People Must Live by Work. Steven Attewell

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      First Objective of Reform

      Direct Job Creation in the Committee of Economic Security and the Designing of the New Deal

      To take a seat in the telegraph office of the White House in mid-1934 was to occupy the front row in the central exchange of the American economy, a million messages of crisis vibrating up from across the nation. Good news and bad news chased each other across the wires: cotton up 4 cents, wheat up 42 cents, corn up 49 cents (a twofold increase over the previous year), and the national index of industrial production up 20 percent over the previous year; ten million workers still on the unemployment lines and eighteen million Americans on relief (up four million from the previous year, thanks to the Federal Emergency Relief Administration [FERA]).¹ Scanning this information as it came in, Roosevelt administration officials tried to piece together the state of the union—there was a crisis, certainly, but were things getting better or worse? Was recovery on the way? How could one tell?

      While the data trickled in, the New Deal’s flagship programs—the National Recovery Administration (NRA), which was tasked with lifting industry out of crippling inactivity, and the Agricultural Adjustment Administration (AAA), which was charged with saving American farmers from accepting below-starvation prices—were drifting and falling to infighting, both reactive and slow. Congress, so acquiescent to the president’s agenda merely a year before, was beginning to push forward on its own in ways that conflicted with the White House’s preferences on an issue near and dear to the administration.

      Senator Robert Wagner (D-NY), who had so bedeviled the previous president with his ambitious relief bills, pushed forward with a bill to create a national Unemployment Insurance (UI) system. It was to be backed by payroll taxes that would cover all workers but which vested the entire management of the system by the states and allowed firms with private pension plans to opt out entirely.² Congressman Ernest Lundeen (DFL-MN) proposed his own bill that went further than Wagner’s efforts, providing for universal and noncontributory insurance programs for unemployment, old age, and disability, all to be provided through general federal taxation.³

      Pressed to do something to regain presidential leadership on the major issue of the day, Franklin Delano Roosevelt announced the formation of the Committee on Economic Security (CES) on June 29, 1934.⁴ Reporting directly to the president, the CES was to develop a comprehensive program to deal with the impact of the Depression. In the face of congressional pressure, and the growing popularity of Francis Townsend’s proposal for a guaranteed $200-a-month pension for each elderly citizen, the CES initially seemed like a presidential fig leaf.⁵

      As much as it might have appeared that the New Deal itself was in crisis due to the travails of the NRA and AAA in the courts, the political situation rapidly shifted in the months following this announcement. Recovering from summertime doldrums, the public’s desire for more reform—not less—grew throughout the fall of 1934 and triumphed on Election Day. Turning out in record numbers, the voters broke with all historical precedent to back the party in power, delivering the Democrats fourteen more seats in the House of Representatives, and ten more seats in the Senate—a filibuster-proof two-thirds majority.⁶ Suddenly, what might have appeared as a stopgap, throwaway committee seemed instead to be an opportunity for new and sweeping legislation that might reinvigorate the entire New Deal.

      Roosevelt’s policy team responded to the midterm elections with a new sense of urgency. The FERA chief, Harry Hopkins, who earlier that year had seen the Roosevelt administration scuttle his Civil Works Administration (CWA) program, pondered the new political landscape. As was his habit, Hopkins leaned up against the rail at a Washington, DC, racetrack, watching the horses hurtle down the track, smoking up a storm with his closest assistants.⁷ “Boys,” Hopkins said, “this is our hour. We’ve got to get everything we want … now or never. Get your minds to work on developing a complete ticket to provide security for all the folks of this country, up and down and across the board.”⁸ Their answer was built on the model of the CWA, which only two years earlier had created 4.26 million government jobs for the unemployed within the space of three months. For Hopkins and his staff, following up with an even more ambitious program of direct government job creation was the best path to ending the Great Depression altogether.

      Hopkins and his team were not the only Roosevelt policy wonks looking over the political racetrack. Over in the Labor Department, Secretary Frances Perkins and her advisors, Professors Edwin Witte and Arthur Altmeyer of the University of Wisconsin, had also seen the potential in the congressional majorities for a new burst of reform. She was thinking through a plan for a state-level system of UI and Old Age Insurance, based on what Witte and Altmeyer developed during their time in Wisconsin two years earlier.⁹ Perkins had made FDR’s support for a social insurance system her price for joining his administration, and now that the pressure of the Wagner and Lundeen bills gave their plan a new urgency, Perkins, Witte, and Altmeyer believed that their approach could become the centerpiece of FDR’s counterproposal to Townsend (and Huey Long) on social security.

      These were but two of the policy beehives at work in Washington. There were many more. Children’s Bureau advocates drew up plans for a national mothers’ pension system. National Resources Planning Board officials in the Interior Department envisioned a twenty-year plan for public works. Public health advocates at the Julius Rosenwald Foundation drew up their own scheme for a national health insurance system.¹⁰ And during the day, all of these policymakers left their offices in their respective agencies, departments, and foundations to walk to the Washington, DC, headquarters of FERA (and also a temporary home of the CES) to fight for their vision of American social policy.¹¹ They divided into two opposing camps: one relied on direct job creation; the other staked its vision on social insurance.

      A full analysis of the CES’s deliberations reveals the origins of direct job creation as the New Deal project closest to the heart of the state “theory” under development in 1934–1935.¹² An eclectic group of expert administrators assembled the foundations of direct job creation both in competition with and cooperation with other New Deal projects within the CES, an effort that would later stand them in good stead when they would move to make direct job creation the dominant economic policy of the New Deal.

       Rethinking the Origins of Social Security

      The historiography of the Social Security program, and its origins within the CES, is voluminous. Historians have often looked to this foundational program as a vehicle for examining the New Deal itself and the development of the American welfare state more generally. However, most of this literature dwells on how the CES shaped our ideas about social insurance and welfare. Direct job creation has tended to be written out of this historical moment or seen as a separate СКАЧАТЬ