Arthur J. Altmeyer
Goals For Social Security
Chairman,Social Security Board
delivered over Columbia Network
at 1:30 p.m., Sunday, February 11, 1945
Good afternoon. The Social Security Board has made a good many recommendations to the Congress for strengthening and broadening the provisions of the Social Security Act. But all of them have only one goal--to keep American families from becoming destitute--in health or in the essentials of life. We do not want a program which, alone, would enable anybody to live in luxury; but we do want a program that will assure every family in the Nation enough to live on in times of adversity. We think that is exactly what a good program of social security should do. We know that if we have such a program--if we remove the haunting fears of poverty, neglected ill-health, and destitution from our people--we will release them from bonds that hold them back, we will stimulate them to even greater enterprise and individual initiative. They will go out and get the luxuries and the comforts for themselves. We think a good program of social security is absolutely necessary if we are to continue to make economic progress, maintain a stable society, and promote a more productive system of free enterprise. When we loose the chains of fear, we really give enterprise a tremendous boost. We think the best way of having a good social security program is by a system of contributory social insurance. We think that is the fairest, surest, and best way to finance social security. That way, the man and woman who works, pays a small premium every payday and thereby helps himself or herself to achieve security--for the individual and for the family. That certainly is the American way. Under a comprehensive social insurance system, the employer matches his worker's premium--and that's a legitimate part of the cost of doing business. The contributions build up the fund from which benefits are paid. And the benefits for every worker and his family are based primarily on his earnings, so that a reasonable relation to past income is maintained when unemployment, sickness, old-age or death strikes.
When the Social Security Act was passed in 1935, Congress adopted the insurance principle of financing certain benefit payments. When the program was amended in 1939 to extend its protection to the family--rather than just to the individual worker--the insurance principle was maintained.
We think we should maintain that principle as we broaden the scope of the Social Security Act to cover risks that are not covered today. That way the worker pays--to a large extent--for what he and his family receive in benefits. And that's something to remember--the benefits have to be paid for. Under a system of social insurance, we spread the risk so widely that the cost is never great to any family at any one time. But when all the people are paying premiums they can get more for their money.
And--at this point--let me say again, we only hope to provide basic minimum benefits. Anybody who wants more than social insurance will provide, can buy from private insurance companies, or he can build up his own resources through savings or in other ways. But we want a floor under the American standard of living--a floor below which nobody can ever fall.
Now, let's see what we already have in the way of social security--and what we ought to have. Let's take old-age and survivors insurance first--that's the Federal family insurance program to replace partially the income that is lost to families when the breadwinner gets too old to work, or when he dies.
In that program we have a Nationwide going concern in which 70,000,000 people have already earned some benefit credits. We have demonstrated that we can give individualized service to American families--no matter in what part of the Nation they live--through local administration of a National system. And we have demonstrated that we can do this well and economically. Although we have been paying monthly benefits under that system only five years, we already have 1,116,000 monthly beneficiaries on the rolls. And they are getting benefits at the rate of about a quarter of a billion dollars a year.
Well--who's getting those benefits? About 450,000 of them are men and women who have had to leave their jobs because they're too old to work. The others are the wives and children of retired workers, or aged widows--or, most important of all--young widows and orphans of men who have died before their families were grown. These beneficiaries include, also, dependent parents of workers who had no wife or children. It is a striking thing to note that well over 60% of the beneficiaries in this program, which so often is misunderstood as only on old-age benefit system, are women and children. This old-age and survivors insurance program is holding American families together. It is making it possible for brothers and sisters to grow up in their own homes, together, with their own mothers--even though their fathers died before they could rear them. It is helping to preserve the American family as it should be--the unit and keystone of American democracy. More than that, it enables the men and women who have toiled all their lives to live out their remaining years in relative independence and the dignity that human beings deserve.
The benefit rolls could be doubled easily within a year if the war should end and all the old people who are holding jobs because of the war should suddenly retire. In any event the rolls will continue to grow rapidly. Under our actuarial estimates, we think there will be between 3.5 and 5 million aged persons on the benefit rolls by 1960--and we think there may be almost 2 million widowed mothers and children getting monthly benefits.
Certainly, with those figures staring us in the face, we should make sure that old-age and survivors insurance can do its job well.
