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RL30920
March 26, 2001
Major Decisions in the House
and Senate on
Summary Since its enactment in 1935, Social Security has been amended hundreds of times. Consequently, this paper is not fully comprehensive. Instead, it briefly summarizes discussions on individual major amendments. These summations do not capture the range of motivations behind Social Security votes; rather they record the arguments expressed at the time and, by so doing, attempt to give the reader the tone and context of the debate on major Social Security issues brought before the House and Senate chambers. This report is intended to respond to the many inquiries that CRS gets for Social Security vote information, which range from requests for general information about legislative action over the years to requests for information about specific floor amendments. Thus, it is intended to be a reference document on the major statutory decisions taken by Congress on the Social Security program. A detailed table of contents and a summary table of the legislation discussed are provided to aid the reader.
Contents Introduction 1 Chamber Votes 4 P.L. 271-74th Congress, Enactment of the Social Security Act 4 1. House Action 4 2. Senate Action 7 3. Conference Action 8 B. P.L. 379-76th Congress, Social Security Amendments of 1939 9 1. House Action 9 2. Senate Action 11 3. Conference Action 12 C. Payroll Tax Freeze, 1942-1947 12 D. P.L. 492-80th Congress, 1948 Provision for Exclusion of Certain Newspaper and Magazine Vendors From Social Security Coverage (H.R. 5052) and P.L. 642-80th Congress, 1948 Provision to Maintain Status Quo Concept of Employee 14 1. House Action 15 2. Senate Action 15 3. Veto 16 4. Veto override 16 E. P.L. 734-81st Congress, Social Security Act Amendments of 1950 17 1. House Action 17 2. Senate Action 18 3. Conference Action 19 F. P.L. 590-82nd Congress, Social Security Act Amendments of 1952 20 1. House Action 20 2. Senate Action 21 3. Conference Action 21 G. P.L. 761-83d Congress, Social Security Amendments of 1954 22 1. House Action 22 2. Senate Action 23 3. Conference Action 24 H. P.L. 880-84th Congress, Social Security Amendments of 1956 24 1. House Action 25 2. Senate Action 25 3. Conference Action 26 I. P.L. 85-840, Social Security Amendments of 1958 26 1. House Action 26 2. Senate Action 26 3. House Concurrence 27 J. P.L. 86-778, Social Security Amendments of 1960 27 1. House Action 28 2. Senate Action 28 3. Conference Action 29 K. P.L. 87-64, Social Security Amendments of 1961 29 1. House Action 30 2. Senate Action 30 3. Conference Action 31 L. Proposed Social Security Amendments of 1964 31 1. House Action 31 2. Senate Action 32 3. Conference Action 32 M. P.L. 89-97, Social Security Amendments of 1965 32 1. House Action 33 2. Senate Action 34 3. Conference Action 35 N. P.L. 89-368, Tax Adjustment Act of 1966 36 1. House Action 36 2. Senate Action 36 3. Conference Action 36 0. P.L. 90-248, Social Security Amendments of 1967 (H.R. 12080) 37 1. House Action 37 2. Senate Action 37 3. Conference Action 38 P. P.L. 91-172, The Tax Reform Act of 1969 39 1. House Action 39 2. Senate Action 39 3. Conference Action 39 Q. P. L. 92-5, Public Debt Limit Increase; Social Security Amendments 40 1. House Action 40 2. Senate Action 40 3. Conference Action 41 R. P.L. 92-336, Public Debt Limit; Disaster losses; Social Security Act Amendments 41 1. House Action 41 2. Senate Action 42 3. House Response to Senate Amendment 42 4. Conference Action 42 S. P.L. 92-603, Social Security Amendments of 1972 43 1. House Action 44 2. Senate Action 44 3. Conference Action 45 T. P.L. 93-233, Social Security Benefits Increase 45 1. House Action 45 2. Senate Action 46 3. Conference Action 46 U. P.L. 95-216. The Social Security Amendments of 1977 47 1. House Action 48 2. Senate Action 50 3. Conference Action 51 V. P.L. 96-265, Social Security Disability Amendments of 1980 52 1. House Action 52 2. Senate Action 53 3. Conference Action 54 W. P.L. 96-403, Reallocation of OASl and Dl Taxes 54 1. House Action 55 2. Senate Action 55 X. P.L. 96-473, Retirement Test Amendments 55 1. House Action 56 2. Senate Action 56 3. House Concurrence 57 4. Senate Concurrence 57 Y. P.L. 97-35, The Omnibus Budget Reconciliation Act of 1981 57 1. Senate Action 58 2. House Action 58 3. Conference Action 59 Z. P.L. 97-123, The Social Security Amendments of 1981 60 I. House Action 60 2. Senate Action 61 3. Conference Action 62 AA. P.L. 97-455, An Act Relating to Taxes on Virgin Island Source Income and Social Security Disability Benefits 62 1. Senate Action 63 2. House Action 63 3. Conference Action 63 BB. P.L. 98-21, The Social Security Amendments of 1983 64 1. House Action 64 2. Senate Action 65 3. Conference Action 66 CC. P.L. 98-460, Social Security Disability Benefits Reform Act of 1984 66 1. House Action 67 2. Administrative Action 68 3. Senate Action 68 4. Conference Action 69 DD. P.L. 99-177, Public Debt Limit-Balanced Budget and Emergency Deficit Control Act of 1985 69 1. House Action 70 2. Senate Action 70 3. Conference Action 70 EE. S. Con. Res. 32, Proposed COLA Constraints in FY1986 Budget Resolution 70 1. Senate Action 71 2. House Action 72 3. Conference Action 72 FF. P.L. 99-509, The Omnibus Budget Reconciliation Act of 1986 72 1. Senate Action 72 2. House Action 73 3. Conference Action 73 GG. P.L. 100-203, The Omnibus Budget Reconciliation Act of 1987 73 1. House Action 73 2. Senate Action 74 3. Conference Action 74 HH. P.L. 100-647, The Technical and Miscellaneous Revenue Act of 1988 74 1. House Action 74 2. Senate Action 75 3. Conference Action 75 II. P.L. 101-239, The Omnibus Budget Reconciliation Act of 1989 75 1. House Action 75 2. Senate Action 76 3. Conference Action 76 JJ. P.L. 101-508, The Omnibus Budget Reconciliation Act of 1990 76 1. House Action 77 2. Senate Action 77 3. Conference Action 78 KK. P.L. 103-66, The Omnibus Budget Reconciliation Act of 1993 78 1. House Action 79 2. Senate Action 79 3. Conference Action 79 4. House Action 80 5. Senate Action 80 6. Conference Action 80 LL. P.L. 103-296, The Social Security Administrative Reform Act of 1994 81 1. House Action 82 2. Senate Action 82 3. Conference Action 82 MM. P.L. 103-387, The Social Security Domestic Reform Act of 1994 82 1. House Action 82 2. Senate Action 83 3. Conference Action 83 NN. P.L. 104-121, The Senior Citizens Right to Work Act of 1996 83 1. House Action 84 2. Senate Action 84 OO. P.L. 106-170, The Ticket to Work and Work Incentives Improvement Act of 1999 84 1. House Action 85 2. Senate Action 85 3. Conference Action 85 PP. P.L. 106-182, The Senior Citizens Right to Work Act 85 1. House Action 86 2. Senate Action 86 3. Conference Action 86
List of Tables
Table 1. Social Security Laws, 1935-2000 2
Major Decisions in the House
and Senate
Introduction The Social Security Act of 1935 established a federal old-age pension financed with employee-employer payroll taxes for most workers in commerce and industry. Congress since then has changed the Social Security program many times. Amendments to the original Act have: added survivors' and dependents' benefits; added disability, hospital, and medical insurance; expanded coverage to new groups of workers; lowered the minimum age for retirement benefits; increased payroll taxes; raised benefits; provided for automatic adjustment of benefits to reflect inflation; and made numerous other changes. This paper reviews the major votes taken by the House and Senate in passing the original Act and in amending it from 1936 through 2000. Discussion centers on Old-Age, Survivors and Disability Insurance (OASDI) votes, although Medicare and other programs are brought up occasionally. The discussion of the votes is set forth in terms of House action, Senate action, and conference agreements and it gives the party breakdown for most votes discussed (D = Democrat, R=Republican, I = Independent). The paper looks not only at votes on final passage of bills and adoption of conference reports, but also at votes on amendments considered on the floor of the House and Senate and at votes for recommittal to committee just before passage. It generally does not examine votes that occurred at the committee level. The primary source of the vote information was the Congressional Record. The primary source of the information for the separation of the vote by political party was the Congressional Quarterly. From the start the old-age benefits program aroused argument. Opponents said that the payroll or Social Security tax was likely to overburden industry, reduce the purchasing power of workers, and endanger the growth