Our Documents:
The Social Security Act

"We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family ..."

Our Documents: The Social Security Act
August 14 , 1935

On August 14, 1935, Franklin Roosevelt signed the Social Security Act. During the Great Depression many older people were unemployed. Americans were living longer but retiring earlier; age discrimination made it difficult for elderly Americans to find employment. People who had worked hard all their life to support their families were living in poverty. Americans all over the country argued that they deserved compensation. Dr. Francis E. Townsend advocated that all Americans over the age of 60 should stop working and receive $200 per month from the federal government, and he gathered over 5 million supporters. As "Townsend Clubs" sprang up across the country, Franklin Roosevelt knew he had to do something to address the plight of unemployed, older Americans.

As Governor of New York State FDR enacted a law to provide old-age pensions and was ready to extend it nationally. By Executive Order, Roosevelt created the Committee on Economic Security and their recommendations provided the basis for Congress' 1935 Social Security Act. Under the Act, Congress appropriated some funds for the program, but the rest of the money came from a payroll tax. Money was taken out of an employee's paycheck to help pay for Social Security, which in 1937 was about 2% of each paycheck. Older Americans, and later dependents and the disabled were given the money. Initially 60% of the workforce was covered by Social Security (by 1995, 95% of the workforce was covered). Ernest Ackerman was the first person to receive Social Security; he retired one day after the program began. For that one day the government withheld $.05 of his paycheck but later he got back a lump-sum payment of $.17. During the first few years of Social Security, eligible Americans received, on average, $58.06.

Before Franklin Roosevelt's administration, it was unusual for the government to give people money, and some Americans were against Social Security. In two cases, the Supreme Court ruled on the Constitutionality of the Social Security Act, but ruled in both instances that Congress could legislate on this national issue. Social Security is one of the many things still in place today because of Franklin Roosevelt. Americans still pay into Social Security while they work so that they will receive money when they stop working.

bullet Franklin Roosevelt's Statement on signing the Social Security Act , August 14 , 1935
bullet Photos

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