Need for a Disability Program in the United States
benefits were not part of the original Social Security
Act, there was a widespread view among social insurance
advocates that disability benefits were a logical part
of the "comprehensive package of protection"
that President Roosevelt had called for in announcing
his Administration's initiative to create a social insurance
system. Although the Committee on Economic Security
that drafted the President's proposal did not advance
a disability plan, the staff did publish two studies
examining the issue and the Committee's report recommended
". . . that provision should be made for the further
study of the occurrence of permanent disability and
of measures to furnish protection against this risk."(17)
a determination to encourage expansion of the program
to include disability and there were continuous efforts,
both within and outside of SSA, to achieve this aim.
The all-important Advisory Council of 1937-38 recommended
the expansion of Social Security to include disability
benefits, and SSA's own report cautiously supported
this recommendation. In its February 1939 issue, the
Social Security Bulletin published its first
major study of disability, in which Elizabeth Otey estimated
that on any given day as many as 7 million Americans
were unable to work due to a disability, and Otey made
the case that voluntary disability coverage was not
meeting the demonstrated need. In its January 1941 issue,
the Bulletin featured an article coauthored by
I.S. Falk (the Director of the Bureau of Research and
Statistics) and Barkev Sanders, which attempted for
the first time to estimate the potential size of a program
for permanent disability coverage along lines then being
considered in Congress. The March 1941 issue of the
Bulletin then led with a long policy essay by
Arthur Altmeyer titled "Social Insurance for Permanently
Disabled Workers," in which Altmeyer argued that
"the social insurance method is applicable to the
risk of disability as well as old age." And the
June issue headlined a "special article" by
one of the Bureau's physicians describing how the difficult
problem of making disability determinations could effectively
be handled. (18) It was clear that SSA was steadily
laying the groundwork to argue that the Social Security
Act should be extended to cover disability benefits.
In spite of
all this effort, and the well-documented need for them,
cash disability benefits would not become part of Title
II until more than 20 years after the original Act was
passed. The reasons are many and complex, and no one
explanation is universally accepted. Certainly, there
were powerful political and societal forces in opposition
to this expansion. For example, the American Medical
Association viewed any involvement by the government
in disability decisions as trespassing on the prerogatives
of the physician. Private insurance companies were opposed
to the government offering disability coverage, despite
the fact that the private sector had abandoned this
market following their disastrous losses on disability
insurance during the early 1930s. Indeed, the insurance
companies were certain that the government could not
operate a successful disability program, since they
had found it impossible to do so. Many in Congress were
worried that disability insurance would entangle the
government in a benefit program whose costs could not
be contained. And almost everyone worried about the
problem of"moral hazard," which meant that
it was too difficult to tell if someone was really disabled.
Many people doubted that any sound system of disability
determinations could be devised. (19)
the weight of all these concerns, SSA found itself in
the disability business during 1943-45. The CWB program
was special in many respects, to be sure, and yet it
was a fairly comprehensive social insurance program
paying survivors benefits, dependents benefits, disability
benefits, and health-care benefits. Prior to the creation
of the CWB program the only similar programs in operation
in the United States were those for veterans, and State-run
workers' compensation programs. But the CWB program
was not just workers' compensation for civilian defense
workers (they were added to the program by the second
Presidential letter), and it was not a program limited
only to veterans. CWB paid its range of social insurance
benefits to any and all American civilians, provided
only that they were in some way harmed by a war-related
trauma. So we could say that this little program represented
in microcosm a large part of the comprehensive Federal
approach to social insurance provision so ardently sought
by the advocates of social insurance. How was President
Roosevelt able to create the CWB program without the
consent of Congress, and how was SSA able to operate
the CWB program, including making many substantive policy
decisions, all without any serious public objection?
The answer is that the CWB program was unique many ways.
