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Copyright ©2011 Pearson Education Inc. All rights reserved.

CHAPTER 8 Aging:

Social Security as an EntitlementThe Policy-Based Profession

An Introduction to Social Welfare Policy Analysis

for Social WorkersFifth Edition

Philip R. Popple & Leslie LeighningerSlides by Heather Kanenberg, University of Houston, Clear Lake

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Social Security

• Debate for years over the concept of entitlements

• Ultimately Social Security Old Age Insurance and other programs are entitlements in today's society.

• Old Age Insurance portion of Social Security focuses on the common needs of the elderly


Social Security: The Problem

• Why was social security developed?– Address the issue of poverty during old age

– In 1930 almost 60% of men over 65 years old were still employed

– The Depression – wiped out most alternative sources of income for veterans, federal employees, state/local governments employees and took lifelong savings’ out of the bank for many


Social Security Act of 1935

• Franklin D. Roosevelt – August 14, 1935 created the Social Security Act.– Two social insurance programs and three public assistance programs– Title 1 = Grants to states of Old Age Assistance (OAA) Feds pay 50%

of the amount spent on public assistance to those over 65 in poverty– Title 2 = Federal Old Age Benefits; Social Security Old Age benefits to

those 65 and over; payments began in 1942; no retired worker could receive more than $35 a month

– Title 8 = described and identified the funding source for the old age insurance program.

– Title 3 & 9 = the fed/state unemployment compensation system; States setting their own unemployment law;

– Title 4 = Aid to Dependent children; – Title 10 = Aid to the blind


Social Security: Historical Analysis

• What actions and activities lead to the development of Social Security? – Jane Addams, Rubinow, Epstein promoted the

German model– The Great Depression & Dr. Townsend– Francis Perkins & Harry Hopkins along with

others pulled a committee together to create the legislation.

– A bill to address social adequacy (public assistance) and social equity (tied to wage contributions)


Social Security: Historical Analysis (cont.)

• Major Changes to the program over time (incremental policy change):– Addition of family benefits – paternal role of government

but still associated with the idea of work related insurance– 1939 Sped up benefits distribution to 1940 (originally due

in 1942)– 1950 increased benefits to parity with OAA; (old age

assistance program)– 1954 – Domestic workers; farmers & Self employed added;– 1956 – Benefits extended to workers with permanent

disability aged 50 and over– 70’s – brought extensions in benefits


Social Security: Historical Analysis (cont.)

• Major Changes Cont’d:– Kennedy & Johnson – 3 major increases to benefits;

addition of Medicare and Medicaid in 1965;– OASDI – benefits to disabled workers of all ages and their

dependents (old age survivors and disability insurance)– 1972 – political battles lead to a connection between the

OASDI benefits and Cost of Living Increases– OAA was transformed into SSI – federally funded but no

increase in payroll taxes;– 1980’s financial crisis became very visible as income did

not match payments


Social Security: Social Analysis

• January 2009 – 48.5 million enrollees with average payments of $1, 056.30 per month

• Equity for Women? – 2007 $896 for women vs. $1,184 for men

–Widows receive only a percentage of their husbands’ social security benefits

• Competing social values: adequacy vs. equity; entitlement; those who deserve support; etc.


Social Security: Political Analysis

• Stakeholders involved: Unions, retired workers, members of congress, low-income workers, organized groups/advocates, AARP, employers, those running for office, etc.

• The elderly are a very active voting block

• Partisan politics when it comes to discussions of the solvency of the funding and proposals for reform


Social Security: Economic Analysis & Proposals for Reform

• Overarching Question concerns the solvency of the Reserves that pay for Social Security Benefits

• Payment exceed benefits until 2013; addition of baby boomers could lead to complete depletion of the trust fund by 2029

• George W. Bush Proposal to Privatize – his efforts to promote the concept among Congress and general public failed


Social Security: Economic Analysis & Proposals for Reform (cont.)

• Proposals for reform were part of the 2008 presidential campaign; no action taken as of yet

• Potential areas for reform:– Reasonable flat grants for all elderly people; coupled with a

secondary pension based contribution– Widen Coverage to include grants for all families to bring

them up to a reasonable standard of living…or universal children’s allowances

– Homemaker credits in a pension system to provide equality to women who work in the home

– Increase the cap on income taxation for those earning over $106,800

– Reforming pension systems

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