History of Social Security

The History of Social Security Since the beginning of time there has been a longstanding tradition of the workers supporting the elderly. This was practiced during biblical times, with the children supporting their parents, and has continued to the present day. As times changed and humans developed more as a society, it became apparent that everyone should be required to support those who cannot work. The goal in mind is to provide everyone with economic security. These principles helped bring about the creation of Social Security. The first act in which a government stepped in to provide for the needy was The English Poor Law of 1601. With this the English government recognized that the poor had to be taken care of. The law was supported through taxation, with relief given to those in need. Buildings, called almshouses, were even built in order to provide shelter for those without it. This law laid the foundations of modern day economic security. The ideology of the workers supporting the needy was brought over to America with the immigrants. Many of the new communities developed laws very similar to the English Poor Law of 1601. One of the major drawbacks to the English Poor Law of 1601 and the new laws made by Americans is that the laws discriminated against the poor. By this I mean that there was no set criteria for being poor. All the decisions on whether or not you were considered to be poor enough to receive money was made on an individual basis. Because of this many needy people did not receive the benefits they were entitled. If the individual making the decision was racist or didn't like the person seeking money, they denied the person of the money. This attitude toward the poor continued for centuries. Poverty doesn't discriminate between races, gender, or age. People of all types can be poor. Most people however, don't feel as compassionate towards middle-aged poor people, the common feeling is that if they didn't want to be poor all they had to do was to go and get a job. As a result of this, deeper compassion was felt for those who couldn't get a job, mainly children and the elderly. One person who recognized the severity of the situation was the Revolutionary War hero Thomas Paine. In 1795 Thomas Paine called for the creation of a "public system of economic security for the new nation". Thomas Paine recognized the tragedy of being poor, especially in regards to the young and old. His plan called for a tax, with the income being paid out to both the young and old. His reasoning for this was to get young people some money to get their careers going, and also give older people money to sustain their life. Not everyone agreed with Thomas Paine and his vision was never fulfilled, at least during his lifetime. It wasn't until 1862 that the Federal government established a form of economic security. It was at this time that the Civil War pensions program was set up. This provided soldier, who were wounded as a result of the war, with benefits so that they could sustain a normal life. This program also provided the widows and children of slain soldiers with money. These pensions were paid out at a huge cost to the Federal government. In 1894 nearly 37 percent of the Federal budget was spent on these pensions. The costs of this program was actually lower than should have been, with confederate soldiers not receiving any of the benefits. While America was moving towards a more equal society, it had yet to realize that programs such as the Civil War pensions program could be adapted to include the entire community. Workers compensation was the next battle to be won in the struggle towards economic security. In 1908 the Federal government passed a law protecting Federal employees from injuries in hazardous jobs. Soon thereafter, many states adapted similar laws, and by 1929 workers compensation laws were in affect in every state. These laws held the employer responsible for living expenses if an employee was killed or injured while on the job. This one a major step towards the social security that we enjoy today, but still some people were unhappy. Huey Long, Governor and Senator from Louisiana, was one of the leaders of the social security movement. He proposed that the Federal government should step in a bridge the gap between the rich and the poor. Long's ideas were very radical for the time period, and would probably be still seen as radical today. Huey Long thought that the government should limit the amount of money that a person could accumulate, and limit the amount of money they could make in a single year. All the money that was made beyond these ceilings would be confiscated by the Federal government and be distributed to the poor. Huey Long thought that every family in America should be making at least 5,000 dollars a year. This money would allow everyone to own a house, car, radio, and provide food. Also in his plan would be a pension plan for everyone over the age of sixty, to insure that they could continue to lead a normal life. While this idea was a little to radical, it still gained support throughout the nation and forced people to realize that social security was indeed a major issue. Social Security really became a necessity after the depression began in the late 1920's. After President Herbert Hoover failed to address the problems of the nation, the people decided that they needed a change. The people looked towards Democratic nominee Franklin Delano Roosevelt. After being elected President Franklin Roosevelt initiated a series of programs designed to end the depression. One such program was a program for Social Security. On June 8, 1934 Roosevelt announced he was to begin such a program. Roosevelt expressed his views on Social Security when he announced his plan for the program. "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 . . ." Franklin D. Roosevelt: Message of the President to Congress, June 8, 1934. The nation agreed with Roosevelt that something had to be done to help curb the poverty situation. Roosevelt appointed a committee to examine the entire economic situation in America. After months of researching the committee presented to Roosevelt their proposal. Roosevelt in turn handed over the proposal to the House and Senate. In July of 1935 the bill was passed. On August 14, 1935 President Roosevelt signed the Social Security Act, making it final. The bill included a number of programs to benefit the general welfare, as well as program designed to give persons over 65 a pension. The main provisions of the bill were to provide unemployment insurance, aid to dependent children, and old age assistance. After signing the Social Security act President Roosevelt thought that the battle to end poverty was beginning to be won. "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."-- After the bill was passed, federal employees immediately began working on getting Social Security started. The next thing on the agenda was assigning every person in the United States a social security number. Once this was established taxes where ready to be taken. In January 1937 the first taxes, Federal Insurance Contributions Act, were collected, with payments planned on being received starting in 1942. The money collected was put into a trust fund, where it was stored until in was needed to be given out. While Social Security looked as though it had finally gotten rid of the problem of economic security, it was not perfect. In 1956 the act was broadened to include disability insurance. This gave benefits to those who were injured on the job and were unable to work for an extended period of time. In 1972 a revision to Social Security occurred with the addition of a cost of living increase schedule, which was parallel to the consumer price index. This insured that those receiving benefits were not getting more or less value out of their money. One of the biggest additions to Social Security was the founding of the Medicare and Medicaid programs. These programs provided medical coverage to those who cannot afford it. As of right now the only problem with Social Security is that it appears to be running out of money. Because of shifts in population growth, ie the baby boom, it seems that in the near future there will be more people receiving benefits from Social Security than those who are contributing to Social Security. This problem leaves only a few solutions. The most obvious solution would be to increase the taxes to make up for it. That solution doesn't seem to be very popular with those who are contributing to Social Security. Many young people feel disillusioned about paying into Social Security because they don't feel that it will be there when it is their turn to retire. Throughout history we have advanced greatly as a society. This has lead us to be able to accomplish things such as economic security. Although we are an advanced society we will continue to strive to provide everyone with average living conditions. This battle with poverty is not an easy one, and will probably not be accomplished for many years, but we still have to try.