of private pension plans. In addition, some argued that huge reserves to be built up in the old-age reserve account would become a tempting source of funds that the government could borrow for current spending and, thus, would lead to an increase in the federal debt. Fear that the reserve account would be used to subsidize "New Deal" projects was one reason why some members argued for current financing (pay-as-you-go) of old-age benefits. Some opponents maintained that the federal government did not have the constitutional power to create a national pension plan. Some questioned whether the system could be kept financially sound and whether adequate earnings records could be maintained for so many millions of workers. Still others said that the program was not generous enough. They protested that it gave only partial protection and minimal benefits, and that it imposed a regressive, "soak-the-poor" tax. Proponents maintained that Social Security would provide protection against destitution and dependency in old age and that it would provide persons with an opportunity to care for themselves on a more adequate basis than could be obtained from state old-age assistance payments (welfare). Some regarded the proposal's self-financing method - payroll taxes on employers and employees - as a strength. As workers would be required to pay taxes on their wages in order to receive Social Security, they would acquire an earned right to benefits, and no income test would apply. Further, some said that because the system would be financed by earmarked payroll taxes, it would be relatively free from political and economic pressures that might impair its financial soundness and capacity to do the job intended. Table 1. Social Security Laws, 1935-2000
* The printed law does not show the ordinal number of the Congress that passed it. The number is given here for reference purposes.
Chamber Votes P.L. 271-74th Congress, Enactment of the Social Security Act
The Social Security Act became law on August 14, 1935, when President Roosevelt signed H.R. 7260. Title II of the Act created a compulsory national old-age benefits program, covering nearly all workers in commerce and industry and providing monthly pensions at age 65 for insured workers. A benefit weighted toward lower-paid workers was to be based on cumulative wages and was to be payable beginning in 1942 to persons aged 65 and over who had paid Social Security taxes for at least 5 years. The benefit was to be withheld from an otherwise qualified person in any month in which he or she did any work. Under Title VIII of the Act, a payroll tax of 1%, each, on employees and employers, payable on earnings up to $3,000 each year, was to be imposed as of January 1, 1937, on covered jobs, and was scheduled to rise in steps to 3% by 1949. Besides old-age benefits, the Act provided for a system of federal-state unemployment compensation funded with employer payroll taxes, and for grants to states to help fund assistance payments to certain categories of needy persons (the aged, the blind, and children under 16 who had been deprived of parental support), child welfare services, and maternal and child health services. When the Act was debated in Congress, prominent Republicans in the House and Senate made attempts to delete the provisions creating the old-age pension system. They said they preferred to rely solely on the assistance (charity/welfare) approach to help the aged. They argued that the payroll tax/insurance mechanism of the old-age benefits provisions might be unconstitutional and that it would impose a heavy tax burden on businesses that would retard economic development. Members of the minority stated, in the Ways and Means Committee's report to the House, that the old-age benefits program (Title II) and the method by which the money was to be raised to pay for the program (Title VIII) established a "bureaucracy in the field of insurance in competition with private business." They contended further that the program would "destroy old-age retirement systems set up by private industries, which in most instances provide more liberal benefits than are contemplated under Title II.(1) Although some party members tried to remove the old-age benefits provisions, the majority of Republicans in both chambers nevertheless did vote for the final Social Security bill. During congressional debate, Democrats generally supported the proposed old-age benefits program. 1. House Action. Debate on the Social Security bill started in the House on April 11 and lasted until April 19, 1935. Approximately 50 amendments were offered, but none passed. According to Edwin Witte, a key player in the development of the Social Security Act, House leaders passed the word that they wanted all amendments defeated.(2) Four particularly significant votes were: Mr. Monaghan's amendment proposing a revised "Townsend plan" and Mr. Connery's amendment proposing the Lundeen plan, both of which (described below) called for a more generous social insurance system; Mr. Treadway's motion to recommit H.R. 7260 to delete the old-age benefits program and its related taxes; and the vote on final passage of the bill. a. On April 18, 1935, Mr. Monaghan (D-MT) offered an amendment, introduced in its original form by Mr. Groarty (D-CA) and referred to as the Townsend plan, which required the federal government to pay a $200-a-month pension to everyone 60 years of age and older, to be financed by a 2% tax on "all financial" transactions (essentially a sales tax). (For more details on the Townsend plan see discussion of the 1939 amendments, page 12.) Mr. Monaghan's amendment, although less costly than the original Townsend plan, was rejected by a vote of 56 to 206.(3) b. On April 18, 1935, Mr. Connery (D-MA) offered an amendment that contained the provisions of a bill sponsored by Mr. Lundeen (Farmer-Laborite-MN). The Lundeen bill, which was approved 7-6 by the House Labor Committee, called for the "establishment of a system of social insurance to compensate all workers and farmers, 18 years of age and over, in all industries, occupations, and professions, who are unemployed through no fault of their own ... "(4) Mr. Lundeen's plan offered higher benefits than the Committee's bill, and tied benefits to the cost of living. Under the Lundeen proposal, a more generous social insurance program was to be extended to all workers and farmers unable to work because of illness, old age, maternity, industrial injury, or any other disability. This system was to be financed by taxes falling most heavily on persons with higher incomes (by levying additional taxation on inheritances, gifts, and individual and corporation incomes of $5,000 a year and over). There was a division vote of 52 in favor and 204 opposed. Mr. Connery asked for tellers. The Connery amendment was rejected by a 40-158 teller vote.(5) c. On April 18, 1935, Mr. Treadway (R-MA), the ranking minority member of the Ways and Means Committee, offered an amendment to strike Title II, the old-age benefit provisions, from the bill. Mr. Treadway was opposed to the old-age benefits provision and to the taxing provisions of Title VIII. He said that the financing arrangement was unconstitutional. He indicated that the tax would be particularly burdensome on industry, running up to 6% on payrolls. He said that "business and industry are already operating under very heavy burdens" and maintained that to add a payroll tax to their burden would probably cause more unemployment and more uncertainty.(6) Mr. Jenkins (R-OH), supporter of the Treadway amendment, stated that making each worker pay 3% of his money for old-age benefits, whether he wanted to or not, and requiring employers to do the same, was clearly unconstitutional. He said, "Why talk about wanting to relieve the depression, why talk about charity, why talk about all these other things when you are placing a financial lash upon the backs of the people whose backs are breaking under a load of debts and taxes?" He described the old-age benefits system as "compulsion of the rankest kind."(7) The Treadway amendment was defeated by a 49-125 teller vote.(8)
