When the Depression struck there was no Federal social safety net for the elderly and the unemployed. Almost half of America's seniors were unable to support themselves. Jobless people fell quickly into poverty. Family resources and charities were stretched beyond the breaking point. And state and local government provided little aid.
Roosevelt, Secretary of Labor Frances Perkins, and other reformers had long supported the idea of government-sponsored pensions and unemployment insurance. Now this cause was given urgency by powerful grass-roots movements, including the Townsend movement, a national campaign for old-age pensions.
On August 14, 1935, FDR signed his proudest domestic achievement - the Social Security Act. It created old-age pensions and unemployment insurance, funded by payroll taxes on workers and employers. The Act also provided grants to states to assist disabled people and fatherless children.
Voices of Protest
During FDR's first term, powerful populist figures emerged who challenged New Deal policies as halfway measures.
In California, Francis Townsend launched a national campaign to provide everyone over 60 with generous monthly pensions (funded by a national sales tax). Since recipients had to spend their checks within 30 days, Townsend argued his proposal would also revive the economy by stimulating consumer spending. Critics said it would simply transfer purchasing power from the young to the old, while doubling the national tax burden.
In Michigan, Charles Coughlin, a charismatic Roman Catholic priest with a popular national radio program, railed against Wall Street bankers and advocated inflationary monetary schemes. By 1937, his message was increasingly laced with anti-Semitism.
Roosevelt's most formidable populist critic was Louisiana Senator Huey Long. Long's popular "Share Our Wealth" program promised to make "every man a king" by taxing the rich to provide a guaranteed annual minimum income to every American.