- Introduction
- New Deal Programs
- Civilian Conservation Corps (CCC)
- Tennessee Valley Authority (TVA)
Social Security Act of 1935- Practice
- Task
Social Security Act of 1935
| Signing of the Social Security Act, 1935 | |||
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| Signing of the Social Security Act, 1935. U.S. Social Security Administration, 14 August 1935. This image is in the public domain. |
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| Signing of the Social Security Act, 1935 |
The most significant New Deal law was the Social Security Act of 1935. It was not designed to end the Depression. It represented, rather, a fundamental change in the role of the federal government; for the first time in its history, the federal government took responsibility for providing a "safety net" for the most needy Americans. The program continues to this day, more than seventy years since its establishment.
The Social Security Act provides government payments, under strict guidelines, to retirees, the unemployed, families with dependent children, and disabled Americans. FDR saw the act as providing a modest fund for the aged and the unemployed. It also provides some money for families—such as single mothers—who have insufficient income to feed their children. Finally, the disability payment goes to those who cannot work. England and other western European nations established such programs years before.
The funding for the old-age pension comes from a mandatory payroll tax (today, 6.2 percent) on employees' income; each employer has to match the employee contribution. The unemployment fund derives from a tax on employers only. The aid to families with dependent children and the disability payments are funded out of the general treasury.
In recent years, President George W. Bush and the Republicans have sought to "privatize" Social Security. They want the government to allow individuals to take, say, half of the 6.2 percent deduction and invest it for themselves. "Privatization" is just one of the proposals offered to shore up the struggling Social Security pension fund. As the "baby boomer" generation, those born from 1945–1964, reaches retirement, there are not enough workers to fund the plan. Clearly, Congress in coming years will have to revise the Social Security system so that future retirees will have their pension.
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