A Dream Translated to Reality
PUBLIC WELFARE is proud to bring its readers this warm and candid article by the former Secretary of Labor and first woman member of the President's Cabinet. In it she reveals the steps by which the social security ideas, which she and Franklin D. Roosevelt had discussed in New York state, came with them to Washington and ultimately became reality, and the crowning point, for her, of a distinguished career. Presently Miss Perkins is on the faculty of the Industrial and Labor Relations School at Cornell University.
It hardly seems possible that a quarter of a century has elapsed since that hot, humid, August noontime when President Franklin Roosevelt signed the Social Security Act. The picture is etched on my mind permanently--the President sitting at his desk and men and women standing around watching him as he read the final sections of the Act and prepared to sign it. Some of these had worked hard and faithfully with enthusiasm, and a sense of mission--some stimulated by loyalty to the party which the President represented--some pioneers in the field, and some come-lately people. There were Senator Wagner and Representative David Lewis who had done much of the educational work of preparing the two Houses of Congress and the people of the country for this kind of legislation which was new and sometimes strange, in theory at least, in the American scheme of things. There were Senator Harrison and Representative Robert Doughton--old standbys of the Democratic party, and chairmen, respectively, of the Senate Finance Committee and the House Ways and Means Committee.
There had been hard feelings when it was rumored that the President would give the Social Security Bill to Senator Wagner and Congressman Lewis, because this bill was clearly a tax bill and an appropriation of tax moneys so raised to a special purpose. And the House Ways and Means Committee and the Senate Finance Committee are jealous masters. I myself had hoped to see Senator Wagner introduce the bill in the Senate, but the President of the United States convinced me that that would be fatal and that the Finance Committees had the right and the duty to it introduce such a bill. And so we had become acquainted intimately with Senator Harrison and Congressman Doughton. Senator Harrison, who knew nothing whatever of the social implications of old age insurance, unemployment insurance, and other matters, but was a great orator and political leader, accepted willingly and even humbly the help and assistance of the young lawyers of the Labor Department who often sat beside him on the Senate steps to assist in answering the questions from the floor. And Congressman Doughton, from the hill country of North Carolina, a veteran of many years service in the House of Representatives, who had never in all his years in Washington stayed out later than nine o'clock at night, accepted an invitation, after months of working together, to come to a celebration party on the night of the signing of the bill. I am in the picture too, as I stood in a plain black dress with a touch of white at the throat, more excited and exultant than any photograph ever showed. For this was the culmination of many years of work and of intensive propaganda for two years.
It is impossible to convey to persons who were not adult in 1935 when this bill became law, the confusions of thought, the lack of experience with this sort of measure, and, above all, the depths of poverty and despair which accompanied the Great Depression and which had been the lash under which political leaders, humanitarians, and people of good will toward other men had worked to secure this great benefit growing out of the terrible times of the Depression. For the proximate cause of this legislation, as indeed most of the other New Deal measures, was the Great Depression which came so suddenly and unexpectedly upon the American people after a long period of apparent high prosperity, luxury living, and with failure to make any provision for so-called "hard times." But the "hard times" came with the crash in October 1929, and the U.S.A. has never been the same again. Almost every element in the society suffered, in varying degrees, of course, great loss, and the speed with which industry reacted to the stock market crash, and the other underlying symptoms of an unsound economy, were startling. Mill after mill, factory after factory closed down or went on half-time, and by early 1930 unemployment on a large scale was a reality, with the accompanying failure of incomes, and therefore failure of money to buy the necessities of life and failure of ability of the people generally to support the market for production goods, and the closing of more factories.
The rise in unemployment and in applications for relief or aid was alarming. This was especially acute in the industrial State of New York where Franklin Delano Roosevelt was then Governor. The Governor and some of us who were in his administration in New York State recognized the necessity for a program, first, of direct relief as the first line of attack on unemployment and its consequent suffering; the provision of public works to take off some of the unemployment (but these are always slow and don't relieve everybody); and, third, a provision by law of unemployment insurance--funds which should be raised through payroll contributions, paid as premiums to the fund, just as the coverage of any insured risk is accumulated.
This idea went to Washington with Roosevelt when he became President in March of 1933. Even the Democratic Party platform on which he was elected President mentioned as one of the desirable programs it would attempt to put into effect, "studies into some form of unemployment insurance." The emergency was very great and made essential an immediate move for large appropriations by Congress to the states, which by this time had largely exhausted their borrowing capacity in order to provide immediate direct emergency relief to thousands of families all over the United States. Harry Hopkins, who had been an emergency administrator in New York State, was called in to devise the emergency work relief project of W.P.A. The Civilian Conservation Corps was established to bring work relief to young men who at that time had no opportunity for work. A Public Works Program was authorized but, like all Public Works Programs, it was slow in getting underway. Nevertheless, all these things were done within the first hundred days.
