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Never A Finished Thing:
A Brief Biography of Arthur Joseph Altmeyer--The Man FDR Called "Mr.
Social Security"
by Larry DeWitt
SSA Historian
1997
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Altmeyer during his early days with Social Security, circa
late 1930s. SSA History Archives. |
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Arthur Altmeyer was one of the seminal figures of the
Social Security program in America. He was part of the President's
Committee on Economic Security that drafted the original legislative
proposal in 1934. He was a member of the three-person Social Security
Board created to run the new program, and he was either Chairman of
the Board or Commissioner for Social Security from 1937-1953. Although
he believed that public administration was a vitally important activity,
he was also one of the principal conceptual and philosophical spokesmen
for social insurance in America, and much of the policymaking during
Social Security's founding decades was formulated by Altmeyer. Along
with a mere handful of others, Arthur J. Altmeyer is responsible for
the Social Security program as it exists in America today.
This biography attempts a very brief, broad-brush overview of Altmeyer's
life and his contributions to Social Security. It is a work in progress.
The full story of the central role of Arthur Altmeyer in the history
of Social Security is a story that remains to be told. |
Chapter
1: Early Life |
"Social Security will always be a goal, never a finished
thing, because human aspirations are infinitely expandable, just
as human nature is infinitely perfectible."
-- Arthur
J. Altmeyer
Altmeyer was born in the little town of DePere Wisconsin, near
Green Bay. His father was of German ancestry, the Altmeyers having
come to American in 1848 with the wave of German immigration seeking
to escape the reactionary political climate in the Germany of
that period. So he inherited, you might say, a liberal progressivism
in his genes. His mother was Dutch.
Altmeyer's parents divorced when he was a young boy and he had
to support himself at age 14 with a job as office boy in the law
office of his uncle. He lived with his grandmother during these
years and paid 80% of his $10/week salary to her for his room
and board.
The young Altmeyer saved what money he could to finance his education.
He stayed in high school until he was 19 then worked for a year
or so to save money for college. At age 21 he finally entered
the University of Wisconsin where he graduated in three years,
Phi Beta Kappa. He would eventually return to Wisconsin where
he would earn a Masters and a Ph.D., while his wife, a school
teacher, worked and supported him during his graduate studies.
His future wife, Ethel Thomas, was his high school history teacher.
Being four years older, Ethel was an intellectual mentor to Altmeyer
in his early years and this characterized their relationship to
a noticeable degree throughout their lives. Although they had
no children, the Altmeyers were instrumental in helping bring
up and educate several nieces and nephews. Not being someone given
to extravagant displays of emotion, when his memoirs were published
in 1966 Altmeyer dedicated the book simply "To my wife;"
and in her personal copy he penned these words underneath the
dedication: "Whose love, wisdom and concern for people have
guided me throughout the years--Arthur."
A coworker of Altmeyer's, and a social friend of the couple, would
describe Mrs. Altmeyer in this way: "Mrs. Altmeyer is
a highly intelligent lady, very outspoken in her beliefs, and
someone who wants to do something about the things she believes
in. She's less cautious and diplomatic, as you might expect. Her
husband was in public office and she wasn't and she could be more
outspoken than he was in many ways. She probably would have anyway."
This same colleague (Maurine Mulliner) would describe Altmeyer
himself in these terms: "He never talked about personal
things. He's quite a detached person--very sensitive and very
shy. . .and sometimes I think part of this what seems to be pride
is shyness--not that he isn't proud also--and, you know, never
in my opinion able to openly admit his competences and abilities
and strengths--very self-critical."
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The young
Ethel Thomas.
SSA History Archives.
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DePere high school,
where Arthur Altmeyer was educated and where he met
his wife. SSA History Archives. |
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The "Wisconsin
World View"
Unquestionably, one of the most powerful formative experiences
of Arthur Altmeyer's life was his education at the University
of Wisconsin in Madison, at the knee of the renowned economist
John R. Commons, in the intellectual center of a world-view that
we might call the "Wisconsin World View."
The Wisconsin World View, broadly construed, was a liberal social
policy tradition, emphasizing a positive and vigorous role for
government. Commons was a "labor economist" and was
the principal author of Wisconsin's first-in-the-nation Workmen's
Compensation program. Not only did Altmeyer study under Commons
as an undergraduate, but he returned to Wisconsin in 1918 (four
years after his graduation) to become Professor Common's assistant.
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Photo
courtesy of Department of Labor. |
Altmeyer's interest in social policy and labor legislation was
awakened by a chance reading of a pamphlet on Wisconsin's pioneering
workman's compensation program. The Wisconsin law had just passed
in 1911 when Altmeyer was beginning his college studies. "The
first big wave of social insurance and labor legislation was on
then," Altmeyer later recalled. Prof. John R. Commons of
the University was an industrial commissioner. I remember getting
that pamphlet explaining the workman's compensation law. I read
it and got interested in it, and decided that I was going to go
under Professor Commons and study labor legislation."
So Altmeyer's world-view was shaped by his father's liberal background,
the general progressivism of Wisconsin in the early years of the
century, and by his tutelage at the knee of John R. Commons. These
forces, and no doubt others, combined to give Altmeyer a life-long,
deeply-held, commitment to the cause of social welfare.
"It is not too much to say
that the philosophy underlying the Social Security Act
is the same philosophy which Professor Commons expounded
to his students throughout the years."
-- Altmeyer , 1963 |
Of Stern Stuff
Altmeyer was a serious, even stern fellow. One biographer described
him as "Scholarly, spectacled Arthur J. Altmeyer is. .
. an earnest man, not given greatly to humor."As an administrator
he would seek anonymity, believing that able and efficient administration
did not require self-promotion. A newspaper profile in 1939 would
be headlined: "Security Board Chief Likes Obscurity."
Altmeyer would put the matter plainly: "A successful administrator
is about as interesting to the public as cold spinach."
"As far as any
color is concerned, I don't find any color in my character
or my activities at all--not in the least. I have a
very methodical mind, I think a good mind, as far as
that's concerned, an analytical mind, but not a flashy
mind, and I think a conservative mind in weighing the
pros and cons and probably leaning a little bit to the
conservative side when it comes to an administrative
decision, and probably when it comes to a legislative
decision. . . I think I do have pertinacity; and I think
I have a certain amount of stubborn courage. Once I
stake myself out, I think I don't retreat very readily,
because I suppose I dislike the humiliation of having
been wrong. . . I don't think you'll find anything colorful
in my whole career. I'd be surprised if you did."
--Altmeyer's self-description |
Altmeyer was also a man of unusual modesty for someone of his
stature and achievements. One story illustrates both his modesty
and his dedication to the Social Security program. Altmeyer was
Chairman of the Social Security Board from 1937-1946, and Frank
Bane was the Executive Director (sort of the chief operating officer).
Bane was the number four official at the Social Security Board,
after the three voting members. Altmeyer's primary skills and
talents were in administration and Bane's were in public relations--a
reversal of their actual job assignments in some ways. Bane was
gregarious and outgoing and had political connections everywhere.
Altmeyer was scholarly and reserved, preferring policy analysis
to politics. In 1938 Bane had an opportunity to leave the Board
to become the head of the Council of State Governments. When he
told Altmeyer he was leaving to accept the new position, Altmeyer
offered to switch jobs with him on the spot if Bane would stay.
Altmeyer knew Bane was invaluable to the work of the Board and
he was willing to take a demotion and cut in pay and go to work
for his former subordinate if that would persuade him to stay.
When commenting on this incident, the executive secretary of the
Board, Maurine Mulliner, would observe: ". . . it's an
indicator of the modesty of Arthur Altmeyer. Some people, having
received a 'no' from him in response to some request, have interpreted
it as being aloofness, stand-offish. Generally, I think it is
this excessive modesty. He really has a high degree of humility
and personal modesty that's unusual in a man in public life in
the roles he has carried."
In an interview in 1966 Altmeyer summed-up
his credo this way:
"A person must have articles of faith. I have
three: faith in the individual--his dignity, his worth,
his potentiality, and his ability to improve himself
and the world in which he is a part; faith in democratic
Government which sometimes seems painfully slow in arriving
at a decision; and faith in using our democratic Government
to the maximum extent to promote social welfare."
