Martha A. McSteen

small photo of McSteen

MARTHA A. McSTEEN

Acting Commissioner
Social Security Administration
 


"Social Security--Reflections and Projects"
The 19th century philosopher Hegel once wrote that "What experience and history teach is this--that people and governments never have learned anything from history, or acted on principles deduced from it." He obviously wrote before the advent of Social Security. When I look back over the 50 years of Social Security in the United States and review how our Nation took the lessons of the past and adapted them to the future, creating the most successful social programs in our Nation's history, I know that, at least in this instance, there was an exception to Hegel's philosophy.. The people, the principles, the wisdom and foresight of many in government that created Social Security and brought it from its infancy in 1935 to the mature and successful set of programs that is Social Security in 1985 used the lessons of history and experience wisely, with compassion and with imagination. We must do no less for the future.

Although I do not have direct experience of the tremendous accomplishments of the 1930's, it was then that the original Social Security Act was designed, the fundamental principles that have guided the program ever since were conceived, and many of the innovative administrative approaches needed to run a national program of earnings-related social insurance were first developed. By the time I came on the scene in 1947, we were paying monthly benefits to almost 2 million people at an annual rate of nearly $500 million. A far cry from the very early days, when I'm told we once made a 17 cent lump-sum retirement payment. And how much further from today, when OASDI benefits are going to 37 million people at a rate of $182 billion a year.

Yet, as far removed as today's Social Security statistics may seem from those of 1947, let alone still earlier times, there are certain fundamental principles that form a direct linkage between the program as it was then and the program as it exists today. They reflect, I believe, our ability to learn from history and experience, to see what worked and did not work, and to couple this pragmatic knowledge with a visionary sense of what the country needed in order to build the most effective and important social programs in the United States. To my mind, the past--and indeed the future--success of Social Security is rooted in these four basic principles.

  • The concept of "earned right." Perhaps the most fundamental source of public support for Social Security is the idea that retirement and survivor benefits (and, latterly, disability benefits) belong to eligible individuals as a matter of right. based on work in covered employment.
  • The floor of protection concept. Social Security is intended to provide for only the most basic income needs of retired or disabled workers, and survivors of deceased workers. It replaces only a portion of income lost due to retirement, disability or death, and is weighted toward more fully replacing the income of individuals with lower earnings during their working years. In this way it provides a floor or foundation onto which many beneficiaries may build by adding income from private sources such as individual savings and private pensions.
  • Continual adjustment to the needs of our society. Throughout their history, the Social Security programs have been dynamic, altering to meet the changing needs and attitudes of the American people. The original legislation was correctly described as "a cornerstone in a structure which is being built but is by no means complete." The extension of coverage to new groups of workers beginning in the 1950's, the addition of disability insurance in 1954-56, Medicare in 1965, and supplemental security income in 1974 are all reflections of this principle. Less obvious but equally important changes have been the indexing of benefits to price increases, the stabilization of initial retirement benefit levels as a percentage of the current value of pre-retirement earnings, and the elimination of gender based distinctions in the law.
  • A tradition of service to the public. From our earliest days, the men and women of the Social Security Administration have prided themselves on providing all Americans with prompt, courteous, accurate and efficient service. We have not always succeeded fully, but we have always tried for these goals. And today, when the provision of such service requires the most up-to-date and comprehensive computer systems, we are embarked on a massive Systems Modernization Plan designed to provide "state of the art" capabilities to our service delivery.

I do not mean to imply that adherence to these principles has always been accomplished without difficulty, or that we have a flawless or trouble-free Social Security system. Anyone who has read the newspapers, watched television, or followed the news some other way during the past few years surely knows that this is not the case. But the financial crises of the early 1980's in the OASDI programs have been resolved by the Social Security Amendments of 1983--the Board of Trustees recently reported that the combined programs were in sound financial shape for the next 75 years--and we are well on our way to correcting other deficiencies in the disability insurance program.

Most important, as President Reagan stated when he signed the 1983 amendments, is the Nation's continued commitment to the vitality of the Social Security programs:

This Bill demonstrates for all time our nation's ironclad commitment to Social Security. It assures the elderly that America will always keep the promises made in troubled times a half a century ago. It assures those who are still working that they, too, have a pact with the future. From this day forward, they have our pledge that they will get their fair share of benefits when they retire.

We have a sound basis for the next 50 years of Social Security. We have 50 years of experience in the successful application of proven principles. If we, as a Nation, learn from this experience and apply it wisely to the challenges and opportunities that face the Social Security programs--the treatment of women in a changing society, increases in longevity and their implications for retirement policy, and a host of others--these programs will continue to well and faithfully serve our national needs.

 

In addition to the President, the Secretary, and the Acting Commissioner, 13 others were asked to reminisce about their experiences with the social security program over the past 50 years. Six are former commissioners--John Svahn, William Driver, Stanford Ross, James Bruce Cardwell, Robert Ball, and Charles Schottland. Jo Anne Ross is now Associate Commissioner for Family Assistance. The others-- Wilbur Cohen, John Carson, Alvin David, Jack Futterman, Ida Merriam, and Robert Myers--although no longer directly involved in the operation of the program, have been instrumental in its development. Their messages contain important insights into the evolution of the social security system.