The Social Security Act (SSA) was enacted on August 14, 1935 by US President Franklin D. Roosevelt. The law was one of Roosevelt’s major New Deal initiatives during the Great Depression. Today, the Social Security Act of 1935 is best known for providing retirement benefits to most workers, and it also provides grants for unemployment insurance, dependent children, and government health initiatives. The law has been expanded, modified, and changed dozens of times since 1935 – most notably with the addition of Medicare and Medicaid in 1965 and most recently in 2009 and 2012.

Programs and Funding

Roosevelt described the SSA when the law was signed in 1935 as a “comprehensive protection package” against the “dangers and vicissitudes of life”. ‘added later – the SSA has launched several government programs that have helped provide economic security for millions of Americans.

Roosevelt signs social security law

Courtesy of the Library of Congress, Prints and Photographs Division

The SSA is best known for programs to support the elderly. Title II of the SSA, “Federal Old Age Pension”, created the social security program commonly referred to as “Social Security”. Title II pays workers after they retire at the age of 65. Social security contributions are not, and never should be, the only source of income for retired workers. Today, social security pays around 40 percent of average employee income. (Most economists estimate that retirees must earn 70 percent of the average worker’s income to lead a comfortable life.) In addition to social security, retirees are expected to live on private pensions, savings, and investments.

However, the SSA did not only pay benefits to the elderly. Dependent children – children under the age of 16 who had lost a parent and lived with relatives – also received social security benefits. In 1940 more than 54,000 children received welfare and the SSA also distributed money to unemployed or disabled workers.

The SSA is a “pay as you go” program. The Social Insurance Act of 1935 was funded by a payroll tax that was shared equally between employees and employers. Today the tax is 12.4 percent of the worker’s income – half of that is deducted from the worker’s paycheck and half is paid by the employer. These taxes are then paid into a trust fund that is distributed to social security beneficiaries, including retirees and dependent children.

Criticism and changes

the SSA was a controversial law from the start. Georgia governor Eugene Talmadge initially refused to fund social security, but at one point said that General Assembly of Georgia that the introduction of an old-age pension is “a further step towards destruction”. Talmadge was a firm believer in laissez-faire government and opposed most welfare programs. The SSA required states to set up agencies that would distribute federal funds, but Talmadge blocked state lawmakers’ efforts to set up such an agency. This move was deeply unpopular – every US Congressman and Senator from Georgia had voted for the SSA. Talmadge’s rejection of social security was a major reason for that ED rivers, an avid New Deal supporter, won the 1936 gubernatorial election.

Eugene Talmadge

Talmadge wasn’t the only critic of the SSA. Conservative lawmakers, particularly from the South, accused the law of socialism, and the tax mechanism at the center of the law survived barely two separate challenges from the US Supreme Court in 1937. The law’s unemployment insurance also excluded many professions that were dominated by women and immigrant people. Speaking to the latter, Charles Houston, a NAACP official, criticized the law as “a sieve with holes just big enough for the majority of Negroes to fall through.”

In In 1939, the SSA was amended to include “trailer benefits” and “survivor benefits”, that is, benefits paid to spouses and children of retired workers and benefits paid to spouses and children of workers who have died, respectively. before they could get welfare. In addition, the benefit amounts were generally increased.

ED riversED rivers

Courtesy of the Georgia Capitol Museum, University of Georgia Libraries

Ida May Fuller of Ludlow, Vermont, received her first monthly pension check in January 1940. She started receiving benefits at 65, turned 100, and died in 1975. The Social Security Act of 1935 expanded to include nearly a dozen welfare programs , including Medicare, Medicaid, and the Supplemental Security Income program. Between 1937 and 2009, social security programs (excluding Medicare and Medicaid) raised $ 13.8 trillion in income and spent $ 11.3 trillion in payments.