- OASIS, August 1966. |
The Wisconsin Period
After graduating from college in 1914, Altmeyer became a school
teacher in northern Minnesota. After two years he moved up to
the job of principal in Kenosha, Wisconsin.
As soon as he paid off his college debt of $1,200 he gave up
his job and returned to the University of Wisconsin to do graduate
work and to take a part-time position as John Commons' research
assistant. Because his part-time job paid only $400 a year, he
had to take a second part-time job as a statistician with the
Wisconsin State Tax Commission. (His wife got a teaching job in
Madison and became thereby the first married woman allowed to
hold a full-time teaching job in the history of that city.)
Commons was an inadvertently demanding task master who thought
nothing of tasking his young assistant with assignments that consumed
a full eight-hour day. As Altmeyer described this period:
". . . I discovered that Commons had no idea of the amount
of effort required to carry out an idea of his, and he had many
many ideas every day. . . So instead of working one-fourth time,
I'd say I worked more than eight hours a day on work for Professor
Commons. I worked down at the State Tax Commission. . . from about
8 till 12. So there were 12 hours, I'd say, out of the day. Then
I was taking full time graduate work. I had to do that at night,
and I recall many times I'd tumble into bed at maybe 2 or 3 o'clock
in the morning."
Thankfully, Edwin Witte, who was Secretary of the State Industrial
Commission, saved Altmeyer from exhaustion by offering him a full-time
job as the Commission's Chief Statistician. Three years later,
Witte left to become the Chief of the Wisconsin Legislative Reference
Library and Altmeyer was promoted to replace him. This was the
job he would hold until Frances Perkins summoned him to Washington,
the first time in 1933, and then again in 1934. |
Chapter
2: To Washington, An Earnest "New Dealer" |
As Secretary of the Industrial Commission Altmeyer spent a lot
of time in Washington, especially during the early years of the
Depression, seeking various kinds of federal help for Wisconsin.
Altmeyer said of this period, "I started coming down to Washington
with my hat in one hand and a tin cup in the other."
Through these and other professional efforts he came to be known
at the Department of Labor and in early 1933 Frances Perkins asked
him to come to Washington temporarily to help her with her initial
reorganization of the Labor Department. As soon as this task was
completed, Secretary Perkins persuaded him to stay on for a while
as the Labor Department's representative with the National Recovery
Administration. Officially, he was Assistant Compliance Officer,
overseeing the enforcement of the various industry codes related
to labor.
After about six months of this, Altmeyer decided it was time
to return to Wisconsin, to his permanent job at the Commission--from
which he had taken a leave of absence. He previously had told
Secretary Perkins that he needed to return to Wisconsin, and when
the time came to leave he went to see her to say goodbye, but
she was not in her office. He boarded the evening train for Madison
and when he arrived he found a telegram from Perkins waiting for
him. She wanted him to return immediately. He hopped on the return
train and when he got back to Washington Perkins offered him a
permanent job as Assistant Secretary of Labor.
Even before taking the oath as Assistant Secretary in June 1934,
Altmeyer was commuting back and forth between Madison and Washington
and was doing important work for the Secretary. He authored the
famous message from FDR to the Congress in which the President
promised to present a new proposal for economic security when
the Congress returned from recess in January 1935. It was this
message that led to the creation, by Executive Order, of the Committee
on Economic Security that would lead, in barely more than a year,
to the Social Security Act. The June 8, 1934 message was thus
the foundation document of Social Security in America, and Arthur
Altmeyer, soon-to-be Assistant Secretary of Labor, was its author.
"When the public
turns to Government, some people become frightened about
dangers they think they see at the end of that road.
I do not share their fear. I think that, in our democracy,
Government is an instrument for the public service and
an expression of the public will. We strengthen our
democracy, and our faith in the processes of our democracy,
when we make it possible for our Government to serve
us by doing for us what we want but cannot do for ourselves
acting as individuals."
-- Arthur J. Altmeyer, 1946 |
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Altmeyer
taking the oath of office as an Assistant Secretary
of Labor, as Frances Perkins looks on. June 8, 1934. |
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Chapter
3: Creating the Social Security Act |
The Committee on Economic Security
The Committee on Economic Security (CES) was created by
President Roosevelt three weeks after Altmeyer's message to the Congress.
Frances Perkins was named the Chairman,
with her cabinet colleagues as the other members. The Executive Order
(which Altmeyer also wrote) also established an Advisory Council (which
would play virtually no role); an Executive Director; and a Technical
Board. Perkins instantly named Altmeyer as Chairman of the Technical
Board, and Altmeyer selected his old boss, Edwin
Witte, to be Executive Director.
It was the CES that designed America's Social Security program, starting
virtually from scratch, and completing its work in barely six months.
Not only did CES design the program, but the numerous technical studies
it produced served as a foundation for legislation and initial policymaking
and in providing the raw data needed to support the Supreme Court's
ruling on the Act's constitutionality.
As Chairman of the Technical Board, it was Altmeyer, along with
Edwin Witte and Frances Perkins who were the principal players on
the CES. These three individuals shaped, in the large, the Social
Security program that emerged from the CES' work (along with the broad
guidance provided by President Roosevelt--which proved critical at
a couple of important junctures). FDR, Altmeyer, Perkins and Witte.
If we wanted to establish the Hall of Fame for Social Security, these
would be the first four names. |
Chapter
4: Putting the Act Into Operation |
The Social Security Board
As the Social Security Act of 1935 emerged from Congress
and was signed into law by FDR on August 14, 1935, it created
a bipartisan three person Social Security Board (SSB) as the principal
executive authority for the new program. Altmeyer was named by
FDR to become one of the Board members.
"Minor brain truster
without the usual connotations. Studious type. A good
administrative technician--some say he now runs the
Labor Department while his superiors, Miss Perkins and
McGrady, settle strikes. Favors organized labor but
without the shoulder chip."
Business Week magazine's capsule announcement of
Altmeyer's appointment to the SSB. August 1935. |
The Board consisted of three members: Altmeyer; former Governor
John Winant of New Hampshire as Chairman; and Vincent Miles, an
Arkansas politician. By far the most important of these three
was Altmeyer. It was Altmeyer who was the major policy maker and
the only administrator of the three. It was Altmeyer, along with
the Board's Executive Director, Frank Bane, who really ran the
new agency in the early years. And when Winant resigned as Chairman
early in 1937 Altmeyer replaced him. The Board was abolished in
1946 when the Social Security Administration (SSA) was created
and Altmeyer became SSA's first Commissioner. So Altmeyer was
the head of Social Security, in one capacity or another, from
February 1937 until April 1953. |
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The first meeting of the
Social Security Board, September 14, 1935. Altmeyer is on
the left, Winant in the middle and Vincent Miles on the
right. SSA History Archives. |
John Winant's biographer
has given us a vivid portrait both of Winant and Altmeyer
and their respective roles on the Social Security Board:
"It was fortunate that Roosevelt and Perkins
had balanced "Utopian John," as the President
once described him, with Altmeyer. One without the other
would have lacked either the practical or the spiritual
leadership necessary at the start of this organization.
But for the cold, practical, technical plodding nature
of Altmeyer, the Chairman might have made a mess of
the Board during its organizational period. While Altmeyer
loved figures, tables and charts, they repelled Winant
because they lack the human quality. Where the former
proved careful, meticulous, and well organized, the
latter carried around memoranda and letters in bulging
pockets. Where Winant combined the intellectual with
the emotional, his practical associate remained coldly
intellectual. Although a suspicious and cautious man,
Winant came to trust his Wisconsin colleague implicitly
and often embarrassed him with the responsibility for
decision making."
(from "He Walked Alone,"
by Bernard Bellush) |
Altmeyer & The Character
of SSA
Many people think that being in power in government means making
public policy. Altmeyer believed as a bedrock conviction that
administration was his most important duty and the most important
duty of his Agency. And he thought administration was an important
skill and contribution in itself. His motto was an expression
of Commons' who often said "administration is legislation
in action."
