Social Security Act of 1935
Despite its flaws, the Social Security Act of 1935, was a significant achievement in that for the first time the government had a responsibility for the individual welfare of all Americans. It established a number of programs that provided for the material needs of individuals and families. The Social Security Act reflected the humanitarianism of the 1930s as well as the inclination of Americans in those years to seek security and group acceptance. Although the Act faced some problems along the way, it provided the economic security that the American people desperately needed during the post-Depression era.
The Great Depression of the 1930s
left millions unemployed and penniless.
From 1930 to 1939, American unemployment averaged 18.2 percent. The economy continued to decline as prices
and world trade fell drastically. The
miserable effects of the Depression led the Roosevelt Administration in its
attempt to jump-start the economy while shielding the indigent Americans from
hardship. President Franklin D.
Roosevelt hoped to institute a program providing protection for the poor,
unemployed, and elderly. In January
1935, FDR called for social reform in his State of the Union Address. He also placed an emphasis on social security
and employment: “We have not weeded out the over privileged and we have not
effectively lifted up the underprivileged” .The Social Security Act was passed
by Congress in July 1935 and signed into law by
A major goal of the Social Security Act was to
maintain maximum freedom in the economic lives of the American people. The Act was established in order to provide
security for the individual and his family.
It highly encouraged individual initiative and saving, in hopes of decreasing
inefficiency, laziness, and dependency.
One of the basic objectives of the act was to protect the elderly and
the disabled against expenses of illnesses that could otherwise drain their
savings. This essentially kept families
together by giving children the opportunity to grow up in health and security .The
original Social Security Act was a comprehensive law consisting of eleven
titles, or subjects. Six of the titles
outlined specific programs. These
original programs included Old-Age Assistance, Old-Age Retirement Benefits,
Unemployment Compensation, Aid to Dependent Children,
Maternal and Child Welfare, and Aid to the Blind. The rest organized the controlling government
body, the Social Security board; established methods of taxation to fund the
programs; and structured the creation of public health facilities .States could
raise funds by utilizing the existing, and unchallenged, taxing powers of the
federal government; this was eventually done through a payroll tax. Although it might have seemed perfect to many
Americans in need of aid, the formation of the Social Security Act had some
complications. It encountered
difficulties because of the constitutional constraints imposed upon the federal
government. It had been generally
assumed that social concerns lay within the domain of the states, rather than
The various provisions of the Social Security Act helped to pull the economy out of the Depression. A Social Security Board (SSB) was established in one such provision. It comprised of three members appointed by the President. The original members of the SSB were John G. Winant, Chairman; Arthur J. Altmeyer; and Vincent M. Miles. During the first year, the task of the SSB was to provide employers, employees, and the public with information on obtaining available benefits.
In addition to establishing the SSB, the Social Security Act also insured 26 million American workers against income loss from unemployment, old age, and blindness. The Act created a social welfare program designed to pay retired workers a continuing monthly income after retirement. Unemployment insurance, retirement benefits, old-age assistance, and aid to dependent or crippled children were among the numerous provisions of the Act. Monthly benefit initially ranged from $10 to $85, and remained frozen at those levels until 1950 .The amount of monthly benefits was determined by the total amount of wages on which taxes had been paid. Lump sum payments would be given to persons who had not paid enough money into the program to qualify for benefits and also to the beneficiaries of workers who died before reading age 65. Beginning in 1936, employers of eight or more persons were taxed 1 percent for unemployment benefits. This tax increased to 2 percent in 1937 and 3 percent in 1938 . The system of taxation for old-age and unemployment benefits imposed a total annual assessment of 6 percent on employers’ payrolls after 1949, in addition to 3 percent contributed by workers. This imposition of payroll taxes on employers and employees established a reserve fund for old-age insurance. Although the federal government provided money for the implementation of public assistance provisions in the Social Security legislation, it was only proportional to the state funds made available. Therefore, the level of assistance received by the needy, old, blind, and mothers with dependent children varied greatly between states. Some provisions of the piece of legislation led to opposing feelings about its components.
Today a hope of many years' standing is in large part fulfilled. The civilization of the past hundred years, with its startling industrial changes, has tended more and more to make life insecure. Young people have come to wonder what would be their lot when they came to old age. The man with a job has wondered how long the job would last.
This social security measure gives at least some protection to thirty millions of our citizens who will reap direct benefits through unemployment compensation, through old-age pensions and through increased services for the protection of children and the prevention of ill health.
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.
This law, too, represents a cornerstone in a structure which is being built
but is by no means complete. It is a structure intended to lessen the force of
possible future depressions. It will act as a protection to future
Administrations against the necessity of going deeply into debt to furnish
relief to the needy. The law will flatten out the peaks and valleys of
deflation and of inflation. It is, in short, a law
that will take care of human needs and at the same time provide the
I congratulate all of you ladies and gentlemen, all of you in the Congress, in the executive departments and all of you who come from private life, and I thank you for your splendid efforts in behalf of this sound, needed and patriotic legislation.
If the Senate and the House of Representatives in this long and arduous session had done nothing more than pass this Bill, the session would be regarded as historic for all time.
---Franklin Roosevelt (