Social Security Day

August 14, 1985, marked the 50th anniversary of the signing of the Social Security Act. A commemorative ceremony and celebration was held in Baltimore, planned by the Social Security Administration (SSA) anniversary committee along with the U.S. Postal Service and the Department of Labor. House Joint Resolution 300 designated August 14, 1985, as Social Security Day and the week of August 11–17, 1985, as Social Security Week. The resolution was introduced in the House of Representatives on June 4, 1985, by Rep. Albert Bustamante [D-TX]; it passed the House and was read twice in the Senate and referred to the Senate Judiciary Committee, but did not become law. While the legislation was not passed at the national level, governors and mayors throughout the country signed proclamations declaring August 14, 1985, as Social Security Day. Today, Social Security Day is official in Massachusetts, being listed in their General Laws.

President Franklin Delano Roosevelt signed the Social Security Act on August 14, 1935, intending to combat poverty and the effects of unemployment, provide financial stability in old age, and reduce burdens on widows and fatherless children. Social Security lifts many people out of poverty today: about half of senior citizens rely on Social Security for at least 50% of their income, and it provides at least 90% of income for one in four senior citizens.

There were a number of old-age security programs that set the groundwork for Social Security. English colonists implemented "poor laws" modeled on the English Poor Law of 1601. Local taxation was used to support the destitute, who were deemed to be "worthy" or "unworthy." Poverty relief in the eighteenth and nineteenth centuries mainly was found in almshouses or poorhouses, but they were not pleasant, to discourage their use. Thomas Paine was an early proposer of old age security. His pamphlet Agrarian Justice called for those inheriting property to pay a 10% inheritance tax which would go to a special fund that would pay 15 pounds sterling to each citizen when they reached 21, and 10 pounds sterling every year when they reach 50, to guard against old-age poverty.

Following the Civil War, there were hundreds of thousands of disabled veterans, as well as widows and orphans. A pension program was created that had similarities to the Social Security that would follow it over seven decades later. At first, the benefits went to soldiers who were disabled because of a service-related disability, and to widows and orphans of deceased soldiers if the soldier had been disabled. In 1890, it changed to provide for any disabled Civil War veteran regardless if their disability was related to their service. In 1906, old age became a qualification for benefits.

Some companies provided pensions before Social Security, but by 1932 only about 5% of the elderly were receiving retirement pensions. Poverty had increased among the elderly following the onset of the Great Depression, but there were scarcely any state welfare pensions for the elderly at the time. Between the start of the Great Depression and the passage of the Social Security Act in 1935, thirty states passed some form of old-age pension, but these pensions were largely inadequate or ineffective. Only about 3% of the elderly benefited from these plans, and the average benefit was 65 cents per day. There were restrictive criteria that kept many poor elderly off, and many others didn't want to go on it because of the stigma attached to welfare. Many counties within states opted out of participating in plans as well.

In 1933, Francis E. Townsend, a 66-year-old out-of-work doctor from Long Beach, California, took up the elderly as his cause. He came up with the Townsend Old Age Revolving Pension Plan—or simply the Townsend Plan—which called for the government to provide a $200-per-month pension to all citizens 60 and older, funded by a 2% national sales tax. It included stipulations that the person had to be retired, couldn't be a habitual criminal, and must spend the money in the United States within 30 days of receiving it. After two years, there were 7,000 Townsend Clubs with more than 2.2 million members who were working to make the Townsend Plan the old-age pension system in the United States. (Some calls for the Townsend Plan remained after Social Security was created, up until 1950, when amendments made Social Security more robust.)

Franklin Roosevelt, elected president in 1932, envisioned a social insurance system where workers would contribute to their future economic security by paying taxes while employed. The program wouldn't fundamentally change the capitalist system, nor would it be welfare. Social insurance, defined as economic security for citizens provided by government-sponsored efforts, was in use in 34 nations when Social Security came about. Around 20 of these social insurance programs were contributory programs similar to Social Security.

On June 8, 1934, Roosevelt announced his idea for Social Security in a message to Congress. He then convened the Committee on Economic Security (CES) to study economic insecurity and make recommendations that would be used when crafting legislation. In January 1935, the CES shared their report with the president, and he introduced it for consideration to both Houses of Congress on January 17. The report led to legislation: hearings were held on a Social Security bill in the House Ways & Means Committee and Senate Finance Committee in January and February. The Social Security bill passed by large margins in both the House and Senate. President Roosevelt signed it into law on August 14, 1935.

The main component of the Social Security Act created a new social insurance program to pay retired workers 65 and over income. Besides the payments for retired workers, the Social Security Act included unemployment insurance, old-age assistance, aid to dependent children, and grants provided to states used to provide medical care. The original Social Security Act didn't have disability insurance or medical benefits.

The part we now think of as Social Security, the federal old-age benefits, were originally only paid to workers when they retired at 65. It was a contributory system where workers contributed to their own future retirement benefits. In 1936, Social Security Numbers were assigned. In January 1937, the first Federal Insurance Contributions Act (FICA) taxes were collected. Special Trust Funds were created for this revenue, and benefits were paid from these Social Security Trust Funds. From 1937 to 1940, Social Security paid single lump-sum payments. The first Social Security lump-sum payment was made to Cleveland motorman Ernest Ackerman. He retired a day after the start of Social Security.

In 1939, amendments added two new categories of benefits: payments to spouses and minor children of retired workers, and survivor benefits paid to a family if there was a premature death of a covered worker. The amendments also designated monthly benefits to first be paid out in 1940. On January 31, 1940, the first monthly retirement check was issued, to Ida May Fuller of Vermont for $22.54.

In 1950, for the first time, Social Security beneficiaries were given a "cost-of-living" increase. A second increase went into effect in September 1952. In August 1956, the Social Security Act was amended to provide disabled workers between the ages of 50 and 64 and disabled adult children with benefits; it was amended in 1960 to provide benefits to disabled workers of any age and to their dependents. Amendments in 1961 lowered the age for old-age insurance for men to the age of 62. Medicare was launched in 1965 and is administered by the SSA.

In 1972, one amendment created Supplemental Security Income (SSI), while another introduced Cost-Of-Living-Adjustments (COLAs). Per the legislation, automatic cost of living allowances began in 1975, based on the annual increase in consumer prices. Amendments in 1977 addressed funding: payroll taxes were raised slightly, from 6.45% to 7.65%, the wage base (the amount of one's income that can be taxed) was increased, benefits were lowered slightly, and the wage adjustment was decoupled from the COLA adjustment. Amendments came in 1980 and 1983; the 1983 amendments made changes to the taxation of Social Security benefits, made Federal employees eligible for coverage and increased the retirement age in the twenty-first century. More changes came in the decades to come.

As of the 2020s, one in seven Americans—over 50 million people—received a Social Security benefit, and 90 percent of workers were in jobs covered by Social Security. Today, on the anniversary of the passage of the Social Security Act, Social Security is celebrated with Social Security Day!

How to Observe Social Security Day

• Learn more about your Social Security benefits.
• Read a book about Social Security.
• Explore the Social Security Administration website.
• Visit the Franklin D. Roosevelt Presidential Library and Museum.

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