7 7 We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.… This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions.
—Statement of President Franklin D. Roosevelt in Signing the
Social Security Act, August 14, 1935
When Franklin Roosevelt took the oath of office in March 1933, there was no American welfare state to cope with the ravages of a Great Depression. Since 1930, the nation had weathered a severe collapse and mounting unemployment—nearly 25 percent by 1933. Roosevelt’s predecessor, President Herbert Hoover, opposed direct federal relief to millions of hungry and homeless people, even though aid from lower levels of government and private sources was disastrously deficient. “For three severe winters, 1930, 1931, and 1932,” wrote Harry Hopkins, the administrator of federal relief in the Roosevelt administration, “the unemployed of the United States had suffered untold misery.”1
Historian Arthur Schlesinger, Jr., described the utter paucity of resources to cope with the severest depression in the nation’s history:
And so, through the winter of 1931–32, the third winter of the depression, relief resources, public and private, dwindled toward the vanishing point. In few cities was there any longer pretense of meeting minimum budgetary standards. Little money was available for shoes or clothing, for medical or dental care, for gas or electricity. In New York City, entire families were getting an average of $2.39 a week for relief. In Toledo, the municipal commissary could allow only 2.14 cents per meal per person per day. In vast rural areas, there was no relief coverage at all.2
Three-quarters of a century later, when the Great Recession struck, the U.S. welfare state was able to cushion some of the effects of mass unemployment. Elected, like Franklin Roosevelt, in a time of crisis, President Barack Obama inherited social welfare programs initiated by Roosevelt’s New Deal. The Roosevelt administration first mounted temporary relief programs to reduce the “untold misery.” Not long after, Roosevelt and his fellow New Dealers began a campaign for permanent economic or social security programs in a nation long schooled in self-reliance. What were the temporary relief measures of the New Deal? What role did the New Deal play in the achievement of permanent social welfare programs? What other forces were at play? How significant were the permanent programs? How did the programs born in the Great Depression mitigate suffering in the Great Recession? Finally, what can the New Deal teach us about meeting current challenges to economic and social security?
When the Great Recession struck, social welfare programs were on hand to reduce mass suffering and privation. Instead of the deep downward spiral of diminishing consumption, rising unemployment and collapsing production of the early years of the Great Depression, its twenty-first-century counterpart remained a recession—a Great Recession, but nonetheless much lower on the Richter scale of economic cataclysm.
Feeding the hungry in the Great Recession did not require a three-year struggle for new federal relief. Food stamps (SNAP), a program born in the Depression, could feed increasing numbers of hungry people. In the first two years of the Great Recession, food stamp beneficiaries increased by 14.3 million.3 According to the president of a national anti-hunger organization, “The program’s almost a model countercyclical program, in the sense that as more people are unemployed, as more people’s wages fall, food stamps can step in quickly and effectively to pick up some of the slack and ameliorate some of the pain.”4 The cost of its expansion was paid for, in part, by funds from the American Recovery and Reinvestment Act (ARRA, or the “Obama stimulus”). Another New Deal program, unemployment insurance (UI), was available to aid millions of jobless workers. UI expenditures increased nearly fivefold (4.84) between 2007 and 2010, keeping 3.3 million Americans out of poverty in 2009.5 The length of time that a worker can collect benefits during normal times, usually 26 weeks, was increased by an extended benefits program enacted by Congress in 1970 and by the Emergency Unemployment Compensation Program (EUC) of 2008. Workers who exhaust regular UI and EUC benefits are eligible for additional coverage, depending on the level of unemployment and the laws in their states. In July 2012, after reduced coverage in six states, benefit length for newly unemployed workers ranged from forty-six to ninety-nine weeks, with the modal number being seventy-three, and 58 percent of the states covering seventy or more weeks.6 Unemployment insurance is a New Deal program available since the mid-1930s, and there has been a precedent since 1970 for extending its benefits with federal financial support during periods of recession.7
The availability of social welfare programs and the relative ease with which they were expanded early in the recession may be one reason why, for three years after the crash, there was little protest from the unemployed, underpaid, or foreclosed—until public service workers, threatened with loss of collective bargaining rights, struck back in Wisconsin, and Occupy Wall Street, protesting a wide range of inequities. Contrast this with the three years following the stock market crash of 1929, when the neglect of catapulting need aroused substantial organized protest by and on behalf of the unemployed (see Chapter 4 for discussion of popular movements during the Great Depression).
Social welfare, though meeting some need in the Great Recession, has its limits. Food stamps, even with fewer holes than other safety net programs, has very low benefits and was serving just 75 percent of potentially eligible individuals or families in 2010.8 Moreover, to paraphrase a placard of Occupy Wall Street: “We didn’t get an education to be on food stamps.” Even though suffering was less widespread than in the early 1930s, it was still severe. Although the proportion of jobless workers collecting benefits rose during the height of the recession, a report early in 2013 put the rate at less than half; extended benefits, moreover, do not last forever.9 On average, not even 50 percent of a worker’s earnings are replaced by UI.10
Has the rest of the social welfare system stood the test of a Great Recession? The old age and disability insurance system, known popularly as Social Security—the foremost legacy of New Deal social reform—continues to pour billions of dollars into the hands of the elderly, the disabled, and the widows and children of retired, deceased, and disabled workers, thereby maintaining their purchasing power. Moreover, the reduction of the Social Security payroll tax became a source of relief to workers and a stimulus to consumption when Congress lowered it in 2011 and 2012.
One program that did not respond to the economic crisis was public assistance for needy families with children. Aid to Families with Dependent Children (AFDC), one of the public assistance programs established by the Social Security Act (initially “Aid to Dependent Children”), was repealed in 1996 and replaced by Temporary Assistance for Needy Families (TANF). The new program has lifetime limits on benefits and strict work requirements that were hard for many recipients to meet before the crisis and impossible for many more in its wake. According to Chairman of the Senate Finance Committee Max Baucus, “A welfare system focused on jobs can work when there are plenty of jobs, … But that kind of system poses harsh realities when a recession sets in.”11 What the senator overlooks is the chronic shortage of jobs and the very low wages of those that do exist, particularly for women with the labor market handicaps of many single mothers.12 Public housing, also enacted during the New Deal, has never been an entitlement in the sense of providing shelter to all who are eligible. In Dallas, when the housing authority began accepting applications for the first time in five years, 21,000 people applied for 5,000 places.13 Yet Congress reduced the 2012 budget of the Department of Housing and Urban Development (HUD) by nearly $4 billion.14
There was no question that the federal government would provide relief when Franklin Roosevelt became president. That had been a promise of the Democratic Party platform and its standard-bearer. While Roosevelt held that the expenditures of cities, states, and the federal government must be reduced, he was “utterly unwilling that economy should be practiced at the expense of starving people.” It was the obligation of government to prevent the starvation of those who try but are unable to maintain themselves—“not as a matter of charity, but as a matter of social duty.” If lower levels of government are unable to fulfill this obligation, “it then becomes the positive duty of the Federal Government to step in to help.” Quoting the Democratic national platform, he said that the federal government has a “‘continuous responsibility for human welfare, especially for the protection of children. That duty and responsibility the Federal Government should carry out promptly, fearlessly and generously.”15 Roosevelt’s rhetoric, however stirring, often exceeded the New Deal’s deeds. With the Federal Emergency Relief Administration (FERA) of 1933, however, the New Deal broke historical precedents by financing direct relief to millions of needy Americans. According to the most knowledgeable officials, the combined budget for relief and public works was just over a fourth of what was needed.16 Nonetheless, social-welfare historian Walter Trattner regards FERA as “a tradition-shattering statute that opened up an era of federal aid that had momentous consequences for social welfare.”17 Appointed administrator of FERA, Harry Hopkins had directed New York State’s Temporary Emergency Relief Administration, established by then-Governor Franklin Roosevelt.
Hopkins, it should be noted, had spent his life working for the poor. Indeed, the Roosevelt Administration included a number of other persons with lifelong commitments to social reform or civil rights, like Labor Secretary Frances Perkins, Interior Secretary Harold Ickes, Jr., and, though she had no official position, First Lady Eleanor Roosevelt, the preeminent New Deal humanitarian. One searched for advisors and appointees with such qualifications in the first Obama Administration. An exception was Labor Secretary Hilda Solis. A former congresswoman, Solis had a strong background in worker and immigration rights but, as a member of the Cabinet, she was barely visible to the public, much less a vocal advocate for an extension of labor rights. As this discussion will show, Hopkins particularly, and Perkins as well, stand out as proponents within the FDR administration of more progressive social welfare measures, available to all workers and, in Hopkins’s case, without invidious distinctions among various needy populations. In referring to the close relationship between Roosevelt and Hopkins, Perkins wrote “Roosevelt was greatly enriched by Hopkins’s knowledge, ability, and humane attitude toward all facets of life.”18 The presence of outstanding reformers in the Obama Administration might have made such differences, but the choice of advisors is, of course, that of the president.
