I’ve been entertaining myself with a walk down memory lane on the legislative history of Social Security and Medicare for a few days. The more I read, the more familiar it all sounded. It’s a little like seeing bellbottoms and skinny jeans come back into style: fundamentally the same with small tweaks. By looking at these arguments, though, a better perspective comes through on this current effort to reform health insurance and expand access for all. From the CRS Report to Congress1, some choice excerpts:
Opponents of Social Security used the following arguments:
Some opponents maintained that the Federal Government did not have the constitutional power to create a national pension plan. Some questioned whether the system could be kept financially sound and whether adequate earnings records could be maintained for so many millions of workers. Still others criticized the program as not generous enough.They protested that it gave only partial protection and minimal benefits, and that it imposed a regressive, “soak-the-poor” tax.
In 2010, opponents of HCR argue its constitutionality, financial soundness, and on the left side, there are still protests that it doesn’t go far enough.
Turning to the legislative debate now:
When the Act was debated in Congress, leading Republicans in the House and Senate made attempts to delete the provisions creating the old-age pension system. They said they preferred to rely solely on the assistance (charity/ welfare) approach to help the aged. They argued that the payroll tax/insurance mechanism of the old-age benefits provisions might be unconstitutional and that, at any rate, it would impose such a heavy tax burden on businesses that it would retard economic development.
They contended further that the program would “destroy old-age retirement systems set up by private industries, which in most instances provide more liberal benefits than are contemplated under title II.
Can you imagine Republicans arguing that today? Campaigning on killing Social Security? Of course not, which is why they instead argue for ‘privatization’.
And yet, isn’t that exactly their argument against HCR? The mandate is unconstitutional, government shouldn’t regulate insurers, health care access disparities are just fine with them, and besides, there’s always emergency rooms.
This scenario should feel familiar. From the halls of the Senate:
On June 19,1935, Mr.Clark(D-MO.)offered an amendment to exempt from coverage under the old-age benefits system employees in firms with private old-age pension systems. This idea came from an official of a Philadelphia insurance brokerage firm that specialized in group annuity contracts. The Ways and Means Committee rejected the proposal and so did the Finance Committee (by a narrow margin), but when Senator Clark offered it as an amendment on the floor, the Senate backed him, 51 to 35, with Democrats divided and Republicans solidly in favor. In the end, the bill’s passage was dependent on deferring that particular issue.
Had this succeeded, we would have had the same weird tiered system we have for health care, where certain groups had a pension and others were utterly dependent upon their employers. Had that come to pass, the welfare rolls would have swelled as employees’ pensions were raided or simply lost to poor investment choices.
Also not lost on me: the age-old Democratic divide: Clark is a conservadem from a midwestern state, who managed to pull enough Democratic Senators with him to succeed with his floor amendment.
How was it resolved?
The conference committee reported the bill without the Clark amendments, but with an understanding that the Chairmen of the Ways and Means and Finance Committees would appoint a special joint committee to study whether to exempt from payroll taxes (and thereby from coverage) industrial employers having private pension plans and to report to the next Congress.
On August 9, 1935 the conference report cleared the Senate and was sent to President Roosevelt for his signature. Social Security was real.
Stay tuned for chapter 2, where we fast-forward to 1950 and the first benefit expansion. Chapter 3 will roll history up to the Great Medicare Debate.
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