It was my duty to keep the President constantly reminded of the fact that unemployment insurance was probably the only reality we had discussed which could be looked upon as a preventive of suffering in time of depression in the future. There were plenty of people who countered the suggestion with the grave reminder that to take money out of the economy now, in 1933, and put it aside as reserves to be paid out in the future for future unemployment, was in itself deflationary, and that any such move, however well intentioned, ought to be postponed. I knew in my heart, and I was sure the President knew, that if we postponed a social security unemployment insurance program we were likely never to get it, and certainly not in the near future. The President had talked with me about these matters before I took office, and he had assented to the program I presented, which included unemployment insurance, old age insurance, and health insurance. When I say "assented" I do not mean to imply that he gave me any promise, but that he assented to my suggestion that this was one of our principal works and the one for which I would assume the responsibility.
The political accomplishment of a pattern or program which is thought about in purely abstract terms is much more difficult than one realizes. Not only are there many people with widely differing points of view who must be consulted and must agree on any program which becomes law in the United States, but there are, even to those who think they know most about the subject, vast depths of constitutional problems, financial uncertainties, administrative complications to be dealt with, as well as doubt between methods of accomplishing the same result. And so, among the friends of what we now call Social Security or social insurance, there were wide differences of opinion as to how this might be accomplished. And everyone with every kind of idea brought it to the President and asked him to agree with him.
As the first year of Roosevelt's administration went by we had accomplished something in the way of direct relief, but the problem of prevention in the future was still unsolved. Senator Wagner had put in his bill and hundreds of people had appeared before the Committee studying it, given testimony about it, and made many suggestions for amendments. It was a bill introduced by Senator Wagner with the President's assent, certainly with the purpose of focusing public attention, of educating the public and of making a forum for the discussion of the whole problem. This was an invaluable contribution.
Many of us who were strongly in favor of social insurance spent a great deal of time in that first year in what can be called active public education. I myself made over one hundred speeches in different parts of the country entirely on the subject of social insurance as a means of overcoming and preventing depressions. And it had effect. The Townsend propaganda for the help of aged persons was also having its political effect, and gradually there came to be a climate somewhat more favorable. Two Englishmen, Steel-Maitland and Sir William Beveridge came over in consultation and stayed to make by invitation a good many addresses at chambers of commerce, manufacturers associations and bankers societies about the practicality and the success of social insurance in England. And gradually the idea seemed to be less alarming.
It was at this point that one realized it must be given form and focus. When I saw that Congress was about to adjourn in the Spring of 1934 and that the Cabinet and even the President were preparing to get away for part of the hot weather, I made a suggestion to the President that he at least appoint a committee under his own controls with directions to bring in a recommendation, which he would pass on to Congress in the autumn or at its next session. It was a counsel of despair and yet it proved to be the best possible way to bring this program to a head. The President at once agreed that it was a good idea and pointed out that if he appointed a committee made up entirely of members of his own Cabinet it would be under his control and would not "run wild," as he put it. What is more, it would be friendly and subject to his own political shrewdness and guidance. He accordingly appointed a committee consisting of the Secretary of Labor as Chairman; the Secretary of the Treasury, as representing the financial problems involved; the Attorney General; and the Secretary of Agriculture, as having knowledge not only of the economic problems but of the sufferings from the depression of the farm population generally. To this he added Harry Hopkins who, although not a member of the Cabinet, had directed the direct relief work; and had direct knowledge of all the social implications of such a pattern.
With the public announcement of this we went to work at once.
The President was a very economical soul and at that period, summer of 1934, he was particularly economical. Therefore, when I asked him, "Where shall we get the money to employ people to do the research and planning work necessary?" he answered gaily, "Oh, you'll have to find that money yourself." It was really a pretty bad situation but the Committee solved it eventually. Each department contributed, not money but personnel. All over the government we borrowed people who were capable of the research and planning that were necessary to work out not only the form of the bill but the method of administration. I think the Department of Labor and the Department of Agriculture were the heaviest contributors of personnel. About one-third of all the people in the Department of Labor were made available, temporarily at least, for this work. In addition, Harry Hopkins contributed $125,000 out of his relief money on the agreement that we employ, with this aid, technical people who were then unemployed and so available otherwise for his relief funds.
