emphasis on maintaining the quintessentially American work ethic. “Those workers who remained unemployed after benefit rights are exhausted … should be given … a work benefit” (emphasis mine). Likewise, “Workers who cannot be brought under employment compensation … will become eligible for public employment.”132 Direct job creation would forestall the possibility that a limited UI system would leave millions destitute or lead to an unlimited dole, as part of a “program for economic security … more comprehensive than unemployment compensation,” which would be “but a complementary part of an adequate program for protection against the hazards of unemployment.”133
Countercyclical planning was used repeatedly as the intellectual cement binding the two halves of the federal program together, with direct job creation playing a leading role. The authors of the final CES report argued, “Provision of public employment in combination with unemployment compensation will … promote private employment … [and] maintain purchasing power,” by pushing billions of federal dollars into the hands of working-class consumers, all according to an overarching process of “advance planning.”134 Economic planning would be driven by the “sound principle that public employment should be expanded when private slackens,” to counteract mass unemployment, to add “the social and economic values of completed projects” as “a considerable offset to … economic losses” incurred in the Hoover years, and to provide “an important stabilizing effect on private industry by increasing purchasing power.”135
UI reserves could be released in planned countercycles to achieve desired effects: “had $2,000,000,000 been available for distribution to the workers when depression set in in 1929 … it would have a most pronounced stabilizing effect at a crucial time.”136 Thus, just as the two programs worked to provide overlapping protections to the individual, they would also work to produce positive outcomes for the national economy. In both cases, the rhetoric of planning was used to give the two policies an aura of scientific exactness, of modern, forward thinking, designed by experts. Overall, it was a textbook approach for linking Roosevelt’s economic security program with the larger Progressive project of rationalization.137
In the final report then, FERA’s work program would serve as the linchpin of Social Security—bringing all workers under the umbrella of federal protection while maintaining American ideals of self-reliance. Politically, programmatically, and intellectually, direct job creation was at the very heart of a vision of the New Deal order that went far beyond the “idea of the state” that Brinkley describes.
On January 4, 1935, President Roosevelt sent to Congress a plan for economic security that transcended a single act—indeed, in his message and public pronouncements, FDR described his two “big bills” (the Social Security Act of 1935 and the Emergency Relief Appropriation Act of 1935) as part of a single package. Introduced almost simultaneously on January 17 and 21, the two bills presented a complementary picture: direct job creation would receive $4.88 billion to put the unemployed to work; by taking many of the unemployed off relief rolls and onto payrolls, Social Security would face a lesser burden on its new funds and receive more contributions from payroll taxes, jump-starting the growth of federal reserve funds.138 Both bills passed Congress with overwhelming majority votes—although the appropriation act would pass three months earlier than Social Security—and would go into effect in the summer of 1935.
The reason why the CES’s work resulted in two big bills instead of one is hard to divine, as there is little archival mention of the decision-making process. Moreover, given that the report prominently featured “employment assurance” among its recommendations, making it an important part of its public relations efforts, one might expect some measure to be part of the eventual Social Security Act. The report mentioned other programs—the coverage of agricultural and domestic workers under social insurance, the creation of a system of old-age annuities, and so on—that never made it into the Social Security Act, so we could just see job creation as one more idea that did not make the cut. However, when it comes to those issues, we have documentation about why they did not make it in: agricultural and domestic workers were left out of the eventual bill by Southern Democrats in Congress with the cooperation of Secretary of the Treasury Henry Morgenthau; old-age annuities frightened the life insurance companies, who successfully lobbied against their inclusion. Direct job creation was a policy that actually did get enacted at roughly the same time—so the question of why the legislative shift happened remains.
The answer may well be that, just as when Hopkins went directly to FDR in October 1933 to get funding for the CWA when he felt that the PWA was taking too long to get “shovel ready,” Hopkins might have gone to FDR to argue for a separate Emergency Relief Act as a plan B in case the CES got bogged down (this time with Harold Ickes as an ally), and that the plan B was put into effect despite the committee wrapping up its work in a timely fashion.139 However, it is equally likely that the reason for the bills being split was an artifact of the congressional process: the powerful Senator Robert Wagner had introduced his Social Security bill as a social insurance and welfare measure so that it would run through his Committee on Banking and Finance, and he may not have wanted to complicate passage of the law by having it run through the Senate Appropriations Committee (as the Emergency Relief Appropriation Act of 1935 was). The latter committee was chaired by the more conservative Senator Carter Glass (D-VA). Politically Wagner may also have considered it easier to get Congress to focus on social insurance and welfare specifically rather than to try to get buy-in on the committee’s vision of comprehensive social protection.
Conclusion
As fraught as its deliberations had been, and as complicated as the ultimate compromise between social insurance and direct job creation was, the CES proved to be the launching pad for job creation’s rapid growth in the New Deal. Within a month of signing the Social Security Act, 220,000 people were drawing paychecks from the WPA. By the time that the first fifty thousand lump-sum Old Age Insurance benefits were paid out in 1937, the WPA had already covered more than two million workers and their families.140
Direct job creation started out in 1933 as an experimental program, having to borrow personnel and budget from elsewhere. It was on the chopping block by early 1934 when the CWA was abruptly shut down, in no small part due to fears that the system was too radical a departure from traditional welfare practice. Now the policy had the explicit, lengthy endorsement of a presidential committee that represented virtually the whole of the Roosevelt administration. Its legislative authority and budget were enacted as one of the big bills backed by the president’s personal prestige, and job creation formed a major part of his campaign for 1936.141
Just as important for the future development of direct job creation, Jacob Baker, Emerson Ross, Corrington Gill, Aubrey Williams, Meredith Givens, Josephine Brown, Alan Johnstone, and the other Hopkins advisors had worked out a set of theories to justify a new policy model. They built goodwill and alliances for their efforts with many New Dealers whom advocates of a job program would need to appeal to when the WPA came into existence. At that point, everyone would be faced with a major conflict over which employment policy would be the dominant force within the New Deal.
Chapter 2
People or Projects
The Works Progress Administration Versus the Public Works Administration Reconsidered as Economic Theory and Ideology
The Cabinet Room of the White House is dominated by a single long table, an oval of darkly gleaming wood. Containing stark white walls, heavy leather chairs, and rich carpeting, the room resembles nothing so much as a turn-of-the-century corporate boardroom, a place of probity and prudence (or of corruption and ruthlessness). But in 1935, the Cabinet Room was a different kind of place altogether—it was the meeting place of the National Emergency