2. Senate Action. There were also four major votes in the Senate: Mr. Long's (D-LA) proposal to substitute taxes on wealth and property for the payroll tax; Mr. Clark's amendment to exempt from coverage employees in firms with private pensions; Mr. Hastings' motion to recommit; and the vote on final passage of the bill. a. On June 17, 1935, Mr. Long offered an amendment to liberalize the proposed old-age assistance program (Title I of the bill) and delete the payroll tax provisions (Title VIII and IX). In place of the payroll tax, Mr. Long recommended that states levy a tax on wealth or property. Mr. Long's amendment was rejected by voice vote.(14) b. On June 19, 1935, Mr. Clark (D-MO) offered an amendment to exempt from coverage under the old-age benefits system employees in firms with private old-age pension systems. This idea came from an official of a Philadelphia insurance brokerage firm that specialized in group annuity contracts. Proponents of the amendment stated that employees would benefit from more liberal private annuities: which would be in true proportion to earnings and service; joint annuities to protect spouses; earlier retirement for disability; and other reasons. Supporters of the amendment also maintained that the government would benefit because the reserves of private annuity plans would increase investment and create more income to tax. The Administration (being opposed to the amendment) argued that the amendment did not provide true retirement income guarantees because private pension programs could be cancelled, or the firm sponsoring them could go out of business. Critics also maintained that the amendment discouraged the employment of older men. The Ways and Means Committee rejected the proposal and so did the Finance Committee (by a narrow margin), but when Senator Clark offered it as an amendment on the Senate floor, it was passed by a vote of 51 (16-R, 35-D) to 35 (3-R, 30-D, 2-I).(15) c. On June 19, 1935, Mr. Hastings (R-DE) made a motion to strike out the old-age benefits provisions from the bill. Mr. Hastings stated that those provisions were an effort to write into law a forced annuity system for a certain group of people. He maintained that the reserve account to take care of people in the future was not a contract and the American public could not depend upon it. He stated that the accumulation of huge sums of money for persons who had not yet reached retirement age would be subjected to many demands and most likely could not be preserved intact. He also said "let us not deceive that youth by making him believe that here is an annuity whereby he is contributing 50% and his employer is contributing 50%, and that it goes to his credit, when as a matter of fact, part of it is taken from him in order that we may take care of the older people of today."(16) Mr. Hastings' amendment was rejected by a vote of 15 (12-R, 3-D) to 63 (7-R, 54-D, 2-I).(17) d. On June 19, 1935, Mr. George (D-GA) offered an amendment to encourage formation of industrial pensions as a substitute for Titles II and VIII. Under the amendment, employers were to operate and manage their own plans. The amendment called for a uniform schedule of benefits nationwide and provided for disability and survivor benefits along with old-age and unemployment benefits. The amendment was defeated by voice vote.(18) e. The Senate passed the bill on June 19, 1935 by a vote of 77 (15-R, 60-D, 2-1) to 6 (5-R, 1-D).(19) 3. Conference Action. The conferees settled all differences except on the Clark amendments related to employees under private pension plans. The conference committee reported the bill without the Clark amendments, but with an understanding that the Chairmen of the Ways and Means and Finance Committees would appoint a special joint committee to study whether to exempt industrial employers with private pension plans from coverage under Social Security and to report to the next Congress.(20) a. On July 17, 1935, the House rejected Mr. Treadway's motion to accept the Clark amendment by a vote of 78 to 268; (21) then agreed by a vote of 269 to 65 to a motion by Mr. Doughton (D-NC) that the House insist that the Senate drop the Clark amendment.(22) b. On July 17, 1935, the Senate agreed, by voice vote, to Mr. Harrison's motion to insist on keeping the Clark amendment and ask for a further conference.(23) c. On August 8, 1935, the conference report cleared the House by a voice vote.(24) d. On August 9, 1935, the Senate conferees agreed to delete the Clark amendment;(25) the Senate then agreed to the conference report by a voice vote.(26)
B. P.L. 379-76th Congress, Social Security Amendments of 1939 H.R. 6635, the Social Security Amendments of 1939, was signed into law on August 10, 1939, by President Roosevelt. Congress expressly provided in the 1935 Act that the Social Security Board (a three-member panel appointed by the President with advice and consent of the Senate) study and make recommendations on the most effective methods of providing economic security through social insurance. An advisory council appointed by the Senate Special Committee on Social Security and the Social Security Board was created in May 1937 to work with the Social Security Board to study amending Titles II and VII of the Social Security Act. Some members of the advisory council represented employees, some represented employers, and others represented the general public. Both the Social Security Board and the advisory council made recommendations on how the old-age benefits program should be changed, and many of their recommendations were the same. The President sent the Social Security Board's recommendations to Congress on January 16, 1939. The 1939 amendments incorporated most of the Board's recommendations. The 1939 amendments extended benefits to dependents and survivors of workers covered by Social Security. Dependents included an aged wife, a child under 16 (under 18 if attending school), a widowed mother caring for an eligible child, an aged widow, and a dependent aged parent if there were no eligible widow or child. Widows would receive 75% of the primary insurance amount (PIA(27) of the worker, and all other dependents would receive 50% of the PIA. The starting date for monthly benefits was accelerated to January 1, 1940, instead of January 1, 1942. Also, benefits were based on average monthly wages rather than on cumulative wages. In addition, Congress repealed the tax rate increase to 1.5%, scheduled to go into effect in 1940, replacing it with an increase to 2% in 1943-45. The amendments also modified qualifying provisions, including the definition of insured status, for consistency with other changes in the Act.(28) Further, people receiving OASI benefits were permitted to earn up to $14.99 monthly: dollar-for-dollar deductions were to be made for any month in which the recipient earned $15 or more in covered employment. The system now was called old-age and survivors insurance (OASI). Congress also changed the old-age reserve account to a trust fund, managed by a board of trustees. 1. House Action. On June 2, 1939, following public hearings on the proposed amendments and 6 weeks of executive sessions, the Committee on Ways and Means reported to the House H.R. 6635, embodying its recommendations for amendments to the Social Security Act. The day before, the House had debated and voted on the Townsend old-age pension bill. The Townsend plan, embodied in H.R. 6466 introduced by Mr. McGroarty (D-CA) in January 1935, was offered as a substitute for H.R. 6635.(29) The Townsend plan would have provided a monthly pension of $200 to every citizen 60 years of age or older who had not been convicted of a felony. To receive the pension, a person could not earn wages and was required to spend the entire pension within 30 days. The plan would have been financed by a 2% tax on every commercial and financial transaction; the President would have been given discretionary power to raise the tax to 3% or to lower it to 1%. During a 1935 Ways and Means Committee hearing Mr. Townsend stated that his plan was only incidentally a pension plan. He said the principal objectives of the proposal were to solve the unemployment problem and to restore prosperity by giving people purchasing power. He cited Census Bureau data that four million people over the age of 60 held jobs in 1930. He reiterated that in order to be eligible for the proposed pension of $200 a month, those elderly people would have to give up their jobs, which he said meant that 4 million jobs would become available to middle-aged and younger people. In addition, he said that requiring 8 million elderly persons to buy $200 worth of goods and services each month would increase demand and result in more jobs.(30) Mr. Sabath (D-IL) said he thought it was "decidedly out of place to bring the Townsend bill to the floor." He said that the bill "had no chance of passing in the first place; neither was it feasible nor possible of operation."