Democratic and Popular Republic of Algeria
Ministry of Higher Education and Scientific Research
University of Oran Es-Senia
Faculty of Letters, Languages and Arts
Department of Anglo-Saxon Languages
Dissertation in American Civilization
Social Reforms and the Welfare State in America after the
New Deal
(1945-1969)
Members of the Jury:
Dr.Belkacem BELMEKKI (President)
Pr. Rachida YACINE
(Reporter)
Dr. Leila MOULFI
(Examiner)
Presented by:
Aziza TAHAR DJEBBAR
University of Oran
University of Oran
University of Oran
Under the supervision of:
Pr. Rachida YACINE
2009-2010
ED 2007-2008
Acknowledgments
No research is done without the help and support of others. Throughout the
achievement of this research, I have received assistance from different people
including my teachers and colleagues; who contributed at different degrees, and by
one means or another, in the writing process of this work. Hence, first and foremost, I
would like to express gratitude to my supervisor, Dr. R. YACINE, for her noble
efforts, ongoing encouragement, and her precious pieces of advice without which this
work would not have been attained.
I would like also to thank Dr. R. HUTCHINS-
VIROUX for the pieces of information she provided me with. Special thanks to the
staff working in CEMA, as well.
I
Dedication
With all my gratitude, love and affection to:
My beloved mother and father;
My husband and my dearest one year –old son Iyad;
My sisters and brothers;
My friends and colleagues.
II
List of Tables
Page
Table 1: Federal Spending and Military Spending during World War II ……….…....31
Table 2: Employment and Unemployment during World War II ……………….…..33
III
List of Figures
Page
Figure 1: Gross National Product, 1929-1990………………………………………….…41
Figure 2: Federal Grants for Welfare Services, 1953-1965……………………………...65
Figure 3: Poverty Rates, 1949-95……………………………………………….………….67
IV
List of Abbreviations
AAA: Agricultural Adjustment Administration
ADC: Aid to Dependent Children
AFCD: Aid to Families with Dependent Children.
AFL: American Federation of Labour
AMA: American Medical Association
CCC: Civilian Conservation Corps
CIO: Congress of Industrial Organizations
CWA: Civil Works Administration
EOA: The Economic Opportunity Act
ESEA Elementary and Secondary Education Act
FEPC: Fair Employment Practices Commission
GDP: Gross Domestic Product
GNP: Gross National Product
MDTA: Manpower Development and Training Act
NDEA: National Defence Education Act
NRA: National Recovery Administration
OASDI: Old Age and Survivors and Disability Insurance.
OEO: Office of Economic Opportunity
OPA: Office of Price Administration
RFC: Reconstruction Finance Corporation
TVA: Tennessee Valley Authority
V
Table of Contents
Page
List of Tables…………………………….……………………………………………………….……………………………..….…III
List of Figures…………………………..……………………………………………………………………………………….…. .IV
List of Abbreviations..................................................................................................................................................................... V
Abstract…………………………………………………………………………………………………………………..………..……IX
General Introduction………………………………………………….………………………….…………………………..……1
Chapter One: Historical Background: The Rise of the Welfare State during the New Deal
Era………..........................................................................................................................................................................................................6
Introduction………………………………………………………………………………………………………………………….…....6
1. The Failure of the Republican Economic Policies during the 1920s and the Great
Depression……………………………………...........................................................................................................................................9
1.1. The Laissez-Faire Policy…………………………………………………………………………………….…....9
1.2. The Great Depression ………………………………………………………………….……….………12
2. Keynesianism, Government Interventionism, and the Emergence of the Welfare State
during the New Deal ……………………………………………...................................................................................................15
2.1. Keynesianism and Government Interventionism …………………………….……….……….…..17
2.2. The Rise of the Welfare State…………………………………………………………………….…....……..18
2.3. The Social Security Act of 1935…………………………………………...….…. 22
VI
2.4. The Impact of the New Deal Programs on Unemployment and Poverty ……………....25
3. World War II and its Impact on the New Deal …………..........…………………………….…………...…..…..29
3.1. Military Spending and Social Spending during World War II……………………………....30
3.2. The Growth of Income and Employment during World War II……...……………………...32
Conclusion…………………………………………………………………………………………………………………….………....35
Chapter Two: Delay of Reform and Welfare during the Post -World War II (1945-1960)….38
Introduction……………………………………………………………….………………………………………….…………..……..38
1. Economic and Social Conditions during the Post –World War II (1945-60)…………..............…39
1.1. The Economic Boom………………………………………………………………………….…………………….39
2.2. Conservatism…………………………………………………………………………………………………………….42
2. The Factors that Contributed to the Delay of Social Reforms during the Truman Presidency
from 1949-1952 …………………………………………………………………………………………………………..……..…....43
2.1. The Coalition of Republicans and Conservative Southern Democrats……………….……46
2.2. Racism………………………………………………………………………………………………………………….…...48
2.3. The Cold War…………………………………………………..……………………………….………………………49
2.4. Conversion of the Economic System……………………………….…….………………………………...49
2.5. Labour Unrest…………………………………………………………………………..………………….…………....51
2.6. Hesitation of Truman himself about New Social Reforms……………..……....………………..52
3. Political Ambivalence about Welfare and Reform during the 1950s………………….………….…...54
3.1. Reduction of Government Interventionism………………………...……………………….…….…...55
3.2. The Cut of the Defence Budget…………………………………………………………………………….…57
3.3. Regression of Aid to Families with Dependent Children (AFDC)…………...…….…58
3.4. Amendment to the Social Security Act of 1935………………...........………………..………….….58
3.5. The Cold War during the Eisenhower Administration…………………………………...…….…59
Conclusion……………………………………………………………………………………………………………………………….61
Chapter Three: Return of Social Reforms and the Expansion of the Welfare State during the
1960s………………………………………………………..……………………………………………………………..…………..……64
Introduction…………………………………………………….………………………………………….…………..……………..….64
1. Economic and Social Conditions in America during the early 1960s…………….……………….…..66
VII
1.1. Synchronism of Poverty and Affluence……………………………………………………………….... 66
1.2. Racial Discrimination and Economic Inequality …………………………………………….....… ..68
1.3. Inadequacy of Laws and Social Reforms ……………………………...............................................…..69
2. The New Frontier and the Return of Social Reform during after 1960………................…………....71
2.1. Cultural and Structural Accounts of Poverty………………………….............................………..….73
2.2. Michael Harrington’s Writings…………………………………………………………………………..…..74
2.3. The Impact of Civil Rights Movement on Social Reform ……………………………..……..76
2.4. Outcomes of the New Frontier………………………………………………………………………..…..….77
3). The Great Society and the War on Poverty………………………………………………………….….…............80
3.1. The War on Poverty………………………………………………………………………………………..….…...82
3.2. Factors that Facilitated the Enactment of the Great Society Plans………..………….….…85
3.3. Medicaid, Medicare and the Expansion of the Welfare State……………..…….………........86
3.4. The Extension of AFDC and the establishment of the Food Stamp Program……..…88
Conclusion………………………………………………………………………..………………………………………………….…..88
General Conclusion…………………………………………………………….……………………………………….………...90
Appendices………………………………………………………………………………………………………………….……...…..94
Appendix One........................................................................................................................................................................................94
Appendix Two………………………………….…………………………………………………………………………..…………95
Appendix Three ……………………………………………………………………………………………………………..……..100
Appendix Four……………………………………………………………………………………………………………………….101
General Bibliography…………………………………………..…………………….………………….……………...……..102
VIII
Abstract
The present research work sought to elucidate whether there was a continuation of
social reforms after the New Deal era, and if the welfare state created during the Roosevelt
Administration expanded from 1945 to 1969. In other words, it endeavoured to explore to
what extent social reforms were maintained during the post – World War II from 1945 to
1969, and investigate accordingly the scope of the welfare state during that period.
This research explained that the package of social reforms that were initiated during
the New Deal era contributed chiefly to the creation of the American welfare state. Yet, there
was a hold-up of reform and welfare from 1945 to 1960. A remarkable return of social
reforms and a huge extension of the American welfare state, however, had taken place during
1960s.
Throughout this dissertation, one can deduce that the American welfare state was
successfully extended in two main eras in which outstanding programs were established: the
1930s and the 1960s. Hence, the Social Security Act of 1935 that was enacted during the New
Deal -called also the "First Big Bang" of the American welfare state - was the cornerstone of
the administrative structure of American welfare state. In addition to this, the War on Poverty
of 1964, Medicare and Medicaid of 1965 that were part of the Great Society - called also the
"Second Big Bang" of the American welfare state - were in fact the formal extension of the
welfare state created during the New Deal.
IX
‫ﻣﻠـــــﺨﺺ‬
‫ﯾﺮﻣﻲ ھﺬا اﻟﺒﺤﺚ إﻟﻰ اﻟﺸﺮح ﺑﺎﻟﺪراﺳﺔ و اﻟﺘﺤﻠﯿﻞ ﻓﯿﻤﺎ إذا ﻛﺎﻧﺖ ھﻨﺎك اﺳﺘﻤﺮارﯾﺔ ﻟﻺﺻﻼﺣﺎت‬
‫اﻻﺟﺘﻤﺎﻋﯿﺔ ﺑﻌﺪ ﻋﺼﺮ اﻟﺨﻄﺔ اﻻﻗﺘﺼﺎدﯾﺔ اﻟﺠﺪﯾﺪة ‪ ، The New Deal‬و ﻓﯿﻤﺎ إذا ﻛﺎﻧﺖ دوﻟﺔ اﻟﺮﻓﺎھﯿﺔ‬
‫اﻟﻤﻨﺸﺄة ﺧﻼل إدارة روزﻓﻠﺖ ﻗﺪ اﺗﺴﻌﺖ ﻣﻦ ﺳﻨﺔ ‪ 1945‬إﻟﻰ ﻏﺎﯾﺔ ‪ .1969‬ﺑﻌﺒﺎرة أﺧﺮى‪ .‬ﯾﮭﺪف ﻋﻤﻠﻨﺎ ھﺬا‬
‫إﻟﻰ اﻟﻜﺸﻒ ﻋﻦ ﻣﺪى اﻹﺑﻘﺎء ﻋﻠﻰ اﻹﺻﻼﺣﺎت اﻻﺟﺘﻤﺎﻋﯿﺔ ﻓﻲ ﻓﺘﺮة ﻣﺎ ﺑﻌﺪ اﻟﺤﺮب اﻟﻌﺎﻟﻤﯿﺔ اﻟﺜﺎﻧﯿﺔ‪ .‬أي ﻣﻨﺬ‬
‫‪ 1945‬إﻟﻰ ﻏﺎﯾﺔ ‪ 1969‬و اﻟﺘﺤﻘﻖ ﺑﺎﻟﻤﻮازاة ﻣﻊ ذﻟﻚ ﻣﻦ ﻧﻄﺎق اﺗﺴﺎع دوﻟﺔ اﻟﺮﻓﺎھﯿﺔ ﻓﻲ ﺗﻠﻚ اﻟﺤﻘﺒﺔ اﻟﺰﻣﻨﯿﺔ‪.‬‬
‫ﯾﺒﺮز ھﺬا اﻟﺒﺤﺚ ﻣﺪى ﻣﺴﺎھﻤﺔ اﻹﺻﻼﺣﺎت اﻻﺟﺘﻤﺎﻋﯿﺔ اﻟﺘﻲ أﺣﺪﺛﺖ ﺧﻼل ﻋﺼﺮ اﻟﺨﻄﺔ‬
‫اﻻﻗﺘﺼﺎدﯾﺔ اﻟﺠﺪﯾﺪة ﻓﻲ ﺗﺄﺳﯿﺲ دوﻟﺔ اﻟﺮﻓﺎھﯿﺔ اﻷﻣﺮﯾﻜﯿﺔ ﻋﻠﻰ وﺟﮫ اﻟﺨﺼﻮص‪ .‬ﺑﺎﻟﺮﻏﻢ ﻣﻦ اﻟﻌﻮاﺋﻖ اﻟﺘﻲ‬
‫واﺟﮭﺖ اﻹﺻﻼح و اﻟﺮﻓﺎھﯿﺔ ﻣﻨﺬ ﺳﻨﺔ ‪ 1945‬إﻟﻰ ﻏﺎﯾﺔ ‪ 1960‬ﻓﺈن دوﻟﺔ اﻟﺮﻓﺎھﯿﺔ ﻗﺪ ﻋﺮﻓﺖ اﻧﺘﺸﺎرا واﺳﻌﺎ‬
‫ﺧﻼل اﻟﺴﺘﯿﻨﯿﺎت‪.‬‬
‫ﯾﻤﻜﻦ أن ﻧﺴﺘﺨﻠﺺ ﻣﻦ ھﺬا اﻟﺒﺤﺚ أن دوﻟﺔ اﻟﺮﻓﺎھﯿﺔ اﻷﻣﺮﯾﻜﯿﺔ ﻗﺪ ﺗﻮﺳﻌﺖ ﺑﻨﺠﺎح ﻓﻲ‬
‫ﻋﺼﺮﯾﻦ رﺋﯿﺴﯿﯿﻦ ﺗﺄﺳﺲ ﺧﻼھﻤﺎ ﺑﺮﻧﺎﻣﺠﺎن ﺑﺎرزان‪ :‬أﺣﺪھﻤﺎ ﻓﻲ اﻟﺜﻼﺛﯿﻨﯿﺎت و اﻷﺧﺮ ﻓﻲ اﻟﺴﺘﯿﻨﯿﺎت‪ .‬و‬
‫ﺑﺎﻟﺘﺎﻟﻲ ﻓﻘﺪ ﻛﺎن ﻗﺎﻧﻮن اﻷﻣﻦ اﻻﺟﺘﻤﺎﻋﻲ ﻟﺴﻨﺔ ‪ 1935‬اﻟﺬي ﺳﻦ ﻓﻲ ﻋﺼﺮ اﻟﺨﻄﺔ اﻻﻗﺘﺼﺎدﯾﺔ اﻟﺠﺪﯾﺪة و اﻟﺬي‬
‫ﯾﻄﻠﻖ ﻋﻠﯿﮫ أﯾﻀﺎ اﺳﻢ اﻟﻘﻔﺰة اﻷوﻟﻰ ‪ The First Big Bang‬ﻟﺪوﻟﺔ اﻟﺮﻓﺎھﯿﺔ اﻷﻣﺮﯾﻜﯿﺔ‪ ،‬ﻛﺎن ﺑﻤﺜﺎﺑﺔ ﺣﺠﺮ‬
‫اﻟﺰاوﯾﺔ ﻟﻠﺒﻨﯿﺔ اﻹدارﯾﺔ ﻟﺪوﻟﺔ اﻟﺮﻓﺎھﯿﺔ اﻷﻣﺮﯾﻜﯿﺔ‪ .‬ﺑﺎﻹﺿﺎﻓﺔ إﻟﻰ اﻟﺤﺮب ﻋﻠﻰ اﻟﻔﻘﺮ ﻓﻲ ﺳﻨﺔ ‪ ،1964‬ﻗﺎﻧﻮﻧﻲ‬
‫اﻟﺼﺤﺔ ‪ Medicare and Medicaid‬اﻟﺬﯾﻦ ﻛﺎﻧﺎ ﺟﺰءا ﻣﻦ اﻟﻤﺠﺘﻤﻊ اﻷرﺳﺘﻘﺮاﻃﻲ ‪Great Society‬‬
‫‪The‬و اﻟﺘﻲ ﺗﺴﻤﻰ أﯾﻀﺎ اﻟﻘﻔﺰة اﻟﺜﺎﻧﯿﺔ ‪ The Second Big Bang‬ﻟﺪوﻟﺔ اﻟﺮﻓﺎھﯿﺔ اﻷﻣﺮﯾﻜﯿﺔ ﻛﺎﻧﺖ ﺑﻤﺜﺎﺑﺔ‬
‫اﻟﺘﻮﺳﻊ اﻟﺮﺳﻤﻲ ﻟﺪوﻟﺔ اﻟﺮﻓﺎھﯿﺔ اﻷﻣﺮﯾﻜﯿﺔ اﻟﻤﻨﺸﺄة ﺧﻼل ﻋﺼﺮ اﻟﺨﻄﺔ اﻻﻗﺘﺼﺎدﯾﺔ اﻟﺠﺪﯾﺪة‪.‬‬
‫‪X‬‬
General Introduction
Throughout American history, many American presidents have tried to create new
reforms to enhance the living conditions of the American citizens and promote their welfare.
Among these reforms were those dealing with health care, education, as well as social
security, which would facilitate accordingly the evolution of the American welfare state that
was founded during the New Deal era. After the New Deal, from 1945 to 1969, some
American presidents sought to carry out and enlarge the scope of the welfare state that
emerged during the Roosevelt Administration by introducing new social reforms.
According to Britannica Encyclopaedia, the welfare state is a concept of
government in which the state plays a key role in the protection and promotion of the
economic as well as social welfare of its citizens.1 In other words, the welfare state is a
political system in which the government assumes the primary responsibility for guaranteeing
1
According to economists, the welfare state has no precise definition, Nicholas. Barr (Ed.), The Economics
of the Welfare State, Stanford University Press, Stanford (California), 1993, p.6. See also, Wallace.
Peterson, Transfer Spending, Taxes, and the American Welfare State, Kluwer Academic Publishers,
Norwell (Massachusetts), 1991, p.1.
1
such basic necessities of life as health, education, and financial well-being of all citizens
through programs or direct assistance. The modern usage of the welfare state grew out of the
Beveridge Report on social insurance, a document presented to the British government in
November 1942.2 Social reform means that social problems like poverty and unemployment
can be solved solely through government action.
In fact, many scholars and historians have recognised the correlation between the
failure of the Republican Administration’s policies during the 1920s, the 1930s economic
recession, the New Deal era, as well as the establishment of the welfare state in America.
Those events are interrelated. It should be noted, therefore, that the prosperity that Americans
witnessed throughout the 1920s had taken place thanks to the Republican Administrations of
Presidents Warren G. Harding, Calvin Coolidge, and Herbert Hoover.
The latter presidents firmly believed that the federal government has to remain
absent from the economic and social life of Americans. Besides, their motto was “more
business in government and less government in business”.3 In other words, their ideal was to
see the government more generous with businessmen and passive with economic issues and
social affairs as well, and that was called the “laissez-faire” policy.4
Nonetheless, that economic policy led to overproduction, because the government
could not intervene with businessmen who produced more and more. Meanwhile, the
government spent little money to help poor people and promote economic and social welfare
for them. As a result of the “Laissez-faire” policy, in addition to other factors, the United
States entered the worst economic recession ever witnessed in its history known as the Great
2
The Beveridge Report became the basis of a system of “cradle-to-the-grave” social insurance for the
people of Great Britain. Its main objective was “the abolition of want” after World War II. It was designed
to guarantee that no citizen’s standard of life would follow below a minimum level of material subsistence.
W. Peterson, Ibid., p.1.
3
Richard D. Heffner, A Documentary History of the United States, Mentor Editions, USA, 2002, p.306.
4
A policy that dictates a minimum governmental interference in the economic affairs of individuals and
society. Laissez-faire assumed that the individual who pursues his own desires contributes most
successfully to society as a whole. The function of the state is to maintain order and avoid interfering with
individual initiative. Encyclopaedia Britannica, Britannica Concise Encyclopaedia, Inc,UK, 2006 , p.1068.
2
Depression. Consequently, the rate of unemployment jumped to an average of 25 % in 1933,
and the rate of poverty increased, too.
President Herbert Hoover could not tackle the economic crisis because he focused
on public and private charities and he denied government interventionism. In other words, he
failed to submit efficient solutions so as to put an end to the problems that were caused by the
economic crisis. The deep economic depression pushed such groups as farmers, capitalists,
unemployed people, and elderly persons for protesting. In fact, those people wanted a more
active federal government that would promote their well-being. Hence, President Herbert
Hoover was easily defeated by President Franklin D. Roosevelt who initiated an array of
programs so as to improve the economic as well as social conditions of the whole nation.
President Franklin D. Roosevelt used the federal government to fight the
increasingly growing problems caused by the depression, mainly unemployment and poverty.
Government interventionism in the social and economic affairs of citizens is, indeed, the main
concept upon which the notion of the welfare state is based.
The latter president’s programs and particularly the Social Security Act of 1935,
were a stepping stone to the establishment of the American welfare state. Despite the fact that
its origins are related to the English Poor Laws of 1601 brought by colonists to the New
World, many scholars agree that state welfare in America is traced back to Roosevelt’s sixtyyear pledge during the New Deal. That is to say, the set of programs that President Roosevelt
initiated paved the way to the creation of the welfare system in the United State of America.
