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FRANKLIN D. ROOSEVELT IN THE OVAL
OFFICE - 1935
Social Security
In addressing you
on June 8, 1934, I summarized the main
objectives of our American program. Among these
was, and is, the security of the men, women, and
children of the nation against certain hazards
and vicissitudes of life. This purpose is an
essential part of our task. In my annual message
to you I promised to submit a definite program
of action. This I do in the form of a report to
me by a Committee on Economic Security,
appointed by me for the purpose of surveying the
field and of recommending the basis of
legislation.
I am gratified with the work of this committee
and of those who have helped it: The Technical
Board of Economic Security, drawn from various
departments of the government; the Advisory
Council on Economic Security, consisting of
informed and public-spirited private citizens;
and a number of other advisory groups, including
a Committee on Actuarial Consultants, a Medical
Advisory Board, a Dental Advisory Committee, a
Hospital Advisory Committee, a Public Health
Advisory Committee, a Child Welfare Committee,
and an Advisory Committee on Employment Relief.
All of those who participated in this notable
task of planning this major legislative proposal
are ready and willing at any time to consult
with and assist in any way the appropriate
congressional committees and members with
respect to detailed aspects.
It is my best judgment that this legislation
should be brought forward with a minimum of
delay. Federal action is necessary to and
conditioned upon the actions of states.
Forty-four legislatures are meeting or will meet
soon. In order that the necessary state action
may be taken promptly, it is important that the
federal government proceed speedily.
The detailed report of the committee sets forth
a series of proposals that will appeal to the
sound sense of the American people. It has not
attempted the impossible nor has it failed to
exercise sound caution and consideration of all
of the factors concerned: the national credit,
the rights and responsibilities of states, the
capacity of industry to assume financial
responsibilities, and the fundamental necessity
of proceeding in a manner that will merit the
enthusiastic support of citizens of all sorts.
It is overwhelmingly important to avoid any
danger of permanently discrediting the sound and
necessary policy of federal legislation for
economic security by attempting to apply it on
too ambitious a scale before actual experience
has provided guidance for the permanently safe
direction of such efforts. The place of such a
fundamental in our future civilization is too
precious to be jeopardized now by extravagant
action. It is a sound idea--a sound ideal. Most
of the other advanced countries of the world
have already adopted it, and their experience
affords the knowledge that social insurance can
be made a sound and workable project.
Three principles should be observed in
legislation on this subject. In the first place,
the system adopted, except for the money
necessary to initiate it, should be
self-sustaining in the sense that funds for the
payment of insurance benefits should not come
from the proceeds of general taxation. Second,
excepting in old-age insurance, actual
management should be left to the states, subject
to standards established by the federal
government. Third, sound financial management of
the funds and the reserves and protection of the
credit structure of the nation should be assured
by retaining federal control over all funds
through trustees in the Treasury of the United
States.
At this time, I recommend the following types of
legislation looking to economic security:
First,
unemployment compensation.
Second, old-age benefits, including
compulsory and voluntary annuities.
Third, federal aid to dependent children
through grants to states for the support of
existing mother's pension systems and for
services for the protection and care of
homeless, neglected, dependent, and crippled
children.
Fourth, additional federal aid to state and
local public-health agencies and the
strengthening of the federal Public Health
Service. I am not at this time recommending
the adoption of so-called health insurance,
although groups representing the medical
profession are cooperating with the federal
government in the further study of the
subject, and definite progress is being
made.
With respect to unemployment compensation, I
have concluded that the most practical proposal
is the levy of a uniform federal payroll tax, 90
percent of which should be allowed as an offset
to employers contributing under a compulsory
state unemployment compensation act. The purpose
of this is to afford a requirement of a
reasonably uniform character for all states
cooperating with the federal government and to
promote and encourage the passage of
unemployment compensation laws in the states.
The 10 percent not thus offset should be used to
cover the costs of federal and state
administration of this broad system. Thus,
states will largely administer unemployment
compensation, assisted and guided by the federal
government.
An unemployment compensation system should be
constructed in such a way as to afford every
practicable aid and incentive toward the larger
purpose of employment stabilization. This can be
helped by the intelligent planning of both
public and private employment. It also can be
helped by correlating the system with public
employment so that a person who has exhausted
his benefits may be eligible for some form of
public work as is recommended in this report.
Moreover, in order to encourage the
stabilization of private employment, federal
legislation should not foreclose the states from
establishing means for inducing industries to
afford an even greater stabilization of
employment.
In the important field of security for our old
people, it seems necessary to adopt three
principles--first, noncontributory old-age
pensions for those who are now too old to build
up their own insurance; it is, of course, clear
that for perhaps thirty years to come funds will
have to be provided by the states and the
federal government to meet these pensions.
Second, compulsory contributory annuities, which
in time will establish a self-supporting system
for those now young and for future generations.
Third, voluntary contributory annuities by which
individual initiative can increase the annual
amounts received in old age. It is proposed that
the federal government assume one-half of the
cost of the old-age pension plan, which ought
ultimately to be supplanted by self-supporting
annuity plans.
The amount necessary at this time for the
initiation of unemployment compensation, old-age
security, children's aid, and the promotion of
public health, as outlined in the report of the
Committee on Economic Security, is approximately
$100 million.
The establishment of sound means toward a
greater future economic security of the American
people is dictated by a prudent consideration of
the hazards involved in our national life. No
one can guarantee this country against the
dangers of future depressions, but we can reduce
these dangers. We can eliminate many of the
factors that cause economic depressions and we
can provide the means of mitigating their
results. This plan for economic security is at
once a measure of prevention and a method of
alleviation.
We pay now for the dreadful consequence of
economic insecurity--and dearly. This plan
presents a more equitable and infinitely less
expensive means of meeting these costs. We
cannot afford to neglect the plain duty before
us. I strongly recommend action to attain the
objectives sought in this report.
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