When Social Security was created in 1935, Roosevelt sent a message to the Congress saying that any Social Security plan should include ‘voluntary contributory annuities, by which individual initiative can increase the annual amounts received in old age’. He added that government funding, ‘ought to ultimately be supplanted by self-supporting annuity plans.’ FDR also said that “for perhaps 30 years to come funds will have to be provided by the States and the Federal Government to meet these pensions.”
No one knows if FDR would endorse President Bush’s current plan to save Social Security by implementing private accounts, however we do know that FDR had proposed a voluntary program to allow people to buy annuities.
Seventy years ago the American president did indeed propose a plan under which workers would have been able to make voluntary payments for which they would receive credits. At age 65, the retirees would have been able to cash in the certificates for annuities that would pay up to the equivalent of about $1,300 today, based on their total deposits plus interest. Roosevelt expected private plans to become available as the 1930s economy improved, for he said; “I am greatly hoping that repeated promises of private investment and private initiative to relieve the government in the immediate future of much of the burden it has assumed will be fulfilled.”
However the Congress would not go along with Roosevelt. Representative Frederick Vinson, who helped kill Roosevelt’s private annuity plan, saying there was no need for it at at that time, also told Congress; “Many of us think the time will come when the voluntary annuity plan, which rounds out the security program for the aged, will be written into law.”
John Fund of the Wall Street Journal has written about this: ‘Above All, Try Something’ What FDR really said about private Social Security accounts.