COLAs and Supplemental
Security Income: The Social
Security Amendments of 1972
In 1972 Congress made two fundamental changes to America's Social Security system. Each was an afterthought. Their significance was not recognized by any but a handful of legislators, nor was it understood by many in the media or among the American public. If ever the ramshackle process of constructing the American welfare state was exposed, it was through the enactment of that year's social security legislation.
The two bills, one creating a new program entided “Supplemental Security Income,” the other pegging future increases in Social Security benefits to the inflation rate, had separate legislative histories. They were linked by a common concern that the existing Social Security programs were not keeping beneficiaries from destitution, and by the political needs of the 1972 election. Supplemental Security Income (SSI) fully federalized America's three smaller Social Security poverty programs, those for the needy aged, the disabled, and the blind (Titles I, IX, and XIV of the Social Security Act of 1935), and offered recipients of these programs a guaranteed annual income. The annual cost-of-living adjustment (COLA) that was added to all Social Security benefits has ensured that beneficiaries are protected from the erosion in the real value of their monthly payments through the insidious effects of inflation, but it has also produced a massive increase in the size of the Social Security program.
Both changes emerged in the aftermath of the most ambitious attempt to reform the United States' welfare system since the original Social Security Act, President Richard Nixon's “Family Assis