Nonetheless, with the emergence of World War II, the rate of unemployment
decreased and the living conditions of the American people were ameliorated, accordingly.
Moreover, the military spending exceeded social spending. Thus, Roosevelt did not focus on
the establishment of new reforms, since the war ended the economic depression, and he
thought that a new period of reform would start when the war would be over.
The question that will be raised at the heart of this research work is: what happened
to the welfare state that emerged during the New Deal era, throughout the post-World War II
3
from 1945 to 1969? In other words, were there any new social reforms5 that were launched
during that period, to sustain those that were initiated by FDR and extend the welfare state
created during his administration?
In fact, from 1945 to 1960, there was a delay of many social reforms, and a halt the
welfare state, due to many obstacles. In the 1960s, however, reforms and welfare reappeared
in the American political, social, as well as economic scenes once again. Hence, the welfare
state started to revitalise and shape up during that period, accordingly. It should be noted that
telling the history of the welfare state in America, its evolution, and explaining how it
functions is not at all the aim here.
Hence, the task of this research work is to depict the postwar period from 1945 to
1969. Some light will be shed on the main causes that led to the delay of many programs
from 1945 to 1960. Further, the focus will be on the main factors that contributed to the return
of many social reforms and the dramatic expansion of the welfare state all along the 1960s.
The remainder of this paper is divided into three chapters.
The first chapter
explains how the welfare state was founded during the New Deal era by focusing on the idea
of government interventionism. Indeed, President Roosevelt maintained the intervention of
government in the social and economic life of the American people, and rejected the “LaissezFaire” policy. Moreover, it explores to what extent Roosevelt’s initiatives affected the social
and economic lives of Americans by analysing and examining statistics of GDP (Gross
Domestic Product) 6 and unemployment.
In this chapter an attempt will be made to see how World War II affected
Roosevelt’s New Deal programs, as well. This will be done by having a look at statistics on
military spending to find out how military spending exceeded social spending. Besides this,
having a look at statistics on employment and income during World War II is required, to see,
to what extent World War II improved the economy.
5
6
See Appendix I, The Social Reform Puzzle, p. 94.
Total market value of the goods and services produced by a nation’s economy during a specific period of
time. Encyclopaedia Britannica, Britannica Concise Encyclopaedia, Inc., UK, 2006, p.807.
4
In the second chapter, an endeavour will be made to explain why there was a delay
of reform and welfare during the post- World War II from 1945 to 1960, despite the
extraordinary growth that marked the era. This will be made through examining the various
problems that interrupted the establishment of further social reforms, and halted the expansion
of the American welfare state created during the 1930s.
In this chapter, an attempt will be made to explain that Truman’s schemes failed
from 1949 to 1952 due to such dilemmas as the coalition of conservative Republicans and
powerful southern Democrats within the 81st Congress, racism, the cold war, the conversion
the economic system, and labour unrest. Moreover, in the same chapter, the focus will be
made on the political ambivalence and hesitation for reform and welfare during the
Eisenhower Presidency. Indeed, the latter president wanted to reduce the role of the federal
government in economic and social issues, and his policies lacked creativity and originality.
And finally in chapter three, an attempt will be made to explain the return of many
social reforms during Kennedy’s and Johnson’s Administrations. In fact, those reforms have
substantially extended the scope of the American welfare state created during the New Deal.
The light will be shed on the impact of Harrington’s writings on Kennedy’s domestic
programs that sought to eliminate the newly discovered poverty in an era of abundance during
the early 1960s. Further, the focus will be on the array of programs initiated by President
Lyndon Johnson such as the War on Poverty, Medicare, and Medicaid that led consequently
to the expansion of the American welfare state created during the New Deal era.
5
Chapter One
Historical Background: The Rise of the American Welfare
State during the New Deal Era
Introduction
Many scholars have drawn attention to the relation that exists between the
programs and policies that were designed by Roosevelt during the New Deal, to promote
economic recovery and social reform, as well as the emergence of the American welfare
state.7 It is useless, however, to talk about the rise of the American welfare state during the
New Deal era without analysing the following facts: the failure of the laissez-faire policy
during the New Era of the 1920s, and the 1930s Great Depression.
Above all, the failure of the economic policy – called the “laissez- faire” policy - of
the conservative Republican Administration during the 1920s was the central factor that
7
André. Kaspi, ‘L’Amérique et ses pauvres, de Roosevelt à Reagan,Vingtième Siècle’ Revue d'histoire,
Vol 2, N°1, 1984, pp. 31-42.
6
contributed to the Wall Street Stock Market Crash in October 1929 which caused
subsequently a Great Depression.8
The Great Depression is the terrible economic recession ever witnessed by
Americans before. Though its consequences were worst, the latter catastrophe paved the way,
directly or indirectly, to the creation of the welfare state in America that answered the social
needs of the whole population and restored the economic growth of the whole nation.9
The period that followed the crash of the Stock Market is divided into five main
eras of reform: The era of denial, the era of emergency reforms, the era of institutionalised
reform, the era of policy stalemate, and the era of pullback. 10 These eras may account for the
development of various programs and policies and the creation of the welfare state during the
New Deal in the United States.
The era of denial of reform from 1929 to March 1933 was characterised by the
failure of Americans to deal with the economic catastrophe, because its problems exceeded
their efforts.11 Moreover, the policies that had been established by the Republican President
Herbert Hoover were not effective, mainly because he urged business and private charities
that were not sufficient to tackle such problems as poverty and unemployment.12
Hence, the Democratic President Franklin D. Roosevelt won the 1932 elections
with a landslide over Herbert Hoover, and he introduced his New Deal domestic agenda,
8
Ibid.
9
Bruce. Jansson, (Ed.), The Reluctant Welfare State: Engaging History to Advance Social Work Practice in
Contemporary Society, Cengage Learning: Brooks/Cole, 2009, p.214.
10
Ibid.
11
Ibid., p.217.
12
Ibid.
7
called also the “First Big bang”13 of the American welfare state. Roosevelt taught Americans
that each citizen has the right to obtain what he called “the good things of life”.14
Indeed, Roosevelt stressed government interventionism and the removal of the
policy of “laissez-faire” during his administration.15 The intervention of government by
creating jobs and the abandonment of the “laissez- faire” policy are emphasised also in
Keynesianism.16 Thus, many programs that sought to ameliorate the living conditions of
citizens by reducing the rates of unemployment and poverty were designed by Roosevelt, and
they were strongly supported by the American people. Those programs were temporary, and
they provided emergency relief for needy people from March 1933 to January 1935, called the
period of emergency reforms.17
During the institutionalised reform era from January 1935 to January 1937, many
Americans decided to make many reforms permanent.18 The Social Security Act of 1935 is
considered by many scholars the most significant of all New Deal reforms during the latter
era. The Social Security Act of 1935 is, indeed, the centrepiece of the legislative structure of
the American welfare State.19
Nevertheless, from January 1937 to December 1941 many of the New Deal reforms
began to decrease, and this is called the era of policy stalemate.20 The New Deal domestic
agenda finally collapsed during the war years. This period was also called the era of pullback
13
Christopher. Howard, The Welfare State Nobody Knows: Debunking Myths about the U.S. Social Policy,
Princeton, New Jersey, 2007, p.54.
14
Philip. Abbott, The Exemplary Presidency: Franklin D. Roosevelt and the American Political Tradition,
University of Massachusetts Press, USA, 1990, p.125.
15
E. Ray. Canterbery, A Brief History of Economics: Artful Approaches of the Dismal Science, World
Scientific Publishing Co. Pte, Ltd, London, 2001, pp.216-217.
16
Ibid.
17
P.Abbott, op.cit., p.125.
18
B.Jansson, op.cit., p.214.
19
W. Peterson, op.cit., p. 9.
20
C. Howard, op.cit., p.54.
8
from December 1941 to August 1945.21 When America entered World War II in December
1941, Roosevelt had focused entirely on military affairs. Moreover, the war brought
prosperity to Americans because the rate of employment increased. Thus, new reforms were
completely denied during that era, merely because the Great Depression was ended. Some of
the New Deal programs remained, however, and they preserved consequently the formal
structure of the American welfare state until today.22
1) The Failure of the Republican Economic Policies during the 1920s and the Great
Depression
Many factors contributed to the great economic recession that took place during the
1930s, among which the failure of the conservative economic policies of the Republican Party
that pushed the federal government to remain passive with the economic and social issues of
the American citizens. Nonetheless, though the Great Depression had bad effects on both the
American economy as well as society, it paved the way to the passage of many social
programs that helped creating the American welfare state. During the Wold War II, another
crisis that Roosevelt faced blocked many of his New Deal programs. Furthermore, the
reluctance to carry on further reforms marked the end of the Roosevelt Administration.
1.1)
The Laissez- faire Policy
When World War I was over, protectionism, also called isolationism, dominated the
political thinking in the United States once again.23 Moreover, the United States entered a
period of change, plenty and prosperity during the 1920s. A second American industrial
revolution had taken place during the latter period: steel, mining, and railroad industries had
developed during the first revolution; the second one focused on such consumer goods as
21
B. Jansson, op.cit., p.17.
22
C. Howard, op.cit., p.54.
23
Jean. Pouvelle et al., Repères de Civilisation, Grande- Bretagne, États-Unis, Ellipses Marketing, Paris,
2003, p.26.
9
cars, radios, washing machines, and refrigerators as well as the electrification of homes and
industries.24
In fact, the Roaring Twenties were said to be an era of “a chicken in every pot and
two cars in every garage.”25 This took place thanks to the advance in science and technology
as well as the succession of a business-friendly Republican Administration of Presidents
Warren G. Harding, Calvin Coolidge, and Herbert Hoover, whose main slogan was: “what we
want in America is less government in business and more business in government”.26
Bruce Jansson brilliantly quotes: “In the 1920s as in the 1950s and the 1980s, many
Americans believed that economic activity carried out by private enterprise, left unfettered by
government would bring unlimited prosperity.”27
That is to say, all along the 1920s, the federal government managed solely to help
industry and business operate with efficiency and productivity.28 Therefore, an economic
boom had taken place. Furthermore, thanks to the prosperity that characterised the era,
America triumphed over poverty. Hence, in the late 1928, Herbert Hoover declared during his
campaign that: “the poorhouse vanished among Americans.”29
Not all people benefited, however, from that prosperity. While the minority
enjoyed affluence, the majority of Americans lived near or below the poverty level in a
society that had just some governmental income transfer programs.30 In other terms, the
federal government did not guarantee any subsidies for Americans including workers,
24
25
B. Jansson, p.215.
Bryn. O’Callaghan, An Illustrated History of the U.S.A, Longman Group UK Limited, UK, 1990,
pp.92-93.
26
B. Jansson, op.cit., p.215.
27
Quoted in B. Jansson, op.cit., p.215.
28
Ibid.
29
Rodney. Carlisle, (Ed.), Geoffrey Golson, (Ed.), America in Revolt in the 1960s and 1970s, ABC-CLIO,
Inc., Santa Barbara (California), 2008, p.43.
30
B. Jansson, p.216.
10
children, the elderly, person with disabilities and women.31 Indeed, charities were the main
sources of those subsidies that brought assistance to needy people.32
The federal government remained a passive coordinator throughout the 1920s in
America. It did not intervene with businessmen. This was called the “Laissez-faire” policy,
and it was a “trickle-down” economic philosophy that was dominant along the decade. It held
that helping rich people and industry would stimulate investments that could bring jobs to
poor and working-class Americans.33 In fact, that economic policy encouraged businessmen
through: reducing federal spending, debts, taxes, and raising tariffs to stimulate business
activity and protect industry, agriculture, as well as labour from foreign competition.34 Bruce
Jansson also quotes:
The low tariffs of the prewar era were
supplanted by protective tariffs for American industry;
federal taxes had been increased to pay off the national
debt in the wake of World War I, but new tax laws
reduced them to one-quarter of their previous level; and
many regulations that had been enacted during the
Progressive Era were relaxed, not implemented, or struck
down by the courts.35
This led, however, to mass production or overproduction which was
unfortunately one of the main factors that contributed to the collapse of the American
economy in 1929.36 This event is known as the Wall Street Stock Market Crash, which led
accordingly to the Great Depression.
31
Nicholas. Barr, (Ed.), The Economics of the Welfare State, Stanford University Press, Stanford
(California), 1993, p.29.
32
Ibid.
33
B. Jansson, op.cit.,p. 215.
34
Cynthia. Northrup, Elaine. Turney, Encyclopedia of Tariffs and Trade in the U.S. History, Greenwood,
Westport, 2003, p.100.
35
Quoted in B. Jansson, op.cit., p.215.
36
Mario. Einaudi, , The Roosevelt Revolution, Greenwood, USA, 1977, pp.59-60.
11
1.2)
The Great Depression
The Great Depression is certainly one of the most terrible events in American
history. The Gross National Product (GNP), that is to say, “the value of goods and services
produced by the nation in a year”37, fell by 30 % between 1929 and 1930.38 Besides, the
unemployment rate increased from about 3 % in 1929 to 15 % and it remained so all along the
decade, except for 1933, in which it reached 25 %.39 Furthermore, farm income dropped from
$900 in 1929 to $300 in 1932 and it remained steady throughout the 1930s.40
That is, due to the depression, farms recessed, banks closed, businesses collapsed
and American citizens had become financially more and more insecure. Since Americans had
become poor, homeless and jobless, they wanted a more powerful government to guarantee
their employment and their well-being.41
Nevertheless, Herbert Hoover, president of the United States of America in
1929, believed that the intervention of the federal government would not end the economic
recession and its bitter consequences. Therefore, he said in his 1931 message to Congress:
I am opposed to any direct or indirect
government dole. The breakdown and increased
unemployment in Europe is due to in part to such
practices. Our people are providing against distress from
unemployment in the American fashion. 42
That is to say, as the former Republican Presidents of the 1920s did, Hoover kept
the federal government out of the economic and social affairs of citizens. In addition to this,
37
Cal. Jillson, (Ed.) , American Government: Political Change and Institutional Development, Routledge,
New York, 2008, p.382.
38
Ibid.
39
Ibid.
40
Ibid.
41
Ibid.
42
Michael. Katz, In the Shadow of the Poorhouse, A Social History of Welfare in America, New York,
Basic Books, 1996,p.218.
12
the latter president maintained strongly the idea that public and private charities would put an
end to the problems caused by the depression mainly unemployment and poverty43; whereas,
the intervention of the federal government would be useless. In fact, Hoover sought to replace
government interventionism with charity. Hence he pointed out:
It is a question of whether the American people
on the one hand will maintain the spirit of charity and
mutual self-help through voluntary giving and the
responsibility of local government as distinguished on the
other hand from appropriations from the federal treasury
for such purposes.44
Nonetheless, Hoover was mistaken, because both public and private charities could
not put an end to the mass unemployment caused by the Great Depression.45 For the main
reason, as in Europe, the task was not easy and charity could not handle it.46 Hence, the
federal government would be asked, sooner or later, to intervene so that to tackle the latter
problem, effectively. Cynthia Clark Northrup clarifies the point, she writes:
State, municipal and private philanthropic
agencies inadequately addressed the burden of relief, as
the needs exceeded, their resources. As the depression
set in, tax revenues and donations diminished… 47
Thus, the federal government assumed finally some responsibility and initiated new
programs. Yet, Herbert Hoover brought schemes for “public works programs”
48
that would
rely on assistance from different states. Those programs could not solve the problem of
unemployment that started to boost more and more.
43
Philip. Abbott, The Exemplary Presidency: Franklin D. Roosevelt and the American Political Tradition,
University of Massachusetts Press, USA, 1990, p.125.
44
Michael. Tanner, The End of Welfare: Fighting Poverty in the Civil Society, Cato Institute, Washington,
1996, pp.46-47.
45
Ibid., p.46.
46
Ibid.
47
Cynthia. Northrup, (Ed.), The American Economy : A Historical Encyclopedia, Vol 2, ABC-CLIO, Inc.,
Santata Barbara (California) , 2003 , p.509.
48
Ibid.
13
In addition to this, the President’s Committee for Employment established by
Hoover was mainly concerned with state, local and private relief programs.49 The latter
program failed because it lacked funding resources and as the depression deepened, it could
not provide assistance to the growing number of poor people.50 Moreover, Reconstruction
Finance Corporation (RFC) gave $300 to states as loans in order to help unemployed
people.51 That program was unfortunately fruitless, solely because the money that was spent
was not in the hands of the federal government.52
It follows that, the Republican President Herbert Hoover proved incapable of
dealing with the catastrophic consequences of that economic recession. Furthermore, his
policies were inadequate to ameliorate the social and economic situation of the whole nation.
Therefore, the rate of unemployment rose to an average of 25 % in 1933. For this
reason, the period from 1929 to March 1933 was called an era of denial. To clarify the point,
Eric Rauchway reveals that Hoover established a set of programs whose shortcomings were
clear right from the beginning, he writes: “Hoover did not do nothing, but he did not do
enough either. Instead he followed a general policy for crisis management he had already
clearly established.53
Hence, Herbert Hoover was soundly defeated by the Democrat Franklin Delano
Roosevelt who signalled a landslide victory of the Democratic Party and promised a bundle of
programs to help the poor.54 The major action he wanted to do first was to expand the federal
49
Ibid.
50
Eric .Rauchway, The Great Depression and the New Deal: A Very Short Introduction, Oxford, Oxford
University Press, 2008, p.23.
51
Ibid.
52
C. Northrup, op.cit., p.509.
53
E.Rauchway, op.cit., p.23.
54
M . Tanner, op.cit., p.48.
14
welfare role.55 That is to say, he urged the use of the federal government to end the depression
and promote welfare for all citizens.
2) Keynesianism, Government Interventionism, and the Emergence of the Welfare State
during the New Deal
When Roosevelt became president, the banking system collapsed, and hence funds
were insufficient to cover the losses of stockholders.56 Moreover, the rate of unemployment
reached an inconceivable rate, because many Americans lost their jobs. As a result, children
and youth people were no longer supported by their parents who could not guarantee
sufficient income.57 Besides, economic inequality became more widespread, and thus the
living conditions of uneducated and coloured people worsen more and more.58
Meanwhile, droughts developed in Oklahoma and neighbouring areas, and
besides, that region was later known as the Dust Bowl.59 Prices of products dropped as
demand decreased, and exports were cut because European nations’ economies were
depressed too.60 Workforces decreased leading to mass unemployment and unions went into
collapse. Suicide rate augmented among bankers, investors, and company executives as
well.61
That is, Roosevelt faced very serious problems in all domains. He knew the
difficulty of his job as president, and his responsibility to restore the economic and social
stability of the entire nation.62 He believed that if he would follow Hoover’s policies, the
55
Ibid.
56
Ibid.
57
B.Jansson, op.cit., p.220.
58
Ibid.
59
E. Rauchway, op.cit., p.24.
60
Ibid., p.4.
61
M.Tanner, op.cit., p.50.
62
B. Jansson, op.cit., p.225.
15
Great Depression would remain.63 He knew that people would die of starvation if he would
not spend huge amounts of federal resources to give them money for survival.64
Roosevelt initiated therefore a vast array and variety of programs called the New
Deal to stop the recession, and protect the economy from the threats of an unbridled
capitalistic system in the future.65 During his “First Hundred Days”,66 he convinced Congress
to legislate his programs that addressed problems faced by the American economy including:
banking, agriculture, and industry.67
Finding resources to fund the programs that were designed to help unemployed
Americans was the first challenge that President Roosevelt faced.68 He realised that raising
taxes cannot solve that problem, because Americans disliked them. Thus, he developed a
clever strategy by increasing “federal spending” to huge “new expenditures”, so as to alleviate
“starvation and dire suffering”, as he promised during his 1932 presidential campaign.69
63
Ibid.
64
Ibid.
65
M. Einaudi, op.cit., p.80
66
Ibid.
67
Ibid.
68
Ibid.