(31) Others branded the bill as "crackpot," and in general objected because they thought that the Social Security program was a better means of caring for the aged, asserting that any liberalization of pensions should be done within the framework of the Social Security Act. Mr. Witte, in his book on the development of the Social Security Act, said: The members of the House of Representatives at all times took the Townsend movement much more seriously than did the senators. The thousands of letters that the members received in support of this plan worried them greatly. With the exception of probably not than a half dozen members, all felt that the Townsend plan was utterly impossible; at the same time they hesitated to vote against it.(32) The House rejected H.R. 6466, the Townsend plan bill, on June 1, 1939, by a vote of 97 (55-R, 40-D, 2-I) to 302 (107-R, 194-D, 1-I).(33) A New York Times editorial reported that "the psychological effect of the presentation of the Townsend bill was to make these liberalized benefits (referring to the provisions in H.R. 6635) seem small. Most of those who voted against the Townsend plan will be eager to vote for these liberalized benefits to show that their hearts are in the right place. The result is that the real cost of the new Social Security scale of benefits is not likely to receive very serious attention."(34) The House took up H.R. 6635 on June 6, 1939. The bill had the general support of the Ways and Means Committee. The minority stated in the Committee's report to the House that "while the bill in no sense represents a complete or satisfactory solution of the problem of Social Security, it at least makes certain improvements in the present law (some of which we have ourselves heretofore suggested) which we believe justify us in supporting it despite its defects."(35) a. On June 9, 1939, Mr. Havenner (D-CA) offered an amendment, endorsed by the American Federation of Labor, to extend Social Security coverage to workers employed in college clubs or fraternities or sororities; employees in nonprofit religious, charitable, or educational institutions; student nurses; and some agricultural workers. The amendment was rejected by voice vote.(36) b. On June 9, 1939, Mr. Kean (R-NJ) offered an amendment that required that the money derived from the Social Security payroll tax be invested in 1-year marketable U.S. government bonds rather than in special nonmarketable Treasury obligations. Mr. Kean remarked that the adoption of the amendment would "prevent the present practice of using old-age taxes for current expenses." The amendment was rejected by voice vote.(37)
2. Senate Action. On July 13, 1939, Mr. Downey (D-CA), in the course of his statement on how "unworkable, unjust, and unfair" the Social Security Act was, moved that the bill be recommitted to the Finance Committee for more study of the whole pension and savings field. Mr. Downey stated that under H.R. 6635 covered workers in 1942 would receive only one-half as much in old-age benefits as those receiving government subsidies (old-age assistance benefits/cash relief). Under H.R. 6635, the average monthly Social Security benefit was projected at between $19 and $20 for 80% of workers in 1942, whereas the maximum old-age assistance benefit was $40. The motion was rejected by a vote of 18 (12-R, 5-D, 1-I) to 47 (4-R, 41-D, 2-I).(41)
3. Conference Action. The conference report was approved by the House on August 4, 1939, by voice vote,(44) and by the Senate on August 5, 1939, by a vote of 59 (14-R, 42-D, 3-I) to 4 (4-D).(45) C. Payroll Tax Freeze, 1942-1947 Between 1942 and 1947, the Social Security payroll tax rate increase was postponed seven times. It was not until 1950 that the 1% Social Security tax rate was allowed to rise to 1.5%. 1. The Revenue Act of 1942, P.L. 753 (H.R. 7378, 77th Congress) was signed by President Roosevelt on October 21, 1942. It provided that for calendar year 1943, the payroll tax rate for old-age and survivors benefits would be frozen at the existing rate of 1% for employees and employers, each, instead of being increased to 2% on each as otherwise would have been required. 2. P.L. 211, (H.J. Res. 171, 78th Congress), a joint resolution regarding the Tariff Act, signed by President Roosevelt on December 22, 1943, froze the payroll tax at the 1% rate until March 1, 1944. The purpose of the resolution was to give Congress time to consider the scheduled payroll tax increase before it went into effect. 3. The Revenue Act of 1943, P.L. 235 (H.R. 3687, 78th Congress), was vetoed by President Roosevelt on February 22, 1944; the veto was overridden by the House on February 24, 1944 and by the Senate on February 25, 1944. The bill deferred the scheduled payroll tax increase (from 1 to 2%) until 1945. P.L. 235 also contained an amendment by Senator Murray (D-MT) that authorized the use of general revenues if payroll taxes were insufficient to meet Social Security benefit obligations. Senator Murray stated that the amendment merely stated in law what had been implied in the Senate Committee report. Senator Vandenberg (R-MI) replied that the amendment "has no immediate application, it has no immediate menace, it contemplates and anticipates no immediate appropriation; but as the statement of a principle, I agree with the amendment completely."(46) The amendment passed by voice vote.(47) The "Murray-Vandenberg" general revenue provision was repealed in 1950, when the tax rate was increased. 4. The Federal Insurance Contributions Act (FICA) of 1945, P.L. 495 (H.R. 5564, 78th Congress), signed by President Rooseve1t on December 16, 1944, froze the payroll tax rate at 1% until 1946 and scheduled the payroll tax rate to rise to 2.5% for the years 1946 through 1948, and to 3% thereafter. 5. The Revenue Act of 1945, P.L. 214 (H.R. 4309, 79th Congress), signed by President Truman on November 8, 1945, deferred the tax rate increase until 1947. 6. The Social Security Amendments of 1946, P.L. 719 (H.R. 7037, 79th Congress), signed by President Truman on August 10, 1946, deferred the tax rate increase until 1948. 7. The Social Security Amendments of 1947, P.L. 379 (H.R. 3818, 80th Congress), signed by President Truman on August 6, 1947, continued the freeze on the tax rate increase until 1950 and provided that it would rise to 1.5% for 1950-51 and to 2% thereafter. Members who favored these payroll tax freezes argued that the Social Security reserves were adequate and that benefit payments in the immediate future could be met with the current payroll tax rate. In a 1942 letter to the Senate Finance Committee, President Roosevelt said that "a failure to allow the scheduled increase in rates to take place under the present favorable circumstances would cause a real and justifiable fear that adequate funds will not be accumulated to meet the heavy obligations of the future and that the claims for benefits accruing under the present law may be jeopardized." He also stated that "expanded Social Security, together with other fiscal measures, would set up a bulwark of economic security for the people now and after the war and at the same time would provide anti-inflationary sources for financing the war."(48) Members who were opposed to the freeze argued that the scheduled payroll tax increase was important for the long-term soundness of the OASI trust fund and that postponing the tax increase would mean higher payroll tax rates in the future and perhaps Government subsidies to meet obligations. Some proponents of the freeze maintained that the Administration wanted the tax increase to retire the public debt accumulated by wartime expenditures. Although Senator Vandenberg (R-MI) was the main spokesman for postponing
the payroll tax increases, the legislative effort to defer tax increases
was bipartisan. "Without regard to party or ideology, elected representatives
of the people were not willing to argue for increases in an earmarked
tax if a current need for them could not be demonstrated," one scholar