FERA either shared the cost of relief with the states or, if states lacked the wherewithal, picked up most of the tag. The federal share of FERA relief was approximately 70 percent, but in some states, notably in the South, where revenues were especially depleted, Washington paid 95 percent or more of relief expenditures.19 Innovation in temporary relief programs went beyond financing. Some aid was in the form of work relief—currently called “workfare”—in which recipients worked for their relief checks. Hopkins preferred work programs like those in the Works Progress Administration (WPA), established later in the New Deal. The unemployed who got jobs in the WPA, Hopkins wrote, were inclined to think of themselves as “working for the government” instead of being on relief.20
Another FERA innovation was more adequate benefits. Average relief grants for the country as a whole about doubled in less than two years, between May 1933, when FERA was initiated, and January 1935.21 According to a representative of the American Association of Social Workers, “perhaps the greatest thing that has been done to the worker by the Federal Emergency Relief Administration is that it has for the first time given assistance … that was way over and above anything that we have known in our state poor laws.”22 Nonetheless, as Hopkins himself regretted, “We have never given adequate relief.”23
The Social Security Act of 1935 and the 1939 amendments that significantly expanded it are the principal social welfare reforms of the New Deal. The complicated history of this legislation is well beyond the scope of this chapter. In a time when confidence in government’s ability to solve problems remains low, it is important to understand how New Dealers took advantage of an economic crisis to make a case for a larger government role in economic security. The timing of reform was important to New Dealers, and is also of contemporary interest, given President Obama’s advocacy of health care reform rather early in the course of a Great Recession. The provision of federal relief to the unemployed was a clear break with tradition, but it was temporary. How did the unemployed fare with the permanent measures? Finally, how much economic security would be met by the permanent social welfare reform, and how conducive was its framework to further expansion of social provision?
Soon after becoming president, Roosevelt told a New York Times reporter, “We’ll be social-minded enough in another year to make a beginning in a great social reform which must be carefully adapted to our special conditions and needs.” The “great social reform” was social insurance. Despite what the Depression should have taught the American people, Roosevelt held that “a nation has to be educated to the point where reforms can be assimilated without dangerous spasms of indigestion.”24 Popular movements, of course, help with digestion and often include not only those who advocate for themselves but “conscience constituents” who favor benefits or justice for others.25 Evidently, FDR was not being too cautious about the need to educate the public. Frances Perkins who headed the Cabinet-level Committee on Economic Security (CES) that planned the Social Security Act, reminded her colleagues that “this was the United States in the years 1934–35.” Thus, their recommendations needed to take into account “the needs of our country, the prejudices of our people, and our legislative habits.”26
According to political scientist George Edwards III, even presidents renowned for their communication skills do not change the minds of those they govern. Instead, they focus the public’s attention on a particular issue, framing or setting the terms of the debate.27 Rather than changing values, they point out the applicability of widely held values to a policy they favor.28 Once is not enough: “It is likely that reaching the public will require frequent repetition of the president’s views.”29
The New Deal security message was frequently intoned, usually associating it with enduring values and with prevention of depressions or aid to its casualties. Historian Elmer Cornwell, Jr. observed:
F.D.R.’s tactic was much more than mere repetition, though this was useful, no doubt, in lending familiarity to the ideas involved. He attempted also to clothe the apparently unorthodox in the garb of the familiar. Over and over he insisted that what he was going to propose was not alien to American values, but a mere fulfillment or rediscovery of elements already present.30
In his message to Congress in June 1934, Roosevelt declared his intention to undertake “the great task of furthering the security of the citizen and his family through social insurance.”31 He set forth the themes that were to be repeated by him and his associates in their effort to make the nation more “social-minded” and more receptive to the idea of government-assured security. “Security” was concerned with common desires for decent homes, productive work and “some safeguards against misfortunes which cannot be wholly eliminated in this man-made world of ours.” The objectives themselves were traditional, but they could no longer be achieved “through the interdependence of members of families upon each other and of the families within a small community upon each other.” In modern society, there were unavoidable “misfortunes” or what Roosevelt also referred to as “the hazards and vicissitudes of life.” It was not just a matter of individual responsibility or self-reliance. This being the case, “we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it [emphasis added].” To allay fears of a radical departure, he pointed out: “This is not an untried experiment. Lessons of experience are available from States, from industries and from many nations of the civilized world.”
An important theme was the relationship of economic security to freedom. In Harrodsburg, Kentucky, Roosevelt looked forward to giving to all the people of the nation “the fulfillment of security, of freedom, of opportunity, and happiness which every American asks and which every man [sic] is entitled to receive.”32 This was one of many attempts to integrate security with the old social philosophy that put political liberty on a pedestal. In a Fireside Chat in November 1934, this weaving of old and new was apparent: “I prefer and am sure you prefer that broader definition of liberty under which we are moving forward to greater freedom, to greater security for the average man [sic] than he has ever known before in the history of America.”33 Thus Roosevelt was creating a new social paradigm consonant with reform and at the same time integrating it with traditional American values.
Repetition was important. Roosevelt referred to the bill no less than twenty-five times in press conferences from February 1934 to August 1935.34 Other New Dealers joined in popularizing the security concept. Urged by Roosevelt to discuss the issue as much as possible, Frances Perkins made more than 100 speeches, “always stressing social insurance as one of the methods for assisting the unemployed in times of depression and in preventing depressions.”35
Less than a year and a half into his first term, when he started to promote permanent social welfare reform, Roosevelt could point to the administration’s accomplishments: “On the side of relief we have extended material aid to millions of our fellow citizens. On the side of recovery we have helped to lift agriculture and industry from a condition of utter prostration.”36 The country was somewhat better off than when he took office, but the road to recovery was still long and uncertain. In 1934, unemployment was almost 20 percent but nonetheless down 14 percent from the previous year; progress in industrial production was better, up almost 30 percent since its 1932 nadir.37 Things were better, but “the surge of recovery subsided,” and between the spring of 1934 and the spring of 1935, “the country rode at anchor.”38 Nonetheless, Roosevelt was determined to move ahead, for he thought 1936 might bring a change of administration.39 Furthermore, he felt the opportunity for reform was a narrow window that could be shut by recovery. The historian David Kennedy alludes to Roosevelt’s “sensitivity to the relationship between economic crisis and political opportunity,” citing a reference in his second inaugural address to improvements in the economy as “portents of disaster!”40
Other New Dealers also wanted to seize the day. Perkins told a conference of social workers that “this is an opportune time to launch a far-sighted security program.… Recovery has not proceeded to the point that we have forgotten the social ills produced by the depression.”41 Carpe diem was also urged by Senator Robert Wagner (D-New York) in introducing the Economic Security Bill: “While the horror of depression is still fresh upon our memory we are taking decisive steps to shake off its lingering aftermath, to prevent its recurrence, and to set up safeguards for those who may suffer in the future from economic forces beyond the control of the individual”42 Note Wagner’s reference to the insufficiency of self-reliance.
The midterm elections of 1934, some months after Roosevelt began to push for social insurance, were a resounding victory for his party and encouraging to reform. By contrast, Barack Obama made healthcare reform the priority of his first two years in office, even though unemployment was higher than when he took office, and he lost control of Congress in a midterm election in which the achievement of reform was, if anything, a liability. In the 1934 midterm election, Democrats gained a three-to-one lead in the House and Senate, the greatest majority ever held by either party and the only time in modern history that the party holding the White House has increased its standing in midterm elections.43 Yet the 1930s Democratic Party was a mix, with some to the left of Roosevelt and Southern legislators protecting their region’s low-wage economy and white supremacy. Nonetheless, to Hopkins, the election results were a golden opportunity: “Boys—this is our hour. We’ve got to get everything we want—a works program, social security, wages and hours, everything—now or never.”44 In the following year, both a works program and Social Security were enacted. Wages and hours came later, in the 1938 Fair Labor Standards Act.
Only a few weeks before proposing the Economic Security Bill (later Social Security Act) to Congress, Roosevelt declared, “The federal government must and shall quit this business of relief.” He then proceeded to say what would be done for the 5 million people then on federal relief rolls. About 1.5 million were, through no fault of their own, unable to maintain themselves independently. In the past they were dependent on the states, counties, towns, cities, churches, and private welfare agencies. FDR stated that “Local responsibility can and will be resumed,” and the security legislation he would soon propose would assist state and local governments to provide relief for the group he designated as “unemployable.”
