The passage of the Social Security Act

This article is the second in a weekly series concerning Social Security Disability programs. The goal is to educate readers on what these programs are about, where things stand with current policy, and the implications of the policies being proposed in Washington, D.C.

Thomas Paine may be best known for writing Common Sense in January 1776 after tiring of watching his fellow colonists suffer under British tyranny, but he also penned one of the first attempts at a social-welfare plan that would forge a course towards the eventual enactment of the program we have today. In 1795, his last great published work was called Agrarian Justice, and as the title implies, it had to do with how to distribute inherited land. It called for a system where those that inherited a piece of land would pay a 10 percent tax and those funds would be redistributed as a one-time payment of 15 pounds to everyone at the age of 21 to give them a financial boost as they began adult life, and then an annual 10-pound disbursement to everyone over age 50 to help thwart poverty in the senior years. But the plan was never enacted.

The Civil War forced America to deal with an increase in the number of disabled, orphaned and widowed. Union forces received benefits for any disability suffered during their service, or if they were killed, their wives and children would receive who benefit. Eventually, in 1890, a disability sustained during battle wasn't required and any Civil War veteran became eligible, and in 1906, old-age would become the only requirement. By 1910, over 90 percent of veterans were receiving benefits even though they only made up 6 percent of the U.S. population. This pension became an asset that attracted younger women to older veterans in their hopes of eventually inheriting that benefit ... the first "gold-diggers."

All those benefits, however, were for the side that won. What about the side that lost? They had no such program in place. Business didn't exactly thrive as a result of the war; in fact, by 1932, only 15 percent of the workforce had any company benefits available to them and only 5 percent actually participated. Life expectancies increased during this period so there were even more senior citizens needing help, just in time for The Great Depression, when unemployment hit 25 percent. Now it wasn't just about the old folks, but also the one-in-four able-bodied citizens among them.

Several private- and public-sector plans were tried but, as we've had to learn more than once, an economic crisis is not the best time for social experimentation. In light of this crisis, the federal government rushed into action … and formed a committee. The Roosevelt administration favored the social insurance concepts in Western Europe. Basically, in order to receive benefits, you had to be one of the people who paid into it. The 1935 Social Security Act was overwhelmingly passed in both the House and Senate, but all it contained was retirement assistance for the elderly, aid for dependent children, and unemployment benefits. Disability and medical coverage weren't included.

More at http://www.chron.com/sponsored/makrislawfirm/article/The-passage-of-the-Social-Security-Act-4247747.php .

[font color=green]Disclaimer: This article is sponsored content by the Makris Law Firm. I am not associated with the firm or any related entities. The opinions expressed in the article do not necessarily represent my personal opinions. I am posting this article for historical context and to stimulate discussion.[/font]