Independent New Hampshire Journalism · Northfield, NH

One Law, 21 Titles, One in Four Granite Staters: The Social Security Act Explained

The 1935 law has grown to carry Medicare, Medicaid, disability insurance and SSI. A larger share of New Hampshire residents collect its benefits than in all but three states, and the fund that pays retirees is projected to run short in late 2032.

The lowest Social Security number ever issued, 001-01-0001, went to Grace D. Owen of Concord. She applied on Nov. 24, 1936, and received the first card typed in Concord. According to the Social Security Administration’s historians, New Hampshire apparently got the lowest numbers, ahead of Maine farther northeast, so that card could go to John G. Winant, the former three-time New Hampshire governor who chaired the new Social Security Board. Winant declined. So did John Campbell, a regional official in Boston. The number went to the first applicant from New Hampshire instead.

The state leans on the program more than most. In December 2025, 353,828 Granite Staters collected a Social Security benefit, one resident in four. Only Maine, West Virginia and Vermont had larger shares of their residents on the rolls, according to SSA’s state data, and 89.1 percent of New Hampshire residents 65 or older were collecting.

Most people use “Social Security” to mean that monthly deposit. The law behind it covers far more. The Social Security Act runs to 21 titles, and they carry Medicare, Medicaid, Supplemental Security Income, the Children’s Health Insurance Program and the federal grants that pay states to run unemployment insurance. A state this dependent on the Act has good reason to know what the law holds, what it promises and what it leaves to Congress. The trust fund that pays retirees and survivors is projected to run out of reserves in the final quarter of 2032.

What Congress passed in 1935

President Franklin D. Roosevelt signed the Social Security Act on Aug. 14, 1935. The original law had 11 titles, and only one of them, Title II, created what most people call Social Security: a federal old-age benefit for qualifying workers who reached 65. Monthly payments were set to begin Jan. 1, 1942, and the law capped them at $85 a month.

Most of the rest sent money to the states. Title I helped pay for state old-age assistance, Title III for administering unemployment compensation, Title IV for aid to dependent children, Title V for maternal and child welfare, Title VI for public health work and Title X for aid to the blind. Titles VIII and IX laid the taxes. Roosevelt set a modest bar for the law, describing it as an effort to give “some measure of protection to the average citizen and to his family.”

Two limits of that first law explain the correction above. It paid nothing to disabled workers and had no aid category for disabled adults; SSA’s history records that needy people with disabilities were added to the state aid programs in 1950. The payroll taxes were not tied by law to the benefits, either. Title VIII’s taxes went into the Treasury like other federal taxes, and Title II created an Old-Age Reserve Account that depended on later appropriations from Congress. Employers and workers each paid 1 percent from 1937 through 1939, on the first $3,000 a worker earned from an employer each year, with the rate scheduled to reach 3 percent after 1948.

Coverage had gaps by design. The law’s definition of covered employment left out farm labor, domestic service in private homes, government jobs and work for many nonprofit organizations, among other exclusions.

How a pension law became a family and health law

Congress has rewritten the Act many times. The 1939 amendments added benefits for a retired worker’s spouse and minor children and for the families of workers who died before retirement, and they moved the first monthly checks up to 1940. The first went to Ida May Fuller of Ludlow, Vermont, on Jan. 31, 1940. It was for $22.54.

Fuller’s check stayed at $22.54 for a decade. The 1950 amendments delivered the first increase for people already collecting, lifting her payment to $41.30. Disability insurance followed in 1956 for workers 50 to 64, and a 1960 law opened it to disabled workers of any age.

On July 30, 1965, President Lyndon B. Johnson signed the law that created Medicare and Medicaid, which sit in the Act as Titles XVIII and XIX. The 1972 amendments folded the state-run aid programs for the aged, blind and disabled into Supplemental Security Income, run by SSA, and made cost-of-living increases automatic starting in 1975. The 1983 amendments began taxing some benefits, brought federal employees into Social Security for the first time and scheduled a higher retirement age. Full retirement age is 67 for anyone born in 1960 or later. The 1996 welfare law ended the entitlement to Aid to Families with Dependent Children, a program rooted in the original Act, and replaced it with time-limited aid tied to work requirements.

Two laws changed the math in 2025. Benefit payments rose that year under the Social Security Fairness Act, which the program’s trustees say increased benefits for people who also receive a pension from work Social Security did not cover. The tax law signed July 4, 2025, known as the One Big Beautiful Bill Act, reduced the income tax many beneficiaries pay on their benefits, and the trustees say that will shrink a revenue stream the trust funds count on.

What the Act covers

SSA’s compilation of the statute lists 21 titles. The nine below do most of the work people notice.

Medicaid shows how far the Act reaches into state policy. In 2018, the federal Centers for Medicare & Medicaid Services approved an extension of New Hampshire’s Medicaid expansion as the Granite Advantage Health Care Program, a demonstration authorized under Section 1115 of the Social Security Act that covers adults 19 to 64 with incomes up to 133 percent of the federal poverty level. Granite State Report has covered the state’s Medicaid work requirements.