Much of the success of SSA over the years, and its reputation
as the best agency in the federal government, was due to Altmeyer's
insistence on the importance of fair, efficient and unbiased administration.
He established the firm position that the Agency would be staffed
by career civil servants, hired on merit rather than political
patronage. In fact, the SSB was the first large federal agency
staffed based on this principle. And keeping politics out of the
administration of Social Security was no easy task. One U.S. Senator
importuned the Board to hire someone he recommended. Since the
person was unqualified for the position, Frank Bane, the Board's
Executive Director, refused. Whereupon the Senator had a rider
attached to the Board's annual appropriation that, by law, cut
Frank Bane's salary by $500 (this was a bit more than 5% of Bane's
annual salary). Such was the price that the Board had to pay to
keep politics out of program administration.
Because he was so concerned with integrity, and so concerned
with blocking patronage appointments, Altmeyer and Winant personally
reviewed each field office manager selection in the first years
of the program. Wilbur Cohen, who was Altmeyer's personal assistant
in the early years, tells of coming into Altmeyer's office and
finding Altmeyer and Winant down on the floor with 3X5 index cards
spread all around. On the cards were the names of all candidates
for office managers and Altmeyer and Winant were personally making
the job selections.
Altmeyer was also the one who defined and institutionalized the
ethic of public service that characterizes the administration
of the Social Security Act. From the earliest days of the program,
the Agency has held to an explicit philosophy of service to the
public premised on Altmeyer's core belief that the Agency has
an affirmative obligation to assist applicants in securing all
the benefits to which they are entitled. This philosophy of service
was revolutionary in its time and the Social Security Board was
the first government agency to adopt such an approach to its duties.
Indeed, this philosophy of service was highly controversial. The
General Accounting Office (GAO) raised strong objections, pointing
out that an obscure 1835 law says no federal official "shall
encourage a claim against the federal government or assist in
its prosecution." According to GAO, Altmeyer and the Social
Security Board were in violation of this law. Altmeyer argued
at length that this was not the case and that since the Social
Security Act established an entitlement to these benefits, the
Agency had an obligation to help applicants secure the benefits
to which they were entitled.
In addition to articulating the Agency's ethic of service, Altmeyer
also made sure that this philosophy was instilled into each and
every employee. Up until the late 1960s, every new employee of
Social Security was brought to Baltimore for an extended training
program, which not only taught them the technical aspects of their
new jobs, but inculcated the history and philosophy of social
insurance and the ethos of public service espoused by the Agency.
Altmeyer would later say of this training and indoctrination:
I think most of the success was
due to the employee training program and the insistence
that we were a social agency. We kept clerks here, as
well as the higher-ups, for months before they went
out and set up local offices. So they just had religion.
They had it complete.
"You're going out there to help people achieve
their rights under this great social program. Don't
sit back and let them try to prove their case. You have
to help them." . . .
But we made many mistakes and are making many mistakes
today. . . If it weren't for the fact that people throughout
the United States in their contacts with these people
at the desks in the local offices got the impression:
"Why that fellow (or that girl) is trying to help
me. . ." --if it weren't for that general attitude,
we would have had trouble. . .I've been told by literally
hundreds and hundreds of people that that's the reaction
they get to their encounter with local offices. I'm
sure we would have been licked even if we had done everything
as well as could be expected administratively without
that. It was the character that was established. |
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Altmeyer as Chairman
of the Social Security Board, 1939. Also pictured are
Board members George Bigge and Ellen Woodward. SSA
History Archives. |
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Chapter
5: Mr. Social Security |
"Mr. Social Security"
Even though he prided himself and his organization on administration,
Altmeyer was also the premier policy maker of his era. From the
earliest days of the program, he was a spokesman for social insurance
in America and was the primary "evangelist" (a description
he would have hated) for convincing the nation of the value of
this new experiment in social welfare policy. He often articulated
Social Security policy in larger contexts, as part of a social
welfare tradition with old roots and based on eternal truths about
human nature. He was very much a "big picture" thinker.
He also was, despite his stated alliance to administration, a
master legislative craftsman. The improvements to the Social Security
program embodied in the 1939 Amendments, and especially in the
1950 Amendments, were to a considerable degree the realization
of Altmeyer's legislative agenda. Indeed, if you read the speeches
and articles reproduced here that Altmeyer authored throughout
the late 1930s and the 1940s, he lays out in great detail the
policies and proposals that are destined to become law during
the next couple of decades.
Altmeyer
on Social Insurance
"Social security as a specific
program is in essence simply a social budgeting of costs
already being borne by the individual citizens of a
nation. Whether they have a social security system or
not, the citizens of every nation are confronted with
the economic burdens of old age, premature death, physical
and mental disability, sickness, and unemployment. These
risks affect individual citizens unevenly and unpredictably.
Apart from its preventive functions, a social security
system spreads these costs more evenly among groups
of people and over periods of time, thereby making bearable
costs and losses which otherwise are unbearable and
lead to destitution and want." -- 1943
"Social insurance is still so
new in this country that many people are yet not sure
exactly how it works. Actually it works on the same
principle as private insurance. That is the principle
of spreading the risk. As Winston Churchill has said,
it brings the magic of averages to the rescue of the
millions. Disaster, to which millions are subject, actually
strikes only a few of us at any given time. If we collect
a small premium from the many who are exposed to the
risk, we can build a fund out of which we can pay benefits
to those who at any given time are suffering from the
impact of the risk." -- 1944
"Social Security in the
sense we use it should not mean that everyone shall
be guaranteed all the good things of life without any
effort on his part. It should not mean a redistribution
of wealth, but a redistribution of welfare. What it
should mean is genuinely equal opportunity in a free
society. Therefore, liberty and security are synonymous,
and we can not have one without the other. Perhaps what
people are concerned about when they deplore the 'welfare
state,' is a paternalistic welfare state rather than
a cooperative state of welfare. In a free society our
quest for social security must always be for a method
whereby people can work together effectively through
their government to achieve security in such a way as
to promote, at one and the same time, individual incentive
and mutual responsibility." -- 1958
"It seems to me that the people
who are fearful that social insurance will affect the
initiative and the freedom of human beings don't really
comprehend the meaning of those terms, and the motivations
that are involved. It seems to me that it isn't fear
that presses people on to high endeavor, to do better
and better, but hope; and I think social insurance replaces
fear with hope." --1963 |
Altmeyer and the Development
of Social Security
Altmeyer argued tirelessly for many core ideas that would not
be realized until long after he left office--and some that to
this day remain unfulfilled dreams. He argued for coverage of
permanent disabilities and health care needs, and his vision would
be realized in the 1956 Amendments and in the creation of Medicare
in 1965. He argued for universal coverage of all workers, and
this goal is still not quite yet in hand. He argued also, for
a philosophy of social welfare that viewed all forms of social
insurance in equal terms. He viewed all forms of public provision
as part of a hoped-for comprehensive system, with appropriate
forms of provision--by social insurances or by public assistance
as need be. He asserted that unemployment insurance could be better
run as a federal program. And he pleaded for more generous benefits
for virtually all social welfare programs. Most of this agenda
remains unrealized.
The "Missing Pieces" of Social
Insurance
The advocates of social insurance wanted the original Social
Security Act to include comprehensive programs for the major threats
to economic security, including death, disability, illness, unemployment
and retirement. The 1935 Act did not include sickness or disability
benefits or survivors benefits and was thus seen by these theorists
has having "missing pieces." This was certainly Altmeyer's
view. Therefore, almost before the ink was dry on the 1935 Act,
Altmeyer began to campaign for the extension of Social Security
to include these other forms of coverage.
In a January 1943 radio address Altmeyer
offered what we can take as a definitive statement of his vision
of Social Security:
" I believe that we should be thinking in terms of developing
for this country a unified comprehensive system of contributory
social insurance which would cover all of the major economic hazards
to which the workers of this country are subjected, namely, old
age, disability, death, and unemployment. We already have a Federal
system providing protection against old-age and premature death
and a Federal-State system providing some protection against unemployment,
but we have no nationwide system providing protection against
the hazards of ill health and disability. Under a unified comprehensive
system of social insurance there would be no gaps, no overlaps,
and no discrepancies in the protection afforded. Such a system
could operate with a maximum degree of simplicity and efficiency.
