Legislative History

1939 Amendments

In the early years, each issue of the Social Security Bulletin featured an opening editorial summary of recent developments in Social Security, entitled "Social Security In Review." The September 1939 issue opened with a brief report on the recently-passed 1939 Amendments.

Social Security Bulletin
Volume 2 September 1939 Number 9

SOCIAL SECURITY IN REVIEW

FOLLOWING his approval of the Social Security Act Amendments of 1939, President Roosevelt on August 11 made a public statement in which he declared the amendments to be "another tremendous step forward in providing greater security for the people of this country." The President commented specifically on the changes in the old-age insurance system, expressing his gratification that in liberalizing the provisions a reasonable relationship had been retained between wage loss sustained and benefits received. "This," he declared, "is a most important distinguishing characteristic of social insurance as contrasted with any system of flat pensions." With regard to changes in coverage of the system, the President remarked: "I am glad that the insurance benefits have been extended to cover workers in some occupations that have previously not been covered. However, workers in other occupations have been excluded. In my opinion, it is imperative that these insurance benefits be extended to workers in all occupations."

The President also commented on other changes in the act, observing that: "The Federal-State system of providing assistance to the needy aged, the needy blind, and dependent children, has also been strengthened by increasing the Federal aid. I am particularly gratified that the Federal matching ratio to States for aid to dependent children has been increased from one-third to one-half of the aid granted. I am also happy that greater Federal contributions will be made for public health, maternal and child welfare, crippled children, and vocational rehabilitation. These changes will make still more effective the Federal State cooperative relationship upon which the Social Security Act is based and which constitutes its great strength. It is important to note in this connection that the increased assistance the States will now be able to give will continue to be furnished on the basis of individual need, thus affording the greatest degree of protection within reasonable financial bounds."

With regard to administrative changes in the act, the President declared that "probably the most important change that has been made is to require that State agencies administering any part of the Social Security Act coming within the jurisdiction of the Social Security Board and the Children's Bureau shall set up a merit system for their employees. An essential element of any merit system is that employees shall be selected on a nonpolitical basis and shall function on a nonpolitical basis."

The President concluded his statement by calling attention to the work of the Committee on Economic Security. "In 1934," he declared, "I appointed a committee called the Committee on Economic Security made up of Government officials to study the whole problem of economic and social security and to develop a legislative program for the same. The present law is the result of its deliberations. That Committee is still in existence and has considered and recommended the present amendments. In order to give reality and coordination to the study of any further developments that appear necessary I am asking the Committee to continue its life and to make active study of various proposals which may be made for amendments or developments to the Social Security Act. The present members of the Committee are: Frances Perkins, Secretary of Labor, Chairman; Henry Morgenthau, Jr., Secretary of the Treasury; Frank Murphy, Attorney General; Henry A. Wallace, Secretary of Agriculture; Harry L. Hopkins, Secretary of Commerce. I am adding to the Committee at this time Arthur J. Altmeyer, Chairman of the Social Security Board."

IMMEDIATELY on adoption of the Social Security Act Amendments of 1939, the Social Security Board discontinued acceptance of claims for lump-sum payments under the old-age insurance program from workers reaching age 65. This type of payment is terminated by the amendments, and workers who might have been eligible to receive such payments are given opportunity to qualify instead for monthly benefits, even though payment of the lump-sum claim has already been made. In the latter event, however, the amount of the lump-sum payment will be deducted from the worker's monthly benefits. Lump-sum payments to the estates of qualified workers who die before 1940 will be continued.

In connection with the announcement of discontinuance of lump-sum payments to workers reaching age 65, it was indicated that, on the basis of preliminary estimates, approximately 485,000 persons past the age of 65 will be entitled to monthly benefits in 1940 and that the benefits payable during that year will exceed $110 million. Under the provisions of the original Social Security Act, it was indicated, lump-sum benefits probably would not have amounted to more than $30 million in 1940, including both payments to workers reaching age 65 and death payments. From January 1, 1937, when the program went into effect, through July 31, 1939, approximately 397,400 claims for lump-sum payments amounting to more than $21.5 million were certified by the Social Security Board to the Secretary of the Treasury.