On August 14, 1935, President Franklin D. Roosevelt signed the Social Security Act, creating a federal safety net for elderly, unemployed, and disadvantaged Americans. The act provided financial benefits to retirees over the age of 65 based on lifetime payroll tax contributions. A cornerstone in the structure being built by Roosevelt, the act also established the Social Security Board, which later became the Social Security Administration. The legislation was the culmination of work begun by the Committee on Economic Security, created by Roosevelt in 1934.
Following the signing of the Social Security Act, a three-person board was established to administer the program with the goal of starting payroll tax deductions for enrollees. By November 1936, registration for the program began, although not everyone could initially participate. Self-employed professionals, field hands, and domestic workers were excluded from the program. Workers who were eligible completed an application at their local post office and received a national identity card, which is now known as a Social Security card.
Over the years, the Social Security Act was amended several times. In 1939, child, spouse, and survivor benefits were added to the retirement benefits authorized by the original act. In 1940, Ida M. Fuller became the first person to receive a monthly benefit, and in the 1950s, benefit amounts were increased, and coverage became close to universal. The program continued to evolve, with the creation of the Medicare program in 1965 and the establishment of Supplemental Security Income in 1972.
As of February 2023, about 66 million people, or one in five U.S. residents, collected Social Security benefits. The program faces financial challenges, with the trust fund expected to run short of cash by 2033. This could potentially reduce benefits for millions of Americans who depend on the program. The primary challenge for Social Security is a demographic issue, as the number of retirees is increasing as the number of workers paying into the program is decreasing.
To address the financial challenges of the program, it may require changes such as increasing payroll taxes, raising the retirement age, or adjusting benefit amounts. While the future of Social Security remains uncertain, it has been a vital safety net for millions of Americans since its inception in 1935. The program continues to provide financial support to retirees, disabled individuals, and survivors, demonstrating its importance as a cornerstone of the U.S. social safety net.
