To achieve a new New Deal, Dems must learn from old one

As the United States reels from the COVID-19 pandemic and nationwide anti-racism protests, pundits from both sides of the political aisle have speculated that a new New Deal is in the offing.

It could happen. Crises, after all, often produce social policy gains, and the similarities between the 1930s and today are hard to ignore.

Unemployment has reached levels not seen since the 1930s, widening gaps in the social safety net. The infirm have been forced to work absent paid sick leave. The laid off have lost health coverage. And one in 5 households with young children faces food shortages.

Similarly, when Franklin D. Roosevelt took office unemployment was at 25% and the poverty rate among elderly citizens hovered over 70%. In 1932 World War I veterans demanding bonus payments were forcibly removed from Washington, D.C., by U.S. troops.

But these conditions don’t automatically result in progressive social policy. Britain muddled through the Depression without social reform, and Germany turned fascist and militaristic, for example.

First, public opinion has to shift drastically. In the 1930s, Gallup polls revealed strong support for government pensions for the elderly. Today public opinion has grown in favor of several social policy initiatives. About two-thirds of voters support a $15 minimum wage, which was a minority view six years ago. A majority of Americans favor a single-payer health plan. That, too, was a minority view just a decade ago.

The crisis also has to unfold under the watch of a regime opposed to expanded social policies. Herbert Hoover opposed public relief – for the agricultural sector, the unemployed or the welfare state, in general – during the Depression. Instead, he ineffectively relied on mobilizing private efforts.

The Trump administration, likewise, has waged war on Obamacare. It wants a payroll tax cut, which would slash into Social Security and Medicare. And the Republican Senate opposes funding increases for food stamps and federal aid for states facing depleted budgets as a result of the pandemic.

The public must also blame the crisis on the party in power and reject that party at the polls. The Republicans lost their congressional majority in 1930, and Hoover suffered a crushing defeat in 1932, with Roosevelt carrying many congressional Democrats on his coattails.

American voters have yet to decide on Trump and the Republicans.

But three other things had to happen in the 1930s before New Deal reforms were implemented.

The first was a long-term shift in political control. Congress did not pass the Social Security and National Labor Relations Acts until Roosevelt’s third year in office. And Congress did not approve the Fair Labor Standards Act, which created the minimum wage, until his sixth year in office.

Compare Roosevelt’s – and the Democrats’ – hold on power to former President Barack Obama’s, and the prerequisites for extensive reform become clear. Yes, Obama helped pass the Affordable Care Act, but he spent much of his early first term seeking passage of the Recovery Act to counter the Great Recession. He had to abandon potential labor and environmental reforms after losing congressional control in 2010.

By contrast, the New Deal reform wave was possible only after congressional elections in 1934 gave Democrats an overwhelming majority, putting legislative control in the hands of liberals. Roosevelt won in a larger landslide in 1936, and congressional Democrats expanded their majority. The Social Security Act was amended twice, and the program we know today was established in 1950, after Democrats had won the presidency for the fifth consecutive time.

New Deal reforms also relied on the mobilization of activists. The 2-million-strong Townsend Plan – with 8,000 clubs across the country – placed intense pressure on Congress. This group demanded universal retirement benefits, about $3,700 per month in today’s dollars. Workers struck for the right to bargain collectively. The unemployed organized and demanded benefits, too. Together, these efforts kept major reforms high on the political agenda.

Though unionization has witnessed steady declines for decades, the labor movement has enjoyed a sporadic resurgence of sorts recently, with major work stoppages – by United Auto Workers, United Teachers of Los Angeles and United Food and Commercial Workers – in the last couple of years. To implement major social policy changes, labor would need to remain active. The activists of Black Lives Matter movement would have to build on their protests and redouble efforts to transform police departments. And social policy would benefit from other reform-minded groups mobilizing as well.

Winning lasting social policy reform also required skillful policy crafting. The Social Security Act included taxes on payrolls and over time made its insurance program universal. Benefits for survivors and the disabled were slipped into the program’s coverage in 1939.

The lessons from the old New Deal suggest that a new one is possible. But Democrats will need to control Congress, policymakers will need to look beyond the current crises, and activists will need to keep the pressure on to establish lasting structural change.