A Program and Policy History. The publication of this article coincides with the celebration of the 7. Social Security Act. 1930s: Program Beginnings. The original Social Security Act of 1935 was amended even before the program became truly operational, but some of the principles embodied. The history and development of the Social Security program from its inception to the present is discussed. Special attention is given to historical debates that have relevance to today's policy discussions. In particular, the article discusses themes regarding program growth, pay- as- you- go financing, reserve funding, rates of return on payroll contributions, and the adequacy of benefits. Patricia P. Martin and David A. Weaver are with the Office of Retirement Policy, Office of Policy, Social Security Administration. Acknowledgments: The authors would like to thank Ed De. Marco, Larry De. Witt, Susan Grad, Joyce Manchester, Linda Martin, Scott Muller, and Paul Van de Water for helpful comments and suggestions. The findings and conclusions presented in the Bulletin are those of the authors and do not necessarily represent the views of the Social Security Administration. Summary. Many of the federal and state programs that provide income security to U. Social Security is the foundation of economic security for millions of Americans—retirees, disabled persons, and families of retired, disabled or deceased workers. The History of Social Security in America. For the first five years of the program (until 1940), the government paid Americans their benefits in one lump-sum payment. S. families have their roots in the Social Security Act (the Act) of 1. This Act provided for unemployment insurance, old- age insurance, and means- tested welfare programs. Future of Social Security benefits for Gen X and millennials comes into question for workers' retirement security. Social Security history of retirement benefits and the millions of Americans who got their Social Security card under President Roosevelt. The IDB promotes programs to enhance coverage and sustainability of social security in Latin America and the Caribbean. Social programs in the United States are welfare subsidies designed. The Social Security program mainly. every person living below poverty level in America. This article examines the historical origins and legislative development of the U.S. Social Security program. Focusing on the contributory social insurance program. United States of America. encompasses several social welfare and social insurance programs. Social Security. All other parts of the Social Security program. Social Security and Medicare. We must preserve, protect, and strengthen these lifelines. Hillary will: Fight any effort to privatize or weaken Medicare and Social. The Great Depression was clearly a catalyst for the Social Security Act of 1. However, the old- age insurance program—the precursor to today's Old- Age, Survivors, and Disability Insurance, or Social Security, program—was not designed specifically to deal with the economic crisis of that era. Indeed, monthly benefit payments, under the original Act, were not scheduled to begin until 1. In addition, from the beginning, the Social Security program has embodied social insurance principles that were widely discussed even before the onset of the Great Depression. The first four decades of the Social Security program were, in general, ones of expansion. In fact, the program was expanded even before it became truly operational. In 1. 93. 9, amendments added child, spouse, and survivor benefits to the retirement benefits authorized by the 1. Act. Those amendments also allowed for monthly benefits to begin in 1. Although the program was not changed substantially during the war years and the initial postwar period, the 1. The 1. 96. 0s witnessed additional growth in Social Security, but the most important development in social insurance occurred in health insurance, with the creation of the Medicare program in 1. Legislative actions in the 1. Social Security program and, indeed, set the stage for many of today's reform debates. Large benefit increases, a new benefit formula that was erroneously generous, and other changes in the early 1. In 1. 97. 7, amendments to the Act corrected the flawed benefit formula and made other changes in the financing of the system to shore up the program. Thus, the 1. 97. 0s represent a watershed in the program's history—program growth gave way to increasing concerns about the program's finances. Those concerns were reflected in the amendments to the Act in 1. These amendments, based largely on recommendations from a commission chaired by Alan Greenspan, adjusted benefits and taxes to address pressing near- term financing problems faced by the system. Although the Greenspan Commission focused to a large extent on short- range issues, the resulting reforms have generated large surpluses in the program and the buildup of a substantial trust fund. However, the looming retirement of the baby boomers and several other demographic factors will, according to projections, result in the exhaustion of the trust fund by 2. Introduction. The original Social Security Act, signed into law on August 1. Committee on Economic Security, a cabinet- level group appointed by President Franklin D. Roosevelt just one year earlier. The Act created several programs that, even today, form the basis for the government's role in providing income security, specifically, the old- age insurance, unemployment insurance, and Aid to Families with Dependent Children (AFDC) programs. The old- age program is, of course, the precursor to today's Old- Age, Survivors, and Disability Insurance, or Social Security, program. Unemployment insurance continues to this day, and AFDC is the forerunner to the current Temporary