69
B. Jansson, op.cit., p.226.
16
2.1) Keynesianism and Government Interventionism
Keynes70 believed that the lack of confidence by consumers destroyed the
business community during the Great Depression.71 It should be noted, however, that the idea
of the lack of consumer confidence was stressed by President Roosevelt in his first address in
March 1933. He said:
So first of all let me assert my firm belief
that the only thing we have to fear is fear itself –
nameless, unreasoning, unjustified terror which
paralyzes needed efforts to convert retreat into
advance. 72
Roosevelt’s economic policies sought to put an end to the “laissez-faire” policy and
guarantee an active government. Indeed, the substitution of “laissez-faire” by state
interventionism was the main feature that characterised the economic policy of the Roosevelt
Administration, and this policy is known as “Primal Keynesian”.73 That is to say, Roosevelt
began implementing Primal Keynesian before Keynes had developed his revolutionary
economic theory.74 Roosevelt was influenced by Keynes’s ideas in that he believed that the
government should create programs that would promote employment for the American
people.75
He emphasised government interventionism, because he firmly believed that the
federal government has the power to get the country out of the depression. In other words,
Roosevelt strongly held the idea that the federal government should intervene with
70
John Maynard Keynes , an English economist, journalist, and financier, best known for his economic
theories (Keynesian economics) on the causes of prolonged unemployment. His most important work, The
General Theory of Employment, Interest and Money (1935–36), advocated a remedy for economic
recession based on a government-sponsored policy of full employment. Encyclopaedia Britannica, UK,
2008, CD-ROM edition.
71
E. Ray. Canterbery, op.cit., pp.216-217.
72
Encyclopaedia Britannica, UK, 2008, CD- ROM edition.
73
E.R . Canterbery, op.cit., p.216.
74
Ibid.
75
Ibid.
17
businessmen; nevertheless, he was not against capitalism as a system but unbridled or
uncontrolled capitalism that caused the economic collapse in 1929.76 E.R. Canterbery states:
These economic policies, though not socialist,
were certainly radical by peacetime standards, that is,
they attempted to uproot the laissez-faire system and
make government an active partner in the conscious
steering of the economy.77
Furthermore, though his domestic program, i.e., the New Deal, was described as
merely socialist, the main intent behind its creation was the protection of the capitalist system
in America. In this respect, E.R.Canterbery points out:
“Although decried as outright
socialism, the program was aimed at saving capitalism.” Steve Fraser and Gary Gerstle also
point out:
President Franklin D. Roosevelt initiated a
dazzling burst of government actions designed to
square the circle that was baffling governments
elsewhere: how to enact major social reforms while
preserving both democracy and capitalism.78
2.2) The Rise of the Welfare State
Roosevelt is recognised by scholars the founder of the American welfare state.79
Under his leadership, the government became a positive coordinator; hence, it extended its
role in social welfare as well as economic regulation. Charles V. Hamilton and Donna C.
Hamilton brilliantly point out in The Dual Agenda that: “The New Deal is the proper
76
Ibid.
77
Ibid., pp.216-217.
78
Steve. Farser, Gary. Gerstle, Rise and Fall of the New Deal Order (1930-1980), Princeton University
Press, Princeton, N.J., 1989, p.3.
79
Fabien .Fichaux, Definitely British, Absolutely American ! : Manuel de Civilisation britannique et
américaine,Ellipses Marketing ,Paris ,2001, p.363.
18
beginning for this discussion, because then this country launched its modern-day version of
the American welfare state.”80
The intervention of government in people’s social and economic affairs - by
guaranteeing the fundamental necessities of life and protecting them from the uncertainties of
life like unemployment so as to prevent poverty- is in reality the fundamental concept upon
which the notion of the modern welfare state is based.81 To clarify this, Richard Polenberg
cleverly writes: “He founded the modern welfare state based on the concept that the federal
government has a responsibility to guarantee a minimum standard of living.”82
In fact, Roosevelt used the expressions “New Deal welfare state” and “liberal welfare
state” interchangeably.83 Roosevelt called his welfare reforms “liberal”, i.e., he tied welfare to
liberalism. For Roosevelt, unlike conservatives, liberals are proponents for the intervention of
the federal government in the economic and social affairs of citizens and for the expansion of
the welfare state. He declared in a speech in 1941:
The liberal party insists that the government
has the definite duty to use its power and resources to
meet new social problems with new social controls – to
insure to the average person the right to his own
economic and political life, liberty, and the pursuit of
happiness.84
The welfare state exists to protect people from poverty due to mass unemployment
whose main result is the loss of income. The main objective of the welfare state is to
guarantee income by providing jobs so as to revitalise the economy. Gwendolyn Mink and
80
James. Jennings, Understanding the Nature of Poverty in Urban America, Praeger Publishers, Westport
(CT), 1994, p. 20.
81
Pierre. Guillaume , ‘Naissance de l'Etat providence’, dans la Revue économique, Vol 51, N° 2,
Décembre 1988 , pp.371-384.
82
R. Polenberg, op.cit., p.4.
83
Brendon. O’Connor, A Political History of the American Welfare System: When Ideas have
Consequnces, Rowman & Littlefield Publisher.Inc., Oxford, 2004, p.37.
84
Ibid., p.37.
19
Alice O’Connor have drawn the attention to the fact that, whenever an economic crisis takes
place, the welfare state appears to establish “public works programs” that target poverty.85
According to these scholars, those programs are in fact part and partial of the
“countercyclical” government spending that stimulates the economy of the nation during
harsh economic times.86 This means that these programs are designed to compensate for the
unwanted effects of business cycles.87
The welfare state provides cash and in -kind88 benefits and it provides also
subsidies for housing, education, training, and in case of low–wage jobs.89 It regulates wages
and labour measures. Moreover, it provides grants and services to promote people’s wellbeing, for example: “medical care, child support, enforcement, legal advice, discrimination
and abuse prevention, and remediation and job training.”90
The array of programs that were initiated by Roosevelt that sought to improve the
economic as well as social situation of the country -that was damaged by the Great
Depression- were a stepping stone to the foundation of the American welfare system.91 In
other words, the economically calamitous effects of the 1930s recession pushed finally the
federal government to do something beyond emergency relief measures by providing “income
maintenance programs”92, designed to ameliorate citizens’ welfare.93 To clarify the point,
Michael Tanner argues:
85
Gwendolyn. Mink, (Ed.),Alice. O’Connor, (Ed.), Poverty in the United States: An Encyclopaedia of
History, Politics, and Policy, ABC-CLIO, Inc., Santa Barbara (California), 2004, p.822.
86
Ibid.p.822 .
87
Encyclopaedia Britannica, UK, 2008, CD- ROM edition.
88
In kind means in the form of goods or services rather than in cash, Encyclopaedia Britannica, UK, 2008,
CD- ROM edition.
89
Gwendolyn. Mink, Alice. O’Connor, op.cit, p.822.
90
Ibid.
91
F.Fichaux, op.cit., p.363.
92
W. Peterson, op.cit., p.7.
93
Ibid.,p 6.
20
At the same time, the New Deal dramatically
increased the federal role in welfare. In 1932, 97.9
percent of the all government welfare spending was at
the state and local level. By 1939 such spending had
declined to just 37, 5 percent.94
As an example of the intervention of government to promote economic and social
welfare to citizens was The Federal Emergency Relief Act that was signed in 1933 by
President Roosevelt. That program was the first federal welfare program in the American
history.95 It provided The Federal Emergency Relief Administration (FERA) with a sum of
money, about $500 million, to state and local governments so as to relief needy Americans –
who were unemployed or employed with low wages- as well as their dependents.96 The FERA
abolished the loans that were established by the Reconstruction Finance Corporation (RFC)
under President Herbert Hoover’s leadership, and replaced them with grants and strengthened
administrative powers to administer it.97
Moreover, the federal government established a range of food programs during
the Great Depression.98 It included Food Stamp program for unprivileged federal workers,
and a “massive surplus commodities program” that gave agricultural goods to needy people.99
The Civil Works Administration (CWA) was created in 1933 whereby the federal government
initiated 190.000 work projects that employed 16 million American.100
Besides, myriad “alphabet agencies” were created by FDR using the federal
government to help the nation recover from the depression.101 The Civilian Conservation
94
Michael. Tanner, The End of Welfare : Fighting Poverty in the Civil Society, Cato Institute, Washington,
1996 , p.50.
95
B. Jansson, op.cit., p.225.
96
Ibid., p.48.
97
C. Northrup, op.cit., p.508.
98
Ibid.
99
B. Jansson, op.cit., p.226.
100
C. Northrup, op.cit, p.508.
101
Jonathan. Alter, The Defining Moments: FDR’s Hundred Days and the Triumph of Hope, Simon &
Schuster Paperbacks, New York, 2007, pp.61-62.
21
Corps (CCC), for instance, helped thousands of young men and boys to get jobs.102 The War
Department managed the CCC work camps, and the Department of Agriculture and the
Interior, designed projects that set them to work in reforestation and flood control.103 The
Agricultural Adjustment Administration (AAA) addressed the problems of farmers. It sought
to increase crop prices by paying farmers to produce less.104
In addition to this, the National Recovery Administration (NRA) managed to make
sure that businesses paid fair wages and charged fair prices for workers.105 The Tennessee
Valley Authority (TVA) is a federal agency that was created in May 1933.106 The Tennessee
Valley was one of the poorest regions in the United State. Most of its inhabitants were
farmers whose low income placed them below the poverty level. TVA built a network of
dams in order to stop floods in that region and consequently created jobs for millions of
Americans whose living conditions were ameliorated, accordingly. 107
2.3) The Social Security Act of 1935
The programs mentioned above and others gave emergency relief to those in need.
Members of Congress, however, wanted to implement a far-reaching program that would help
involuntarily unemployed American citizens.108 Hence, on August 14, 1935, Congress passed
the Social Security Act which paved the way to a long-term federal government responsibility
to provide assistance to needy Americans. The Social Security Act of 1935, passed under the
Roosevelt Administration is considered by many historians the most important legislation that
set the bedrock of the American welfare state.109
102
Ibid.
103
C. Northrup, op.cit., p.508.
104
Philippe. Lemarchand, Philippe. Amar, Atlas des Etats-Unis : les Paradoxes de la Puissance, Edition
Atlande, Luxemburg, 1997 , p.65.
105
Ibid.
106
Ibid.
107
Ibid.
108
Ibid.
109
Ibid.
22
Therefore, Wallace Peterson argues: “The key element in the legislative structure
of America’s welfare state is the Social Security Act, passed on August 14, 1935.”110 Michael
Katz also points out that the Social Security Act, called also the Economic Security Act is
“the charter of the federal welfare state.”111 The latter act was recommended by a Committee
on Economic Security created by President Franklin Delano Roosevelt in June 1934.112
That committee intended to study the dilemma of economic insecurity in America
caused by the Great Depression.113 It studied also the problems caused by unemployment, old
age, and physical disability and sought to determine the role that should be played by the
federal government to avail those problems. Moreover, it sought to protect the American
people from the “misfortunes which cannot be wholly eliminated in this man-made world of
ours.”, as President Franklin D. Roosevelt pointed out.114
The Social Security Act of 1935, that is the most important program of the
institutionalised reform era, succeeded to protect Americans against unemployment and
poverty by offering subsidies to those who had worked, and assistance to those who could not
work due to age, disability or motherhood.115 In other terms, the landmark Social Security Act
of 1935 established a system of: “old–age pensions”, “unemployment compensation”, and
“public assistance” for the “deserving poor” mainly the aged, the blind and children.116
According to Peterson, in the jargon of Washington the Social Security Act has five major
titles or parts:
Title I provided grants to the states for
assistance to the aged; Title II established the Social
Security system; Title III provided grants to the states for
distraction of a system of unemployment compensation;
Title IV established the Aid to Dependent Children (ADC)
110
W. Peterson, op.cit., p.5.
111
Michael. Katz, op.cit., p.5.
112
Ibid.
113
Ibid.
114
Ibid., p.3.
115
G. Mink, A. O’Connor, op.cit., p.30.
116
Ibid., p.30.
23
program; and Title V provided grants to the states for aid
to the blind. 117
The Social Security Act established also a permanent feature of the American
approach to social spending which is the division of “transfer spending”, or “expenditures”
into two main categories118. In other words, that act led to the division of the money spent by
government for social provision, into two main programs: Social Insurance and Public
Assistance Programs.119
Social Insurance consists of all cash and in-kind benefits paid by the Social
Security Program which will be known later as the Old Age and Survivors and Disability
Insurance program (OASDI), as well as unemployment compensation.120 Social Insurance
programs are not means-tested; i.e., people with low income are not required to receive
assistance. That assistance is related to someone’s prior employment status.
The main objective of such program is protecting workers and their dependents
from the loss of income due to: retirement, mass employment, illness, or unexpected death of
the breadwinner.121 The Social Insurance programs are based on the assumption that the main
factor that contributes to poverty in capitalistic societies is the loss of income due to mass
unemployment.122
Public Assistance programs, however, are designed particularly to increase the
incomes of needy people, called also the deserving poor through in-kind benefits; besides,
they are means-tested.123. There are two programs that were established by the 1935 Social
Security Act under this category: Aid to Dependent Children (ADC) and assistance to the
117
W. Peterson, op.cit., p.6.
118
Ibid.
119
Ibid.
120
Ibid.
121
Ibid.
122
Ibid., p.7.
123
Ibid.
24
blind and the aged as well.124 Charles V. Hamilton and Donna C. Hamilton declare also in
The Dual Agenda that:
With the Social Security Act of 1935, the
country established a two-tier social welfare system.
The first tier (Social Insurance) was contributory,
funded from payroll taxes levied on employers and
employees. Covering retirement pensions, and
unemployment compensation, it has expanded over the
years to include survivors, spouses, disability
provisions, Medicare. … the second tier ( Public
Assistance) was for those unable and generally not
expected to work. This included dependent children
(Aid to Dependent Children), later AFCD; the elderly
poor and disabled who had not contributed to the
Social Security fund. This category of assistance was
means –tested… But it was also perceived to provide
help on a temporary basis, because the “recipients”
were expected to be able in time to go into the labor
market and become self-supporting.125
The Social Security Act of 1935, though hotly criticised especially by
conservatives who argued that such program was a mere socialism126, was indeed, the most
important legislation passed under the Roosevelt Administration, and it is considered by many
scholars the cornerstone of the American welfare state .
2.4) The Impact of the New Deal Programs on Unemployment and Poverty
It should be noted that Franklin D. Roosevelt’s New Deal addressed different
problems caused by the economic distress among which unemployment and poverty. His
attempt to ameliorate the living conditions, particularly of those who were in the bottom of
the American society, by initiating programs to reform the economic system and society, was
not toothless.127 In order to understand to what extent his social programs worked with
124
Ibid.
125
J. Jennings, op.cit., p. 20.
126
Encyclopaedia Britannica, UK, 2008, CD-ROM edition.
127
J.Jennings, op.cit., p.20.
25
effectiveness to decrease the rates of poverty and unemployment, we need to explore the
impact of his initiatives on both the American economy and society.
Above all, we need to have a look at the situation of the Gross Domestic Product
(GDP), during the Great Depression and how it developed thanks to Roosevelt’s reforms.
Second, we need to have an idea about the rate of unemployment, because it is closely related
to GDP.128 According to Okun’s Law129, when unemployment rises, the GDP falls
automatically.130
In addition to this, the rate of unemployment affects the rate of poverty. In fact,
unemployment leads to decrease income, and according to Wallace Peterson, low-income is
the main factor that contributes to poverty.131 It follows that, Roosevelt was so clever because
he designed programs that generated jobs for American citizens to fight poverty and promote
welfare for them,
except for the idea of job training –maintained during the Johnson
Administration- that he either denied, or forgot.132
GDP was high during the 1920s133, and then it collapsed rapidly during the Great
Depression years. During the early years of the New Deal era, there was a dramatic and
steady pick up of GDP because the rate of unemployment that was high during the Great
Depression decreased substantially during the New Deal. Indeed, Roosevelt made major
efforts to eliminate unemployment throughout the United States. That is, the New Deal was
challenged by a mass unemployment that made millions of families unprivileged.
Hence,
Administration.
128
134
unemployment
became
the
major
concern
of
the
Roosevelt
The rate of unemployment reached an average of 25 % in 1933; therefore,
Charles. Wheelan, Burton. Malkiel, Naked Economics: Undressing the Dismal Science, W.W.Norton &
Company, Inc., N.Y., 2003, p. 160
129
Ibid.
130
Ibid.,p.160.
131
W. Peterson, op. cit., p.9.
132
J. Jennings, op.cit., p.23.
133
See Appendix III, p.100.
134
J. Jennings, op.cit., p.21.
26
the FERA was established to regulate this problem. As we also explained above, the latter
program provided relief payments to states and funds for creating jobs. In 1935, the Works
Progress Administration (WPA) was founded, (later called the Works Project Administration
in 1939.).135 Under that program three million persons found a job throughout the United
Sates.
According to Harold Hopkins, the first director of the WPA until 1939, the
ultimate goal of the WPA was to preserve the self-respect of the poor and the unemployed
through public unemployment.136 The WPA created a wide range of jobs and funded the
construction of public buildings such as schools, hospitals, and urban parks.137 The WPA
dominated the Roosevelt “public work strategy” from 1935 onward. Hence, from 1935 to
1940, 14 billion American citizens were allocated to it, and 7.8 million received work
relief.138
The rate of unemployment increased remarkably when the Stock Market crashed
in 1929.139 Then, it rose swiftly to reach an average of 25 % in 1933. With the initiation of
programs by Franklin Delano Roosevelt that gave relief payments to states as well as funds to
create jobs for American citizens, such as the FERA, the WPA, and other programs, the rate
of unemployment started to decrease throughout the 1930s until 1945.
Except for 1937 and 1938, because during those years there was a deep economic
recession, and consequently during that years, the rate of unemployment rose.140 When
America entered the war, men were obliged to leave their jobs and join the army as soldiers,
and their jobs were taken by women. Therefore, there was a balance in the work-force.
135
Ibid.
136
Ibid.
137
Ibid.
138
B. Jansson, op.cit., p.243.
139
See Appendix VI, p. 101.
140
Erwin C. Hargrove, The President as Leader: Appealing to the Better Angels of our Nature, University
Press of Kansas, Kansas, 1998, p.98.
27
All in all, Roosevelt’s efforts to reform the economy and the society to promote
welfare for all the American people were fruitful. The results were fascinating: a balanced
GDP and dwindled rate of unemployment. That is to day, the package of schemes that were
initiated by Roosevelt, particularly those presented during the emergency reform and
institutionalised reform eras, were successful.141
Many scholars call the period from 1937 to 1941 of the New Deal, an era of policy
stalemate.142 After that Roosevelt had won the 1936 elections with a landslide victory over the
Republicans, people thought that the first thing Roosevelt would do, was to continue his New
Deal reforms with a massive enthusiasm.143 Nevertheless, Roosevelt did not have the
intention to push through Congress further reforms, except for some notable policy
successes.144
For instance, after the recession of 1937, the financial support of the New Deal
programs such as WPA, CCC increased.145 Moreover, the Fair Labour Standards Act was
passed in 1938 and it led to the establishment of minimum wages and fair working conditions.
Furthermore, the Wagner-Steagall Housing Act was passed in 1937, and it paved the way to
the foundation of the United States Housing Authority that gave loans to local authorities to
construct public housing.
That legislation was very crucial for the reduction of poverty in America as well as
the elimination of slums and urban blights. In addition to this, in 1940 federal authorities
managed to prevent administrative abuses of welfare programs. Besides, Roosevelt realised
the need of an organisation of social welfare programs.146
141
Ibid.
142
B. Jansson, op.cit., p.244.
143
Ibid.
144
Ibid.
145
Ibid., p.245.
146
Ibid., p.246.
28
It follows that, the set of polices and programs that Roosevelt introduced to
Americans during his campaign, called the New Deal, played a crucial role in shaping the
American welfare system and it expanded the role of the federal government to promote
welfare for all citizens. That is to say, as Michael Tanner points out, “President Roosevelt and
the New Deal forever changed the face of welfare in America.”147
3) World War II and its Impact on the New Deal
Americans were firm believers in isolationism and they wanted to remain neutral
during World War II, because they thought that the latter war was a European business.
Therefore, they were not worried about Germany’s invasion on Poland in 1939, and Great
Britain’s declaration of war on Germany.148 Nevertheless, Roosevelt was worried a lot about
the war that emerged in Europe. Hence, his efforts were no longer focused on domestic
affairs.149 Although Roosevelt did not focus on the creation of new reforms, the nightmare of
the Great Depression came finally to an abrupt end by the entrance of America in World War
II.150
Roosevelt’s New Deal reforms started to decrease during the war. His program to
use the federal government as a financier of public works was reversed. Moreover, Roosevelt
himself refused to implement health care legislation and redistributive tax cut.151 Roosevelt’s
attempt to make from CCC a long-term program failed because conservatives were against
it.152 Conservatives were indeed against any long-term federal programs created to help
American youth.153 Additionally, all initiatives to establish other federal agencies like TVA in
other river basins were fiercely rejected.154
147
M. Tanner, op.cit., p.50.
148
J. E.Persico, Roosevelt’s Secret War: FDR and World War II Espionage, Random House Publishing
Group,NY, 2002, p.258.
