Hugh McKenna Oral History Interview
This is an interview with Hugh McKenna. The interviewer was Larry DeWitt, SSA Historian. The interview took place on May 29, 1996 at Mr. McKenna’s home in Baltimore, Maryland. Remarks by the interviewer and editorial comments are in italics to distinguish them from Mr. McKenna’s comments. Mr. McKenna was given an opportunity to review and edit the raw transcript.
Q: Hugh, you started with the Social Security Board in 1936. Before that you were in private insurance, right?
McKenna: Right. I was in the group insurance and pension business. I was interested in the development of Social Security but I hadn't thought particularly about employment or working there. Bill Williamson, who was the Actuary for Social Security then, came to me and said they were very much interested in having some people with that kind of background at SSA.
In July of 1936 I reported to SSA. We went through a training session for new people. My wife was pregnant and I left her in Pennsylvania (Merion, PA--outside of Philadelphia). I traveled back and forth weekly and managed to be back on the weekend when my son was born. I finished up with the training and then did some work with in the training process myself--informing the people on the group insurance and pension business as related to Social Security.
Then I was taken over by Ben Beecher, who then headed up the field organization for the Bureau of Old-Age Benefits. My assignment there was to write the manual for the issuance of Social Security numbers by Social Security district offices. I had an Associate who wasn't very good. I remember going to Ben Beecher one day and bitterly saying, "Now if you could assign him somewhere else, I'd be able to get this job done." Ben was very agreeable and he managed to put him somewhere else where he could hopefully be useful and we completed that work.
Shortly after that I was moved from Ben's office up to the Director's office. I guess you'd call me a Special Assistant to the Director. At that time the Director was Leroy Hodges, and John Corson was the Executive Officer, and John did most of the job. Leroy Hodges was a fine person, but he didn't know the operation the way that John Corson did at that point. I worked there; at one point it seemed desirable for me to get out to the field organization and see how it was going. I managed to work that out and I was in Philadelphia when Judge Dill was the Regional Director. I had some dealings with him.
I was interested in actually getting into a district office itself, rather than just the Regional Office. I managed to do that, and then I moved from there to New York, where Anna Rosenburg was the Regional Director, and I again was able to get into district offices and actually see how they were operating, and actually getting to participate myself in handling the public and...
Q: You did all this while you were still a Special Assistant?
McKenna: That's right.
Q: Can I ask you about the manual and issuing account numbers? That's an interesting topic because when we did the first batch of account numbers we weren't prepared to do it in the field offices and we had to get help from the post office to send those out. So in early 1937 we tried to do that ourselves, take over that business, and that was the instructions you prepared, right?
McKenna: Right. That's precisely the way it went, and the manual did it's job. We were able to take it on and not get into any major problems on the issue of Social Security numbers.
Q: Were there any issues or problems associated with us taking that over, anything that we had to overcome, or was it pretty smooth?
McKenna: I think it went pretty smoothly. I mean we had to be ready at a certain date--don't ask me when right now--but we had to be ready at a certain date to take it on, and be sure we'd be able to deal with it. The post office had wanted out at that time, and that had been agreed upon. It was significant that the district office did get into that as Social Security offices, because at that time we were not doing anything in terms of paying monthly benefits, we were just paying some routine death benefits.
Q: Now was there any school of thought at Headquarters that district offices shouldn't do the issuing, that maybe we should do it centrally some way? Was there any idea like that?
McKenna: I don't think I ran into any difficulty along that line. There may have been some discussion at a higher level, but there was no significant idea to do so because it was quite clear that this was the way we were going to do it--the district offices were going to handle the issuance.
Q: So then you were going up to Philadelphia and New York to go into the DOs and see how they operate?
McKenna: Yes. And also get some feeling for the relationship between the Regional Office and the district offices and how that was going. At that time, of course, we had the Social Security Board and the Regional Offices. We were dealing with the Bureau of Old-Age Benefits, the Bureau of Employment Security and the Bureau of Public Assistance, and so on. The Regional Offices were very significant at that point, in terms of the Social Security Board activities, because they had close relationships with the states in terms of handling those operations and so that meant that a Regional Director, per se, was substantially involved in activities other than just Bureau of Old-Age Benefits and the district offices. It had a Regional Rep who reported to the Regional Director--but it differed from Region to Region. Just in those two Regions, Judge Dill was interested more in district office operations than in the other phases, and I'd say Anna Rosenberg was quite interested in the relationships with the states, dealing with the other programs, but she also kept a real interest in how the district offices were doing, but not quite to the degree that Judge Dill was doing at that time.
My son was born in September and my wife was still living in Pennsylvania and then in November we were able to make the move. We found a house in Virginia and the baby and the mother were both doing very well at that point.
Q: Now were these hectic times in the first part of 1937 when the district offices took over enumeration? We were enumerating millions of people and assigning employer identification numbers.
McKenna: Employer identification numbers, and familiarizing the employer with reporting and following through on that. At one period we had all the trainees, after completing their training in Washington, they were detailed to me in New York after I moved to the Regional Rep job, because we had a concentration of employers and a need to follow through with them in terms of their reporting, primarily in terms of their reporting, but also being sure they knew what SSA was all about.
I worked with Ben Beacher who was still in charge of Field Operations and I was able to persuade him that I needed these people for a temporary period in New York more than they needed them in whatever offices they were going to be assigned to. So that worked out very well in that crucial period. For example, the garment industry in New York City had a real problem in getting people to make wage reports.
Q: Now you mentioned that you became the Regional Rep in New York? How did that come about?