. . The present Federal old-age and survivors insurance central
record system, which already contains 68 million individual accounts,
could be used for all insurance purposes. . . The nationwide network
of offices of the Federal old-age and survivors insurance system
and the offices of the United States Employment Service could
be merged and used as the offices of the new system.
The contributory social insurance system should of course
be extended to all employees and (except in the case of unemployment
and temporary disability) should be extended to all self-employed
persons as well. If this were done, we would be providing a minimum
basic security for the people of this country upon which they
would have a greater opportunity to build a higher degree of security
through individual savings and private insurance. In other words,
this minimum basic security would constitute a safety net protecting
the workers of this country against these major economic hazards,
not a feather bed releasing them from the necessity of helping
themselves.
While I believe responsibility for the establishment and maintenance
of a unified comprehensive system of social insurance should be
centralized in the Federal Government, I believe that the actual
administration of the system should be highly decentralized with
representative advisory committees and appeals councils in the
several States.
The cost of providing this basic security would not be excessive.
If the cost were shared equally by employers and employees, contributions
at the rate of 5 or 6 percent each would be sufficient for a long
time to come. In my opinion such a plan would provide a maximum
degree of protection to the people of this country at a minimum
cost which could easily be borne because it would be spread evenly."
At first he was cautious in pursuit of this vision. In his
first public pronouncement after becoming Board Chairman,
he would only say that the Board was "studying" the
question of expansion of the program.
"No one realizes more clearly than the Social Security
Board that possible amendments now under consideration represent
only the first beginnings in a long slow process of growth and
development. . . There is no responsibility which it takes more
seriously than the duty, placed upon it by the act itself, of
studying and making recommendations to Congress, not only within
the scope of the present act, but also in the whole field of social
security legislation. Because it . . . believes profoundly
that no program of social legislation is ever complete or final--that,
indeed, in social legislation to "finish" would be to
fail --the Board has no sense of apology either for the Social
Security Act in its present form or for the admission that it
is open to amendment."
It was not until the summer of 1938
that he ventured for the first time to actually identify the specific
shortcomings of the Act and the kinds of Amendments he had in
mind, suggesting: survivors benefits, universal coverage, accelerated
monthly benefits, and some acknowledgement of the need for disability
and health coverage. This was, by no coincidence, the agenda he
was pushing with the 1937-1938 Advisory Council.
The Advisory Council was Altmeyer's first real opportunity to
focus the nation's agenda on the "missing pieces." This
Council, which Altmeyer initially opposed, would in fact become
the vehicle through which Altmeyer would realize a major part
of his vision. Altmeyer crafted a completed legislative agenda
for the Council, persuaded President Roosevelt to support it,
and skillfully "sold" it to the Council. The Council's
report, which tracked Altmeyer's agenda almost perfectly, would
become the very important 1939 Amendments, which fundamentally
altered the nature of the program by adding survivors and dependents
benefits to what had been a retirement program for workers. This
changed Social Security from a program focused on the economic
security of the individual worker and made it a program focused
on the economic security of the family unit. This was very much
in keeping with Altmeyer's vision of social insurance, and he
played a major role in the development of the 1939 Amendments.
After the passage of the 1939 Amendments Altmeyer's efforts shifted
to disability and health insurance, as well as the overall adequacy
of old-age insurance. The next big milestone was the 1950 Amendments.
It was these amendments which increased the value and importance
of old-age insurance and made it into the modern Social Security
program we know today. If the theme of the 1939 Amendments was
new benefits, the theme of the 1950 Amendments was benefit
adequacy.
Prior to the 1950 Amendments there were more recipients of old-age
assistance than of Social Security retirement and the dollar amount
of this public assistance was actually higher on average than
the Social Security benefits. If this trend had not been reversed,
there is good possibility that Social Security may well have been
replaced by a welfare program. Indeed, years later, another Commissioner
of Social Security, Bob Ball, would observe: "It is probably
no exaggeration to say that the 1950 Amendments really saved the
concept of contributory social insurance in this country."
Again, Altmeyer was in a position to influence the legislation.
By now, the big issues were coverage and adequacy, as well as
disability insurance. The Administration recommended both significant
increases in coverage and dramatic increases in benefits (both
of which were enacted) and disability benefits (which were not).
Altmeyer withheld any proposals regarding health insurance or
unemployment insurance as battles to be fought another day. He
was gratified that coverage and adequacy were addressed, and disappointed
that disability was not.
When Altmeyer left office in April 1953, two big pieces of his
vision were still missing--disability benefits and health insurance.
Recall that he had begun advocating both of these programs as
early as 1938, and he took every opportunity to make the case
that they were sorely needed. In the lead article of the March
1941 Social Security Bulletin, Altmeyer offered a detailed
proposal for how a disability program might work--including thing
from making disability determinations to computing benefit amounts.
It was, in effect, the blueprint for a future disability program
and most of this blueprint would be realized in 1956 when President
Eisenhower signed the disability program into law.
On health insurance neither Altmeyer nor anyone else conceived
in advance the unexpected way that health care would finally become
part of the Social Security Act--as a program, initially, only
for retirees. Altmeyer always conceived of health care coverage
as a universal need and it would never have occurred to him to
limit it to only one segment of the population. Of course, the
idea of limiting Medicare to the elderly was more a political
decision than the expression of a public policy principle. So
it should not come as a surprise that Altmeyer did not foresee
it. In any case, he did identify health care as a need early on,
he articulated its logic, and he advocated for it whenever he
had a chance. He even participated in the drafting of the famous
1945 proposal by President Truman calling for national health
insurance. But the realization of this part of the dream was many
years in the making.
Universal Coverage
Altmeyer and Frances Perkins, along with most all of the social
insurance theorists on the CES, believed that the Social Security
program should be nearly universal--so that all might share in
its support and all might enjoy its benefits. After some modest
internal debate, the CES did in fact settle on more or less universal
coverage (the self-employed and highly paid professional were
to be the only excluded groups). Their initial report, implicitly
agreed to by President Roosevelt, was forwarded to the Congress
with this recommendation and Altmeyer was deeply disappointed
when the bill that emerged covered less than half the nation's
workers under the new contributory social insurance scheme.
Arguing for expansions of coverage thus became one of Altmeyer's
earliest and most persistent "crusades." In only the
second article he wrote for the Social Security Bulletin, in
August 1938, Altmeyer could confidently observe: "In
principle, there is no reason why old-age insurance should not
apply to every wage earner and even to those who are not technically
wage earners but who are the operators of small enterprises, that
is, the 'self-employed.' Because of the practical administrative
difficulties involved, this is an ideal which probably cannot
be attained immediately. There is every reason to believe, however,
that it will not be long before a number of wage earning groups,
now excluded, will be brought into the system."
Altmeyer was somewhat over-confident in this early assessment.
It would be 1950 before any significant inroads were made on his
goal of universal coverage. The reference to administrative difficulties
was due to the fact that this was the argument advanced by the
Treasury in 1935 for excluding certain groups from the program--Treasury
was afraid it would be too difficult to collect the taxes. But
this would prove to be one of Altmeyer's more successful "crusades"
in that the nation has in fact progressed steadily toward his
ideal of universal coverage--no doubt more slowly than he would
have liked.
Universal Coverage--High
Stakes Poker
Henry Morgenthau, Jr. was FDR's second choice for
Secretary of the Treasury. His first choice, William Woodin, died
less than a year after taking office. Despite being FDR's second
choice, Morgenthau had ready access to the President and often
was able to influence him to support the policies Morgenthau preferred.
The affinity between Morgenthau and FDR was based on a long-standing
personal friendship--he was a Hudson Valley neighbor to FDR's
magnificent Hyde Park estate, and they were "poker buddies"
in the frequent games Roosevelt held with his closest circle of
friends.
Within the CES, the question of the scope of the
program was settled in favor of universal coverage, which meant
that essentially all employees in the country would be subject
to the new payroll taxes and would eventually be eligible for
the new benefits. Morgenthau signed the unanimous report to this
effect. But when the legislative dust settled, the new Social
Security Act would exclude from the program the self-employed,
government workers, agricultural and domestic workers, members
of non-profit, religious and charitable organizations, and all
workers age 65 and older--hardly the universal coverage the CES
proposed.
