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The Politics of Social Security Expansion: Social Security Disability Insurance, 1935–19861

  • Edward Berkowitz (a1) and Daniel M. Fox (a2)

Extract

In 1956 President Eisenhower signed an amendment to the social security program that created disability insurance. His action marked the end of a sharp debate over disability insurance and the beginning of two decades of consensus concerning the program. Thirty years later, however, major issues have arisen in the disability insurance program that closely resemble the disputes that preceded its passage. Consensus no longer prevails about the goals and administration of the program. In this paper, we describe the history of the social security disability program in terms of an illusive search for a political consensus.2 We first examine the U.S. Senate's 1956 debate over disability insurance. This debate provides a convenient summary of the ingredients of the compromise that sustained the consensus of the next two decades. Then, in an effort to explain what was at stake in 1956, we review discussions about disability that had taken place previously in bureaucratic and professional circles. We next examine the post- 1956 expansion of disability insurance, and we conclude with the dissolution of the compromise.

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2. Our essay summarizes and extends our previous work, as well as that of other modern researchers in the fields of social security, health-care policy, and disability. See, in particular, Derthick, Martha, Policymaking for Social Security (Washington, D.C., 1979), and her more recent essay on social security administration, “The Plight of the Social Security Administration,” in Social Security After Fifty: Successes and Failures, Berkowitz, E., ed. (Westport, CT, 1987), 101–18. Deborah Stone examines the development of disability insurance in comparative perspective in her influential The Disabled State (Philadelphia, 1984).Mashaw, Jerry analyzes disability insurance from the perspective of administrative law in Bureaucratic Justice (New Haven, 1983). Our previous contributions include Berkowitz, Edward D., Disabled Policy: America's Programs for the Handicapped—A Twentieth Century Fund Report (New York, 1987), and Fox, Daniel M., Health Policies, Health Politics: The Experience of Britain and America, 1911–1965 (Princeton, 1986).

3. This discussion of the Senate debate draws on Berkowitz, Edward D. and Wolff, Wendy, “Disability Insurance and the Limits of American History,” The Public Historian 8 (Spring 1986), 6869.

4. The 1949 bill, it should be noted, was more generous than the 1956 bill, with no age restrictions and no provisions for state administration. See Berkowitz, Edward D., “The American Disability System in Historical Perspective,” in Disability Policies and Government Programs, Berkowitz, E., ed. (New York, 1979), 57.

5. Nelson Cruikshank in an interview with Edward Berkowitz, August 1983, Washington, D.C.

6. Nelson Cruikshank, “Disability Insurance in 1956,” n.d., Nelson Cruikshank Papers, Box 11–A, Wisconsin Historical Society, Madison, Wisconsin.

7. For labor's campaign to persuade Senator George, see Meany to George, 22 May 1956, Nelson Cruikshank Papers, Box 11–A. Nelson Cruikshank was almost certainly the author of the letter.

8. See Walter George's remarks in Congressional Record 102, Part 10:13039–40 (17 July 1956). From personal conversations with Wilbur Cohen on the part of the authors, it can be inferred that Wilbur Cohen wrote George's speech. Cohen claimed that Fedele Fauri, his colleague at the University of Michigan's School of Social Work, wrote the opening speech by Senator Byrd.

9. Senator Harry Byrd, Remarks in Congressional Record 102, Part 10: 13046–49, (17 July 1956).

10. Charles Schottland, “Social Security Amendments of 1956: A Summary and Legislative History,” Social Security Bulletin 19 (September 1956), 12.

11. Cruikshank to Arthur Altmeyer, 18 July 1956, Cruikshank Papers, Box 11–A.

12. Cruikshank interview.

13. See the details of the program's coverage and benefits as listed in Social Security Bulletin, Annual Statistical Supplement, 1984–85 (Washington, D.C., 1985), 3.

14. This point is developed further in EdwardTierkowitz, “Introduction: Social Security Celebrates an Anniversary,” in Berkowitz, ed., Social Security After Fifty, 19–21.