McKenna: After I visited up there, or while I was visiting up there, something happened in my personal life. My father died in Connecticut and I had planned to go up on the weekend and visit with him. I knew he was hospitalized, but not until I got to the hospital did I find out that he had died the day before. So I had to really stay there for several days and take care of the situation. People in New York knew about this, and that may have had some influence because I went back there and spent some time, maybe another week or so, and then returned to working in the Director's Office in the Potomac Park apartment building in Washington. At that time the person who had been the potential Regional Representative in New York didn't qualify and then the Regional Director was very much interested in my coming up there, and it got to the Board members, I guess as well as John Corson, about my coming up there as a Regional Representative. I had just moved my family to Washington only a short time before. I debated over it, but I concluded I had better do that because I was interested in the field organization anyway, and since I was in demand, I figured it would get me off to a good start.
After I arrived up there with my family, the moving van got stopped at the border of Queen's County. I was moving to Jackson Heights, which is in Queen's County rather than Manhattan, and there was a strike and the movers couldn't go any farther. I had an apartment all available for us. I got on the phone and told the Regional Director the problem, and, lo and behold, she got a hold of Mayor LaGuardia. And in a couple of hours there were three trucks and about 15 men moving me in.
Q: So Mayor LaGuardia helped move you in (laughter).
McKenna: That's right! (laughter)
McKenna: We had a managers' meeting and Anna Rosenberg introduced me to the group, and these are managers from all over the Region, and said to them that I came from Washington and if they didn't like the way I worked with them I could be sent back to Washington! I was a little concerned with that kind of an introduction. But that worked out alright.
I had one little problem; I had two Assistant Regional Representatives, actually just covering district offices and seeing how things were going, and one of them had a close relationship with Mrs. Rosenberg, and I had a few little problems with him. But overall, he was a very capable guy.
Then, of course, along came the 1939 amendments and we really had Social Security getting underway at that point, paying monthly benefits. The operation in the Region was going quite well.
At that time, in the history of our United States, New York was the biggest city in population, and in all the concentration of businesses there. That was the city, and of course the state was the biggest state. We had offices all through the state, as well as three offices in Manhattan, two in Brooklyn and two in the Bronx. I had four district office managers who were former army officers--three were former majors and one was a former colonel in the Army. They were kind of interesting to deal with. The one that was the former colonel, he was actually the one who was the easiest to work with--he accepted a direction or two if you wanted to give him one. The others, they varied. But two of them were on the difficult side and the other one was pretty good and was quite an able person.
One of the things I remember, speaking of that, one of those managers was from downtown, one was a manager in Brooklyn, one was a manager in the Bronx and the other one was a manager in Syracuse, NY. The one downtown, whom I thought was doing quite an effective job, got tagged by the then World Telegram--a major New York paper. They weren't publishing it, but they had some information that he was a communist. I remember getting in touch with the managing editor of the World Telegram. I wanted to talk with him, and I wanted him to meet with the person that they were considering as being a communist. So we proceeded with the meeting, and I'd say it didn't go more than 15 minutes before the man was convinced that this man couldn't be a communist, that he was a real member of the United States, and an army officer, and a fine person. But that was an interesting experience, how we killed that problem, and he continued with his job in an effective fashion.
Q: While we're on that subject of your District Managers, one of the things that I believe you did during your time as a Regional Rep was that you appointed the first female District Manager in 1938, and the first black Assistant District Manager in 1941. Is that right?
McKenna: That's correct.
Q: Tell me about that.
McKenna: Well, let's see. I'm trying to recollect about the female manager. I'm having trouble with the name and with the location. We had a Negro manager in Harlem at that time and I was able to bring in this other very able person in my estimation and appoint him as Assistant Manager. The woman manager was an upstate New York office, and I have to say I'm blank on that at the moment as to her name, but we did achieve that, and both worked out very well. As a matter of fact, the man who made Assistant Manager in Harlem subsequently I moved over to the second Brooklyn office--I put him in charge of that office in Brooklyn and he was a very able person. He did a fine job. I should remember that lady, but at the moment I'm kind of blank on that.
Q: That's alright.
McKenna: Then, while I was still in New York, along came World War II, and the Regional Director decided she would take a wartime appointment--still stationed in New York, but working for one of the wartime agencies. And she took with her one of my Assistant Regional Reps, who had the close relationship with her, and she urged me to come to the wartime agency, but I wasn't coming. I wanted to stay with the Social Security program and the Bureau of Old-Age Benefits, and I did.
Then, of course, we ended up with a new Regional Director, a man whose background was in public assistance, and you had to maintain a reasonable relationship with the Regional Director. That worked out pretty well because he was really quite willing to meet and proceed as I had been, and he knew that I had established a reputation with dealing with the managerial group and so on. So that turned out to work pretty well.
Q: This is something that always interests me about the impact of the war on our personnel. A lot of folks went off into the service and other folks went off into war time agencies. I assume that we lost a lot of staff during that time and had to bring in other people on temporary appointments for the duration. Tell me about that.
McKenna: Well, for the most part we were able to bring in replacements. We may have made some of those on the temporary basis, but I think for the most part, we made replacements. At the war's end we brought back, I would guess about 80%, of the people who left, and we were able to work out placement without any great difficulty. Of course, there weren't a great number of managers of offices who left because a substantial number of them were in the age bracket where they wouldn't be called on.