The CES' legislative proposal had to be revised
at the last minute to make the old-age insurance program fully
self-supporting and this required actuarial recalculations of
the tax and benefit rate tables included in the original proposal.
These revised calculations were not available when the bill was
first filed and had to be added by a later amendment. Once the
revised rate tables were ready, a special hearing was held before
Ways and Means to present them, and Secretary Morgenthau was the
designated Administration spokesman. And in a time-honored tradition
of Washington hard-ball politics, Morgenthau used the opportunity
of his testimony to announce that the Treasury Department did
not support universal coverage, citing administrative difficulties
in collecting payroll taxes from certain types of workers. Secretary
Perkins was angered by Morgenthau's move and spoke at the hearing
in favor of universal coverage, but the Committee was only too
happy to go along with the Morgenthau recommendations since this
was the path of least political resistance. And because of this
moment of high-stakes political poker, the new Social Security
program would only cover about half of the nation's workers when
it began in 1937. The biggest expansion in coverage was enacted
in the 1950 Amendments, but even today the Social Security program
has not quite achieved the universal coverage that the CES envisioned.
Public Assistance vs. Social Insurance
One of Altmeyer's losing battles was his campaign to convince
America that public assistance should be greatly expanded. Public
assistance was woefully inadequate, he repeatedly said, and needed
to be substantially raised. It made moral sense, he argued, it
made economic sense, and it made public policy sense. In virtually
every speech he gave or article he penned, Altmeyer returned again
and again to this theme. He wanted America to adopt a comprehensive
view of social provision whereby government protected its citizens
against economic hazards by a combination of contributory programs
where possible and "welfare" programs where necessary.
But he did not view recourse to a welfare program as a failure
in any sense. It was just that non-contributory forms of social
insurance made more sense for certain groups of people, such as
dependent children and chronic "unemployables." The
stigmatizing of welfare as a moral failure of the recipient was
alien to Altmeyer's philosophy, although he always viewed income
from work as the basis for economic security. Thus, welfare was
to be paid to people who suffered a disruption in their income
"for reasons beyond their control," and who could not
otherwise be provided for under social insurance programs.
Although Altmeyer's views were fairly standard among the social
welfare types of his era, they were considerably more liberal
than the general attitude of the country at the time. They were
conservative, however, in the sense that he always conditioned
his advocacy of public assistance on the idea that people suffered
from disruptions to their income for reasons other than choice--age,
youth, illness and unemployment being the principal ones. He probably
would have shared the common attitude that the able-bodied ought
to work, and he viewed the creation of a "full employment"
economy as one of the obligations of government--so that the able-bodied
would have work to do. In one sense, Altmeyer's views were again
ahead of his time in that during the "war on poverty"
of the 1960s his more liberal view of welfare gained favor with
the policymakers of that era. But this view, and the whole war
on poverty, came to grief over an older, deeper, tradition in
America--the idea that welfare was shameful and that the poor
ought to be responsible for lifting themselves out of poverty,
that their predicament was almost certainly their own fault. This
quintessentially American attitude toward welfare was something
Altmeyer could never overcome. And yet he tried, with practical
argument and deeply held moral conviction. In
1952 he would optimistically observe:
"A new concept of social welfare has been developing
under which welfare programs consist not only of counseling and
assisting the individual and family in making the necessary adjustments
to the environment but, more importantly, of marshaling community
resources to promote the well-being of individuals and of families
generally. In other words, we no longer think in terms of a few
underprivileged and disadvantaged persons but in terms of all
individuals and families. In this country, under this newer concept,
social work would include both constructive welfare services and
measures designed to promote economic security--that is, both
public assistance and the social insurances. . . In other words,
social security would be part of social welfare in its present-day
meaning."
Federalizing Unemployment Insurance
One of Altmeyer's biggest failures was his attempt to persuade
the Congress and the States that the nation would be better off
with a federal take-over of the unemployment insurance program.
When the CES was considering its unemployment program recommendations
there was an internal split--many members favored a purely federal
system while others favored some form of federal/state partnership.
President Roosevelt had broadly hinted his preference for a federal/state
type system and this was in fact the recommendation the Committee
ultimately put forward. Altmeyer supported this recommendation.
Altmeyer never really clarified why he supported the mixed system,
but he suggested that his main motive was that he was taking his
cue from the the President. In any case, somewhere along the way
he changed allegiances to become the principal advocate for federalization.
He began this crusade in 1941 by criticizing the level of support
provided by the States and pointing to the lack of uniformity
in payment levels from State to State. He argued, in effect, that
the present system was broken. It was nearly two years later,
in March 1943, before he would openly
argue that the broken system should be replaced by federal administration:
" There is no question in my mind that combining the
present State-by-State unemployment insurance system into a unified
comprehensive contributory social insurance system would result
in far simpler, more effective, and more economical administration.
. . But of still greater importance than these administrative
advantages is the fact that a truly national system of unemployment
insurance would be much safer and sounder because of the wider
spreading of the unemployment risk and the more effective utilization
of reserves. . . A Federal unemployment compensation system could
also provide much more adequate benefits for workers generally
because of the wider spreading of the risks and the more effective
utilization of reserves. It is most important that unemployment
compensation benefits be made more adequate than they are at the
present time. The weekly benefit rates in many States are insufficient
to cover a reasonable proportion of the weekly wage loss that
an unemployed worker suffers. Most serious of all is the fact
that in most States the duration for which benefits are payable
is so limited that a very high proportion of workers in receipt
of unemployment compensation benefits exhaust their benefit rights
before finding another job. For the country as a whole, even in
a period of good employment, such as 1940 and 1941, 50 percent
of the workers exhausted their benefit rights before they found
another job. In some States the proportion ran as high as 65 and
75 percent. In a period of considerable unemployment these percentages
would of course be still higher."
His arguments had a certain logic, and viewed abstractly they
probably had considerable merit. But logic can take you only so
far, and powerful vested political interests were involved in
the status quo and these interests were unlikely to yield to the
gentle pleadings of the reasonable bureaucrat. Once the die had
been cast in the report of the CES, and codified in the 1935 Act,
there was no going back.
The War Years as
a Time of Opportunity for Social Insurance
Although World War II was a vast tragedy for the nation
and the world, Altmeyer saw it as presenting unique opportunities
for the cause of social insurance. Several related economic shifts
happened due to the War:
- many previously covered workers went into military service
where they had no Social Security coverage;
- many workers previously in non-covered employment shifted
into covered employment in war-industries;
- unemployment went down, reducing demands on unemployment compensation;
- because more people were working, wages were higher, and many
retirements were being deferred for the duration, there was
a sudden "windfall" of income to the Social Security
Trust Funds.
This unique set of circumstances led Altmeyer to argue that the
War was in fact an opportunity for the nation .
First, it raised the problem of coverage, since millions of people
who had been covered were losing their coverage during their war
service. Altmeyer seized on this anomaly and started
arguing as early as October 1943, that coverage should be
extended to service personnel in the form of "credits"
toward Social Security coverage--an idea that would be adopted
in 1956 as "gratuitous wage credits" for military service.
He also made a very novel and somewhat creative argument for
expanding coverage to non-covered groups based on an appeal for
more effective financing of the war effort. His argument, articulated
first in a November 1942 article, was
that bringing new workers under the program now would result in
an inflow of cash into the Treasury, which could be used to finance
the war effort--without recourse to additional borrowing. And
since there would be greater need for restored income security
in the aftermath of the War, this form of financing would also
help with post-War adjustments. President Roosevelt echoed Altmeyer's
thesis by observing: "This is one case in which social
and fiscal objectives, war and post-war aims are in full accord.
Expanded social security, together with other fiscal measures,
would set up a bulwark of economic security for the people now
and after the war and at the same time would provide anti-inflationary
sources for financing the war."
In the unemployment insurance program his argument was that by
federalizing the program now the adverse impacts of expected post-war
surges in unemployment could be lessened --and that there was
no time like the present, when revenues were high and claims were
low. So the War, in Altmeyer's eyes, even facilitated his cherished
goal of a federalized unemployment compensation system. (See
April 1943 speech.)
