Conflicts of Interest and Compliance
Since social security's inception, SSB/SSA program executives have been the public elites most actively involved with social security policymaking. If we examine their initiatives over time, it is hard to argue that they have not been concerned with the objective of helping vulnerable citizens. The disparities between SSA preferences and what we might regard as recipient interests reflect in part matters of timing and emphasis. The cautious, conservative approach adopted by SSB in the early days can be justified by the need to carve out a secure niche for the immature system in a hostile environment. Nonetheless, as Jerry Cates convincingly argues, several preeminent SSB executives were also swayed by their pre—New Deal experiences with the Wisconsin school of social policy. Their idea about the proper way to handle social hazards, which Cates terms "conservative social insurance," led them to limit the initial extent of social security benefits and to later reject various liberalizing alternatives. All in all, program executives were more concerned with safeguarding the philosophy and form of their new program than with addressing the needs of the nation's depressionera elderly.
From the mid-1950s on, as social security officials became less fearful of their opponents, the program's conservative orientation
became less obvious, and an effective incremental approach to program development was adopted. But program executives still insisted on extensive and limiting eligibility prerequisites, the supplemental and wage-based character of social security benefits, and financing through regressive taxation. Since program executives were far more involved in initiating policy than were others in the legislative or executive branches, their conceptions prevailed. In the 1950s, however, increases in social security benefits were a relatively common accoutrement of election years, and by the late 1960s political candidates enthusiastically associated themselves with program development. And while Congress exhibited considerable reluctance with respect to initiating disability benefits, once the disability program was in place, members of Congress tended to side with disgruntled disability applicants against SSA. To many beneficiaries' advantage, SSA executives are no longer the independent arbiters of their interests.
Employers represent another affected constituency, with the program dependent on employers' cooperation in completing the paperwork and paying their share of the payroll tax. Collectively, individual small-scale employers can limit the program's reach at the fringes of the labor market. Employers of domestic workers and restaurant help have at times circumvented social security by imposing exchanges of desperation on their employees. Other than that, private third-party providers are involved only marginally (disability determination) in the non-Medicare operations of social security.
In the area of compliance with program objectives, social security offers various incentives. For the working-age population, the program reinforces socially approved behavior, namely working regularly and earning as much as possible in covered employment. The program's capacity for relying on positive reinforcement is bolstered by two exceptional features of retirement as a social hazard. First, it happens to most people and, second, it happens at a fairly predictable time, late in life. A social program aimed at the elderly thus avoids the disincentive problems that plague such programs as unemployment insurance.
Up to now, participant noncompliance with the retirement aspects of social security has come only from small, fairly unrepresentative groups. For instance, some workers would like to opt out
of social security, arguing that they could do better financially with a private alternative. Other workers, particularly those in low-income jobs, are troubled by the tax bite and seek work in the unrecorded labor market.
Recipient noncompliance with social security's disability provisions is more problematic. Although the disability program remains a modest portion of social security ($23 billion as opposed to $171 billion in 1986), the number of recipients has grown much more rapidly than was anticipated. It is hard to ignore the possibility that people working in low-paying, dispiriting jobs may abuse the program, and the potential for such abuse cannot be eliminated entirely. During the lengthy struggle to add disability coverage to social security, Roswell B. Perkins, an assistant secretary of HEW, argued forcefully that a safeguard would be provided by having disability determined by state vocational rehabilitation agencies. But the recent growth of disability claims suggests that a revised approach may be needed.
Through it all, SSB and SSA program executives have perceived themselves to be acting in the national interest, and their actions represent a relatively rare example in which statist interpretations fit American politics. In the last fifteen years the executive branch has increasingly sought to slow the proportion of national resources consumed by social security. This effort will necessarily continue. But antagonistic third-parties such as the Chamber of Commerce and the AMA are unlikely to overturn the program. Even if a serious intergenerational struggle develops over social security in the early twenty-first century, the program might be altered but hardly scrapped.