President Obama’s budget proposal to reduce scheduled increases in Social Security benefits is already under fire. In a continuation of Wednesday’s Rewrite segment, msnbc’s Lawrence O’Donnell imagined what Frances Perkins, the architect of Social Security and first female Cabinet member, would say about the president’s push to change the formula for calculating Social Security’s cost of living adjustment.
When the Social Security Act was passed in 1935, the highest concentration of poverty in America was among the elderly. At its signing, President Franklin Roosevelt said, “We can never insure 100% of the population against 100% of the hazards and vicissitudes of life but we have tried to frame a law which will give some measure of protection to the average citizen, and to his family, against the loss of a job and against poverty-stricken old-age.”
O’Donnell pointed out that today, children are the age group most likely to be poverty-stricken, not the elderly. “President Roosevelt and Frances Perkins knew Social Security would change over time and they knew it would have to be changed,” he said in Thursday’s Rewrite.
In a speech in 1962, Perkins said of the Act, “Thousands and thousands of new problems arose in the administration which had not been foreseen by those who did the planning and the legal drafting. Of course, the Act had to be amended, and has been amended, and amended, and amended, and amended.”
It would not come as a shock to Perkins or Roosevelt that the benefits calculation formula would change as the years went on, but there were some principles that both Perkins and Roosevelt considered imperative in the design of Social Security.
“He didn’t want it to be a welfare program,” said O’Donnell, citing a comment FDR made to Perkins in a private meeting. Roosevelt said, "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my Social Security program."
That is not to say, however, that Roosevelt didn’t believe in welfare, but the welfare provision was intended to be used exclusively by women. “Franklin Roosevelt hated the idea of men collecting welfare,” O’Donnell said.
But despite the changes that the Act would no doubt be subjected to, Perkins remained adamant that Social Security would be everlasting: “One thing I know: it is so firmly embedded in the American psychology today that no politician, no political party, no political group could possibly destroy this Act and still maintain our democratic system. It is safe. It is safe forever, and for the everlasting benefit of the people of the United States.”
What would they think of the current debate on making cutbacks to the program now? "I have absolutely no doubt tonight that Franklin Roosevelt would support President Obama's proposed reduction of three-tenths of a percent in the annual increase in Social Security retirement benefits," O'Donnell surmised. "Roosevelt would think it perfectly reasonable to slightly reduce the annual increase in order to extend the solvency of the program. He would absolutely be opposed to simply removing the limit of Social Security so that rich people would pour much more money into funding Social Security because then workers including the highest-earning workers would not be getting a payment based on what they paid in and the top-earning workers would actually get back much less than they paid in."
O'Donnell guessed Perkins "would take a broader view" of the situation now. "While looking at Social Security retirement benefits, she would want to look at every way the federal government subsidizes retirement in this country, including the big tax breaks that the rich get for self-funding their own personal retirement funds."