has observed.(49) D. P.L. 492-80th Congress, 1948 Provision for Exclusion of Certain Newspaper and Magazine Vendors From Social Security Coverage (H.R. 5052) and P.L. 642-80th Congress, 1948 Provision to Maintain Status Quo Concept of Employee Two pieces of 1948 legislation, H.R. 5052 and H.J. Res. 296, settled the argument of who was considered an employee for purposes of Social Security coverage. The term "employee" was not defined in the Social Security Act or in the Internal Revenue Code. However, in 1936 the Social Security Board and the Treasury Department issued regulations that to a certain extent explained the meaning of the terms "employee" and "employer." In defining "employer," both sets of regulations emphasized the concept of "control" - the right to give instructions, but other significant factors such as the right to discharge, the furnishing of tools and a place to work were also mentioned in the regulations. During the next few years, the Social Security Board and the Treasury Department issued numerous rulings to clarify the boundaries of the employee-employer relationship and a number of court cases established generally applicable precedents. The common-law meaning of the term employee, however, was very unclear in cases of outside salesmen(50) On December 31, 1946, the U.S. district court, in the case of Hearst Publications, Inc. v. The United States, ruled that newspaper vendors should be considered employees rather than independent contractors. H.R. 5052, introduced in 1948, proposed to treat newspaper and magazine vendors as independent contractors rather than employees and thereby to exclude them from Social Security coverage. In addition, in 1948 Congress addressed the broader issue of who was to be considered an employee by passing H.J. Res. 296, a resolution to maintain the status quo of treating newspaper vendors as independent contractors, by stating that Congress, not the courts nor the Social Security Administration (SSA), should determine national policy regarding Social Security coverage. It was reported that H.J. Res. 296 was primarily introduced to prevent the release of new federal regulations defining the meaning of the term "employee" along the lines interpreted by the Supreme Court in three cases decided in June 1947.(51) H.J. Res. 296 excluded from Social Security coverage (and unemployment insurance) any person who was not considered an employee under the common-law rules. In effect, H.J. Res. 296 said that independent contractors (e.g., door-to-door salesmen, insurance salesmen, and pieceworkers) were not to be considered employees. H.R. 5052 and H.J. Res. 296 were vetoed by President Truman. Congress overrode both vetoes. In his veto of H.R. 5052, President Truman asserted that the Nation's security and welfare demanded that Social Security be expanded to cover the groups excluded from the program: "Any step in the opposite direction can only serve to undermine the program and destroy the confidence of our people in the permanence of its protection against the hazards of old age, premature death, and unemployment."(52) The action taken on H.R. 5052 illustrated the controversial issues involved in determining who should be covered under Social Security. 1. House Action. On March 4, 1948, Mr. Gearhart (R-CA) asked unanimous consent for immediate consideration of H.R. 5052. Mr. Gearhart stated that "until the rendition of the federal court decisions I have referred to were rendered the status of the newspaper and magazine vendors was considered by everyone, and as this Congress clearly intended, to be that of independent contractors since they bought their periodicals at a low price and sold them at a higher price, deriving their livelihood from the profit in the operation." Under the court decisions "these vendors were arbitrarily declared to be employees and therefore subject to the payroll taxes though the money they receive is not wages, as generally understood, but profits derived from an independent business operation of their own." Under the court decisions, newspaper and magazine vendors were in essence "employees" of all of the newspaper and magazine companies with which they had an arrangement. H.R. 5052 excluded newspaper and magazine vendors from coverage under the Social Security Act. Mr. Gearhart stated in his remarks that "when newspaper vendors are covered into the Social Security system-and I believe they will be by act of Congress before this session ends - they will be brought in as the independent contractors which they are, as the self-employed ..." H.R. 5052 was passed in the House on March 4, 1948, by unanimous consent.(53)
2. Senate Action. On March 23, 1948, the Senate passed by unanimous consent H.R. 5052 in form identical to that passed by the House.(55)
3. Veto.
4. Veto override.
E. P.L. 734-81st Congress, Social Security Act Amendments of 1950 H.R. 6000, the Social Security Act Amendments of 1950, was signed by President Truman on August 28, 1950. H.R. 6000 broadened the Social Security Act to cover roughly 10 million additional persons, including regularly employed farm and domestic workers, self-employed people other than doctors, lawyers, engineers and certain other professional groups, certain federal employees not covered by government pension plans, and workers in Puerto Rico and the Virgin Islands. On a voluntary group basis, coverage was offered to employees of state and local governments not under public employee retirement systems and to employees of nonprofit organizations. Dependent husbands, widowers, and, under certain circumstances children of insured women were also made eligible for benefits (before, such benefits were not generally available to children of women workers). In addition, Congress raised benefits by about 77%; raised the wage base from $3,000 to $3,600; raised employer and employee taxes gradually from 1.5% to an ultimate rate of 3.25% each in 1970 and years thereafter; set the OASI tax rate for the self-employed at 75% of the combined employer-employee rate; eased requirements for eligibility for benefits by making 1950 the starting date for most people in determining the quarters of coverage needed; permitted recipients to have higher earnings ($50 a month) without losing any OASI benefits (those aged 75 and over could now earn any amount without losing OASI benefits); and gave free wage credits of $160 for each month in which military service was performed between September 16, 1940, and July 24, 1947(64) 1. House Action. On August 22, 1949, the Committee on Ways and Means reported H.R. 6000. H.R. 6000 did not include President Truman's recommendations for health insurance or his request to lower the OASI eligibility age to 60 for women, but it did include disability protection for both Social Security and public assistance recipients. It also extended coverage to farm and domestic workers. All 10 Republicans on the Committee (including seven who voted to send H.R. 6000 to the floor) filed a minority report stating that OASI coverage and benefits should be limited so as to provide only a "basic floor" of economic protection. The minority report opposed the disability insurance provision, saying that aid to the disabled should be limited to charity aid provided under the proposed public assistance program for the permanently and totally disabled.(65) The Committee on Rules at first refused to send H.R. 6000 to the floor, but, after much debate, a closed rule barring floor amendments was granted. A number of Members opposed the rule because they said it foreclosed their right to improve the bill through floor amendments. a. On October 4, 1949, Mr. Sabath (D-IL) offered a resolution for 4 days of debate, with only the Committee on Ways and Means having the right to offer amendments, and with only a motion to recommit being in order. Those favoring the resolution stated that the Ways and Means Committee had devoted 6 months to considering the bill, had heard testimony from 250 witnesses and thus knew best how to improve the program. Those opposing the closed rule said the bill was very controversial and that the whole House should settle difficult questions of policy. They said the closed rule negated the importance of other House Members and usurped their rights. The House agreed to the resolution for a closed rule by a vote of 189 (12-R, 176-D, 1-I) to 135 (123-R, 12-D) on October 4, 1949.(66)
The motion to recommit was defeated by a vote of 113 (112-R, 1-D) to 232 (29-R, 202-D, 1-I).(67)
2. Senate Action. Since Congress adjourned shortly after the House action, the Senate did not consider H.R. 6000 until 1950. The Senate Finance Committee held extensive hearings and adopted many amendments to H.R. 6000. The Committee stated that the chief purpose of the bill was to strengthen the OAS1 system so that OASI would be the primary method of offering "basic security to retired persons and survivors,"(69) with public assistance (particularly old-age assistance) playing strictly a supplementary and secondary role. The Finance Committee version of the bill did not include the disability insurance provision passed by the House nor the provision providing federal grants to states for needy persons who were permanently and totally disabled, nor President Truman's health insurance proposal. The bill was reported to the Senate on May 17, 1950, and debate began on June 12, 1950.