Assistance for Needy Families program. The original Act also provided federal support for means- tested old- age assistance programs run by the states, which were eventually transformed into the current Supplemental Security Income (SSI) program. The original Act also contained provisions allowing for research on the topic of health insurance, but the Medicare program would not come into existence until 3. Although the Great Depression was a catalyst for the creation of the Social Security program, the idea of social insurance predated the committee's work and the Depression. As early as the 1. Germany had built a social insurance program (one requiring contributions from workers) that provided for sickness, maternity, and old- age benefits. Some authors have linked Germany's early adoption of social insurance programs to its rapid industrialization in the latter half of the 1. Schottland 1. 96. Schieber and Shoven 1. A significant period of industrialization and urbanization also preceded the advent of social insurance programs in the United States. In 1. 88. 0, the populations of farm and nonfarm workers were about equally balanced, but by 1. Census Bureau 1. 95. As the nation industrialized, increasing numbers of Americans depended on wage income (and less on family- based structures typical of a farm economy). Further, Schieber and Shoven (1. Depression, was volatile. From 1. 90. 5 to 1. Schieber and Shoven 1. Older workers, in particular, often bore the brunt of economic downturns. Cyclical swings in the economy were not the only concern. Lost wages due to disability, death, or retirement were also seen as problems not adequately dealt with by the structures of an industrial economy. Academic and political interest grew in social insurance plans that would smooth out the volatility of income or, said differently, insure against fluctuations in labor- market income. The Great Depression no doubt crystallized these concerns (the nonfarm unemployment rate stood at 3. Mc. Steen 1. 98. 5, 3. Social Security program politically possible. Frances Perkins (who as secretary of labor headed the Committee on Economic Security) recalled: I've always said, and I still think we have to admit, that no matter how much fine reasoning there was about the old- age insurance system and the unemployment insurance prospects—no matter how many people were studying it, or how many committees had ideas on the subject, or how many college professors had written theses on the subject—and there were an awful lot of them—the real roots of the Social Security Act were in the Great Depression of 1. Nothing else would have bumped the American people into a social security system except something so shocking, so terrifying, as that depression (Perkins 1. It is interesting that the features of the old- age insurance program were not, however, generally designed to provide immediate relief from the effects of the Depression. As an explanation, it is useful to contrast the early Social Security program with its main "rival" of the time—a plan developed by Francis E. Townsend (a retired California doctor). The Townsend plan, which was noncontributory, offered persons 6. De. Witt 2. 00. 1). The Townsend plan was unrealistic (among other things, costs were prohibitive) and was never enacted, but it was popular because it focused on the economic conditions of the day. The large $2. 00 pension (average wages at the time were only $1. In contrast, as will be seen in the next section, the original Social Security program was small, contributory, and phased in. Thus, although the Depression led to the creation of the Social Security program, it did not, in general, shape its features. In Chart 1, a timeline of key milestones in the history of the Social Security program is presented with an overview of selected program changes and demographic events, from the start of the program in 1. Chart 1. Overview of changes in the Social Security program, demographic events, and milestones. Social Security is enacted. Social Security Amendments of 1. Baby boom begins. Social Security coverage is extended to several groups, including farm and domestic workers, self- employed persons, and others. Benefits are first provided to disabled workers. Baby boom ends; first baby boomers reach age 1. Automatic cost- of- living adjustments are enacted. Congress corrects technical flaw in automatic indexing provisions. Social Security trust funds face exhaustion; Greenspan Commission recommends reforms, many of which are included in the 1. Amendments; remaining gender distinctions in Social Security are eliminated. The retirement earnings test is eliminated for persons at or above the full retirement age. SOURCES: A. and B.: Based on data from the Annual Statistical Supplement to the Social Security Bulletin (SSA 2. Table 2. A3); C.: Based on data from the Congressional Research Service (2. D.: Based on various editions of the Green Book and Social Security publications; E. F.: Based on unpublished data from the Current Population Survey (Census Bureau and Bureau of Labor Statistics); G. H.: Based on data from the 2. OASDI Trustees Report (Board of Trustees 2. Tables V. A1 and V. A4). a. Data are not available for 1. Average number children who would be born to a woman in her lifetime. Program Beginnings. The original Social Security Act of 1. Act still underlie the program today. In addition, the fundamental changes made by the amendments in 1. Social Security. 3. The original Act provided for monthly retirement benefits, payable to persons 6. The benefit formula was based on cumulative wages (earned since 1. Specifically, monthly benefits equaled 1/2 of 1 percent of the first $3,0. So, for example, someone who retired in January 1.
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