One soon realized that, although the Cabinet Committee had the final authority and drive and presidential sanction, they could never do the work alone or create the climate and the political support for such a program. Consequently, we organized a Technical Advisory Committee--advisory, of course, to the Cabinet Committee--but were so fortunate as to get Edwin Witte of the University of Wisconsin to act as the director of this Advisory Committee. One of the griefs that one feels today is that Ed Witte has died just this spring, after a long life of heroic and enthusiastic service to the people of the United States. May he "Rest in Peace."
The members of the Technical Advisory Committee were, many of them, high-powered economists and social thinkers and required a good deal of driving. On our very small funds we were able to pay their railroad fare to Washington, but no living expenses while there. Nevertheless they came, many of them people who were released from universities or colleges for the summer, and we had a million dollars worth of work for a very small sum. The Cabinet Committee itself proved more of a problem in its constant changes of thought about how to do this. We eventually appointed a General Citizens' Advisory Committee, largely of course to give to the Cabinet Committee that practical "grass roots" kind of comment that was so necessary to secure the recommendations and comments and criticisms of the labor people and of the business elements in the community and of the social workers. Many insurance companies contributed the services of an actuary to help us with the intricate new problems that were arising in the estimate of the amount of money that would be needed and must be collected in order to meet the particular claims. It was all very confused and complicated, and the wonder of it is that we carried out the President's direction to deliver a report on January 1, 1935; that the report should offer both to the employed persons in every line of work in the United States a benefice of unemployment insurance and the benefits of old-age insurance, and we devised a program for health insurance, if possible.
We settled on the taxing approach to the raising of funds--given a hint of its propriety and effectiveness by a Justice of the Supreme Court who muttered under his breath one day something about the taxing power of the United States: "the taxing power of the government, rely on it and you're all right." We adopted a state-federal form of unemployment insurance while relying on a federal form of old-age insurance. The reason for the state-federal form in unemployment insurance was that the Department of Justice had grave doubts, not about the ability of the United States to collect funds, but about the constitutional ability to distribute the funds on a pattern of social need. By relying upon the state-federal method of legislation we would, in case of an unfavorable decision, still have left the state legislation.
We agreed upon the universal coverage of every employed person in the United States, but unfortunately the Treasury Department balked at this on the ground that the effort to collect from farm employers, domestic workers' employers, and employers who employed a very small number of people would be too much for the Treasury Department. This was a great blow, and what the Treasury has been able to do in devising technical methods indicates clearly that they could have handled the problem of wider collection. The President was so sure that universal coverage would be possible that he even recommended the use of the Post Office as a collection and administration agency and pointed out that in rural areas the Rural Free Delivery men could carry the claims and the benefits back and forth between the central government and the farm worker in remote regions. The plan of post office administration has never seemed practical to me, but it was one of the problems which we had to face.
The problem of how to pay benefits under the old-age insurance to those then aged and needy, was of course never boldly faced. Instead, we recommended a program of public assistance which would take care of those then aged and needy. But the problem of what Witte and Arthur Altmeyer called "the half old," which struck the President as a ridiculous phrase, was a much greater problem. The problem was how to provide an income on retirement which would mean anything at all to those 45 and 50 who had never made contributions to unemployment insurance in their working lives. It was finally solved as we all know, and as time passes, fewer and fewer people are in this category.
The failure to recommend a health insurance program was due frankly to ignorance, lack of time on the part of the Committee, and to the unwillingness or inability of the medical authorities to face the question and to cooperate with the Committee in finding a way to do it. The report went in, therefore, with only the Technical Advisory Committee's report, which the Cabinet concurred in, about the desirability of health insurance and the recommendation that further studies be made to continue it.
These recollections bring the days of this effort clearly to mind, and one is grateful for the intelligence and social conscience which led the American people and the American Congress to accept the report, to tinker it into a more practical form perhaps, and to pass it into legislation which the President could sign in August, 1935, with the statement that it was the "cornerstone of his Administration." And if it was the cornerstone of Roosevelt's Administration, it was for me the high point of my entire life's career. When I saw this bill adopted by Congress with a large majority of votes of both parties, and when I later saw, after a few flurries of opposition in later years, both parties continue to improve it and to broaden its coverage and to make more generous its benefits, I have come to realize that not only was it the crowning act of my working life, but that it was perhaps one of the most useful blessings which time has brought to the American people. I shall never cease to be grateful for the opportunity to have helped this program along. I recall that the President, on the day he signed this bill, with the hungry eyes of a number of people fixed on him, said, as he put the final flourish onto his signature, to MacIntyre, his secretary, "Here, MacIntyre, give this pen to Frances, she's done the work," with one of his flashing and slightly embarrassed smiles which made all expressions of gratitude unnecessary.