The Birth Of Social Security

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Why did Roosevelt thus delay congressional action on what, by 1934, was just beginning to be called “social security”? (Use of the term was partly due to Epstein, who in 1933 had broadened his AAOAS program to include unemployment insurance and had renamed his organization the American Association for Social Security.) All we can be sure of is that the delay continued and that, during it, popular pressures for farreaching welfare legislation grew rapidly toward a point beyond which the White House would be unable to exercise decisive control over them.

In January, 1934, an impecunious, sixty-six-year-old medical doctor named Francis E. Townsend, of Long Beach, California, organized a nonprofit corporation called Old-Age Revolving Pensions, Ltd., to promote what soon became known nationwide as the Townsend Plan. Simultaneously, Louisiana senator Huey P. Long launched what he called a Share Our Wealth Society, its slogan “Every Man a King,” which soon spawned local chapters across the land. Townsend proposed to give two hundred dollars a month to every person over sixty who retired from active employment and spent the full amount within a month after its receipt, the scheme to be financed by a two per cent tax on all “transactions”- a general sales tax, in other words. Long proposed that the federal government provide every family with a five-thousand-dollar “homestead,” guarantee a family income of two to three thousand dollars annually, give “adequate” pensions to the old and generous bonuses to veterans, and provide a college education for all youths of “proven ability.”

Neither of these grandiose schemes had yet sparked a mass movement but they were clearly on the way to doing so when Roosevelt, on June 8, 1934, sent Congress a special message saying that, among New Deal objectives, “I place the security of the men, women and children of the nation first,” and advocating “some safeguards against misfortune which cannot be wholly eliminated in this man-made world.” He still failed to plump for either Dill-Connery or Wagner-Lewis, however. Instead he suggested that legislative implementation of the administration commitment be deferred until early next year, to give time for further study by a special Committee on Economic Security which he soon would appoint, and the preparation by it of definite legislative proposals to be presented to Congress in January, 1935. He established the committee by executive order three weeks later: it consisted of Secretary of the Treasury Henry Morgenthau, Jr., Secretary of Agriculture Henry A. Wallace, Attorney General Homer Cummings, Relief Administrator Harry Hopkins, and Secretary of Labor Perkins, who was named chairman.

But the real work was to be done by a full-time professional staff whose appointment was awaited with mingled eagerness and anxiety by those most dedicated to social insurance. And at least some anxiety proved justified. Not one of the major ideological leaders of America’s social insurance movement was appointed—not Rubinow, not Epstein, not Douglas. Instead, economist Edwin E. Witte of the University of Wisconsin, a former student and protégé of Commons, was named executive secretary; second assistant Secretary of Labor, A. J. Altmeyer, also from Wisconsin, was named chairman of the committee’s Technical Board on Economic Security; and these two, who themselves had been involved in the Wisconsin Plan, naturally were inclined to choose staff members generally sympathetic to that plan and their views.

The staff finally assembled, however, was too large to be of the same mind on any subject and was surrounded by what Paul Douglas called a “bewildering cluster of advisory committees,” the chief being a general advisory council of distinguished citizens chaired by the president of the University of North Carolina, Frank P. Graham. The staff itself was organized into three sections, the two largest having to do respectively with unemployment insurance, on which popular attention was focused, and health insurance, on which the baleful eyes of the AMA were focused. Much smaller was the section dealing with old-age security, in which Witte and the Wisconsin group had relatively little personal interest.