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The Growth of Social Security

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By Bill Koch, editor

Part 3 in a continuing series

By Bill Koch

A Benjamin in 1940 would be worth nearly $350 today. That’s about what Ida M. Fuller received on Jan. 31, 1940: $22.54.

That was her first Social Security check. In fact, Fuller was the first regular Social Security recipient under the new old-age benefit enacted into law some five years prior by President Franklin D. Roosevelt.

Roosevelt signed the Social Security Act on Aug. 14, 1935.

Fuller paid into the system between 1937 and 1939, according to the Social Security Administration. She paid $24.75 on an income of $2,484. She retired from work as a legal secretary in November 1939.

Fuller, who died in 1975 at the age of 100, collected a total of $22,888.92 in benefits.

Fuller filed her claim on Nov. 9, 1939. She had decided to visit a Social Security office to get information about filing for benefits. “It wasn’t that I expected anything, mind you, but I knew I’d been paying for something called Social Security and I wanted to ask the people in Rutland about it.”

Claims Clerk Elizabeth Corcoran Burke took Fuller’s claim and sent it to Washington, D.C. for consideration. Fuller’s claim was the first on a list. Her check number was 00-000-001.

While Fuller may have been the first to receive regular benefits, Ernest Ackerman deserves credit for being the first recipient. He received 17 cents in January 1937. The single payout was the only form of benefit distribution at the time as bureaucrats were assembling the federal system between January 1937 and December 1939.

Slightly more than 222,000 began receiving OASDI (Old Age, Survivors and Disability Insurance) benefits in 1940.

John David Sweeney, Jr., was the first to receive a Social Security number, in November 1936. His number was 055-09-0001. Nearly 455 million different numbers have been issued to date.

The Social Security Administration does not reissue numbers after the death of a number holder. More than 5 million new numbers are issued yearly.

The average Social Security benefit today is nearly $1,400 per month, or nearly $17,000 a year. The national minimum wage is $7.25 per hour. At that rate, the full-time minimum wage worker would make about $1,250 per month.

The lowest Social Security number, 001 01 0001, went to Social Security Board Chairman John G. Winant, a former New Hampshire governor. He became the administration’s first chairman in 1935.

Initially, the Social Security Administration only paid retirement benefits to the primary workers in families. Lawmakers changed the system in 1939 to provide survivors benefits for spouses and children. Disability benefits were established in 1956.

A 1972 law enacted cost-of-living increases into the law, which went into effect in 1975. Benefit increases were previously provided by special acts of Congress.

The Social Security Administration has paid out more than $11 trillion since 1937 and received nearly $14 trillion in income through taxes.

The Social Security trust fund is invested in securities and earns interest. The fund is in short- and long-term bonds. The fund interest income matches the average market yield on long-term treasury yields. The investment has generated a 7 percent yield.

Read next week’s article on the common misconceptions about Social Security.