I had put in an application in late 1942 for a commission from the Army, and that had been going through process. I had been called by my draft board. I was then living up in Scarsdale, NY. My son was going to Kindergarten and my daughter was born in 1941, and so the draft board didn't see that there was any immediate pressure for me to be drafted, but was alerted to keep an eye on it. So I put in an application for a commission. Then in 1943 I was called in to central office. Corson was then the Director of the Bureau of Old-Age Benefits, and Mike Shortley was the head of field operations. Mike Shortley and I had been in class together back in the early days, so we knew each other. We were both living in the Philadelphia area and we traveled back and forth together, so we knew each other pretty well. He was going to leave and become the Director of Vocational Rehabilitation, so they felt that I should come in and replace him as head of the field organization. Interestingly enough, I mentioned about potentially being called in to armed service and my application for commission, and lo and behold, Corson was on the draft board that would be passing on this application, and he advised me that it had now gone through his area and was now at the top of the board. I had applied for a major's commission and Corson said "you won't get it, the guy at the top says people at your age bracket, the best thing is to give them a captain's commission. So, the push was on for me to withdraw that application for a commission and accept this position as head of the field organization.
Q: Corson wanted you to do that. He wanted you to come and take this job.
McKenna: Oh Yes. He really had me in a strange situation and he strongly wanted me to take the job.
Q: Can you tell me a little bit about Corson--what he was like, his management style and his personality? Can you describe him to me?
McKenna: He was in some respects a little on the severe side. He consulted with staff, but he had his own ideas about how he thought the operation should go. But I think the staff generally had respect for him because they knew that he knew what he was talking about, and he had some background that fit in. He had also been the Assistant Executive Director of the Social Security Board, and he handled that while he was also working for the Bureau as an Executive Officer. So when a directorship became available I thought the Board did a very wise thing by appointing him as the Director. He had a good knowledge of what was going on in the Bureau of Old-Age Benefits and then in the Bureau of Old-Age and Survivors Insurance.
I personally thought he was quite good to deal with. We had a respect for each other and an understanding of what we were trying to accomplish, and I think also he had the respect of Joe Fay, who was then our Assistant Director for Accounting Operations. I'd say generally he handled himself well. He knew about the operation and he had program background and I thought that--at what was a very crucial period for SSA--we were very fortunate to have him as the Director of the Bureau. We had Joe Fay was in charge of Accounting Operations, Oscar Pogge was in charge of the claims operation, which included the area offices we call them now, and Murray was in charge...
Q: Murray Dewberry...is that him?
McKenna: No. Murray, that's his last name--Merrill Murray. He was in charge of the program side of it.
Q: Now when you came back, had we relocated to Baltimore at this point?
McKenna: Yes, we were in Baltimore. I should have made that point. We had been in Baltimore for some time when I came in 1943, a year or two anyway. It wasn't long after I came back to Baltimore, though, that John Corson left and he was succeeded by Oscar Pogge. Oscar wasn't quite the executive that John had been. We rocked along pretty well, but I'd say not with the same definitiveness that we had under Corson.
We had other Assistant Directors there; Roy Touchet was in charge of management and Ewell Bartlett in claims policy. I may not be getting this quite right as far as time frame, but we had a change occur with Oscar Pogge.
And somewhere in there Merrill Murray left as the Assistant Director for Program Analysis and we had to replace him, and that's when Bob Ball came back. My recollection could be wrong here. I think Oscar Pogge was still Director when Murray left, and we came up with the conclusion of Bob Ball as the selection. The top staff were in on the selection; it wasn't just the Director himself. All of we Assistant Directors were involved, and there was a debate. Some of them thought Alvin David should have it, and others thought that Bob Ball should have it. But Bob succeeded and then went from there. Then Vic Christgau came in as Director and Reed Carpenter departed somewhere along in there as Assistant to the Director and then Bob Ball moved into that job, and Alvin David succeeded him in the Program Analysis job.
Q: To the job that they debated about, that he wanted to be in the first place. David ended up there.
Q: When you came in '43, back to Baltimore, what was the challenge facing operations? What was going on? I mean we had the '39 amendments a few years before; we were now doing survivors claims and retirement claims and paying regular monthly benefits.
Q: And the war was still on and...
McKenna: And I found myself involved in closing a number of district offices.
Q: Because of the war?
McKenna: Because of the war, and the problem of replacing people who had gone.
Q: Now did we have to close these offices to save money, or because we lost the personnel and we couldn't staff them?
McKenna: My recollection on that was that it was primarily because we were short of staff. My recollection wasn't that we were just pushed in terms of funds and had to delete offices. It was primarily because of loss of staff.
Q: Was there any difficulty in doing that? If we tried to close an office now it would be politically resisted. At that time was there any difficulty?
McKenna: No, not any substantial difficulty. I don't remember any instance where we had the local papers disputing with us or anything. And of course we arranged for continuing service at least on, if not on a daily basis, at least on a semi-weekly, basis. I guess one can say, looking in retrospect, that it went quite smoothly in terms of what could of been the situation.
Then the war ended and we had quite a number of former employees returning from the war. We only had one or two Regional Representatives who got involved in war activities--I think only one came back and the other one didn't. That worked out. We were able to make their replacements when they left and we were able to work out having them come back into the position they had left. Then in the late 40s (Christgau was the Director of the Bureau at this point), we had three GS-15 positions that had become available and those went to Field Operations, Accounting Operations and Claims Control, and then that group became the executive group of the Bureau. The other Assistant Directors were involved overall, but this group became the executive group.
Q: So that was you and. . .?
McKenna: Yes, me in Field Operations, Joe Fay in Accounting Operations and Oscar Pogge and then Ewell Bartlett in Claims Control.
Q: So the three of you became sort of first among equals? Is that sort of what it was?
McKenna: That's about what it was.
One of the things that I should mention that was significant, I think, in terms of the overall operation, is that we did continue with Regional conferences of managers throughout that war period, and also had the Regional Representatives come in to Baltimore for periodic meetings. It was a very frank discussion of how things were going and so forth.
I always remember Ernie Tallman, who had been in World War I and had been Regional Representative in California ever since we started, raising an issue at one of these meetings about the IRS letters we were doing at the time. These were letters put out by the IRS on people who weren't reporting properly, and we had taken over the operation to follow through on those. And Ernie, I can vividly remember him saying in a meeting, "Now look, we've been working for the IRS all this time; it's about time they took that on. Let them follow up themselves."
