DOCUMENT RESUME ED 262 315 CG 018 550 TITLE Fifty Years of Social Security: Past Achievements and Future Challenges. An Information Paper Prepared for Use by the Special Committee on Aging. United States Senate, Ninety-Ninth Congress, First Session. INSTITUTION Congress of the U.S., Washington, D.C. Senate Special Committee on Aging. REPORT NO Senate-Prt-99-70 PUB DATE 13 Aug 85 NOTE 96p.; These essays were commissioned by Carnegie-Mellon University for a special coherence and committee meeting held there on August 13, 1985. PUB TYPE Collected Works General (020) -- Legal /Legislative /Regulatory Materials (090)-- Viewpoints (120) EDRS PRICE MF01/PC04 Plus Postage. DESCRIPTORS *Disabilities; *Females; History; *Labor Economics; Older Adults; *Policy Formation; Position Papers; *Public Policy IDENTIFIERS *Social Security ABSTRACT This document contains six essays examining the history and impact of the social securityprogram on America's economic and social development. "Social Security: The Cornerstone of American Social Welfare Policy," by Malcolm H. Morrison,presents brief background information on the system and discussesthe basic principles of social security. The second section ofthe paper describes the changing profile of the aging population which will require modifications in the social securitysystem. "Social Security: A Source of Support for All Ages," by W. AndrewAchenbaum, reviews the development of social security and offersa three-stage strategy for renewing the system: job training for older workers, assurance of universal coverage, and recognition of the changed status of women. "Emerging Issues in Disability Policy," by EdwardD. Berkowtiz, discusses the stages of development and policyproblems in the disability insurance program along with recommendationsto address those problems. "Social Security and Labor Market Policy," by Ben Fischer and Edward Montgomery, assesses the impact of the social security system on America's labor market. "Social Securityand the Changing Role of Women," by Gail Buchwalter, explores needsof women who do not have traditional work patternsor family lifestyles and concludes that the social security system has not sufficiently addressed their needs. "Contemporary Social Security inComparative Perspective: What Kind of Crisis?" by Peter N. Stearns, reviewsthe history of American social security in light ofEuropean trends in order to examine the distinctiveness of basic policy assumptions. (MCF) *********************************************************************** Reproductions supplied by EDRS are the best thatcan be made from the original document. *********************************************************************** 99th Congress .I S. PRT. COMMITTEE PRINT 1st Session j j 99-70 FIFTY YEARS OF SOCIAL SECURITY: PAST ACHIEVEMENTS AND FUTURE CHALLENGES AN INFORMATION PAPER PREPARED FOR USE BY THE SPECIAL COMMITTEE ON AGING UNITED STATES SENATE US. DEPARTMENT OF EDUCATION NATIONAL INSTITUTE OF EDUCATION ED CATIONAL RESOURCES INFORMATION CENTER (ERIC) This document has been reproduced as received from the person or organization originating it O Minor changes have been made to improve reproduction quality Points of view or opinions stated in this docu merit do not necessarily represent othcral NIE position or poIocv AUGUST 1985 0 Lri Serial No. 99-C Ill CO 0yrs CD C.) This document has been printed for information purposes. It does not offer findings or recommendations by this committee. U.S. GOVERNMENT PRINTING OFI ' ^E 49 -9450 WASHINGTON : 1985 BEST COPY AVAILABLE 2 SPECIAL COMMITTEE ON AGING JOHN HEINZ, Pennsylvania, Chairman WILLIAM S. COHEN, Maine JOHN GLENN, Ohio LARRY PRESSLER, South Dakota LAWTON CHILES, Florida CHARLES E. GRASSLEY, Iowa JOHN MELCHER, Montana PETE WILSON, California DAVID PRYOR, Arkansas JOHN W. WARNER, Virginia BILL BRADLEY, New Jersey DANIEL J EVANS, Washington QUENTIN N. BURDICK, North Dakota JEREMIAH DENTON, Alabama CHRISTOPHER J. DODD, Connecticut DON NICKLES, Oklahoma J. BENNETT JOHNSTON, Louisiana PAULA HAWKINS, Florida JEFF BINGAMAN, New Mexico STEPHEN R. MCCONNELL, Staff Director DIANE LIPSEY, Minority Staff Director ROBIN L. KROPF, Chief Clerk (U) 3J8AJ1AVA MOO BM PREFACE Fifty years ago this August, President Franklin Delano Roosevelt signed into law one of the most significant bills in American histo- rythe Social Security Act. With a stroke of his pen, President Roosevelt sealed a compact among all future generations of Ameri- cans. This compact, conceived in one of our Nation's darkest hours, recognized that dependency and destitution too often are the com- panions of old age. The Social Security Act symbolizes a national commitment to defend the average citizen and his family against these grim companions. The true genius of social