The U.S. Social Security Administration
By Larry W. DeWitt
Historian, U. S. Social Security Administration

The Social Security Administration (SSA) is the federal agency with responsibility for the administration—and to some extent the policies—of the Social Security and Supplemental Security Income (SSI) programs. As such, it is one of the larger and more visible federal agencies. In dollar terms, the Social Security system’s annual income is larger than the total national income of all but 12 nations in the world, 1 and its network of 1,500 offices around the country brings it into contact with millions of Americans on a regular basis.

The agency is headed by a Commissioner—who is appointed for a six-year term, under a 1994 law—and who is nominated by the President and subject to Senate confirmation. Once confirmed, the Commissioner of SSA can only be removed for cause—he or she does not serve "at the pleasure of the President."

The agency currently has about 65,000 employees nationwide. It is headquartered in suburban Baltimore, Maryland, and has 10 Regional Offices in major cities around the country. Its 1,300 local field offices, its
network of 130 Hearings Offices, 35 Teleservice Centers, and its contractual relationship with over 200 State Disability Determination Services offices, give it a massive presence around the country.

SSA presently has responsibility for the Social Security program, the SSI program, and its local offices and its 800# telephone network provides information and claims services for the Medicare program as well. In FY 2006, the agency:

• Took over 7 million new claims for benefits
• Answered 60 million phone calls over its 800# network
• Processed 1.2 million appeals
• Issued more than 17 million Social Security cards
• Issued 143 million Social Security Statements
• Paid monthly benefits to over 53 million people.

The agency's administrative budget in Fiscal Year 2006 was $9.5 billion.
ORGANIZATIONAL HISTORY OF THE SOCIAL SECURITY ADMINISTRATION
The Social Security Board

The SSA began life as the Social Security Board (SSB). The three-person SSB was created at the moment President Roosevelt inked his signature on the Social Security Act (August 14, 1935 at 3:30 p.m.).

The members of the Board (appointed by the President and subject to Senate confirmation) were: Arthur J. Altmeyer, who was then serving as an Assistant Secretary of Labor under Frances Perkins?; John G. Winant (Chairman), who was the former three-term Republican Governor of New Hampshire; and Vincent M. Miles, who was a Democratic Party official in Arkansas. Franklin Roosevelt intentionally appointed a Republican to head the new agency because he wanted to make a symbolic statement that he believed the Social Security program should be non-partisan in its administration.



John Winant would resign as Chairman during the 1936 presidential campaign in order to speak out politically in support of the program, which was then under attack by the nominee of his party. Following his resignation, Altmeyer would be elevated to the position of Chairman of the Board, and he would be the top Social Security official in the federal government until 1953 when he was replaced by the incoming Eisenhower Administration.

The SSB was an entirely new entity, with no staff, no facilities and no budget. The initial personnel were donated from existing agencies, and a temporary budget was obtained from Harry Hopkins and the Federal Emergency Relief Administration?. Frances Perkins even donated her high-backed red-leather executive chair to Altmeyer since the SSB had no furniture of its own.

At this stage, the SSB has federal oversight for all of the programs under the Social Security Act, including: the Social Security program proper; the federal role in the Unemployment Insurance system; federal oversight for State welfare programs; and the Aid to Dependent Children (later renamed Aid to Families with Dependent Children (AFDC) program.
The Federal Security Agency is Created

The SSB was initially an independent agency within the federal government. This meant that Winant, and then Altmeyer, took their authority directly from the President, and indeed, both men enjoyed fairly close access to President Roosevelt throughout his administration.

Beginning in early 1937, President Roosevelt sent to Congress a series of messages and proposals regarding reorganization of the Executive Branch. He probably had many agendas, but one was to reduce the number of agencies reporting directly to him. His years in office, and the growing burdens of preparing for a world on the brink of war, caused him to search for ways to lessen the demands on his time. The Reorganization Act of 1939 authorized the President to devise a plan to reorganize the Executive. As part of this Plan No. 1, the President created a new Cabinet agency, the Federal Security Agency, and placed the Social Security Board under its jurisdiction.

Under this reorganization, the SSB lost its independent agency status when the new sub-cabinet level Federal Security Agency (FSA) was created. The FSA encompassed: the SSB; the Public Health Service; the Office of Education; the Civilian Conservation Corp.; the National Youth Administration; and the U.S. Employment Service as a new function of the SSB. The FSA was headed by an Administrator, who was initially Paul McNutt, who was the former Governor of Indiana and a prominent Democratic party political figure. McNutt thus became Altmeyer's superior within the federal hierarchy.