Q: Did you persuade them to do that, or they didn't see it that way?
McKenna: No, they didn't see it that way.
Q: One thing I noticed that characterized your time, your early years, especially in field operations, is an emphasis on training, and you mentioned regional meetings. There was an emphasis on training the managers and the field personnel and your philosophy was that this was a key ingredient to success. Is that right?
McKenna: Right. And we used to run in new employees for training in central office, new employees that were going to be Claims Representatives. And I was always concerned that people did have the opportunity for training--really knew what the program was about.
Q: I'm very interested also in the fact that you just mentioned, that we even used to bring in Claims Reps to central office and give them training, not only in how you take a claim, but also in the philosophy of social insurance and the background of the program and the rationale for the program. Which is something we don't do anymore. It seems to me that's a loss. That's something of value. Do you think that had value?
McKenna: Oh, yes. Frankly, I think it is a loss. And I don't know about holding conferences of managers, and whether that has been just continued to a substantial degree. It is very important in terms of building a relationship with Headquarters and the guys working hard in the field.
Going through the next number of years...in 1950 we had major amendments. I recall now that we raised benefits. I shouldn't say we raised benefits. . .benefits were raised 77% in 1950.
Q: For the first time--the first time since we started paying monthly benefits. That was a large increase.
McKenna: We paid a great many very small monthly benefits in those early years. That was really, I would say, bringing it up to date.
Q: Now, did that cause an increase in your workloads in the field?
McKenna: Well, of course, the 1950 amendments were extended coverage to many public employees except those who were already covered by the government retirement system, and we also covered many self-employed in the 1950 amendments. That was a major time--a tremendous amount of work for the field organization. Those were really very substantial amendments, and they also meant a great deal for the program itself. It was updating it and also expanding it on an acceptable basis. People who were included joined without any major complaints.
Then we had some benefits increases in '52 and '54 but then came...in 1956 was the disability program.
Q: Ok. Before we go to disability I want to ask you a couple of things about 1950-1954. You mentioned that we started covering public employees and some self-employed. I assume that meant that we had to do some public information activities, and we had to go out and explain to people who hadn't been covered before what the program was all about, and that the district offices played a significant role in all that.
McKenna: No question about it. They actually were relating to these groups in the district offices. They were dealing with it in terms of publications of articles...
McKenna: Speeches. Oh yes. Including not only managers but Assistant Managers and Field Representatives, and occassionally a Claim Representative. And really doing an effective job. Which, again, I think speaks very well for the field organization. They worked with the conviction that this was the right thing to be doing and this is going to help the people.
It did go pretty well I think.
Q: The district offices were the main source of that kind of work for many, many years. It was almost a tradition--one of the jobs of the district offices did. In more recent years we've gotten away from that. When did we start this type of work in the field offices, and did you think it was important?
McKenna: Oh yes, and we did that from the very beginning. I'll give you an illustration.
I felt the managers had to get out and deal with employers in their areas, not just the Field Rep, but the manager himself got out and made a point of getting to significant employers, and so on, even if they had no complaints, just to make sure that things were going correctly and they had no problems. I had one manager in Yonkers, NY--fairly close to the metropolitan area--and he wouldn't go out of the office, and the employees of course were aware of it. I visited there and then I found out what his position was and I told him, "you know, either you get out and contact people and see what their problems are, alert them that you're here to help them, or else you are not going to be a manager in my organization." So I fired him. I think he made some kind of a protest, but...
Q: You were serious about this? This was an important part of the job?
McKenna: No question about it. Generally, across the country the Regional Reps were on this kind of a pitch, and then managers of course. We had the conferences of managers regularly and we had an understanding of what we were trying to do and we wanted them to actually get out and see people, deal with them personally.
You know during the period that we've been talking about the Social Security Board was eliminated and initially became a part of the Federal Security Agency and subsequently part of the Department of Health, Education and Welfare. Arthur Altmeyer was the Commissioner, which was helpful, but we didn't get too much attention in the early days from the head of the Federal Security Agency, or later the Secretary or the Secretary's office.
And then when Elliott Richardson was Secretary, he of course had background with Social Security and there was an easy working relationship. He was interested in what went on in Social Security. Most of the Secretaries weren't particularly interested. At that time I remember attending conferences in the Secretary's office to discuss matters. That only occurred during Elliott Richardson's Secretary-ship. Others weren't particularly interested unless some particular problem was arising.
Q: You mentioned Altmeyer...
Q: What was his role in terms of your job in field operations? Was he interested in the management of field operations? Did you have many dealings with him? Tell me a little bit about him.
McKenna: Well, I would have to say I think he was always interested, but he didn't interfere with the job.
I'll always remember way back when I was working in the Director's Office-- before I went to New York--and Altmeyer came walking around and said, "Oh, this is where you are now?" I didn't even think he'd recognize my name. I thought well, he's doing better than I expected.
I thought he--no question about it--had great interest in the program, and of course, he was Chairman of the Board when they were dealing with public assistance and unemployment compensation and so on. I think he did a very fine job in that end. He was a member of the Board when John Winant was the first Chairman of Board. That was a pretty fortunate appointment too because Winant did have some interest, but he didn't stay long enough to make a big impact. Even my appointment initially had to pass through the Chairman's office. I remember some friend of mine writing a letter to Winant recommending that they approve this appointment.
I'd say Altmeyer did very well, even when he had to take the brunt of being eliminated as an independent agency and made part of the Federal Security Agency. I think he handled it pretty well, although I'm sure he wasn't too happy about it. I think he had an understanding of these programs and he had also a respect for how old-age and survivors insurance had gone along. So it was pretty easy working with him and Bill Mitchell, who was the Assistant. Bill had some other background before he became the Assistant Executive Director. And then Bill Mitchell did succeed Altmeyer as the Commissioner.
