Steve Benen, in the course of making an argument that most of his commenters don’t want to hear, overstates FDR’s intentions with the Social Security Act.
Roosevelt, the towering political figure of the 20th century, with an electoral mandate, a Democratic Congress, and the stench of a failed Republican president fresh on the nation’s mind, had to take what he could get on Social Security, which was far less than what he wanted.
Now, in a perfect world, a unicorn or magic pony of some kind would have written a history of the Great Depression and the New Deal that corrected this gentle myth in a short, introductory fash–OMIGOD! LOOKEE HERE!
The report [Committee on Economic Security] sent to Roosevelt called for universal coverage of the American elderly by pensions paid for partly by their own contributions and increasingly, over time, out of the general revenues of the U.S. Treasury. Roosevelt rejected this plan, declaring it was ‘‘the same old dole under another name’’—he wanted a self-financing plan under which old-age pensions worked on the model of insurance premiums.Workers and their employers would pay into a fund a percentage of their paychecks. In the event of retirement in old age, workers would draw a pension funded by their savings. The program would thus constitute ‘‘a wholly contributory scheme with the government not participating,’’ as Roosevelt asked.Critics immediately pointed out the drawbacks of this plan. No other country financed social insurance this way, and for good reason.
Contributions calculated as a percent of payroll put a relatively heavier tax burden on poorer earners. Within the administration, Harry Hopkins pointed out the regressivity of the payroll taxes and recommended a tax on wealthier Americans’ incomes instead. In the press, opinion-makers fretted that ‘‘the law is almost a model of what legislation ought not to be,’’ as the New Republic wrote.
The administration’s concern with fiscal soundness also prevented the Social Security system from reaching all Americans. Because the United States came late to the business of old-age insurance, it had the advantage of other countries’ experience to examine. As Abraham Epstein, an advocate of old-age insurance, noted in 1922, ‘‘It is evident that it can only be made to apply to persons who are in regular employment. It is next to impossible to collect contributions from persons who are irregularly employed, from agricultural laborers, from those who are not their own employers, from women who work at home not for wages, from small merchants, and so forth.’’ The Roosevelt administration therefore sought to follow other countries that had excluded farm workers and domestic servants from their old-age pension policies at the start, and Congress complied.
Now, you could certainly argue that because Roosevelt and the CES trimmed their interest in health insurance as part of the bill, what they got in the end was “less than what [they] wanted.” And we could point out that Congress did make revisions (for example, to the morals test for “mothers’ pensions”) that made the bill more conservative than perhaps the administration would have preferred. But Benen’s suggestion that FDR had to swallow major concessions to get the Social Security Act passed really isn’t well founded. There’s little doubt that FDR wanted — at least at first — a less comprehensive, less expensive, and more regressive program than what his own advisers outlined. Moreover, there’s plenty of evidence that FDR was ambivalent about aspects of the bill (including the old age pensions) that were not directly related to unemployment relief, which was his strongest motivation for pursuing social insurance in the first place. Even so, when conservative Democrats like Missouri’s Bennett Clark tried to give private employers a way to opt out of contributing to Social Security, Roosevelt successfully fought to preserve the system he’d proposed. All things considered, he pretty much got what he wanted.
11 comments
November 9, 2009 at 6:19 pm
dana
I deny that eric is a pony.
November 9, 2009 at 9:17 pm
max
overstates FDR’s intentions with the Social Security Act.
FDR, Obama, same difference. Sorta.
max
[‘I suspect Obama too has gotten what he was looking for.’]
November 9, 2009 at 9:39 pm
davenoon
I deny that eric is a pony.
So he’s a unicorn then.
November 9, 2009 at 10:18 pm
stevenattewell
One more thing that gets glossed over about Social Security – the exclusion of agricultural and domestic workers was NOT in the original vision of Social Security. The CES included them and wanted them included in the bill, despite the opposition of Dixiecrats in Congress.
It was Secretary Morgenthau of the Treasury who said that he felt they shouldn’t be included (for technical rather than racial reasons) that gave the Dixiecrats the cover to strip it out.
November 10, 2009 at 8:06 am
THE CON
Eric is not a unicorn or a pony, he is a magic pony.
November 10, 2009 at 8:24 am
TF Smith
Are unicorns, by definition, magic ponies?
Or malformed goats?
November 10, 2009 at 8:33 am
elizardbreath
The possibility of the winged magic rainbow sparkle ponycorn has been sadly neglected.
But on the post, that’s the kind of thing that reassures me about Obama, sadly centrist as he is. When people get delusional about how some politician is going to be a force for progressivism and social justice, even if they’re actually kind of lukewarm, they end up with progressives working for them and progress happens somehow.
JFK didn’t do all that much for civil rights, but he inspired a lot of people who did.
November 10, 2009 at 8:59 am
eric
I kind of liked “Aquaman” better.
Thanks for the plug, Dave.
November 10, 2009 at 1:27 pm
Anderson
technical rather than racial
I had thought that was “political” — the Dixiecrats wouldn’t provide the necessary votes if b-l-a-c-k field hands would qualify.
November 10, 2009 at 10:02 pm
stevenattewell
Anderson:
Oh, the Dixiecrats were quite openly racial about it. Morgenthau, on the other hand, argued that it was the fact that agricultural workers and domestic workers aren’t on regular payrolls that was the issue, making deduction a problem. People on the CES had worked out passbook systems that other countries with social insurance used for similar occupations. It could be that Morgenthau was being unusually closeted about his racism, or (equally likely) he was an idiot.
Seriously, Morgenthau is up there as my pick for worst FDR appointment ever.
November 23, 2009 at 11:34 am
Papa Ray
Too bad the internet wasn’t around when FDR was the President. He would have been impeached.
Did they still use tar and feathers then?