First, it was an emergency wartime program and many
government activities were tolerated in the name of
the war effort. Second, it was a small program, involving
only a select group of especially "deserving"
beneficiaries who had become disabled in the service
of their country. It did not cost much money; and finally,
it was temporary, so opposition hardly seemed necessary.
At the same
time, it is important to appreciate that SSA successfully
operated a disability program, including the key sensitive
issue of making disability determinations, for more
than 2 years. Strategies were found to accommodate the
concerns of the medical community; disability determination
schedules were developed; and rigorous procedures and
evidentiary requirements were put in place to guard
against "moral hazard." Familiar disability
concepts were introduced and put into operation that
included presumptive disability, multiple impairments,
waiting periods, continuing disability reviews, and
so forth. In short, SSA was in the disability business
and was successful at it.
It would be
natural then to expect that this early success with
disability would be used by the advocates of expanding
Title II benefits as a foot in the door to get SSA into
the disability business. After all, a plausible argument
could be made that many of the core problems in operating
a disability program had been faced and solved in the
CWB program. And yet this argument was never made. As
World War II was drawing to a close, the Social
Security Bulletin again took up its crusade on
behalf of disability. In its January 1945 issue, just
3 months before the last disability claim was taken
under the CWB program, the Bulletin published two excerpts
from the Ninth Annual Report of the Social Security
Board, on the need for disability and health insurance.
The argument for disability insurance was passionate
and sustained. The Board argued:
. . .
the United States is the only Nation which insures workers
against old age without insuring them against permanent
or chronic disability. . .The vast wage loss from disability
in any given year falls on only a small minority of
all workers' families, though all are subject to risk
of loss. . .Disability insurance, like life insurance
or fire insurance, is a way of distributing the losses
of the relatively few over the many who are subject
to the risk. . . The field organization, wage records,
administrative experience, and other characteristics
of the Federal old-age and survivors insurance system
provide a ready framework for administering benefits
for permanent total disability. (20)
Here was SSA
making the argument that a permanent disability program
was needed and that its experience administering old-age
benefits qualified it to run such a program. SSA's
experience with the CWB program is never mentioned.
SSA simply turned over the CWB program to the Employees
Compensation Commission and went back to its old approach
to the advocacy of disability insurance. The explanation
for this is probably the same as the reason why the
CWB program was so easily created in the first place.
The CWB program was a small, temporary, wartime emergency
program, and as such, it was not seen as having precedential
value in the larger struggle for disability insurance.
Even so, it is surprising that the argument was not
made that the experience with the CWB program proved
SSA could operate a successful disability program. Whether
it would have been persuasive is another matter; but
the fact that it was not even attempted is puzzling.
I think we are entitled to conclude that this failure
to build on the CWB program was a small but significant
missed opportunity for advocates of disability insurance.
soon as the Social Security Act was signed, executives
at SSA began a long, determined campaign for disability
benefits. For years, a viable disability program, along
with some form of health insurance, were viewed as the
obvious missing elements in Social Security, and SSA
was conducting research on disability programs and subtly
lobbying for the addition of disability to its existing
the Federal Security Administrator tasked SSA with the
operation of the CWB program, they were, you might say,
rehearsed and ready. And, quite naturally, the program
SSA devised had many features in common both with the
existing OASI program and other governmental disability
programs. Indeed, as we have seen, there was a remarkable
degree of similarity between the CWB program and the
later Title II cash disability benefits program. Conceptually
speaking, the CWB program can be viewed as a clear intellectual
progenitor of Title II cash benefits. The officials
at SSA who created and managed the CWB program clearly
saw it as being in the social insurance tradition and
as having intellectual roots in existing disability
programs. And yet when it came time to use the experience
with CWB as a "foot in the door" in pursuing
cash disability benefits, that connection was not made.
This failure to retain the CWB program and to use it
to make the case for Title II cash benefits may well
be judged a significant missed opportunity.
