President Franklin D. Roosevelt, the 32nd president, signed the Social Security bill into law on this historic day, August 14, 1935. It was a mere 14 months after sending a special message to Congress on June 8, 1934, promising a plan for social insurance as a safeguard “against the hazards and vicissitudes of life,” according to the official website of the Social Security Administration. The Social Security Act created a federal safety net for elderly, unemployed, and disadvantaged Americans, as noted by History.com.
“The original Social Security Act had the main stipulation of paying financial benefits to retirees over the age of 65 based on lifetime payroll tax contributions,” stated the same source. “The Act also established the Social Security Board, which later became the Social Security Administration, to structure the Social Security Act and determine the logistics of implementing it.” President Franklin D. Roosevelt officially signed the Social Security Bill into law on August 14, 1935. This law established two types of provisions for financial security in old age. The act has been amended over the years (Getty Images).
This 32-page act of legislation was the result of the work initiated by the Committee on Economic Security, created by FDR on June 29, 1934. It became, as he stated during the signing ceremony, “a cornerstone in a structure which is being built but is by no means complete,” as noted by the Social Security Administration. The Social Security Act established two types of provisions for old-age security: Federal aid to states to enable them to provide cash pensions to their needy aged citizens, and a system of federal old-age benefits for retired workers.
After successfully signing the Social Security Act, FDR established a three-person board to administer the program, with the goal of starting payroll tax deductions for enrollees. It was a challenging task, but by November 1936, registration for the program began, as recounted by History.com. However, not everyone could initially participate. Self-employed professionals, field hands, and domestic workers were excluded.
During that time, workers completed an application at their local post office and received a national identity card, known as a Social Security card, with a unique, nine-digit identification number. The Social Security card was, and still is, used to track workers’ earnings and benefits. The Social Security Act has been amended multiple times.
On January 31, 1940, Ida M. Fuller became the first person to receive a monthly benefit. Her first check was for $22.54, which is equivalent to $420.15 today when adjusted for inflation. Fuller lived until the age of 100. In 1939, amendments were made to include child, spouse, and survivor benefits to the retirement benefits authorized by the 1935 Act, according to the National Library of Medicine.
The 1950s marked a transformative decade in the program’s history. Benefit amounts were substantially increased, coverage under the program became nearly universal, and a new disability insurance benefit was offered, as stated by the National Library of Medicine. The 1960s witnessed further growth in Social Security with the creation of the Medicare program in 1965.
The program continued to evolve, and on October 30, 1972, Congress established Supplemental Security Income (SSI), a national benefit program administered by Social Security that provides monthly cash payments to older, blind, and disabled people with very low incomes and limited assets, according to AARP.
Currently, approximately 66 million people, or about one in every five U.S. residents, receive Social Security benefits. However, the Social Security trust fund is projected to run short of cash by 2033, potentially leading to reduced benefits for millions of Americans who rely on the program.
The primary challenge for Social Security is a demographic issue. As baby boomers retire, there are fewer workers contributing to the program to support the increasing cost of benefits. As of last year, there were just 2.7 workers paying into the system for each person drawing Social Security benefits.
In conclusion, the signing of the Social Security Act by President Franklin D. Roosevelt on August 14, 1935, was a significant milestone in American history. The act created a federal safety net for elderly, unemployed, and disadvantaged citizens. Over the years, the act has undergone amendments to include additional benefits. The Social Security card, issued to track workers’ earnings and benefits, remains an important aspect of the program. However, the future sustainability of Social Security poses challenges, as the aging baby boomer population and a decreasing number of workers contribute to the system.
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