In March 1934, a year into Franklin D. Roosevelt's first term, a woman from North Dakota wrote the president:
“I am now 72 years old and have never had anything. I have always been poor and always worked hard, so now I am not able to do any more. I am all worn out but am able to be around and I thank God that I have no pains. It is hard to be old and not have anything. I do not own as much as one cent to my name, so I know God would bless you, if you could help us to get more money for pension, so we would have enough to eat.''
In 1934, outside of emergency assistance, neither Roosevelt nor the private sector had much to offer her.
Being elderly in an industrial society, as America had become in the early 20th century, was not easy. Few jobs offered pensions or retirement plans, and for most workers living close to the bone, day-to-day expenses overwhelmed saving for old age.
Most elderly people worked as long as they possibly could, then moved in with family. If they had no family, they would be warehoused in charitable homes for the elderly, or county poorhouses, which by the 1920s had become dumping grounds for impoverished old people.
Being elderly was even harder during the Depression. As unemployment passed 20 percent in the early 1930s, older workers were among the first fired. Emergency relief from towns, states and finally the federal government saved many from starving, but when economic recovery did not materialize during Roosevelt's first year in office, radicals offered alternatives. Huey Long, the charismatic and controversial senator from Louisiana, proposed a “Share the Wealth'' program radically redistributing income.
But it was Francis Townsend, an elderly doctor from California, who caught the attention of older Americans. He proposed that people older than 60 should receive $200 every month from the government on the condition that they would not work, and would spend the entire pension every month — thus, in one fell swoop, relieving old people, freeing up jobs and injecting money into the economy. Groups of the elderly formed “Townsend Clubs'' nationwide and flooded their congressional representatives with demands to enact Townsend's proposal.
Roosevelt responded with Social Security. While committed to the idea that the government had a role in helping the needy, FDR thought Long too radical and Townsend's plan too expensive. The 1935 Social Security Act, he hoped, would derail these movements by offering “social insurance'' to the elderly and the unemployed — government guaranteed assistance to reduce the impact of two of the most common causes of poverty, old age and unemployment.
Social Security's original provisions also provided for payments to the elderly in absolute poverty (regardless of work history), and to those who were blind. Over time, coverage for people with other disabilities was added and was consolidated in 1972 under Supplemental Security Income, a less heralded but extremely important element of the program. Similarly, benefits were added in 1939 for survivors of Social Security recipients, adding a level of family security to a program that was originally written for individual workers.
It remains the basic fabric of the weak public safety net in the United States, and, along with Medicare (passed in 1966), its most successful element. In 1999, 8 percent of Social Security recipients were classified as poor; without Social Security, 48 percent would have been considered poor.
Memories of the Depression fade, and with them, the sense of how precarious life was for most elderly people even before the crash of 1929. Social Security, to many, seems like a poorer version of an individual retirement account. Advocates for privatization use this analogy, and urge, at the very least, the chance for those with a taste of risk to opt out.
It is worth noting that private-sector programs have had their own troubles as of late — note United Airlines' proposal to renege on its pension plan, the emptying of retirement plans at Enron and elsewhere, and those who have had to push their retirement dates back when their portfolios lost value with the decline in the stock market.
In addition to the huge costs it would take to cover those funds that left the system to maintain payments for current recipients (and the fees that would go to private brokers), such a policy erodes the common commitment this country has made to the elderly.
We may forget how important Social Security, meager as it may seem, remains to many elderly people — in 2003, Social Security was the major source of income (50 percent or more) for 65 percent of the elderly, and the only source of income for 20 percent of the elderly.
Instead of regarding it in the same light that the luckier among us look at their stock portfolios, a more accurate way to think about Social Security, as historian Michael Katz suggests in “The Price of Citizenship,'' is as a form of social insurance against poverty in old age, and by comparison, hold it up against the other forms of insurance that we regularly invest in.
In that light, it is not a bad deal — by all participating in it, we all extend help to those who need it the most.
Efforts to radically reform Social Security gained more traction in the late 1990s, mostly because of dire predictions about the financing of the program. While Social Security is facing problems, this is nothing new.
The architects of the program anticipated that eventually the contributory base would erode, and that the plan would have to be adjusted — most likely, in their view, with additional tax dollars. Time and again, Congress has revisited Social Security — in 1939, in 1950, in 1972, in 1983, to name the most significant, broadening its coverage and solidifying its finances.
Many of the demographic and economic figures that underlie the dire predictions are essentially unpredictable, and while we should not be afraid to countenance reform, we should do so with a sense of history and proportion.
The Depression generation learned the hard lesson that the vagaries of the free market can undermine the best-laid plans of individuals for their future; thus, their tenacious defense of Social Security as an element of protection, through the government, underlying their own lifetimes of hard work.
The generations subsequent to them have seen less need, and have less faith, in this role for the government, and the ideological climate of the early 21st century does not seem to support the language of social commitments through broad government programs like Social Security.
On the other hand, while Americans have shied away from the language of “big government,'' they remain very much attached to big government programs such as Social Security, and it will be interesting to see, when push comes to shove, how successful market-based reforms actually are.
We can hope that a 1929 stock market crash will never happen again, but keeping in mind how bad the elderly once had it — and the precarious situation of many today — may prompt us for renewed efforts to keep the “social'' in Social Security.
All Times Union materials copyright 1996-2004, Capital Newspapers Division of The Hearst Corporation, Albany, N.Y.