On August 14, 1935, at 3:30 pm ET, the same time of day I am posting this, President Franklin Delano Roosevelt signed the Social Security Act into law. The act provided benefits to retirees, ensuring the elderly in the United States had a “decent subsistence” and provided a system of payments to states for various social welfare safety net programs. Social Security grew out of the devastation of the Great Depression and the catastrophic impact it had on America’s elderly. It was based on the “social insurance” principles, which usually ensure the condition of a particular group in society by pooling the risk among all members of a society. In this case, ensuring a basic subsistence to America’s elderly.
The means, motives and methods behind Social Security were hotly debated in the United States. Like today’s debates over social welfare programs, there were essentially two sides of the debate: one that believed in the obligation of society to help those because forces beyond the individual’s control that caused harm; and one that believed individuals and families had personal responsibility to protect themselves from the volatile forces that impacted them. Those who believed in the theories of social insurance won the day.
Ms. Ida May Fuller was the first Social Security recipient and received the first Social Security check. She was unmarried and had no children. Her work history included being a school teacher and legal secretary for John G. Sargent, Attorney General during the Coolidge Administration. Although she had worked for several years, Ms. Fuller had only worked for approximately three years under the new Social Security law before receiving benefits. Ms. Fuller’s check of $22.40 was paid on January 31, 1940. That’s about $340 in today’s dollars.
Over the years, Social Security benefits were expanded to include benefits for individuals with disabilities, widows, orphans, and dependants of retirees and those with disabilities. In 1965, as an extension of the social safety net created by the Social Security Act, Congress passed Medicare. Medicare now provides health insurance for individuals over age 65 or who have been determined disabled and have the requisite work history.
In 2013, approximately 58 million Americans will receive some form of Social Security benefits totaling approximately $816 billion. The average monthly benefit for a retiree in 2013 is $1269.00. The average monthly benefit for a disabled worker in 2013 is $1,221.00.
For information about Social Security benefits, including eligibility, visit the Social Security Administration website http://www.socialsecurity.gov/. The Social Security website also allows individuals to apply for benefits, file Representative Payee Reports and find additional information about programs like Medicare and extra help with drug costs.
I am interested in your take on Social Security. Is it a birthday you would celebrate or abhor?