Although the SSB was moved lower in the federal hierarchy, it retained all its existing programmatic responsibilities, and acquired some new ones in the area of employment security. To a noticeable degree, the FSA Administrator and the FSA executive hierarchy deferred to the expertise of the SSB in its programmatic areas.

This change did, however, mean some reduction in access to the President and influence within the Administration, although Altmeyer continued to enjoy the President's confidence and upon occasion was known to go over the head of its boss at the FSA and deal directly with the President or the White House staff.

The Social Security Administration Is Created
Following the end of World War II, President Truman, like FDR before him, felt a need to reorganize the federal government. Truman's Reorganization Plan of 1946 was, however, limited to the FSA and the functions Truman thought it should encompass. The main purpose of the reorganization was to bring additional human-welfare type programs under FSA's authority.

The major consequence of the 1946 reorganization on the SSB was that the Board itself was abolished and replaced by the Social Security Administration (SSA), with a single Commissioner as the head of the new agency. The SSA retained its existing responsibilities, and acquired the Children's Bureau from the Department of Labor.

This move of the ((U.S. Children's Bureau)) into SSA was the most controversial aspect of the reorganization as the officials within the Bureau vigorously protested their placement within SSA.

Arthur Altmeyer, who had been chairman of the Board of the SSB, became SSA's first Commissioner. At this time, interestingly, the job of Commissioner was made a civil service job, rather than a political appointment.

The Department of Health, Education and Welfare (HEW) Is Created
As noted, the FSA was a sub-cabinet position. Throughout his presidency, President Truman made several unsuccessful efforts to elevate the FSA to cabinet status, a move that was resisted by the Congress. When President Eisenhower came into office in 1953 he was able to achieve this long-deferred goal.

So early in his presidency, President Eisenhower implemented a reorganization with abolished the FSA and replaced it with the new cabinet-level Department of Health, Education and Welfare (HEW). SSA was made part of this new cabinet agency.

Oveta Culp-Hobby was named the first Secretary of HEW, and the second woman in American history to attain cabinet rank (after Frances Perkins).

As part of this shift, SSA acquired responsibility for the Bureau of Federal Credit Unions, and thus federal oversight of the nation's credit unions. The job of Commissioner was also changed from a civil service position to that of a political appointee.

In 1965 when the Medicare? program was created, it was given to SSA as an additional programmatic responsibility. So SSA ran the Medicare and Medicaid? programs from 1965 until 1977 when a new federal agency, the U.S. Health Care Financing Administration? (HCFA) was created to take over this responsibility.

Department of Health & Human Services (HHS) Created

As part of his campaign promises in the 1976 election, President Carter pledged to elevate the education function to cabinet-level status. In 1980 he was finally able to make good on this promise when the HEW was abolished and replaced by the Department of Health & Human Services (HHS). SSA thus became a sub-cabinet operating agency within HHS

An Independent Agency Once Again

SSA was a major part of HHS—comprising more than 60% of its personnel and a similar portion of its budget—until legislation signed by President Clinton in 1994 returned SSA to it original status as an independent agency—effective in March 1995.

Throughout the years, arguments had been heard in the halls of Congress that SSA should be returned to independent agency status. This debate was given impetus in 1981 when the National Commission on Social Security recommended that SSA once again become an independent Social Security Board.

The 1983 National Commission on Social Security Reform (aka, the Greenspan Commission) again raised this issue and recommended a special study be commissioned of the matter. This study was completed in 1984 and it outlined several options for making SSA an independent agency. This led to numerous legislative proposals in the ensuing years and in 1994 the legislation passed both houses of Congress unanimously.

President Clinton signed the bill on August 15, 1994 (59 years and one day after FDR signed the original Act). And on March 31, 1995 at a ceremony at SSA Headquarters in Baltimore, SSA once again became an independent agency.



NOTES
1 This is based on a comparison of the Gross National Incomes in 2004 for the nations of the world as reported in the World Bank’s World Development Indicators 2006 report, "Table 1.1 Size of the Economy." In 2004 there were only 12 nations (counting the U. S. itself) with national incomes larger than the $658 billion in income to the Social Security system in that year.
More information on the institutional history of the SSA can be found on their website at: http://www.ssa.gov/history/

Chronology of SSA's History

8/14/1935
Social Security Act signed, creating Social Security Board (SSB)

9/14/1935
First meeting of SSB held

7/1/39
Federal Security Agency created

7/16/46
Social Security Administration is cr

4/11/53
HEW created

7/31/65
Medicare program becomes SSA responsibility
3/9/77
HCFA created and Medicare taken out of SSA
5/4/80
HEW abolished and replaced by HHS
8/15/94
Legislation signed to make SSA an independent agency, effective in March 1995
3/31/95
SSA again becomes an independent agency