Q: So you were back to, I guess, the '54 amendments...oh, there's something else I wanted to ask you about and I don't know when this happened. Maybe it was later. It probably was later. I was going to ask you about modular organization in the Program Service Centers.
McKenna: Well, that's later. Before we get to that...Now if I'm taking up too much time...
Q: No, no. It's your time. I'm here as long as you'll talk to me. You can throw me out the door. Whenever you want to break...
McKenna: Ok. We'll go through to '67 and then maybe take a few minutes out.
Disability came in--and I have to go back to my background now, back to the days of private business, the group insurance and pensions. We had disability coverage in our group insurance, but in 1932 or '33 all insurance companies decided to eliminate group disability insurance. It was very difficult to administer and it was a losing proposition and, remember, those were the depth days of the Depression and that was the end of disability insurance in the private sector on a group basis.
Q: I think before we took on disability in '56 the insurance companies were saying it was going to be Doomsday. We couldn't do it either, right?
McKenna: That's right. It was a very difficult matter to deal with. We got there finally. I had reservations myself about taking this on, but I was willing to take a shot at it and see if we couldn't make it work.
We got the states involved in it, in terms of adjudicating the disability business. We took the claims but at the district offices we didn't adjudicate; we sent it to the state and then it came to central office. We had to have the district offices able to properly interview, and to know when to deny a claim as well as to forward it on for adjudication. That went along reasonably well.
Let's see, we passed that in '56 so I was involved in that for 10 years before I moved out of the field operations. My recollection of that is we were able to do the job in the district offices reasonably well and the disability operations in those days went along with fairly prompt adjudication and that it was a fairly successful program. We retained pretty good relationships with the states although I don't know that we exhibited enough control. But I guess it went reasonably well in those days, so then that brings me up to '67.
Q: Before we go to that, let me ask you a couple of general questions about returning to field operations. What was the relationship between field operations and claims policy, or other sort of parts of the organization, in terms of who made policy for the field. It seems to me as I look at this history that there might be a possibility of some tension here over the issue of who makes policy for the field. Is it field operations or is it somebody else? Tell me what your thinking was about it then and how you saw that issue go back and forth.
McKenna: Well, we did have a Division of Claims Policy, policy and they had the authority to rule what the policy change should be subject, of course, to the Director of BOASI overruling them. By and large I thought we worked that out pretty well. We certainly got a field point of view involved with the policy people. We had that opportunity. I would say we had a pretty good working relationship. Ewell Bartlett was in charge of Claims Policy at that time and I'd say we may have had some differences, but by and large, we had a good working relationship. We could accept what Policy would come up with.
Q: Now, how about the other direction, at the Bureau level? To what degree did the Bureau direct what you did in Field Operations, and to what degree was field operations fairly independent? Can you give me some idea what that relationship was like?
McKenna: What do you mean?
Q: The impression I got was that Field Operations was fairly independent, kind of operating on its own. Is that an accurate impression or not?
McKenna: Well, I'd say we maintained relationships with the other segments or organizational parts of the Bureau. But I don't think I had a sense that they were controlling. I think we had a pretty good freedom of operation. At the same time, recognizing that there were points that we had to consider in terms of the viewpoint of people in the Office of Management and the people in the Office of Claims Policy, and so forth.
I can remember quite vividly a meeting with Roy Touchet about the budget situation, and his staff. I've forgotten what year that might have been, but they were trying to cut the Field Operations budget to a greater degree than I thought was desirable. We had quite a debate about that, and I guess that came to the Director's office. That was one time when it turned into a real battle and then we had to get it to the Director's office. That must have been in Christgau's time. My recollection is that instead of being cut $20 million, we got it reduced $10 million. But I don't remember that ever happening in another year, where we didn't have understanding and had to have a big battle about it.
In terms of the policy phases, I think that worked pretty well. If the field had a strong view on a particular situation we the got the opportunity to fully express that and maybe modify a ruling that was coming out. But by and large, it seemed to me that worked along in a pretty reasonable fashion--no sense of a major contraction. Well, then Frank DeGeorge came in--he came in with Cardwell, and then we had some really difficult problems. . .
Q: Let's come back to that.
Two very important things happened in 1965. Of course one of them was Medicare. I wanted to talk a little bit about the impact on the field, and the other one was SSA did a reorganization, a big organization which had a big impact on you and your job. so do you want to talk about that first or do you have something before '65 that you wanted to talk about? Do you want to talk about Medicare first?
Q: Ok. Let's talk about Medicare. Medicare passed in '65 and then we had a year to get ready to implement it.
McKenna: Right. And we had the initial job of signing up people for Medicare Part B. That was the responsibility of the field organization. I think we had a very fine feeling for Medicare, again, in terms of the organization's position. We worked at it and it came out that we actually had signed up for Medicare Part B about 94% of the people eligible, so that got us off to a very fine start.
At that time, and I still think it should be, it was a popular program--well received. I have a letter from President Johnson, hanging on the wall in my den, thanking me for my work in getting people signed up for Medicare. I guess that also made an impression on the President because then I also got his photograph, which is also in the den, with some nice words on it. I was very enthused about Medicare. I thought it was a fine program. Of course, now I'm participating in it, and have been. That's about the story there.
Q: Now one of the things that happened as a result of Medicare is that we--I guess it was a result of Medicare--we expanded the number of field offices fairly significantly. If I look at the number of field offices right around the time of Medicare, it's the first time I see a big expansion after the War. Is that correct? Did we do that?
McKenna: I think...
