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The Birth Of Social Security
Had Franklin D. Roosevelt not been so conservative, we might have had national health insurance forty years ago
April/May 1979 | Volume 30, Issue 3
From the first, these four were agreed that any workable old-age plan must be national in scope and administration. Their response to the constitutional problem was pragmatically hopeful: “Since law is a living science,” they wrote in a crucial memorandum, “it is reasonable to assume that… our system of constitutional law will evolve in time to support… [a sound old-age] program.” They were drawn together in a close working community by their sense of being faced by inimical forces. They were aware from the first that the executive director, Edwin Witte, had relatively little interest in their work, being himself primarily concerned with unemployment insurance—and in midNovember, when their insistence upon a national rather than state insurance scheme had been stressed repeatedly, they were brought suddenly to realize that the very survival of their project was threatened, not only by the priorities of the executive director but also by those of the President.
This jolting realization came during a national conference on economic security (some two hundred interested professionals) assembled on November 14 in Washington’s Mayflower Hotel. The White House sponsored it for two main purposes. One was to offset growing Townsend-Long pressures with public evidence of the administration’s concern; the other was to give inspiration to all laboring under the aegis of the Cabinet committee. And the latter purpose was served by Relief Administrator Hopkins with a luncheon address that seemed to commit the administration, once and for all, to the single “bold stroke” in which “all phases of social security” would be comprehended. The audience response was enthusiastic. Even the feeble hopes for health insurance were revived momentarily.
But barely three hours later, when the President himself addressed the conferees, reading a speech for which the initial draft had come from Witte, the sole immediate commitment he made was to unemployment insurance, which, he stressed, must not be allowed to become “a dole” through “a mingling of insurance and relief” but “must be financed by contributions” exclusively. Bowing to the AMA, he dismissed health insurance as a present possibility, using words already quoted. His similar dismissal of old-age security, however, astonished and dismayed a substantial portion of his audience. “I do not know if this is the time for any federal legislation on oldage security,” said he, going on to deplore “organizations promoting fantastic schemes” whereby hopes impossible of fulfillment were aroused. These had “increased the difficulties of getting sound legislation: but I hope that in time we may be able to provide security for the aged….”
Initially stunned (“It’s the kiss of death!” cried Barbara Armstrong), members of the old-age section quickly rallied and fought back with the only weapon they had at hand, that of publicity. Next day the national chain of Scripps-Howard newspapers carried an editorial sharply critical of Roosevelt’s abandonment of old-age security, written by Max Stern, a personal friend of Barbara Armstrong’s; and the New York Times carried a lengthy story under a three-column front-page headline, by Louis Stark, telling how great expectations had been aroused by Hopkins only to be dashed by Roosevelt when he “chopped the entire social security program down to one subject for early enactment—unemployment insurance.”
Within hours Secretary Perkins, informed of the President’s displeasure over the “press” his speech was getting, conferred with Witte, and Witte, greatly agitated, came to the office shared by Brown and Armstrong to ask why, in their view, the speech was reported as it was. No doubt because the President had said what he said, the two blandly replied: obviously old-age security had wide popular support. That afternoon Secretary Perkins expressed to newsmen her surprise and annoyance at the “interpretation” reporters were placing on the speech. Roosevelt, she said emphatically, was not opposed to oldage legislation by the upcoming session of Congress; a “broad comprehensive program of economic security” remained the administration goal. And in fact, as Perkins revealed later, FDR had conceded to her, “We have to have it. The Congress can’t stand the pressure of the Townsend Plan unless we have a real old-age insurance system, nor can I face the country….”
And at that very moment, key old-age section members were meeting with Epstein and Rubinow to review a draft “Outline of Old Age Security Program” completed just a few days before. In it, to a degree that seemed to these expert consultants dangerously mistaken, the private insurance model was being followed—in good part because the President was known to think in this way. (“If I have anything to say about it,” Roosevelt would tell a press conference in 1937, “it [the total financing of Social Security] will always be contributed, and I prefer it to be contributed … on a sound actuarial basis. It means no money out of the Treasury.”)