149
Ibid.
150
Ibid.
151
B. Jansson, op.cit, p.248.
152
Ibid.
153
Ibid.
154
Ibid.
29
Roosevelt avoided pursuing domestic policy during World War II for two main
reasons: first, he wanted to gain bipartisan support for the war effort; second, because all his
attention were directed to the war.155 In other words, when America entered World War II
Roosevelt replaced his “Dr. New Deal” with “Dr. Win -the -War”156. Consequently, the latter
president shifted his efforts to maintain the promise of his New Deal towards promoting funds
and resources for the war sake.157 In this respect, Alan Brinkley declares:
The Roosevelt administration in those years
no longer had the political capital – and at times, it
seemed, no longer the political will- to sustain a
program of reform in any way comparable to its earlier
efforts. The result was a political stalemate that
continued into and beyond World War II. 158
3.1) Military Spending and Social Spending during World War II
Roosevelt sent money and supplies to Great Britain often secretly159. Moreover, he
made speeches to caution the nation about the expected war from Germany, Japan and
Italy.160 In the beginning he looked for small augmentation in military expenditures; however,
through time he demanded longer ones.161 Besides, he pushed Congress to establish a military
plan and improve America’s military by creating more tanks, airplanes as well as weapons.162
155
Ibid., p.259.
156
Ibid.
157
Thomas, Fleming, The New Dealers’ War and the War within World War II, Basic Books , NY, 2001,
pp.210-211.
158
Alan. Brinkley, The End of Reform: New Deal Liberalism in Recession and War, Alfred A. Knopf, New
York, 1995, p.3.
159
Ibid.
160
B. Jansson ,op.cit. p.248.
161
A. Brinkley, op.cit., p.3.
162
B. Jansson, op.cit., p.248.
30
Roosevelt decided to increase funds for the War Department and the navy to
confront the expected war with Germany and Japan.163 He sought to enhance aircraft
production to 50.000 planes per year as well as increase the creation of other armaments,
enourmously.164 Subsequently, the result was a military budget of $17 billion that equalled
two times of the general federal budget of 1939. Moreover, federal government spent more
money for military purposes rather than domestic services. The data shown in Table (1)
clarifies the point:
Income
Federal Spending
Year
Total $
Increase
Total $
1940
101.4
1941
120.67
19.00%
13.00
1942
139.06
15.24%
1943
136.44
1944
1945
Increase
9.47
Defence Spending
GDP
Total $
9.34%
1.66
37.28%
10.77%
6.13
30.18
132.15%
21.70%
-1.88%
63.57
110.64%
174.84
28.14%
72.62
173.52
-0.75%
72.11
Increase
GDP
Federal
Spending
1.64%
17.53%
269.28%
5.08%
47.15%
22.05
259.71%
15.86%
73.06%
46.59%
43.98
99.46%
32.23%
69.18%
14.24%
41.54%
62.95
43.13%
36.00%
86.68%
-0.70%
41.56%
64.53
2.51%
37.19%
89.49%
Table 1: Federal Spending and Military Spending during World War II.165
163
Ibid., pp.248-249.
164
J. Persico, op.cit., p.255.
165
Louis, Johnston, Samuel, Williamson, ‘Nominal GDP: ‘The Annual Real and Nominal GDP for the
United States, 1789 — Present,’ Economic History Services, March 2004, available at
<http://www.eh.net/hmit/gdp/>, accessed in 5th, May 2009.
31
Table (1) shows the federal and military spending during World War II. According
to this table, military expenditures started to increase noticeably during the war years. In
1941, military spending jumped to 269, 28 % and during the same year, it was 5.08 % of GDP
and 47.15 % of federal spending.
In fact, in 1940, Roosevelt convinced Congress to augment military expenditures
as a response to Hitler’s invasion to Denmark, Luxembourg, Belgium, the Netherlands, and
France.166 In 1945, military spending was 37.19 % of GDP and 89.49% of federal spending.
That is to say, Roosevelt spent more money for the military effort, and this led to eliminate
many of the New Deal programs. In addition to this, according to this table, federal spending
rose sharply throughout the war years.
3.2) The Growth of Income and Employment during World War II
The beginning of World War II marked the beginning of a new phase in Americans’
economic and social life. Since America had become “the arsenal of the democracies”, the
nation’s income rose, mainly because a huge sum of money was directed the war effort.167
Besides, many Americans had become employed particularly in military domains; and hence,
the rate of unemployment obviously dropped throughout the war years.168
Indeed, income of the United States of America rose during the war years, as it is
displayed in table (1) shown above. What one may infer from the latter table is the following:
the more you spend for the military, the more income increases, accordingly. In other words,
America’s income progressed during World War II for two main reasons. Above all,
Roosevelt focused his attention on military affairs, and what was produced for the war
contributed to the growth of the country’s income in 1941,1942, and 1944 as table (1)
illustrates.
166
B. Jansson, op.cit., p.249.
167
M.B. Katz, M.J. Stern, One Nation Divisible: What America was and what it is Becoming, Russell Sage
Foundation, New York, 2006, p.97.
168
Ibid.
32
In 1941, income grew due to the high degree of utilization of resources. The
further increase in 1942 was very impressive. In fact, the expansion in both 1941 and 1942
resulted partially from the rising prices, yet the amplified use of men and machines played a
central role in this augmentation of income.169 In addition to this, according to this table
further gains would be made in 1944 due to the rising prices.170
Year
1940
1941
1942
1943
1944
1945
Total
55,640
55,910
56,410
55,540
54,630
53,860
Population
55.7%
56%
57.2%
58.7%
58.6%
57.2%
Total
47,520
50,350
53,750
54,470
53,960
52,820
Population
47.6%
50.4%
54.5%
57.6%
57.9%
56.1%
Labour Force
85.4%
90.1%
95.3%
98.1%
98.8%
98.1%
Total
8,120
5,560
2,660
1,070
670
1,040
Population
8.1%
5.6%
2.7%
1.1%
0.7%
1.1%
Labour Force
14.6%
9.9%
4.7%
1.9%
1.2%
1.9%
Civilian Labour
Force
Employed
Unemployed
Table 2: Employment and Unemployment during World War II. 171
Table (2) shows employment and unemployment rates in the United States during
World War II. According to this table, the rate of employment increased during the war from
47.5 % in 1940 to approximately 53 % in 1945. The rate of unemployment, however,
decreased during the war, and it reached an average of about 1 % in 1945. To the best of my
knowledge, since employment increased, the New Deal programs were no longer needed.
169
Ibid.
170
Ibid.,p. 98.
171
Bureau of Labor Statistics, ‘Employment Status of the Civilian Noninstitutional Population, 1940 to
date’. ,available at:< http://www.bls.gov/cps/cpsaat1.pdf.>, accessed in August, 12th, 2009.
33
It is generally assumed that when World War II emerged, America was obliged to
enter the war in December 1941. Therefore, Roosevelt turned his attention towards foreign
affairs.172 That is, World War II ended the New Deal. Yet, despite the fact that the New Deal
provided tangible help for millions of American citizens, it never succeeded to restore
prosperity.173 Indeed, it was not until the World War II that America witnessed another
period of affluence, and that prosperity had taken place due to the increase of income as well
as employment.174 In other words, “it was not the New Deal that bought prosperity but World
War II”175.
As Roosevelt started spending more money on military services for the war
effort, unemployment started vanishing by 1941 due to the expansion of military expenditures
and recruitment of many men and women in the armed forces176. Hence, conservatives urged
further cuts in New Deal spending because they saw it “nonessential” as compared to military
spending and they were given more power in Congress so as to facilitate the legislation of
many proposals for the war effort.177 In addition to this, Roosevelt lessened his support of the
New Deal programs by 1940 and he used his work programs for military purposes.178
Military spending jumped to $120 billion in the wake of America’s entry into the
war, particularly after the unexpected attack of Japan on Pearl Harbour. Many liberals were
disappointed, because many of the New deal programs were terminated in 1943 such as WPA,
CCC, and PWA.179 Nonetheless, many New Deal programs remained “intact” such as the
172
J. Persico, op.cit, p.256.
173
Ibid.
174
The New Deal and World War II, U.S. Department of State Publication, USA History in Brief, 05 June
2008 at http://www.america.gov/st/educenglish/2008/June/20080610225246eaifas0.2413214.html,
accessed in 15 May, 2009.
175
R. Carlisle, G. Golson , op.cit, p.45.
176
J. Persico, op.cit, p.257.
177
B. Jansson, op.cit., p.249.
178
Ibid.
179
Ibid.
34
Social Security Act, Fair Labour Standards Act, housing legislation, TVA and WagnerStegnall Act.180
Conclusion
During the 1920s, the federal government remained absent and played a passive
role in the economic and social lives of the American people. It favoured and supported
businessmen and enabled them to compete for producing more and more. That was called the
Laissez-faire policy and it was maintained throughout the Republican Administrations of
Warren G. Harding, Calvin Coolidge, and Herbert Hoover.
That is to say, the idea of developing a “social safety net” was not necessary at
that time. 181 It was not until the Great Depression twelve years that the way and the manner in
which American people perceived poverty, unemployment, and the functioning of economy
completely changed.182 The failure of Republican economic policies that led to the Great
Depression pushed them to ask for a powerful government that would guarantee their wellbeing.
Hence, they voted for the liberal Democrat Roosevelt and they gave him the green
light to set off his New Deal domestic agenda. They considered the New Deal a shield that
would protect them and the coming generations from the uncertainties of life.183 The New
Deal used public resources effectively and developed a wide range of policies within a short
180
Ibid.
181
Social safety net means in this context government or programs ( at national, state or province, and/or
local levels) that are designed to assist those needing assistance to maintain a basic standard of living as
designed by the community . Fernando F. Padró, Statistical Handbook of Social Safety Net, Greenwood
Press, Westport, CT , 2004, p.1.
182
B. Jansson, op.cit., p.269.
183
Ibid.
35
period of time including the Social Security Act of 1935 that is considered by historians and
scholars of social policy the cornerstone of the American welfare state.184
As demonstrated by the political scientist David McKay in his book entitled
Domestic Policy an Ideology, the New Deal generated novel types of social programs to fight
poverty and unemployment. He points out: “We tend to forget that the 1935 Act also marks
the beginning of the national unemployment compensation and welfare.”185 Although his New
Deal did not take account of Civil Rights, housing, and Food Stamps, the latter president is
considered by many scholars and historians, the founder of the American welfare state.186
The New Deal legacy revealed that, the federal government inability for being a
central power in social welfare is invalid, and challenged also the widespread belief that the
federal government lacked the aptitude to design and manage major social programs.187 The
New Deal also demonstrated that the American welfare state would help citizens to find a job.
Thus, during the Roosevelt Administration, the federal government became the major
financier of social programs, especially the ADC program that could not be financed by
states.188
The New Deal was characterised by the involvement of government or
“government activism” in the areas of poverty and social welfare 189. Meanwhile, it provided
social programs that created jobs such as CWA, WPA, CCC, PWA; and also resources as
FERA, and Social Security to the deserving poor mainly the aged, the blind, as well as
children.190 Nonetheless, Roosevelt did not want to push through Congress new reforms from
1937 to December 1941, that era was called an era of policy stalemate.
184
Unlike the welfare states of other capitalist democracies, the American welfare state is said to be,
laggard, incomplete and truncated, and it is called also a semi –welfare state. Michael. Katz, The Price of
Citizenship: Redefining the American Welfare State, Metropolitan Books, New York, 2001, p.15.
185
J. Jennings, op.cit., p.21.
186
Ibid.
187
Ibid.
188
Ibid., p.270.
189
J. Jennings, op.cit., p.19.
190
Ibid., pp.19- 20.
36
Furthermore, when World War II emerged, Roosevelt was obliged to dismiss his
New Deal to tackle foreign ones. Hence, during the war WPA and NYA were terminated.191
In addition to this, during the war years military spending exceeded social spending, and
hence, the New Deal programs were no longer needed. Meanwhile, the rates of income and
employment increased substantially throughout the war years. Therefore, the war solved the
problems of poverty and mass unemployment caused by the economic distress.
Roosevelt thought that a new era of social reform would set in motion after the
end of World War II. His 1944 pledge to enact an economic “Bill of Rights” for all
Americans including descent housing, education, and health care reflected his attention to
carry on further social reforms after the war.192 Liberals had also believed that the New Deal
programs would be maintained after the war.193
Nevertheless, during the Post- World War II, and particularly from 1945 to 1960,
conservatives dominated the American political area.194 For, in addition to other factors, they
delayed new social reforms during the administrations of Presidents Truman and Eisenhower
who sought to carry out the President Roosevelt’s programs and expand the scope of the
welfare state created during his administration. In the next chapter, the main factors that
contributed to the delay of further social reforms and the halt of the New Deal welfare state
from 1945 to 1960 will be depicted and analysed.
191
William . Chafe, The Unfinished Journey: America since World War II, Oxford University Press,
Oxford, 2003, p.77.
192
Ibid.
193
Ibid.
194
B. Jansson,, op.cit., p.269.
37
Chapter Two
Delay of Reform and Welfare during the PostWorld War II (1945-1960)
Introduction
Post- World War II was an era of economic boom and prevalent conservatism.
Yet, despite the prosperity that marked that period, there was a delay of many reforms that
halted the expansion of the welfare state due to many obstacles.195 Hence, though President
Truman sought eagerly to sustain the New Deal programs by introducing his domestic social
welfare policies known as the “Fair Deal”, his dream to accomplish the latter purpose did not
come true.196
Furthermore, President Eisenhower wanted also to undertake President
Roosevelt’s social welfare policies.197 That policy, however, was recognised by many
195
B. Jansson, Ibid., p. 276
196
Ibid.
197
Ibid., p.280.
38
historians and scholars of social policy as ambivalent.198 That is to say, during Truman’s and
Eisenhower’s presidencies there was a hold-up of many reforms. Hence, Ruud V. Dijk argues:
“The administrations of Truman and Dwight Eisenhower offered little in the way of real
social reforms outside of a few initiatives…” Those initiatives were in fact an imitation of
already existed programs.199
1) Economic and Social Conditions during the Post – World War II (1945-60)
The economic boom and conservatism were the main features that marked the
post -World War II. Though economists and public officials feared that a new depression
would emerge after World War II, there was no depression, yet an economic boom that
remained during the following fifteen years.200 Besides, conservatism dominated the political
thinking from 1945 to 1960.201
For it is the questions arise: why the economic boom that marked the post –World
War II from 1945 to 1960 as well as conservatism led to the decline of many social reforms,
and the halt of the welfare state that was created during the New Deal? To what extent
conservatism
and
prosperity
made
Americans
less
concerned
with
government
interventionism in their economic as well as social affairs?
1.1) The Economic Boom
Unlike the American economy, European nations’ and Japanese economic systems
were devastated by World War II.202 Consequently, the United States had become the major
economic power in the world, and it dominated world trade. In fact, the massive savings,
198
Ibid.
199
Ruud V. Djik, (Ed.), Encyclopaedia of the Cold War, Routledge ,Tailor & Francis Group (NY), 2008,
pp.796-797.
200
Ibid.
201
Ibid.
202
Randall B. Woods, The Quest for Identity: America since 1945, Cambridge University Press,
Cambridge, 2005, p.121.
39
development of the American industry, technical innovations, increase of workforce
productivity, as well as government spending on aid programs and the Korean War, all
contributed to the post- World War II economic boom.203 In this respect Randall B. Woods
points out:
The 15 years following the end of World
War II comprised a period of remarkable economic
growth for the United States. Despite widespread fears
among economists and public officials, a recurrence of
the Great Depression did not materialize. The postwar
boom in America was fuelled by a number of factors.204
In the wake of World War II, many Americans made huge savings in the form of
war bonds.205 They quickly benefited from them when the war ended so as to purchase
goods.206 Peace and prosperity were established again. The threats to meet another depression
as the one that preceded the war disappeared completely, the living conditions of the
American people improved tangibly, too.
Therefore, between 1945 and 1960, the GNP augmented to 250 %; moreover, the
average of each person’s consumption of goods, services as well as constructions of houses
and hospitals increased obviously during that period.207 That era was characterised also by a
remarkable social change. At that time, many people enjoyed a comfortable home, car, and
managed to seek a college degree.208 That is, an extraordinary improvement at the level of the
middle-class family had taken place. The following figure explains the fact:
203
Ibid.
204
Ibid.
205
Ibid.
206
Michael B. Katz , Mark J. Stern, op.cit., pp.179-180.
207
Michael. Lacey, (Ed.), The Truman Presidency, The Press Syndicate of the University of Cambridge,
New York, 1991,p. 154.
208
Ibid.
40
Figure 1: Gross National Product, 1929-1990.209
Figure (1) shows the situation of the Gross National Product from 1929 to 1990. As
we can see, GNP was low in 1929 due to the hard economic times that America witnessed as
a consequence to the Wall Street Market Crash in 1929. Nevertheless, the American economy
started to improve as a result to Roosevelt's programs, as it was mentioned in chapter one;
with an exception of 1937 and 1938 , during which a deep economic recession occurred due
to World War II.210 After that recession there was a sudden pick up of GNP in 1941. From
209
Randall B. Woods, op.cit., p.122.
210
Ibid.
41
1941 onwards, the GNP started to increase steadily until 1990.211 All in all, one can note that
the American economy boomed after the end of World War II.
It follows that, America was the sole nation whose economy was not damaged by
the war. Hence, it had become the main exporter and supplier to nations that suffered from the
destructions of the war. This led, however, to an economic boom. Therefore, many
conservatives wanted to reduce the government spending on reform and welfare.212 During
the post-World War II, the mood of America was not liberal, yet conservative.213
2.2) Conservatism
During post- World War II, from 1945 to 1960, conservatism was widespread in
the American social and political life, and because of the postwar affluence the American
people denied novel reforms.214 Indeed, one of the outcomes of World War II was a shift to
the political right in the American society. Hence, liberal reforms as civil rights did not have
interesting public support.215
Therefore, Americans were not ready to support the Fair Deal domestic initiatives.
Indeed, they did not have the appetite of social reform during that period because of the
economic affluence they enjoyed after the war. Therefore, they were not enthusiastic for
Truman’s schemes as they did for Roosevelt’s ones.216 They ignored the needs of people in
rural areas and African Americans who were poor and lived under the tyranny of Jim Crow
Laws.217
211
Ibid.
212
B. Jansson, op.cit., p.277.
213
Ibid.
214
Ibid.
215
Ibid.
216
Ibid.
217
Ibid., p.278.
42
Moreover, due to that abundance many Americans saw the uselessness of
enacting new reforms.218 That is to say, the prosperity that marked the post-World War II did
not encourage new reforms in America. In contrast, it made many Americans less enthusiastic
about asking for new programs that would promote their well-being and the equal rights of
opportunity.219
It follows, the huge abundance that had taken place after the war led Americans
to deny new reforms in all domains. Furthermore, conservatism dominated Americans’
political, social and cultural life throughout the period. This led by one means or another to
delay new reforms and the expansion of the welfare state created during the 1930s.
Yet, from Truman’s perspective, prosperity would help the federal government
enlarge, develop and extend its programs to deal with social and economic problems of the
entire nation.220 In fact, that was the theory upon which Truman constructed his Fair Deal
program221. Nevertheless, his dream to enlarge the formal structure of the welfare state
created throughout the New Deal era, and to enact a new bundle of programs, did not come
true. Depicting the factors that lay behind the failure of Truman’s schemes is the task of the
following section.
2) The Factors that Contributed to the Delay of Social Reforms during the Truman
Presidency from 1945 to 1952
The first question that was asked when Truman became president was, whether he
would be able to continue the liberal agenda of social and economic reforms associated to
Roosevelt’s New Deal successfully or not.222 Moreover, policymakers feared that a worst
218
John M. Murrin, (Ed.) et al., Liberty, Equality, Power: A History of the American People, Thomson
Wadsworth, Belmont, 2009, p. 716.
219
Ibid.
220
Ibid.
221
Ibid .,p. 717.
222
Michael. Lacey, op.cit., p.156.
43
economic recession would start after World War II.223 Meanwhile, they were not sure about
Truman’s ability to reconvert the wartime economy to a peacetime one.