The remaining larger group on the federal relief rolls numbered 3.5 million. These were “victims of a nation-wide depression caused by conditions which were not local but national.” The federal government, Roosevelt held, “is the only governmental agency with sufficient power and credit to meet this situation.” For this group he proposed a new program of emergency public employment. He outlined its principles: that all work undertaken should be useful, “in the sense that it affords permanent improvements in living conditions or that it creates future new wealth for the Nation.” Another principle was that compensation on emergency public work projects would be in the form of security payments, larger than a “relief dole” but not large enough to be a disincentive to private employment. The public works program would be an emergency measure: the Works Progress Administration was enacted as the Emergency Relief Appropriation Act of 1935 in April of that year and renewed annually until its demise in 1943.45 According to Josephine Brown, an administrator in the federal relief program and author of a definitive history of public relief in the 1930s, “These changes were entirely consistent with the original intention of the Federal Administration to attack the unemployment problem by providing work. The FERA was looked upon as a temporary expedient, a stop-gap, to be liquidated as soon as possible.”46
How well did the WPA and other federal work programs like the Civilian Conservation Corps meet the needs of the unemployed? In early 1936, the number on work projects was about 3.85 million, the vast majority on WPA. On average during the period from 1935 to 1940, the total number served by federal work programs averaged from 2.3 to 4.6 million. At its peak, the number employed represented less than half of the estimated unemployed, and throughout the period the average number served was between one-quarter and one-third of the unemployed.47
The Social Security Act of 1935 was primarily interested in the future security of the American people and in prevention or easing of the effects of future depressions. It enacted the nation’s first national social insurance programs, available on the basis of the contributions of employers and employees and hence without the stigma of relief. Unemployment insurance was an acknowledgement after centuries of blaming those without work for their condition that unemployment could be involuntary and through no fault of their own. There would also be a permanent federal presence and financial contribution to public assistance. In that sense, the federal government did not entirely “quit this business of relief” but did reduce its financial commitment to the 1.5 million. Whereas it had been footing 70 percent or more of the relief bill, it would be sharing with the states a smaller proportion of the assistance programs, but, it should be noted, all of the costs of the work programs. The assistance programs were presumably for unemployable people, but as the numbers showed, there were many employable people not served by the work programs, and further, the term “unemployable” was inaccurate because many men and women who might seem unemployable had been made temporarily so by prolonged unemployment and poverty. Many of those people became employable when employment opportunity was abundantly available during World War II.
As the description of each of the Social Security programs will show, they were limited in the risks they covered and the level of benefits. In signing the Social Security Act, Roosevelt hailed it as an historic achievement but acknowledged that it “represents a cornerstone in a structure which is … by no means complete.”48 Indeed, the cornerstone could give rise to a larger and more secure structure over time that would cover more risks and more vulnerable population groups. Nonetheless, the division of the Act into insurance and assistance programs has created an enduring divide between the beneficiaries of the insurance programs, who see themselves as having earned their benefits through the contributions of employment and payroll taxes by themselves or their breadwinners, in contrast to the recipients of means-tested benefits that are perceived as unearned. Harry Hopkins, for his part, had advocated for a more progressive approach: that relief and social insurance be lumped together, that relief payments be called “unemployment” or “old age insurance,” and that payment be made as a matter of right and not of need. Roosevelt, however, saw this as the very thing he had been against for many years—“the dole.”49
The two major risks to income security covered in the Social Security Act were only for a portion of the workforce. The CES proposed that unemployment insurance cover employees in all firms employing four or more persons, but the House Ways and Means Committee exempted agricultural labor, domestic service in a private house, and employment in the nonprofit sector. Similarly, the CES recommended that the old age insurance system be for all employed persons.50 However, persuaded by members of his department that it would be difficult to collect taxes from these types of workers, CES member and Treasury Secretary Henry Morgenthau, later recommended that the House Ways and Means Committee exclude farm laborers, domestic servants, and employees in establishments employing fewer than ten people.51 However, it seems certain that the Southern-dominated Congress would have excluded them anyway. According to Witte, Perkins was strongly opposed to this amendment.52 She later wrote, “This was “a blow.”53 It was a blow to African Americans, 50 to 70 percent of whom were employed as farm laborers and domestic servants.54
The change in Old Age Insurance between 1935 and 1939 offers one of the most important lessons for current advocates of social reform. The Townsend Movement, which had advocated a benefit of two hundred dollars a month for every person over sixty years of age, did not stop when the Social Security Act fell far short of its goals. It continued to agitate and was joined by other groups, some focusing at the state level, in what became a pension movement.55 In 1939, even with a loss of New Deal strength in Congress, the movement played a part in gains for the elderly at a time when Congress neglected other needs, although it once again did not come near to achieving the movement’s goals.56
The 1939 amendments made several important changes in Old Age Insurance (OAI). Most importantly, OAI coverage was extended to dependents and survivors, thus transforming a program for retired workers that closely resembled private insurance into a family program, or social insurance. With this change, a worker with dependents could collect more in benefits than a worker without dependents who had comparable lifetime wages.57 Furthermore, OAI benefits were to begin two years earlier than scheduled, thus providing income to persons who could not have contributed much to them. It also instituted a weighted-benefit formula that provides a higher proportion of benefits to contributions to lower- than to higher-wage workers. Expansion of the program continued. In 1948, the excluded domestic service workers were covered, and in 1950, agricultural laborers. Risk coverage extended to disability insurance in 1956; inflation with automatic-cost-of-living increases in 1972; and partial cost of health care for the elderly (Medicare) in 1965 and for the disabled, after two years of receipt of disability insurance, in 1972. Clearly, the structure of Old Age Insurance was expandable.
Unemployment insurance has been less expandable. However, coverage was provided to excluded groups in the 1970s. Also in 1970, as noted in discussion of benefits during the Great Recession and its aftermath, the length of time unemployed workers can collect benefits is extended in periods of high unemployment and with partial or full federal support.
Security is not only a matter of risk and population coverage but of adequate benefits. There were no requirements regarding benefit levels in either of the insurance programs. The wages on which benefits were based could be very low. In unemployment insurance, the duration of benefits is related to adequacy. Typically, benefits have been for 26 weeks or less, leaving longer-term jobless workers without benefits. As noted, even with some added federal benefits, current allowances remain low.
OASI benefits were very low in the early years of the program. A survey of seven cities by the Social Security Board found that in 1940 and 1941 the income from all sources of between three-fourths and four-fifths of aged beneficiaries fell below the Maintenance Budget of the federal Works Progress Administration, one considerably below a Bureau of Labor Statistics City Workers’ Budget.58 Reluctance to burden the workers and employers during a severe depression was a factor in the size of benefits. However, different funding sources, such as federal general revenues, could have boosted them.59 Benefits in recent times have risen somewhat but are still low. In 2010, the average retired worker had an annual benefit about 8 percent higher than the near poverty level (125 percent of the very meager poverty standard).
Who pays for a social welfare program can, of course, be as important as who benefits. In the case of Old Age Insurance, payroll taxes levied on workers came under fire for several reasons: as a burden to workers, as a deduction from their wages, as a regressive tax, and for reducing consumption, and hence recovery, during a depression. Because of the limit on taxable wages, workers above the cutoff pay a lower proportion of earnings than those below. Roosevelt, for his part, was clear about the value of payroll taxes in both of the insurances. In conferring with public administration specialist Luther Gulick, who had questioned their value, Roosevelt responded:
I guess you’re right on the economics. They are politics all the way. We put those pay roll contributions there so as to give the contributors the legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics. They’re straight politics.60
It has been suggested that this was merely a rationale of the preferences of other actors and that employees did not contribute to unemployment insurance.61 However, according to Gulick, Roosevelt referred to the effect of contributions in destroying the “relief attitude.”62
The Committee on Economic Security and the Social Security Act went against the recommendations of the Advisory Committee on Public Employment and Relief consisting of representative social workers and leaders in the field of public welfare and appointed by CES chairperson Frances Perkins. The Committee had recommended Federal grants to the states for general relief for all persons in need who could not be provided for on the work programs. Instead, Congress followed the recommendation of the CES that the federal government only share in the cost of assistance to certain categories of the needy. The CES proposed that only the needy elderly and dependent children be covered in the federally aided programs, and Congress added the blind.
