Traitor to His Class: The Privileged Life and Radical Presidency of Franklin Delano Roosevelt (85 page)

The committee examined various models. Other countries had established social security systems years or decades earlier; these shed light on how particular aspects of unemployment compensation, disability insurance, and pension programs operated in practice. In the United States, Wisconsin had established an unemployment compensation program in 1932; many Wisconsinites thought it could serve as a template for a national program.

The committee heard testimony from numerous groups. Business leaders feared that a tax on business would simply prolong the depression. Labor leaders liked the general concept of social security, but some worried that it would weaken unions by causing workers to look to government rather than to the unions for their welfare. Townsendites and other advocates for the elderly wanted to ensure that pension payments were high enough to meet the needs of retired people.

Roosevelt let the committee do its work but provided guidance at key moments. Perkins called a conference at Washington’s Mayflower Hotel in November 1934, to which two hundred industry leaders, labor officials, and academic experts were invited. Roosevelt received the group at the White House and offered his opinions as to what a system of social security ought to encompass. “Unemployment insurance will be in the program,” he said definitively. He contended that the program ought to be a federal-state collaboration, allowing experimentation by the separate states but affording guarantees only the federal government could provide. Unemployment insurance should be funded by workplace contributions rather than general taxes; workers would pay for what they received. “It is not charity.” Old-age pensions, too, should be based on “insurance principles”—that is, on specific contributions by individual workers. Some committee members advocated including health insurance under the social security umbrella. Roosevelt agreed that illness was “a very serious matter for many families with and without incomes,” but he remarked that health insurance might be added to the package “later on.”

Two problems, related to each other, proved the most refractory in developing the social security concept. The first had to do with funding. If pensions were funded entirely by contributions, workers already near retirement would receive pitifully small amounts. Some contribution from general revenues almost certainly would be necessary for the first several years of the program.

The second problem involved the constitutionality of the program. Whether the federal government could compel workers and business to contribute to a social security plan had never been tested. Roosevelt’s worries on this point pushed him toward the federal-state collaboration. As Perkins noted, “If the federal aspects of the law were declared unconstitutional, in the federal-state system we would at least have state laws which could be upheld legally.”

Perkins took some encouragement on both issues from a personal encounter with Harlan Fiske Stone. The secretary of labor and the Supreme Court justice found themselves at a reception together; Perkins described what her committee was up to but added that she worried about the constitutionality of the program it would propose. “Your court tells us what the Constitution permits,” she said in a statement that was also a question. Stone replied softly, “The taxing power of the federal government, my dear—the taxing power is sufficient for everything you want and need.”

Roosevelt resisted applying the general taxing power to social security. As often as the committee contended that taxes were necessary, the president responded, “Ah, but this is the same old dole under another name.” When the committee recommended funding part of the program with deferred taxes—that is, by increasing the current deficit and letting future generations pay the cost—he declared, “It is almost dishonest to build up an accumulated deficit…. We can’t do that. We can’t sell the United States short in 1980 anymore than in 1935.”

Yet the demand for a tax-funded system mounted. Roosevelt knew that Huey Long’s Share Our Wealth scheme and Francis Townsend’s revolving pension plan were fiscal folly, but he also knew that they were political magic. Looking to the elections of 1936, he determined that the administration had to come up with a program that would provide pensions soon enough and large enough to satisfy at least some of the redistributionists. “We have to have it,” he told Perkins. “The Congress can’t stand the pressure of the Townsend Plan unless we have a real old-age insurance system.”

The need to get social security up and running compelled Roosevelt to accept a funding scheme that combined individual contributions with receipts from general revenues. In defending this compromise to a critic who complained that the contributional aspect of the program, embodied in payroll taxes, did nothing to rectify economic inequality, the president explained, “I guess you’re right on the economics. But those taxes were never a problem of economics. They are politics all the way through. We put those payroll contributions there so as to give the contributors a 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.”

I
N
J
ANUARY
1935 four bills were introduced in Congress displaying various aspects of Roosevelt’s design for social security. A more fastidious president might have insisted that his allies on Capitol Hill speak with a single voice. But Roosevelt refused to preempt those lawmakers who wanted to see their names on what might be the most important piece of legislation in a decade. “You will hurt Bob Doughton’s feelings,” he told Perkins, by way of explaining what would happen if she told the North Carolina Democrat not to introduce a bill bearing his own name. Roosevelt’s politeness was pragmatic as well. Doughton chaired the House ways and means committee; his enthusiastic support would be essential to the success of social security both now, in the authorization stage, and later, in appropriations. Besides, Roosevelt reckoned that multiple targets would be harder for the enemies of social security to hit.

