The first battle for Social Security
Mills, Nicolaus
IN THE CURRENT debate over Social Security reform, the name of Alf Landon, the 1936 Republican candidate for president, rarely comes up. But it should. Landon made what he called "the bungling...
...YOU'LL HAVE TO SERVE THAT SENTENCE UNLESS YOU HELP REVERSE IT NOVEMBER 3." When they opened their pay envelopes, the warning was even more dire...
...Your Government is still on the same side of the street with the Good Samaritan and not with those who pass by on the other side," Roosevelt told his audience...
...Every message in a pay envelope," FDR insisted, "is a command to vote according to the will of the employer...
...For the rest of us, uncertainty...
...As if that were not enough, the "vast army of clerks" required to administer Social Security, would, Landon insisted, create a bloated bureaucracy that would be a "cruel hoax" on American workers...
...Landon made what he called "the bungling and waste" of Social Security the key to his presidential campaign, and his opposition to Social Security, along with the arguments President Franklin Roosevelt voiced in defending Social Security against Landon, offers a history lesson that deserves our attention...
...A parallel political outcome is impossible to imagine today, but what is not difficult to imagine, if opponents challenge the president's Landonlike proposals as FDR once did, is voters' seeing the battle over Social Security not only in terms of haves versus have-nots but as a referendum on a seventy-year-old social covenant that Americans have made to share the risks of aging with each other...
...Those who suggest that are already aliens to the spirit of American democracy...
...I should like to have it said of my first Administration that in it the forces of selfishness and lust for power met their match...
...Roosevelt's counter to Landon's attack and the pay-envelope scare came in an October 31, 1936, speech at Madison Square Garden...
...Landon's contention that the government was taking workers' money and might never give it back received strong support in the business community...
...Yet rather than explore such remedial options for Social Security, the president proposes an ownership society in which the key to Social Security is private retirement accounts tied to investments in the stock market...
...But they are guilty of more than deceit," Roosevelt went on to say of his Social Security critics...
...The overt class warfare that FDR accused his Republican opponents of waging may be over, but what has replaced it is not the end of class warfare so much as a more sophisticated clash between haves and have-nots...
...Landon's attack on Social Security was stated most sharply in a September 26, 1936, speech, "I Will Not Promise the Moon," that he gave in Milwaukee, Wisconsin...
...There was, he predicted, "every probability that the cash they pay in will be used for current deficits and new extravagances," and in the end impoverish the system...
...Two weeks before the election, workers in Detroit found placards in their plants telling them, "YOU'RE SENTENCED TO A WEEKLY PAY REDUCTION FOR ALL OF YOUR WORKING LIFE...
...It assumes that old-age pensions are necessary because Americans lack the foresight to provide for their old age...
...Most important, in his Madison Square Garden speech FDR drew a clear moral distinction between those who wanted to dismantle Social Security and the New Deal and those who saw them as essential to the country...
...The contribution Social Security required from the employer, Landon argued, was sure to be "imposed" on the consumer, while the contribution Social Security required from the worker was too much for him to bear...
...Based on a report done for the Twentieth Century Fund, Landon's speech attacked Social Security, which was due to begin collecting contributions on January 1, 1937, as a philosophical and economic disaster...
...Gone from the president's plan is the hallmark of today's Social Security, the generationtogeneration commitment to ensure everyone a basic income in old age...
...They tell DISSENT / Spring 2005 5 COMMENTS & OPINIONS the worker his wage will be reduced by contributions to some vague form of old-age insurance...
...They carefully conceal from him the fact that for every dollar of premium he pays for that insurance, the employer pays another dollar...
...If the present compulsory insurance plan remains in force, our old people are only too apt to find the cupboard bare," Landon concluded...
...I should like to have it said of my second Administration that in it these forces met their master...
...What we can do instead is provide "some measure of protection" against "poverty ridden old age...
...Effective January 1937, we are compelled by a Roosevelt New Deal law to make a 1 percent deduction from your wages and turn it over to the government...
...6 DISSENT / Spring 2005...
...FDR did not hesitate to label those opposed to Social Security as "organized money" and to describe the assault on Social Security as class warfare by the rich...
...We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life," the president declared...
...NICOLAUS MILLS is a professor of American Studies at Sarah Lawrence College and the author of Their Last Battle: The Fight for the National World War II Memorial (Basic Books...
...In 1936, FDR won a landslide election victory while Alf Landon captured two states...
...As Landon put it, "This law is unjust, unworkable, stupidly drafted, and wastefully financed...
...When he signed the Social Security Act into law in 1935, FDR had been very sober in his assessment of the impact of Social Security...
...For the rich and those able to succeed in the stock market, the result would be an improvement in fortunes...
...Landon argued that Social Security was "paternal government," at its worst...
...You might get this money back .. . but only if Congress decides to make the appropriations for this purpose...
...We are a long way from 1936, but in a period in which employers are cutting back on pension plans, globalization is shaking the job market, and the computer revolution continues to make traditional skills obsolete, we have entered a new era of instability in which the retirement years are more uncertain than at any time since the Great Depression...
...But in his response to the 1936 attacks on Social Security, a different and more passionate Roosevelt took center stage...
...The current Social Security system will not begin running a debt until 2042, according to the Social Security Trustees (2053, according to the Congressional Budget Office), and as the American Association of Retired Persons points out, just raising the income cap on Social Security taxes from its current limit of $90,000 to $140,000 would lower that projected shortfall by 43 percent...
...When they promote the idea that the Social Security reserves will be stolen by some future Congress, "they attack the integrity of American government itself...
...It assumes that Americans are irresponsible...
Vol. 52 • April 2005 • No. 2
