security Act was signed into law on August 14th 1935.

One of the first things that this act did was establish a bipartisan Social Security Board made up of 3 members who were chosen by the president. The original members of this board included John G. Winant, Arthur J. Altmeyer, and Vincent M. Miles. The duties of the SSB encompassed such things as delegating to the public how earnings were to be reported and what benefits were available to them. For Social Security to be effective though the United States government had much more to do. The biggest thing on this to-do list was to register all employers and employees by the deadline January 1, 1937 when they would start receiving credits towards their old age insurance benefits. To do this the government contracted with the United States Postal Service to deliver applications to the American people. Over 35 million SSN cards were issued via this mass registration between 1936 and 1937 alone.

Through the Social Security Act monthly benefits were to begin in 1942. So from 1937 up until then the U.S. paid out single lump-sum payments to retirees. The first man to receive such a payment was Ernest Ackerman, a retired Cleveland motorman. Acker retired only one day after the act began and so he received a payment for only 17 cents. This was far below the average of the time of $58.06.

The first amendments to the Social Security Act took place in 1939. The amendments added two new benefits, which included payment to the spouse and minor children of a retired worker and payment to the family of a worker in the event of a premature death. The 1939 amendments also increased the benefit amounts and quickened the start of monthly benefit checks from 1942 to 1940. The next set of amendments came in 1950. These were to increase the amount of the benefits as they were still very low. In fact until 1951, welfare assistance for the elderly actually exceeded Social Security benefits. A COLA or a cost-of-living-adjustment was first issued after the 1950 amendments. This initial COLA called for a 77% increase in Social Security pay outs. From that point on benefits increased only when Congress said so. However, in 1972 the law was changed so that Social Security received annual COLAs based on consumer prices. In 1954 an amendment provided for a disability insurance program. Then in 1956 the Social Security Act was amended again to provide disabled workers age 50-65 and disabled adult children benefits. Eventually disabled workers at any age were able to qualify these benefits. The next most significant amendment came in 1961 when the age at which men were first able to receive retirement benefits was lowered to 62. Also, the policy of medicare was enacted during this time. Under medicare health coverage was extended to social security beneficiaries aged 65 and older. The 1980 amendments then made various changes that had to do with the disability program. One of these changes included periodic checks of the disability recipients to insure the continued eligibility for the program. Additionally, in the 1980’s President Ronald Reagan appointed a blue-ribbon panel, known as the Greenspan Commission to address the mounting financial concerns Social Security was facing. The bill which resulted from this commission taxed Social Security benefits, raised the retirement age starting in 2000, and increased the reserves in Social Security Trust Funds.

Currently the Social Security Administration is hurting severely for funds which are expected to be exhausted by the 2030’s. Also, the age at which you can begin receiving benefits for retirement has been raised to 67. So if drastic changes are not made soon to provide Social Security with more financial reserves then this benefit that all us young people are buying into with every paycheck will be nothing more than a distant memory by the time we’re of age to collect it.

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