The 1935 Social Security Act, a goal of reformers since the Progressive era, aimed to alleviate the plight of America's visibly poor--the elderly, dependent children, and the handicapped. A major political victory for Roosevelt, the Social Security Act was a triumph of social legislation. Financed by the federal government and the states, the act offered workers age 65 or older monthly stipends based on previous earnings, and it gave the indigent elderly small relief payments. In addition, it provided assistance to blind and handicapped Americans and to dependent children who did not have a wage-earning parent. The act also established the nation's first federally-sponsored system of unemployment insurance. Mandatory payroll deductions levied equally on employees and employers financed both the retirement system and the unemployment insurance.
Conservatives argued that the Social Security Act placed the United States on the road to socialism. The legislation was also profoundly disappointing to reformers, who demanded "cradle to grave" protection as the birthright of every American. The new system authorized pitifully small payments; its retirement system left huge groups of workers uncovered, such as migrant workers, civil servants, domestic servants, merchant seamen, and day laborers; its budget came from a regressive tax scheme that placed a disproportionate tax burden on the poor; and it failed to provide health insurance.
Despite these criticisms, the Social Security Act introduced a new era in American history. It committed the government to a social welfare role by providing for elderly, disabled, dependent, and unemployed Americans. By doing so, the act greatly expanded the public's sense of entitlement and the support people expected government to give to all citizens.
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