The Foes of Social Security: Right…and Left!

https://upload.wikimedia.org/wikipedia/commons/2/28/Signing_Of_The_Social_Security_Act.jpg

The signing of Social Security into law, August 14, 1935

I have another tax-themed post for you since tis the season. One of the taxes employees pay is the Social Security tax to fund their retirement. This law was actually quite popular in its time, with the vote on it being 372-33 in the House and 77-6 in the Senate. Although the vote was overwhelmingly favorable, one can expect opposition to the Social Security Act from the right, even if this side was mostly confined to the most conservative elements of the Republican Party. Some of the leading spokesmen against it were a trio of upstate New York Republicans: John Taber (previously covered for curing a Congressman’s deafness through shouting), James W. Wadsworth Jr. (covered in a recent post), and Daniel A. Reed.

Taber warned “Never in the history of the world has any measure been brought here as insidiously designed as to prevent business recovery, to enslave workers and to prevent any possibility of the employers providing work for the people” (Bortz).

Wadsworth, who fully acknowledged that his opposition was futile in the face of the measure’s popularity, warned “This bill opens the door and invites the entrance into the political field of a power so vast, so powerful, as to threaten the integrity of our institutions and to pull the pillars of the temple down upon the heads of our descendants” (Bortz).

Reed warned “The lash of the dictator will be felt and 25 million free American citizens will for the first time submit themselves to a fingerprint test” (Bortz).

Although all of these warnings seem to the casual observer exaggerated if not outright false today, there is more truth in them than people think. Taber, for instance, may have been referring to the Social Security tax, which collected money while none was being paid out until 1940. This served as a short-term drain on the economy and was a contributing factor to the Roosevelt Recession in 1937. Wadsworth’s prediction of the political power base that arose from Social Security is undoubtedly correct, and the threat he states it portends may still come to pass if Social Security’s sustainability issues aren’t resolved. Reed’s is the most hyperbolic with the “lash of the dictator” bit, yet Social Security may prove oppressive in its spending growth as it crowds out other options for spending and will force tax raises in the future, limiting economic growth.

This kind of opposition was to be expected from this absolutist trio. However, what is more interesting was the small opposition that arose from the left.

In the final vote for Social Security, three members of the progressive wing of the Republican Party voted against: Vito Marcantonio of New York, and Usher Burdick and William Lemke of North Dakota. Marcantonio, who I covered in a previous post, was a communist fellow traveler and Burdick and Lemke were “agrarian radicals”. The three supported the Townsend Plan over Social Security, which would have allocated $200 a month for every citizen 60 and older, to be paid by a 2% sales tax. Others who opposed in the name of supporting the Townsend Plan included Democrats John Tolan, Henry Stubbs, John McGroarty, and John Hoeppel of California, Compton White of Idaho, and Joseph Monaghan of Montana as well as Farmer-Laborers Ernest Lundeen and Paul Kvale of Minnesota. California had so many Democrats in opposition since the Townsend Plan was quite popular in the state: in 1938 Townsendite Sheridan Downey would oust former Secretary of the Treasury William G. McAdoo in the Senate Democratic primary despite Roosevelt’s endorsement of him.  Townsendite opposition didn’t manifest itself in the Senate, as all eight senators on record against it were not part of the progressive wings of their parties. Even Huey Long, who often posed (the truth is more complicated) as a Democratic foe of Roosevelt from the left, voted for it.

Of course, any opposition to Social Security from the left dropped after the measure became law. The small group of leftists simply stood their ground in their desire for a more generous plan than offered by the Roosevelt Administration. Indeed, Social Security was pushed by FDR in part to stymie a potential challenge in 1936 from the ambitious Senator Huey Long. He may still have tried anyway had an assassin’s bullet not felled him in 1935. Social Security has since served as a system of automatic retirement savings for Americans and is one of he most popular (and expensive) programs in existence.

References

Bortz, A. Lecture on the History of Social Security. Social Security Administration.

Retrieved from

https://www.ssa.gov/history/bortz.html+&cd=10&hl=en&ct=clnk&gl=us&client=firefox-b-1-d

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