The Birth Of Social Security

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Judged by its direct and profound I influence upon individual and collective lives, no social legislation in all American history is more important than the Social Security Act of August, 1935. And of no other New Deal measure is the legislative history more instructive for one who would understand the essential nature and central purpose of the Roosevelt administration, and the ways in which the mind, character, and temperament of Franklin D. Roosevelt had major shaping impact upon today’s America.

In the spring and summer of 1935 there was, of course, much impassioned public commentary on the allegedly “revolutionary” nature of the New Deal. Widespread among both opponents and supporters of Roosevelt was the belief that profound structural changes were being made in the American system, effecting a major and permanent shift of ruling power from property to people. As government became more representative of, and responsive to, the great mass of citizenry, it used its spending and taxing powers drastically to alter the incomedistribution pattern of the United States, reducing the percentage going to the affluent, increasing the percentage going to the poor—and direct government intervention in the economy (Agricultural Adjustment Administration, National Recovery Administration, Tennessee Valley Authority, et al.) rectified the glaring deficiencies of the old “capitalist” order with a species of socialism. Such was the popular view.

But it was sharply challenged by an informed minority. Many close observers of the current scene, including most of the political Left, could discern in the overall thrust of the New Deal no intention to achieve any great increase in egalitarianism, any important modification in the basic power structure of America. Insofar as changes were made in these directions they were incidental to a central purpose that, far from being “radical,” was profoundly conservative. This purpose was to prevent social revolution. Roosevelt gathered together and focused energies which, released by the debacle of American capitalism following the crash of ’29, had been driving toward fundamental change; but he did so to divert these forces from their logical ends and then dissipate them in relative ineffectually. If Roosevelt “carried out” the Socialist program, commented Socialist Norman Thomas, wryly, he did so “on a stretcher.”

In other respects, the New Deal was a salvage operation: it aimed to restore the wrecked profit system to some kind of working order with a bare minimum of the most obviously needed reforms. Why, then, was Roosevelt so bitterly hated by conservative businessmen? Because they generally were ignorant of the historic forces he mastered on their behalf. They reacted blindly to his public rhetoric, which, being usually of the political Left, insulted them. They failed to note the discrepancy between his words and his deeds.

An example of that discrepancy was his handling of the great banking crisis of March, 1933. The nation’s credit structure had collapsed, and bankers, utterly discredited and demoralized, were objects of vast popular wrath. Roosevelt castigated them in his inaugural address as “unscrupulous money changers,” leading many to believe he intended to nationalize the banks. (This “could have been accomplished without a word of protest,” and should have been, wrote New Mexico senator Bronson Cutting a year later—the same Cutting to whom Roosevelt had offered the post of Secretary of the Interior.) Instead he summoned leading “money changers” to Washington, asking them for their ideas on banking reform (they had none, as the chief of the Brains Trust, Raymond,Moley, discovered to his disgust); and it seemed to some observers both typical and significant that the single important structural change resulting from the crisis, the Federal Deposit Insurance Corporation, was one Roosevelt opposed from first to last, yielding finally to irresistible pressures.

 

The same held true with regard to the crisis in labor-management relations resulting from the business community’s adamant hostility to collective bargaining. When Senator Robert Wagner’s historic labor-relations bill was introduced in 1934 and again, in revised form, in February, 1935, Roosevelt pointedly refrained from endorsing it. Indeed, Wagner had to work hard to keep Roosevelt from supporting efforts of conservative senators to block a floor vote on the measure. Not until it had passed the Senate without his approval in May and appeared certain of easy passage through the House did the President stamp the bill “must” legislation. It overwhelmingly passed the House in June, by voice vote, whereupon Roosevelt hailed it as “a tremendous step forward” and signed it with a flourish.

Less clear cut, but of the same kind, were Roosevelt’s dealings with the social insurance movement as it approached culmination in the Social Security Act of 1935.