Q: And then the next time I see a big increase is around the time of SSI in '72. Do you recall that?
McKenna: I'm not sure now if there was a substantial expansion of district offices during the Medicare period.
Q: Maybe it was just a slow growth.
McKenna: I don't have a feeling that we expanded the district office structure to handle Medicare. We may have added some offices, but I don't have a sense of immediately expanding the organization on the specific scale to be sure we dealt with Medicare problems.
Then later on, after I left the field organization and Jim Murray came in, Jim not only expanded the district offices, but also moved the Assistant Regional Representatives out of the regional office into their separate places. Neither of which I agreed with, but I wasn't consulted. Jim and I were always good friends, but when he succeeded me in charge of Field Operations, he didn't want to consult with me on what went on. We would have had some differences; I'm sure he knew we'd have differences of opinion.
Q: Now, the thing that happened there, of course, that set that up was the 1965 reorganization which took the Division of Field Operations and made it a Bureau. What was the Agency's thinking behind that reorganization. Why was that done? Why was Operations elevated to be a Bureau and the other things that happened? Can you remember what went on at that time and what the rationale was for that and did you think it was a good idea? Did it make sense to you? Were you in favor of it?
McKenna: I'm not too clear on that. Let's see. Prior to 1962--in 1962 Bob Ball became Commissioner--we had disability as a separate operation. Then we had Medicare that came in as a separate operation and I think that's what developed the change in terms of divisions, in terms of bureau structures. I don't have any recollection of feeling any adverse concerns about it. It seems to me that as the structure developed this was probably a sound move.
Q: Alright. Now I'm going to ask you the same question I asked you before, about the relation between the policy making part of the operation and field operations. Because now what's happened is you used to head Field Operations, under the BOASI which had policy and operations together in one place. Now you become BDOO, the Bureau of District Offices Operations. And there is another bureau over here, BRSI--Bureau of RSI, which is basically the policy making place, and then there's another bureau over here for disability and health insurance and policy making for them...
McKenna: Now, BRSI also had a major operational function. They took over what was once the Claims Control operation and the Area Offices.
Q: So they have what are now the Program Service Centers?
McKenna: Yes . That's right. That was a combination, but I think it worked reasonably well. The relationships with the district offices and the Area Offices were on a pretty sensible and reasonable basis.
Q: Let me ask your view of who the Area Offices should report to. In more recent years they've come under field operations. But back in that time they were under a different Bureau. Did you--at the time you were head of field operations--did you think that the Area Offices ought to be part of your operation, or did you have no problem with the way it was?
McKenna: I didn't have a serious problem with the way it was. Several of the heads of those Area Offices came from the field organization and we had a pretty good working relationship and I don't recall that I had any concern about that structure. That was in 1965 that we had that structural change and that went on...
Q: And two years later you left and took the BRSI job.
McKenna: '67. Yes. That went on, and Bob Ball was Commissioner and I recall I had gone out to the airport to take a plane to Cleveland. I got a call from Ball. He wanted to talk to me before I took the plane. I've forgotten how we arranged the timing, but anyway, he got out to the airport to talk to me about whether I would seriously think about taking over the directorship of BRSI because BRSI was in real trouble, and he knew I had a strong relationship with the field structure and so on. He'd have to do something about Dick Branham who was then in charge of it, but before I left on this trip he wanted me to start thinking about that and let him know if I'd be willing to do that. I thought about it. I remember I didn't sleep very well that night. And then I talked to the Regional Rep in Cleveland-Arthur Simermeyer. He was thinking it may be a good idea if I took that job because he knew they were having problems. So anyway, that's how that started and that's how that ended up that I told Bob I would take that job. Incidentally, it didn't have any influence on my decision at the time, but it did have a different grade. My grade was a 17 and the BRSI grade was 18. See, it had a policy making function...
Q: Now I assume you had real mixed feelings about this. You said you didn't sleep well that night. I mean you had been with the field organization more than 20 years.
McKenna: 24 years. 24 years as head of the field organization and previously 5 years as a Regional Representative.
Q: Right. So you must have had real mixed feelings about it.
McKenna: Oh yeah, I did. I struggled on that one. I have to say that, with some reluctance, I agreed to take it on because it was becoming a very serious organizational problem.
Q: Now did you do this out of a sense of duty or did you foresee that Ball was making you an offer that you weren't supposed to refuse, or a little bit of both?
McKenna: (Laughter.) I guess it was a combination.
Q: Ok, so now you take over BRSI.
McKenna: I first dealt with operations in the Payment Centers. We also had the policy business, and policy was under Ed Watman at that time and we worked pretty well together, but I really concentrated on the Payment Center operation--they had heavy backlogs, they had personnel problems and we were moving from a manual operation to a more computer-related operation, and that wasn't working very well, so that became a very significant problem.
We set up a task force to review the Payment Center operations and propose improvements. The task force had people who came in from Payment Centers and also people from the district offices. Under the leadership of Byron Goetz, they came up with a very good report of things that needed to be done. They had 47 recommendations and we put 46 of them into operation. Of course that took a little doing.
Then we had the matter of employee/management relations. The structure in the Payment Centers was such that you were almost bound to have personnel problems. So we set up another task force for employee/management relations, and we had the Chairman from the Mediation Conciliation Service, and members from the Payment Centers and from other parts of the organization. They came up with 52 recommendations, and we didn't put 51 of those into immediate operation, but we found that the bulk of those were worth real consideration and effectuation.
Then we came up with another claims policy review group to see if we could do better in terms of sending instructions and guidelines to Payment Centers and district offices. I don't have the number of recommendations that they came up with, but again, it was a constructive report and we were able to make some progress in that phase of the operation.