In any event,
it is certainly significant that SSA was in the disability
business as early as 1943, long before cash disability
benefits became part of Title II. This largely overlooked
episode in the history of disability benefits at SSA
is yet another intriguing facet of disability's rich
The idea for this note came from conversations
with Mr. Herbert Borgen, whose oral history of the early
years of disability at SSA was an important source of
information about the Civilian War Benefits program
and its significance as an antecedent to later developments
in disability. I also am indebted to Mr. Borgen for
his review of an earlier draft of this note and for
several pertinent corrections/ improvements he suggested.
Professor Edward Berkowitz, Chairman of the Department
of History at George Washington University, also generously
gave of his time to read an earlier draft of this note
and to offer helpful suggestions for increasing the
rigor of my analysis.
of the Civilian War Benefits program are available at
the National Archives II; RG-47, 833.2-847.2, Boxes
342-346. Some portions of the records are also available
in the SSA History Archives at SSA Headquarters in Baltimore.
(1) The first
cash disability payments under Title II were paid in
January 1957 to disabled adult children of retired or
deceased wage earners. Monthly disability payments to
the wage earners themselves were first made in July
1957. Although Medicare was enacted into law in July
1965, the first reimbursement claims were not processed
until July 1966, after the completion of a 1-year implementation
(2) From 1935
until 1946, SSA was known as the Social Security Board
(SSB). As part of the President's Reorganization Plan
of 1946 the Board was abolished and was replaced by
the Social Security Administration (SSA). The three-member
executive board of the SSB was also replaced in favor
of a single Commissioner as head of the agency. Throughout
this note, for convenience, SSA is referred to, rather
than SSB and SSA. The reader should keep in mind that,
technically, it was the SSB rather than the SSA that
was involved in most of the events discussed herein.
(3) In fact,
the first claims under this program, for dependents'
benefits, were paid in March 1942.
(4) The CWB
program formally ended in May 1945, although entitled
beneficiaries continued receiving payments. SSA turned
the remaining caseload over to the U.S. Employees Compensation
Commission (USECC), a sister organization within the
Federal Security Agency, in 1947. The USECC was described
by contemporaries as the "Smithsonian attic"
of Federal programs, since it housed several extinct
programs with lingering beneficiary caseloads. In 1950,
the USECC was abolished and its functions, including
the CWB program, were subsumed by the Department of
Labor. The Department of Labor continues to administer
the CWB program to the present day.
War Benefits and War Relief Act of 1942," Report
No. 1448, from the Committee on Education and Labor,
June 8, 1942, p. 6.
(6) The term
"enemy alien" when used in these programs
meant simply a resident non-citizen of Japanese, German,
or Italian origin.
material not included in the print version of this article)
program provided a variety of types
of assistance, everything from food, clothing and shelter,
to language training and transportation. The main effort
involved repatriation of American citizens who were
abroad at the outbreak of the war. For a time, two employees
of SSA's Bureau of Public Assistance were assigned to
the largest ship bringing passengers back to the U.S.;
these staffers made the hazardous journey across the
oceans so they could begin the preliminary work with
the repatriates while the ship was still at sea. A longtime
SSA executive, Jack Futterman, was an unwitting observer
of the CWA program in action. After serving in the Navy
for more than two years in the Pacific, Jack received
a 30-day leave state-side. The only transport available
was a ship repatriating civilians from the Philippines.
The civilians had been imprisoned by the Japanese under
near-starvation conditions and many were frail and undernourished.
So the ship was ordered to make the crossing to California
as slowly as possible while the crew engaged in a massive
feeding program to restore the passengers to health.