Categorical aid was a characteristic of the Poor Laws with their emphasis on aiding only the “worthy poor.” The U.S. Children’s Bureau, a division of the Department of Labor, had long championed and maintained some oversight over state Mothers’ Aid programs. These had been a progressive departure in the early decades of the twentieth century from the previous prohibition of any aid to the poor in their own homes. In any case, the Children’s Bureau had prepared a report to the CES arguing that attempts to provide security for the unemployed would not benefit families whose breadwinners were absent. For these families, “special provision must be made.”63 However, they could have been provided for by making federally aided relief non-categorical. The Bureau, like others in the social services, had favored careful supervision of single-mother families, and this may be the main reason for its report’s having advocated “special provision.” Whereas the state mothers’ aid programs had usually been restricted to white, native-born widows, the Children’s Bureau proposals did not specify the marital status of the single parent or caretaker of the dependent child.64 This opened the door to unmarried and divorced parents as well as to African American and immigrant women, although relief authorities, especially in the South, found ways of discriminating against them.65
Aid to Dependent Children was itself restrictive, for it did not cover all needy dependent children. Although it was named “Aid to Dependent Children,” the Social Security Act limited coverage to children in single-parent families or those in which a second parent was disabled.66 Thus, most needy children in two-parent families were denied aid throughout the history of the program. Confining AFDC to one-parent families, overwhelmingly single-mother families, meant that if fathers were either marginally employed or jobless, their families could be better off financially without them. Thus AFDC was viewed as an incentive to single parenthood. How frequently the program provided such an incentive is not known, but the perception contributed to its unpopularity and ultimate repeal in 1996.
If African Americans were not excluded from ADC on specifically racial grounds, discrimination against them in the South was rampant until the 1960s, when both the civil rights and welfare rights movement brought millions of African Americans onto the rolls. An important source of discrimination was the “suitable homes” policy made possible by the congressional stipulation that “a state may … impose such other eligibility requirements—as to means, moral character, etc.—as it sees fit.”67 “Suitable homes” was really a euphemism for “legitimate children.”68 Since out-of-wedlock births were much more common among African Americans, the “suitable homes” policy was used to deny aid to thousands of black children, until it was terminated at the end of the Eisenhower Administration.69
In time, the denial of aid to two-parent families would stigmatize AFDC by race as well as single motherhood. When the rolls expanded in response to the civil rights and welfare rights movements, the number of black recipients increased, although they were never the majority.70 The combination of racism and restriction based on family composition contributed to the unpopularity and repeal of AFDC.
There were other important omissions to the federal categories of assistance. The disabled, except for the blind, were excluded, and employable persons not accommodated by the work programs—including two-parent families with children in which neither spouse was disabled—would be ineligible. Then and now, individuals and families who do not fall into the federally aided categories are relegated to general relief which, in most states, is less adequate and sometimes only available on an emergency, short-term basis.
Although the assistance programs bore marks of the traditional Poor Laws, there were some differences, in addition to partial payment by the federal government. A very important step forward was the stipulation in the law that assistance benefits meant “money payments,” thus providing the choice that comes with cash rather than in-kind benefits. The 1939 amendments specifically excluded payments to persons in public institutions, thus ruling out federally assisted relief to inmates of poorhouses. Individuals whose claims to benefits were denied had a right to a fair hearing before a state agency. Residence requirements that restricted the mobility of the poor and lessened the financial obligations of local authorities were retained but limited in length.71 Later, the Supreme Court ruled all residence rights unconstitutional.72
The 1939 amendments outlawed the practice of publicly identifying relief recipients by requiring states to “provide safeguards which restrict the use or disclosure of information concerning applicants and recipients” of both Old Age Assistance (OAA) and Aid to Dependent Children (ADC), and they required that personnel standards for state administering agencies be on a merit basis. These amendments specifically stated that in determining eligibility states were to take into consideration the income and resources of an individual claiming old-age assistance, but it is likely, given their limited resources and the tradition of the Poor Laws, that states were applying the means and asset tests from the inception of the program.73
The inadequacy of assistance benefits was another poor law vestige. The CES recommended that states must furnish assistance to provide “when added to the income of the aged recipient, a reasonable subsistence compatible with decency and health.”74 Senator Harry Byrd (D-Virginia) led the successful opposition to this requirement, arguing that it would place a financial burden on states like his own and would also be a form of “dictatorial power” over the states by the federal administrator.75 Fifty years later, Wilbur Cohen, on the staff of the CES and later Secretary of Health, Education and Welfare (now Health and Human Services), wrote that Byrd was responsible for the bill’s “most significant long-range loss … the fatal blow that still prevents any effective nationwide quantitative standards in federal-state welfare.…”76 In the House, representative Howard W. Smith’s (D-Virginia) opposition clearly showed that an adequate benefit would threaten low-wage labor. Smith pointed out that if the average farm laborer who earned between $20 and $30 a month were put on a pension of $30 a month at age sixty-five, it was “not only going to take care of him, but a great many of his dependents … who could much better be employed working on a farm.”77 In short, they would not be available to pick cotton. While it has been argued that excising the “reasonable subsistence” requirement was primarily a means of keeping both white and black labor cheap, Witte held that “at least some Southern Senators feared that it could serve as an entering wedge for federal interference with the handling of the Negro question in the South.”78 In some Southern states, benefits for blacks were even more inadequate than for whites because federal matching funds were not contingent on paying all classes of people at the same rate.79
The report of the Committee on Economic Security to FDR stated that “the first objective of economic security must be maximum employment,” and consequently it proposed “employment assurance” through public works and stimulation of private employment not only in periods of deep depression but in normal times as well.”80 Recognizing that unemployment would continue to be a problem well after the Depression, Roosevelt and Hopkins considered creating a permanent government employment program for those still jobless after receiving short-term unemployment benefits, typically sixteen weeks in the early years of the program.81 Hopkins had convinced Roosevelt that the social security bill should be combined with his job creation program. Witte writes that the acting budget director objected, and the president agreed to present the bills separately, but the reasons against a permanent, expensive work program probably go deeper, including likely conservative opposition to such a permanent program or an admission that unemployment was there to stay.82 As noted, WPA was enacted as a temporary program that had to be renewed annually, lasting until wartime employment temporarily solved the unemployment problem.83 As Perkins wrote in the mid-1940s, “Unemployment insurance stands alone as the only protection for people out of work.”84
As unemployment rose after World War II, the United States concentrated primarily on short-term cash benefits for the unemployed, except for a few years during high unemployment in the 1970s when government job creation and training or “active” labor market policies were enacted.85 As a result of the failure to assure employment opportunity, millions of workers and their families—in good times and bad—have suffered economic privation and been vulnerable to the myriad of social problems associated with unemployment. As Amartya Sen has written, unemployment has many far-reaching effects other than loss of income: “psychological harm, loss of work motivation, skill and self-confidence, increase in ailments and morbidity, and even mortality rates, disruptions of family relations and social life, hardening of social exclusion, and accentuation of racial tensions and gender asymmetries.”86
Today, as well, the United States has only a passive labor market policy or cash benefits for short-term unemployment but still lacks an active labor market policy of job creation or public employment for workers who suffer longer periods of unemployment. The New Deal planners had their eye on the insecurity of normal times. They recognized the tendency of capitalist economies to generate unemployment unless government employs or creates jobs for those whom the private sector fails to accommodate. In a typical month in the year 2000, when unemployment was at a thirty-year low of 4.0 percent, 5.7 million people were officially unemployed and another 7.4 million “hidden unemployed” were either working part-time because they could not find full-time work, or wanted jobs but were not looking, so were not counted in official statistics—a total of 13 million.87 The CES planners and FDR recognized that unemployment was a serious, permanent problem, but they and the Congress addressed it with only a temporary, partial solution, albeit an innovative and relatively large one.
In the famous phrase of his second inaugural address, Roosevelt referred to “one-third of a nation ill-housed.…”88 The housing problem was not addressed in the Social Security Act, but measures to deal with it had been enacted during Roosevelt’s famous First Hundred Days. Two years after passage of the Social Security Act, Senator Wagner’s name would be on another piece of liberal legislation, the United States Housing Act of 1937 (Wagner-Steagall Act).
