Social Security--Yesterday and Tomorrow<...>
Of course, the great omission in the 1935 Social Security Act was health insurance. The Committee on Economic Security stated in its report that its staff had prepared a tentative plan which was being studied by several professional advisory groups which had requested an extension of time. The Committee further stated that, therefore, it could not present a specific plan. But the Committee did list what it called "broad principles and general observations which appear to be fundamental to the design of a sound plan of health insurance."
In 1938, after a conference with the President, it was decided to call a National Health Conference. The public support for a national health program which included health insurance was amazing. The President was so enthusiastic that his first inclination was to make the health program an issue in the 1938 campaign. He then said he thought it would be better to make it an issue in the 1940 Presidential campaign. World War lI then intervened.
But, before the war broke out, it was possible to secure amendments to the Social Security Act which converted the federal old-age insurance system into an old-age and survivors insurance system, providing widows' and orphans' benefits as well as benefits for aged beneficiaries and their dependents. The public assistance titles were improved by providing more liberal federal matching, by protecting the confidential character of the records and by requiring a merit system for State and local personnel. It is ironical to note that in 1935 it was not possible to get a merit system requirement in the public assistance titles because a prominent member of the Ways and Means Committee said he didn't want any damned social workers telling his people what kind of persons they had to hire. The reason for the change of heart by the Committee was due to the fact that non-civil service State and local employees were being used for political purposes, sometimes to the disadvantage of members of the Committee. This was also the reason for making the assistance records confidential.
I failed to convince the Ways and Means Committee of the desirability of varying the matching ratio for public assistance in inverse proportion to the per capita income of each State -- that is, paying a higher proportion of the cost in low income States than in high income States. It was not until 1960 that such a matching formula was included in the public assistance titles.
The Social Security Board was kept rather busy putting into effect the 1939 changes in the Social Security Act. But, nevertheless, it did recommend to the President in 1941, just before Pearl Harbor, that a comprehensive social insurance system be established, including not only old-age and survivors' insurance, but also temporary and permanent disability benefits, unemployment insurance and cash hospitalization benefits. The Board also recommended federal grants for public assistance to all needy persons. It is interesting to note that, although President Roosevelt said at his first press conference following Pearl Harbor that "old Dr. New Deal" had to be replaced by "Dr. Win-the-war", he included in his January 1942 Budget Message all of the recommendations the Board had made except federal aid for all needy persons.
The famous Beveridge "Cradle-to-the-Grave" report came out in November 1942 and I was able to have included in the President's State of the Union Message a few weeks later the following passage: "When you talk with our young men and women you will find that with the opportunity for employment they want assurance against the evils of all major economic hazards -- assurance that will extend from the cradle to the grave. This great Government can and must provide this assurance."
The research staff of the Social Security Board assisted Senators Wagner and Murray and Congressman Dingell in the preparation of a comprehensive social security plan. However, the President did not specifically support the Wagner-Murray-Dingell Bill and it died in Committee.
The President did continue to show his interest in a comprehensive social security program. Thus, in October 1944 he called for an Economic Bill of Rights, including:
"The right to adequate medical care and the opportunity to achieve and enjoy good health.
"The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment."
In his last Message on the State of the Union in January 1945, he again urged an expanded social security program and health and education programs, saying, "I shall communicate further with the Congress on these matters at a later date." But he died three months later.
President Truman, in a message on September 6, 1945, signalling the beginning of the Fair Deal, said he favored "extending, expanding and improving our entire social security program." A few months later he sent a message to Congress outlining a broad national health program, including a federal health insurance system. Bills were introduced by Senators Wagner and Murray and Congressman Dingell to give effect to the President's program but no hearings were held until 1946.
In 1946, 1947 and 1948 the President repeated his recommendations regarding improvements in the Social Security Act. In May 1948 he sent a special message on social security. But his recommendation regarding health insurance attracted the most attention.
Republican leaders introduced rival health bills. The major difference between the Republican bills and the Administration bill was that the Republican bill provided only for grants-in-aid to the States to assist them in furnishing medical care for needy persons instead of a national health insurance system coveting the cost of medical care without applying a means test.
Extended hearings were held throughout 1946, 1947 and l948. Some health legislation resulted, notably the 1946 Hospital Survey and Construction Act and the expansion of the National Institutes of Health. But no legislative action was taken on health insurance.
Actually, for the whole decade following 1939, there was no legislation increasing the benefits or any general extension of coverage of the social insurance titles. There was a 1948 amendment to the public assistance titles increasing the federal matching ratio. But the public assistance amendment was included in a bill which narrowed the definition of "employee" under the Old Age and Survivors Insurance System so as to exclude a half million workers. This exclusion and health insurance were made issues by President Truman in the 1948 campaign when he attacked the record of what he called "the terrible 80th Congress."
This decade might perhaps be called The Lost Decade for social security as a whole if measured by actual legislation passed. But throughout that entire period the members of the staff of the Social Security Board and Social Security Administration had devoted themselves wholeheartedly to administration of the existing provisions of the Social Security Act and to research as regards its improvement. They had won the confidence of their associates in the Federal and State governments and they had won the confidence of Congressional leaders of both parties. I like to believe that this well-earned confidence, built up in this decade, contributed greatly to the legislative developments which came later
At any rate, the election of President Truman and a Democratic Congress seemed to constitute something of a mandate for social security legislation. I hoped so because I felt that the events of 1949 would be decisive as to whether the old age and survivors' insurance system would survive. Twice as many persons were receiving old age assistance as were receiving retirement benefits under this insurance system. Moreover, the average monthly assistance payment was almost double the average monthly retirement benefit. I felt that, if the old age and survivors' insurance system failed, any hope for a comprehensive social insurance covering all major economic hazards was remote indeed.
There were long drawn out hearings. But the amendments finally enacted in 1950 unquestionably represented a major advance in strengthening our social security system. Many millions of workers, including more than half of the self-employed, were brought under old age and survivors' insurance and benefits were increased by 80%. Federal matching was provided for assistance to needy persons permanently and totally disabled.
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