Social security is a federal program that for the most part does not rely on state or local officials. In centralized Baltimore offices, national officials rather quietly carry out an array of complex operations: actuarial calculations, rule development and interpretation, and record keeping. SSA's fairly clear, if not exceptionally simple, instructions do not allow for much decentralized discretion in its field offices. Thus while social security is not a simpler program than the notoriously complex AFDC, its complexities are centralized and hidden, and recipients and the public generally perceive its operations as relatively straightforward. Senior program administrators have also been efficient and effective in choreographing adroit political maneuvers to ensure the program's popular success. Until the early 1970s SSA executives confidently knew what needed to be done to fulfill the program's objectives, had the requisite expertise to plan the necessary tasks, and had the autonomy to execute and monitor their plans.
Since then, program executives have seen the size and complexity of their tasks grow while their autonomy has been eroded by
the executive and legislative branches. Given that social security now touches the vast majority of American households, it is not surprising that Congress and the White House have begun to take more interest in the program. In the face of increasing outside intervention in program decisions, even this gifted and devoted program bureaucracy can no longer assure a high degree of administrative efficiency.
Executive and congressional interventions designed to counter funding shortfalls have also focused attention on several distinct limits issues. The first, sometimes referred to as the adequacy-equity dilemma, concerns in part the adequacy of benefits for workers in the lower socioeconomic strata. By design, social security does not single out pockets of exceptional disadvantage and focus its resources on them. Indeed, the program's contributory prerequisites exclude the most disadvantaged, and retirees with histories of low earnings qualify for only modest pensions. At the program's founding, problems of social disadvantage were believed to lay in the bailiwick of short-term public assistance. Public-employment efforts begun during the Great Depression and worldwide economic recovery were expected to ease unemployment, and the addition of survivors benefits to social security would, it was hoped, eventually eliminate the need for public assistance. This view, however, overestimated the national commitment to full employment and overlooked social discrimination, structural unemployment, the inadequacy of the wage structure for household support, and the resulting underclass. Today it seems both necessary and reasonable to ask social insurance to do more than social security now does for the disadvantaged. Early SSA administrators were probably correct that "a program for the poor is a poor program." Precisely because this is so, the disadvantaged must be incorporated into broadly inclusive insurance programs to the maximum degree that the nature of their resource inadequacy problems allows.
The equity aspect of the dilemma emerges at the other end of the socioeconomic spectrum in the practice of granting relatively high benefits to persons with substantial unearned income. Social security currently serves some households that cannot reasonably be seen as experiencing a social hazard. But halting earned benefits in instances in which aging poses no financial threat carries the risk
of diluting the firm association social security currently has for Americans with principles of distributive justice of which they generally approve—effort and results.
An independent limits concern stems from the narrowness of the range of social hazards that social security covers. In addition to the deficiencies with respect to the three social hazards that are covered, social security offers no general security against catastrophic illness or against wage disruption due to childbirth and or child-rearing to name two basic gaps in protection.
Because social security focuses almost exclusively on people who are no longer expected to work due to age or disability, until recently the program had not prompted many of the harmonization concerns that frequently arise in discussions of social programs. One of the rationales used to sell social security to a hesitant Congress in the 1930s was the encouraging effect it was anticipated to have on aggregate demand, and there is little reason to suspect that these hopes have gone unfulfilled. Precise effects are difficult to estimate, but most social security benefits are spent rather than saved, so they contribute, minimally, to maintaining demand and employment levels. That these benefits therefore also contribute to inflation did not until recently attract a great deal of attention from economists, with the exception of caveats against the double indexing of the 1972 benefit increases (corrected in 1977). Today, however, the overall size of the program, particularly in conjunction with recent federal budget deficits, casts an increasingly long shadow over federal fiscal policy. In the words of Peter G. Peterson, a former secretary of commerce, "the prospects for social security and for general prosperity are now inseparable."
As noted earlier, social security has had an odd relationship with American concerns for limited and local government. The Roosevelt administration's initial plan for social security was assaulted by Townsendites, among others, as too little, too late for the elderly who faced immediate resource inadequacy problems. At the same time, the Chamber of Commerce and the American Medical Association (AMA) decried the compulsory program as an attack on individual freedom and discretionary income.
In anticipation of these latter concerns, the program's formulators made every effort to distinguish social security from the limited and rather disappointing record of previous American efforts
at public social provision. So, for example, the SSB portion of the 1935 Social Security Act did not use the term social insurance . Two separate bills, one authorizing the collection of payroll taxes by the Treasury and the other authorizing the appropriation of these revenues by SSB, were based, respectively, on Congress' power to tax and appropriate funds.
Surprisingly, amidst all this hostility, social security prospered. The Great Depression no doubt facilitated the acceptance of the three-rights conception of democracy and the contemporary conception of human dignity, but most appealing was the program's firm basis in the effort-oriented principle of distributive justice. As social security grew to benefit a larger group of people more thoroughly, it increasingly fulfilled its theoretical underpinnings, which in turn themselves became more popular despite American preferences for limited and local government.