Social Security

Social Security

Social Security is one of the centerpieces of America's social safety net. It was created in 1935 by the Social Security Act (unemployment insurance and welfare were also instituted by this law).  Social Security is a federally administered and funded insurance program to alleviate poverty among the elderly. Social Security functions as a contributory system wherein workers and their employers contribute taxes to the program throughout their working lives, and are then able to utilize the fund upon retirement. The Social Security Act has been expanded and amended over the years.

Commentary

Lessons from FDR: When the Right Cries Wolf, Bite Back

August 14, 2010

Cry Wolf Quotes

Effective January 1937, we are compelled by a Roosevelt New Deal law to make a 1 percent deduction from your wages and turn it over to the government. You might get this money back . . . but only if Congress decides to make the appropriations for this purpose.

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Two weeks before the election, workers in various Detroit plants found these placards at their workplaces. October, 1936.

[Social Security will ] impose a crushing burden on industry and labor [and] establish a bureaucracy in the field of insurance in competition with private business.

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Republican statement on the Ways and Means committee vote.

I submit, however, that no man who himself has any practical acquaintance with business processes and methods who is not utterly blinded by partisan political considerations can examine the Securities Act, the Stock Exchange Act, the successive revenue acts in recent years, the Social Security Act, the Public Utilities Act, the Tennessee Valley Authority Act and many of the arbitrary regulations devised under a dozen other recent acts and arrive at any verdict other than they cripple and retard business rather than help revive it. The fact is even so clear that it is hard to keep from wondering if such a result were not actually intended.

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Chamber of Commerce Vice President Philip J. Fay

We are creating an enormous bureaucracy to take care of problem the magnitude and significance of which we really do not understand…. This is a problem so far-reaching, so important, and so long in duration that it should not be as an emergency measure, without the opportunity for review and consideration, so as to minimize the inevitable tinkering that will come.

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Elon H. Hooker, president of the Manufacturing Chemists Association. Senate Finance Committee hearings.

Related Laws and Rules

Resources

Center for Economic and Policy Research (CEPR) is a progressive think tank that concentrates on social and economic policy, both domestic and international.

The Center on Budget and Policy Priorities (CBPP) is a think tank focused on tax and fiscal policy. They provide in-depth analysis of state issues.