SOCIAL SECURITY’S HUMBLE ORIGINS…. When President Obama was doing his best to defend his tax deal with congressional Republicans to the left the other day, he emphasized to his allies that “in order to get stuff done, we’re going to compromise.”
To bolster his case, the president noted, “This is why FDR, when he started Social Security, it only affected widows and orphans. You did not qualify. And yet now it is something that really helps a lot of people. When Medicare was started, it was a small program. It grew. Under the criteria that you just set out, each of those were betrayals of some abstract ideal.”
To be sure, the president was overstating matters — Social Security did more than affect “widows and orphans” at the time of its passage. Paul Krugman is troubled that “Obama doesn’t know this history.”
This is all wrong: both programs were huge from the start. From the beginning, Social Security applied to all private-sector workers, except those in agriculture, domestic service, or casual employment — and yes, those exceptions happened to exclude the majority of African-Americans. Still, it was by no means a small program that grew big. Medicare covered everyone 65 and older right from the beginning, although initially it only provided hospital insurance.
I’m loath to disagree with Krugman, and it’s clear that the president’s assessment was at best incomplete, but my read on social insurance history is slightly different.
On Medicare, Krugman’s right, it was pretty ambitious at its start. It all but ignored people with disabilities, it didn’t cover prescription drugs, and made no allowances for home health services, but in general, Medicare started quite strong.
Social Security, however, is another story.
No self-respecting liberal today would support Franklin Roosevelt’s original Social Security Act. It excluded agricultural workers — a huge part of the economy in 1935, and one in which Latinos have traditionally worked. It excluded domestic workers, which included countless African Americans and immigrants. It did not cover the self-employed, or state and local government employees, or railroad employees, or federal employees or employees of nonprofits. It didn’t even cover the clergy. FDR’s Social Security Act did not have benefits for dependents or survivors. It did not have a cost-of-living increase. If you became disabled and couldn’t work, you got nothing from Social Security.
John Judis noted earlier this year that the original Social Security Act “was a bare shell of what it became in the 1950s after amendment. Benefits were nugatory. And most important, coverage was denied to wide swaths of the workforce.”
And why was it so limited? Because Franklin Delano Roosevelt had to cut deals with conservatives — many of whom were motivated by nothing more than racism — in order to get the legislation passed. FDR knew he was betraying his principles and even some of his own supporters at the time, but he considered the goal of getting Social Security in place paramount, even if it was incomplete, even if it left Americans in need out.
At the time, The Nation ran scathing pieces against Roosevelt and the Social Security, condemning the “betrayal,” and accusing FDR’s White House of possibly dealing “a death blow” to social-insurance movement “for many years.”
Under the circumstances, this history seems relevant.