In addition to this, when Franklin Roosevelt died, Truman himself was scared that
he would not be able to carry out his liberal domestic agenda and enlarge the scope of the
welfare system that was created during his presidency.224 He was also uncertain about his
ability to convert the wartime economy to peacetime economy.
Many scholars agree that Truman’s schemes were a failure, but they disagree
about the precise period. Nevertheless, the most frequent phase that the majority of historians
and scholars refer to is from 1945 to 1952, the full term of the Truman Presidency.
On the one hand, Bruce Jansson notes that there were only few enacted proposals
during the Truman Presidency, from 1945 to 1952. He points out:
Before he died, President Franklin Roosevelt
hoped that a new reform era would begin after the end
of World War II, but many conservatives were
determined that this would not be the case. In fact,
relatively few social reforms were enacted during the
presidency of Harry Truman (1945-1952).225
On the other hand, from Gary Donaldson’s perspective, Truman’s programs were
not successful from 1949 to 1952. He argues that “The Fair Deal was clearly a failure within
the boundaries of the U.S. domestic policies between 1949 and 1952.”226 President Truman
sought with eagerness to carry on and maintain the New Deal tradition.227
223
Ibid.
224
Ibid., p.158.
225
B. Jansson, op.cit., p. 276.
226
Gary. Donaldson, Abundance and Anxiety: America, 1945-1960, Praeger Publishers Westport, 1997,
p.68.
227
Ibid., p.156.
44
Therefore, after he had become president, he initiated a legislative program called
the “Fair Deal” that was consistent with Roosevelt’s domestic agenda. His Fair Deal program
was built on the assumption that the federal government has to intervene to promote welfare
for each American citizen with fairness and equality.228 Hence, in a speech he claimed that
“every segment of our population and every individual has the right to expect from our
government a fair deal.”229
Indeed, the latter president believed that prosperity would be a good instrument
to extend governmental programs that would deal with the social and economic problems of
the American people.230 President Truman, however, faced many problems that blocked
many of his initiatives.231
Besides, Truman sought to expand outstanding New Deal programs such as the
Social Security system, and minimum wage laws to increase the minimum wage from $0.40
to $0.75 per hour.232 He wanted also to establish a national health insurance plan, federal aid
to education, to repeal the Taft-Hartley Act of 1947, increase the federal tax of $ 400 billion,
and finally to legislate Civil Rights.233 Truman’s objective was to urge considerable spending
on projects of public housing as well, and his secretary of agriculture, Charles Brannan,
proposed new governmental funding to hold up farm prices.234
Again, Truman faced many serious problems during his presidency that delayed
new reforms, halted many of his Fair Deal measures- except for handful legislations- and put
an end to Roosevelt’s New Deal liberal agenda. Unlike Eisenhower, Truman meant to use
228
John M. Murrin et al.,op.cit., p.716.
229
Patrick. Garry, Liberalism and American Identity, The Kent State University Press, Kent, 1992, p.72.
230
Ibid.
231
B. Jansson, op.cit., p.276.
232
John M. Murrin et al.,op.cit., p.716.
233
Marc .Chaux, Rupture des Styles et Continuité de l’Action : l’héritage des présidents Mythiques, F.
Roosevelt-H . Truman ( 1933-1952)/ J. Kennedy, L. Johnson (1961-1968),Publibook, Paris, 2008 , p.74.
234
John M. Murrin et al. ,op.cit, p.716.
45
successful New Deal programs as a model for his administration to carry on what Roosevelt
had already started, yet his aim was not accomplished.235
2.1) The Coalition of Republicans and Conservative Southern Democrats
During the 81st Congress, Republicans and southern conservative Democrats
were allied to block any expansion of the liberal welfare state that sprang up during the New
Deal.236 That is, the coalition of Republicans and powerful conservative southern Democrats
rejected the legislation of further social reforms throughout The Truman Administration.
237
Brendon O’Connor perceptively points out:
During the late 1940s and early 1950s,
Republicans and conservative Southern Democrats in the
Congress had effectively blocked the development of
further social reform… New Deal reforms were
reversed.238
In fact, Republicans and southern Democrats opposed the Fair Deal proposals
because they were fiscally, socially, and politically conservatives. Besides, they were against
government intervention in the economic and social affairs of the American citizens.239 They
were both against the redistribution of wealth, labour unions, and the legislation of Civil
Rights for African-Americans.240
Furthermore, Southern Democrats supported Republicans intentionally. Because,
they thought that in return, Republicans would support them in opposition to Civil Rights
235
Ibid.
236
Yanek. Mieczkowski, The Routledge Historical Atlas of Presidential Elections, Routledge , New York,
2001, p.106.
237
B. Jansson, op.cit.,pp.275-276.
238
Brendon .O'Connor, A Political History of the American Welfare System: When Ideas have
Consequences, Rowman & Littlefield Publishers.Inc., Oxford, 2004, p.51
239
Ibid.
240
Ibid.
46
bills.241 Indeed, this coalition was the main factor that contributed to the failure of the Civil
Rights initiatives during this period and many of the liberal Fair Deal agenda.
A special philosophy that characterised the Fair Deal and made it distinct from
other domestic agendas was the redistribution of the postwar abundance.242 A good example
of the Truman’s Fair Deal philosophy was the “Brannan Plan”. The latter plan was an
agricultural redistribution and it was named after the Secretary of Agriculture Charles F.
Brannan. 243
The bill asked the federal government to support farm income through direct
payments according to the size of a farmer’s crop.244 Therefore, by doing so, that bill sought
to guarantee lower prices for consumers, because overproduction would drive prices down;
and therefore, farmers would consequently receive a fail-safe income from the federal
government.245
That is to say, the passage of that bill would ensure low prices for consumers and a
living income for farmers. In addition to this, the plan paid to small family farmers more than
factory-type farms.246 This will thereby enhance small family enterprises.247 The Brannan
Plan was like the “Jeffersonian type” designed to encourage agrarian individualism.248
Nevertheless, the Brannan Plan received blistering opposition from both
Republicans and southern Democrats Republicans. They opposed the latter plan merely
because they found it “socialistic”.249 Southern Democrats were against that legislation as a
241
Ibid.
242
Ibid.
243
R.B. Woods, p.122.
244
G. Donaldson, op.cit., p.65.
245
Ibid.
246
Ibid .
247
Ibid.
248
Ibid., pp.66-67.
249
R. B. Woods, op.cit., p.28.
47
response to big cotton farmers who feared that they would not be able to receive New Deal
subsidies. Thus, the Brannan Plan finally came to a dead point in July 1949.250
2.2) Racism
Truman sought to establish a long-term Fair Employment Practices Commission
(FEPC), a temporary agency which was created during World War II to stop unemployment
and housing discrimination.
251
Nonetheless, the “race riots” of 1943 paved the way to a
counterattack against the legislation of the Civil Rights Act.252 Thus, a group of southern
legislators blocked the passage of FEPC when it came before Congress in 1946.253 Thence, in
addition to the coalition of Republicans and southern Democrats in the 81st Congress, racism
was another problem that President Truman faced during his administration.
Moreover, Truman’s scheme for aid to education ended because of racism and
religion.254 The bill included assistance to private schools. Hence, it stimulated hot debates in
the press between Francis Cardinal Spellman, the archbishop of New York and Eleanor
Roosevelt.255 Furthermore, conservative southerners wanted to support the bill if it would be
limited to public schools. They were against the idea of equal allocation to segregated schools
in the South.256 Therefore, the latter bill was not passed through Congress because of the
consistent opposition from religious people and racists.257
250
251
Ibid.
B. Jansson, op.cit.,p.276.
252
Ibid.
253
Ibid.
254
Ibid.
255
R. B. Woods, op.cit, p.29.
256
Ibid.
257
Ibid.
48
2.3) The Cold War
Another obstacle that Truman faced was the Cold War. Hence, he oriented most of
his efforts to contain Communism abroad and safeguard the home country and Americans
from its threats.258 In the late 1940s, Truman focused on Russia because he feared that Stalin
would extend his empire to Western Europe. He promised to support societies threatened by
the forces of international communism and this was called the “Truman Doctrine”.259
Therefore, he initiated the Marshall Plan in 1947 whereby America could provide
economic assistance to Western European countries as Greece and Turkey, and protect them
accordingly from Russian exploitation.260 In order to gain support from the conservative
coalition in Congress for his Marshall Plan, Roosevelt gave little attention to social
reforms.261
2.4) The Conversion of the Economic System
The “conversion” or “reconversion” of the basis of the economic system from
wartime to peacetime was another difficult issue that was faced by Truman.262 The problem of
the conversion had three major parts: spiralling inflation, the shift from wartime production to
peacetime production as well as the return of soldiers from World War II.263
During the war, the Office of Price Administration (OPA) had controlled prices and
wages.264 When the war was over, many conservatives wanted to eliminate such controls and
ultimately succeeded in doing so in 1946.265 American consumers were also anxious to spend
258
William J. Rorabaugh et al ., America’s Promise: A Concise History of the United States, Vol I,
Rowman and Littlefield Publishers ,Inc., Maryland, 2004, p.585.
259
R.B.Woods, op.cit., p.45.
260
B. Jansson, op.cit., p.278.
261
Ibid.
262
Ibid.
263
M. Lacey, op.cit., pp.91-92.
264
Ibid., p.139.
265
Ibid.
49
money on new products. Without wartime price controls, consumer demand outran supply
and inflation expanded in the United States.266
One reason for the continued shortage of consumer goods was the transition
necessary to move from wartime to peacetime production. Business leaders had been unaware
of the atomic bomb and were not prepared for such a quick end to the Pacific war.267 As a
result, when the war came to an end, American factories were still producing planes and tanks
instead of radios and washing machines.
Indeed, during that period policymakers worried that a depression would be
caused by the return of World War II soldiers to the labour force.268 Therefore, the GI Bill
was passed and it kept millions of veterans out of the workforce by sending them to
college.269 Thanks to the latter bill, veterans received economic and social subsidies from the
government. They obtained financial assistance for college and job training, loans to purchase
homes or businesses as well as medical care in veterans’ hospitals.270
By doing so, jobs in the domain of construction increased substantially;
furthermore, a postwar suburban housing boom occurred.271 All in all, the task of converting
the economic system after the World War II was not an easy one for Truman. Therefore, his
administration focused on people who returned from war to prevent mass unemployment that
would lead to another economic recession.
266
M. Lacey, op.cit., p.139.
267
Ibid, p.182.
268
B. Jansson, op.cit., p.278.
269
William J. Rorabaugh et al ., op.cit., p.585.
270
John M. Murrin et al., op.cit., p.718.
271
William J. Rorabaugh et al ., op. cit., p.585.
50
2.5)
Labour Unrest
Another postwar issue was labour unrest. In the aftermath of the War, a wave of
strikes swept the nation. In 1946, for example, 400,000 miners struck not once, but twice.272
In all, 4.6 million workers struck at one time or another during that year. The conservatives'
reply to the labour problem was the Taft-Hartley Act of 1947.
Indeed, a coalition of Republicans and conservative southern Democrats during the
80th Congress passed the moot Taft- Hartley Act in 1947.273 Yet, Truman promised to abolish
the “Taft-Hartley”, also called the “Slave-Labour Bill”274 by him as well as labour leaders,
throughout his campaign for presidency.275 Despite his vetoes, Taft-Hartley was enacted and
it allowed the use of antistrike court orders against labour unions, and banned secondary
union boycotts.276 The act has four main points: prohibited the closed shop, prohibited
secondary “sympathy” strikes, prohibited political contributions by unions, and gave the
President power to impose a cooling-off period to avert strikes.277
As a result, the Taft-Hartley Act may have strengthened big labour by forcing
various groups to work together in the face of extraordinary opposition. Thus, during the next
decade, the conservative attack on unions encouraged those groups to coordinate strategies
and to pool their resources.278 In 1955, for instance, two competing unions joined forces: the
American Federation of Labour (AFL), and the Congress of Industrial Organizations (CIO).279
The AFL-CIO represented over 70% of the American unionised labour force and became the
largest federation of labour unions in the United States. 280
272
William J. Rorabaugh et al ., op. cit., p.586.
273
Ibid.
274
R. B. Woods, p.122.
275
Ibid.
276
G. Donaldson, op.cit., p.68.
277
Ibid.
278
R.B. Woods, op.cit. ,p.122.
279
Ibid.
280
Ibid.
51
2.6) Hesitation of Truman himself about New Social reforms
Truman’s determination about social reforms is still controversial. Therefore hot
debates have been stimulated among historians and scholars of social policy to decide whether
he was for or against legislating further reforms to improve the living conditions of the
American people. Many of them agree that Truman was for enacting more social reforms in
order to extend the welfare state that was created during the New Deal; yet, he failed because
he met many problems that delayed his Fair Deal proposals. On the other hand, others believe
that Truman himself denied new reforms.
For them, Truman fought for Roosevelt’s liberal New Deal during his presidency
by making major efforts to pass through Congress many liberal measures as: Civil Rights,
Social Security , aid to education and Medical Care, he was not conceived by many politicians
as a “radical liberal”.281 Moreover, Truman did not support domestic reforms because he
believed that it was the duty of Congress. Hence Bruce Jansson points out:
Truman was ill equipped to lead a
crusade for major social reforms, even had he desired
them… Although he believed that presidents should
assume leadership in foreign affairs, he thought they
should merely articulate broad goals in domestic
affairs and leave the development of specific
legislation to Congress.282
Truman’s sincerity on Civil Rights issues has been controversial, because many
scholars assume that, he wanted to repay African-Americans for their support in 1948.283
Hence, he made efforts to push the FEPC Bill. He wanted to fulfil his campaign pledge to
African- Americans and their leaders. Thus, in 1949, he appointed William Hastie to seat on
the Third Circuit Court by Appeals, the highest court seat ever held by an AfricanAmerican.284 Nonetheless, he is said to be “all rhetoric and no action”285 about Civil Rights,
281
Bruce. Jansson, The Sixteen-Trillion-Dollar Mistake: How the U.S. Bungled its National Priorities from
the New Deal to the Present, Columbia University Press; New York, 2001, p.77.
282
Ibid., p.78.
283
Ibid.
284
Ibid .
52
and he appointed African- Americans for higher positions just to gain more votes in the
coming elections.
Nonetheless, the Fair Deal was a success in two main things: first, it maintained the
New Deal, expand and modify many of it programs to fit new economic and social trends.
Second, it set forth the groundwork for the 1960s reforms particularly: Civil Rights, federal
housing, Medicare, slums clearance, as well as federal aid to education.286
That is to say, despite the failure of many of Truman’s plans, there were indeed
some successes. Yet, his measures of social reforms remained unsuccessful. In other words,
those successes failed to accomplish the goals highlighted by the Truman Administration.287
For instance, Congress responded to Truman’s demand to increase minimum wage;
nevertheless, it reduced the number of eligible beneficiaries.288 Furthermore, the Truman’s
National Housing Act of 1949 was passed and hence Congress permitted the removal of
slums and the construction of 800,000 low income housing units.289 Yet, lesser than the half
of the expected units were built, in reality.290
Moreover, though Congress rejected Truman’s plan to expand social security in
1949, it accepted in 1950 to increase Social Security benefits to 80 % and enlarge its coverage
to reach a number of 10 million American citizens.291 In 1950, subsidies rose tangibly for the
Rural Electrification Administration, the Tennessee valley Authority, and the Farmer’s Home
Administration. That was a humble extension to the welfare state created during the New Deal
era.
285
Gary. Donaldson, op.cit., p.69.
286
Ibid.
287
Ibid.
288
Gary. Donaldson, p.70.
289
Ibid.
290
Ibid.
291
Michael J. Lacey , op.cit., p.151.
53
One of the most important achievements of Truman during his administration,
though he faced many problems, was the extension of Keynesian ideas that triumphed during
the New Deal era. Gary Donaldson clarifies the point: “One of the Truman’s many legacies to
the nation was an expanding capitalist economic order supported in Keynesian economic
theory and shored up by an extensive social welfare safety net.” 292
In 1953, the Republican Dwight D. Eisenhower was elected president of the
United States of America. The latter president wanted also to continue many of President
Roosevelt’s reforms that were established during the 1930s. His administration, however, was
characterised by political ambivalence about new social reforms.
3) Political Ambivalence about Reform and Welfare during the 1950s
Ambivalence about the creation of new social reforms and the extension of the
welfare state marked the presidency of the conservative Republican President Eisenhower.293
Eisenhower did not attack the New Deal social reforms, and some scholars of social policy as
well as historians have paid attention to the fact that, Eisenhower wanted to carry out
programs initiated by Roosevelt, and that was reflected in his rhetoric.294 Other scholars,
however, regarded his policy ambivalent, or not clear about the creation of further social
reforms.
On the one hand, Eisenhower limited the government’s role in economic and
social affairs, and he cut also the Defence Budget that was regarded as a crucial economic
avenue of profits for conservative Republicans.295 On the other, he extended the Social
Security Act created during the 1930s and established highways and seaways to facilitate the
transportation of troops in case another war would emerge in the future.296
292
Gary. Donaldson ,op.cit., p.69.
293
B. Jansson, op.cit., The Reluctant Welfare State: Engaging History to Advance Social Work Practice in
Contemporary Society, p. 281.
294
Ibid.
295
Ibid., pp. 279-280.
296
Ibid.
54
Eisenhower was not in fact interested in extending social spending, except for
some initiatives that he set forth just to placate Democrats, or to maintain already existed
programs such as the Social Security System.
297
He met also opposition from Republican
Conservatives who wanted to cut social spending and extend military spending.298
Though his attempt to maintain the New Deal tradition of welfare and reform
failed, his presidency was characterised by a little progress of social welfare programs or
social services comparing to Truman’s, particularly that of the Social Security system that
saw a little expansion throughout his presidency .299 That is, the Eisenhower Presidency was
marked by little progress of social reforms in some domains, and regression in some other
domains.
3.1) Reduction of Government Interventionism
The Eisenhower Administration managed to keep taxes so as to avoid
government interference with the private economy.300 His administration aimed at puting an
end to governmental programs that conflicted with private enterprise.301 That is to say, the
conservative Eisenhower Administration encouraged again businessmen and discouraged
government interventionism as conservative Republicans did during the 1920s by applying
the Laissez-faire policy.
Therefore, the Reconstruction Finance Corporation was ended in 1953.
Moreover, it rejected also to support important public power projects and enhanced private
ones.302 TVA was called “creeping socialism” by Eisenhower, and he insisted that he would
297
Ibid., p.280.
298
Ibid.
299
B. O’Connor, op.cit, p.51.
300
G. Donaldson, op.cit., p.79.
301
B. O’Connor, op.cit., p.51.
302
Ibid.
55
“sell the whole thing if I could”.303 Yet, though Eisenhower made major efforts to end public
programs, TVA remained intact and the Rural Electrification also survived.304
The Eisenhower Administration sought also to get the government out of the
agriculture business, and that action delighted Republicans. The main objective beyond that
policy was to decrease the government financial support and tied farm production with
marketplace prices.305 Yet, that policy was not successful. Furthermore, in 1956 Eisenhower
refused the legislation of a Democratic bill that maintained a New Deal strategy that
encouraged farmers to leave a portion of their lands out of production.306
Besides, government-sponsored medical programs were not welcomed by the
administration of Eisenhower.307 Hence, the scheme that sought to provide free “Dr. Jonas
Salk’s polio vaccine” to all American children was banned, and it was called “socialized
medicine through the bedrock”.308 Throughout Eisenhower’s presidency, all governmentguaranteed medical insurance programs, for the aged and the poor, were hotly rejected as
well.309
It follows that, the sole objective behind that Eisenhower’s policy was to keep the
government passive with economic affairs as in the 1920s, and enhance the private sector.
Consequently, it meant by one means or another to keep the federal government out of the
social issues of the American people.
303
Ibid.
304
B. Jansson, op.cit., The Sixteen-Trillion-Dollar Mistake: How the U.S. Bungled its National Priorities
from the New Deal to the Present, p.78
305
Ibid.
306
Ibid., pp.79-80.
307
Ibid.
308
Ibid.
309
Ibid.