When Roosevelt took office, 1,000 home loans were foreclosed each day.89 In response, the New Deal created the Home Owners’ Loan Corporation (HOLC), which bought mortgages from failed banks and modified the terms so families could make affordable payments and keep their homes, providing HOLC judged they had sufficient income to make loan payments. In fact, it would not loan to unemployed people and foreclosed on 100,000 homes during the economic downturn in 1938.90 HOLC often counseled delinquent borrowers and readjusted payment schedules in order to delay or prevent foreclosures when borrowers fell behind on their payments. On average, loans were delinquent two years before foreclosure.91 In another example of how New Deal programs discriminated against African Americans, HOLC instituted the policy of “redlining” or refusing loans to homeowners in black or racially or ethnically mixed areas.92 HOLC refinanced about 10 percent of non-farm, owner-occupied dwellings and about 20 percent of those carrying a mortgage.93
With mounting foreclosures in 2008, then-Senator Hillary Rodham Clinton (D-New York) proposed a new version of HOLC to help homeowners refinance their mortgages. Clinton argued that “if we are going to take on the mortgage debt of storied Wall Street giants, we ought to extend the same help to struggling, middle-class families.”94 Unfortunately, federal policy has been inequitable in the way Clinton feared; the Troubled Asset Relief Program was supposed to aid 3 to 4 million troubled homeowners, but by the end of 2010, only about 750,000 had been helped.95
The Federal Housing Administration (FHA), created in 1934, also attempted to stimulate the housing industry and to facilitate homeownership by offering insurance for loans for upgrading existing housing or construction of new. However, the FHA followed HOLC’s racially discriminatory evaluation practices, thus disadvantaging those probably in greatest need of help.96 Today, the FHA lends disproportionately to African Americans and Hispanics.97 It has contributed to the growth of homeownership from 40 percent of U.S. households in the 1930s to almost 70 percent currently.98
Resettlement of displaced farm or factory workers was a New Deal housing venture that joined the goals of relief, employment, and conservation. Both the Public Works Administration (PWA) and FERA had homestead divisions. Their resettlement communities combined subsistence farming and part-time employment, offered a chance for home ownership, and fostered a spirit of cooperation. Together, FERA and PWA developed nearly sixty such projects. These were taken over by the Resettlement Administration of 1935, which added over thirty more communities, developed camps providing temporary, decent housing for migrant Okies, and created the famous “greenbelt” towns.99 Four model communities were anticipated: “garden suburbs, protected by encircling belts of farm and woodland, easily accessible to cities, but with the space and tranquillity of the countryside”; however, only three were built.100 The greenbelt towns were very forward-looking ventures prefiguring the contemporary “smart growth” movement, which also recognizes the value of linking housing to jobs and recreational space and a sense of community and place.
Housing reformers and organized labor lobbied vigorously for public housing legislation—labor standing to gain from jobs in construction as well as housing for workers.101 The result was the National Public Housing Act of 1937, which established publicly owned and operated housing, a reform in which the United States was preceded by a number of European nations. The act, as housing experts Peter Marcuse and Dennis Keating maintain, “was liberal in that it relied on direct public construction by local housing authorities, which built, owned and managed the housing under federal government oversight.” On the other hand, it was made more acceptable to conservatives by limiting eligibility for public housing to persons with such low incomes that they were not in the private housing market. As Marcuse and Keating point out, its meager funding also limited any competition with the private sector.102
A recent review of the legislative process that ended with passage of Wagner-Steagall credits it with a victory for the reformers.103 If it was, the victory was short-lived. In the first three years of the program, the dollar value of new public housing construction was $300 million, compared to $6.8 billion for private construction.104 Pointing to its appropriations and the number of projects that had been built by 1940, New Deal historian William Leuchtenburg concluded that “the federal housing venture was notable more because it created new precedents for government action than for the dimensions of its achievements. Measured by the needs or by the potentialities, Roosevelt’s public housing program could make only modest claims.”105 Yet, millions of Americans, though not nearly enough, escaped homelessness, budget-breaking housing costs, or substandard housing.
A major omission in the Social Security Act of 1935 was health insurance. Harry Hopkins was said to be “more interested in it than in any other phase of social insurance,” but even he realized it would “have to be handled very gingerly.”106 As Perkins recounts, “Powerful elements of the medical profession were up in arms over the idea of any kind of government-endorsed system.”107 Even an announcement of a CES study of health insurance, along with a long list of other studies, evoked an outpouring of protests to President Roosevelt and an editorial in the Journal of the American Medical Association stating that the administration was trying to railroad health insurance through Congress without consulting the profession.108 The AMA and its insurance and Christian Science allies had crushed state health insurance initiatives in what historian Roy Lubove describes as “a complete disaster.” The medical profession, Lubove wrote, “emerged from the struggle with an awareness of its political power and a determination to use it to protect its corporate self-interest.”109
The only health protection in the Social Security Act was grants to the states for maternal and child health services and services for crippled children (Title V). Witte pointed out that these may have compensated some for the omission of health insurance, or were advocated by opponents of health insurance as a means of “killing the proposal for health insurance.”110
President Harry Truman proposed a national health insurance plan that was turned down by Congress in 1950, a move that led to an expansion of workplace coverage and a consequent, prodigious growth in the power of private insurance companies. Medicare was enacted in 1965, as was Medicaid, which provides healthcare to some groups of the poor. In 2009, when Barack Obama became president, there were 49 million persons in the United States without either private or public health care coverage.111
In response to the mass unemployment and widespread poverty of the Great Depression, Franklin Roosevelt’s New Deal mounted large-scale federal relief programs. After coping with the emergency, FDR launched a campaign for permanent programs, in the case of the insurances, resembling those initiated by some other industrial countries a half century earlier. The enactment of major social welfare reform, the Social Security Act of 1935, was the result of a combination of political factors, including executive leadership and powerful social movements. The focus of one of those movements, the Townsend Movement on behalf of the elderly, had a lasting effect on the nation’s social programs: a tilt toward one group in the population and a tendency to neglect some other populations and risks equally worthy of attention. On the other hand, the continued advocacy of the pension movement, though it did not achieve the universal, generous program for the elderly that it sought, was a factor in the transformation of a program of limited benefits for retired workers into a family program covering workers’ dependents and survivors.
New Deal social reform left much need unmet—risks ignored, populations, particularly minorities, covered poorly or not at all, and meager benefits. The insurances were, on one hand, contributory but financed by regressive taxes. One historian called the United States a “semi-welfare state.”112 Yet a federal government that had previously eschewed responsibility for the economic security of its people had now stepped permanently into the arena of social welfare. For a nation steeped in individualism and laissez-faire, it was a considerable achievement.
The achievement of modest reform, we learn from the 1930s, can be a cornerstone rather than a stone wall. The social movement on behalf of the elderly was not strong enough to achieve its goals in 1935, but it did not fold its tents. In the next four years, it grew in strength, added new organizations on behalf of the elderly, and exerted pressure that influenced the previously noted improvements in old age insurance.
The Patient Protection and Affordable Care Act of 2010 (hereafter, Affordable Care Act or ACA) has been compared to the limited Social Security Act of 1935 that nonetheless proved expandable.113 That would imply that health advocates should follow the example of 1930s advocates for the elderly by continuing to mobilize and fight for improvements. However, Dr. Steffie Woolhandler, a professor of public health and co-founder of Physicians for a National Health Program, which advocates a single-payer program without private insurance intermediaries, does not consider the Affordable Care Act comparable to the Social Security Act: “this is a little like saying that we are going to start Social Security by handing it over to the private pension fund.”114
A private option in Social Security was, in fact, a distinct possibility that Roosevelt thwarted. An amendment to the Social Security Act, introduced by Senator Bennett Clark (D-Missouri), proposed exempting from the tax for Old Age Insurance employers with industrial pension plans paying benefits at least as liberal as the federal program’s. Roosevelt threatened to veto the bill if it contained this amendment. The result was a decision to deal with the issue in the next session of Congress.115 In all likelihood, Roosevelt not only realized that a private option would undermine the system but took on the private pension movement because it was weak. According to economic historian Steven Sass, “The Great Depression of the 1930s sent a massive shock wave through the nation’s fragile private pension system.”116 By the time Congress would have taken up the issue, insurance industry representatives no longer feared a loss of business because the SSA had awakened interest and investment in private insurance as a supplement to low Social Security payments.117 Arthur Altmeyer, chairman of the technical board of the CES and chairman of the Social Security Board in its formative years, gives a different reason: that employers and insurance companies recognized the difficulties in developing a private option, and that, in any case, strict governmental controls would have to be imposed.118 Whereas the private pension system was weak in 1935, private health insurance was formidable in 2010. Still, introducing a public option into health care for the non-elderly or disabled and the poor was a compromise between expensive, private intermediaries and a wholly public single-payer system--one that seems to have been yielded too easily.
Even if one takes Dr. Woolhandler’s position, it is still important for health advocates to build a stronger movement for universal, affordable care. According to Richard Kirsch, who was the national campaign manager of Health Care for America Now (HCAN), the beyond-the-Beltway grassroots campaign that contributed significantly to passage of the Affordable Care Act, “the fight goes on.”119 In less than two years after its passage, the Supreme Court upheld the constitutionality of the ACA. Nonetheless, healthcare advocates face a harder battle than did their 1930s counterparts for social insurance reform: not only fighting for expansion and improvement but opposing conservative efforts to repeal it. After Old Age Insurance was declared constitutional in 1937, reformers had only the task of improving it.