15. It is interesting to note that earlier social welfare programs, such as workers' compensation, were explicitly based on an insurance model (the property and casualty line of insurance) but chose not to highlight this fact.

16. The public and private aspects of social security are explored at greater length in Berkowitz, Edward and McQuaid, Kim, Creating the Welfare State: The Political Economy of Twentieth Century Reform, 2d edition (New York, 1988); on the 1939 amendments, see Edward Berkowitz, “The First Advisory Council and the 1939 Amendments,” in Berkowitz, ed., Social Security After Fifty, 55–78.

17. This point was made repeatedly in the congressional hearings on social security in 1935. Edwin Witte, director of the Committee on Economic Security, explained that “the plan is designed so that people who start contributions after the 5 percent rate is in effect will pay their own pensions. People who are now past middle age will not pay their own pensions entirely. These unearned pensions will in the long run be paid by the United States government” (Economic Security Act, Hearings Before the Committee on Ways and Means, House of Representatives, Seventy-Fourth Congress, Firs Session on HR 4120, A bill to alleviate the hazards of old age, unemployment, illness, and dependency, to establish a social insurance board in the department of labor, to raise revenue and for other purposes [Washington, D.C, 1935],90).

18. Worrall, John and Appel, David, “Some Benefit Issues in Workers' Compensation,” in Worrall and Appel, eds., Workers' Compensation Benefits: Adequacy, Equity, and Efficiency (Ithaca, NY, 1985), 18.

19. Deborah Stone, Disabled State, 75–74; Edward Berkowitz, Disabled Policy, 51–53.

20. Haveman, Robert, et al., Public Policy Toward Disabled Workers: Cross-National Analyses of Economic Impacts (Ithaca, NY, 1984), 2843.

21. W. R. Williamson to Wilbur J. Cohen, 9 February 1938, in Record Croup 47, Records of the Social Security Board, Chairman's Files, 1935–42, 056.11–12, National Archives, Washington, D.C.

22. Stone, Disabled State, 160.

23. Quoted in Berkowitz, Disabled Policy, 57.

24. As, for example, Arthur Altmeyer, “Formulating a Disability Insurance Program,” January 1942, File 056.11, Box 20, Accession 56–533, RG 47, Washington National Records Center, Suitland, Maryland.

25. Derthick, Policymaking for Social Security, 217.

26. Cates, Jerry, Insuring Inequality: Administrative Leadership in Social Security, 1935–1954 (Ann Arbor, 1983).

27. Altmeyer, Arthur, The Formative Years of Social Security (Madison, 1966), 272.

28. Berkowitz, “The American Disability System in Historical Perspective,” 56.

29. See, for example, Oscar Pogge to Arthur Altmeyer, 21 February 1946, RG 47, File 056.11, 1944–47, Accession 56–533, Washington National Records Center.

30. Berkowitz, Disabled Policy, 56–60.

31. Advisory Council on Social Security, Permanent and Total Disability: A Report to the Senate Committee on Finance, 80th Congress, 2d sess., Senate Document 1621 (Washington, D.C, 1948).

32. Altmeyer to Oscar Ewing (Federah-Security Administrator), 24 March 1947, RG 235, Records of the Federal Security Agency (later Department of Health, Education, and Welfare, General Decimal Series, 1944–1950, 500–700, Box 265, National Archives.

33. Cohen, Wilbur J. and Myers, Robert, “Social Security Act Amendments of 1950: A Summary and Legislative History,” Social Security Bulletin 13 (October 1950), 315.

34. A point noted by many writers on Medicare, including Marmor, Theodore, Politics of Medicare (Chicago, 1970).

35. Altmeyer, Arthur, “Social Insurance for Permanently Disabled Workers,” Social Security Bulletin 4 (March 1941), 4.

36. I. S. Falk to Wilbur Cohen, 3 December 1938, RG 47, Chairman's Files, File 056.11, Washington National Records Center.

