History of SSA During the Johnson Administration 1963-1968

In carrying out its responsibilities the Social Security Administration has worked with numerous Federal agencies and departments. Those with whom the Social Security Administration has treated in implementing the Medicare aspect have already been noted earlier in this narrative.

Relations with only the more important of the other agencies and departments follow.


As the social security program increased in size and complexity it has become increasingly more important for the Social Security Administration to maintain a close liaison with the Treasury Department in planning and developing operational techniques and related procedures. The Social Security Administration EDP systems are integrated to the extent that the Treasury Department utilizes computer equipment which is compatible to the Social Security Administration's for the preparation and issuance of approximately 2 million benefit checks per month based on EDP transaction data supplied by the Social Security Administration each month. The Treasury Department and SSA also work very closely in developing procedures for the handling of returned checks and the non-receipt of
check process.

The most significant accomplishments involving coordination between the Social Security Administration and the Treasury Department during the Johnson Administration took place following the 1965 and 1967 amendments to the Social Security Act.

The Superendorsement Procedure

The 1965 amendments to the Social Security Act permitted the use of the "Superendorsement Procedure" whereby a surviving spouse may be authorized by designated officials of the Social Security Administration and the Treasury Department to cash a combined check which would ordinarily be unnegotiable because of the death of one of the payee beneficiaries to whom the check was drawn. Through the joint efforts of the Social Security Administration and Treasury, hardship and difficulties resulting from delay in issuing subsequent benefits to the surviving spouse of a combined husband-wife payment have been significantly reduced through use of this procedure.

ZIP Code Mailing of Social Security Benefit Checks

In October 1964, the Executive Office of the President requested that ZIP codes be used in the addressing of all mail by the Departments and Agencies of the Federal Government. The Social Security Administration responded by coordinating with the Treasury Department and the Post Office Department to convert the Social Security Administration's master benefit record file and Treasury's check writing files to a ZIP code format. This was a monumental task requiring strict coordination of EDP systems and clerical procedure modification in each component. With the mailing of the February 3, 1967 benefit checks, the Social Security Administration became the first large federal agency to implement mass ZIP code mailing. The most significant savings were, of course, realized by the Post Office Department because of a substantial decrease in handling time.

Expediting Payments--1967 Amendments to the Social Security Act

Effective July 1, 1968, in accordance with Section 205(q) of the Social Security Act, individuals have the right to request expedited action on initial claims requests for reinstatement or a report of nonreceipt of a check after a specified time. This provision was enacted to ensure that no beneficiary is faced with a long period of nonpayment where the applicant has done all that is expected of him. Development of this procedure required a close coordination with Treasury in the area of nonreceipt of check delays. Special procedures and forms were developed and mutually agreed upon, which will provide information pertinent to both the Social Security Administration's and Treasury's role in the Expedited Payment Provisions of the Social Security Act.

Social Security Benefits Increases–1965 and 1967

As noted earlier, social security legislation had also provided two benefit increases covering all beneficiaries on the rolls. An undertaking of this magnitude required working very closely with Treasury to produce new check writing files and ensure everyone a timely check in the increased amount. Arrangements also had to be made to include informational media in the form of check stuffers along with the increased checks.

The Treasury Department played a very important role in the 1965 benefit conversion with the preparation and delivery of separate, retroactive increase checks. Additionally, the Treasury Department, through use of high speed EDP print equipment in their regional disbursing centers, assisted the Social Security Administration in printing millions of folder documentation forms to reflect the legislated increase in the individual Social Security Administration claims folder.

Letters of Credit

In accord with Treasury Department Circular No. 1075, the Letter of Credit system of financing was initiated in July 1965, in 52 of the 56 State agencies, under contract to make determinations of disability. Fiscal and Administrative Letter No. 35{1} provided the necessary instructions for State agencies to implement the new system. Prior to this system, funds were advanced quarterly by Federal check to these 52 agencies. The purpose of the Letter of Credit system is to preclude the withdrawal of funds from the United States Treasury any sooner than is necessary to finance State agency operations, and thus reduce the level of Federal debt and the interest costs of short-term borrowing.

Coordination between the United States Treasury Department and the Social Security Administration has assisted greatly in resolving problems encountered during the implementing stages of the system. As a result of the new financing system, cash balances in State agencies under contract to make determinations of disability are now 90 percent less than they would have been under the old method of financing.

Coordination with the Internal Revenue Service

Coordination with the Internal Revenue Service exists on a continuing basis concerning the application of similar provisions in the Social Security Act and the Internal Revenue Code regarding the coverage of employees and self-employed and the reporting of their covered earnings (wages and/or self-employment income). During the Johnson Administration this coordination has been intensified as the agencies working together have attempted to find new and better means of coordinating their joint responsibilities in the coverage and earnings areas. Emphasis has been placed on the use of new methods, e.g., automatic data processing systems, so as to achieve greater efficiency, resulting in savings to the Government and better services to the public. In addition, considerable coordination was established and extended with other Government agencies because of the involvement of other programs on the coverage of workers under the social security system, e.g., Office of Economic Opportunity, Department of Agriculture, etc.

The most significant areas of coordination relative to coverage and reporting of earnings which occurred during the Johnson Administration follow:

1. The Magnetic Tape Transmission of Se1f-Employment Income Data From the Internal Revenue Service to the Social Security Administration
Since the inception of the coverage of self-employment in 1951 the self-employment income data used for crediting to the individual's earnings record was derived from a portion of the individual's income tax return which, after certain processing by the Internal Revenue Service, was detached and forwarded to the Social Security Administration for processing. As a result of extensive joint efforts by the two agencies a system has been devised whereby such self-employment income data will be transmitted by the Service to the Administration by means of magnetic tape. This will eliminate the handling of paper data by both the Service and the Administration; expedite the processing of the self-employment earnings data; insure a higher degree of accuracy of the end product which will be posted to the individual earnings record to the Administration and will result in significant savings to the Government in the processing and reporting of self-employment income data.

2. Anti-Poverty Formulation of Policies and Instructions Regarding Coverage of Participants in Various Programs
The passage of the Economic Opportunity Act of 1964 raised issues regarding the social security coverage of participants in the various programs created thereunder which required extensive coordination with various Government agencies. Among others, discussions were held with the Office of Economic Opportunity regarding the coverage of job corps enrollees and VISTA volunteers, Department of Labor with respect to the Neighborhood Youth Corps, Welfare Administration with respect to Work Experience Programs, Office of Education with respect to Work-Study Programs and, in overall policy and positions, with the Internal Revenue Service.

These activities provided the basis for internal Social Security Administration instructional material and joint agency background and instructional issuances. Subsequent amendmentshave required continuing activities of this nature.

3. Coverage of Tips as Wages
The coverage of tips in the 1965 amendments required coordination with the Internal Revenue Service to devise forms by which the tips would be reported and by which tips reports could be adjusted; the issuance of regulations; the issuance of instructional and educational materials to employers and tipped employees.

Footnotes (Footnote numbers not same as in the printed version)

{1} FISCAL AND ADMINISTRATIVE LETTER NO.35 dated June 23, 1965, Subject: Letter of credit system for payment of disability program expenses to States.