Compromise 4: Whittling Down The New Deal


Treasury Secretary Henry Morgenthau broke the impasse with a proposal to limit future liabilities by excluding certain categories of employees from any coverage whatsoever —some 10 million farm laborers, domestic servants, and workers in establishments with fewer than 10 employees.

“This was a blow,” Perkins wrote afterward. “But there were enough people afraid of the deflationary effects . . . enough people afraid of too large a system, and enough people confused about the desirability of social legislation by the Federal Government,” that Morgenthau’s solution was adopted.

Perkins shared Roosevelt’s regret that his big bill “had been chiseled down to a conservative pattern.” His separately enacted full-employment proposals proved short-lived. Universal health care had disappeared. Unemployment insurance constituted no kind of consistent national plan. And all but uniquely in the developed world, contributory taxes for old-age insurance defined America’s old-age pension system as a property right, not a civil right. Meanwhile, millions of the least secure and neediest workers—a disproportionate number of them black farmworkers and black female domestics—had been denied coverage.

And yet Perkins ultimately affirmed Roosevelt’s conclusion that the Social Security Act was the “cornerstone of his administration.” It may not have conformed to his highest aspirations, but it has benefited hundreds of millions of Americans—retirees and the unemployed alike—for three-quarters of a century. It laid the foundation on which Medicare, Medicaid, and the Health Care and Education Reconciliation Act of 2010 were later erected. It’s not too much to say that it rewrote the American social contract. As Roosevelt envisioned, it made life more secure for generations to come. And were it not for the abundant compromises that attended the Social Security Act’s enactment, none of those things might have come to pass.