Social security and pension funds: History and future

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The original Social Security Act was drafted during Franklin Roosevelt's first term as president and passed by Congress under FDR's New Deal. The act was an attempt to limit what was seen as dangers in modern American society, including old age, poverty, unemployment and the burdens of widows and fatherless children. By signing the act on August 14, 1935 Roosevelt became the first president to advocate federal assistance for the elderly. The Social Security Act provided benefits to retired persons and the unemployed and a lump sum benefit at death. The act also gave money to states to provide assistance to the elderly, for unemployment insurance, aid to families with dependent children, maternal and child welfare, public health services and the blind.

At first many opposed the creation of Social Security because many felt that it would cause a loss of jobs. Those who were for it felt it would encourage older, tired workers to retire, thereby creating opportunities for younger people to find jobs, which would lower the unemployment rate.

Most women and minorities were excluded from the benefits of unemployment insurance and old age pensions. Job categories that were not covered by the act included agricultural labor workers, domestic workers, government employees, teachers, nurses, hospital employees, librarians and social workers. The act also denied coverage to people who worked intermittently. These jobs were dominated by women and minorities. These jobs were dominated by women and minorities. Women generally qualified for insurance only through their husbands or children.

In 1937 payroll taxes were first collected and the first benefits were paid, including death benefits to over 50,000 beneficiaries. In 1940 benefits paid out totaled $35 million. Amendments to the Social Security Act included the Creation of the Social Security Trust Fund in 1939 to accommodate any surplus funds; greater family ...