Pressure exerted on Congress and the Roosevelt Administration by the Townsend Movement contributed to the passage of the Social Security Act. Indeed, many Republicans said “aye” to Social Security, fearing reprisal at the polls if they voted against a bill that contained benefits for the elderly. In the words of the title to Edwin Amenta’s book on the Townsend Movement, this was a time “when movements mattered.”
Executive leadership also mattered—in strategic use of pressure from advocates of more Progressive reform, in timing and in focusing and shaping public opinion. The forces to the left served moderate reform in several important ways. First, the more radical proposals like those of the Townsendites and advocates of more progressive financing and taxation made the administration’s proposals seem a moderate, acceptable alternative. Roosevelt’s insistence on an omnibus bill was also important, for there is some reason to doubt that public assistance for children, old age insurance, perhaps even unemployment insurance, would have been enacted had the administration not insisted on an omnibus bill that used the coattails of the elderly to gain passage of less popular measures that were nonetheless important to economic security. It should be noted that neither title for the elderly met the demands of the pension movement for a flat, universal or non-means-tested benefit for the elderly or a universal demogrant. Instead, the Social Security Act initiated a small relief program for the needy elderly, partially funded by the federal government, and work- and wage-determined insurance for retired workers and, beginning in 1939, their dependents and survivors.
Timing was an important element of executive leadership. Roosevelt began the campaign for security legislation relatively early in his administration but not too early to point to some accomplishments—in relief, modest recovery, and reconstruction. Conditions had improved, and, although recovery had stalled, Roosevelt had the public’s confidence, as demonstrated a few months later by the unprecedented victory for his party in the midterm elections. It was a time when Republican and other opponents to the right were still relatively weak, although conservative Southern Democrats in the president’s party watered down the legislation before voting for it.
New Dealers’ push for reform began after moderate recovery, but they did not want improvements to have progressed to the point where the memory of the terrible insecurity of the Depression had faded. Roosevelt, aided by other New Dealers, focused public attention on security. They not only drove home the need for measures that would prevent insecurity, but Roosevelt, in particular, showed how an industrial order required government to supplement the traditional sources of economic security, namely, the individual, the family, and the community. Furthermore, Roosevelt was a master at making reform more acceptable by emphasizing its compatibility with traditional American values.
At a time like the present, when anti-government ideology forms a wall of resistance to reform, New Dealers’ rationale for expanded government is a lesson for those whose goals depend on weakening that wall. As the former HCAN director Richard Kirsch observed, “the push to repeal the Affordable Care Act is part and parcel of a broader attack on the role of government overall and in particular in health care.”120
Those who mount a counterattack on the ideology that undermines reform could draw a lesson from history. They could make the public more aware of how the absence of government programs led to enormous suffering and near economic collapse following the stock market crash of 1929. They could contrast the conditions that led to “untold misery” with the very different aftermath of a severe crash eighty years later—when the legacy of New Deal government programs mitigated mass suffering and helped to prevent a second Great Depression.
1. Harry L. Hopkins, Spending to Save: The Complete Story of Relief (Seattle: University of Washington Press, 1936), 95.
2. Arthur M. Schlesinger, Jr., The Crisis of the Old Order, 1919–1933 (Boston: Houghton Mifflin, 1957), 174.
3. Center on Budget and Policy Priorities, Policy Basics: Introduction to the Food Stamps Program (Washington, DC: Author, 2010), accessed November 20, 2010, available at http://www.cbpp.org/cms/index.cfm?fa=view&id=2226. In the two decades following the Great Depression, Food Stamps was discontinued in favor of distribution of surplus commodities, but it was revived by President John F. Kennedy early in the 1960s and expanded in the 1970s under the Nixon and Carter presidencies in response to revelations of widespread hunger and an anti-hunger movement. The program was officially renamed the Supplemental Nutrition Assistance Program or “SNAP.”
4. James Weill, president of the Washington-based Food Research and Action Center (FRAC), cited in Lizzy Rattner, “Food Stamps vs. Poverty,” The Nation, January 2, 2012, 14.
5. Regarding expansion: Unemployment Insurance Benefits and Family Income of the Unemployed (Washington, DC: Congressional Budget Office, 2010), accessed November 26, 2010, available at http://cbo.gov/ftpdocs/119xx/doc11960/11-17-UnemploymentInsurance.pdf; regarding poverty, Robert Greenstein, Statement on Census’ 2009 Poverty and Health Insurance Data (Washington, DC: Center on Budget and Policy Priorities, 2010), accessed November 20, 2010, available at http://www.cbpp.org/cms/index.cfm?fa=view&id=3292.
6. “Policy Basics: How Many Weeks of Unemployment Compensation Are Available?” (Washington, DC: Center on Budget and Policy Priorities), July 2, 2012, accessed July 8, 2012, available at http://www.cbpp.org/cms/index.cfm?fa=view&id=3164.
7. For information about Unemployment Insurance, including the Extended Benefits (EB) program and Emergency Unemployment (EU) compensation, see Chad Stone and William Chen, “Introduction to Unemployment Insurance” (Washington, DC: Center on Budget and Policy Priorities, February 6, 2013), accessed April 14, 2013, available at http://www.cbpp.org/cms/index.cfm?fa=view&id=1466.
8. The percentage of eligible individuals choosing to participate in SNAP was 75 percent in fiscal year 2010, with states ranging from 55 percent to 100 percent. Reaching Those in Need: State Supplement SNAP Participation Rates in 2010, Summary (Washington, DC: U.S. Department of Agriculture Food and Nutrition Service, December 2012), accessed April 14, 2013, available at http://www.fns.usda.gov/ora/MENU/Published/snap/FILES/Participation/Reaching2010_Summary.pdf.
9. Stone and Chen. The EU was scheduled to expire at the end of 2013.
10. Stone and Chen. In 2011, the latest year available at this writing, the average unemployed worker collecting UI had benefits equal to 46 percent of previous earnings.
11. “Baucus Hearing Statement on Welfare Reform: A New Conversation on Women and Poverty” (Washington, DC: United States Senate Committee on Finance, September 21, 2010), accessed March 10, 2012, available at http://finance.senate.gov/newsroom/chairman/release/?id=62f7c15c-ce76-48b1-92cc-2f0ae81d671c.
12. Prior to the recession, 1 million poor mothers were without either work or welfare every month. Sharon Parrott and Arloc Sherman, TANF at 10: Program Results Are More Mixed Than Often Understood (Washington, DC: Center on Budget and Policy Priorities, 2006), accessed June 16, 2012, available at http://www.cbpp.org/files/8-17-06tanf.pdf. For labor market conditions for poor single mothers, see Gertrude Schaffner Goldberg, “Feminization of Poverty in the United States,” in Poor Women in Rich Countries, Gertrude Schaffner Goldberg, ed. (New York: Oxford University Press, 2010), 230–265.
13. Patrick Markee, “The Deep Freeze in Housing Aid,” The Nation, January 2, 2012, 25.
14. HUD Program Funding for 2012 (Washington, DC: Center on Budget and Policy Priorities, November 8, 2011), accessed March 13, 2012, available at http://www.cbpp.org/files/9-27-11-IPmemoHUDapprops.pdf. While the voucher program is likely to be sustained at present rates that nonetheless continue to fall very short of meeting need, other areas, including capital repairs for public housing, suffered sharp cuts.
15. Franklin D. Roosevelt, radio address on unemployment and social welfare, Albany, N.Y., October 13, 1932, in Franklin D. Roosevelt, The Public Papers and Addresses of Franklin D. Roosevelt, Vol. 1, The Genesis of the New Deal, 1928–1932 (New York: Random House, 1938), 788–789. In part of his address he was quoting from a speech he had made to the New York State Legislature in 1931.
16. Rexford. G. Tugwell, “Protagonists: Roosevelt and Hoover,” Antioch Review, 13, no. 4 (1953): 430. The officials were Senators Robert Wagner (D-NY) and Robert LaFollette, Jr. (R/Progressive-WI).
17. Walter I. Trattner, From Poor Law to Welfare State: A History of Social Welfare in America, 6th ed. (New York: Free Press, 1989), 284.
18. Frances Perkins, The Roosevelt I Knew (New York: Harper & Row, 1946), 191.
19. Arthur E. Burns and Edward A. Williams, Federal Work, Security and Relief Programs, Research Monograph XXIV, Federal Works Agency and Works Projects Administration (Washington, DC: U.S. Government Printing Office, 1941), 37. For high federal shares in some states, see Edith Abbott, Public Assistance, 3 vols. (Chicago: University of Chicago Press, 1940), 3, 763.