He also argued very forcefully (see March
1943 speech) that the provision of income security would be
especially pressing for children since many working fathers will
be killed or disabled by the War and their best hope of security
comes from participation in the programs of the Social Security
Act. This argues, according to Altmeyer, for an immediate expansion
of coverage to include all workers and to provide disability insurance
so that the nation's children can have the maximum of protection
in the post-war world.
Long-Range Financing And Delays In Contribution
Rate Increases
The 1935 Act contained a rationalized schedule of tax rate increases
designed by the actuaries to make the system self-supporting--in
fact it was due to yield a $47 billion surplus by 1980. The fact
that the system was designed to be in surplus was a source of
political controversy. In the early years, one major conservative
criticism of the program was over the issue of the surplus--conservatives
being opposed on general political grounds to the accumulation
of a tax-financed government surplus. The surplus was also a constant
temptation to reduce the tax rates on the argument that the system
did not really need the money.
The issue about the surplus expressed itself in a conflict between
advocates of "reserve financing" (the basis of the 1935
Act with its $47 billion surplus) and advocates of a "pay-as-you-go"
approach, which would mean lower taxes in the early years and
higher taxes in the distant future. The great temptation, of course,
from a politician's point-of-view would be to opt for lower taxes
and happier constituents now, with only the promise of higher
taxes by and by. Altmeyer clearly saw this as one of the motives
for supporting "pay-as-you-go" and he thought it was
not responsible financing. Altmeyer offered his views in May 1937,
only two months after assuming Chairmanship of the Board. Although
he did not come right out and advocate reserve financing, he made
it clear that the alternative "pay-as-you-go" approach
had serious problems.
"As a matter of fact, there is very little difference
between the pay-as-you-go and the reserve systems in so far as
the next few years are concerned. Violent disagreement arises,
however, when the respective advocates undertake to project their
imagination to the distant future, two generations hence. . .
A second important reason for this violent disagreement is that
the respective advocates fail to come to grips as to whether or
not they would apply the pay-as-you-go system before or after
there is practically universal coverage. . . The significance
of the extent of coverage lies in the fact that unless the system
operates on the reserve principle, either the future payroll taxes
must ultimately increase to a figure double that now contemplated
or there must be a substantial government subsidy, which means
in effect that the uncovered portion of the population pays for
a part of the cost of insuring the covered population. . . Moreover,
if we start monthly benefit payments sooner, pay such benefits
in more liberal amounts during the early years, add survivors'
benefits and benefits for permanent total disability, we would
be hard put to it to finance these benefits under even the existing
tax rates. However, there is this real difference between pay-as-you-to
advocates and the reserve advocates. The pay-as-you-go advocates
would collect less money in payroll taxes in the early years of
the system than the reserve advocates."
Altmeyer then put his keen mind on the central political point
regarding program financing. It is hard to imagine an observation
with more currency than this one by Altmeyer in 1937:
"It is absolutely vital to recognize clearly that if
we adopt a pay-as-you-go system either before or after we have
been able to achieve universal coverage, we must bear in mind
the effect on our entire tax structure and government budget.
To be concrete, if we adopt the pay-as-you-go system, we must
make absolutely certain that at the same time we not only balance
the budget but proceed to retire the government debt within the
next generation through the imposition, let us hope, of progressive
taxes, in order that we do not reach a period in the future when
the burden of the interest charges on a large public debt and
the burden of a large government subsidy to the Federal Old-Age
Insurance plan cannot be sustained through current taxation."
The production of a future surplus depended, of course, on the
tax rates built into the system. Under the 1935 law, the rates
were to start at 1% (on the employer and the employee), rising
to 1.5% in 1940, 2% in 1943, 2.5% in 1946 and 3% in 1949. The
1939 Amendments eliminated the 1.5% rate and accelerated the payment
of monthly benefits from 1942 to 1940, while adding major new
benefits for survivors and dependents. In Altmeyer's view, these
changes placed increased strain on the remaining rate schedule,
making adherence to it more imperative. And yet in 1943 the Congress
was considering delaying again one of the scheduled rate increases.
In fact, this would become a pattern in Social Security financing.
Scheduled increases were delayed or eliminated throughout the
1940s and 1950s. The 1% rate did not rise to 1.5% until 1950 and
the 3% rate originally contemplated for 1949 did not actually
start until 1960. Altmeyer sternly warned the Congress against
this trend in testimony he gave in October
1943:
"In the history of social insurance throughout the world
the major difficulty of social insurance systems has been the
lack of adequate financing of old-age retirement benefits. It
is always easiest to delay levying the necessary insurance contributions,
thus perpetuating and strengthening the belief that the insurance
benefits are meager and the costs of the insurance system are
low. Inevitably when the time comes to increase the taxes many
reasons can always be advanced as to why the imposition of the
additional taxes is unwise or impossible. In this country we are
still in a position to avoid these mistakes by getting clearly
established now that if our people want social insurance they
must be willing to pay for it. The time to obtain the necessary
contributions is when people are able to pay for the insurance
and are willing to pay for it because they can be shown that they
are getting their money's worth. If we should let a situation
develop whereby it eventually becomes necessary to charge future
beneficiaries rates in excess of the actuarial cost of the protection
afforded them, we would be guilty of gross inequity and gross
financial mismanagement, bound to imperil our social insurance
system."
|
Three
of the most important figures in the history of Social
Security are here assembled on the porch of the White
House, May 5, 1965, at a ceremony where President Johnson
honored the 20,000,000th Social Security beneficiary.
Left to right Arthur Altmeyer; Bob Ball (taller man
in back) and Wilbur Cohen (shorter man in front). SSA
History Archives. |
|
Chapter
6: A Bureaucrat with a Broad Portfolio |
Other Duties As Assigned
Altmeyer served not only as the head of the nation's
largest domestic program, but he also found time to serve his
nation and the world in many other capacities as well. During
World War II, Altmeyer was the Executive Director of the War Manpower
Commission and served as a member of that Commission until 1945.
He was a member of the Executive Committee of the National Youth
Administration. He also somehow found time to serve as an advisor
to the U.N.'s Economic and Social Council, and served as the U.S.
representative on the Social Council from 1946-1953. In 1947 he
served as the Executive Director of the Preparatory Commission
of the International Refugee Organization.
One of Altmeyer's most important "extra-curricular"
activities was his key role in supporting the development of social
insurance in the Americas. As early as 1939 he was serving as
Chairman of the U.S. delegation to the Conference of American
States of the International Labor Organization. He headed the
American Delegation to the first Inter-American Conference on
Social Security, in Santiago, Chile. From 1942-1952 he was Chairman
of the Permanent Inter-American Committee on Social Security.
In this role he was instrumental in bringing Social Security to
many central and South American nations. He is fondly remembered
to this day throughout Latin America.
A Couple of Stray Brass Rings
At least twice in his career Altmeyer was considered for "higher"
office and was passed by. It is not clear why he was passed over,
and it is far from certain that he cared.
After serving as the Chairman of the independent Social Security
Board for more than two years, Altmeyer was clearly disappointed
and chagrined when, in July 1939, President Roosevelt stripped
the SSB of its independent status and directed that the Board
would henceforth report to the new Federal Security Agency and
its Director, Paul V. McNutt. Although their relations were cordial,
Altmeyer certainly disliked this change in his and the Board's
status. McNutt was primarily a politician (McNutt was planning
to run for the Democratic presidential nomination in 1940 if FDR
didn't seek a third term). Altmeyer, in addition to being an able
administrator, was an intellectual. He was as much at home in
social insurance and economic theory as in the nuts and bolts
of running Social Security. Whether he viewed McNutt as a peer
is hard to say, and there were some incidents of serious conflict
between the two of them.