As a result, Jack spent a month-and-a-half at sea, eating
ice cream, before he could make it home to start his
30-day leave. (Cf. Futterman, Jack S., SSA Oral History
Interview, 7/26/96. SSA History Archives.)
the main workload of the CWA program involved repatriation
activities, the workloads fluctuated dramatically as
repatriations occurred from particular war zones. The
two biggest repatriations were in 1945 following the
liberation of the Philippines and from Europe in 1946.
more than 67,000 individuals were repatriated to the
U.S. under support of the CWA program. Total program
expenditures from April 1942 through June 1948 were
approximately $4.3 million. The CWA program was initially
funded as part of the Presidential Allocations. For
fiscal year 1946-1947 the Congress appropriated funds
for this program as part of the FSA budget even though
there was no authorizing legislation for the program
itself. The Congress made a similar appropriation for
FY 1947-1948 but refused to further fund the program
because of the absence of supporting legislation; so
the program terminated in June 1948.
purpose of the ASEA program
was as a funding mechanism to provide some assistance
to resident aliens who were under government restriction,
such as forced relocation from sensitive defense areas
or even involuntary internment. The FSA was not responsible
for any of the decisions that resulted in these restrictions
on resident aliens, and in some sense, FSA's role was
beneficent in that it paid monetary benefits to the
aliens themselves as well as providing in-kind goods
and services. Typical of FSA's role was the payment
of transportation costs to help previously interned
aliens return to their homes.
policy issue that arose during the internment was the
eligibility of the interned aliens for unemployment
benefits. The affected aliens were involuntarily terminated
from their employment and would ordinarily have been
eligible for unemployment. However, the problem was
that the law required the worker to be "available
for work" as a condition to qualify. State unemployment
agencies ruled that interned aliens were not available
for work and hence the State did not have to pay them
unemployment benefits. Since SSA's Bureau of Employment
Security formulated Federal policy for the State unemployment
programs, SSA was called upon to rule on the issue.
SSA determined that, in fact, many of the interned aliens
were able to leave the internment centers on passes
or leaves of various types and could therefore be available
for work. SSA thus ruled that interned aliens could
not as a class be ruled ineligible for unemployment
benefits but that determinations had to be made on a
case-by-case basis as in all other unemployment claims.
(Cf. Document No. 5864 summarizing action of the Social
Security Board on 2/26/43. SSA History Archives.)
the ASEA program was funded from the Presidential Allocations.
However, a special appropriation to the War Relocation
Authority also paid some of the program's expenses.
The ASEA program paid approximately $1.3 million to
resident aliens through June 1946 when the program ended.
Approximately 18,000 resident aliens were aided under
the ASEA program.
(7) This special
Emergency Fund was part of the Independent Offices Appropriations
Act of 1942, approved April 5, 1941.
For The President, Subject: Compensation for Civilian
War Injuries or Dependency Resulting from Enemy Action,"
from Harold D. Smith, Director of the Bureau of the
Budget, to President Roosevelt, dated February 3, 1942,
Franklin Delano Roosevelt Library, copy in SSA History
Archives. This memo not only recommends the $5,000,000
allocation, but it identifies the Federal Security Agency
(FSA) as the appropriate agency of responsibility; and
it outlines the criteria for eligibility in even more
detail than given in the President's subsequent letter.
For example, it states that "A definite schedule
of benefits would be set up, based upon the number and
composition of the dependent family and possibly to
some extent upon the wages of the persons affected by
enemy action." This level of detail and specificity
makes it highly likely that the Bureau of the Budget
had prior contact with FSA on this issue and that FSA
was the source of this initiative, although no documentation
of such prior contact has been found.
letter, dated February 6, 1942 (Allocation No. 4270).
Copy available in the SSA History Archives and text
reprinted in the Senate Report referenced in note 5
(10) The Director
of the Bureau of the Budget sent his formal request
to this effect to the President in a memorandum dated
October 3, 1942. "Memorandum For The President,
Subject: Amendment of Allocation No. 42-70, from the
Emergency Fund of the President, from Harold D. Smith,
Director of the Bureau of the Budget to President Roosevelt,
dated October 3, 1942, Franklin Delano Roosevelt Library,
copy in SSA History Archives.
letter, dated October 5, 1942 (Allocation No. 42/3-56).