3. Conference Action. Conferees dropped the disability insurance proposal, but retained the public assistance program for the permanently and totally disabled (the so-called charity approach). The conference report was submitted to the House on August 1, 1950.
F. P.L. 590-82nd Congress, Social Security Act Amendments of 1952 H.R. 7800, the Social Security Amendments of 1952, was signed into law on July 18, 1952, by President Truman. The amendments increased OASI benefits for both present and future recipients (by an average of 15% for those on the rolls), permitted recipients to earn $75 a month (instead of $50) without losing OASI benefits, extended wage credits of $160 for each month in which active military or naval service was performed during the period from July 24, 1947, through December 1953, and provided for a disability "freeze," which in principle preserved the Social Security benefits of qualified workers who became permanently and totally disabled before retirement by averaging the person's wages only over his or her working years. (See following conference action section for more details.) 1. House Action. In the House, debate centered largely on a so-called "disability freeze" proposed by the Committee on Ways and Means. Under the provision, if a person became permanently and totally disabled, the period of disability was to be excluded in computing the number of quarters of coverage he or she needed to be eligible for benefits, and in computing the average earnings on which the benefits would be based. The provision, in effect, preserved benefit rights while a person was disabled. Medical examinations by doctors and public institutions would be designated and paid for by the Federal Security Agency (FSA). The American Medical Association (AMA) claimed that this arrangement would lead to socialized medicine. Mr. Reed (R-NY), the minority leader of the Ways and Means Committee, was the primary spokesman for Members who endorsed the AMA position.
2. Senate Action. When the bill came to the Senate Finance Committee, it dropped the disability freeze provision. The Finance Committee said there was inadequate time to study the issue properly. a. The Committee amendment, offered by Mr. George (D-GA), to drop the disability freeze provision, was passed by voice vote on June 26, 1952.(83) b. H.R. 7800 (without the disability freeze provision) was passed in the Senate by a voice vote on June 26, 1952.(84) 3. Conference Action. The conferees retained the disability freeze provision, in principle. The compromise terminated the freeze provision on June 30, 1953; at the same time, it did not allow an application to be accepted before July 1, 1953. Thus, the disability freeze provision was made inoperative unless Congress, in subsequent legislation, were to take action to remove the bar. The stated intent in making the provision inoperative was to permit "the working out of tentative agreements with the States for possible administration of these provisions."(85) In addition, the conferees gave responsibility for determining whether an applicant was disabled to appropriate state agencies (public assistance, vocational rehabilitation, or workmen's compensation), instead of the FSA. The Federal Security Administrator would be able to overturn a ruling by the State agencies that a person was disabled, but would not be able to reverse a ruling by the State agencies that a person was not disabled.
G. P.L. 761-83d Congress, Social Security Amendments of 1954 H.R. 9366, the Social Security Amendments of 1954, was signed by President Eisenhower on September 1, 1954. In his 1953 State of the Union Message, the President recommended that "OASI should promptly be expanded to cover millions of citizens who have been left out of the Social Security system." The Social Security Amendments of 1954 extendedmandatory coverage to, among others, some self-employed farmers, self-employed engineers, architects, accountants, and funeral directors, all federal employees not covered by government pension plans, farm and domestic service workers not covered by the 1950 amendments, and voluntary coverage to ministers and certain state and local government employees already covered by staff retirement systems. The bill also raised the wage base for the OASI tax to $4,200; raised the tax rate to 3.5%, each, for employers and employees beginning in 1970, and to 4.0%, each, beginning in 1975, with the tax rate for the self-employed continuing at 1.5 times the employee rate (or 75% of the combined employee-employer rate). OASI benefits for recipients were raised by roughly 15%, with the maximum individual benefit rising from $85 to $98.50 a month, and a revised benefit formula was provided for future retirees that increased benefits by roughly 27%, with the maximum benefit rising from $85 a month to $108.50. The bill also put the disability freeze into effect (see discussion on page 23), with disability determinations to be made by the appropriate State agencies, permitted a recipient to earn up to $1,200 a year without deductions, eliminated the earnings test for people age 72 and over, and dropped the 5 years of lowest earnings from average monthly wage determinations for benefit computation purposes. 1. House Action. On June 1, 1954, Mr. Smith (D-VA) and other farm area Democrats objected to bringing H.R. 9366 to the floor under a closed rule because coverage of farmers was included in the bill. Mr. Smith stated, "I object to the feature of this bill that prohibits you from offering any amendment. I think that requires a little discussion and a little understanding. We all agree that on an ordinary tax bill it is not feasible or practical to write it on the floor of the House, and therefore we have adopted the theory that we have closed rules on tax bills ... all we asked for in the Rules Committee was that the individual members of this House be given an opportunity to offer amendments to designate what classifications of persons should be included."(87) On June 1, 1954, by a vote of 270 (171-R, 98-D, 1-I) to 76 (5-R, 71-D),(88) debate of the closed rule was cut off, and the closed rule was then adopted by voice vote.
2. Senate Action. H.R. 9366 as reported by the Finance Committee included the coverage of farm and domestic service workers, ministers, employees of state and local governments covered by a retirement system, and a small number of professionals. It also increased the earnings test threshold to $1,200 a year, reduced to 72 the age at the earnings test no longer applied, and increased the lump-sum death benefit from $255 to $325.50. During the Senate debate on H.R. 9366, nine amendments were adopted, six were rejected, and six were presented and then withdrawn.(91)
b. Among the amendments defeated were the Johnston (D-SC) amendment to reduce the Social Security eligibility age to 60; the Stennis (D-MS) amendments that would have left the coverage of farm workers unchanged; and the Humphrey (D-MN) amendment to increase the widow's benefit to 100% of the primary insurance amount. On August 13, 1954, Mr. Johnston's amendment was rejected by voice vote.(93) On August 13, 1954, the Stennis amendments were rejected en bloc by voice vote.(94) On August 13, 1954, Mr. Humphrey's amendment was rejected on a division vote.(95) c. Among the amendments that were presented and then withdrawn was an amendment by Mr. Lehman (D-NY) to extend Social Security coverage, increase benefits, add permanent and total disability and temporary disability Social Security benefits, and to make other changes.(96) d. On August 13, 1954, the Senate passed H.R. 9366, by voice vote.(97) 3. Conference Action. The conferees, among other things, accepted a provision mandatorily covering self-employed farmers, accountants, architects, engineers, and funeral directors, but excluding lawyers, doctors, dentists, or other medical professionals, and extended coverage to federal employees not covered by staff retirement systems.
