“The Family” in Social Security: Entrenched Norms and Prospects for Transformation

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In several ways, Social Security supports a type of family that is increasingly a relic. It fails to accommodate a growing number of American families by basing family benefits solely on marital or biological connections and by rewarding traditional family structures with proportionately greater benefits than families that break up or break from the two-parent, single earner mold. Perhaps Social Security would be better off privatizing, thus allowing individuals to choose who they will support free from government control and the presumption that only marriage will suffice for derivative benefit eligibility. The appeal of privatization, however, is undercut by the problems it would pose for some of the most vulnerable families in our society.

In light of these concerns, this paper has offered an ambitious suggestion for reform, which would adopt the “household” as the relevant eligibility marker for family benefits instead of marriage, adoption, or a biological connection. This proposal would take a giant leap in terms of covering all families but is undercut by familiar concerns about administration and cost. A more moderate proposal, to insure parents and children that currently fall into a gap in Social Security family benefits has some possibility for success because it imports elements of the program that are already in use in other areas. Despite these prospects for reform, Social Security is a large and entrenched program and ideas for reform are often met with opposition. After all, Social Security is a unique public program. Unlike other forms of government aid, Social Security pays qualified workers benefits based on money they have already contributed. The final proposal forwarded in this paper would offer family benefits on an equal basis to people who currently pay Social Security taxes and whose families should receive their fair reward. Unfortunately, any step towards including more workers and dependents is especially likely to get shut down given concerns not just about maintaining traditional values but because of ongoing worries about the financial soundness of the program itself. To make this proposal more viable, additional research defining the costs that would be incurred from such a change and the benefits that would adhere to formerly uninsured families will be necessary.

1 In August 2005, some 52,857,000 people received Social Security, Supplemental Security Income (SSI), or both. The different forms of Social Security benefits are, in order of prevalence: retirement (old age) benefits, disability insurance benefits, survivors’ insurance benefits, Supplemental Security Income benefits, and dependents’ (old age) benefits. Monthly Statistical Snapshot – September 2005: http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/index.html (last visited Nov. 8, 2005).

2 Kilolo Kijakaze, The Social Security System and Women Today: Social Security and Women of Color, 16 N.Y.L. Sch. J. Hum. Rts 217, 225-26 (1999).

3 In addition to pension benefits, under the 1935 Act, a one-time lump-sum death benefit was available to survivors after an insured worker died. Social Security Administration, Research Note #16: Summary of Major Benefits Under the Social Security Program, http://www.ssa.gov/history/benefittypes.html (last visited Nov. 8, 2005).

4 See infra text accompanying notes 107-148 for a discussion of these cases.

5 See infra text accompanying notes 79-90 for a brief history of these amendments. Also note that, uncharacteristically, stepfamilies and adoptive parents and children were included in the Social Security Act of 1935. For a discussion of stepchild and adopted child coverage see infra text accompanying notes 91-106.

6 Between 1929 and 1933 the unemployment rate in the United States skyrocketed from about 3 percent to over 25 percent. Wikipedia, Great Depression, http://en.wikipedia.org/wiki/Great_Depression (last visited Nov. 8, 2005).

7 Stephen Sugarman, Children’s Benefits in Social Security, 65 Cornell L. Rev. 836, 838, n.14 (1979-80). Sugarman notes (see n. 14) that “only 16 state [welfare plans for the elderly] were actually operating in 1933 and many had long waiting lists.”

8 Edward D. Berkowitz, America’s Welfare State: From Roosevelt to Reagan 13-15 (Johns Hopkins Press 1991).

9 See Sugarman, Children’s Benefits, supra note 7 at 837 (noting that except for retirement “pension” benefits all of the forms of assistance enacted by the Social Security Act of 1935 consisted of federal grants to states. Only Title II retirement benefits, now known as Old Age Survivors and Disability Insurance (OASDI) was controlled in whole by the federal government.)

10 Id. at 838.

11 Id.

12 Berkowitz, supra note 8, at 2.

13 Id.

14 Id. at xviii.

15 Id.

16 Edwin E. Witte, The Development of the Social Security Act 147 (The Univ. of Wis. Press 1963); Social Security Online, Agency History, Research Note #2 – The History and Development of the Lump Sum Death Benefit, http://www.ssa.gov/history/lumpsum.html (last visited Nov. 17, 2005).

17 Berkowitz, supra note 8, at 41.

18 Id. This scheme was justified because under the provisions of the 1935 Act, people needed a few years of work to build up enough credit to deserve more than a trivial benefit. Also, from an actuarial standpoint, it made sense to build up a large surplus. This is how private pension plans and insurance companies operate when they take in money now with an obligation to pay that money out in the future. E-mail correspondence with Professor Sugarman Nov. 15, 2005 (on file with author).