How can we do that? The Board believes we can do it this way. Extend the protection of the system to the families of 20,000,000 people who are not now protected. Raise benefits generally--in the light of experience that shows the present benefits usually are too low. Reduce the age for women to qualify for old-age retirement benefits from 65 to 60 years. Of course, insured widows with young children are already entitled to monthly benefits, regardless of age. We think with those improvements and extensions, the program will serve its purpose well and give needed assurance to all Americans that they will not face the choice of starvation or dependency.
Next--we think we should broaden the field of social insurance to cover more risks. We think we should make the present old-age and survivors insurance program into a system of old-age, survivors and PERMANENT DISABILITY insurance. Disability is actually as great a threat to family security as either death or old age. In fact, it is worse. Because when the breadwinner is disabled or sick, family expenses go much higher than they would if he were dead or merely old. And disability strikes too often when the breadwinner is young and has a growing family. That is an insurable risk--and monthly benefits to replace a part of the wages lost through disability certainly would help to make America a more secure--and hence--a stronger Nation. The old-age and survivors insurance machinery is all set to handle the recordkeeping and benefit payments. All we need is a law to put the system in operation. And--if anyone thinks it isn't needed, let me point out that the number of Americans who are permanently disabled right now is about 3.5 million.
Next we get to that most controversial subject which is generally miscalled "socialized medicine." I'd like to make the Social Security Board's point of view of that subject unmistakably clear. We don't want to socialize medicine. We don't want a system of State medicine. We don't want to regiment doctors, or hospitals, or patients. We don't want to interfere with the patients right to choose his doctor or the doctor's right to accept or reject a patient. All we want to do is set up a system of insurance whereby premiums will build up a fund to pay the doctor bills, the hospital bills, and possibly the bills for other related services. We don't want to regiment anything but enough money to see to it that the American people can get the wonderful medical care that is available but which most of them do not get because they can't pay for it at the time they need it.
That can be done--and should be done on a basis of local administration, so that neither the doctor nor the patient need fear that any Washington bureaucrat is going to come in and tell him whether John Brown can be treated for a foot infection, or how he should be treated. We want to make the American people a healthy people--and the way to do it is to see that they get the necessary care. No family can foresee when a serious illness is going to put it in the hole financially--maybe for years. But we do know about what it costs to give medical care to the Nation as a whole, and by spreading the cost, it won't hit anybody hard at any time--and everybody will have the medical care they need.
Now let's talk a minute about unemployment compensation. We have 51 different systems, on a basis of the Federal Government's partnership with each of the States, Alaska, Hawaii and the District of Columbia. The provisions vary. The circumstances under which a man can get benefits vary from State to State. The benefits vary widely, also--but generally they are too low and they don't last long enough. We would like to see unduly restrictive disqualifications removed. We would like to see all workers given the protection of the system--about 15,000,000 are excluded now. We would like to see benefits generally replace about half the wages lost when a worker is out of employment through no fault of his own. We would like to see some provision made to add dependents' allowances to benefits when these benefits are small and the worker has a family. We would like to see the benefits paid for 26 weeks--when the worker can't get a job in less time. And we would like to see the maximum weekly benefit set at $25--that's not the minimum benefit, it's the MAXIMUM.
We would prefer to have one national system of unemployment compensation which could be tied in with our existing social security offices, but we think the present State by State unemployment compensation system can be made to do its job better than at present under the existing system, with the establishment of rational minimum benefit standards, some reinsurance of State funds by the Federal Government, and full cooperation between the States and the Federal Government.
Just as permanent disability affects a family much in the manner of old age or death, so temporary disability or sickness stop wages just as they are stopped when a man is laid off for lack of work. So we would like to see in addition to the unemployment compensation system a temporary disability compensation system to provide benefits when a man is sick or disabled temporarily--benefits that would partially replace the wages he loses and would thus help to keep the family going.
We already have 2 programs of public assistance to buttress our social insurance programs. If these insurance programs are made stronger and better, the need for public assistance will decrease as families gain social insurance protection. But we would always need some system to take care of people who for one reason or another cannot build up insurance rights. We have made recommendations which we think would improve our present system. They are important, but I will not attempt to go into details.
I would like to sum up this discussion with two short sentences. All of our recommendations are parts of a common design in which each has its full value only through interrelation with the others. All serve a single objective--to assure a minimum security on which, through individual initiative, families and the Nation can build to secure economic independence.