Social Security Flubbed Its Rollout. No One Remembers.

Bill Scher

Over at The Week I offered up 5 Other Botched Rollouts of Government Programs” in order to bring a little historical perspective to the current pile-on over the HealthCare.gov bugs. The common thread of all the programs I covered is: stuff gets fixed, people move on.

The Social Security example is the one with the clearest parallel to HealthCare.gov. The federal government was facing a similarly massive undertaking. As the Social Security Bulletin recounted on the program’s 75th anniversary, “Keeping a record of each individual’s lifetime earnings was an unprecedented task, and the technology to support this Herculean effort did not even exist.” That the government did it is now seen by historians as an “amazing” accomplishment. But when snags arose, people at the time had no idea that would be the case.

An “early crisis,” recalled the Bulletin, was the “John Doe” problem: “Many employers reported earnings without providing a worker’s name or SSN [Social Security number]. The first report from the Bureau of Internal Revenue did not contain SSNs for about 12 percent of the wage items—and this rapidly increased in subsequent reports.”

For two months, syndicated columnist Drew Pearson stoked panic over the John Does. Here’s one example from November 1939:

Admininstration executives … are up in arms over the high-handed bureaucracy which dominates the Social Security Board, and concern over the discovery of millions of unidentifiable “John Doe” records in the SSB files.

With pension payments due to start January 1, these unidentified records are loaded with political dynamite…

…Considerable progress has been made, but millions of cards — exactly how many is a matter of controversy, still are unidentified and will require many months and considerable expense to straighten out.

…Inside word is that it is only a matter of time before the Board goes the way of the junked Bituminious Coal Commission.”

In other words, as the former Chair recounted later, “They said that millions of people would never get their benefits.”

None of that was borne out. The Social Security Board figured out new procedures to extract information from employers and cut down on the John Does. The Board was not “junked.” It was reorganized into the Social Security Administration seven years later, though that was no shakeup, as the Chair of the old board was kept on as the first Administrator. He wasn’t punished because there were some early problems; he was kept on because he dealt with the inevitable problems.

Did the media panic force President Franklin Roosevelt to leap into action and save the day? Not exactly. As the Chair of the Board at the time said in a 1967 interview: “He wasn’t interested in it. He was bored stiff. I couldn’t have kept him interested in any of my woes. He laughed them off. That’s the only way he could survive, I suppose.”

It’s worth noting that the John Doe problem was not solved in one fell swoop, but gradually diminished over time. In all likelihood, the HealthCare.gov problems will be whittled away at too. And just like with Social Security, they will become an obscure historical footnote.

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