SOCIAL SECURITY: OLD AGE AND SURVIVORS INSURANCE by Alanson W. Willcox In expanding and liberalizing the national system of social insurance. the 83rd Congress, under the leadership of the Eisenhower administration, followed lines of growth forecast by the action of earlier Congresses under other leadership. Though the advances were less than some had wished, they included several important changes in the benefit structure and also —and of prime importance to the future of the system—the attainment of coverage which, taken with other government retirement systems, is not very far from universal.
In addition to its achievements, the 83rd Congress must have credit for two things it did not do: it avoided the tempting pitfall of voluntary coverage for farmers and self-employed professional people (most of whom it ultimately decided to cover compulsorily); and it refused to yield to attacks upon the integrity of the insurance system which had been pressed both within and without the halls of Congress. The disruptive effect of large-scale voluntary coverage is readily apparent, but the other threat to the system was more subtle.
In support of proposals to "blanket in" the present aged who have never contributed to the insurance system and have no retirement protection, the chairman of the House Ways and Means Subcommittee on Social Security and spokesmen for the United States Chamber of Commerce have urged that we do not in any event have a system worthy of the name "insurance"—that all we are doing is to tax some people now in order to pay benefits to other people now, and to hold out a hope that the process may continue into the future. If that were so, there would not be much security in social security, and the government ought not to be giving assurance that the promised benefits will actually be paid twenty and thirty and forty years hence.
Nevertheless, proposals to "blanket in" the present aged are in many ways appealing. Their rejection reflects, not disagreement with their objective of universal protection, but rather a widespread conviction among both laymen and experts that the present system of insurance is sound and affords genuine security to its contributors, and that the proposed changes would endanger its continued existence. Let us examine this con
viction and the reasons that underlie it.
The Basic Alternatives In 1935, when the Social Security Act was passed, there were under consideration three general methods of providing governmental protection against dependent old age: contributory social insurance, with benefits geared to past earnings; noncontributory pensions geared to determinations of individual need; and flat noncontributory pensions to all the aged without regard either to past employment or to need. The Social Security Act adopted the first two of these methods and rejected the third.
Within the broad purpose of aiding the aged, the three methods have different objectives, as evidenced by their different ways of selecting the beneficiaries and determining the amounts to be paid them. One's choice reflects in part his philosophy of a democratic state, but philosophy becomes entangled with many practical problems.
Flat noncontributory pensions to all the aged, popularized by Dr. Townsend and his followers, are defended on the ground that we ought to treat all the old people alike. The scheme has been described as "a threshold to Heaven," the theory being that those who have lived long in a world where the equality of man has not been achieved need a period of preparation for the more egalitarian hereafter they are approaching. A decisive argument against this approach, however, is that it is costly and inefficient, as becomes evident when one considers any given level of pension. The lowest figure that would be acceptable in New York City might, in some rural sections, enable an aged couple to support their children in idleness. Old-age protection is too expensive at best to permit us to indulge in extravagance.