The New Hampshire numbers

Social Security paid Granite Staters $755.8 million for December 2025, a pace of about $9.1 billion a year by GSR’s arithmetic from SSA’s tables. Retired workers made up 277,320 of the state’s 353,828 beneficiaries. Another 39,030 were disabled workers, and 21,643 were widows, widowers, parents or children of workers who had died.

New Hampshire checks run larger than the national norm. The average retired worker in the state received $2,297.70 for December 2025, about $226 more than the $2,071.30 national average in the same SSA dataset, a gap of roughly 11 percent.

The checks reach every county. Hillsborough counted 92,990 beneficiaries and Rockingham 79,605. Merrimack had 40,370 and Strafford 30,225. In Belknap County, 20,980 residents drew benefits worth $44.6 million for the month. Coos had the fewest of any county, 11,400.

Who pays, and where the money goes

Workers and employers each pay 6.2 percent of wages into Social Security on earnings up to $184,500 in 2026, and self-employed people pay both shares. A separate 1.45 percent Medicare tax applies to all wages, with no cap. Reported earnings also build the work credits that decide eligibility, one credit for each $1,890 of covered earnings in 2026. Granite State Report has explained what happens to workers whose cash pay never gets reported.

The program pays out more than it takes in. In 2025, Social Security’s income totaled $1.45 trillion and its costs $1.61 trillion, so the trust funds covered a $160 billion gap from reserves, which fell to $2.56 trillion by year’s end. The trustees tie the long-run squeeze to lower birth rates and an aging population. There were about 2.6 covered workers for every beneficiary in 2025, down from a steady 3.2 to 3.4 between 1974 and 2008, and the trustees project about 1.9 by 2075.

The 2032 deadline

The trustees’ 2026 report projects that the Old-Age and Survivors Insurance Trust Fund, which pays retirees and survivors, will run out of reserves in the fourth quarter of 2032. From that point, incoming revenue would cover about 78 percent of scheduled benefits, a share the trustees expect to slide to 62 percent by 2100. The separate Disability Insurance Trust Fund is projected to stay solvent through 2100.

A second date, 2034, treats the two funds as one. That projection assumes Congress changes the law so the funds can share reserves. On that footing, the combined funds would last until the third quarter of 2034 and could then pay 83 percent of scheduled benefits.

Applied to New Hampshire’s December 2025 payments, a 22 percent cut to retirement and survivor benefits would take about $151 million a month out of the state, and the average retired worker’s $2,298 check would drop to about $1,792. Those figures are a GSR illustration built on SSA’s December 2025 data. Real amounts would depend on benefit levels when the shortfall arrives and on whatever Congress does first.

The trustees also priced a fix. To keep the combined program solvent for 75 years starting in 2026, Congress could raise the combined payroll tax rate from 12.4 percent to 16.65 percent, cut benefits 25.2 percent for all current and future beneficiaries, cut them 30.3 percent only for people first eligible in 2026 or later, or combine revenue increases with benefit cuts. Waiting until 2034 raises the price to a 17.3 percent tax rate or a 28.5 percent across-the-board cut. The report urges lawmakers to act early so changes can phase in gradually.

The 2026 report also explains why the outlook worsened from the year before. The trustees lowered their assumption about future birth rates, revised their immigration assumptions and counted the 2025 tax law’s effect on revenue from taxing benefits. The 75-year shortfall grew from 3.82 percent of taxable payroll to 4.42 percent.

What the law does not guarantee

The old-age program survived a direct constitutional challenge in 1937, and the case passed through the federal appeals court that hears New Hampshire’s cases. The U.S. Court of Appeals for the First Circuit held that Title II invaded powers the Tenth Amendment reserves to the states. The Supreme Court reversed on May 24, 1937, in Helvering v. Davis, ruling that Congress may spend for the general welfare and that the old-age benefit program did not violate the Tenth Amendment. Justice Benjamin N. Cardozo summed up the Court’s role:

A second ruling defines what a benefit is. In Flemming v. Nestor, decided June 20, 1960, the Supreme Court held that a worker covered by the Act does not hold the kind of accrued property right in old-age benefits that would make every cutoff a violation of the Fifth Amendment’s due process clause. The Court pointed to the clause, included in the original Act, that reserves to Congress the right to alter, amend or repeal any provision. The same opinion left one limit in place: a change cannot be patently arbitrary. Benefits exist on the terms Congress writes, and Congress can rewrite them within that limit.

That makes 2032 a question for Congress. SSA runs the program, and the trustees have priced the options; only Congress can choose among them. Grace Owen’s card started a paper trail that reached one New Hampshire resident in four by December 2025. The two senators and two House members New Hampshire sends to Washington will help decide who pays to keep it whole and when, and voters can ask each of them which option they would pick.

Fact check

Editor’s note. Every factual claim above was checked against the sources listed in the fact-check table. Dollar averages, annual totals, the state ranking and the 22 percent illustration are Granite State Report calculations from Social Security Administration data and the trustees’ 2026 report. Trust fund dates are the trustees’ intermediate projections, which change with each annual report. All graphics are original to Granite State Report. Corrections: Granite State Report corrects verified errors promptly and appends a dated note identifying what changed and when. The corrections policy and the corrections register are public, and correction notes are never removed. The correction on this article appears at the top.