security is that it captures is law two fundamental American principles: A fierce commitment to individ- ual economic independence, and the belief that interdependence and mutual self-help are necessary for the larger social good. Social se- curity shields the working population from the burden of support- ing their elders, while assuring a dignified source of income for those who no longer work. This compact among generations has underwritten the success of the program for the past 50 years and guarantees its viability for the future. While 50 years ago most Americans' struggled with the very concept of "social security," today social security touches the lives of nearly everyone in this country. It is the foundation of cr,-._ Nation's social policy. The Senate Special Committee on Aging has undertaken several projects to commemorate this anniversary year. This selection of essays, commissioned by Carnegie-Mellon University,is being printed for release at a special conference and committee briefing held on the campus of CMU, on August 13, 1985. Theseessays pro- vide an historic.: window on the social security program and its impact on America's economic and social development. The birth of social security 50 years ago was greeted with great hope, and great skepticism. The program has borne the tests of time, of revisions, and of continued skepticism. It stands today intact, true to its underlying compact, a tribute to the genius of the American spirit and the dignity of our national commitment to the greater good. JOHN HEINZ, Chairman. 7. EXECUTIVE SUMMARY (W. Andrew Achenbaum) Many individuals spend their 50th birthday assessing what they have accomplished, what challenges lie aheadand what strategies are most likely to prove successful in meeting them. As social secu- rity passes through a climacteric of its own during the 50th anni- versary of its enactment, a similar retrospective analysis and con- sideration of the future seems just as appropriate. Indeed, it ises- sential for the program, for the millions who depend or will depend on it, and ultimately for the health of the American body politic. Any assessment must begin by acknowledging that social securi- ty's size, scope, costs, and technical jargon overwhelm all buta few who have the ability and patience to fathom the system's complex- ity. Those who are not numbed by the numbers often sharean opinion expressed by Yale law professor and New Deal advisor Thurman Arnold in 1935, the year the original Actwas passed: "Bureaucracy is probably the most important of our negativesym- bols. It does not hold up an ideal. Instead. it picturesa vague terror." Social security's critics would contend that Arnold's obser- vation has proven sadly prophetic. A "crisis mentality" has pervaded discussions about theprop am since the mid-1970's. The Nation's elderly, who depend on social se- curity as a primary means of economic support, worry that their retirement and health-care benefits will be cut amid mounting defi- cits in the Federal budget. Younger workers increasingly doubt that there will be any funds to support them in their old age. Poll- sters have documented a steady erosion of confidence in the system. Yet there is another, equally important, side to the story. For 50 years social security has played a central role in providing protec- tion to American families for contingencies they invariably face in a "modern" society. Social security has evolved into the country's largest and costliest domestic program is part because it is also its most successful one. More than 36 million people are eligible for old-age, survivors, and disability (OASDI) pensions. More thana quarter of all households in the United States receive benefits monthly. Through 1,300 local offices, 10 regional headquarters, and central offices in Baltimore and Washington, the Social Security Administration issues some 432 million checks each year and han- dles 380 million other transactions, making mistakes only 1 per- cent of the time. Less than 2 percent of its operating budget covers overhead costs. This is a remarkable1 elLAJI u fc.,i- any bureaucracy. From the very beginning, social security has been intended to serve the best self-interests of the American people. Franklin Delano Roosevelt considered it a cornerstone for "the kind of pro- tection Americans want." Social security's faithful servantsin- (v) VI eluding Robert Ball, Lenore Bixby, Douglas Brown, Wilbur Cohen, Ida Merriam, and Robert Myershave demonstrated a pragmatic capacity to dispense with a narrow view of political expediency in adapting OASDHI to changing human needs. Nonetheless, social security has reached a critical juncture in its maturation. The 1983 amendments temporarily defused concern over the financial health