The Social Security Act
Amendments of 1939
By the end of the 1930s, Social Security had survived its toughest political tests. In 1936, Alf Landon, the GOP nominee for president, made opposition to the program a campaign theme in his effort to unseat President Roosevelt. Landon's crushing defeat demonstrated Social Security's popularity. A year later, the Supreme Court found the program to be constitutional.
Though it was now clear that the Social Security Act would survive, debate over the program did not end. Liberals continued to believe that Title II, the old-age insurance plan, was too stingy, while conservatives still worried about the fiscal impact of the entire enterprise. In 1939 these worries strangely combined to produce a major change in Social Security. Today, when one thinks of “Social Security,” one is actually thinking of the American old-age insurance program as recreated in 1939. In the 1935 act, the old-age insurance program was a reserve or annuity-style plan, a plan in which an individual received back, upon retirement, his or her own contributions plus interest. The 1939 Amendments began shifting the program to a “pay-as-you-go” plan, in which a retired individual's benefits were paid, not from his or her own taxes, but from the annual contributions of those currently in the workforce. The Amendments also added a survivors benefit to social security. In the 1935 program, a worker's benefits ended with his or her death. In 1939, this was changed to continue benefits, at a reduced level, to the worker's spouse or dependent children.
The 1935 act had given the Social Security Board the authority to offer recommendations for the improvement of the Social Se