Flashbacks May 2005

When Social Security Was Young

Three articles from the pages of The Atlantic about the early, uncertain days of Social Security

Last week, President Bush reiterated his warning that the Social Security program is facing a looming crisis and announced a new plan for its overhaul. While no one questions that the Social Security system has come under increasing strain as the percentage of younger workers has decreased, there is fierce debate over the severity of the crisis and the efficacy of Bush's plan, which calls for scaling benefits according to the wealth of the recipient. Social Security was founded by the Roosevelt Administration during the New Deal as a way to provide aid to both the aged and the unemployed. Over the years, The Atlantic has published several articles with different takes on the program's founding. But all three make clear that a program that today is considered by many to be sacred had, at the outset, to be sold to the American people, and indeed barely made it into existence.

Soon after the Social Security program was enacted, in August 1935, but before it had gone fully into effect, M. Albert Linton, the president of a large insurance company, set out both to explain the ins and outs of the complicated program and to critique it. In "Old-Age Security for Everybody" (April 1936 Atlantic) Linton argued that the program was essentially a good idea, but that things could go awry if it were not properly constructed and understood.

To the average person the old-age security programme appears technical and complicated. Although this is true as to the basic calculations, it fortunately is not true as to the broad principles which underlie it. I say 'fortunately' for the reason that the programme has such far-reaching consequences that it should be understood and discussed from one end of the country to the other. From the point of view of financial magnitude, of the number of people concerned, and of the administrative problems that will press for solution, the programme is unprecedented. Its various provisions must be soundly conceived and properly coordinated or the consequences may be quite different from what is anticipated.

Linton explained that in the early years the plan would take in far more money than it would pay out, thus allowing for the creation of a reserve fund. His concern was that as the reserve fund grew, Congress would either raid it to fund more immediate expenses, or would pay out the reserve too early by lowering the retirement age. Linton's worry that the complacency engendered by a large reserve fund could eventually threaten the system turned out to be prescient, as was his recognition that Social Security would someday come to be seen as a right, and would then be very difficult to take away.

Everyone fears an old age of poverty. Any plan to have the Federal Treasury provide an old age of comfort, free from want, will have a powerful political appeal. When upwards of twenty-five million voters directly concerned with the operation of the contributory plan become acquainted with its provisions and begin to pay taxes to support it, they are bound to take a lively interest in what is going to come back to them. If perchance their interest should tend to lag, candidates for political office will take care that it is revived.

A year later, John G. Winant, the first chairman of the Social Security Board, sought to sell the program to the public by carefully outlining its benefits in the pages of The Atlantic. Winant's article, "An Approach to Social Security" (July 1936), was written at a time when benefits were just starting to be distributed. He explained that support for the elderly had previously been left up to the states—and some had provided it and others hadn't. Such support, with no federal backing, was extremely vulnerable to the vicissitudes of local economic conditions. As Winant explained, "Disease and economic distress recognize no state boundaries, and destitution in any one area may depress economic conditions in the whole country. It seemed, therefore, a situation in which Federal action was essential."

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Nick Bellistri is an intern for The Atlantic Online.

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