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Social Security: A Brief History

With the recent round of budget negotiations capturing headlines, Social Security, a huge and important federal program and source of necessary income to many, is back in the news. In several posts over the coming weeks, I hope to explain a little bit about specific parts of the program, including what benefits are involved and who can receive those benefits.

Congress passed the Social Security Act in 1935 as part of the New Deal. President Franklin Delano Roosevelt signed the bill on August 14 of that year. Its initial purpose was to provide income to retirees and the unemployed. The original provisions of the Act provided benefits to retirees and employed workers, as well as a lump-sum benefit upon a worker’s death. The original bill made no provisions for workers’ families or workers who were disabled. In 1937, the Supreme Court upheld the constitutionality of the programs in a pair of cases, Stewart Machine Company v. Davis and Helvering v. Davis. The Act contained two other important parts. First, it established the Social Security Administration, an independent agency in the federal government. The Social Security Administration, or SSA, not only is in charge of the nuts and bolts of the program, but also conducts hearings and the first several appeals if and when a person is denied benefits. SSA is led by a Commissioner of Social Security, who is appointed by the President and confirmed by the Senate. The Commissioner’s term of service is six years. The current Commissioner is Michael J. Astrue, who started in 2007. The second important part of the 1935 act was that it started the collection of payroll taxes, which most of us see on our pay stubs. Social Security went through several important changes and additions in the twentieth century. For our purposes, only a few are important at this time. At the beginning, it merely provided cash to workers who retired at age 65. In 1939, benefits were extended to dependent children, the wives and widows of workers. In 1956, the benefits were extended to workers who were no longer able to work as a result of a disability. In 1961, benefits were extended to all persons who retired early at the age of 62, though the amount of benefits decreased for early retirees. The 1972 amendments to the act established Supplemental Security Income, or SSI, which became one of the benefits programs administered by the SSA. Over the next several decades leading up to the present, Social Security and its programs have undergone several more changes, mostly dealing with financial stability. I hope this introduction has been helpful. In the coming weeks, I hope to discuss several Social Security programs more in depth, some of which were part of the original program in 1935 but many of which were established afterward but still fall under the heading of Social Security. Please contact me at dlenz@lawtoncates.com if you have questions or need help handling a Social Security claim.

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