An Incident
in Defense of Social Security
The leading alternative to Social Security in
the early years were so-called "flat benefit" schemes
(the Townsend Plan was one such scheme). Under these types of
plans, a flat amount would be paid to all recipients, without
regard to past earnings levels or contributions to any social
insurance system. Conservatives favored these types of plans
as an alternative to Social Security. And apparently McNutt
did as well. In 1940 McNutt decided to make public his preference
for a flat-rate universal pension to replace the Social Security
program. Altmeyer knew that President Roosevelt was adamantly
opposed to flat-rate pensions, as was he. When Altmeyer saw
a draft of McNutt's speech he rushed to Washington and showed
it to Roosevelt. The President gave Altmeyer instructions to
stop McNutt from delivering the speech. Since McNutt was already
on the train to New York, Altmeyer had to dispatch Ellen Woodward
(a member of the Board) by plane. She finally caught up with
McNutt as he was standing at the podium on the stage, clearing
his throat to start his speech. Woodward motioned McNutt to
the wings and delivered the President's edict. She handed him
a new speech that Altmeyer had prepared. A red-faced McNutt
returned to the podium and made Altmeyer's speech rather than
his own, without any mention of his views on Social Security
and flat-rate pensions.
When McNutt left FSA in 1945 Altmeyer was rumored to be the heir
apparent. Instead, the job went to McNutt's deputy, Watson Miller.
Altmeyer stayed put as head of the Social Security Board. He never
expressed any disappointment in remaining as the head of the SSB.
Also in 1945 Altmeyer was considered for another high office.
The Veterans Administration job was coming vacant and Altmeyer
was the favored candidate of the remaining FDR "brain trusters."
But there were bigger fish trolling in that sea, and General Omar
Bradley, fresh from the Allied victories in the War, was tapped
by President Truman to head the VA. Altmeyer was re-appointed
by President Truman, in July 1945, to another six-year term as
Chairman of the SSB. Once again, Altmeyer seemed destined for
bigger things, but Social Security held him.
It does not seem that either of these near-misses caused Altmeyer
any sleepless nights as his heart was always with the Social Security
program. He was, after all, called by FDR and others "Mr.
Social Security" and he had a parental attachment to the
program and the agency that administered it.
|
On December 9, 1952
Altmeyer was presented with a Distinguished Service Award
in recognition of "distinguished contributions to
the enrichment of humanity through long advocacy of social
legislation and achievement in its administration."
Also shown are (left) Leo L. Miller and (right) Acting
FSA Administrator John L. Thurston. |
|
Chapter
7: Death By Preposition |
Death By Preposition
Altmeyer was appointed to his job by President Roosevelt in early
1936. He was confirmed by the Senate as a political appointee. He
held the top position at Social Security for nearly 20 years, through
the Roosevelt and Truman administrations. During this time he acquired
a special status in the minds of many. He was not universally viewed
as a political appointee, but was rather seen by most people as
a career civil servant. Technically, however, he was a political
appointee and he fully expected to leave once the new administration
was fully in place, following the 1952 elections. In fact, he had
already announced, prior to the election, that he would retire on
May 8, 1953, when he reached the minimum age for full retirement.
But as soon as the new Secretary, Oveta Culp-Hobby, took office
she made it clear that Altmeyer was persona non grata in
her eyes. She excluded him from meetings, ignored his memos, and
made a point of being cool to him whenever they did have any interaction.
Altmeyer described Hobby this way: "She gave the impression
of glacial calmness, impersonality, objectivity, and decisiveness."
But, Hobby, according to Altmeyer's account of those who knew her
well, ". . . was in reality a sensitive, shy, and uncertain
person who found it painful to deal with fellow officers and to
make difficult decisions." So perhaps it suited her that a
scheme was found in which she did not have to fire Altmeyer directly.
Instead, a Reorganization Plan was submitted to Congress by the
Administration under which the job that Altmeyer held, the Commissioner
for Social Security, would be abolished and a new job created,
the Commissioner of Social Security. By this simple maneuver
Altmeyer would be out of a job and there would be a vacancy for
a new Republican political appointee. And over this preposition
the storied career of Arthur J. Altmeyer was ended.
But there was a problem. The Reorganization Plan went to Congress
on March 12, with an effective date of May 11th (three days after
Altmeyer attained retirement age). As the Plan emerged from Congress,
the effective date had been changed to April 11th. It is unclear
whether Hobby played a hand in this change, but she clearly did
nothing to prevent it. This created a problem for Altmeyer since
it meant that by being forced to retire 27 days too soon, his wife
would lose potential survivors benefits. When this fact became known,
it was a brief embarrassment to the Administration who was seen
to be treating Altmeyer callously. Especially since the Administration
had not named a replacement for him, and the law allowed former
officials to stay in their old jobs for up to 60 days, if the President
asked them to do so. As the political fall-out grew, Secretary Hobby
contacted Altmeyer, literally as he was in the process of cleaning
out his desk, with an offer to hire him as a "consultant"
for 30 days so he could earn his full retirement. A proud man, with
a strong sense of propriety, Altmeyer refused the offer. He later
said, "I didn't feel justified in taking money for any such
make-work proposition or boondoggle. So, I declined."
|
This 1953
editorial cartoon expressed what many felt was the unfair
treatment suffered by Altmeyer in his abrupt dismissal after
the Eisenhower Administration took office. |
|
Altmeyer at his desk
on his last day on the job as Commissioner, April 10, 1953.
SSA History Archives. |
|
Chapter
8: Life After Government |
Retirement from government service did not mean retirement
for Altmeyer. In many ways he was as active, and almost as influential,
after leaving government. He became part of the informal Social
Security policy network of former officials and program advocates
that historian Ed Berkowitz has called "the apparatus."
This group influenced the course of legislation throughout the 1950s
and 1960s.
Formally, Altmeyer became a consultant on Social Security. He advised
the governments of Iran, Turkey, Colombia and Peru. In 1957 he co-authored
a study, in Spanish, of Peruvian social legislation. He was named
President of the National Conference on Social Work in 1954-1955,
and was Chairman of a Social Security Commission of the Democratic
Advisory Council in 1960.
Throughout his "retirement" years he continued to write
and lecture on Social Security and was a visiting professor at the
University of Utah; UCLA; the University of North Carolina; the
University of Wisconsin and the University of Chicago.
Congress Redux
In his many years as a top government official Altmeyer
had many dealings with Congress. In the early years of his retirement
Congress reentered his life in two unexpected ways.
An "Invitation" to Testify
During his tenure as a federal official Altmeyer probably
testified before Congress hundreds of times (although former Social
Security Actuary Bob Myers holds the Guinness record for the most
appearances before Congress). And yet in 1953 he would be subpoenaed
and forced to testify against his will in a Congressional hearing
about Social Security.
With the election of President Eisenhower in 1952 the Republican
Party also gained control of the House and Carl T. Curtis (R-Nebr.)
ascended to the Chairmanship of the Social Security Subcommittee.
Representative Curtis was supporting a proposal by the U.S. Chamber
of Commerce to eliminate the Social Security Trust Fund and place
Social Security on a strict pay-as-you-go basis, while transforming
Social Security from a wage-connected social insurance system into
a guaranteed minimum income scheme. Curtis was anxious to use Altmeyer's
reputation to help him undermine support the for existing system
by forcing him to make various admissions at the hearing. One central
issue for Curtis was whether workers had a contractual right to
Social Security benefits. Experts like Altmeyer thought there was
no such contractual right, but the general public probably assumed
there was, if they thought about such issues at all. (In a 1960
case, Flemming v. Nestor, the Supreme
Court settled the matter by ruling that the Social Security Act
is like any other act of Congress--it can be changed by a subsequent
Congress.)
Altmeyer was invited by the Subcommittee to appear at their hearings
to provide a "complete statement of the principles underlying
the present programs of Old Age and Survivors Insurance and Old
Age Assistance." Believing that the real purpose of the invitation
was to embarrass him, Altmeyer declined. Which led Chairman Curtis
to send a subpoena to Altmeyer by way of the United States Marshal
in Madison, directing him to appear. Thus Altmeyer was forced to
return to Capitol Hill less than six months after his retirement
from government service for the purpose of giving Congress his opinion
about the principles underlying the Social Security program. The
Subcommittee was not entirely ungenerous with Altmeyer; they did
provide him a travel stipend of $144.98 for his trouble.