19 Id.

20 Arthur J. Altmeyer, The Formative Years of Social Security 9 (The Univ. of Wis. Press 1966).

21 Id. The Townsend Plan was named after the retired doctor who lobbied for the proposal. Dr. Francis Townsend began advocating for the plan in 1932 and the widespread movement to enact the plan carried strength through 1952. See id. at 99, 242-43; see also Berkowitz, supra note 8 at 18-19. Across the nation, as many as 25 million people signed petitions in support of the Townsend plan and 1200 clubs were formed to advance the cause.

22 Altmeyer supra note 20 at 10.

23 Id.

24 See Witte supra note 16 at 95 n.56 (noting the bulk of mail that state representatives received in support of the Townsend plan).

25 Berkowitz, supra note 8 at 26.

26 Id. at 27.

27 Witte, supra note 16 at 146 (highlighting the difficulty of drafting such a complex system from scratch and explaining the objections and doubts as to the constitutionality of the plan expressed by leading members of the House Ways and Means Committee).

28 Berkowitz, supra note 8 at 41.

29 301 U.S. 619, 637 (1937); see also Berkowitz, supra note 8 at 42-43.

30 301 U.S. at 637.

31 Id.

32 See Brief for the Respondents, Helvering v. Davis supra note 29 at *3 (available on Lexis-Nexis).

33 Id. at 644-45.

34 Brief for the Petitioners, Helvering v. Davis supra note 29 at *2 (available on Lexis-Nexis).

35 Helvering, 301 U.S. at 644-45.

36 Id. at 641-42, 644.

37 Berkowitz, supra note 8 at 44-46, 56.

38 Id. at 46.

39 Id.

40 Id. at 47.

41 Id. at 47-48,

42 See Berkowitz, supra note 8 at 56-57 (noting how, especially in rural areas, welfare benefits often exceeded the benefits that were available from Social Security’s Old-Age insurance. Unfortunately, this discrepancy persisted even past the initiation of the 1939 Amendments and was only addressed in the Amendments of 1950 which expanded the program to cover more people who were employed in primarily rural jobs).

43 See Sugarman, supra note 7 at 843, n.32

44 Id.

45 Berkowitz, supra note 8 at 47-48; see also Altmeyer, supra note 20 at 90-92.

46 See Berkowitz, supra note 8 at 191.

47 Id. at 48.

48 Id.

49 Altmeyer, supra note 20 at 101.

50 Sugarman, supra note 7 at 848-49.

51 Id. at 849.

52 These family maximums still apply and cut-off funds to large families by imposing caps on the amount of benefits a family can receive. See Sugarman, supra note 7 at 869-71, 882-83. This limitation contrasts with programs like food stamps which are based on economies of scale and do not foreclose benefits to large families.

53 See Sugarman, supra note 7 at 848, 856 (also noting that by awarding a widow with 75% of the husband’s benefit the widow received half of what the couple would have received together (150%) while the husband was alive. While this is true, if a wife died first leaving her husband as a widower, he would have retained his full 100%). In 1972, Congress responded to this discrepancy and increased the widow’s benefit to 100% of her late husband’s benefit. Grace Ganz Blumberg, Adult Derivative Benefits in Social Security, 32 Stan. L. Rev. 233, 241 n.32 (1980).

54 Berkowitz, supra note 8 at 48.

55 §202(d)(1)(A) of Title II of the Social Security Act under the 1939 Amendments. For a reproduced text of the 1939 Act see Public-No. 379-76th Congress 6, http://www.ssa.gov/history/pdf/1939Act.pdf (last visited Nov. 12, 2005).

56 Id. at 96.

57 See, e.g. Sugarman, supra note 7 at 876 (briefly discussing how county welfare officials often denied aid because they disapproved of a mother’s “dating behavior or race”).

58 Id. at 848.

59 Id. at 849; Berkowitz, supra note 8 at 48-49. Again, this was subject to family caps.

60 In addition to benefits for surviving spouses and children, if an insured worker died without dependents, his surviving elderly parents could also receive benefits based on his average earnings. To receive benefits under this provision for parents, elderly parents had to prove financial dependence upon their deceased child. Betty G. Farrell, Family: The Making of an Idea, an Institution, and a Controversy in American Culture 147 (Westview Press 1999); see also §202(f)(1) of the 1939 Act see Public-No. 379-76th Congress 7, http://www.ssa.gov/history/pdf/1939Act.pdf (last visited Nov. 12, 2005).These “Parent’s Insurance Benefits” are still available to “[biological, adopted, or step] parents of an individual who died… fully insured if such parent has attained age 62…, was receiving at least one-half of his support at the time of [their child’s] death [or disability]… and has not married since [their child’s] death.” 42 U.S.C.S. §402(h)(2005).

61 Blumberg, supra note 53 at 257.

62 See, e.g. Stephen D. Sugarman, Reforming Welfare Through Social Security, 26 U. Mich. J.L. Reform 817, 823-827 (1993) (discussing the differential treatment of Social Security beneficiaries and welfare recipients).

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