20. Hopkins, 114. For a full description of the work programs, see Chapter 6 in this book.
21. Burns and Williams, 26–27.
22. U.S. Senate Committee on Finance, Statement of Dorothy Kahn, Hearings Before the Committee on Finance, United States Senate, Seventy-fourth Congress, First Session on S.1130, A Bill to Alleviate the Hazards of Old Age, Unemployment, Illness, and Dependency, to Establish a Social Insurance Board in the Department of Labor, to Raise Revenue, and for Other Purposes (Washington, DC: U.S. Government Printing Office, 1935), 652.
23. Hopkins, 99.
24. Anne O’Hare McCormick, as cited by Elmer E. Cornwell, Jr., Presidential Leadership of Public Opinion (Bloomington: University of Indiana Press, 1965), 118.
25. Bob Edwards and John D. McCarthy, “Resources and Social Movement Mobilization,” in David A. Snow, Sarah A. Soule, and Hanspeter Kriesl, eds., The Blackwell Companion to Social Movements (Malden, MA: Blackwell, 2004), 116–162.
26. Perkins, 286.
27. George C Edwards, III, Strategic President: Persuasion and Opportunity in Presidential Leadership (Princeton, NJ: Princeton University Press, 2009), Chapter 3.
28. Ibid., 64.
29. Ibid., 105.
30. Cornwell, 129.
31. Franklin D. Roosevelt, Message to the Congress reviewing the broad objectives and accomplishments of the Administration, June 8, 1934, The Public Papers and Addresses of Franklin D. Roosevelt, Vol. 3, 1934 (New York: Random House, 1938), 287–292. Hereafter PPA.
32. Roosevelt, Address at George Rogers Clark Celebration, Harrodsburg, Kentucky, November 16, 1934, PPA, 3, 458.
33. Roosevelt, “Second ‘Fireside Chat’ of 1934,” November 30, 1934, PPA, 3, 422.
34. Cornwell, 122.
35. Perkins, 278.
36. Roosevelt, PPA, 3, 287.
37. The figures, based on official sources, are from Broadus Mitchell, The Depression Decade: From New Era Through New Deal, 1929–1941 (Armonk, NY: M.E. Sharpe, 1947), 446, 451.
38. William E., Leuchtenburg, Franklin D. Roosevelt and the New Deal (New York: Harper & Row, 1963), 94.
39. Perkins, 281.
40. David M. Kennedy, “What the New Deal Did,” Political Science Quarterly, 124, no. 2 (2009): 261.
41. “Asserts Law Lags Behind Social Need: Miss Perkins Tells Social Work Session in Montreal,” New York Times, June 11, 1935, 19.
42. Robert F. Wagner, “Wagner Statement on Bill’s Objectives,” New York Times, January 18, 1935, 16.
43. Leuchtenburg, 116, regarding the margins; Robert S. McElvaine, The Great Depression: America, 1929–1941, 2nd ed. (New York: Times Books, 1993), 229, regarding the unprecedented increase in mid-term outcome.
44. Robert Sherwood, Roosevelt and Hopkins: An Intimate History (New York: Harper, 1948), 65.
45. Franklin D. Roosevelt, Annual Message to the Congress, January 4, 1935, The American Presidency Project, accessed April 14, 2013, available at http://www.presidency.ucsb.edu/ws/?pid=14890.
46. Josephine Chapin Brown, Public Relief 1929–1939 (New York: Henry Holt, 1940), 301.
47. Burns and Williams, 74.
48. “Social Security Bill Is Signed; Gives Pensions to Aged, Jobless,” New York Times, August 15, 1935, 1.
49. Perkins, 284.
50. Edwin Witte, The Development of the Social Security Act (Madison: University of Wisconsin Press, 1962), 152–153. The CES overruled staff who had also recommended exclusion of these workers. Universality was largely at the insistence of Hopkins but also favored by Secretary Perkins.
51. Witte, ibid.; Perkins, 298. Kennedy, 268–269, offers another reason for Morgenthau’s exclusion of these workers: on one hand, that Roosevelt was opposed to meeting future obligations out of general revenues, and on the other, the fear of the deflationary effects of levying sufficient taxes to cover such a large number of workers.
52. Witte, 153.
53. Perkins, 197–198.
54. Bernstein, 295, estimates 70 percent. The National Urban League estimated two-thirds, and the NAACP, half. Dona Cooper Hamilton and Charles V. Hamilton, The Dual Agenda: Race and Social Welfare Policies of Civil Rights Organizations (New York: Columbia University Press, 1997), 31.
55. Edwin Amenta, When Movements Matter: The Townsend Plan and the Rise of Social Security (Princeton, NJ: Princeton University Press, 2006), chapters 5–7.
56. Amenta, Chapter 8; see also Abraham Holtzman, The Townsend Movement: A Political Study (New York: Bookman Associates, 1963), 101–120.
57. For example, the average benefit for an individual in 1940 was $23 for a retired male worker, $37 for a worker and eligible wife, and $51 for a widow and three or more children. Eveline M. Burns, The American Social Security System (New York: Houghton Mifflin, 1951), 97.
58. Ibid., 100.
59. This was not done, partly because the government was operating at a deficit and because of what Perkins referred to as “the President’s prejudice about the ‘dole.’” See Perkins, 296.
60. Luther Gulick, Memorandum on conference with FDR concerning Social Security taxation, Summer 1941, accessed April 20, 2021, available at http://www.ssa.gov/history/Gulick.html.
61. G. William Domhoff and Michael J. Webber, Class and Power in the New Deal: Corporate Moderates, Southern Democrats, and the Liberal-Labor Coalition (Stanford, CA: Stanford University Press, 2011), 176. Domhoff and Webber maintain that Roosevelt gave in to “the liberal-labor coalition” that did not want employee contributions for unemployment insurance. Perkins, 290, felt that unemployment was a “natural risk” of industry, part of the cost of doing business and that only employers should contribute.
62. As noted, this was an important goal to FDR. As governor of New York, he stated his preference for old age insurance over state pensions: “the next step to be taken should be based on the theory of insurance by a system of contributions commencing at an early age.” Roosevelt, PPA, 1, 103.
63. U.S. Committee on Economic Security, Social Security in America; The Factual Background of the Social Security Act as Summarized from the Staff Reports to the Committee on Economic Security, Social Security Board Pub. No. 20 (Washington, DC, 1937), 229–230. For a discussion of the role of the Children’s Bureau in the design of the ADC program, see Gertrude Schaffner Goldberg and Sheila D. Collins, Washington’s New Poor Law: Welfare “Reform” and the Roads Not Taken, 1935 to the Present (New York: Apex Press, 2001), 28–56.
64. The Chief of the Children’s Bureau, Katharine Lenroot, who had co-authored the ADC program, had been supporting the extension of mothers’ aid to unwed mothers for more than a decade, although she and her colleagues favored careful supervision of single-mother families. Katharine Lenroot and Emma O. Lundberg, Illegitimacy as a Child Welfare Problem, Children’s Bureau Pub. No 75 (Washington, DC: U.S. Government Printing Office, 1921), 67, cited by Marguerite G. Rosenthal, “Social Policy for Delinquent Children: Delinquency Activities of the U. S. Children’s Bureau, 1912–1940” (Ph.D. diss., State University of New Jersey, 1982), 142–144.
65. Reportedly, Perkins thought in terms of widows or married women with disabled or deserting husbands, but not unwed mothers. She thus felt misled by the Children’s Bureau for its having written the program to include the unwed mothers. Gerald Reilly, “Madame Secretary,” in The Making of the New Deal: The Insiders Speak, ed. Katie Louchheim (Cambridge, MA: Harvard University Press, 1983), 175. Reilly was on the legal staff of the Department of Labor, 1934–1941.
66. “The term dependent child means a child under the age of sixteen who has been deprived of parental support or care by reason of the death, continued absence from the home, or physical or mental incapacity of a parent, and who is living with his father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, or aunt, in a place of residence maintained by one or more of such relatives as his or their own home.” Social Security Act of 1935, Title IV, Grants to States for Dependent Children, Sec. 406, accessed May 13, 2013, available at http://www.ssa.gov/history/35activ.html.
67. U. S. House of Representatives, Report No. 615, 75th Cong., 1st sess., 24 (1935).
68. James T. Patterson, America’s Struggle Against Poverty, 1900–1950 (Cambridge, MA: Harvard University Press, 1981), 69.
69. For a history of the effect of the “suitable homes” policy, see Winifred Bell, Aid to Dependent Children (New York: Columbia University Press, 1964).