56
3.2) The Cut of the Defence Budget
Though he was a former war hero, the latter president wanted to cut defence
budget.310 He was against government spending for military. Hence, he made a speech against
the “military –industrial complex” in 1960, in which he pointed out that “spending one dollar
on guns is not spending one dollar on humanitarian programs.”311
Nevertheless, Republican and Democratic members of Congress were against that
idea because they saw military contracts a substantial source of revenue for both their country
and for their political affairs.312 Additionally, the main slogan of Republicans in the campaign
of the 1952 presidential elections was: lower taxes and a balanced budget so as to put an end
to New Deal intemperance.313 A Republican bill was passed accordingly, and it eliminated
11% from the personal income taxes that had been adopted by the Truman Administration to
finance the Korean War.314
Yet, that bill did not work because it caused three separate economic depressions
during the Eisenhower Presidency, and it led unfortunately to increase unemployment.315
Moreover, it led to the reduction of tax incomes and made the idea of balanced budget
unattainable. Hence, the administration objective to cut taxes and balance the budget was not
fulfilled.316 Therefore, Republican economic policies had become widely recognised as an
absolute failure.
310
Ibid.
311
B. Jansson, op.cit., The Reluctant Welfare State: Engaging History to Advance Social Work Practice in
Contemporary Society, p.280.
312
Ibid.
313
G. Donaldson, op.cit., p.80.
314
Ibid.
315
Ibid.
316
C. Howard, op.cit, p.58.
57
3.3) Regression of Aid to Families with Dependent Children (AFDC)
The 1950s were recognised by many scholars as a period of stagnation in
AFDC317. The latter program was weakened during that period because it was administered
by state and local governments and not the federal one.318 This regression in AFDC was due
to the apparent prosperity that made poverty invisible in the American society; hence, those
social issues withdrew from the American political life.319
The Eisenhower Administration did not develop AFDC. Yet, he firmly believed
that the New Deal legacy could not be totally eliminated because many Americans depended
and still depend on its grants. He was against discriminating African-American children.
Thus, when the courts ordered the City of Little Rock, Arkansas, to enable African-American
children attend its schools in 1957, Eisenhower sent federal troops to accomplish the mission
successfully.320
3.4) Amendment to the Social Security Act of 1935
Despite the fact that the Eisenhower Administration did not encourage social
reforms and the expansion of the American welfare state, his administration was characterised
by a little progress of social reforms. Hence, the Social Security Act of 1935 was amended in
1956321 despite conservatives’ opposition. Meanwhile, he was not enthusiastic about it, and
this remains a moot point about Eisenhower’s administration. In this respect Steven Green
Livingston points out:
317
ADC program was renamed the Aid to Families with Dependent Children Program, or AFDC, and it
extended cash benefits to mothers and children .Michael B. Katz, op.cit., p.61.
318
Robert C. Lieberman, Shifting the Color Line: Race and the American Welfare State,
University Press, United states of America, 2001, p.154.
319
Ibid.
320
Ibid.
321
Steven G. Livingston, Student’s Guide to Landmark Congressional Laws on Social Security and
Welfare, Greenwood Press, Greenwood Publishing Group, 2002, p.98.
58
Harvard
On August 1, 1956 President Eisenhower,
though indicating lack of enthusiasm about the
disability program signed the 1956 amendments to
the Social Security Act into law.322
Therefore, in 1956, he raised the minimum wage to $1.00 per hour as a response
to Democrats request. In addition to this, he passed a bill to increase the construction of public
housing to 35.000.323 Moreover, the Social Security Act was expanded in 1950 under the
recommendation of Eisenhower and it had become a family Program and it covered
11 million workers.324 In his State of the Union message on February 2, 1953, he claimed
that: “Old Age and Survivors Insurance law should promptly be extended to cover millions of
citizens who have been left out of the Social Security System.”325
3.5) The Cold War during the Eisenhower Administration
Eisenhower focused on the Cold War effort by maintaining military programs to
protect the nation from any internal or external threats. Thus, he pushed the federal
government to improve substructures for military purposes.
326
He established the national
highway system and the St. Lawrence Seaway to facilitate the transportation of troops and
military hardware to be ready for another world war. 327
In 1954, an American-Canadian project was launched and it aimed to convert the
St. Lawrence River into an inland waterway that connected the Great Lakes with the Atlantic
Ocean. In 1956, the Federal Highway Act was passed and it aimed to build 40.000 miles of
superhighways and freeways.328
322
Ibid.
323
Ibid.
324
Ibid., p.83.
325
Eric .Kingson, (Ed.), James. Schulz, Social Security in the 21st Century, Oxford University Press, New
York, 1997, p.30.
326
Ibid.
327
Randam B. Woods, op.cit., p.73.
328
Michael B. Katz, op.cit., p.115.
59
Eisenhower was influenced by the German autobahn system and believed that it
facilitated the transportation of German troops and armour during World War II. Therefore,
both projects were crucial for national defence. Moreover, they worked for the American
business, industry, as well as the transportation of raw materials and goods to other nations’
factories and markets cheaply and quickly.329
Eisenhower supported the National Defence Education Act (NDEA) of 1958 that
provided federal aid for education, yet only in sciences and mathematics. NDEA gave also
federal loans to college students so as to make education available for every American citizen.
That legislation was in fact a reaction towards Russians’ launch of Sputnik I into orbit.330
Nonetheless, his real goals and Republicans’ ones were not accomplished: lower
taxes and a balanced budget. Meanwhile, agricultural programs were less dependent on
federal funds and more dependent on marketplace power. Moreover, his strategy could not
administer the nation’s economy effectively.331
Many scholars of social policy have argued that the latter programs were
extended because Democrats dominated Congress during the Eisenhower Administration, and
Democrats were for the expansion of the welfare state and the enactment of social reforms.332
Thus, with collaboration to Democrats, Eisenhower succeeded to pass some social welfare
programs that maintained the New Deal tradition.333 Eisenhower recognised also that
Americans wanted to keep the New Deal programs. Hence, he made some efforts to placate
them.
Despite the fact that Eisenhower did not cut social spending or ban former social
programs, he was not remembered as reformist. Furthermore, his reaction towards race
329
Ibid.
330
Ibid.
331
G .Donaldson, op.cit., p. 83.
332
Ibid.
333
G .Donaldson, op.cit., p.82.
60
relation was not clear.334 He had many relationships with Southern governors and friends, and
he believed that racial issues should be left by the federal government to states. 335
Thence, during the Eisenhower Administration there was a very tiny progress of
social reforms. Those initiatives were introduced to placate Democrats and Americans who
wanted to maintain the New Deal domestic programs. Those initiatives included: the
establishment of a health department, the enhancement of education and welfare, the creation
of the highway and seaway systems, the extension of the Social Security system, and
promotion of federal aid to education.336 That is, Eisenhower did not want to establish
something “new” during his administration. Yet, like Truman, he wanted just to extend what
was already established during the New Deal and satisfy Democratic liberals and FDR’s
proponents.
Conclusion
It follows that, during the post –World War II era, from 1945 to 1960, there was
both a hold-up of social reforms, and a halt of the welfare state that was designed during the
1930s due to many problems. In fact, Truman wanted to carry on the social reforms created
during the New Deal era so as to shape up the formal structure of the welfare state during his
administration. For, he introduced his Fair Deal agenda. He believed that newer reforms were
required to put an end to both economic and social disturbances during the post- war era.
However, his aim to do so failed because the chaotic political, economic, and social
conditions that characterised his term of presidency.
Above all, conservative ideas dominated the political and social thinking at that
period, and it is generally held that conservatives were against expanding social spending.337
Indeed, a coalition of Republicans and conservative southern Democrats dominated the 81st
334
Charles O. Jones, (Ed.) , The Presidency in a Separated System, The Brookings Institution,
Washington, D.C., 2005, pp.172-173.
335
Ibid.
336
Ibid.
337
Paul. Gottfried, Politics & Regimes: Religion and Public Life, Vol.30, Transaction Publishers, New
Brunswick (New Jersey),1997, p.41.
61
Congress during the Truman presidency and it blocked his famous Fair Deal that was an
expansion of the New Deal because it called for: medical insurance, education, public
housing, and civil rights.338
Meanwhile, Congress refused to establish a national health care program, new civil
rights legislation, and to reform education –with an exception of the G. I. Bill and a slight
progress of unemployment benefits.339 Moreover, Truman sought to convince Congress to
pass a housing initiative in 1949. The conservative political coalition, however, blocked the
President’s latter proposal. That is to say, Americans had become more conservative after the
war and the establishment of more social reforms and the expansion of the welfare state did
not interest them.
The prosperity that marked the fifteen years that followed World War II made
Americans less zealous about new reforms. Americans were not interested in government
subsidies, merely because, they had sufficient savings after the war that consequently
prevented the emergence of another economic recession.340 In addition to racism that was
widespread during that period, communism was another difficult issue that Truman faced.
Hence, the latter president endeavoured to contain communism in the home country and
abroad, so as to protect the whole nation for its threats.
Thus, in order to gain conservatives’ support for his Marshall Plan, Truman was
compelled to abandon the idea of establishing further social reforms. Meanwhile, he sought to
convert the war time economy to peace time economy, and this was a great challenge that
faced his presidency. That problem consisted of three main elements: spiralling inflation, the
shift from wartime to peacetime production, and the return of WWI soldiers. Truman’s
presidency was marked by labour unrest, as well. Besides this, the cold war, the conversion of
the economy, affluence, and conservatism led to the delay of new social reforms during the
Truman and Eisenhower Administrations. Moreover, during that period, from 1945 to 1960,
there was a shift in political attention towards foreign affairs rather than home affairs.
338
Ibid.
339
Ibid.
340
Ibid.
62
Eisenhower wanted also to carry out Roosevelt’s New Deal so as to placate
Democrats by introducing measures in social and economic domains particularly the
expansion of the Social Security System. He was not remembered, however, by achieving
significant social welfare programs. In addition to this, his real objectives were similar to
Republicans’ ones, and his political rhetoric about social reform and welfare was very
ambivalent.341 Eisenhower’s political attitudes towards social reforms were not clear. Indeed,
Eisenhower devoted greater efforts and attention to foreign affairs rather than home ones.
Moreover, Eisenhower’s initiatives were not creative; yet, a continuum to already existed
programs.
Both Truman and Eisenhower focused on the containment of communism abroad
and to avoid its threats on America and its people. In this respect Brendon O’Connor argues:
“In general, however, the Truman and Eisenhower presidencies were marked by a general
political consensus, which gave primacy to foreign policy concerns over domestic issues.”342,
particularly the Cold War.
All in all, the social policies that had been introduced during the post- World War
II did not expand social reforms and the welfare state that emerged during the Roosevelt
Administration. In a word, Truman and Eisenhower administrations were characterised by a
delay of social reforms and a tiny progress of the welfare system. Many scholars as Mark J.
Stern asserts, “are apt to ignore the quiet welfare state of the 1950s.” 343
Nevertheless, hot debates emerged among scholars of social policy to decide
whether the reluctance of reform and welfare that symbolised the 1950s would remain after
the 1960 presidential elections. The 1960s was an era in which large-scale social reforms had
been introduced, and in which the scope of the welfare state that was founded during the New
Deal era had been largely expanded.
341
C. Howard, op.cit., p.56.
342
B. O’Connor, op. cit., p51.
343
Ibid., p.25.
63
Chapter Three
Return of Social Reforms and the Expansion of the
Welfare State during the 1960s
Introduction
As it was mentioned in chapter two, the post- World War II era was recognised by
historians a period of prosperity and affluence in America.
Moreover, many factors
contributed to that economic growth. In spite of that prosperity, however, many Americans
lived in poverty among which minorities.344
Hence, the government was pushed to intervene in order to solve those
disturbances and look for solutions to ameliorate the living conditions of those categories and
the whole nation.345 Moreover, many programs were established to end racial discrimination
within Americans, and also to ban the poverty that appeared in the midst of prosperity.346
344
Robert .Lieberman, op.cit., pp.166-167.
345
André. Kaspi, op.cit., pp. 31 – 42.
346
B. Jansson, op.cit., p.
64
Therefore, Kennedy proposed his famous “New Frontier” to improve the social
and economic conditions of the American people. Yet, the latter president was assassinated,
and Lyndon Johnson continued his New Frontier domestic agenda under his “Great Society”
legislative program.
Indeed, Lyndon Johnson’s Great Society domestic agenda, called the “Second
Big Bang”
347
of social reform, was comparable in scope to Roosevelt’s New Deal, and it
sought to end poverty and discrimination. Unlike the 1950s, the 1960s were marked by an
extensive development of social reforms and notable development of the welfare state that
emerged during the New Deal.
348
All in all, that period was characterised by a return of
social reforms and the expansion of the welfare state.349
Figure 2: Federal grants for welfare services, 1953-1965.350
347
C. Howard, op.cit., p. 54.
348
Norman. Ginsburg, Norman. Ginsburg, Divisions of Welfare: A Critical Introduction to Comparative
Social Policy, Sage Publications Ltd, London, 1996, p.98.
349
R .Lieberman, op.cit, pp.166-167.
350
Sophie R. Dales, ‘Federal Grants’, Social Security Bulletin, (29 June 1966), p.14, cited in R.Lieberman,
op.cit., p.166.
65
Figure (2) shows the federal government’s funding for social services from 1953 to
1965 in the United States. As it can be inferred from this chart, little money was spent for
welfare services prior to 1960, because the federal government did not encourage new
reforms. That is to say, a very small progress of social reforms at that time, and a slight
expansion of the welfare state, had taken place.351 By 1960, however, the chart shows that the
federal government spent more money to promote welfare to citizens, expand the welfare
state, and establish many social reforms.352 Hence, during the 1960s a substantial and steady
increase of social reforms as well as welfare services had occurred.
1) Economic and Social Conditions in America in the early 1960s
Despite the postwar prosperity that Americans enjoyed, the rate of poverty was
high in both urban and rural areas. Moreover, the economic situation of the nation at that
time was stable. Unfortunately, many problems existed such as racial discrimination,
economic inequality, and inadequacy of social reforms as well as laws.353 However, these
problems were the main factors that pushed the federal government to intervene so as to put
an end to such problems and promote welfare for all American citizens throughout the
1960s.354
1.1)
Synchronism of Poverty and Affluence
In the very late 1950s until 1960, America was prosperous. Yet, the rate of
poverty was high.355 According to the economist John Kenneth Galbraith356 the author of the
book The Affluent Society published in 1958, America was rich and affluent during the post –
351
C. Howard, op.cit., p.54.
352
R. Lieberman, op.cit., p.167.
353
Ibid.
354
B .Jansson, op.cit., p.281.
355
Rodney. Carlisle, (Ed.), Geoffrey .Golson, (Ed.), America in Revolt in the 1960s and 1970s, ABC-CLIO,
Inc., Santa Barbara (California), 2008, p.45.
356
John Kenneth Galbraith has been America’s best –known economist since the 1950s. throughout his
career , he was deeply involved in issues of poverty and development . Gwendolyn. .Mink, Alice.
O’Connor, op.cit., p.57.
66
World War II. Yet, poverty existed in the midst of affluence. For him, at that time, poverty
was “more nearly an afterthought”357, comparing it to the poverty of the Great Depression.
Bruce Jansson points out: “A strange combination of affluence and prosperity coexisted as
the nation entered the 1960s.”358 In addition, Rodney Carstile and Geoffrey Golson say:
The new post-war baby boom helped fuel a
growth in consumerism and a new suburbia [….]The
reality was something different [….] a subclass of
poor continued to exist. The problem of poverty
within the world’s richest nation was something of a
paradox. [….] many got rich and others did not.
Pockets of poverty remained in many cities and rural
landscapes.359
Figure 3: Poverty Rates, 1949-95.360
357
Ibid.
358
B. Jansson, op.cit., p.281.
359
R. Carlisle, G. Golson, op.cit., p.45.
360
Michael. Tanner, op.cit., p.14.
67
According to Figure (3) the rate of poverty was high in the late 1950s and early
1960s, then it fell dramatically throughout the 1960s.That is to say, despite the fact that
America was prosperous during the postwar era, many people lived in poverty and misery.
The rising rate of poverty stimulated hot debates among public opinion and politicians who
looked for its causes and remedies.
1.2) Racial Discrimination and Economic Inequality
Serious social problems existed mainly in the South and Southwest regions, in
which African Americans, Latinos, and Native Americans experienced harsh living conditions
as well as deprivation from their fundamental rights.361 They suffered from racial segregation,
persistent poverty. They were not permitted to vote, use public facilities and transportation as
well as live in White neighbourhood. Carlisle and Golson point out:
African
Americans
and
the
growing
number of Hispanics were disproportionately poor.
The
Jim
Crow
South
not
only
meant
disenfranchisement of Afro- Americans, a block to full
voting rights, but segregation in public and private
facilities[....] minorities still had the lowest life
expectancies and levels of education but the highest
rates of infant mortality and crime.362
African- Americans were also marginalised in the North. Indeed, in the 1940s and
1950s, millions of African Americans migrated from the South to the North. By doing so,
they sought to join their families or friends, find jobs and escape from oppression. Many of
them settled in big cities such as California, New York, Pennsylvania, Ohio, Michigan, and
Illinois.363
361
Ibid.
362
R. Carlisle ,G. Golson, op.cit., pp.45-46.
363
Michael B. Katz, Marc J. Stern, op.cit., p.107
68
Nevertheless, they were disenfranchised and they were not allowed to live in
White areas, to get skilled jobs, participate in unions and access superior school system. Thus,
leaders of African-American Churches had become more conscious about the fact of racism;
therefore, they encouraged African Americans to ask for their rights.364
In 1960, the American society was characterised by an extreme economic
inequality despite its prosperity. Poverty existed in low-income urban and rural areas such as
Appalachia in which infant mortality, housing, health, and income problems were widespread
as in Third- World nations.365
1.3) Inadequacy of Laws and Social Reforms
In 1960, such programs as Social Security, unemployment insurance, and AFDC
provided a very inadequate safety net.366 Indeed, AFDC was administered by notorious
authorities who violated the rights of many recipients. Moreover, Southern states paid low
benefits under the latter program. Furthermore, no funded nutrition programs existed. Hence,
many people including those who received insufficient AFDC payments suffered
malnutrition.367
The federal government did not establish any important medical programs;
therefore, poor people depended on undefended country and municipal hospitals.368 Besides,
there were no clinics for pregnant women, infants, or family planning.369 In addition to this,
the federal government could not also guarantee health insurance programs; thus, many
elderly persons were not able to pay their medical bills after they lost their private medical
364
Ibid.
365
Ibid.
366
B. Jansson ,op.cit., pp. 281-282.
367
Ibid.
368
M. Katz, M. Stern, op.cit.,p. 108.
369
R. Carlisle,G. Golson, op.cit., p.47..
69
insurance they received during the postwar period.370 Social Security pensions that were
received by millions of elderly people helped them survive economically.371
Moreover, women who replaced male workers- who joined the military during
World War II- lost their jobs once veterans came back to their home country.372 Those who
remained in the labour force occupied such low-paying jobs as: clerical, check out, sales,
nursing, and teaching.373 In addition to low-wages, women workers received no insurance.374
In other words, women were one of the main categories that were marginalised by the welfare
state apparatus in 1960.
Blue- collar workers, who dealt with risky working conditions in chemical,
plastics, pesticide, and assembly-line plants, did not receive sufficient safety regulations, as
well.375 Many of them lacked private health insurance and they were compelled to depend on
charity medicine in public hospitals in case they would become desperately sick.376 To the
best of my knowledge, those workers were deprived from their rights and they did not receive
any subsidies from the government and the welfare state apparatus marginalised them. One
can understand that, not only minorities were neglected from their rights of welfare, but also
white people.
People with physical disabilities, mental illnesses as well as development
weaknesses faced many problems within the American society, and they received no help
from their government. That category of the American population was completely
marginalised. Persons who suffered from severe mental problems were sent to hospitals
because only few community programs existed to help them, and their rights were not
370
Charles. Noble, Welfare as we Knew it: A Political History of the American Welfare State, Oxford
University Press, New York, 1997, pp. 88-89.
371
Ibid.
372
Ibid.
373
Ibid.
374
B. Jansson, op.cit., The Reluctant Welfare State: Engaging History to Advance Social Work Practice in
Contemporary Society, p. 282
375
Ibid.
376
Ibid.
70
protected within institutions.377 Indeed, many mental institutions served as a storehouse for
older persons who were not allowed to access community-based services.
People with physical handicaps were also ignored and they received no assistance
from the federal government. Besides, children with development incapacities and their
families were hopeless, because they were not welcomed in schools and only little
community–based services existed to help them.378
It follows that, in 1960 there was a shortage of Social Security services. Moreover,
there were no federal programs that guaranteed health care for American citizens particularly
old people, mentally, and physically handicapped people .Moreover, most of them lived
below the poverty level. Women worked in low paying jobs, and received no day care
assistance. In addition to this, minorities were deprived from their natural rights and they were
marginalised by the welfare state apparatus.379
In other words, in addition to inadequate laws and social programs, public
discrimination existed in 1960 against women, people with colour, unprivileged white people,
and disabled people. Those circumstances and others paved the way to the thrust of many
social reforms during Kennedy’s and Johnson’s Administrations.
