Social Security Administration Created as an Independent Agency: Public Law 103-296

Article excerpt

At an historic White House bill-signing ceremony on August 15, 1994, Public Law 103-296--Social Security Independence and Program Improvements Act of 1994--was signed into law. President Bill Clinton symbolically used one of the pens President Franklin Roosevelt had used when he signed the original Social Security Act 59 years ago, on August 14, 1935. The new legislation officially separates the Social Security Administration (SSA) from the Department of Health and Human Services (HHS), effective March 31, 1995, and restores the SSA to its original status as an independent Federal agency. (Since 1939, SSA has operated under the direction of a "parent" agency.) A single administrator will lead the agency with a seven-member bipartisan advisory board. Also contained in the new law is a number of other major changes affecting the Social Security and Supplemental Security Income (SSI) programs.

Historical Background

What is today the Social Security Administration was established in 1935 as the Social Security Board, managed by a three-member bipartisan board, and operated as a e-standing entity within the Executive Branch. The Social Security Board chairman reported directly to the President. The members of the board, including the chairman, were nominated by the President, and appointed with the advice and consent of the Senate.

In the 1939 U.S. Government Reorganization Act, the Federal Security Agency was created and the Social Security Board became one of its components, no longer reporting directly to the President. In 1946, the three-member Board was abolished and an Office of Commissioner of Social Security was created to run what became the Social Security Administration, still a part of the Federal Security Agency. In 1953, the agency was replaced with the creation of the cabinet-level Department of Health, Education, and Welfare (HEW), and SSA consequently became a component of HEW. When in 1979 the educational components of HEW were spun off and reorganized into a new cabinet-level Department of Education, the remaining components (SSA, Public Health Service, Health Care Financing Administration, Office of Human Development Services, and Office of the Secretary) were reconstituted as the Department of Health and Human Services, which continued as SSA's parent agency until March 31, 1995.

Since the Social Security Board was abolished in 1946, 18 persons have served in the position of Commissioner or Acting Commissioner of Social Security, with tenure in office ranging from as little as a few months to as long as 11 years. The agency's internal organizational structure has also undergone many changes. The most recent reorganizations occurred in 1975, 1977, 1979, and 1994. In its nearly 60 years of operations, SSA has been assigned diverse responsibilities under a myriad of programs (see Milestones). Currently, SSA has principal responsibility for Old-Age, Survivors, and Disability Insurance (OASDI), Supplemental Security Income (SSI) and Black Lung art B) programs. It receives support from the Treasury Department--which collects Social Security taxes and disburses benefit check--the Postal Service, General Services Administration, and the Office of Personnel Management.

Independent Agency Issue

The impetus behind an independent SSA emanated primarily from a desire to separate Social Security policymaking from economic and budgetary decisions affecting the rest of the Federal Government. Considering Social Security unique among Federal social programs because of its self-financing nature and "implied compact' with the Nation's workers to pay "earned" retirement, survivor, and disability benefits, proponents of SSA's independence wanted to insulate it from everyday political, fiscal, and operational policy decisions of the Government.

Support for independence began to emerge in the early 1970's. It can be traced to the decision taken under the Johnson Administration to create a Unified Federal Budget in which Social Security program revenues and outlays were shown together with other government operations. …