37. Berkowitz, Edward and Berkowitz, Monroe, “The Survival of Workers' Compensation,” Social Service Review 58 (June 1984), 259–80.

38. Arthur Altmeyer, “Extended Disability Benefits: Administrative and Medical Considerations,” 15 February 1949, Altmeyer Papers, Box 7, Wisconsin State Historical Society.

39. Smith to Jane Joey, 5 February 1942, Record Group 47, File 056.11, January–December 1941, Box 20, Accession 56–533, Washington National Records Center.

40. Altmeyer, “Extended Disability Benefits.”

41. Falk to Cohen, 3 December 1938.

42. An argument made most clearly in Falk, I. S., Security Against Sickness (New York, 1936), which was written in the interlude between Falk's work for the Committee on Economic Security and his emergence as a key Social Security Board employee.

43. Arthur Altmeyer, The Formative Years of Social Security, 260.

44. See Fox, Health Policies, Health Politics, 153–58.

45. See Berkowitz, Disabled Policy, 55–56.

46. Two contemporary documents describe the business and professional-conservative position. See American Medical Association, “Secretary's Letter 131,” 19 December 1949 (in RG 235, General Files, Alphabetical Series, 1944–50, Office of the Administrator), and Chamber of Commerce, “You and Socialized Medicine—The Basic Facts and a Call to Action,” privately printed pamphlet, 1949 (in RG 235, General Decimal Series, 1944–50, 011.4), both in the National Archives.

47. For more on this point, see Berkowitz and Wolff, “Disability Insurance and the Limits of American History,” 79.

48. For the rehabilitation ethos and the development of rehabilitation medicine, see Berkowitz, E., “The Federal Government and the Emergence of Rehabilitation Medicine,” The Historian 43 (Summer 1981), 2433.

49. Transcript of “American Forum of the Air,” 23 September 1950, RG 47, Box 97, Accession 64A–751, Washington National Records Center.

50. Gritzer, George and Arluke, Arnold, The Making of Rehabilitation (Berkeley, 1985).

51. See Berkowitz, Disabled Policy, 155–83; MacDonald, Mary, Federal Grants for Vocational Rehabilitation (Chicago, 1944).

52. A point recognized by nearly everyone who came into contact with the program during its first half-century. For a view of some of the consequences, see Berkowitz, Edward, “Growth of the U.S. Social Welfare System in the Post–World War II Era: The UMW, Rehabilitation, and the Federal Government,” in Uselding, Paul, ed., Research in Economic History (Greenwich, CT, 1980), 233–47.

53. “Statement for Mr. Altmeyer to present to [1947–48] Advisory Council,” n.d., File 025, Box, Accession 56–533, Washington National Records Center.

54. Berkowitz, Edward and McQuaid, Kim, “Welfare Reform in the Fifties,” Social Service Review 54 (March 1980), 4558.

55. A point that is pivotal to Martha Derthick's interpretation of the expansion of disability insurance. See Policymaking for Social Security, 295–315.

56. Quoted in Committee on Ways and Means, Subcommittee on the Administration of the Social Security Laws, Administration of Social Security Disability Insurance Program: Preliminary Report (Washington, D.C., 1960), 11. This subcommittee, led by Representative Burr Harrison of Virginia, was appointed on a temporary basis to study disability insurance, in part to distract congressional attention from the more difficult and pressing issue of health insurance.

57. Ibid., 20.

58. Subcommittee on the Administration of the Social Security Laws, Administration of the Social Security Disability Insurance Program: Hearings (Washington, D.C., 1959), 16.

59. Martha Derthick views Mills and Long as program proprietors whose interests diverged from those of other congressmen. Financial solvency meant more to the proprietors than to other congressmen, and since both of these committee chairmen were politically secure, their behavior took on an administrative as well as political character. See Policymaking for Social Security, 327 (a passage on Medicare that also applies to disability insurance).