The hostile fire commenced immediately. The National Association of Manufacturers called social security the first step toward “ultimate socialistic control of life and industry.” Alfred P. Sloan, the chairman of General Motors, declared, “Industry has every reason to be alarmed at the social, economic, and financial implications…. The dangers are manifest.” Republican representative John Taber of New York confused Congress with the world but nonetheless made plain his profound alarm: “Never in the history of the world has any measure been brought in here so insidiously designed as to prevent business recovery, to enslave workers, and to prevent any possibility of the employers providing work for the people.” Taber’s Republican and New York colleague James Wadsworth asserted ominously, “This bill opens the door and invites the entrance into the political field of a power so vast, so powerful as to threaten the integrity of our institutions and to pull the pillars of the temple down upon the heads of our descendants.” Daniel Reed, yet another GOP representative from Roosevelt’s home state, waxed wroth more succinctly: “The lash of the dictator will be felt.”

Roosevelt let his enemies rage. The 1934 elections had made him invulnerable, for the time being at least. And most of the senators and representatives interpreted the pressure from Townsend and Long just as he anticipated. After the competing bills were amalgamated in each chamber, the resulting measures passed the House on a vote of 371 to 33 and the Senate by 76 to 6. Reconciliation required additional heavy lifting, but on August 14, 1935, Roosevelt signed the Social Security Act into law. The measure established a system of unemployment insurance, accident and disability benefits, support for dependent children, and old-age pensions. Life would never be without risks, Roosevelt explained at the signing, but the government could reduce the uncertainty. “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.” Congress should be proud of itself. “If the Senate and the House of Representatives in this long and arduous session had done nothing more than pass this bill, the session would be regarded as historic for all time.”

L
ORENA
H
ICKOK RECORDED
the experience of the most destitute during the depression, and she explained what happened when a person in New York City applied for relief:

You go first to a schoolhouse in your neighborhood designated as a precinct home relief office. If you are the kind of person the government really should be interested in helping, you go there only as the last resort. You have used up all your resources and have strained the generosity of your relatives and friends to the breaking point. Your credit is gone. You couldn’t charge a nickel’s worth at the grocery store. You owe several months’ rent. The landlord has lost his patience and is threatening to throw you out. Maybe you’ve already gone through an eviction or two…. The chances are you’ve been hungry for some time. And now there’s no food in the house. You’ve simply got to do something.

If your children happen to attend the school where you must go to apply for relief, it just makes it that much tougher. It’s true, of course, that you don’t use the same entrance, that the chances are against your running into them or any of their playmates—but you don’t know that.

There will be a policeman around—maybe several. A lot more would be there inside of three minutes if you caused any commotion. The Commissioner of Public Welfare feels that serious riots have been prevented by locating each Home Relief Station within a short distance of a police station…. If you get by the policeman—and some people, I have been told, take one look at him, lose their courage, and turn around and go home—you have to tell some man at the door what you’re there for. If you’ve got any pride, it hurts. And maybe he isn’t any too patient. He’s on relief himself, perhaps totally unqualified temperamentally for the job and worried about how he’s going to make ends meet if he doesn’t get his paycheck next week….

You go into a room filled with people. Up at the front are a line of makeshift desks, where interviewers are taking down the stories of relief applicants. You sit down on a bench in the back of the room. And there you wait, wondering if they’re going to make you sell the radio, which wouldn’t bring in enough to feed the family two days…. Eventually you get your turn. May be the questions aren’t so bad, but you hate answering them just the same. If the person asking the questions were sympathetic and tactful, qualified by experience and temperament for the job, it might not be so bad. But the person asking those questions is just another victim of the depression like yourself…. Possibly he hates the job—and hates you because you’re part of it….

Finally you get out—and go home and wait.

What you waited for was word that Harry Hopkins had enough money to keep the wolf from your door for another month. As Roosevelt’s relief director, Hopkins headed first the Federal Emergency Relief Administration and later the Civil Works Administration. The president’s charge to Hopkins was to get money to state and local relief agencies as quickly as possible. “Action had to be immediate,” Roosevelt explained later. Congress provided Hopkins with $500 million, and Hopkins made a fast start spending it, disbursing $5 million in his first two hours on the job. “The half-billion dollars for direct relief of states won’t last a month if Harry L. Hopkins, new relief administrator, maintains the pace he set yesterday,” the
Washington Post
reported the morning after Hopkins began.