H. P.L. 880-84th Congress, Social Security Amendments of 1956 H.R. 7225, the Social Security Amendments of 1956, was signed by President Eisenhower on August 1, 1956. The amendments provided benefits, after a 6-month waiting period, for permanently and totally disabled workers aged 50 to 64 who were fully insured and had at least 5 years of coverage in the 10-year period before becoming disabled; to a dependent child 18 and older of a deceased or retired insured worker if the child became disabled before age 18; to women workers and wives at the age of 62, instead of 65, with actuarially reduced benefits; reduced from 65 to 62 the age at which benefits were payable to widows or parents, with no reduction; extended coverage to lawyers, dentists, veterinarians, optometrists, and all other self-employed professionals except doctors(99) increased the tax rate by 0.25% on employer and employee each (0.375% for self-employed people) to finance disability benefits (thereby raising the aggregate tax rate ultimately to 4.25%); and created a separate disability insurance (DI) trust fund. The Social Security program now consisted of old-age, survivors, and disability insurance (OASDI). 1. House Action. Major House Ways and Means Committee provisions provided benefits to disabled persons age 50 and older and reduced the age at which women could first receive OASI benefits to 62. Although some Members maintained that not enough time was spent in working out the details of these two controversial provisions, H.R. 7225 was brought to the floor under suspension of the rules, which barred floor amendments and required a two-thirds vote for passage. H.R. 7225 was passed by the House on July 18, 1955, by a vote of 372 (169-R, 203-D) to 31 (23-R, 8-D).(100) 2. Senate Action. At Senate Finance Committee hearings on the House-passed bill, the Secretary of Health, Education, and Welfare, Mr. Folsom, stated that the Administration was opposed to reducing the retirement age to 62 for women and providing disability benefits. According to Congress and the Nation, Mr. Folsom said that OASI had stayed actuarially sound without excessive taxes because it had been restricted to one purpose with "predictable costs": providing income for the aged.(101) Spokesmen for the AFL-CIO and several other groups maintained that union experience with welfare plans and federal studies dating back to 1937 showed that disability insurance was both administratively and financially sound.
3. Conference Action. The House on July 26, 1956,(105) and the Senate on July 27, 1956,(106) cleared the conference report on H.R. 7225 without amendments by voice votes. I. P.L. 85-840, Social Security Amendments of 1958 H.R. 13549, the Social Security Amendments of 1958, was signed by President Eisenhower on August 28, 1958. The amendments raised recipients' benefits an average of 7%, with benefits ranging from $33 to $127 per month for future recipients; increased maximum family benefits from $200 to $254; raised the wage base from $4,200 to $4,800 a year; increased the tax rate by 0.25% on employers and employees each and 0.375% for the self-employed; provided benefits to dependents of workers receiving disability benefits; and permitted the aged dependent parents of an insured deceased worker to receive survivors' benefits even if the worker's widow or dependent widower or child were alive and also eligible for benefits. 1. House Action. Most of the controversy over H.R. 13549 pertained to public assistance programs. There was relatively little controversy over the proposed OASDI provisions. During debate on H.R. 13549, Mr. Reed (R-NY) stated that the bill would strengthen the actuarial soundness of the Social Security program.(107)
2. Senate Action. On August 15, 1958, Mr. Yarborough (D-TX) offered an amendment to increase benefits by 10%, rather than 7%, as proposed in H.R. 13549. Mr. Yarborough stated that in many states old-age public assistance payments were higher than the "Social Security payments the people have earned by putting their money into the Social Security fund."(109)
d On August 16, 1958, Mr. Humphrey (D-MN) offered an amendment to provide health insurance (Mr. Morse's amendment was based in part on this Humphrey amendment). Mr. Humphrey withdrew his amendment.(113) e. On August 16, 1958, Mr. Kennedy offered an amendment for himself and Mr. Smathers (D-NJ) to eliminate the dollar ceiling of $255 on the lump-sum death benefit and restore the 3-to-1 ratio between the death benefit and the regular monthly benefit. The amendment was rejected by voice vote.(114) f. On August 16, 1958, Mr. Revercomb (R-WV) offered an amendment to provide full Social Security retirement benefits at age 62, for both men and women. Mr. Revercomb's amendment was rejected by voice vote.(115) g. The Senate passed H.R. 13549 on August 16, 1958, by a vote of 79 (37-R, 42-D) to 0.(116) 3. House Concurrence. On August 19, 1958, the House by a voice vote agreed to the Senate amendments.(117) J. P.L. 86-778, Social Security Amendments of 1960 H.R. 12580, the Social Security Amendments of 1960, was signed by President Eisenhower on September 13, 1960. Health care for the aged was the primary issue in 1960. At the crux of the debate was the question of whether the federal government should assume major responsibility for the health care of the Nation's elderly people, and, if so, whether medical assistance should be provided through the Social Security system or through the public assistance programs (charity approach). The 1960 amendments provided more federal funds for old-age assistance (OAA) programs so that states could choose to improve or establish medical care services to OAA recipients. In addition, the legislation known as "Kerr-Mills" established a new voluntary program (under jurisdiction of the OAA program) of medical assistance for the aged, under which states received federal funds to help pay for medical care for persons aged 65 and older who were not recipients of OAA but whose income and resources were insufficient to meet their medical expenses. The 1960 amendments also contained a number of OASDI provisions. The amendments made disability benefits available to workers under age 50; established a new earnings test whereby each dollar of yearly earnings between $1,200 and $1,500 would cause only a 50-cent reduction in benefits with a dollar-for-dollar reduction for earnings above $1,500; liberalized requirements for fully insured status so that to be eligible for benefits a person needed only one quarter of covered work for every three calendar quarters (rather than 1 for every 2 quarters, as under the old law) elapsing after 1950 and before retirement, disability, or death; and raised the survivor benefit of each child to 75% of the parent's PIA. 1. House Action. H.R. 12580 as reported by the Ways and Means Committee contained two medical care provisions for elderly people. The first provision provided the states with additional funding to improve or to establish medical care programs for old-age assistance recipients. The second provision established a new federal-state program (under a new title of the Social Security Act) designed to assist aged persons who were not eligible for public assistance but who were unable to pay their medical bills. The Ways and Means Committee rejected H.R. 4700, introduced by Mr. Forand (D-RI), which would have provided insurance against the cost of hospital, nursing home, and surgical services for OASDI recipients, by a vote of 17 to 8. Proponents of H.R. 12580 said that it provided medical assistance for every aged person in any state that implemented a medical assistance program. Mr. Thompson (D-NJ), a supporter of the Forand bill stated that, under H.R. 12580, people would be "denied the opportunity of contributing to their old-age health insurance coverage while employed and would be forced to rely upon charity after their working days were over."(118) He contended further that "even this charity . . . is contingent upon the action of the separate states."(119)
2. Senate Action. The Senate deleted the bill's new title, and instead adopted an amendment by Mr. Kerr (D-OK) and Mr. Frear (D-DE) that amended Title I of the Social Security Act to provide medical services for medically needy aged persons.
c. On August 23, 1960, the Senate passed by voice vote Mr. Byrd's (D-WV) amendment to permit men to retire at age 62 with actuarially reduced benefits. (The amendment was later dropped in conference.)(123) d. The Senate passed H.R. 12580 on August 23, 1960, by a vote of 91 (31-R, 60-D) to 2 (l-R, 1-D).(124) 3. Conference Action. The conferees agreed to the medical care provisions in the Senate-passed bill (i.e., no new title for a program for aged persons not eligible for OAA benefits). The medical provisions became known as the Kerr-Mills program, named for Senator Robert Kerr (D-OK) and House Ways and Means Committee Chairman Wilbur Mills (D-AR).