2) The New Frontier and the Return of Social Reforms after 1960
The “rediscovery” of poverty in America and John Kennedy’s attention to it in
the 1960 presidential campaign marked the national political agenda throughout the decade.380
When Kennedy died, President Lyndon Johnson declared the “War on Poverty”, and therefore
he engaged his administration to expand a welfare state that was established during the New
Deal.381
377
M. Katz, op.cit., p. 54.
378
Ibid.
379
M .B. Katz, M.J. Stern, op.cit., p.180.
380
R. Lieberman, op.cit., p.166.
381
Ibid.
71
John Kennedy had proposed his New Frontier domestic agenda, an array of
programs that sought to solve the nation’s economic and social problems. The latter pledged
to use the central government to improve America’s economy by creating new frontiers in
science, education, social welfare, and economic policy.382 The term New Frontier was used
for the first time by President Kennedy when he accepted the Democratic nomination for
president in July 1960. He said: “We stand today on the edge of a New Frontier... the choice
our nation must make (is) between the public interest and private comfort—between national
greatness and national decline.”383
The sluggishness and the slowness of social reform that marked the 1950s in
America ended by the election of Kennedy in 1960.384 Moreover, shifts in public opinion
enabled him to call for a thrust of social reforms. Indeed, poverty and social reforms were
neglected during the 1950s. Furthermore, the federal government had not even tried to define
poverty before the early 1960s.
That is to say, a new window of social reforms opened during the 1960s.
Therefore, many scholars of social policy and historians consider Kennedy as a sociallyminded leader whose legislation was defeated mainly because he faced a conservative public
as well as Congress.385
Though Kennedy sought to accomplish the New Deal liberal strategies, he
believed that Roosevelt’s schemes were old-fashioned and that they would not be able to
tackle social and economic problems that persisted during a prosperous period. Furthermore,
382
Paul. Boller, Presidential Campaigns: From George Washington to George W. Bush, Oxford University
Press, Oxford, 2004, p.298.
383
Michael. Eidenmulle, Great Speeches for Better Speaking: Listen and Learn from History's Most
Memorable Speeches, McGraw-Hill Companies, USA, 2008.p.88.
384
B. Jansson, op.cit, p.283.
385
Michael. Flamm, David. Steigerwald, Debating the 1960s: Liberal, Conservative, and Radical
Perspectives, Rowman & Littlefield Publishers, Inc., Maryland, 2008, p.30.
72
according to Kennedy despite of prosperity, poverty existed in both urban and rural places.
Bruce Jansson cleverly suggests:
Kennedy regarded New Deal reforms, which
provided economic resources and jobs to the poor, as
outmoded in an affluent era when, he believed that
problems of poverty involved intergenerational
pockets of poverty in inner cities and rural areas.386
2.1) Cultural and Structural Accounts of Poverty
Kennedy accepted both cultural and structural accounts of poverty that were
conceived by many scholars the main explanation of that social phenomenon. The cultural
account is based on the assumption that poor people are poor mainly because they do not
perceive the value of education.387 However, the structural justification is based on the belief
that technology and automation made many people with few skills and education
unemployed. In both cases, the solution was to change poor individuals themselves by
providing them with various positions or giving them training or education.
The latter explanations of poverty were based on questionable hypotheses. Despite
the fact that structural unemployment exists, many researchers suggest that low-income
persons can find a job; yet, they would remain subjects to short-term periods of
unemployment by working in seasonal occupations or firms.388 Moreover, many people with
colour and women were compelled to work in low-paying, unskilled, or semiskilled
occupations.389
386
B. Jansson, op.cit., p. 283.
387
M. Flamm, D. Steigerwald., op.cit., p.30.
388
B. Jansson, op.cit., p.285.
389
Ibid.
73
The assumption that poor people have a distinctive culture was not true, merely
because, poverty is an immediate situation that is subjected to alterations.390 That it to say,
paupers' lives would improve through finding a job. Indeed, the different accounts of poverty
and unemployment that were widespread in the 1960s, paved the way to many policies that
sought to improve the living conditions of poor people, through promoting services and
training for them. 391
Yet, Kennedy faced different political problems in 1960. After that he was
elected president, voters and many Americans did not give him the green light to push
measures through Congress to address poverty and discrimination issues. Besides, a clash
emerged within the Democratic Party itself between Southern conservatives and Northern
liberals.
In fact, Southern conservatives were against the legislation of domestic
reforms. However, Northern liberals, including Senator Hubert Humphrey claimed that
Kennedy developed a range of social reforms, such as executive orders and legislation to
protect the rights of African Americans in the South. 392
2.2) Michael Harrington’s Writings
In 1962, Michael Harrington published a very influential book entitled The Other
America, in which he talked about the fact of poverty in America. This book had an impact on
Kennedy’s attitude towards poverty; hence, he asked the Chairman of his Council of
Economic Advisers, Walter Heller to launch a war on poverty.393
That assault against poverty was continued under the administration of Lyndon
Baines Johnson. Moreover, that book made many Americans more conscious about the fact of
390
James. Patterson, Great Expectations, The United States, 1945-1974, Oxford University Press, Oxford,
1996, p.459.
391
Ibid.
392
Ibid.
393
W . Peterson, op.cit, p.9.
74
poverty that existed in a time when it must not exist. O’Connor justifies the impact of
Harrington’s book. He points out:
Many scholars commenting on the 1950s and
early 1960s argue that the publications of Michael
Harrington‘s book The Other America (1962) and
subsequent reviews of the book lifted the collective
blinders about the real nature of poverty in America [….]
Harrington’s impact was such that he received audiences
with the Kennedy’s and Johnson’s administrations.394
From Michael Harrington’s perspective, the persistence of poverty in the United
States during the 1960s was due to other problems rather than income losses from
employment, premature death or disablement of the breadwinner, as well as insufficient
income in the retirement years.395 According to the classic and traditional concept of the
welfare state, the loss of income is regarded as the root and central cause of poverty.396
Thus, for Harrington, the real explanation was thought to be the low-labour
productivity of the poor and not the loss of income.397 In other terms, a new tendency
emerged to explain the causes of poverty in the 1960s, and it assumed the lack of job
experiences and skills the main factor that contributed to poverty. That is to say, poor persons
were poor because they lacked enough job skills to get a sufficient wage for a decent and a
dignified life.398 According to the latter, despite the fact that poor people worked hard, they
could not prevent themselves from poverty.
394
Brendon. O’Connor, A Political History of the American Welfare System: When Ideas have
Consequences, Rowman & Littlefield Publishers.Inc., Oxford, 2004, p.55.
395
W. Peterson,op.cit., p.8.
396
Ibid.
397
Ibid.
398
Ibid.
75
In addition to this, poor people are powerless vis- à- vis the institutions that shaped
their lives at the community level. Indeed, in the jargon of social sciences, and according to
the opportunity theory of poverty, the causes of poverty or its “pathology” lay in the
community rather than the individual itself.399
These explanations of poverty were very useful not only for the Kennedy
Administration, but also the Johnson Administration to reduce the rate of poverty in America.
Hence, in the following sections in the same chapter, we are going to see that President
Johnson emphasised job training and community action programs throughout his
administration to fight the poverty that persisted in a period of affluence.
2.3) The Impact of the Civil Rights Movement on Social Reform
The main factor that pushed Kennedy and the whole nation to initiate new social
reforms was the Civil Rights Movement. It started when a young African -American minister,
Martin Luther King, Jr., was chosen to head a bus boycott in Montgomery, Alabama, to
protest against a policy that obliged African-Americans to sit in the back of the bus.400
Their protests were fruitful and the result was the repeal of that racist policy.
Furthermore, the bus boycott paved the way to a series of protests against segregation in
public transportation, lunch stands, train stations, interstate swimming pools, public schools,
and colleges as well. 401
In addition to this, the murder of Emmett Till in 1955, an African -American child
from Chicago who was visiting his family members in Mississippi, caught the attention of
African-Americans in the North and the mass media.
402
Therefore, the civil rights struggle
forced political leaders to look for remedies for social problems that persisted within the
American nation.
399
Ibid.
400
B .O’Connor, op.cit., p.55.
401
P. Boller, op.cit., pp.298-300.
402
Ibid.
76
The Substantial augmentation of the Civil Rights Movement’s protests pushed the
Kennedy Administration to intervene. Hence in 1961, the Committee on Equal Employment
Opportunities was created under his administration. That committee sought to abolish
discrimination at work. Hence Charles Noble argues: “The administration’s early record was
not entirely without merit. It created the Committee on Equal Employment Opportunities in
1961 to investigate discriminatory hiring practices.”403
Kennedy realised that he needed the votes of both Southern Democrats and liberal
Democrats to enact his domestic and foreign policies. Liberal Democrats pushed him to enact
civil rights measures and issue executive orders to ban job discrimination. Therefore they
introduced a series of Civil Rights Bills in Congress due to ongoing violence and asked
Kennedy to support them.404 Thus, in 1963 Kennedy proposed his civil rights legislation so as
to ban racial discrimination in school, public places, and voter registration.405 Hence, Charles
Noble points out: “ In May 1963 … Kennedy propose (d) long-delayed civil rights legislation,
including provisions covering voting rights, public accommodations, and public
education”.406
2.4)
Outcomes of the New Frontier
Kennedy’s attempt to increase the minimum wage was successful and it was
passed under the recommendation of unions. Moreover, in 1961 he established the Area
Redevelopment Agency to increase employment in poor rural areas such as Appalachia, by
affording loans and funds for businesses and improving the systems of transportation.
After that Congress established a commission in 1955 to solve the problem of
persons who had been discharged from mental hospitals, a report was written for that purpose
403
404
C. Noble, op.cit., p.91.
B. Jansson, op.cit., p.286-287.
405
Ibid., p.289.
406
Ibid.
77
and it paved the way to the intervention of government.407 The commission’s report that was
entitled “Action for Mental Health” was issued in 1961, and it pushed the federal government
to finance community-based mental health services. 408
Furthermore, Kennedy secured the passage of the Community Mental Health
Centres Act of 1963 which guaranteed federal funding for the construction of mental health
centres.409 That act was amended rapidly and it provided funds for workers in those centres.
That act led accordingly to the creation of interstate network of centres that gave outpatient
services to millions of American citizens.410
Many scholars realised the remarkable expansion of AFDC rolls in the early
1960s. Indeed, the federal government provided 75 % of funds to states so as to encourage
local welfare departments to promote social services for AFDC beneficiaries.411 The
substantial growth of AFDC recipients was caused by the migration of many AfricanAmericans to urban areas in the North and the South, the lack of jobs for unskilled female
workers, and finally the absence of day care assistance. 412
According to many economists, “insufficient investment capital” led to regular
recessions, unemployment, and the slowness of economic growth.413 Therefore, with
combination to Walter Heller’s advice, Kennedy proposed in 1962 to raise “depreciation
allowances” for business and permit a “tax credit” for investments.414 Meanwhile, other
proposals were passed and they sought to reduce taxes paid by businessmen and wealthy
people. Those tax measures stimulated investment and economic growth.
407
Ibid.
408
C. Noble, op.cit., pp.90-91.
409
Ibid., p.92.
410
Ibid., p.93.
411
Ibid.
412
W. Peterson, op.cit., p.8.
413
M. Flamm, D. Steigerwald ,op.cit. , p.17.
414
Ibid.
78
The Manpower Development and Training Act (MDTA) was passed under
Kennedy’s leadership, and that legislation helped unemployed persons who lacked skills to
find a job. Therefore, thanks to that act, 600.000 workers had completed technical training by
1968. The MDTA represented the first major job-training program since the New Deal work
relief programs did not focus on training.
Thus, Kennedy’s New Frontier policies and programs, whether proposed or
enacted, were completely different from that of Eisenhower’s ones. They were more liberal
and generous with needy people living in the United States and in other nations. Proponents
argued that his policies made from America an open-handed and hopeful nation. Many
opponents assumed that they reflected too much dependency on the federal government.
Moreover, the Kennedy Administration was characterised by the return of social
reforms to Americans’ lives. Kennedy succeeded to pass through Congress many proposals as
the Manpower development and Training Act, Area Redevelopment Agency, the Community
Mental Health Centers, the expansion of AFDC rolls, as well as preparing the ground for civil
rights legislation.
415
Yet, Kennedy faced a Republican and southern Democratic Congress
that tried to block many of his proposals. Besides, he expanded military spending to contain
Communism and to prepare the nation for any wars from the Soviet Union and China.
Unfortunately, Kennedy was assassinated in 1963 and many of his social
legislations were not accomplished. His program, however, was carried out by Lyndon
Johnson, who pledged to provide a sense of continuity and stability by keeping most of
Kennedy’s cabinet and advisers. The latter promised to support the social and economic aims
of President Kennedy’s New Frontier, and to guarantee the enactment of many of the New
Frontier legislative proposals through Congress.416
In fact, Kennedy’s assassination, Lyndon Johnson’s landslide victory over the
conservative Republican Barry Goldwater in the 1964 election and other factors, enabled
415
Ibid., pp.8-9.
416
K. Marshall, Great Society, Microsoft® Student 2008. Redmond, WA: Microsoft Corporation, 2007.
79
Lyndon Johnson to push a raft of measures through Congress during the 1960s and expand
accordingly the scope of the welfare state that emerged during the New Deal.417
3) The Great Society and the War on Poverty
Lyndon Johnson proposed his “Great Society” legislative programs to Congress
with analogy to Roosevelt’s New Deal domestic agenda. His programs intended to put an end
to poverty and racial discrimination; hence, Brandon O’Connor points out: “Clearly, the
approach sought to combat both poverty and discrimination.” Moreover, Lyndon Johnson
declared in a speech on May 22, 1964:
We have the opportunity to move not only
toward the rich society and the powerful society, but
toward the Great Society that demands an end to
poverty and racial injustice, to which we are totally
committed in our time.418
The Great Society resembled Franklin D. Roosevelt’s New Deal domestic agenda.
It was similar in scope and ambition to his famed 100 days. Nevertheless, there is a very
distinctive feature that distinguishes Johnson’s programs from that of Roosevelt’s ones.
Roosevelt succeeded to develop federal income as well as insurance programs for
economic security; whereas, Johnson extended federal programs into domains that were not
taken into account by the federal government previously.419 The legislative reforms of the first
years of the Great Society highlighted the scope of the Johnson administration initial attack on
poverty. Hence O’Connor explains:
417
W. Peterson, op.cit., p.8.
418
Lyndon B. Johnson, Great Society Speech, 1964 Public Papers of the Presidents of the United States,
Lyndon B.Johnson, Book I (1963-64), pp. 704-707.
419
C. Noble, op.cit , pp.101-102..
80
The key reforms were Federal Aid to
education, an expansion of Medicare and Higher
education funding, the Housing Act, which included
rent subsidies for the poor; Operation Head Start ;
man power training; the establishment of the teacher
corps; and the passing of new mental health,
environmental mass transit, and voting rights
legislation.420
Lyndon Johnson wanted to be the most successful President in the American
History through his domestic and foreign programs. He wanted to exceed even Roosevelt‘s
accomplishments at home and abroad. Moreover, he wanted to gain bipartisan support from
both conservatives and liberals.421 According to Wallace Peterson, it was thanks to Lyndon
Johnson that many acts were passed and many programs were established, he argues:
Major civil rights acts were passed, and the
Voting Rights act became law, along with the Economic
Opportunity Act, the cornerstone of the war on poverty,
Medicare and Medicaid, federal aid to education, and
the food stamp program.422
For Bruce Jansson, the Johnson Administration achieved major successes that
were similar to Franklin Roosevelt’s such as : providing federal funds for public schools for
the first time in history, medical insurances for the elderly, financial assistance for health care
directed to the poor, legal aid for the poor, job training for poor teenagers, implementation of
civil rights for African Americans, nutritional programs, preschool programs, community
development projects, health care for migrant labour, as well as medical aid for pregnant
women and children.423
420
Ibid.
421
Ibid.
422
W. Peterson, op.cit., p.8.
423
B.Jansson, op.cit, p.290.
81
3.1) The War on Poverty
Lyndon Johnson launched also a war on poverty which was part of his vision of
a “Great Society”, a set of social and reform legislation that he put together throughout his
campaign of the 1964 presidential elections in his own right424
The War on Poverty was
launched in 1964 by Lyndon Johnson and it sought to “promote opportunity by focusing on
four main areas: education, job training, civil rights and juvenile delinquency”.425 That is to
say, in his fight against the newly discovered poverty, Johnson focused on the most sensitive
domains that included education and job training that were neglected during the Roosevelt
Administration, as well as Civil Rights that Kennedy failed to enact, and problems related to
youth.
The root of poverty that existed during the 1960s was explained by the low
labour productivity. That is to say, poor people could not lift themselves out of poverty
because they lacked sufficient job skills. This explanation stimulated job training and
community action programs during the Johnson Administration.426
The Economic Opportunity Act (EOA) passed in August 1964 through Congress
under the initiative of Lyndon Johnson and it is regarded the cornerstone legislation of the war
on poverty. Job training is regarded as the centerpiece of EOA and it was used for such
programs as Job Corps, Neighborhood Youth Corps, and the Work Experience Program.
It should be noted that, it was via community action programs that poor people
could participate in the fight against poverty in the United States of America.427 That is to say,
Lyndon Baines Johnson was against the idea that the government should give money directly
to needy people.428
424
Ibid
425
B. O’Connor, op.cit., p.58.
426
W. Peterson, op.cit., p.10.
427
Ibid.
428
Ibid.
82
Moreover, during his first years of presidency, Johnson pushed Kennedy’s Civil
Rights Bill through Congress. And in order to ensure the passage of that bill, he said to
Congress that “No memorial oration or eulogy could more eloquently honour president
Kennedy’s memory that the earliest possible passage of the Civil Rights Bill for which he
fought so long.”429
Therefore, the Civil Rights Act was passed in 1964, and it was the most
significant piece of legislation passed by Congress since the Reconstruction in which the
federal government assumed a major role in protecting the voting rights of African Americans in the South. The latter act sought to end racial segregation at schools, work,
as well as public places.
430
Moreover, the Voting Rights Act of 1965 paved the way to the
enfranchisement of African -Americans.
Head Start programs were initiated in 1965. They sought to strengthen the learning
readiness and ability of preschool children, from three to five years, whose family income is
below the poverty level.431 In other words, the latter programs were designed for the sole
purpose to enhance the intellectual, social, as well as the emotional growth of children who
live below the poverty line. They were initiated in the Office of Economic Opportunity
(OEO).432 The Head Start Bureau has become the “linch-pin” of the Administration of
Children and Family of the Department of Health and Human Services.433 Its services are in
education , health, social services, and nutrition .
The 1965 Elementary and Secondary Education Act (ESEA) was enacted to ensure
equity in education for students, and pushed the federal government to help local school
429
W. Chafe, op.cit. , p.230.
430
Robert D. Loevy (Ed.) et .al., The Civil Rights Act of 1964 : The Passage of the Law that Ended racial
Segregation, State University of New York Press , State University of New York (Albany), 1997, pp.211212.
431
Cynthia L. Jackson, African American Education: A Reference Handbook, ABC-CLIO, Inc., Santa
Barbara (California), 2001, p.8.
432
Ibid.
433
Ibid.
83
districts:
“with scholarships, grants, and work-study programs.”434 Moreover, bilingual
education was introduced as well as special education which helped millions of children with
learning disabilities. 435
It follows that, in his war against poverty, Johnson sought to establish national
programs that touched several domains; hence, he did not focus on economic programs at the
expense of social ones. Moreover, his proposals were creative, ambitious, and complementary
because he did not establish already existed programs.
As it have been already noticed in Figure (3) (see page 66), the rate of poverty
declined noticeably throughout the 1950s and the period that preceded the War on Poverty.
That is to say, Johnson’s war on poverty was successful and it efficiently decreased the rate of
poverty.
Nevertheless, many scholars, policy makers, and presidents as Richard Nixon,
firmly believed the War on Poverty programs did nothing to stop the poverty that existed
during the 1960s. This remains a moot point, however, about Johnson’s War on Poverty.
Indeed, the decline of the poverty rate started bottoming out during the late 1960s.436 Thus,
despite his promise of “guns and butter”, Lyndon Johnson’s escalation of the Vietnam War
weakened his War on Poverty.437
434
Ibid.