Flirting With A Senate Run
Altmeyer was always involved in Democratic Party politics, in a
discrete and indirect way during his years as a civil servant, and
overtly and actively after his forced retirement. In 1954 he was
a co-chairman of the gubernatorial campaign of prominent Wisconsin
Democrat Jim Doyle. Doyle returned the favor in late 1955 by starting
a movement to draft Altmeyer to run for the U.S. Senate in 1956.
Wisconsin's less-famous Republican Senator, Alexander Wiley, was
up for re-election in 1956 and the Democrats saw a real chance to
replace him with a liberal like Altmeyer. Disgust with Wisconsin's
more famous Republican Senator, Joe McCarthy, led the Democrats
to think 1956 would be their year.
Altmeyer expressed surprise at this turn of events, and was a reluctant
candidate. Throughout the end of 1955 and the early months of 1956
he repeated his hesitancy and declined to commit himself to the
campaign until he had greater confidence in his support around the
state. Doyle formed an exploratory campaign committee and even collected
$190 in campaign contributions from 27 Wisconsin citizens before
Altmeyer withdraw his name from consideration in the early Spring
of 1956. (Altmeyer paid back all the campaign contributions from
his own pockets, despite the fact that he had not asked Doyle to
raise this money on his behalf.) Ultimately, William Proxmire would
replace McCarthy in the Senate in 1957 and Gaylord Nelson (one of
Altmeyer's 1956 contributors) would oust Wiley in 1962. So both
Wisconsin Senate seats would shift to the Democrats within one election
cycle, but Altmeyer took a pass on his potential opportunity to
return to Washington.
Altmeyer's Memoirs
During his long life Altmeyer wrote three books, each
important in its own way. His first, "The Industrial Commission
of Wisconsin" was published in 1932. It was his PH.D. thesis
under John R. Commons. Wisconsin's workman's compensation program
was a pioneering innovation and Altmeyer's account of it was important
because it articulated some of the basic concepts in administration,
such as the concept of a legal right to adjudication and appeal,
that he would have the opportunity to implement on a national scale
in the Social Security program.
Altmeyer was himself a pioneer in bringing Social Security to Latin
America. He was a consultant to several latin governments and in
1957 he co-authored a study of Social Security in Peru ("Estudio
Economico de la Legislacion Social Peruana y Sugerencias para su
Mejoramiento," with Romulo A. Ferrero).
Altmeyer's most important work was his memior, "The FormativeYears
of Social Security," published in 1965. This book is one of
the key source documents for much of the early history of Social
Security in America. Like Altmeyer, his book is humble and self-effacing,
striving to present an objective account of events. Nowhere in Altmeyer's
book will one find the intrique and behind the scenes personality
plays of which history is composed. But one does find the history
and the intellectual context of one of the most important social
developments in 20th century America.
Final Days
Arthur Altmeyer and his wife Ethel spent their final
years living in Madison, Wisconsin in a modest apartment at 4728
Regent Street.
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The Altmeyer's final home on
Regent Street in Madison. |
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Chapter
10:
Tributes to a Life of Accomplishment |
There are a handful of people whose names stand out in the history
of Social Security in America. Arthur Altmeyer is certainly on
this short list. And when it comes to the history of the Social
Security Administration, Altmeyer stands alone as by far the most
important figure. It was Altmeyer who gave SSA its basic character
and operating philosophy. It was Altmeyer who, more than any other
person, shaped the ethos of public service that has characterized
SSA over the years. Altmeyer described that ethos in this way:
"I think most of the success was due to the employee
training program and the insistence that we were a social agency.
We kept clerks here, as well as higher -ups, for months before
they went out and set up local offices. So they had religion.
They had it complete. . . I'm sure we would have been licked even
if we had done everything as well as could be expected administratively
without that. It was the character that was established."
If SSA had religion, Altmeyer wrote the canon. SSA's headquarters
in Baltimore bears his name. It is a fitting tribute.
"Arthur could discuss basic concepts of the right to
insurance and to assistance and services with social workers.
He could discuss the constitutional implications with lawyers--many
times reversing their opinions and judgments. At the same time,
he could explore with Bob Myers the intricacies of mathematical
cost calculations of social insurance. In an era of increasing
specialization he demonstrated the importance, at the highest
levels of government, of a variety of competences . . . so vitally
necessary to make . . . programs (such) as those included in the
Social Security Act of 1935 become living, working realities."
Wilbur Cohen--1972
"This enormously able man was a guide and inspiration
to all of us who knew him well, and his shaping of the social
security program and its administration entitle him to high rank
among the outstanding public servants of all time."
Bob Ball--1972
"Those who worked closely with him knew that besides
his superior intellectual and administrative abilities Arthur
Altmeyer was a man of sensitivity, compassion and integrity."
Maurine Mulliner--1972
|
In its
obituary of Altmeyer the New York Times said
simply:
"His death last week ended a life that brightened
existence for millions who never heard his name." |
|
Chapter
9: Death & Burial |
Altmeyer's last days were marked by several bouts of illness which
required extended hospital stays. Through it all he maintained his
intellectual interest in ongoing developments in Social Security.
Arthur finally died on Monday, October 16, 1972. Funeral services
were held at the First Unitarian Society in Madison, presided over
by the Rev. Max Gaebler. Altmeyer was laid to rest in Madison's
Forest Hills Cemetry on Thursday October 19, 1972. A memorial service
was held a few weeks later in Washington, D.C.
Ethel would survive him for another six years, and was buried alongside
her husband in their modest plot in Madison in 1978.
The Altmeyer gravesite in Madison, Wisconsin.
|
Chapter
11: Key Dates in the Life & Career of Arthur J. Altmeyer |
May 8, 1891 |
Born, in DePere, Wisconsin |
1914 |
Received his B.A. degree from the University of Wisconsin |
1914-1918 |
High school teacher and principal |
7/3/16 |
Married Ethel May Thomas |
1918-1920 |
Graduate assistant to John R. Commons and part-time statistician
with the Wisconsin State Tax Commission. |
1920-1922 |
Chief Statistician for the Wisconsin Industrial Commission. |
1921 |
Received M.A. degree from University of Wisconsin |
1922-1933 |
Secretary of the Wisconsin Industrial Commission. |
1931 |
Received Ph.D. degree from the Universityof Wisconsin |
1933-1934 |
Chief, Compliance Division, National Recovery Administration |
6/8/34-10/15/35 |
Second Assistant Secretary of Labor |
1934-1935 |
Chairman, Technical Board, Committee on Economic Security |
1935 |
Member of Executive Committee of the National Youth Administration |
1935 |
Member Interdepartmental Committee to Coordinate Health
and Welfare Activities |
10/16/35-2/18/37 |
Member, Social Security Board |
2/19/37-7/16/46 |
Chairman, Social Security Board |
1939 |
Awarded honorary LL.D. degree from the University of Wisconsin |
1939 |
Chairman, United States Government Delegation to Regional
Conference of American States Members of the International
Labor Organization |
1941 |
Member Interdepartmental Advisory Council to coordinate
health, welfare, and related defense activities |
12/7/42-1945 |
Executive Director and Member War Manpower Commission |
1942-1952 |
Chairman, American delegation 1st-5th Inter-American Conferences
on Social Security |
1942-1952 |
Chairman Permanent Inter-American Committee on Social
Security |
2/44 - |
Chairman of the Board of Trustees of the Retirement Fund
of the Coat and Suit Industry |
7/16/46-4/10/53 |
Commissioner, Social Security Administration |
1946-1953 |
U.S. Representative Social Commission, United Nations
Economic and Social Council |
1946-1949 |
Member United Nations Staff Benefit Committee |
1947 |
Executive Director Preparatory Commission International
Refugee Organization |
1948 |
Member of International Labor Organization Correspondence
Committee on Social Insurance (aka Committee of Social Security
Experts) |
1951 |
Member of U.S. Delegation to International Labor Conference |
1954-1955 |
President National Conference on Social Work |
1955 |
Social welfare advisor to governments of Iran and Turkey |
1960 |
Chairman Social Security Commission, Democratic Advisory
Council |
10/16/72 |
Died in Madison, Wisconsin |
10/19/72 |
Buried in Madison's Forest Hill Cemetery |
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