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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….
This quote was taken from Franklin D. Roosevelt’s Message of the President to Congress, which he presented on June 8th, 1934. By this time, our country has seen many changes, and unfortunately they were not positive ones. We were in the midst of the Great Depression, and President Roosevelt recognized that some things had to change in order for us to recover fully.
By Executive Order, the President created the Committee on Economic Security ("CES"). The CES was comprised of a small group of experts from other agencies whose job it was to study the problem of economic insecurity. They also studied the economic issues dealt with by European countries. After much research and the first-ever national town hall forum regarding Social Security, CES developed a Report to the Congress as well as drafted the legislative proposal, which was given to President Roosevelt in January of 1935.
On January 17th, the President submitted the proposal to both houses of Congress. By July of that same year, the bill was passed by both houses and sent to the President to sign and make official, which occurred on August 14th, 1935. The bill provided not only several provisions for general welfare, but also a social insurance program that would pay income to retired workers aged 65 and older. The provisions included unemployment insurance, old-age assistance, aid to dependent children, and grants to the states for their medical care programs.
Title I and Title II were the first major provisions related to the elderly. Title I – Grants to States for Old-Age Benefits, supported state funded welfare programs for the elderly. Title II, which is what we think of now as Social Security Disability (SSD), was originally called Federal Old-Age Benefits. Benefits were paid to the worker when he or she retired at age 65. The first taxes for this purpose were collected in 1937, and monthly benefits began in 1942. However, under amendments passed in 1939, payments were advanced to 1940.
The Title I program was meant by President Roosevelt to be temporary “relief” to support retired workers until the Title II program was in full-swing. This program was gradually phased out as more and more workers paid into the Title II program.
Another provision of the Social Security Act was the creation of the Social Security Board ("SSB"). This was a committee comprised of three members who where appointed by the President. Their responsibilities included providing employers and employees with information on how earnings were to be reported, what benefits were available, and how to get them. SSB was also responsible for the opening and staffing of Social Security offices across the nation.
SSB’s biggest task was registering employers and employees by January 1st, 1937, which is when workers would begin acquiring credits towards benefits. They contracted the Post Office Department to distribute applications and the numbers were assigned at local post offices. The applications were then forwarded to Baltimore, Maryland where the numbers were registered and employment records were established. The first-ever SSN account number established belonged to John David Sweeny, Jr., of New Rochelle, New York.
After this arduous task was completed, the first Federal Insurance Contributions Act ("FICA") taxes were collected in January 1937.Trust funds were created from which benefits would be paid.
While the SSB was originally an independent agency of the federal government, it became part of the cabinet-level Federal Security Agency in 1939, and eventually was abolished altogether and replaced with the current Social Security Administration.
The first-ever monthly benefit check was received by Ida May Fuller, a retired legal secretary from Ludlow, Vermont. The check was issued on January 31st, 1940 in the amount of $22.54. Previously, from 1937 to 1940, benefits were paid to retired workers in lump-sum payments, as these people contributed to the program but did not do so long enough to receive the monthly benefits. The first recipient of a lump-sum benefit was Ernest Ackerman, a retired motorman from Cleveland, Ohio. Mr. Ackerman paid a nickel into the Social Security system and retired the next day, receiving a lump-sum payment of 17 cents! The average lump-sum payment made during this time period was around $58.06. The smallest lump-sum payment ever was 5 cents.
This is just the tip of the iceberg of the Social Security Administration’s long and interesting history. There is even a museum located in Baltimore, Maryland, where visitors can learn about the history of SSA in vivid detail. From past to present, SSA continues to change and evolve for the greater good of its citizenry, which is what President Roosevelt would have wanted.
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 the Social Security Act
Source: http://www.ssa.gov/history/
Written by Anna Westfall & Attorney Andrew November
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