Prior to 1935, the United States did not have any social security programs at the national levels until the Social Security Act was enacted as part of the President Franklin Delano Roosevelt’s program of the New Deal. The enactment of the act saw the establishment of two major programs of social insurance: the old-age retirement insurance of a federal program and a federal-state program addressing the retirement of the old age insurance.
The act also provided for federal grants which backed up the state efforts in addressing matters related to the problems of the aged, the disabled, vocational rehabilitations, public health services and the programs concerned with the welfare of the children (Disability Advoacte, n.d). During this time, the mandatory insurance for old-age provided benefits which were equivalent to the prior salaries for the persons who were over 65 with the accumulation of reserve funding through the payroll taxes on employees and employers. The tax rate was initially set at 1 percent and it would accumulate for the benefit of the retirees.