Social Security reform perpetuates narratives of American individualism and prevents radical movements

At the same time, it may well be asked — did the Social Security Act [slow], set back or kill off the development of an old age movement, one that would have moved off with considerable — and growing strength — to new and more radical nostrums?

Yet Social Security was also a weak and hesitant piece of legislation in many ways:

1. It relied on regressive taxation. Yet, perhaps, there was something more to this: As F.D.R. put it some years later: “I guess you’re right on the economics. But the taxes were never a problem of economics. They are politics all the way through. We put the payroll contributions there so as to give the contributors a legal, moral and political right to collect their pension and their unemployment benefits. With those taxes in there, no politician can ever scrap my social security program.”

2. It withdrew vast sums to build up reserves.

3. It denied coverage to numerous classes of workers, including those who perhaps needed it most – farmer laborers and domestics, most or all of whom have since been provided coverage or the chance to do so.

4. The full impact of old age benefits was not even to begin to be felt for more than 6 years; contributions were to begin in 1937, with monthly benefits not until January 1942– a long time considering the obvious needs.

5. Health insurance was ignored.

6. The unemployment insurance system was not provided with adequate national standards.

Thus the Social Security Act was really a compromise. It reconciled the philosophy of individualism with the facts of economic interdependence. It involved acceptance of the premise that a Government has a certain responsibility for the welfare of its people –one consistent with humanitarian principles and with the tradition of democratic Government. It would have been more radical had the Government assumed responsibility to assure continuity of income and a minimum level of economic well being to those citizens whose income had been interrupted or curtailed by certain risks or events. This, as you know, is under serious consideration today.

The Social Security Act only slightly modified the distribution of wealth and it did not alter at all the foundations of our capitalistic and individualistic economy. Nor does it relieve the individual of primary responsibility for his own support and that of his dependents. It does not dampen initiative nor render thrift outmoded. Eligibility and benefits both in the contributory old age and unemployment insurance titles were closely work-related, Government contributions were omitted, and fiscal conservatism prevailed in the emphasis upon reserves and the equity principle of private insurance.

The concept of differential benefits related to wages and the duration of earnings is essentially a conservative element in our social insurance philosophy. In America we still believe that a man should be rewarded for his own efforts. An established differential in one’s earnings and living standards is a precious asset, not only to the individual, but to the society in its progress toward a better world. Perhaps this attitude is changing, perhaps not.