Copy available in the SSA History Archives.
Rating Schedule, Social Security Board, December 1943,
SSA History Archives, pp. 3-4.
Rating Schedule, December 1943 edition, p. 1.
(Additional material not included in the print version
of this article)
impairments were present, the percentage of each impairment
was first determined using the Rating Schedule. Then
the Combined Ratings Table would be used to compute
a total percentage of impairment. When two impairments
were present the degree of the greater would be read
in the far left column and the degree of the lesser
in the top row, the combined rating would be the value
at the intersection. If there were more than two impairments,
the combined value of the first two would be found and
this combined value would then be read in the left column
and the percentage of the third impairment would be
read in the top row; the intersection would be the combined
value for all three impairments, and so on for any number
of Instructions and Procedures for Payment of Benefits
Under the President's Allocation for Temporary Aid to
Civilians," Social Security Board, January 1, 1943,
Part IV, Sec. 41, SSA History Archives.
(15) We cannot
say with precision that the 934 cases identified in
these data were the total caseload since we do not know
the number of unique individuals who received permanent
disability benefits. In particular, we cannot account
for the possibility of some recoveries and/or deaths
among this beneficiary population over this period.
As a consequence, the estimate of 1,000 cases is probably
fairly close to the real value.
the CWB program was non-statutory, its beneficiaries
were left in a kind of limbo after President Truman
ended the program in May 1945. Current beneficiaries
continued to receive benefits even though the program
had ended. SSA turned the remaining caseload over to
the United States Employees' Compensation Commission
and, ultimately, to the Department of Labor. Under these
circumstances, it was difficult to promulgate new policies
regarding the program. Thus, the $85 maximum benefit
established in 1942 remained in effect until December
1962, when the Secretary of Labor, by executive action,
granted a 50-percent increase to all remaining beneficiaries.
(There were 38 beneficiaries at that point.) In 1973,
the Secretary again authorized a benefit increase of
42.6 percent. These two actions raised the maximum payment
amount to $181.82, where it apparently has remained
ever since. According to the Department of Labor, there
were 21 beneficiaries in 1978; 13 in 1984; and 4 at
the end of FY 1996.
(The data in this Table are formatted differently than
in the printed version.)
of Transmittal and Summary of Major Recommendations
on Health Insurance from the Committee on Economic Security
to the President. Letter dated November 6, 1935. Reprinted
in Edwin Witte's, The Development of the Social
Security Act, University of Wisconsin Press (1963),
Otey, "Cash Benefits Under Voluntary Disability
Insurance," Social Security Bulletin,
Vol. 2, No. 2, February 1939, pp. 27-33; I.S. Falk and
B.S. Sanders, "The Prevalence of Disability in
the United States With Special Reference to Disability
Insurance," Social Security Bulletin,
Vol. 4, No. 1, January 1941, pp. 2-8; A.J. Altmeyer,
"Social Insurance for Permanently Disabled Workers,"
Social Security Bulletin, Vol. 4, No. 3, March
1941, pp. 3-10; and Ruth E. Stocking, M.D., "Certification
of Disability in Social Insurance," Social
Security Bulletin, Vol. 4, No. 6, June 1941, pp.
(19) A thorough
and authoritative account of the early efforts of SSA
to advocate disability insurance, and the opposition
to this expansion of the program, can be found in Edward
D. Berkowitz', Disabled Policy, Cambridge University
Press (1987). Other explanations of why social insurance
did not expand in the immediate postwar period can be
found in the essay by Skocpol and Amenta, "Redefining
the New Deal: World War II and the Development of Social
Provision in the United States," in Theda Skocpol,
Social Policy in the United States, Princeton
University Press ( 1995).
and Medical Care Insurance: An Excerpt From the Board's
Ninth Annual Report," Social Security Bulletin,
Vol. 8, No. 1, January 1945, pp. 12-16.