Creation: The Social Security Act
Posted on:4/19/2009
| The Social Security Act was drafted by President Roosevelt's committee on economic security, under Edwin Witte, and passed by Congress as part of the New Deal. It was controversial when originally proposed, with one point of opposition being that it would cause a loss of jobs. However, proponents argued that that was in fact an advantage |
President Roosevelt signs Social Security Act,
The Social Security Act was drafted by President Roosevelt's committee on economic security, under Edwin Witte, and passed by Congress as part of the New Deal. It was controversial when originally proposed, with one point of opposition being that it would cause a loss of jobs. However, proponents argued that that was in fact an advantage: it would encourage older workers to retire, thereby creating opportunities for younger people to find jobs, which would lower the unemployment rate. Historian Edward Berkowitz subsequently contended that the Act was a cause of the "Roosevelt Recession" in 1937 and 1938. However, the program has gone on to be one of the most popular government programs in American history.
The Act is formally cited as the Social Security Act, ch. 531, 49 Stat. 620 at 15:40 on (14 August 1935), now codified as 42 U.S.C. ch.7. The Act is also known as the Old Age Pension Act. The Act provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payments to current retirees were (and continue to be) financed by a payroll tax on current workers' wages, half directly as a payroll tax and half paid by the employer.
In the 1930s, the Supreme Court struck down many pieces of Roosevelt's New Deal legislation. In the spring of 1935, Justice Roberts joined with the conservatives to invalidate the Railroad Retirement Act. In May, the Court threw out a centerpiece of the New Deal, the National Industrial Recovery Act. In January 1936, a passionately split Court ruled the Agricultural Adjustment Act unconstitutional. In another case from 1936, the Court ruled New York state's minimum-wage law unconstitutional. President Roosevelt responded with an attempt to pack the court via the Judiciary Reorganization Bill of 1937. On 5 February 1937, he sent a special message to Congress proposing legislation granting the President new powers to add additional judges to all federal courts whenever there were sitting judges age 70 or older who refused to retire.[8] The practical effect of this proposal was that the President would get to appoint six new Justices to the Supreme Court (and 44 judges to lower federal courts), thus instantly tipping the political balance on the Court dramatically in his favor. The debate on this proposal was heated and widespread, and lasted over six months. Beginning with a set of decisions in March, April, and May, 1937 (including the Social Security Act cases), the Court would sustain a series of New Deal legislation.