People Must Live by Work. Steven Attewell
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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 development within the New Deal.
As one of the earliest theoretical frameworks applied by historians to the study of the New Deal, Arthur Schlesinger Jr.’s model of the First and Second New Deals understandably influenced many later historical investigations of the Roosevelt administration. This is certainly true for the history of the CES. Social Security was Schlesinger’s ür-case study in the transition between a New Deal oriented around cooperation with capitalist interests, and a New Deal that moved to challenge them.13 For Schlesinger, Social Security showed FDR acting to create a new relationship between the national state and individual citizens, a new federal responsibility for social welfare, and a new attitude to laissez-faire capitalism that saw it as a fatally flawed system that must be replaced by a mixed economy guided by an activist government.
Schlesinger argued that Social Security was a durable “reform” measure meant to shield Americans from any future recession and hence was a permanent contract between the working citizen and the state. Works Progress Administration (WPA) job programs were, on his account, a “relief” measure, a temporary effort meant to lessen the effects of the Great Depression rather than to become a permanent part of the New Deal order. Other periodization models have followed in the same vein: John Jeffries, Otis Graham, and Barry Karl built on Schlesinger’s model by hypothesizing a Third New Deal oriented around economic planning and the expansion of state capacity; they tended to place direct job creation efforts as part of both the Second and Third New Deals, while still seeing them as separate from the First, and as separate from efforts to construct and expand social insurance programs in the late 1930s.14 Alan Brinkley’s End of Reform reconceived the New Deal as either reconstructing or ameliorating capitalism and flipped the order of events, but he retained the two-period radical/reformist framework pioneered by Schlesinger. In Brinkley’s model, the WPA was part of the earlier radical phase that ended with the rise of the conservative alliance and the turn to a more moderate liberalism that no longer directly challenged the prerogatives of capitalism.15
Direct job creation does not fit particularly well with these periodization efforts. FERA work programs and the CWA chronologically fall within the First New Deal period but are virtually identical to the WPA of the Second New Deal, which calls into question the sharp discontinuities between periods described by Schlesinger, Graham, Karl, and Jeffries. Likewise, as we will see in