Social Security Act

Impact

Immediately after its passage, the Social Security Act became a campaign issue in the 1936 presidential election. Although no taxes had been collected or benefits paid, opponents of the program sounded warnings of the consequences such taxes would have on the economy. The Republican presidential candidate Alf Landon used Social Security as a major component of his campaign. He proposed a repeal of the act, arguing that it encouraged deficit spending and government intrusion in people's lives. Landon referred to Social Security as “a fraud on the workingman” which was “unjust, unworkable, stupidly drafted and wastefully financed” (Altman, 103).

Social Security was attacked by the Left as well. Senator Huey Long, claiming that the Democrats had sold out to big business, conducted a filibuster on the floor of the Senate, blocking a vote on funding the Social Security Act in 1935. John W. Davis and Al Smith, two Democrats who had lost presidential bids, formed the American Liberty League in August 1934. Funded by William Randolph Hearst and the DuPont family, the Liberty League sought to defeat Roosevelt; league pamphlets referred to Social Security as “the end of democracy” (Altman, pp. 90–91).

Nevertheless, the program survived and has evolved over the years. The Social Security Act Amendments of 1939 address many early concerns. Benefits were calculated based on average income, not cumulative wages. Coverage was extended to dependent widows, spouses, and children. Following World War II, Social Security expanded dramatically, adding disability coverage; benefits for agricultural service, domestic service, and other previously excluded workers; and Medicare/Medicaid. Fueled by an expanding economy, Social Security benefits emphasized aid to the less fortunate; private pension plans boomed in the postwar years, easing concerns of middle-class workers.

The Social Security situation changed in 1973. In the midst of the Watergate scandal, a sudden energy crisis, runaway inflation, and growing unemployment, Social Security faced its first deficit. Projections showed a long-term shortfall as the baby boomers (Americans born before 1964) began to retire and pull money out of the fund. Economists began to criticize Social Security as well, arguing for private-sector alternatives and the privatization of Social Security itself. In his February 2005 State of the Union address, President George W. Bush announced that Social Security was “headed toward bankruptcy” and called for major reforms, specifically individual accounts for each worker, in which the employee would make investment decisions. Although they were not enacted, these reforms represent a shift in attitude toward Social Security. Perhaps some Americans today have less faith in the program's ability to deliver, but Roosevelt's vision nevertheless remains a reality for the many Americans who, lacking private individual savings of their own, would be destitute without Social Security.