Designing Social Security
By the time FDR passed the Social Security Act in 1935, 34 nations already offered some form of social insurance, according to the Social Security Administration historian’s office. Many U.S. states also had workers’ compensation laws and old-age assistance programs for people who met certain qualifications.
During the Depression, with so many Americans suffering, lawmakers, economists and others debated whether the nation should create a federal old-age pension or an assistance program. But they disagreed about what it should look like. One of the most generous proposals came from California physician Francis Townsend, whose 1933 Townsend Plan called for the U.S. government to provide every person 60 years and older with $200 a month.
In 1934, FDR created the Committee on Economic Security to consider what unemployment or old-age programs the United States could adopt. Under the leadership of Secretary of Labor Perkins, the committee developed the idea for a contributory old-age pension plan. With this “Social Security” program, certain workers and their employers would make tax contributions to a trust fund that would later provide these workers with monthly payments starting at age 65.
Social Security stood out from other New Deal initiatives in that it wasn’t designed as a short-term program. The Works Progress Administration created projects that employed people who needed work immediately. But because workers had to make contributions to receive Social Security, people who enrolled in the program in 1935 were told they wouldn’t be able to receive benefits until 1942.
One of the reasons FDR chose a contributory pension model was that he wanted a system that would pay for itself. “But there was another logic to this that Francis Perkins wrote about,” Béland says.
The idea was that because workers would help contribute to their Social Security pensions, they “will feel entitled to benefits,” he says. “And that will make it harder for other politicians—especially Republicans—to later on dismantle Social Security.”
While this proved true in the long run, it provided no help to people who needed immediate assistance in 1935. The fact that no one would actually see a benefit from the program for several years made Social Security particularly vulnerable to attacks during the 1936 presidential election.