435
Joseph. Califano, What was Really Great about the Great Society: The Truth behind the Conservative
Myths, October 1999 at http://www.washingtonmonthly.com/features/1999/9910.califano.html accessed in
15th may, 2009.
436
Ibid.
437
M. Katz, op.cit., p.18.
84
3.2) Factors that Facilitated the Enactment of the Great Society Schemes
Lyndon Johnson’s legislative successes are explained by the following factors.
Above all, the Kennedy’s assassination made the path toward reform easy for Lyndon
Johnson. The latter was equipped by Kennedy’s agenda which consequently facilitated the
task of his legislative programs.438
Moreover, Lyndon Johnson was aided by an ongoing pressure form the Civil
Rights Movement that stimulated public opinion in the North. Thus, northerners had become
more concerned about the needs and problems of the marginalised people, particularly
Africans-Americans and poor people.439
In addition to this, Lyndon Johnson was very sympathetic with people in need.
Besides, he was always keen to pursue social reforms, write legislation, and seek its
enactment.440 Hence, his programs targeted poor people who lacked the minimum necessities
of life, answered the problems of various interest groups, and addressed also people who lived
in suburbia. In this respect Wallace Peterson argues:
There were tax cut for big business, air and
water pollution standards for environmentalists, truth
in packaging for consumers, a model cites program,
funds for low- cost housing, federal assistance for mass
transit, higher subsidies for farmers, money for major
additions to the national park system, establishment of
a national foundation for the arts and humanities for
intellectuals, and many billions for regional economic
and social development.441
438
W. Peterson, op. cit., p.8.
439
Ibid.
440
Norman. Ginsburg, op. cit., p.90.
441
Ibid.
85
What facilitated also the task of social reforms and the expansion of the welfare
state during Lyndon Johnson’s Presidency was the election of a liberal and moderate
Democratic Congress.
442
After that he won the 1964 elections with a smashing victory over
the conservative Republican Barry Goldwater, he got large Democratic majorities in both
Houses of Congress.443
Therefore, Lyndon Johnson was able to push through Congress large-scale
domestic measures that greatly expanded the role of the federal government in social policy,
accordingly. Besides, because the majority of members in Congress were Democrats, Johnson
was not challenged by the conservative coalition of Republicans as well as southern
Democrats.444
Lyndon Johnson received also an extraordinary assistance from Republicans who
nominated the conservative Republican Barry Goldwater in 1964. The latter nominee attacked
the legacy of the New Deal programs such as Social Security and the Tennessee Valley
Authority.445 Therefore, he was severely defeated by Lyndon Johnson.
3.3) Medicaid, Medicare and the Expansion of the Welfare State
Amendments in 1965 to the Social Security Act of 1935 paved the way to the
creation of Medicare and Medicaid as Titles XVIII and XIX of the Social Security Act.
446
Indeed, both Medicare and Medicaid amendments were the last additions to the formal
structure of the American welfare state that was created in 1935.447
442
C. Howard, op.cit., pp. 54-55.
443
Ibid.
444
C Noble, op.cit., p.92.
445
Ibid.
446
Charles. Lockhart , Gaining Ground : Tailoring Social Programs to American Values, University of
California Press, London, 1989, pp.94-95.
447
W. Peterson, op.cit., p.11.
86
Medicare is a program of health care for elderly persons, and it is an in –kind
type of transfer program.448 In other words, it is not means-tested, and hence it falls under the
Social Insurance category. Medicare received widespread attention because of the political
power held by elderly people and the extensive discussions for their needs in the preceding
years.449 The program was divided into two main parts. Part A of the program financed
particular hospital services of the elderly.
The participation in Part A was obligatory, and it was funded through a payroll
tax on workers as well as employers.450 Medicare enabled elderly persons who could not pay
for their medical bills without selling their possessions.451 Part B was funded by the
combination of monthly payments on elderly persons and general expenditures of the federal
government. 452
On the other hand, Medicaid is a program of medical support for the poor; it was
enacted in 1965 and it was also an in-kind transfer program. It is means –tested; i.e., it falls
under the Public Assistance category.453 The latter program addressed the medical needs of
welfare recipients as well as needy people who could not pay their medical bills.454 Like
AFDC, Medicaid was a matching grant in which states assumed responsibility to provide
some basic services such as outpatient and emergency care services.
448
Ibid
449
C. Noble, op.cit., pp.102-103.
450
Ibid.
451
W. Peterson, op.cit., p.11.
452
Ibid.
453
Ibid.
454
C. Lockhart, op.cit., p.96.
87
3.4) The Extension of AFDC and the establishment of the Food Stamp Program
The number of complainers about the AFDC recipients augmented dramatically in
1967. The main reason of that increase was the turbulent protests that emerged from the huge
number of persons -who fled rural areas to seek jobs in urban ones- asking for their rights of
AFDC.
Moreover, by the late 1960s, women received also AFDC benefits, Medicaid,
Food Stamps, day care assistance as well as other related work payments that made many
Americans discontent.455 Indeed, the belief that women should remain at home and take care
of their children was brought to an end in the 1960s. Thus, many conservatives wanted to see
female workers receiving employment instead of welfare so as to reduce federal spending on
social issues.456
Conclusion
The harsh social and economic conditions that shaped the American society
during the 1960s pushed the federal government to appear in the economic and social life of
the American people, once again. Moreover, conservatism that marked the administrations of
Truman and Eisenhower came to an end in the 1960s; and therefore, the liberal thinking
dominated the area of social policy during the presidencies of Kennedy and Johnson.
That fertile liberal political atmosphere helped flourishing the growth of new
social reforms during the 1960s. In addition to this, the interests of intellectuals with
combination to hot debates over poverty at that time paved the way to the intervention of the
federal government in Americans’ matters all along the latter decade. The Federal government
set forth many social reforms to tackle poverty and racial issues. The result was an extensive
expansion of the “liberal welfare state” that was created during the New Deal era.457
455
B. Jansson, op.cit.p.290.
456
Ibid.
457
B. O’Connor, op.cit., p.58.
88
Thus, the “New Frontier” domestic program established by President Kennedy
sought to use the federal government to put an end to the social and economic problems of the
American citizens, and also to promote welfare for them.
Kennedy was, however,
assassinated and his program was carried out under the leadership of President Lyndon
Johnson with the establishment of the “Great Society” domestic agenda. The programs
initiated under Johnson’s leadership brought about real results, reducing rates of poverty, and
improved the living standards for America's poor.458
It should be noted that, the poverty that was “rediscovered” in a period of
extreme affluence as well the social unrest due to protests from many movements, paved the
way to the reappearance of many social reforms during the 1960s. Hence, the scope of the
welfare state created during the 1930s was extensively expanded. It follows that, during the
1960s, America witnessed a period of social reforms and the expansion of the formal structure
of the welfare state that was founded under Franklin D. Roosevelt’s presidency.
458
Encyclopaedia Britannica, UK, 2008 , CD-ROM edition.
89
General Conclusion
Premises of state welfare in America are traced back to the English Poor Laws of
1601 brought by colonists to the New World. Many historians, however, consider President
Franklin D. Roosevelt the founder of the American welfare state. In other words, Roosevelt’s
domestic program called the “New Deal” that sought to improve the country’s economic as
well as social conditions - that was damaged by the 1930s economic distress- paved the way
to far-reaching reforms within the free-enterprise system. The latter reforms laid the
groundwork of the welfare state in America which is based on the concept of government
interventionism in the economic as well as social life of citizens.
It should be noted that the New Deal emerged as a reaction towards the deep crisis
of the free-market capitalism as well as the protests of its victims such as farmers, capitalists,
unemployed people, and mainly elderly persons. Those people called for a more active
federal government that would guarantee their well-being. Indeed, the New Deal reforms that
brought welfare to Americans would be a reference for the future administrations’ social
welfare programs.
The ultimate achievement of Roosevelt‘s New Deal was the establishment of the
Social Security System through the legislation of the Social Security Act of 1935.
In fact, the latter act that was passed during the Roosevelt Administration is considered by
many historians the most important legislation that set the bedrock of the welfare state in
America. It is the cornerstone of social welfare in the United States. The Social Security Act
of 1935 created a long-term program that included unemployment, old age, and sickness
90
insurances. It also consisted of more expanded health care programs, pensions for old people,
as well as fatherless children.
When World War II emerged, Roosevelt turned his attention towards foreign affairs
to protect people from the war and its threats.459 Hence, military spending exceeded social
spending. In addition to this, social reforms were abandoned during that period because both
income and the rate of employment increased substantially. In fact, World War II marked the
end of the New Deal social reforms, except for such reforms that remained intact as the Social
Security Act, the Fair Labour Standards Act, the housing legislation, TVA, and the WagnerStegnall Act. Those programs preserved the structure of the welfare state created during the
1930s.460
Roosevelt firmly believed that a new period of reform would begin when the war
would be over. Yet, the period from 1945 to 1952 was characterised by a conservative
political swing that delayed new reforms in economic and social domains. In other words,
during the Truman Administration there was no progress of the welfare state created during
the New Deal era.
Above all, the Truman Administration- despite promises of establishing a Fair Deal
as a continuation of the New Deal- was compelled to discard social reforms due to many
problems. At the outset, the coalition of Republicans and powerful southern Democrats in the
81st Congress rejected many of President Truman’s proposals.
Besides, Truman focused on foreign affairs more than home affairs for the sake of
the Cold War so as to contain communism and protect the whole nation from its threats. In
addition to this, the task of reconverting the economy of the country from peace time to war
time was not an easy one for him. Another obstacle that Truman faced as well was racism.
Indeed, racists refused to see their government tackling issues of racial discrimination and
generating further civil rights legislation.
459
B. Jansson, op.cit., p.248-249.
460
Ibid., p.249.
91
The Eisenhower Administration was characterised by political ambivalence and
hesitation about social reforms. Eisenhower wanted also to carry out Roosevelt’s New Deal
for the sole purpose to placate Democrats by introducing measures in social and economic
domains, particularly the expansion of the Social Security System. The latter President was
not remembered by achieving important social welfare programs; for, his rhetoric about
economic and social reform as well as welfare was extremely shallow.
It was not until the 1960s, however, that large-scale social reforms were passed,
and the scope of the welfare state that was created during the New Deal era was enlarged
extensively; despite many obstacles such as the escalation of the Vietnam War during the
Johnson Administration. Both Kennedy and Johnson encouraged social reforms.
During the Kennedy Administration, America witnessed a new period of social
reform. Indeed, the rate of poverty at that time was vey high despite the prosperity that
marked the post- war era. That is to say, affluence and poverty coexisted throughout the
decade. Therefore, Kennedy who was influenced by Harrington’s writings about the newly
discovered poverty, sought to make an end to poverty and other social problems, so as to
enhance the living conditions of the whole nation.
For the President Kennedy, the call for a more active government in the social
and economic matters of the American people was necessary. Nevertheless, Kennedy was
unfortunately assassinated and his agenda was carried out by Lyndon Johnson under the Great
Society label. Lyndon Johnson was elected president after a smashing victory over the
conservative Republican Barry Goldwater in 1964, and he launched his war against poverty
and racial discrimination.
President Lyndon Johnson sought also to extend remarkably government’s
involvement in social and economic areas to promote welfare for all people with regard to
their age, health, and colour. His Great Society programs were stimulated by the rediscovery
of poverty, the welfare needs of elderly persons, women, people with colour and disabilities in
the midst of an affluent society. Hence, many social reforms were established among which
92
the War on Poverty, Medicare, and Medicaid. Those reforms are recognised by scholars the
focal extension of the formal structure of the welfare state created during the New Deal era.
It follows that, the welfare state developed in the United States in two main eras
of social reform and prevalent pressure: the New Deal of the 1930s and the extensive
expansion of social programs during the Great Society era of the 1960s. Those two periods
were called the “First Big Bang” and the “Second Big Bang” of the American welfare state,
respectively. Moreover, whenever presidents and their advisers establish social reforms to
promote welfare to citizens, the scope of the American welfare state expands accordingly.
93
Appendices
Appendix One
The Social Reform Puzzle
Source : B .Jansson, op.cit., p.172.
94
Appendix Two
Summary of the Major Provisions of the Social Security Act
TITLE I: GRANTS TO STATES FOR OLD AGE ASSISSTANCE:
Nature of grants:
Secretary of treasury pays to each state 50 percent of the sums expended in a year for
assistance to people over age 65 who are not inmates of public institutions, but not
including that portion of payments that exceeds $30 per month – and 5 percent of the
federal payments are used to administer the programs by the states.
Requirements that states must meet
Each state must:

Have a state plan for old age assistance that is in effect in all political subdivisions of the state and that is mandatory on them.

Pay for the non-federal share of the costs of assistance.

designate a single state agency to administer the plan (or supervise the plan if
local jurisdictions administer part of it)

Establish an opportunity for a fair hearing before the state agency for any-one
who is denied assistance.

Provide for methods of selecting personnel and administering the grants that are
found by the Social Security Board to be necessary for the efficient operation of
the plan.

Provide to the Social Security Board any information and data that it requests.

Pay to the United States one-half of the net amount collected by any state (or its
subdivisions) from the estate of any recipient of old age assistance.
95
Requirements that the Social Security Board cannot impose on the states:
An age requirement of more that 65 years; any residence requirement that excludes any
resident of a state who has resided therein five years during the nine years immediately
preceding the application and who has resided therein continuously for one year
immediately preceding the application..
TITLE II: FEDERAL OLD AGE BENEFITS:
Establishing the trust fund:
An account is created in the U.S. Treasury, knows as the Old Age Reserve Account, to
which funds are appropriated for each fiscal year in an amount sufficient to provide for the
payments under this title to retired persons.
Definition of eligibility:
People who are at least 65 year of age, who have received after December 31, 1963, and
before reaching age 65 total amount of wages not less than $2,000 ineligible categories of
work include:

Agricultural labor.

Domestic service.

Casual labor not in the course of the employer’s trade or business.

Service performed as an officer or member of the crew of a vessel documented
under the laws of the United States government.

Service performed in the employment of state governments or political subdivisions
thereof.

Service performed in the employment of not-for-profit agencies.
96
Amounts of benefits:
If total wages after December 31, 1936, and before the age 65 are not more than $3, 000,
the old age benefit shall beat a monthly rate of one half of one-half of 1 percent of such
total wages. If these total wages are more than $3,000, the monthly rate will be one-half of
1 percent of the first $ 3, 000 plus one-twelfth of 1 percent of total wages that exceed $3,
000 and do not exceed $45, 0000.
TITLE III: GRANTS TO STATES FOR UNEMPLOYMENT COMMISION
ADMINISTRATION:
But in no case shall the monthly rate exceed $85.
If someone dies before reaching 65, there shall be paid to his estate an amount equal to 3.5
percent of the total wages determined by the board to have been paid to him with respect to
employment after December 31, 1936.
The federal government authorized appropriated funds to help states administer their
unemployment compensation laws (title IX discusses the actual unemployment program
provided that the state provides fair and efficient methods of implementing the program;
including fair hearing. (If a state agency denies benefits unfairly; the Board can stop
making further payments to that state.)
The Social Security Board; on collecting funds in the unemployment fund of each state;
will give it to the secretary of the treasury; who will place in the Unemployment Trust
Fund.
Each state agency administering the program pays its benefits from funds from the
Unemployment Trust Fund that are forwarded to it to it by federal authorities.
Title IV: GRANTS TO STATES FOR AID TO DEPENDENT CHILDREN:
States make payments to needy dependent children with the federal government paying to
each state an amount equal to one-third of the total of the sums expended in a given
97
quarter; but not counting the amount of grants that exceed 18 per month with respect to
each additional dependent child.
The term dependent child means a child under 16 deprived of parental support by reason of
death, continued absence from the home, or physical or mental incapacity of a parent – and
the child must be living with his father, mother, grandfather, grandmother, brother, sister,
stepfather, stepmother, stepbrother, stepsister, uncle or aunt in a place of residence
maintaining by one or more of such relatives as his or their own home.
The requirements are similar to those for Title I, but states cannot deny aid to any child
who has resided in the state for one year immediately preceding the application or who was
born within the state within one year of the application if the child’s mother has resided in
the state for one year immediately preceding the birth.
TITLE V: GRANTS TO STATES FOR MATERIAL AND CHILD WELFARE:
There are five parts to Title V:
Part 1:
Provides funds to be paid to the states to enable them to extend and improve services for
promoting the health of mother and children, especially in rural areas and in areas suffering
from severe economic distress. States must have plans for the services funded by the part
approved by the Chief of the Children’s Bureau. ( The state plan must inclide state
contributions to the services and administration or supervision of the spending by the
state’s health agency.)
Part 2:
Provides federal funds to help each state extend and improve services for locating children
with disabilities and providing them with medical, surgical, corrective, and other services
and care, particularly in rural areas and areas with severe economic distress. State plans
must be approved by the chief of the Children’s Bureau.
98
Part 3:
Provides funds for the purpose of enabling the Children’s Bureau to cooperate with state
public welfare agencies to establish, extend, and strengthen public welfare services, called
child welfare services, for the protection and care of homeless, dependent, and neglected
children, and children in danger of becoming delinquent.
Part 4:
Provides funds to the states to allow them to extend and strengthen their programs of
vocational rehabilitation of people with physical disabilities- and to allow them to continue
to carry out legislation enacted in 1920 to provide vocational rehabilitation to persons
disabled in industry or otherwise to help them return to employment.
Part 5:
Provides funds for the maintenance of the Children’s Bureau.
TITLE X: GRANTS TO STATES FOR AID TO THE BLIND:
Nature of the grant:
The federal government pays one-half of the funds expended by a state for aid to blind
persons but not counting expenditures exceeding $30 a month-and 5 percent of the deferral
funds are to be used to administer the program. Inmates of public institutions cannot
receive assistance under this title.
Requirements that states must meet: The requirements are similar to those for title I.
Source: B. Jansson, op.cit., pp.240-242.
99
Appendix Three
GDP during the Great Depression from 1929 to 1940
Source : Bureau of Economic Analysis (BEA) , U.S. Department of Commerce, Bureau of
Economic Analysis, National Economic Accounts, GDP during the Great Depression ,16th March
2007, available at <http://www.housingbubblebust.com/GDP/Depression.html> ,accessed in 12th
May, 2009.
100
Appendix Four
Unemployment rate, 1900-1995
Source : J. Jennnings, op.cit., p.21.
101
General Bibliography
Official Documents
Lyndon B. Johnson, Great Society Speech, 1964 Public Papers of the Presidents of
the United States, Lyndon B.Johnson, Book I (1963-64), pp. 704-707.
Books
ABOTT, Philip, The Exemplary Presidency: Franklin D. Roosevelt and the
American Political Tradition, University of Massachusetts Press, USA, 1990
ALTER, Jonathan, The Defining Moments: FDR’s Hundred Days and the Triumph
of Hope, Simon & Schuster Paperbacks, New York, 2007
BARR, Nicholas (Ed.), The Economics of the Welfare State, Stanford University
Press, Stanford (California), 1993
BOLLER, Paul, Presidential Campaigns: From George Washington to George W.
Bush, Oxford University Press, Oxford, 2004
102
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Abstract
The Present research work sought to elucidate whether there was a
continuation of social reforms after the New Deal era, and if the welfare
state created during the Roosevelt Administration expanded from 1945 to
1969. In other words, it endeavoured to explore to what extent social
reforms were maintained during the post – World War II from 1945 to
1969, and investigate accordingly the scope of the welfare state during
that period. This research explained that the package of social reforms
that were initiated during the New Deal era contributed chiefly to the
creation of the American welfare state. Yet, there was a hold-up of reform
and welfare from 1945 to 1960. A remarkable return of social reforms
and a huge extension of the American welfare state, however, had taken
place during 1960s.Throughout this dissertation, one can deduce that the
American welfare state was successfully extended in two main eras in
which outstanding programs were established: the 1930s and the 1960s.
Hence, the Social Security Act of 1935 that was enacted during the New
Deal -called also the "First Big Bang" of the American welfare state - was
the cornerstone of the administrative structure of American welfare state.
In addition to this, the War on Poverty of 1964, Medicare and Medicaid
of 1965 that were part of the Great Society - called also the "Second Big
Bang" of the American welfare state - were in fact the formal extension
of the welfare state created during the New Deal.
Key Words:
American welfare state; New Deal; Great Society; Government
interventionism; Laissez-faire policy; Social reforms; Fair Deal; War on
poverty; Medicare; Medicaid.