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WORKERS COMPENSATION, FEDERALISM, - page 20 / 43

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a six month waiting period (U.S. Congress 1974). Both provisions were by design more restrictive than those found in states’ worker compensation laws.

These restrictions were enough for the House, which approved national disability insurance in 1950 as part of a series of amendments to the Social Security Act. They were not enough for the Senate, which successfully replaced the DI section with a means-tested grant program for the permanently and totally disabled, administered jointly with the states. The Senate was responding in large part to pressures from the American Medical Association (AMA), which portrayed disability insurance as the first step towards the complete socialization of American medical care. Joining the AMA in opposition were the U.S. Chamber of Commerce and various insurance companies. This pattern was repeated in 1952 (Altmeyer 1966: 185-86; Derthick 1979: ch. 15). 21

In such a hostile political environment, it was hard to imagine tackling workers’ compensation at the same time. Doing so might have been good policy, but it would have heightened the resistance of some powerful groups and generated additional enemies.

Despite social security planners’ disapproval of workers’ compensation inequities and complexities and their desire to eliminate them under their new laws, they were not free of the older program. Workers’ compensation had one big advantage over the new program [disability insurance]: it already existed. Both labor and management had invested a lot of political energy into shaping it to their ends. As a result, the program had well-defined interest groups ... (Berkowitz 1979: 41).

Labor and management were not the only interested parties. Insurance companies made millions of dollars off workers’ compensation policies, and several states had established their own monopolistic or competitive funds. National involvement posed a direct threat to their existence. A number of doctors and trial attorneys in every state also counted on business from workers’ compensation cases. State accident boards and industrial commissions had existed since the 1910s and 1920s, long enough to form their own professional associations and professional identities. Located in every district of every state, opponents to national involvement were in an ideal position to pressure Congress.

If anyone doubted the power of established interests, further proof came just as policy makers were finalizing disability insurance. In 1954, Under Secretary of Labor Arthur Larson was leading an effort to develop a standard for states’ worker compensation programs. Intended to motivate improvements in coverage and benefits, the plan triggered fears of a national takeover. “By 1956, Larson’s model compensation act ... lay totally discredited, the victim of political sniping by state officials, businessmen, and their allies in the administration” (Berkowitz 1987: 34).

To advocates of disability insurance, the political legacy of workers’ compensation was clear – stay away. Advocates viewed these concessions as the price that had to be paid

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