Then, in terms of organizational structure, we had another group...we brought in a group from John Corson's company to take a look at the organizational structure. They came up with a report which ended up with our modular structure in the Payment Centers. That was kind of an interesting period because here was John Corson running this thing and under my direction (laughter).
Q: ...working for you.
McKenna: But again as far as I was concerned they did a very good job. It took quite a lot of doing--putting that modular structure into actually operating.
We had an experiment going on in the San Francisco Payment Center and they were moving in that direction, but they hadn't moved as far as the modular structure so I had to say to them, "Well, now I think we've been making progress here but I want to do this in the whole organization so I want you to get on board too with the modular structure." Walter Baum was in charge, and he worked very well under the circumstances.
There was no other Payment Center that had any real structural arrangement that had anything related to what we were talking about. We had real success in getting that; it took quite a lot of doing but I'd say we got very fine staff reaction to it and it did the job. The Payment Centers then functioned very effectively and enjoyed doing it. But it took some doing--we couldn't do that in 5 minutes. Let's see, we started that in 1967; it was about 1971 I guess before we really had that effectively going. But then we had a fine operation going at that point.
Then Commissioner Ball was removed and he was succeeded by Bruce Cardwell. I was a little discouraged about that because I knew that I had been recommended to the Secretary for the Commissioner's job and I actually had a copy of a letter he had written to somebody on that saying that I would be getting very good consideration. I never even heard from them and we had Cardwell as a Commissioner.
Cardwell was a fine person but he didn't know anything about the operation of the Social Security Administration, except as a Comptroller--reviewing the budget and that sort of thing. But beyond that he was coming in as pretty green. And then along with him came Frank DeGeorge in charge of management. Then Cardwell wanted to have a review of the organizational structure. I was involved heavily in that and came up with some proposals and out of that we made some changes. I became the Associate Commissioner for Program Operations.
Q: There are several things to talk about there. Let me go back and pick up a couple of stray issues. I happened to see in your file a letter that you had written to Jack Svahn back in '82. He had published an article in some New England management publication about Social Security. And you sent him a letter commenting on his article. You talked about several things and I wanted to ask you about one and then after that, we'll come back and talk about the Associate Commissioner job. You didn't mention SSI, and SSI of course didn't effect you directly and personally, but it certainly effected the Agency. Tell me how you saw that.
McKenna: Well, very frankly, I didn't enthuse about SSI at all--I thought it was a mistake. I never had any kind of consultation about this possible change and I guess I still feel the same way. I feel it was a major mistake for SSA to take that on because it distracts people from the fundamental program and it is a welfare program and people get mixed up. They just think Social Security is a welfare program.
Well, as I say, I didn't enthuse about it. And then we had Sumner Whittier come in as head of SSI. Sumner had some pretty good experience, although I think that was a job that he needed at the time. I don't know that he was ever very enthusiastic about it, but anyway, he was willing to work at it. Then he got a Deputy whose name I can't recall now. He was a real problem. I don't recall his name, and I don't recall how he got there, but we finally got rid of him.
Again, I wasn't in charge of field operations at this time and SSI was another thing for district offices to take on. I regret it. I guess I'd have to say I wasn't directly involved, but it changed the atmosphere of the organization to some degree. Well I guess that's about all I have to say on it.
Q: Another thing that you mentioned in your letter, and I'm not quite sure what you were trying to say here, you also said that another thing that happened in '72 was that the 20% COLA--and that was the year that Nixon put that check stuffer in.
McKenna: I think it probably was.
Q: He put that check stuffer in saying President Nixon is sending you a 20 percent increase in your benefits. I don't know what your point was, whether that was politicizing the program, or why you thought what happened in '72 was not...
McKenna: Well I certainly didn't think we should have anything like that going in with our checks. To me that was it, it was just too much politicizing the program. I wouldn't care which President it was; I wouldn't agree with him doing that. Well that's the story.
Q: Ok. A couple of other things you mentioned. One, you said you thought it was a bad idea when they replaced Joe Fay when he retired as head of Data Processing and they brought in somebody from the outside to replace Joe and that your view was that they should have brought in someone from the organization. Is that right? Did I understand your point?
McKenna: Yes. That would have been my position, because there were several people, just in Accounting Operations, who to me would have been in the position to take on that job and I didn't see the need for them to go outside to fill it. I can apply that same philosophy and feeling to the appointments of Commissioners in recent years and there are people from within the structure who could have been appointed and would have done a much better job. The same thing there.
Q: You also talked about that in the context of the systems problems that we had later on in the '80s, when things got really bad in the systems area we started bringing in people from the outside that didn't understand our system. But we had the Office of Advanced Systems back in 1974 or was it '75 trying to deal with the systems, and it didn't work out. You alluded to it, but I was wondering how you saw the Office of Advanced Systems. Was that something that had promise, or were you suspicious of it? I know some executives thought that the Office of Advanced Systems sort of trespassed on their territory, sticking its nose where it didn't belong? Was that your view?
McKenna: I wasn't in the organization then. I had retired several years before that.
Q: Well, I think the Office of Advanced Systems happened right at the end of your career, in '74 or '75, sometime in there, right in Cardwell's time.
McKenna: I probably was negative on that. Again, I attributed this both to Cardwell and DeGeorge, and I guess that to me was not the way to do it.
Q: Ok. let's talk about then. Cardwell did another reorganization in 1975 and you became Associate Commissioner for Program Operations and they had all these other Associate Commissioners. We started out when you were the head of the Division of Field Operations, as part of BOASI . Then you went over and became the head of BRSI, which covered policy and Payment Center operations. Then you got a job combining both of those together in one job, over all of operations.
McKenna: Including disability and including SSI.
