From Volume 4, Issue Number 32 of EIR Online, Published Aug. 9, 2005
This Week in History

August 9 - 15, 1939

FDR Extends Social Security Coverage To Conquer 'Human Want and Fear'

On Aug. 11, 1939, President Franklin Roosevelt signed a number of far-reaching amendments to the Social Security Act which not only extended its coverage, but added new benefits. The Congressional legislation embodied most, but not all, of the recommendations made by the Social Security Board at the request of the President. Roosevelt stated, when he signed the amendments, that, "In order to give reality and coordination to the study of any further developments that appear necessary, I am asking the committee to continue its life and to make active study of various proposals which may be made for amendments or developments to the Social Security Act."

When Franklin Roosevelt signed the original Social Security Act on Aug. 14, 1935, he stated that the legislation represented "a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions. It will act as a protection to future administrations against the necessity of going deeply into debt to furnish relief to the needy. The law will flatten out the peaks and valleys of deflation and of inflation. It is, in short, a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness."

Beginning in April of 1938, President Roosevelt began to lay the groundwork for further improvements to Social Security, especially the extension of benefits to a larger number of people, and the addition of needed programs which had not been included in the original legislation. Roosevelt had never disbanded the original Committee on Economic Security which he had appointed in 1934, and the group continued to study what improvements might be needed and what the impact of the program had been on those receiving benefits.

On April 28, 1938, the President sent a letter to Arthur Altmeyer, the Chairman of the Social Security Board, asking that the Board "give attention to the development of a sound plan for liberalizing the old-age insurance system. In the development of such a plan I should like to have the Board give consideration to the feasibility of extending its coverage, commencing the payment of old-age insurance annuities at an earlier date than Jan. 1, 1942, paying larger benefits than now provided in the Act for those retiring during the earlier years of the system, providing benefits for aged wives and widows, and providing benefits for young children of insured persons dying before reaching retirement age. It is my hope that the Board will be prepared to submits its recommendations before Congress reconvenes in January."

The Board subsequently recommended to Congress that the old-age insurance provisions be extended to include over 1 million new recipients. It also recommended that the date for beginning payments be moved up to Jan. 1, 1940. In addition, supplemental benefits were granted to the wives and widows of insured individuals, and to the young children of insured persons who died before reaching retirement age.

Finally, the Board recommended paying larger benefits than originally provided for in the Social Security Act to those who would retire during the early years of the system. As Roosevelt explained it, "Under the original Act, the basic amount paid in old-age retirement benefits was computed from the total accumulated wages of the person retiring. Thus, an individual who reached 65 within a short time after the passage of the Act would not have a very large annuity because the wages accumulated would be small. Under the amendments adopted in 1939, the basis for paying benefits was changed from accumulated wages to average wages. In this way, a person retiring in the early years of the system would receive more than a paltry amount."

While the Board was debating on how to improve the Social Security program, President Roosevelt made a radio address on Aug. 15 to commemorate the third anniversary of the Social Security Act. He opened his address by saying that the legislation was three years old, and that "This is a good vantage point from which to take a long look backward to its beginnings, to cast an appraising eye over what it has accomplished so far, and to survey its possibilities of future growth."

He then stated that, "Five years ago the term 'Social Security' was new to American ears." But now, he said, it had significance for the more than 40 million workers whose applications for old-age insurance had been received; for the more than 27 million wage earners who had earned credits under state unemployment insurance laws; and for more than 2 million needy men, women, and children who were receiving assistance. In the last group, "One million, seven-hundred thousand old folks are spending their last years in surroundings they know and with people they love; more than 600,000 dependent children are being taken care of by their own families; and about 40,000 blind people are assured of peace and security among familiar voices."

President Roosevelt cited the accomplishments of the past three years as being impressive, but said, "We should not be unduly proud of them. Our government, in fulfilling an obvious obligation to the citizens of the country, has been doing so only because the citizens require action from their representatives. If the people, during these years, had chosen a reactionary administration or a 'do nothing' Congress, Social Security would still be in the conversational stage—a beautiful dream which might come true in the dim distant future."

Roosevelt continued: "Long before the economic blight of the Depression descended on the nation, millions of our people were living in wastelands of want and fear. Men and women too old and infirm to work either depended on those who had but little to share, or spent their remaining years within the walls of a poorhouse. Fatherless children early learned the meaning of being a burden to relatives or to the community. Men and women, still strong, still young, but discarded as gainful workers, were drained of self-confidence and self-respect.

"The millions of today want, and have a right to, the same security their forefathers sought—the assurance that with health and the willingness to work they will find a place for themselves in the social and economic system of the time.

"Because it has become increasingly difficult for individuals to build their own security single-handed, government must now step in and help them lay the foundation stones, just as government in the past has helped lay the foundation of business and industry. We must face the fact that in this country we have a rich man's security and a poor man's security and that the government owes equal obligations to both. National security is not a half-and-half matter; it is all or none.

"Some time ago, I directed the Social Security Board to give attention to the development of a plan for liberalizing and extending the old-age insurance system to provide benefits for wives, widows, and orphans. More recently, a National Health Conference was held at my suggestion to consider ways and means of extending to the people of this country more adequate health and medical services, and also to afford the people of this country some protection against the economic losses arising out of ill health.

"I am hopeful that on the basis of studies and investigations now under way, the Congress will improve and extend the law. I am also confident that each year will bring further development in Federal and state Social Security legislation—and that is as it should be. One word of warning, however. In our efforts to provide security for all of the American people, let us not allow ourselves to be misled by those who advocate short cuts to Utopia or fantastic financial schemes.

"We have come a long way. But we still have a long way to go. There is still today a frontier that remains unconquered—an America unreclaimed. This is the great, the nation-wide frontier of insecurity, of human want and fear. This is the frontier—the America—we have set ourselves to reclaim."

All rights reserved © 2005 EIRNS