Transcript for:
Understanding Social Security in America

NARRATOR: Social Security is a system where people pay an extra tax on their payrolls and wages to fund government assistance programs and benefits. Today, money from Social Security payments provides pensions to the elderly, the disabled, the unemployed, and their dependents. But Social Security hasn't always existed in America. President Franklin Delano Roosevelt changed all of that when he came into office in 1933. FDR was not only tasked with helping Americans survive the Great Depression, but also with figuring out how to improve the lives of people in our rapidly industrializing America. How could America provide its citizens with a social safety net if an economic downturn were to happen again? Upon taking office, he announced a New Deal, a series of programs and projects that aimed to provide relief for Americans and institute crucial economic reforms. However, critics complained that these measures were too conservative and temporary in nature. A variety of social safety net proposals gained broad popular support across the nation. So in 1935, FDR announced a second New Deal, which included the Social Security Act, signed into law on August 15. Workers pay into pension funds. And once they retire, they receive payments back from that same fund in proportion to their own payroll deductions over the years. Implementing Social Security was not an easy task. To secure the system against attacks from its plentiful enemies in the Republican Party, the Roosevelt administration set up the system as an insurance, rather than a welfare program. Every citizen was assigned a Social Security account number. During the remainder of the 20th century, Social Security went through many changes as the act was amended several times. The 1939 amendments added dependent benefits for the spouse and minor children of a retired worker and also survivors' benefits to be paid to the family of a covered worker in the event of premature death. In 1950 and 1954, Congress made farm and domestic service workers eligible for Social Security. In 1956, President Dwight D. Eisenhower signed into law amendments to the Social Security Act, which established the Social Security Disability Insurance Program. Under President Johnson, the amendments in 1965 created Medicare, a basic program of hospital insurance for persons aged 65 and older. In 1983, under Reagan, further amendments made Social Security payouts subject to taxes and began to gradually raise the age of retirement. To this day, Social Security remains a central part of many elderly Americans' lives, allowing them to feel some economic security in their old age. The proportion of retirees to workers on payrolls increases as Americans live longer lifespans, leading to increasing debate over the viability of Social Security, the centerpiece of FDR's New Deal legacy.