Social Security Act
The Social Security Act, Pub.L. 74-271, 49 Stat. 620, enacted August 14, 1935, now codified as 42 U.S.C. ch.7, was a legislative act which created the Social Security system in the United States.
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[edit] Overview
The Social Security Act was drafted during Roosevelt's first term by the President's Committee on Economic Security, under Frances Perkins, and passed by Congress as part of the New Deal. The act was an attempt to limit what were seen as dangers in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children. By signing this act on August 14, 1935, President Roosevelt became the first president to advocate federal assistance for the elderly.[2]
The Act provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payments to current retirees are financed by a payroll tax on current workers' wages, half directly as a payroll tax and half paid by the employer. The act also gave money to states to provide assistance to aged individuals (Title I), for unemployment insurance (Title III), Aid to Families with Dependent Children (Title IV), Maternal and Child Welfare (Title V), public health services (Title VI), and the blind (Title X).[2]
[edit] Constitutionality
In the 1930s, the Supreme Court struck down many pieces of Roosevelt's New Deal legislation, including the Railroad Retirement Act. The Court threw out a centerpiece of the New Deal, the National Industrial Recovery Act, the Agricultural Adjustment Act, and New York State's minimum-wage law. President Roosevelt responded with an attempt to pack the court via the Judiciary Reorganization Bill of 1937. On February 5, 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.[3] 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 thing 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.[4]
Two Supreme Court rulings affirmed the constitutionality of the Social Security Act.
- Steward Machine Company v. Davis, 301 U.S, 548[5] (1937) held, in a 5–4 decision, that, given the exigencies of the Great Depression, "[It] is too late today for the argument to be heard with tolerance that in a crisis so extreme the use of the moneys of the nation to relieve the unemployed and their dependents is a use for any purpose narrower than the promotion of the general welfare". The arguments opposed to the Social Security Act (articulated by justices Butler, McReynolds, and Sutherland in their opinions) were that the social security act went beyond the powers that were granted to the federal government in the Constitution. They argued that, by imposing a tax on employers that could be avoided only by contributing to a state unemployment-compensation fund, the federal government was essentially forcing each state to establish an unemployment-compensation fund that would meet its criteria, and that the federal government had no power to enact such a program.
- Helvering v. Davis, 301 U.S. 619 (1937), decided on the same day as Steward, upheld the program because "The proceeds of both [employee and employer] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way". That is, the Social Security Tax was constitutional as a mere exercise of Congress's general taxation powers.
[edit] References
- ^ "History 1930". Social Security Administration. http://www.ssa.gov/history/1930.html. Retrieved May 21, 2009.
- ^ a b Achenbaum, Andrew (1986). Social Security Visions and Revisions. New York: Cambridge University Press. p. 25-6.
- ^ Supremecourthistory.org[dead link]
- ^ "Social Security Administration". Ssa.gov. http://www.ssa.gov/history/court.html. Retrieved 2011-09-11.
- ^ "Steward Machine Company vs. Davis, 301 U.S, 548". http://www.oyez.org/oyez/resource/case/368/. Retrieved December 3, 2005.[dead link]