70. In 1994, just prior to the repeal of Aid to Families with Dependent Children, just over one-third of the caseload was black (36 percent) and another 20 percent was Hispanic. U. S. House of Representatives, Committee on Ways and Means, 1996 Green Book: Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means (Washington, DC: U.S. Government Printing Office, 1997), 474.
71. Social Security Act of 1935, Title I, Grants to the States for Old Age Assistance, accessed April 15, 2013, available at http://www.ssa.gov/history/35act.html#TITLE I.
72. In Shapiro v. Thompson, 394 U.S. 618, 1969, the Supreme Court ruled that the residency requirement violates the constitutional right to travel between states.
73. Social Security Act Amendments of 1939, Title I—Amendments to Title I of the Social Security Act, accessed April 15, 2013, available at http://www.ssa.gov/history/pdf/1939Act.pdf.
74. Witte, 144.
75. U.S. Senate Committee on Finance, Hearings Before the Committee on Finance, Seventy-fourth Congress, First Session on S. 1130 (Washington, DC: U.S. Government Printing Office, 1935), 579.
76. Wilbur J. Cohen, “The Social Security Act of 1935: Reflections Fifty Years Later,” in Committee on Economic Security, The Report of the Committee on Economic Security of 1935, 50th Anniversary Edition (Washington, DC: National Conference on Social Welfare, 1985), 8.
77. U.S. House of Representatives, Committee on Ways and Means, Hearings on H.R 4120, 74th Cong., 1st sess. (Washington, DC: U.S. Government Printing Office, 1935), 974. The “reasonable subsistence” language was also troubling because it was feared that a state would be forced by the federal statute to spend more than it wanted or could afford, 974–978.
78. Witte, 143–144.
79. Mary Poole, The Segregated Origins of Social Security: African Americans and the Welfare State (Chapel Hill: University of North Carolina Press, 2006), 51–52, citing Confidential Hearings before the Committee on Finance, United States Senate, May 1935, 17, and other archival material.
80. Report of the Committee on Economic Security, Summary of Major Recommendations, Employment Assurance, accessed April 15 2013, available at http://www.ssa.gov/history/reports/ces5.html.
81. Perkins, 188–189. See also Hopkins, 182–184.
82. Witte, 77. For some other reasons, see June Hopkins, Harry Hopkins: Sudden Hero, Brash Reformer (New York: Palgrave Macmillan, 2009), 195–196; Searle F. Charles, Minister of Relief: Harry Hopkins and the Depression (Syracuse, NY: Syracuse University Press, 1963), 95–101.
83. According to Irving Bernstein, p. 149, “throughout its history, both the President and the Congress considered the WPA a ‘temporary’ if not ‘emergency’ agency slated for oblivion as soon as severe unemployment disappeared.”
84. Perkins, 189.
85. The Comprehensive Employment and Training Administration (CETA) ran from 1973 until 1982. It provided classroom and on-the-job training, work experience, basic and remedial education, counseling, job-search assistance, supportive services, and public service employment to jobless individuals. See, e.g., Helen Ginsburg, Full Employment and Public Policy: The United States and Sweden (Lexington, MA: Lexington Books, 1983), 51–54.
86. Amartya Sen, Development as Freedom (New York: Knopf, 1998), 94.
87. U.S. Bureau of Labor Statistics, “The Employment Situation for June 2000,” tables A-1, A-4, accessed May 30, 2013, available at http://www.bls.gov/news.release/history/empsit_07072000.txt. For monthly figures on real and hidden unemployment, visit the website of the National Jobs for All Coalition, http://www.njfac.org.
88. Franklin D. Roosevelt, The Second Inaugural Address, January 20, 1937, PPA, 6, 5.
89. David C. Wheelcock, “The Federal Response to Home Mortgage Distress: Lessons from the Great Depression,” Federal Reserve Bank of St. Louis Review, May–June 1, 2000, 138, citing Fifth Annual Report of the Federal Home Loan Bank Board, 1937, 4, accessed April 15 2013, available at http://research.stlouisfed.org/publications/review/08/05/Wheelock.pdf.
90. Leuchtenburg, 165.
91. Wheelcock, 142, citing C. Lowell Harris, History and Policies of the Home Owners’ Loan Corporation (New York: National Bureau of Economic Research, 1951).
92. Douglas S. Massey and Nancy A. Denton, American Apartheid: Segregation and the Making of the Underclass (Cambridge, MA: Harvard University Press, 1993), 51–52.
93. Wheelock, 142.
94. Hillary Rodham Clinton, “Let’s Keep People in Their Homes,” Wall Street Journal, September 25, 2008, accessed June 15, 2012, available at http://online.wsj.com/article/SB122230767702474045.html#articleTabs%3Darticle.
95. New York Times: Times Topics, “The Obama Housing Plan,” updated February 1, 2012, accessed May 20, 2012, available at http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/housing_plan/index.html.
96. Massey and Denton, 53–54.
97. Albert Monroe, “How the Federal Housing Administration Affects Home Ownership,” Harvard University Department of Economics, November 2011, 3, accessed May 12, 2012, available at http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/monroe_w02-4.pdf.
98. U.S. Department of Housing and Urban Development, “Federal Housing Administration,” undated, accessed May 25, 2012, available at http://www.reference.com/browse/Federal_Housing_Administration.
99. Robert D. Leighninger, Jr., Long-Range Public Investment: The Forgotten Legacy of the New Deal (Columbia: University of South Carolina Press 2007), Chapter 9. The Resettlement was transferred to the Department of Agriculture in 1937 and renamed the Farm Security Administration.
100. Arthur M. Schlesinger, Jr. The Coming of the New Deal (Boston: Houghton Mifflin 1958), 371. Leighninger, 157–163, regarding fewer communities.
101. Peter Marcuse and W. Dennis Keating, “The Permanent Housing Crisis,” in A Right to Housing: Foundation for a New Social Agenda, eds. Rachel G. Bratt, Michael E. Stone, and Chester Hartman (Philadelphia: Temple University Press, 2006), 139–162.
102. Ibid., 142.
103. D. Bradford Hunt, “Was the 1937 U. S. Housing Act a Pyrrhic Victory?” Journal of Planning History, 43 (August 2008): 195–221.
104. Marcuse and Keating, 143, citing U.S. Department of Commerce, 1975. Currently, Marcuse and Keating report, public housing is about 1 percent of U.S. housing stock.
105. Leuchtenburg, 136.
106. Witte, 174. Perkins “likewise believed in health insurance, although originally she was doubtful whether it was immediately feasible,” Witte, 187. According to Perkins, 289, Roosevelt told a conference held by the CES that it was “highly desirable.”
107. Perkins, 289.
108. Witte, 174.
109. Roy Lubove, The Struggle for Social Security 1900–1935 (Cambridge, MA: Harvard University Press, 1968), 89. For discussion of the pre–New Deal health insurance campaigns, see 66–70.
110. Witte, 172–173.
111. Carmen DeNavas-Walt, Bernadette D. Proctor, and Jessica C. Smith, Income, Poverty, and Health Insurance in the United States: 2010, U.S. Census Bureau, Current Population Reports, P60–P239 (Washington, DC: U.S. Government Printing Office, 2011), Table 8, 26, accessed May 1, 2012, available at http://www.census.gov/prod/2011pubs/p60-239.pdf.
112. Michael B. Katz, In the Shadow of the Poorhouse: A Social History of Welfare in America, rev. ed. (New York: Basic Books, 1996), esp. 254–255.
113. Katherine S. Newman and Steven Attewell, “Learning to Live with the Healthcare Bill,” The Nation, May 17, 2011, 22–24.
114. Steffie Woolhandler in “Healthcare Debate: As Supreme Court Hears Landmark Case, Does Law Do Enough to Fix Health Crisis?” Democracy Now, March 27, 2012, accessed April 16, 2012, available at http://www.democracynow.org/2012/3/27/healthcare_debate_as_supreme_court_hears.
115. Witte, 159–162.
116. Steven A. Sass, The Promise of Private Pensions: The First Hundred Years (Cambridge: Harvard University Press, 1997), 88, as cited by Domhoff and Webber, 155.
117. Nancy J. Altman, The Battle for Social Security: From FDR’s Vision to Bush’s Gamble (New York: John Wiley, 2005), 95–96.
118. Arthur J. Altmeyer, The Formative Years of Social Security (Madison: University of Wisconsin Press, 1966), 42. Controls would have to be imposed “to assure actuarial soundness, proper investment and control of funds, and protection of beneficiaries’ rights.”
119. Richard Kirsch, Fighting for Our Health: The Epic Battle to Make Health Care a Right in the United States (Albany, NY: Rockefeller Institute Press, 2011), 357–372.
120. Ibid., 367.