Q: So tell me about that. You had that job for about 7 months and you decided to retire. First tell me...you said before that you were a part of planning for this reorganization, that you participated in this design, in this scheme. So you thought that this was a good idea. You thought this organizational structure was the way to go.
McKenna: I guess. Maybe I thought it was the lesser of several evils. I didn't go overboard on it, but I felt as long as I came out as the Associate Commissioner in charge of all operations that maybe this would be a workable kind of thing. But things weren't going to well, as I saw them, and I had Cardwell and DeGeorge. DeGeorge, as I mentioned earlier, was a very difficult person to deal with, in my experience. I had consulted with Ball before he retired as to whether I should think about working until I was 70 and he was very positive about it. I should definitely figure on working until I was 70. Of course at that time that was the mandatory retirement age. So that's what I had in mind. But when I got into this situation I found out it was really quite difficult and then I became ill and I had to have surgery and that's when I concluded I would retire.
Q: Did Cardwell try to talk you out of that. I saw some discussion somewhere that he tried for awhile to persuade you to stay on then you agreed to come back as a consultant for awhile?
McKenna: Yes, he did. He tried to keep me on. I felt that the strain was getting a little too much, and I had to undergo surgery at that time. As it happened, I didn't have the surgery until I actually retired, but there it was facing me and in part it contributed that to the strain that this situation caused. So instead of retiring at 70, I retired at 68.
And I've been concerned about the operation of SSA in the subsequent years. Because so many times they put people in charge of the operation as Commissioner that didn't know anything about it, and sometimes, some of them were not very effective at all. In fact, they were negative in terms of results, and that's hurt the organization. Most of those people I never met. I just know what I read about them. Of course I got reports from people who were involved, and I think that's been pretty rough.
I was very enthused to see SSA become an independent agency, but I haven't seen much in the way of what I would consider progressive thinking and operating. I have a feeling there's still a lot of dominance from the Department on the independent agency. Actually I think that's too bad. But again, our present Commissioner had never been confirmed, as I recall. With a situation like that it's unfortunate.
But I consider it a very fine program. I'm concerned now about the efforts for privatization, and so forth. This is the time when you need a strong organization, a strong Commissioner who really knows the story and really knows something about operating and I'm really concerned about that.
Did you see that column in the past week or so about Social Security? Let me see if I have a copy.
Q: Oh, yes. I did read this. This is very good.
McKenna: I was very happy to see that.
Q: Yes, this was a very good article. I'd like to see more like this because you sure don't see many articles supporting the program.
McKenna: No you don't see much of it, and I'd like to see things like that appear in a lot of papers.
Q: I agree with you.
McKenna: And of course this Advisory Council is going to come up with a privatization proposal. Ball is going to be opposing that, but I gather he's for at least investing some of the Trust Fund in the stock market. I haven't talked to him. I think possibly that part of that is that they figure maybe they can beat off privatization by...
Q: Yes, I'm sure you're right. I think that's a shrewd political maneuver on his part to try to save the base of the program.
McKenna: Of course the Concord Coalition is one of the primary movers on this. And of course they would say let's do away with Social Security.
Q: Or at least means test it.
McKenna: Yes, means test it. I think by the time they got through with what they were proposing then you wouldn't have any program left. Privatization and means testing of those who are getting benefits. I'm very concerned about those, and I certainly hope we can fend them off.
The National Academy of Social Insurance is going to do a study on privatization matters, and I concluded recently that I would discontinue my membership in the National Academy. Although Bob Ball is still there and Bob Myers is still working at it. But I am a little concerned that they are taking on a new major study of privatization, and I personally wouldn't want to see that--giving that much, what I consider support, to the idea. Maybe they'll have a mind to come up with a report saying this is for the birds and kill it.
Q: Speaking personally, I hope that's what happens too. But I suspect that it may not. The two people who are in charge of that report, one of them is Peter Diamond who is a professor at MIT, whom I think is favorable toward the program. But the other is Michael Boskin who was Ronald Reagan's Chairman of the Council of Advisors and who has written a book critical of Social Security, and I suspect Boskin is in favor of privatization. So they've tried to make these two guys co-chairs of this study to give some balance. But we'll see how it comes out. I don't know. I'm concerned about that myself.
McKenna: Well, I guess that's about it.
Q: Alright, well let me just ask you a last questions then. You started out with Social Security in 1936, expecting that it was just going to be a temporary job; you were just going to stay for awhile and then go back into the insurance business, I guess. You ended up staying 40 years. Tell me your overall reaction to your career. Was that a good move? Are you glad you did that? How would you summarize your career for me?
McKenna: Fundamentally, I think it was a good move.
You see, I had developed an awareness, first of course as I mentioned earlier about killing the disability business in the private sector. Also, in those times, it was very difficult to get a group pension plan going. Remember, we had been in a depression and companies were concerned that they didn't have enough money to do this. I can remember making a presentation to an organization about what it would cost them, and they would have to make some provision for people who were let's say now 50 and they had been working there for 20 years--they had to make some provision for that period--and almost inevitably you'd run into, "Well this is going to cost too much. We just can't afford it." I think that also influenced me in terms of here was something that the country really needed and we're moving in a direction that would be helping millions of people and that the private sector wasn't going to be able to produce. Maybe that improved in the postwar time but in those years I guess that influenced my thinking. And as I got involved, I just developed enthusiasm for this whole program. And in retrospect, I'm not at all sorry that I stayed with it, not 40 years--39.
My deal with Cardwell was that I'd be a consultant for a year or so. But I'm a little sorry now that there hasn't been more contact with former people in the organization by the Commissioners who have been in charge. But that's just a regret, that I think we could have been helpful along the way. Although, frankly, with some of the Commissioners I don't know that anybody could have been very helpful.
Q: Alright. Terrific.
Hugh McKenna 5/29/96