Social Security Act of 1935-36
“I Will Not Promise the Moon”: Alf Landon Opposes the Social Security Act, 1936
by Alf Landon
…Beginning next January employers must, in addition, begin paying taxes on the payrolls out of which your wages are to come. This is the largest tax bill in history. And to call it “social security” is a fraud on the workingman.
These taxes start at the rate of in taxes for every 0 of wages. They increase until it is in taxes for every 0 in wages.
We are told that this will be equally divided between the employer and the employe [sic]. But this is not so, and for a very simple reason. The actual fact will be, in almost every case, that the whole tax will be borne either by the employe [sic] or by the consumer through higher prices. That is the history of all such taxes. This is because the tax is imposed in such a way that, if the employer is to stay in business, he must shift the tax to some one else.
Do not forget this: such an excessive tax on payrolls is beyond question a tax on employment. In prosperous times it slows down the advance of wages and holds back re-employment. In bad times it increases unemployment, and unemployment breaks wage scales. The Republican party rejects any feature of any plan that hinders re-employment… …One more sample of the injustice of this law is this: Some workers who come under this new Federal insurance plan are taxed more and get less than workers who come under the State laws already in force.
For instance, under the new law many workers now 50 years old must pay burdensome taxes for the next fifteen years in order to receive a pension when they are 65; whereas those of the same age who come under some State laws- pay no taxes and yet actually get a larger pension when they reach the age of 65.
These are a few reasons why I called this law unjust and stupidly drafted. There is a further important point in connection with the compulsory saving provided by the plan of the present administration. According to this plan, our workers are forced to save for a lifetime. What happens to their savings? The administration’s theory is that they go into a reserve fund, that they will be invested at interest, and that in due time this interest will help pay the pensions. The people who drew this law understand nothing of government finance…
…Let me explain it in another way—in the simple terms of the family budget. The father of the family is a kindly man, so kindly that he borrows all he can to add to the family’s pleasure. At the same time he impresses upon his sons and daughters the necessity of saving for their old age.
Every month they bring 6 per cent of their wages to him so that he may act as trustee and invest their savings for their old age. The father decides that the best investment is his own I O U. So every month he puts aside in a box his I O U carefully executed, and, moreover, bearing interest at 3 per cent.
And every month he spends the money that his children bring him, partly in meeting his regular expenses, and the rest in various experiments that fascinate him.
Years pass, the children grow old, the day comes when they have to open their father’s box. What do they find? Roll after roll of neatly executed I O U’s.
I am not exaggerating the folly of this legislation. The saving it forces on our workers is a cruel hoax .
There is every probability that the cash they pay in will be used for current deficits and new extravagances . We are going to have trouble enough to carry out an economy program without having the Treasury flush with money drawn from the workers…
Excerpts of Frances Perkins
On her promise to the public:
"I promise to use what brains I have to meet problems with intelligence and courage. I promise that I will be candid about what I know. I promise to all of you who have the right to know, the whole truth so far as I can speak it. If I have been wrong, you may tell me so, for I really have no pride in judgment. I know all judgment is relative. It may be right today and wrong tomorrow. The only thing that makes it truly right is the desire to have it constantly moving in the right direction."
-Early speech as New York State Industrial Commissioner, 1929
On the New Deal:
"What was the New Deal anyhow? Was it a political plot? Was it just a name for a period in history? Was it a revolution? To all of these questions I answer "No." It was something quite different... It was, I think, basically an attitude. An attitude that found voice in expressions like "the people are what matter to government," and "a government should aim to give all the people under itsjurisdiction the best possible life."
Labor Under the New Deal and the New Frontier, p. 2.
On the common man:
"Very slowly there evolved from these conferences certain basic facts, none of them new, but all of them seen in a new light. It was no new thing for America to refuse to let its people starve, nor was it a new idea that man should live by his own labor, but it had not been generally realized that on the ability of the common man to support himself hung the prosperity of every one in the country."
People at Work, p. 138
What was the importance of the Social Security Act?
Who did it help.
Did the Act possitively or negatively affect American lives?
Do you agree or disaqree with the Social Security Act? Why?
How has the Social Security Act developed since 1935?