K. P.L. 87-64, Social Security Amendments of 1961 H.R. 6027, the Social Security Amendments of 1961, was signed into law on June 30, 1961, by President Kennedy. In general, the amendments made many of the changes in the Social Security program recommended by President Kennedy in his February 2, 1961, message to Congress, in which he outlined a program to restore momentum to the national economy.(127) The amendments raised the minimum benefit to $40 per month; permitted men to retire at age 62, instead of 65, with actuarially reduced benefits; liberalized the insured status requirement so that, subject to the 6-quarter minimum and the 40-quarter maximum, an individual was fully insured if he had one quarter of coverage for every calendar year that elapsed between January 1, 1951, or age 21, whichever was later, and the year before he died, became disabled, or reached retirement age; increased benefits to a surviving aged widow, widower, or dependent parent of an insured deceased worker from 75 to 82.5% of the benefit the worker would have been entitled to if alive; changed the earnings test so that an aged recipient had no benefits withheld for the first $1,200 a year of earnings, $1 withheld for each $2 earned between $1,200 and $1,700, and a dollar-for-dollar reduction of earnings above $1,700; and raised the employer and employee tax rates by 0.125% and the self-employed tax rate by 0.1875%.(128) 1. House Action. In the House, the principal point of dissension was the provision in H.R. 6027 that lowered the eligibility age for men from 65 to 62. Several Republicans opposed the provision on the basis that it would likely start a trend toward "compulsory retirement" at age 62. Speaking for himself and most of the minority Committee members, Mr. Curtis (R-MO) stated, "The reason [we are] against the age 62 [provision] is this: our older people are having a hard enough time now to stay in the labor market. This provides further incentive to drive them out."(129) a. On April 20, 1961, Mr. Curtis made a motion to recommit H.R. 6027(130) and substitute a measure that cut out the provisions for lowering the first eligibility age for men, increased benefits for widows, and raised the minimum benefit from $33 to $40. The motion was rejected by voice vote.(131) Note that the provisions raising the minimum benefit and increasing benefits for widows were already in H.R. 6027 as reported out of Committee. b. The House passed H.R. 6027 on April 20, 1961, by a vote of 400 (149-R, 251-D) to 14 (14-R).(132) 2. Senate Action. In the Senate, debate focused on Mr. Cotton (R-NH)'s amendment made on June 26, 1961 to increase the earnings test limit to $1,800 a year.(133) Mr. Kerr (D-OK) said that Mr. Cotton's amendment failed to provide increased OASDI taxes to pay for the additional $427-$615 million that would be paid out each year under the proposed amendment.(134) Mr. Kerr stated that "an amendment which would result in the impairment of the fiscal integrity of the fund should not be pressed."(135)
3. Conference Action. Both chambers cleared the conference report by voice votes June 29, 1961.(140) L. Proposed Social Security Amendments of 1964 H.R. 11865, the proposed Social Security Amendments of 1964, was passed by both the House and the Senate but the Conference Committee could not reach agreement, adjourning on October 3, 1964 without making any recommendations. The proposed Social Security Amendments of 1964 as passed by the House contained a 5% across-the-board Social Security benefit increase; extended the child's benefit to age 22 if he or she were in school; allowed widows to retire at age 60, with actuarially reduced benefits; provided limited benefits to persons aged 72 and over who had some Social Security coverage but not enough to meet the minimum requirements of existing law; and extended Social Security coverage to groups of persons who previously had been excluded. The House-passed bill contained no provision relating to hospital insurance for the aged. The proposed Social Security Amendments of 1964 as passed by the Senate contained a hospital insurance program, the so-called King-Anderson bill; increased benefits: raised the earnings base; liberalized the earnings test; changed the eligibility requirements for the blind; and permitted religious groups to reject Social Security coverage if they had religious objections to social insurance). 1. House Action. H.R. 11865, the proposed Social Security Amendments of 1964, was reported out of the Ways and Means Committee on July 7, 1964. The bill was debated under a rule that permitted only Committee amendments. No amendments were offered.
2. Senate Action. The Finance Committee approved H.R. 11865 on August 21, 1964. The Committee rejected several amendments that would have created a hospital insurance program for the aged through the Social Security program.
3. Conference Action. The Conference Committee on H.R. 11865 could not reach agreement. The conferees from the Senate voted 4 to 3 to insist on including the hospital insurance provisions; the conferees from the House, by a 3 to 2 vote, refused to accept such provisions.(146) The Conference Committee adjourned on October 2, 1964. M. P.L. 89-97, Social Security Amendments of 1965 H.R. 6675, the Social Security Amendments of 1965, was signed into law on July 30, 1965, by President Johnson. Although a federally operated health insurance program covering the entire nation was considered by the Roosevelt Administration in 1935, it was not explicitly endorsed until January 1945, when President Roosevelt's budget message called for an "extended Social Security including medical care." Such a plan was submitted to Congress by President Truman in November 1945, but neither chamber acted on the proposal, in large part due to strong opposition by the AMA. The controversy surrounding the establishment of a federal health insurance program for the aged was finally ended by the 1965 amendments (H.R. 6675),(147) which established a basic two-part health insurance program called Medicare (Title XVIII of the Social Security Act). The costs of hospitalization and related care would be met in part by a compulsory program of Hospital Insurance (HI, part A), financed by a separate payroll tax. The program would serve recipients of the Social Security and railroad retirement programs, age 65 and older. A voluntary Supplementary Medical Insurance (SMI) plan (Part B) would help pay doctor bills and related services, for all persons age 65 and older, financed through monthly premiums paid by the recipient and a matching federal payment from general revenues. The amendments also provided a 7% across-the-board increase in OASDI benefits, extended compulsory self-employment coverage to doctors, made child's benefits available through age 21 if the child attended school full time (under prior law, they were available only through age 17), permitted widows to receive actuarially reduced benefits at age 60 rather than age 62, provided benefits to divorced wives and widows under certain conditions, increased the earnings test amount to $1,500 with $1 withheld for every $2 earned up to $2,700, and provided that an insured worker would be eligible for disability benefits if his or her disability was expected to end in death or to last for 12 consecutive months, instead of indefinitely. The 1965 amendments also increased the payroll tax rate and the taxable wage base. In addition, P.L. 89-97 reduced the number of quarters of work necessary for persons age 72 or over to have insured status (from 6 quarters to 3 quarters for a worker and from 6 quarters to 3 quarters for a wife who reached age 72 in or before 1966, to 4 quarters for a wife who turned 72 in 1967, and to 5 quarters for a wife who attained age 72 in 1968). Further, a new federal-state medical assistance program established under Title XIX of the Social Security Act replaced the Kerr-Mills law (medical assistance for the aged that was enacted in 1960). The program was to be administered by the states, with federal matching funds. The new Medicaid program was available to all people receiving assistance under the public assistance titles (Title I, Title IV, Title X, and Title XIV) and to people who were able to provide for their own maintenance but whose income and resources were insufficient to meet their medical costs. 1. House Action. A federal hospital insurance program, or "Medicare," had been passed only once by the Senate, in 1964, and then by a narrow margin. It had never been approved by the Ways and Means Committee and thus had not been put to a House vote. The 1964 congressional elections, however, brought 42 new Northern Democrats into the House, almost all of them Medicare supporters.(148) The Ways and Means Committee began holding executive sessions on H.R. 1, a bill to establish a social insurance program for hospital and related care for the aged, on January 27, 1965. The Committee reported H.R. 6675 March 29, 1965, with all 17 Democrats favoring the bill and all 8 Republicans opposing it. House floor debate centered on the Medicare proposal. Supporters said it was long overdue. Critics opposed its compulsory nature, argued that it would be financed by a "regressive" payroll tax, and said it would endanger the Social Security cash benefit program. Republican spokesmen instead wanted a voluntary health plan (as opposed to a mandatory social insurance approach) with a Medicaid-like program underpinning it to provide medical assistance for the needy aged.
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