60. For an overview of social security, see Achenbaum, W. Andrew, Social Security: Visions and Revisions—A Twentieth Century Fund Study (New York, 1986). It is important to note how closely the fate of disability insurance was tied to social security, rather than to events in disability policy, such as the passage of civil rights law for the handicapped, an argument that forms a major theme of Berkowitz, Disabled Policy.

61. Committee on Ways and Means, Subcommittee on Social Security, Status of the Disability Insurance Program (Washington, 1981).

62. Califano, Joseph, Governing America: An Insider's Report from the White House and Cabinet (New York, 1981), 384–86.

63. Mashaw, Jerry L., Bureaucratic Justice (New Haven, 1983).

64. Arthur Hess, oral interview with Peter Corning, 1967, Columbia Oral History Collection, New York; “Processing Time for Disability Claims,” 25 November 1959, RG 47, File 752.1, Box 92, Accession 64–751, Washington National Records Center.

65. Claude Andrews to Arthur Hess, 20 January 1960, RG 47, File 055.4, 1968, Box 7, Accession 68–888, Washington National Records Center.

66. David Koitz, “Staff Report: Current Legislative Issues in the Social Security Disability Insurance Program” (mimeographed, Department of Health, Education, and Welfare, 1977). In the very earliest legislation, such as that passed by the House of Representatives in 1949, the provisions for spending trust fund money for rehabilitation were removed. According to Wilbur Cohen (who discussed these matters with us in the course of many informal conversations), Congressman Doughton recognized the contradiction between a program for the permanently and totally disabled and a rehabilitation program. Mary Switzer, the chief bureaucrat in charge of rehabilitation, later blocked efforts to use the trust fund for rehabilitation, perhaps because she was worried about maintaining her own program's appropriations. Apparently she relented in 1965.

67. For a complete discussion, see Berkowitz, Disabled Policy, 114–22.

68. For the statistics, see Subcommittee on the Administration of the Social Security Laws, Disability Insurance Fact Book (Washington, D.C., 1959); Subcommittee on Oversight, Government Affairs Committee, Social Security Disability Reviews: The Role of the Administrative Law Judge (Washington, D.C., 1983). For an overview of the system, see Mashaw, Bureaucratic Justice, and Berkowitz, Disabled Policy, 79–104.

69. Collins, Katherine and Erfle, Anne, “Social Security Disability Benefits Reform Act of 1984: Legislative History and Summary of Provisions,” Social Security Bulletin 48 (1985), 30ff., provides an excellent summary. See also Derthick, “The Plight of the Social Security Administration,” 110–12.

70. General Accounting Office, More Diligent Follow-up Needed to Weed Out Ineligible SSA Beneficiaries (Washington, D.C., 1981).

71. See Stone, The Disabled State, 90–117.

72. Spencer Rich, “Administrative Law Judges File Suit Over Pressure to Pare Disability Rolls,” Washington Post, 28 January 1983.

73. Louis Enoff, “Litigation Management Project Statement” (mimeographed, Social Security Administration, 27 August 1984).

74. See Weaver, Carolyn L., “Social Security Disability Policy in the 1980s and Beyond,” in Disability and the Labor Market: Economic Problems, Policies and Programs, Berkowitz, Monroe and Hill, M. Anne, eds. (Ithaca, NY, 1986), 2964.

75. See Collins and Erfle, “Social Security Disability Benefits Reform Act of 1984,” and Weaver, “Social Security Disability Policy in the 1980s.”

1 This paper originated as a commissioned background paper for the Institute of Medicine's Committee on Pain, Disability, and Chronic Illness Behavior. The Committee's report appeared as Pain and Disability: Clinical, Behavioral, and Public Policy Perspectives, Marian Osterweis, Arthur Kleinman, and David Mechanic, eds. (Washington, D.C., 1987). The authors would like to thank Marian Osterweis, Mark Leff, and an anonymous reviewer for their helpful comments. Our names are listed in alphabetical order.

The Politics of Social Security Expansion: Social Security Disability Insurance, 1935–19861

  • Edward Berkowitz (a1) and Daniel M. Fox (a2)

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