Roosevelt signs the Social Security Act; the elderly get a federal pension
Six years into the Great Depression, millions of older Americans had no pension and no savings to fall back on. On August 14, 1935, Franklin D. Roosevelt signed the Social Security Act, establishing a federal old-age pension funded by payroll taxes, alongside unemployment insurance run by the states and aid to families headed by single mothers. It was the first time Washington took formal responsibility for the economic security of Americans who were old, out of work, or raising children alone. Millions of farmworkers, domestic servants, and government employees were excluded from coverage at the start.
Social Security grew into the federal government's largest and longest-running commitment to its citizens, and it is credited with a sharp decline in poverty among the elderly over the following decades. Who it covered, and who it excluded, remained a point of political fights for decades afterward.
QWho was Roosevelt's real rival for the pension debate, and what did he want instead?
Physician Francis Townsend built a nationwide movement demanding a flat monthly payment for every American over sixty, funded by a national sales tax, with the requirement that recipients spend the money right away to stimulate the economy. Townsend Clubs sprang up across the country and pressured Congress directly. Roosevelt's Committee on Economic Security, chaired by Frances Perkins, was assembled largely to offer a more fiscally cautious, insurance-based alternative before Townsend's plan gained enough momentum to pass on its own terms.
QWhich workers were left out of Social Security when it first passed?
The 1935 law excluded agricultural laborers, domestic servants, most government employees, and many teachers, nurses, hospital workers, librarians, and social workers. Because so many Black Americans worked in farm labor and domestic service in 1935, the exclusions left about 65 percent of the Black workforce uncovered, compared with 27 percent of white workers. Congress closed most of these gaps through later amendments, but the original law covered only a fraction of American workers.
QWhat was Aid to Dependent Children, and who did it target?
Tucked inside the same 1935 law was a separate program, Aid to Dependent Children, providing federal aid to families headed by single mothers. It ran alongside the old-age pension and the state-administered unemployment insurance system created by the same act. Together, the three programs marked the first time the federal government took on responsibility for old-age support, unemployment, and aid to children in a single law.
