President #3: Dwight D. Eisenhower (1953-1961)

What were your policy priorities on Social Security? What were some concerns about the consequences of past policies?

In the several years prior to my presidency, the Federal Government had assumed an increasing variety of functions, many of which were duplicated to some extent in State Government. Upon entering office, I identified the need for a Presidential Commission on Federal/State Relations and noted that the development of the Social Security program warranted study. Though it is a proper function of government to help build a sturdy floor over the pit of personal disaster, this must be done efficiently and with greatest possible benefit to those in need.[1]

In my first message to Congress on the State of the Union, I pointed out this urgent need for making our social security programs more effective. Social Security furnished the opportunity for our citizens, through a heritage of self-reliance, to build the foundation for their own security. We therefore strove to ensure that we extended that opportunity to millions of our citizens who remained unable to avail themselves of this protection under previous versions of the program. I proposed to Congress that would offer over 10 million citizens Social Security protection for the first time. This plan, once enacted, brought immeasurable peace of mind and security to the many citizens who were covered for the first time, while adding greatly to the national sense of domestic security.[2]

We were very concerned about the efficient and responsible administration of social welfare programs, as we recognized that good intent and high purpose were not enough to ensure a program’s success. I therefore established a unified Department of Health, Education, and Welfare that improved the vital delivery of social insurance functions.[3]

The Social Security Act Amendments of 1954 represented the accomplishment of the two goals of expanding coverage and promoting efficiency. By enabling some 10 million more Americans to participate in the Old-Age and Survivors Insurance Program, the Amendments provided a solid foundation of economic security. The Amendments also raised payments to all retired workers by an average of five dollars a month, and increased payments for future retirees. The law also eliminated the five lowest years of earnings from benefits computations, preventing an unfair reduction in benefits for workers suffering from illness or unusual unemployment.[4]  

In 1954, I articulated my belief that private and group savings and insurance schemes fostered by a healthy economy should be the primary means of protection against the economic hazards of old age and death. Private savings must always be encouraged by sound tax and fiscal policies of the Government. Social Security was not intended as a substitute for private savings, but instead was meant to be a foundation about which other private forms of protection can be built. Using these guidelines, several principles emerged from a detailed study on the Federal Social Security system:

·         Coverage must be broadened and benefit levels must be increased for all retirees

·         Discrimination against continuing wage earners must be removed

·         Benefits should be computed on a fairer basis with a higher earnings base for all workers

·         Social Security must fulfill its purpose of helping to combat destitution[5]

Amendments in 1956 contributed further to the successful fulfillment of these principles. The reforms would have imposed a 25% increase in Social Security taxes on everyone covered by the system, but that tax increase was cut in half by my administration because of increases in effectiveness.[6]

In 1958, I again approved legislation to increase Social Security benefits and expand the tax base, in light of changes in the economy since 1954. For the fifth time in a twelve year period, legislation had successfully been enacted that provided an increase in benefits. But, worrying, the 1958 Amendments were also the fifth time that laws increased the Federal share of costs of these programs relative to the financial contribution of the States and communities. The Federal share increased from about 45% in 1946 to about 59% in 1958.[7] By the fiscal year 1960, Federal programs for the aged, including Social Security programs, increased fivefold since 1950 and cost about $15 billion.[8]

Throughout my presidency, I sought to reaffirm our commitment to the efficient and responsible administration of the Social Security program. I also expanded coverage to millions of Americans, providing them with much needed economic security that served as a foundation for private work, planning and thrift to increase individuals’ own standards of living.

   

Editor’s Note

Eisenhower’s presidency was a remarkable development for the Social Security program. The Eisenhower amendments to Social Security resulted in one of the largest ever expansions of the program in terms workers covered and total benefits paid.[9] Yet Eisenhower, as a moderate Republican leader, was also the first president to truly inject notions of efficiency and cost control into the dialogue on Social Security and old-age insurance. These ideas were largely symbolic, with little substantive change proposed by President Eisenhower to match the rhetoric of an increasing reliance on more efficient administration and private provision of economic security.

Thus in many ways Eisenhower’s presidency represents a minor turning point of sorts. The rhetoric and actions of Presidents Roosevelt and Truman focused exclusively on increasing access to Social Security and the associated equity gains from such improvements. President Eisenhower, too, focused on improving access to benefits, but began to take steps to address burgeoning costs and inefficiencies in the program, thus shifting the balance marginally away from programmatic expansion, and establishing a trend of increasing focus on the reduction of costs, particularly among Republicans.

Despite his rhetoric, it is worthwhile to note that President Eisenhower adopted a radically different approach to Social Security than did the Republicans in the House of Representatives under President Truman. Whereas they sought to undermine the program’s core structure through systematic reductions in coverage, Eisenhower sought to increase coverage while reducing costs in other areas. This perhaps reflected the emerging reality of Social Security’s popularity and status as the “third rail” of American politics. Finally, it indicated that there was not yet a sharp and coherent partisan divide over the long-term objectives of social security between Democratic and Republican presidents.  

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[1] Statement by the President Concerning the Need for a Presidential Commission on Federal/State Relations, February 26, 1953.

[2] Special Message to the Congress Transmitting Proposed changes in the Social Security Program, August 1, 1953.

[3] Special Message to the Congress Transmitting Reorganization Plan I of 1953 Creating the Department of Health, Education, and Welfare, March 12, 1953.

[4] Statement by the President Upon Signing the Social Security Amendments of 1954, September 1, 1954.

[5] Special Message to the Congress on Old Age and Survivors Insurance and On Federal Grants in Aid for Public Assistance Programs, January 14, 1954.

[6] Statement by the President Upon Signing the Social Security Amendments of 1956, August 1, 1956.

[7] Statement by the President Upon Signing the Social Security Amendments of 1958, August 29, 1958.

[8] Letter to Secretary Flemming on Receiving the Report of the Federal Council on Aging, November 16, 1959.

[9] Berkowitz, Edward D. America’s Welfare State: From Roosevelt to Reagan. Johns Hopkins University Press, 1991.